Sitting of 8 March 1983

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

    School Leavers
    Mr. Hooleyasked the Secretary of State for Employment how many boys and girls who left school in the summer of 1982 were still without a job or training place by 31 December 1982.
    The Secretary of State for Employment (Mr. Norman Tebbit): By 31 December 1982 fewer than 8,000 of the 600,000 1982 school leavers were without a job or the offer of a place on the youth opportunities programme.
    Mr. Hooley: That is another promise that has gone down the drain. What will happen to the thousands of boys and girls on the youth training programme when they complete that exercise? Where will they go, what type of jobs will they have, and what is their future?
    Mr. Tebbit: I am sorry that the hon. Gentleman should not have a kind word to say about any of the employers, the Manpower Services Commission, the trade unions and the others who have managed to get within an ace of carrying through that Christmas undertaking. The hon. Gentleman's attitude is mean and carping. As for the youngsters who will be going on the youth training scheme in September of this year, if the YOP scheme is an example, the YTS should do better in our economic circumstances. More than half the youngsters will be accommodated in either jobs or further training as they leave the YTS—[An HON. MEMBER: "Real jobs?"]—They will be real jobs. I hope that the hon. Gentleman will have one, one day.
    Mr. Marlow: Does my right hon. Friend agree that one of the Government's greatest successes has been their imaginative approach to the training of young people in a way that has never been done by any previous Government?
    Mr. Tebbit: Yes. When the Government started and approved the youth training scheme, the right hon. Member for Crosby (Mrs. Williams) was sufficiently gracious to say that she wished she could have persuaded her colleagues in the Socialist Government to do that. She congratulated the Government on their initiative.
    Mr. Barry Jones: As there are more than 250,000 17 and 18 year-olds out of work, does the right hon. Gentleman agree that he carries a heavy responsibility for that human tragedy?
    Mr. Tebbit: I carry responsibilities. I look forward to doing so for the next five, 10 or 15 years. The hon.
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    Gentleman must understand that this country is not the only one suffering from unemployment or the tragedy of youth unemployment. Britain is coping better than most.

    Long-term Unemployment
    Mr. Jim Marshallasked the Secretary of State for Employment how many people have been out of work for over a year; and what was the comparable figure in May 1979.
    The Under-Secretary of State for Employment (Mr. Selwyn Gummer): At January 1983 the number of unemployed claimants in the United Kingdom who had been unemployed for more than 52 weeks was 1,106,800, while the latest figure for employees in employment is 21 million. In April 1979 the number of registered unemployed who had been unemployed for over 52 weeks was 366,700.
    Mr. Marshall: Does the Minister accept that those figures show beyond any shadow of doubt the total failure of the Government's economic policy? If it is his intention to blame the world recession for the high levels of unemployment, will he tell the House what contribution the world recession has made to the overall reduction in inflation in the United Kingdom?
    Mr. Gummer: The hon. Gentleman mentioned the world recession. His original question concerned the reasons for unemployment. Unemployment is partly due to the world recession and largely due to the fact that this country allowed itself to become uncompetitive in world markets after years of Socialist Governments.
    Mr. Dorrell: Does my hon. Friend agree that the position of those long-term unemployed people who have savings of more than £2,500 is particularly unenviable? Does it not amount to a means-tested benefit? Will he make representations to his right hon. and learned Friend the Chancellor of the Exchequer to improve the position of those who suffer that disadvantage?
    Mr. Gummer: The problem that my hon. Friend has highlighted has existed under successive Governments and is a matter for my right hon. Friend the Secretary of State for Social Services.
    Mr. Allen McKay: The Prime Minister, the Minister and his colleagues seem to believe that wages have something to do with unemployment, but how does the hon. Gentleman account for the fact that in Yorkshire and Humberside the average wage is the lowest in Britain while unemployment is the highest?
    Mr. Gummer: The hon. Gentleman must accept that employment levels have fallen because Britain has been uncompetitive across the board. No region can overcome that. If the nation as a whole is uncompetitive, we shall not create the weatlh that we should. One cannot draw a distinction between one part of the country and another. The fact that there are lower wages in Yorkshire and Humberside can be contrasted with other parts of the country.
    Mrs. Shirley Williams: Will the Minister reconsider his disappointing answer to the question on unemployment benefit? Long-term supplementary benefit rates are not made available to the long-term unemployed, and the Government's advice that the unemployed should save

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    their redundancy pay is made an ass of because those involved cannot draw benefit if they have saved their money. Therefore, will the hon. Gentleman reconsider his answer?
    Mr. Gummer: The right hon. Lady is right to draw attention to an important issue. I am not being in any way unsympathetic when I say that it is a matter not for this Department but for my right hon. Friend the Secretary of State for Social Services, and I shall draw it to his attention.
    Mr. Needham: Does my hon. Friend agree that one of the reasons for the grave level of unemployment is action such as that taken by the president of the National Union of Mineworkers, who tries to call his members out on strike when he has the flimsiest of cases? Does my hon. Friend further agree that such action does little for miners' employment prospects?
    Mr. Gummer: My hon. Friend is right to point to one of the many reasons for unemployment. The difficulty is that Opposition Members will accept only a party political reason. However, every strike in this country cuts out jobs. Those who want to keep their jobs should bear in mind that it is important not to strike.

    Wage Awards
    Mr. Doverasked the Secretary of State for Employment if he has any plans to meet the chairman of the retail food and allied trades wages council to discuss the effects of wage awards on employment.
    Mr. Tebbit: I have no plans for a meeting at present. However, I have written to the chairman of the council telling him that it is abundantly clear that, if not modified, the awards proposed by this council will have damaging effects on employment.
    Mr. Dover: Does my right hon. Friend agree that when inflation is less than 5 per cent., a proposal for a wage increase of more than 8 per cent. will not help to increase employment in the food and allied industries? Is my right hon. Friend aware that there is price resistance and that fewer jobs are available because the volume of trade has fallen?
    Mr. Tebbit: My hon. Friend is absolutely right. If wages are pushed up to a level above that which customers are willing to pay, greater unemployment will certainly result.
    Mr. Harold Walker: Have not the Secretary of State and the Prime Minister repeatedly said that they have no intention of interfering in wage bargaining? Is it not true that the 8 per cent. increase was on a wage of £62, which is half the national average, and that the wage for a senior shop assistant was brought up to only £65? Is it not disgraceful that the Government and the Conservative party should try to make low-paid workers the scapegoat for the unemployment that the Government have created?
    Mr. Tebbit: The Government have no intention of interfering in wage negotiations. However, I have a responsibility to draw the attention of those concerned to the consequences of what they are doing—[Interruption] The right hon. Gentleman does not understand what he is saying.
    Mr. Harold Walker: I understand only too well what the Secretary of State is saying.
    Mr. Tebbit: I told the chairman that if the council ignored the representations and confirmed the proposed increase, I would be driven to conclude either that the council did not recognise links between wages and jobs or that it did not see it as part of its responsibilities to take that clear connection into account when making proposals about minimum wage rates. I should be glad to know which view the council takes.
    Mr. David Atkinson: Is my right hon. Friend aware that this week I received a letter from a bread and cake shopkeeper in my constituency saying that last year's 8 per cent. wage award led to redundancies and that this year's wage award would lead to more redundancies? When will employers be able to pay wages that they can afford without having to make redundancies?
    Mr. Tebbit: I can understand that point of view. Hon. Members should not underestimate the sheer fury and frustration that is expressed in the more than 300 letters that I have received in the past month. Many of them point out that redundancies will result if the wage award goes through. I cannot do anything about wages councils, because we are tied by our adherence to the treaty and the ILO convention, which cannot be renounced until 1985.
    Mr. Skinner: Is the Secretary of State aware that voters are concerned more about the fact that a director of a company in Britain, Mr. Ricardo Gordiano, can pick up more than £500,000 a year and that Mr. Fieldhouse can pick up £700,000 in a golden handshake—commonly called redundancy pay—than about low-paid workers receiving a miserly 8 per cent. increase on their poverty-stricken wages?
    Mr. Tebbit: I am not sure that that was uppermost in the minds of voters in Bermondsey recently.

    Youth Training Scheme (Equal Opportunities)
    Miss Joan Lestorasked the Secretary of State for Employment whether he is satisfied that girls will have access to equal opportunities on the youth training scheme; and if he will make a statement.
    The Minister of State, Department of Employment (Mr. Michael Alison): I am satisfied that girls will have equal access to the scheme.
    Miss Lestor: The right hon. Gentleman may well be satisfied, but is he aware that there is great concern that most members of the Manpower Services Commission's boards both regionally and nationally are male, as are the lecturers in the youth opportunities programme? Is the right hon. Gentleman further aware that traditional skills that are rapidly dying out—partly due to technology—are being offered to girls? [Interruption.] Will the right hon. Gentleman try to keep his Back Benchers in order? Will he bear in mind that many of those young girls are likely to be discouraged from participating in the courses because they feel that they do not have any link with what they are likely to be offered later in life?
    Mr. Alison: I am satisfied that there will be no prejudice against girls or women because the majority of the members of the commission are male. Indeed, the reverse is no doubt true. I believe that those involved will bend over backwards to take girls' needs properly into account. The youth training board has issued a statement requesting all parties involved in preparing and delivering

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    the scheme to accept the principle of equality of opportunity, and the board will shortly be considering more fully how that can be achieved.
    Mr. Myles: Is my right hon. Friend aware that there is an alarming lack of employment for girls in the countryside? Will he introduce training so that girls can obtain jobs in the countryside and so stop the drift away from rural areas?
    Mr. Alison: I take note of that point, but there will be equality of opportunity in the youth training scheme. However, girls must be allowed to choose the courses that they wish to pursue.
    Mr. Christopher Price: Will the Minister explain what Mr. David Young meant when he told the Select Committee that although there would be equal opportunities for girls in the technical and vocational educational initiative scheme, he could not guarantee that an equal number of girls would be catered for? Is the right hon. Gentleman aware that there are approximately equal numbers of boys and girls in most schools? How can he offer girls equal opportunities if there are so few of them in the scheme?
    Mr. Alison: The hon. Gentleman, who is a great educationist, will know that we cannot predetermine the proportions of girls and boys who will want to stay on at school, the number who will be on the labour market, the number who will find jobs or which girls will choose which courses on the training scheme.

    Right to Strike
    Mr. Winnickasked the Secretary of State for Employment if he has any plans to introduce legislation to remove the right to strike from any groups of employees.
    Mr. Tebbit: No, Sir.
    Mr. Winnick: Has not the Secretary of State told the Select Committee on Employment what he may have in mind for workers in essential services? Is the right hon. Gentleman aware that what is needed is not the removal of the right to strike from any group of workers, but his own removal from office, since he has degraded a distinguished office of state by his notorious political behaviour and antics? Bearing in mind his plans for trade unionists, would he not be far better off in present-day Chile, Argentina or Poland, where he would be more at home with the rulers of those dictatorships?
    Mr. Tebbit: I shall resist the temptation to suggest some of the countries where the hon. Gentleman would find himself more at home. I shall repeat the answer that he clearly did not hear. I have no plans to legislate away the right to strike. I am considering—and I think the public would want me to consider—means to inhibit the propensity of people to strike in essential public services.
    Mr. Gorst: Is my right hon. Friend aware that when the general secretary of the Trades Union Congress appeared before the Select Committee last Wednesday he said that the Government had an obligation to take the necessary measures to protect public health and safety?
    Mr. Tebbit: Yes; and I notice that the general secretary of the TUC referred to the duty of the Government and their powers to use the armed forces to that end.
    Mr. Ashley: While the Secretary of State is in the mood to resist temptation, will he try to resist the temptation to undertake a vendetta against trade unions, which is what he is doing, thereby reducing the liberty of the individual? Does he accept that he may win a short-term victory, but that it will end in long-term disaster for industrial relations in this.country?
    Mr. Tebbit: I have no vendetta against the trade unions. I have every intention to do what I can to ensure that the members of trade unions are assured of their rights in relation to politically motivated leadership, which often forces them out on strike and acts against their best interests.
    Mr. Beaumont-Dark: Does my right hon. Friend agree that in many of the public services where there is a monopoly there is virtual absolute job security and that people who have such job security have a greater responsibility than others when there is a dispute? Does my right hon. Friend further agree that if he is contemplating changing the law about the right to strike those who have absolute job security should be the first to be looked at?
    Mr. Tebbit: No one has absolute job security. Those who go on strike in breach of their contracts with their employers lay themselves open to dismissal.

    Trade Union Reform
    Mr. Hoyleasked the Secretary of State for Employment whether he has any plans to meet the Trades Union Congress to discuss proposals on trade union reform.
    Mr. Tebbit: I have invited the TUC to give me its views, but the TUC has preferred not to accept my invitation.
    Mr. Hoyle: Surely the Secretary of State understands the reason. Why does he continue to attack the trade unions in the way that he does in spite of the fact that he says that there is no vendetta? Will he take into account the views of some of those who know more about the trade union movement than he does, and drop his half-baked crackpot schemes for the reform of the trade union movement, which are doing so much damage to industrial relations?
    Mr. Tebbit: I hope, of course, that the trade union movement will change its mind. Certainly some distinguished members, such as Mr. Gavin Laird, think that it is ridiculous that the TUC should take the attitude that it does. In answer to what the hon. Gentleman said about listening to people who have some knowledge of the matter, I listened carefully, and I noticed that the chairman of the TUC, referring to his own union, said:
    "Over the years we have suffered from extremism and communist power bids more than any other union."
    Referring to the extreme Left, he said:
    "They want to use this power for their own political ends—it would be a disaster if they succeeded."
    I agree with the chairman of the TUC.
    Mr. Timothy Smith: Is it not clear that the proposals in the Green Paper have substantial support among ordinary trade union members? In those circumstances, is it not a grave dereliction of duty on the part of the TUC not to discuss these proposals with the Government?
    Mr. Tebbit: I agree with my hon. Friend. Every opinion survey shows that the proposed measures have great support among trade unionists. To be fair to Mr. Murray, I understand that he told the Select Committee last week that the TUC would be willing to talk to the Government, provided that Parliament repealed the 1980 and 1982 Acts. I must say that I think Mr. Murray has a slightly odd idea of the relative roles of Parliament and the TUC.
    Mr. Varley: Does the Secretary of State appreciate that some of the hostility of the TUC towards him, and perhaps to some of his colleagues, is because they have given the impression over the past three years that their only policy towards the trade unions is mass unemployment, the whip of unemployment and oppressive legislation? Will he take this opportunity to say that what distinguishes a democracy and free society is the right to strike, as opposed to a dictatorship where that right is taken away?
    Mr. Tebbit: What distinguishes a democracy is that there are free and fair elections and that the majority control the Government. That is why this Government have the right to legislate in accordance with the proposals that they put before and had endorsed by the people in 1979.

    Long-Term Unemployment
    Mr. William Hamiltonasked the Secretary of State for Employment what was the total number unemployed for over 52 weeks on January of each of the past four years; and what steps are being taken to alleviate this problem.
    Mr. Craigenasked the Secretary of State for Employment what assessment of, and consequential provision for, the rise in the number of long-term unemployed his Department is making.
    Mr. Gummer: At January 1983 the number of unemployed claimants in the United Kingdom who had been unemployed for over 52 weeks was 1,106,800. The numbers registered as unemployed for over 52 weeks were 905,000 in January 1982, 455,000 in January 1981, and 355,000 in January 1980. Jobs are created only when we produce goods and services that people want at a price that they are prepared and able to pay. This Government have cut inflation dramatically, and as productivity rises we should become more competitive. In the meantime, the community programme, introduced last year, is the largest ever initiative to help the long-term unemployed.
    Mr. Hamilton: Is the 'Minister aware that that parrot reply will be no consolation to the more than 1 million workers who have now been out of work for more than a year, that number being more than treble the figure when the Government came to office? Do they disclaim all responsibility for that? When the next election comes, what will they do with those Saatchi and Saatchi posters? Will they put up another one saying "Conservative Government does not work"? What alibi will be given at the next election for those disgraceful figures?
    Mr. Gummer: The hon. Gentleman thinks that it is a parrot cry when we tell the truth. The truth is that the only jobs that can be made available are jobs that produce goods that other people want to buy. There is no other truth. Until the Opposition accept that view they will never contribute
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    to the ending of unemployment. It is because the Government have taken that view that we will conquer unemployment.
    Mr. Craigen: As we could well have 1·5 million longterm unemployed by the end of this year, will the Minister tell us whether he is satisfied with the present woefully inadequate provision that is made for long-term unemployment? Does he really feel that the community programme is meeting the needs of the 1·1 million longterm unemployed?
    Mr. Gummer: The hon. Gentleman is right to underline the fact—this is a matter about which we should all be concerned—that many people are unemployed for long periods. The community programme does not meet all the needs of all those people. That is why we have concentrated on producing new jobs right across the board. It is an important programme, and to provide 130,000 places on that programme is also important.
    Mr. Forman: As the plight of the long-term unemployed is not only a matter of major social concern, but places a considerable economic burden on the rest of the community—notably those in work—what plans does the Department have to expand the community programme so that it takes up the full number of places allocated for it, as envisaged by my right hon. and learned Friend the Chancellor of the Exchequer, and preferably supplements it with other ideas, such as the excellent enterprise allowance, to get more people back to work?
    Mr. Gummer: I am sure that my hon. Friend is right to say that we have to work as hard as we can—that is what we are doing—to make sure that the community programme is fully utilised. We have used the other programmes that we have brought forward precisely for that purpose. As always, we are considering other ways of providing jobs, but I am sure my hon. Friend will agree that, over and above that, we have to find real jobs for people, and that that can be done only by producing goods that people want to buy.
    Mr. J. Enoch Powell: When the Government persist in attributing unemployment to uncompetitiveness, how do they account for the persistent surplus on our trading account during the years in which unemployment has risen?
    Mr. Gummer: The right hon. Gentleman returns to his theme, but the fact is that we could have done a lot better. That is one of our problems.
    Mr. Kenneth Carlisle: What evidence is there that the community programme is helping the long-term unemployed to obtain jobs? Are the Government keeping a record of that?
    Mr. Gummer: It is important that the programme should provide jobs for the long-term unemployed. When someone has had a job, he is more employable thereafter. There are provisions that enable individual employers to spend nearly £1,000 on training during that period, and that will also help.

    Youth Opportunities Programme (Statistics)
    Mrs. Shirley Williamsasked the Secretary of State for Employment what proportion of young people who

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    completed youth opportunities programme courses between one year and six months previously entered (a) full-time employment and (b) further education.
    Mr. Speaker: No. 8, Mrs. Shirley Williams.
    Hon. Members: Stand up.
    Mr. Gummer: Information is not yet available—
    Mr. Speaker: Order. The Minister must not answer before the question is asked.
    Mrs. Shirley Williams: No. 8, Sir.
    Mr. Gummer: Information is not yet available on this particular group. The most recent—(Interruption] —national survey of those who joined youth opportunities programme schemes—
    Mrs. Williams: On a point of order, Mr. Speaker. I regret that I am completely unable to hear the Minister's reply owing to barracking from across the Floor.
    Mr. Gummer: Information is not yet available on this particular group. The most recent national survey of those who joined youth opportunities programme schemes between April and June 1981 shows that about 40 per cent. of young people subsequently found employment and a further 10 per cent. went into further education or training.
    Mrs. Williams: Is the Minister aware that on 23 April 1979 the Prime Minister said in Darlington—[HON. MEMBERS: "Reading".]—
    "We Tories believe in policies that will create real jobs—not just paying youngsters to do artificial jobs without a future".
    In view of the Prime Minister's remarks at Darlington, will the Minister now redeem the Prime Minister's promise by representing to his right hon. and learned Friend the Chancellor of the Exchequer that real jobs should be created by putting £3 billion to £4 billion into public investment and not into tax cuts, which will create only one job for every four that public investment creates? We need real jobs, not artificial ones.
    Mr. Gummer: The right hon. Lady does not meet the need to create real jobs by asking for general reflation by putting money into public expenditure. The right hon. Lady knows perfectly well that the only way to produce real jobs is to produce goods and services that people want to buy. That that has to be repeated again and again from the Dispatch Box, even to representatives of the Social Democratic party, shows the people of Darlington and elsewhere that if they want jobs the only party that will ever produce them is the Conservative party.
    Mr. Needham: Is not one of the reasons why we have such a high level of youth unemployment that adequate schemes for training young people were not introduced early enough and certainly were not introduced by the right hon. Member for Crosby (Mrs. Williams) when she had some authority in the matter? If the right hon. Lady had done something more we should not have such high numbers as we now have.
    Mr. Gummer: It would be easier to congratulate the right hon. Member for Crosby (Mrs. Williams) had she managed to do something about training during the many years that she held office in a Labour Government. The new training scheme has been needed in Britain for many years and should be seen as a major step forward in the training of young people.
    Mr. Barry Jones: Bearing in mind the growing and genuine fears of a major shortfall in training places this year, is it not reprehensible that in April the Government plan to cut from £18 to £15—a 16 per cent cut—the supplementary benefit of 16 and 17-year-olds living at home? Is not the nation entitled to be sceptical of the Government's competence when we read in The Sunday Times of a plan to dump unemployed teenagers into military service because the Government cannot find them jobs in civilian life?
    Mr. Gummer: The hon. Gentleman must do better than that. He knows perfectly well that there is no truth in any reports about dumping people into military service—
    Mr. Barry Jones: Answer the question.
    Mr. Gummer: If several questions are asked I shall answer them—
    Mr. Barry Jones: Answer the question.
    Mr. Speaker: Order. Will the hon. Gentleman stop tapping the table. It irritates me.
    Mr. Gummer: The hon. Gentleman asks whether the Government have plans to dump young people into military training. The Government have no such plans, and when the hon. Gentleman gives the Government credit for the largest training scheme that has been produced in the history of Britain, he will have a right to ask such questions.

    Wage Rates
    Mr. Dubsasked the Secretary of State for Employment what is his estimate of the percentage fall in wage rates that would be necessary to achieve full employment.
    Mr. Tebbit: Any such estimates would depend on a variety of variable factors, few of which are reliably predictable.
    Mr. Dubs: Is not the truth that the Secretary of State wants to get British wages down to the level of those in Hong Kong and Taiwan—under 50p an hour?
    Mr. Tebbit: The hon. Gentleman must know that he is being rather silly when he says such things. If people charge more for their labour than the market will bear, jobs will disappear.
    Mr. Wilkinson: Does my right hon. Friend agree that one of the worst aspects of the British economy is that while it has been a low wage economy for many years it has also been a low productivity economy and that what we need is not so much to bring wage levels down to those in Hong Kong and Taiwan as to increase productivity to their levels?
    Mr. Tebbit: Yes, indeed. We need to reach the productivity levels of Germany, the United States and Japan and then we would be able to pay much higher wages. That is the object of our policy. It is no good paying people more than the value of the work that they do.
    Mr. Flannery: Does the Minister not realise the simple fact that the lower wages are the fewer goods people can buy and, because they cannot buy the goods, that accelerates the slump?
    Mr. Tebbit: I realise that I am being taken on now by the intellectual wing of the Labour party. If the hon. Gentleman considered what would happen were wages to double, he would have to conclude that our projects would become uncompetitive and we would lose markets and jobs. That is precisely what has happened in recent years.
    Mr. Varley rose—
    Mr. Speaker: Order. In order that the House can understand my system, may I say that I should like to know in advance which Front Bench Members wish to speak, so that I can maintain the correct balance?
    Mr. Varley: The Secretary of State implies that present policies are working. How can that be so when 2·5 million people have lost their jobs, when plant after plant has been forced to close, when manufacturing production is down by one fifth and investment by one third, and when over the past four years our national wealth has been reduced by 5·5 per cent? If that is success, God help us when the Government admit failure.
    Mr. Tebbit: I am sorry to interrupt the right hon. Gentleman when he is rolling with delight at bad news but I must tell him that if, for example, he had been watching the ITN weekly job survey recently he would have seen that in the last month, for the first time for some considerable time, the new jobs recorded exceeded those lost. If the right hon. Gentleman likes he could have a list of many of the new jobs on the way—1,000 in Texaco in South Wales; 100 at Tattung television manufacturers in Bridgnorth; 1,200 on the urban development programme; 40 at Edgley Aircraft, Old Sarum; 1,000 at Hyster, Ayrshire; 200 at Leicestershire Co-operative—but, Mr. Speaker, you would not want me to go on too long and it only gives the right hon. Gentleman a great deal of pain.

    Wages Councils (Awards)
    Mr. John Townendasked the Secretary of State for Employment what have been the three highest percentage wage awards made by wages councils during the past three months.
    Mr. Alison: The three highest percentage increases in basic minimum rates in wages orders which took effect between 1 December and 28 February were 6·7 per cent., 6·2 per cent. and 5·9 per cent. However, proposals of increases in excess of 8 per cent. have been made recently but not yet confirmed.
    Mr. Townend: My right hon. Friend will have noted that all those figures are in excess of inflation, and 8 per cent.is 60 per cent. above the current rate of inflation. Will my right hon. Friend accept that such increases make nonsense of the Government's exhortations to industry to become more competitive? Is it not true that these wages can be paid for only by lost jobs and increases in prices? Despite international agreements, has not the time arrived when these bodies should be abolished because they are undermining the Government's anti-inflationary and employment policies?
    Mr. Alison: I agree with 90 per cent., if not 95 per cent., of what my right hon. Friend says. I hope that the proposals for an 8 per cent. increase will not be carried into effect.
    Mr. Cryer: Will the Minister accept that it is a nauseating spectacle when a Conservative Member of
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    Parliament, with half a dozen company directorships and a handsome salary to boot, attacks the lowest paid sector of our society? Why do not the Government express their concern about the 45 per cent. increase in farm incomes in 1982 instead of continuing this vendetta against low-paid workers?
    Mr. Alison: The hon. Gentleman is concerned only to make party political points. My hon. Friend the Member for Bridlington (Mr. Townend) is concerned with the possibility of people finding work, even at low rates that are well above the level paid in supplementary benefit.

    Employment Statistics
    Mr. Dormandasked the Secretary of State for Employment what is the number and percentage of people unemployed in the northern region and the United Kingdom, respectively.
    Mr. Gummer: At 10 February the number of unemployed claimants in the northern region was 231,074 and the rate was 17·8 per cent. The figures for the United Kingdom were 3,199,412 and 13·7 per cent.
    Mr. Dormand: Is the Minister aware that the disgraceful figures that he has just announced for the northern region will be made even worse if the replacement for the Sir Galahad is not built on Tyneside? Will he confirm that there is no question of the Sir Galahad replacement going to Australia? Does he agree that the record of the Tyneside shipyard workers in building many vessels of this type in the past shows that this is where the priority order should go? Will he, as a matter of urgency, consult his colleagues in the Department of Industry to see that the order is placed on Tyneside?
    Mr. Gummer: I shall see that my right hon. and hon. Friends in the Department know of the hon. Gentleman's proper concern.
    Mr. McQuarrie: The figure that my hon. Friend gives in respect of the United Kingdom is 9 per cent. lower than that for my constituency of Aberdeenshire, East, which is suffering many redundancies every day. Will my hon. Friend try to take some steps to ensure that work can be created in my area, which has not benefited from the golden age enjoyed by Aberdeen city?
    Mr. Gummer: I understand the careful concern that my hon. Friend has for unemployment in his constituency, but I am sure he will agree that in the end—one always comes back to it, I afraid—the only way that jobs are created is if those jobs are wanted in the sense that the goods and services that they produce can be sold at the price that people are able to pay.
    Mr. Beith: What hope will the unemployed get from the hon. Gentleman's Department if he persists with his plans to close or cut down the hours of jobcentres in some of the smaller communities where unemployment is highest? Does the Minister realise that some of the jobcentre closures afford savings of only £200 or £300 a year, and that many local authorities in the area would be happy to help with those minimal costs to ensure that a service of job finding is still available to people in places such as Amble?
    Mr. Gummer: I am sure that the hon. Gentleman will accept that we are seeking to make the system as efficient

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    as possible, and it is only sensible to look at some of the jobcentres that are of small use and to which a small number of people go, and make them as economic as possible. If the hon. Gentleman has a particular case in mind we shall look at it carefully. In the end, what we want is not the jobcentres that find the work, but the work itself.
    Mr. Radice: Has the Minister noted that despite the Prime Minister's commitment to real jobs, made in Darlington during the 1979 general election campaign, unemployment in the Darlington travel-to-work area has risen from 6 per cent. then to over 15 per cent. now?
    Mr. Gummer: The hon. Gentleman must accept that had we continued with the policies of the Labour Government unemployment would be much higher. For the first time a Government are taking the steps that will bring back to this country the economic basis that has been frittered away by years of under-productivity.

    Trade Union Democracy (Green Paper)
    Mr. Rentonasked the Secretary of State for Employment how many representations he has so far received from trade unions in response to his Green Paper on trade union democracy.
    Mr. Tebbit: I have so far received no representations from trade unions on our Green Paper "Democracy in Trade Unions". The period for consultations will continue until 8 April.
    Mr. Renton: Is that not a very depressing reply? Are trade union leaders not interested in democracy in their unions? If there continues to be no response from those who are fearful that more balance will lead to loss of office and of power for them, will my right hon. Friend make a strong appeal in the remaining weeks for ordinary trade unionists to write to him with their views on obtaining more balance and on opting out of the political levy in their union?
    Mr. Tebbit: My hon. Friend is slightly unfair to some of the trade union leaders, because many of them have a deep commitment to democracy in their unions and have been taking steps to achieve that. What is regrettable is that some have not and are seeking to thwart progress in this regard. I hope that more and more ordinary trade unionists, as well as those leaders such as Mr. Gavin Laird, who has said that these matters should be discussed with the Government, will come forward and give me their views.

  PRIME MINISTER

    Engagements
    Mr. Foulkesasked the Prime Minister if she will list her official engagements for Tuesday 8 March.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including one with the Deputy Prime Minister of Hungary. I also unveiled a sculpture of my noble Friend the Lord Home in another place. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Foulkes: Will the Prime Minister confirm that her vacillation over the appointment of a new chairman for the coal board is because Lazard Frere is demanding yet
    702
    another transfer fee of £1·8 million, a sum it would take a miner 250 years to earn? What a reflection on British management that the Government think that the only person capable of running the coal board is this superannuated superman from the United States.
    The Prime Minister: I have nothing further to add to what I said last week about the chairmanship of the National Coal Board. I remind the hon. Gentleman that the gentleman of whom he is speaking is a distinguished Scotsman who has done well for the coal industry.
    Sir Neil Marten: Has the Prime Minister read, and I see no reason why she should have, the speech of Mr. Gaston Thorn, President of the European Commission, on 8 February, in which he said that it was time to shelve the Luxembourg compromise? While I do not necessarily expect my right hon. Friend to reply straight away, could she study the speech and let me know what she thinks?
    The Prime Minister: My right hon. Friend's surmise that I have not read that speech by Mr. Thorn, is correct, although I seem to have read quite a number. I do not believe that the Luxembourg compromise should be shelved.
    Mr. David Steel: Is the Prime Minister aware that we all hope that the miners will not be provoked into voting for strike action? Is she also aware that despite the Gentleman's considerable ability, what the coal board needs is not a temporary chairman but somebody who has a long-term commitment to the future of the industry and is involved in it?
    The Prime Minister:: The gentleman to whom I believe the right hon. Member refers has an excellent record in the coal industry—
    Mr. Foulkes: Rubbish.
    The Prime Minister: —which I described last week. One is not thinking in terms of a short-term chairman.
    Mr. James Callaghan: I ask the Prime Minister a simple statistical question. Will she confirm that the Chancellor of the Exchequer will need to reduce the standard rate of income tax by 9p in the pound in the Budget next week if the real level of total taxation on the average family is to be reduced to the point at which it stood when I left office?
    The Prime Minister: That figure, which I understand has been given in a parliamentary answer, takes no account whatsoever of increases in earnings over the period. If those are taken into account, even for those at lower income levels, real take-home pay is now higher than it was in 1978–79.
    Mr. Myles: Is my right hon. Friend aware that the distilleries in my constituency could substantially cut their energy costs by 25 per cent. and get a 25 per cent, grant for doing so, but they do not do it because of Scargillism?
    The Prime Minister: I hope that the distilleries in my hon. Friend's constituency will continue to flourish and that they will choose the fuel that makes their costs most efficient.
    Mr. Foot: As we are approaching Budget time, will the Prime Minister take the opportunity to answer the question of my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan)? Will she tell us how much extra

    703
    revenue in 1982–83, compared with 1978–79, in tax and national insurance the Government are receiving as a result of the tax changes introduced by the Government?
    The Prime Minister: I cannot give precise figures, nor would the right hon. Gentleman expect me to. He can find them perfectly well through tabling written questions, so that the figures can be absolutely precise. The yield in income tax plus national insurance contributions is greater. If his promises to the old-age pensioners were to be added, the cost in income tax and national insurance contributions would be enormous. Although he has been careful about the costs of his programme, in so far as it is equal to what the pensioners asked for it would cost an extra £17·5 billion.
    Mr. Foot: Is the right hon. Lady aware that the answer to the question, which she said she could not give, is £9 billion a year? [HoN. MEMBERS: "Why ask?"] That is the answer to the question. That figure confirms my right hon. Friend's figure. Will the right hon. Lady confirm, a week before the Budget, that her Government have raised £9 billion more in taxation and national insurance than did my right hon. Friend in his last year of office?
    The Prime Minister: Yes, but of course pensions have gone up considerably in real terms. They have gone up more than the increase in the cost of living. Is the right hon. Gentleman suggesting that in order to cut the national insurance contribution one should cut old-age pensions?
    Mr. Cunliffeasked the Prime Minister if she will list her official engagements for 8 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Cunliffe: Has the right hon. Lady seen the report by the independent low-pay unit, which discloses that poor families in Britain are taxed twice as heavily as similar families in any other country in Europe? Is she aware that the report shows that since the Government came into office the number of families in the poverty trap has doubled? Is she not ashamed of that state of affairs? Does it not amply prove that her Government's suicidal fiscal policies have militated against the interests of the poor sections of the community by rewarding the richer sections, which her party represents?
    The Prime Minister: The hon. Gentleman is right, I believe, in one thing, which is that taxation starts at lower levels of income here than overseas, and that it starts at a higher level of standard rate of income tax. What the hon. Gentleman has ignored is that the United Kingdom has a much longer basic rate of tax compared with other EC countries. In other words, that basic rate of tax goes on for a longer time before it is increased than in other countries. The hon. Gentleman also ignores the fact that, even for those at lower income levels, real take-home pay is now higher than it was during the last year of the Labour Government.
    Mr. Pawseyasked the Prime Minister if she will list her official engagements for 8 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Pawsey: Is my right hon. Friend aware that since she came to office the number of owner-occupiers has increased by over 1 million? Does she agree that lowering
    704
    interest rates will accelerate that process? Does she also agree that it is far better that homes should be owned by individuals than by the state?
    The Prime Minister: Yes, Sir. Thanks to the Government's policies a record number of dwellings are in owner-occupation. If a number of councils were quicker in replying to applications to purchase council houses, the number would be greater. It is also true that there has been a considerable increase in home improvement grants, particularly last year. The figures have almost reached those of 1972–73.
    Mr. Norman Atkinsonasked the Prime Minister if she will list her official engagements for Tuesday 8 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Atkinson: Now that it has been authentically leaked that the National Health Service's policy study group is considering the possibility of recommending raising prescription charges to £2 per item, will the Prime Minister assure the House that never, so long as she is Prime Minister, will she allow prescription charges to rise to 10 times the amount that they were when she came to office?
    The Prime Minister: From time to time prescription charges have to be raised. The hon. Gentleman will be aware of the number of exemptions that there are from prescription charges, including the elderly and children. The very considerable number of exemptions means that those who really need prescriptions because they are chronically sick get them free.

    Inflation
    Mr. Kenneth Carlisleasked the Prime Minister whether she will make a statement on the current rate of inflation.
    The Prime Minister: Inflation at 4·9 per cent. is now at its lowest level since early 1970.
    Mr. Carlisle: Does my right hon. Friend agree that it is good news for this country that the rate of inflation is at its lowest for 13 years and is at half the rate it was when the Government took office? Is it not also good news for the pensioners and those on fixed incomes, because the value of their savings will be protected? Will it not boost jobs, because interest rates will follow inflation and give confidence to business to plan for the future?
    The Prime Minister: Yes, Sir, it is very good news that inflation is down as low as it is. We still have to get it down further so that we can compete with some of our most efficient competitors. I agree with my hon. Friend that that will have a good effect on interest rates and therefore on confidence for the future. I also especially agree with my hon. Friend that savings will keep their value. Had we not had the level of inflation that we have had over the past 20 years, many pensioners would have savings that would be worth more in real terms today than they are. The money that they saved many years ago would still be able to buy goods to the same value as when the money was earned.
    Mr. John Morris: Has the Prime Minister given further thought to the dual control of cruise missiles—
    Mr. Speaker: Order. This is not an open question. It is about the current rate of inflation.
    Mr. Woodall: Has the Prime Minister received a letter from Mr. James Nicolson of Tadcaster, as most right hon. and hon. Members have, about his mother's intention to put up for auction her late husband's Victoria Cross in order to—
    Mr. Speaker: Order. We give a good run on open questions, but this one must be on inflation.
    Mr. Woodall: On pensions, Sir.
    Mr. Speaker: No, it is on inflation.
    Mr. Woodall: On a point of order, Mr. Speaker. It is the same intention. This arises because of inflation.
    Mr. Speaker: Order. The hon. Gentleman is quite right now.
    Mr. Woodall: Mr. Nicolson's mother wants to draw the Prime Minister's attention to the circumstances of pre-1974 war widows. Will the Prime Minister please give an unequivocal assurance that the anomalies that apply to pre - 1974 war widows because of inflation will be removed as soon as possible?
    The Prime Minister: The Government have reduced inflation to a lower level than that to which the Labour Government reduced it. Moreover, the Government have been especially meticulous to increase war widows' pensions way beyond others and to give extra age allowances for war widows' pensions. Further, war widows' pensions have been completely relieved of tax. I am grateful to the hon. Gentleman for allowing me to draw the House's attention to the Government's excellent record on war widows' pensions.

Statutory Instruments, &c.
Mr. Speaker: By leave of the House, I shall put together the Questions on the six motions relating to statutory instruments.
Ordered,
That the draft Pig Industry Levy Scheme 1983 (Confirmation) Order 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the Representation of the People Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the Representation of the People (Northern Ireland) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Farm and Horticulture Development (Amendment) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Agriculture and Horticulture Development (Amendment) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the Agriculture and Horticulture Grant (Variation) Scheme 1983 (S.I., 1983, No. 273) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Cope.]

Buyers' Premium (Abolition)
3.31 pm
Mr. Andrew Faulds: I beg to move,
That leave be given to bring in a Bill to abolish the buyers' premium at auctions.
The traditional role of auctioneers has long been that of disposing of other people's property and charging the seller a commission for acting as agent in such disposals. But in 1975, the two leading fine art auctioneers, Sothebys and Christies, got together somewhat surreptitiously and decided to pull a fast one on their customers by simultaneously introducing a so-called buyer's premium of 10 per cent. in addition to the seller's 10 per cent. commission.
One of the difficulties that arises when one discusses the auctioneers' buyer's premium is that there is widespread misunderstanding as to what precisely it is. First, it is not, despite what auctioneers would have us believe, a commission payable by buyers at auction. It is simply a spurious device whereby an auctioneer effectively doubles the commission that is payable by the seller who, more often than not, is unaware of that double dealing as the real selling price is the hammer price plus the premium. Thus, when the vendor is told that his article has fetched, say, £100, the auctioneer is deceiving him as, with a premium of 10 per cent., the buyer actually pays the auctioneer £110, the auctioneer furtively pocketing the extra £10.
The truth is that the seller reads on his statement that his property has been sold for f£100 from which the auctioneer merely deducts his selling commission. This is reminiscent of the three-card trick where the quickness of the deal deceives the eye. Mr. Charles Lee, president of the British Antique Dealers' Association, has circulated a letter to the members of that organisation in which he neatly summarises the effects of this impropriety. He says:
"It is not the expense of auction sales, which when taking vendor's commission and buyers' premium together adds up to some 18–20 per cent. of sale value, to which the dealers object. It is the fact that the imposition of the buyers' premium disguises the true cost. Apart from the incidence of taxes such as VAT and Stamp Duty, there is no other type of sale transaction in this country in which an extra charge of 10 per cent. is imposed on the buyer over and above the sale price. In effect the extra cost falls on the seller, as the buyer must allow for the premium in assessing his maximum offer. The 'hammer price' at auctions therefore tends to be lower than it would be if the true cost of sale was properly charged as vendor's commission.
To the extent that sellers are misled into believing that the cost of sale is no more than the vendor's commission, and bearing in mind that buyers get no benefit whatever in return for paying the premium, market conditions in the art world are distorted by … 'this … practice',"
A stamp auctioneer and dealer from the west country has made the point in these terms:
"This premium is just a device to increase commission charges without the vendor realising it. Most vendors are told we have 'reduced' our commission and now charge a reduced rate. The fact that there is a double commission is not pointed out to him. The vendor thinks the auctioneer is being competitive whilst in fact he is charging much more than the straight vendor and buyer auctioneer ֵ The buyer in many instances does not know that there is VAT to be paid on the premium. Also in an auction room it is practically impossible for him to work out the final price he has to pay. When bidding commences he has to have a computer of a brain to work out the bidding plus premium plus VAT."
Leading figures in the arts world were vociferous in their condemnation of this new practice. Leading dealers such as I have quoted in fine arts and antiques were much

709
opposed to the new charge. Boycotts of auctions were mooted and some dealers actually absented themselves from auctions for a while. But, of course, business has to go on. Unfortunately, such gestures were not supported widely enough to have any effect. To their everlasting credit, other auctioneers who disapproved of Sotheby's and Christie's misleading ploy of the buyer's premium decided not to introduce such a charge. Foremost among them were Messrs. Phillips. Due credit should be paid to them. They held out until economic and commercial necessity to compete forced them to do so. But, to underline their dislike of the premium, they decided never to charge it for acquisitions by public museums and galleries in Britain. That stance has the unqualified support of the National Art Collections Fund. But the same consideration for national interests is not shown by that conniving twosome, Sothebys and Christies.
The art trade referred the collusion between Sothebys and Christies to the Office of Fair Trading on two separate occasions, but Sir Gordon Borrie eventually claimed that he did not have sufficient evidence or proof. The dealers tried to stop the buyer's premium by bringing a High Court action against Sothebys and Christies in 1981, alleging collusion. As such, it was a registrable charge under restrictive trade practices legislation and thus the two auctioneers had broken the law by failing to register it.
There is an interesting story here. The case was about to be tried when, quite suddenly, and without warning, after some sort of involvement by that eminent panjandrum Lord Goodman, who has played the role of official intervener on a number of occasions, the two trade organisations—the British Antique Dealers' Association and the Society of London Art Dealers—were persuaded, I know not by what means, to join Sothebys and Christies for a champagne get-together at Claridge's at 3·30 one morning. They caved in to the auctioneers by withdrawing their case.
To be fair to the dealers, they were frightened by the appalling legal costs that were involved in pursuing their action. And, they had been led to believe that the auction houses would review and possibly withdraw their buyer's premiums and that a new era of trust and collaboration between Britain's auctioneers and dealers had dawned. That was some sad hope. From that day onwards, the auctioneers have held the whip hand over buyers and sellers alike.
The Department of Trade considered the matter to be of little importance. The Department's mistake is that, whereas perhaps this arrangement is not of crucial
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importance if it affects only the richest in the land, it becomes very serious when almost every small auctioneer has been forced to follow the example of Christies and Sotheby's. Thus, everyone now who buys and sells at auction through a premium charging house in Britain is subject to what The Times, in an excellent leading article, described accurately as a "shoddy little deception." That leading article was a good deal more knowledgeable and exact in its analysis of this matter than The Times has been recently on several other issues. It concluded by saying that the legislature should end this ploy, referring to the buyer's premium. I trust that we shall do that, and I hope that no party political controversy will be allowed to inhibit any necessary legislation.
I have been informed by letter that the chairman of the Museums and Galleries Commission—that excellent gentleman Sir Arthur Drew—has written personally in support of my Bill to the Secretary of State for Trade. The museum commissioners are appointed by the Prime Minister to advise government on important matters affecting our public institutions and the private sector that helps them. As the chairman has given that advice, surely it is now the Government's duty to act upon it It would be infinitely preferable if the Government, knowing that they had the blessing of the entire art world and of the House, were to introduce an appropriate Bill that would receive the support of the House to enable it to be processed with some expedition. I hope that the Government will show that due concern and responsibility and pick up my excellent effort to change this matter in legislation.
Question put and agreed to.
Mr. Speaker: Who will prepare and bring in the Bill?
Mr. Faulds: Mr. Jim Callaghan—perhaps I should point out that that is my hon. Friend the Member for Middleton and Prestwich, although I am sure that I have the support of my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan)—Mr. Patrick Cormack, Mr. David Crouch, Mr. Tam Dalyell, Mr. John Garrett, Sir John Langford-Holt, Mr. George Morton, Mr. Stephen Ross, Mr. Neville Sandelson, Mr. A. W. Stallard, and Sir Derek Walker-Smith—a goodly band—and myself.

Buyers' Premium (Abolition)
  BUYERS' PREMIUM (ABOLITION)
  Mr. Andrew Faulds accordingly presented a Bill to abolish the buyers' premium at auctions: And the same was read the First time; and ordered to be read a Second time upon Friday 22 April and to be printed. [Bill 99.]
Orders of the Day
  Energy Bill
  As amended (in the Standing Committee), considered
  Energy Bill
    New Clause 1

      PURCHASES BY ELECTRICITY BOARDS FROM LOCAL AUTHORITIES
      '(1) This section applies to any purchase of electricity by an Electricity Board in accordance with arrangements made in pursuance of—

      (a) section 21(2) of the Control of Pollution Act 1974 (production of heat and electricity from waste, etc.), or

      (b) section 11(2) of the Local Government (Miscellaneous Provisions) Act 1976 (production of heat etc. by local authorities).

      (2) The price at which a purchase to which this section applies is made shall be the same as it would be by virtue of section 7 above if the purchase were made in compliance with a request under section 5 above; and subsections (4) and (5) of section 7 shall apply to a purchase to which this section applies as they apply to a purchase made in compliance with such a request.
      (3) Section 9 above shall apply to a dispute as to—

      (a) the price at which a purchase to which this section applies is to be made, or

      (b) the reasonableness of any payment demanded by an Electricity Board in accordance with section 7(4) above as applied by this section,

      as it applies to disputes within section 9(1)(a) to (e).'.—[Mr. Gray.]
      Brought up, and read the First time.
      3.42 pm
      The Minister of State, Department of Energy (Mr. Hamish Gray): I beg to move, That the clause be read a Second time.
      Section 21(2) of the Control of Pollution Act 1974 and section 11(2) of the Local Authorities (Miscellaneous Provisions) Act 1976 require that electricity generated by local authorities must be used on the authorities' own premises or be sold to an electricity board. The board is obliged to take the electricity, but there are no provisions about the price that it must pay. We discussed the position of local authorities in Committee, as reported in c. 252 of Hansard, and I agreed that provision should be made for local authorities to benefit directly from the prices available to private generators.
      Therefore, I am pleased to introduce this new clause, which proposes that an electricity board should be obliged to purchase the electricity at the price specified in a tariff fixed under clause 7(1) of the Bill. If there is no applicable tariff in force or if, owing to special circumstances, the applicable tariff is not appropriate, the price that the board is obliged to pay for the electricity must be based upon the principles set out in clause 7. Under that clause, a board may recover from the local authority its costs and expenses incurred in taking the supply. The clause also makes provision for disputes involving prices to paid to local authorities similar to that made for prices paid to private generators.
      The clause extends to local authorities the framework for fair prices for electricity paid by a board. It has been welcomed by the Association of County Councils, and I commend it to the House.
      Mr. John Smith: I welcome the new clause, which follows a concession made by the Minister in Committee when the Opposition asked about the position of local authorities in this legislation.
      It seemed to me then, as it does now, that the Government could well have inserted this provision in the Bill at the beginning had the Bill been properly thought out. However, in Committee, when the Bill was subject to searching analysis, several difficulties were revealed, and this afternoon Government amendments will be brought forward to deal with the difficulties exposed in Committee. However, at least this part of the Bill is being put right by the Government, and I should be churlish if I were to oppose it.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 2

      DUTY OF AREA BOARDS TO SUPPLY
      'In section 27 of the Schedule to the Electric Lighting (Clauses) Act 1899 as incorporated with the Electricity Act 1947 (duty to supply premises within fifty yards of a distributing main) after subsection (1) there shall be inserted—
      "(1A) Subsection (1) of this section shall not apply in relation to premises to which a supply of energy is already given, directly from electric lines belonging to the Undertakers, by a private supplier.".'.—[Mr. Gray.]
      Brought up, and read the First time.
      Mr. Gray: I beg to move, That the clause be read a Second time.
      Area boards and Scottish boards are under a duty contained in the schedule to the Electric Lighting (Clauses) Act 1899 to give a supply of electricity to premises within 50 yards of a distributing main upon being required to do so by the owner or occupier. This new clause would relieve a board from that duty in cases where the premises receive a supply of privately generated electricity through the board's transmission and distribution system.
      The clause, which we have tabled at the request of the Electricity Council, removes any doubt about the board's obligations and rights in respect of consumers who, while they are not the board's consumers, remain connected to the board's system. The new clause makes it clear that a consumer who receives a private supply through a board system will be regarded as the customer of the private generator, not of the board Any electricity supplied by the board in those circumstances—for example where consumption exceeded the private generator's output—will be regarded as being provided to the private generator under the Bill, and not to the consumer in accordance with the duty to supply contained in the 1899 schedule. That prevents the board from having to conduct a commercial relationship with both the private generator and his customer, and it overcomes the problem that it would be impossible to meter and to separate, for billing purposes, a private supply and a board supply conveyed through the same line to a private generator's customer. We expect our proposal to lead to a fully workable solution, and I commend the new clause to the House.
      Mr. Arthur Palmer: Those hon. Members who have followed the Bill through Committee will be obliged for the Minister's explanation. I am reassured by the right hon. Gentleman's statement that the new clause is being inserted at the request of the Electricity

      713
      Council. The change could have two effects. One is to relieve the board of any obligation to supply in circumstances where a private consumer takes power from the grid but when, in theory, that power is supplied by a private generator possibly somewhere else in the United Kingdom. The second effect is that in some circumstances it will consolidate the position of private suppliers.
      What will happen if a private customer who is supplied by a private generator—perhaps on the other side of the kingdom, via the national grid which extends everywhere either through the Central Electricity Generating Board network or the secondary network into the area boards—decides that the terms are not as favourable as in the past and wishes therefore to go back to the public supplier? That is a contradiction, which has arisen throughout the passage of the Bill. I hope that that possibility is allowed for. Does it mean that the consumer on this occasion no longer has a right to exercise the power which has been exercised by prospective customers ever since the 1899 Act was introduced? Once having sold his soul to a private generator, will he be able to retrieve the former position of having a statutory right to take a supply from the public network in the ordinary way?
      Mr. Gray: I believe that I can help the hon. Member. I said that the new clause makes it clear that the consumer receiving a private supply through a board system will be regarded as the private generator's customer and not as a customer of the board. Any future negotiation which took place would have to be conducted in the usual way. There is nothing to prevent a change of supply, should the consumer wish it. If at some future date a new negotiation is started, there is no reason why the supplier should not be changed.
      Mr. John Spellar: I thank the Minister of State for his explanation. Like my hon. Friend the Member for Bristol, North-East (Mr. Palmer), I welcome the new clause, but I see a further difficulty with it which again, to a certain extent, underlies the paradoxes of the Bill. What will be the position of a customer if a supplying company goes out of business either because of technical failures—perhaps because of an unsafe plant—or, indeed, on economic grounds? The customer who has taken on the supply would be in a difficult position. While there should not be an undue obligation on the electricity board, the new clause will give pause for thought to potential customers. The new clause underlies the difficulties into which the Bill is heading in terms of our breaking away from the enormous economic and engineering merits of an integrated grid system.
      Mr. Gray: This is the same query in a different guise to that raised by the hon. Member for Bristol, North-East (Mr. Palmer). My answer is the same. What the hon. Member for Birmingham, Northfield (Mr. Spellar) suggests is not unheard of. I can give other examples of where particular supplies cease to be available. New negotiations must take place at that time.
      Mr. John Smith: I, too, see the logic behind the new clause and understand why the Electricity Council wished the Government to include the new clause in the Bill. It would be quite unfair if the electricity boards were under an obligation to continue to supply to a past customer who had elected to obtain his electricity from the private sector.
      714
      In those circumstances, it would be unfair for the electricity board to have a statutory duty to supply. As my hon. Friend the Member for Birmingham, Northfield (Mr. Spellar) pointed out, those who elect to take private sector generated electricity should pause and consider before they do so because, as a result of the new clause, they will lose the statutory right to have electricity supplied to them. That could be an important matter not only for a domestic consumer but perhaps for an important industrial consumer.
      I have my doubts about whether there will be so much difficulty at the end of the day because I do not think that there will be much in the way of privately generated electricity. A great deal of the Bill is a figment of the ideological imagination of the Secretary of State and others who wish to be able to report to the Prime Minister that they have privatised this or privatised that so that they can go a few inches up the privatisation table. None the less, we must take it seriously just in case difficulties arise.
      I hope that all those who are contemplating the change, particularly those who are dependent on electricity for their industrial processes, will pause and consider before they do so, because under the terms of the new clause they will thereby lose the important right which has existed ever since 1899, as part of the Electric Lighting (Clauses) Act. The Minister said something which worried me. He said that if the private sector generating capacity failed to satisfy the customer, the customer could then make another choice. It could be awkward if people popped in and out of the public electricity supply system. If they found that they had been failed by the private sector, the good old public sector would then bail them out. It will have a continuing obligation. If a customer decides that he will have privately generated electricity but then finds that that was a great mistake—he may well find that out—why should the board have to take him back without any penalty? Should he not have to pay the extra cost involved? Should there not be a penalty of some description? Why should he be bailed out by the public sector if he has discovered that his folly in the private sector was not beneficial to him?
      While I do not disapprove of the elementary fairness that lies behind the concept of the new clause—we appreciate the anxiety of the Electricity Council to see the new clause incorporated in the Bill—will the Minister deal with my question about the person who, having suffered at the hands of the private sector, seeks succour from the public sector? Will the public sector have an opportunity to recoup some of the costs involved in taking the customer back on board?
      Mr. Gray: The right hon. Member for Lanarkshire, North (Mr. Smith) has allowed his philosophical prejudices to get the better of him. In the first place, I have absolutely no doubt that anyone deciding to take electricity from a private generator would satisfy himself, during the negotiations which took place at the beginning, that the generator was of substance and was able to give a longterm supply of electricity. No doubt the Electricity Council weighed up all these points before it decided to ask us to include the new clause in the Bill.
      No apology is necessary for the obligation of the state sector to supply should things go wrong. The public sector has an obligation, and if it is to be relieved of that obligation by the introduction of private generation that can only be good for competition. Our general philosophy,

      715
      in contrast to that of the right hon. Member for Lanarkshire, North, is that there should be competition and that, as far as possible, there should be a sharing of electricity supply. Indeed, the more generation that is provided by the private sector, the better.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 3

      AMENDMENTS RELATING TO METERS
      'The enactments mentioned in Schedule (Electricity: amendments relating to meters) to this Act shall have effect subject to the amendments specified in that Schedule.'.—[Mr. John Moore.]
      Brought up, and read the First time.
      4 pm
      The Under-Secretary of State for Energy (Mr. John Moore): I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to take Government amendments Nos. 11, 15, 22, 23, 24, 26 and 27.
      Mr. Moore: In the new clause and schedule and seven consequential amendments, the Government propose three changes concerning meters that I said in Committee would be brought forward.
      First, we are proposing that a meter measuring the supply to a customer of a private supplier, where that supplier uses an electricity board's distribution system and the customer takes the supply directly from the system, shall be certified and subject to the statutory procedure for the determination of disputes about meter accuracy. That change is being proposed at the specific request of the electricity supply industry. It is, naturally, concerned to ensure that where an electricity supply involving three parties—the customer, a board and a private supplier—is being measured the Board should continue to have some reassurance about the accuracy of that measurement. It is also especially important in those circumstances that if any dispute over meter accuracy were to arise an independent determination could be made by one of my Department's meter examiners which would be binding on all three parties. The Government accept that it is reasonable for the electricity supply industry to seek the protection of its interests and those of its consumers in these provisions, and are happy to commend them to the House.
      The second change proposed by the amendments has been urged on the Government by both the meter manufacturers and the electricity supply industry. We are proposing that the Secretary of State should have the power to authorise manufacturers and repairers of meters themselves to certify the meters they produce or repair. Under the present statutes all meters, both new and reconditioned, must be offered for certification by an area electricity board. They are tested by the board and certified by one of my Department's meter examiners on the basis of tests carried out on a sample of meters selected from the batch offered for certification. In its report on the supply and export of electricity supply meters in August 1979, the Monopolies and Mergers Commission commented on the fact that new meters were tested both by manufacturers and area boards before being offered for certification. It
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      criticised that unnecessary duplication of effort. The proposal for self-certification in the amendments will meet the MMC's criticism. It is possible for that change to be made now because of the considerable advances in recent years in the technology of meter design, manufacture and testing.
      As a result, much greater confidence can now be placed in the control of quality during the manufacturing and repairing processes. Self-certification will thus provide a more flexible and efficient system for ensuring meter accuracy without in any way adversely affecting current safeguards for the consumer. Authorisations for self-certification will be subject to stringent conditions laid down by the Secretary of State governing the procedures to be used and regular control audits will be carried out by the Department's meter examiners. As I have said, that change has been requested by both manufacturers and area boards because both will benefit considerably. For example, manufacturers can offer sales of certified meters in crucial export markets and area boards will be relieved of the necessity of testing new meters and will be able better to utilise the capacity of their meter testing stations in improving their throughput of reconditioned meters to cope with the continuing increased demand.
      I should emphasise that self-certification will be introduced gradually. It will obviously take time for manufacturers and boards to set up the necessary procedures and to have them audited and approved. The amendments therefore provide for the existing statutory certification procedures to continue and, even where it proves necessary, to be extended to manufacturers premises. Self-certification and the existing procedure will operate in parallel until such time as there is no longer any demand for certification by meter examiners.
      The third and last change proposed in the amendments concerns the costs involved in determining disputes about meter accuracy. If a consumer considers that his meter is not accurately measuring his supply, his first course of action is to take it up with his electricity board. It applies a number of tests including, in some cases, the installation of a check meter. Should it find that, according to its measurements, the meter is operating within the statutorily permitted limits of accuracy, the consumer is not bound to accept that as final. He can as a last resort exercise his statutory right to have the meter checked by one of my Department's meter examiners. Though such disputes, at between 500 and 600 a year, are relatively few compared with the 20 million meters installed, they are costly to resolve.
      The present statutes provide no specific power for those costs incurred by the meter examiner service to be recovered. Such a power is now proposed. We have also taken the opportunity to examine the most appropriate and equitable way for recovering these costs. We believe that the bulk of them should continue to fall on area boards, but we wish to be able, in appropriate circumstances, to ask others such as a private supplier or a consumer to contribute. We believe that there is a case for seeking at least a small nominal contribution from them towards this service. We are accordingly framing the power in this sense, though details as to how the regulations will be framed have yet to be settled. It is likely that if a nominal contribution were sought from consumers after determination of the dispute, it would be small in relation to the total cost involved and would be waived if the meter was found to be at fault.

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      The changes in the legislation concerning meters that the Government are proposing in the amendments will be beneficial to the electricity supply industry, the meter manufacturer and the electricity consumer. They are essentially non-controversial, and I accordingly commend them to the House.
      Mr. Palmer: When we discussed the clause dealing with meters in Committee, I viewed it not exactly with suspicion but with great care. It appeared to give additional safeguards to the electricity boards. The Minister will remember that I asked how it would affect the working of the almost famous piece of legislation, the Electricity Supply (Meters) Act 1936. That was 11 years before nationalisation. Before that date, metering of electricity supplies was somewhat confused. If a customer had a dispute with the authorised undertaking—whether municipal or a company—he negotiated about the accuracy of the meter. The meter was often sent to the National Physical Laboratory. If it was found to be accurate, the consumer was charged for the cost of testing. The authorised undertaking could tell the consumer that if he did not like the meter he could supply his own, but that if he did not do so it would charge him rent. That is how meter rents came about.
      As I said in Committee, this is a part of the general evolution of the electricity supply industry. Meters are important because from the dawn of civilisation—certainly since we began to live as human beings in ordinary communities—the transmission of value from one individual to another has always been a serious matter for Governments. Hence, we have a coinage that is supposed to retain its value, and weights and measures with legislation governing them. The electricity meter is a means of judging the value of a supply—the transmission of value from one individual or corporate body to another. Accuracy is of tremendous importance. We must remember the amount of electricity that is generated and consumed in Britain every day, because that reinforces the importance of accurate metering.
      The matter was of great importance before 1936. The position was so confused that in 1935 or 1936, despite previous enactments, the then Government introduced special legislation. The system of meter examiners was established. The Minister was good enough to write to me on that point. He gave me the information that there are altogether 23 meter testing examiners.
      Mr. John Moore: Twenty-four.
      Mr. Palmer: I am obliged. There are 24 meter examiners, including the boss meter examiner, who is known as the chief meter examiner for the nation.
      This is a very serious matter. As we all know, in any Member of Parliament's constituency, if a consumer gets a large electricity bill he often decides that the meter is the culprit and that it is not accurate. This kind of thing, with bills increasing and perhaps more and more people unable to pay them, means that the accuracy of meters is being challenged. Therefore, the importance of the office of chief meter examiner to the country cannot be overestimated. He is a most important functionary.
      I am glad that the intention of the Government's proposals is to protect the consumer. The object of the changes, as I understand from the hon. Member for Croydon, Central (Mr. Moore), is to extend the system of
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      meter examiners to private suppliers of energy into the grid under the special circumstances envisaged by the legislation and to do the complicated metering of supplies when the national grid is being used as a common carrier. That can be quite a complicated metering matter. This is all to the good, and we are using a procedure which has been tested since the 1936 Act.
      What I think is more doubtful is the new provision that meter manufacturers are to be entrusted with the statutory obligation to ensure the accuracy of meters; the electricity boards will not alone certify the accuracy of meters but those who make the meters are to do the certification. I suppose that, subject to proper checks, that is a practicable proposition, but it is certainly a break with the past. It may well be argued that manufacturers have less material interest in correcting the inaccuracy of metering, provided it favours the supplier, than the boards, because they are perhaps neutral in this matter.
      The House needs to satisfy itself that the meter examiners will have as much power in relation to the factories of the makers of meters as they have at the moment in relation to the premises of area boards. In future, batches of meters—as the hon. Member for Croydon, Central, said, they are now being batch tested to a great extent—may arrive from the manufacturers and be sent straight out to the consumers for use on the system, with the electricity boards not intervening with an intermediate check.
      In these circumstances, it is important that we should have an assurance that the testing stations—meter makers test meters all the time; they are bound to do so as part of their job—and their testing facilities will be as open to the meter examiners as the meter testing stations of the electricity boards are at present.
      From the point of view of the employees, this is a matter of transferring work in many cases from the boards to the manufacturers. The trade unions have put this point to me, as they no doubt have to others who were members of the Standing Committee. The unions are interested to know whether this will mean a reduction in the meter staff employed by the electricity boards. The hon. Member for Croydon, Central seemed to say that they would be able to deploy their staff resources differently, but, as I say, the transfer of testing to the manufacturers is now to be allowed and batch testing is certainly on the increase.
      Therefore, as the House will appreciate, the unions have a real interest in obtaining some facts on the effect: of this change. Electricity supply metering is a great science, and I have known a few men who have devoted their lives to ensuring the accuracy of meters. They discuss jewels, not in the way that we discuss the crown jewels, but from the point of view of the friction on meter bearings in order to ensure accuracy and—this is a very important: point—to prevent fraud. It is possible, of course, to slow meters by various devices and meters have to be designed to avoid that.
      I apologise for taking the time of the House, but this is fundamentally a very important question. I should be glad to have the observations of the Under-Secretary.
      4.15 pm
      Mr. John Moore: I know the House will not mind if I start by saying that all of us on the Committee benefited throughout, as the House already has tonight, from the remarks of the hon. Member for Bristol, North-East (Mr. Palmer). We learnt a great deal of the electricity industry's

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      history from him in seminars in the Committee, and I do not think that he need apologise for giving us the benefit of his wisdom and information on the subject. I should not encourage hon. Members to read the Committee Hansards in detail because the hon. Gentleman gave one or two examples—vicariously, I trust, as an observer—of what happened in the past with regard to meters, and I certainly would not encourage the general public to read them with any care.
      I should like to take up the points that were made, quite legitimately, by the hon. Gentleman. As far as numbers are concerned, I apologise for intervening from a sedentary position. I thought that the hon. Gentleman was talking about the number of meter testing stations as opposed to examiners. The number of meter examiners in my Department, as opposed to the head man, is 21—not 23 or 24. There are 24 meter testing stations for the area board.
      As far as the involvement of the meter manufacturers is concerned, I should stress again that the decision to allow self-certification was taken at the request not just of the meter manufacturers but of the electricy supply industry. That change was heralded by the 1979 Monopolies and Mergers Commission report. Also, of course, as the hon. Gentleman will know better than most of us, it was taken because of the welcome major technical advances that have taken place in this area.
      There will be no restraint on the meter examiners' access to the manufacturers. They obviously need the same access and relationship as they have with the area testing stations. I certainly give that assurance. It is essential if they are to do their job properly.
      The hon. Gentleman also legitimately raised a point that has been raised at meetings with my right hon. Friend the Minister of State about the implications for jobs. In the last analysis this is a matter for debate between the industry and the unions concerned. However, the hon. Gentleman is right to bring to the attention of the House the legitimate concerns expressed at meetings with my right hon. Friend and at what I gather was a further meeting with the electricity supply industry on the implications involved. Perhaps it would help if I put on record the specific position so that the background is clear.
      There are 24 area board testing stations, including that in Scotland. They employ about 1,200 staff and test about 1·5 million reconditioned meters and 760,000 new meters per year. Although new meters represent a large proportion of the number tested, they account for only 4 to 5 per cent. of the work load, the vast bulk of which relates not to testing but to reconditioning. The reconditioning work will be unimpaired by the change. I gather that as the boards will be released over a period from the task of testing new meters, the stations will be able to increase their output of reconditioned meters. Clearly, the implications of self-certification must be a subject for discussion between the industry and the unions, but I think that the facts that I have given put the matter into better perspective. Certainly we in no way wish to deprive the consumer of the excellence of service in the crucial area of self-certification.
      Mr. John Home Robertson: The Minister referred to the large numbers of meters that are tested. As a docile, law-abiding citizen
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      who simply pays the electricity bill when it arrives, I have always tended to assume that it is right. How many of the meters tested are found to be inaccurate?
      Mr. Moore: My excellent brief contains statistics about those which have already gone through a considerable process of queries. This may give a better idea of the situation. In the 539 disputes determined by Department examinations, 8 per cent. of the meters were found to be faulty. I emphasise that that is 8 per cent. not of all meters but only of those subject to dispute. As there are 20 million meters at large, that shows what a tiny proportion of them are faulty and proves the excellence of manufacture and of the certification process. The number is very small indeed, and so it should be.
      Mr. John Smith: I agree wholeheartedly with the Minister's generous reference to the work of my hon. Friend the Member for Bristol, North-East (Mr. Palmer) in the Standing Committee. For many years, my hon. Friend has been the doyen of electricity supply industry debates. I wish publicly to express the gratitude of the Opposition to him for the great contribution that he has made to this Bill and the close attention that he pays to all electricity matters. I know that his own trade union values that highly. It is a classic example of constructive trade unionism in action—watching the development of legislation on behalf of the crucial trade union with which he is proud to be associated.
      I understand that the Electricity Council has told the trade unions that it does not expect any adverse effects on employment to result from the new arrangement. If the Minister can now assure us that the Government also do not expect there to be any adverse effects on employment, fears about the possible transfer of work may be laid to rest. If the Minister can help on that, considerable progress will be made.
      Mr. Moore: I appreciate the right hon. Gentleman's concern, but I must revert to my remarks about perspective. We are dealing with 24 stations and 1,200 employees. I recognise the importance of all those jobs, but in some areas a significant increase in work load is expected over a period while the expected reduction as a result of the new system will be only 4 to 5 per cent. I am not in the business of trying to manage the industry, and as a Minister I think that I would be wise to stick to the remarks that I made earlier. Clearly the implications of self-certification for staff at area board meter testing stations is a matter for the trade unions and the industry. Nevertheless, I think that I have said enough to show the very minor nature of the change compared with the potential increase in work load.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 4

      STATUTORY CODE OF PRACTICE FOR DISCONNECTIONS
      `1. In this section—

      (a) "the Disconnection Rules" means the regulations specified in subsection (3) of this section;

      (b) "supplier of electricity" means the Electricity Board, local authority or any other person who supplies electricity however generated;

      (c) "domestic premises" means premises used for human habitation;

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      (d) "disconnect" means cut off, discontinue or withhold a supply of electricity and "disconnecting" and "disconnection" shall be construed accordingly.

      (2) Notwithstanding any provision to the contrary, a supplier of electricity shall not disconnect any domestic premises whether under section 21 of the Electric Lighting Act 1882 or section 18 of the Electric Lighting Act 1909 or otherwise on the grounds that the owner or occupier has not paid any sum of money due to him for electricity except in accordance with the Disconnection Rules.
      (3) Within six months of the passing of this Act the Secretary of State shall, after consulting the Electricity Council, the North of Scotland Hydro Electric Board, the South of Scotland Electricity Board, the Electricity Consumers' Council, each area electricity consultative committee, the Scottish Electricity Consultative Council and such other representatives of customers as he shall deem expedient make regulations specifying inter alia—

      (a) the circumstances in which a supplier of electricity

      (i) shall not

      (ii) may

      disconnect any domestic premises;

      (b) the procedures to be followed by a supplier of electricity

      (i) prior to disconnecting a domestic premises

      (ii) after having disconnected a domestic premises to try to recover sums of money owed to him for electricity by a customer whether by instalments or otherwise and to assist that customer to be able to meet the cost of his electricity supply;

      (c) the provision to be made for appeals and arbitration;

      (d) the information to be collected and made public by a supplier of electricity relating to the operation of the Disconnection Rules,

      the purpose of such regulations being the very considerable reduction of the incidence of disconnection of domestic premises and nothing in this section shall limit the content of the Disconnection Rules to achieve that purpose.
      (4) The Disconnection Rules shall come into force nine months after the passing of this Act.'.—[Mr. Eadiej
      Brought up, and read the First time.
      Mr. Alex Eadie: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Paul Dean): With this it will be convenient to take new clause 5—Extending the code of practice to private suppliers—
      '1. (1) In this section "a private supplier" means a person other than an electricity board who supplies electricity generated other than by an electricity board or a local authority.
      (2) Where a private supplier supplies electricity to premises used for human habitation and a debt to the supplier for a supply of electricity to those premises exists he shall not disconnect the supply of electricity or refuse to connect or reconnect such supply without first conforming to the rules laid down in the relevant Code of Practice currently accepted by the Electricity Council as a Code of Practice for Electricity Boards.
      (3) Where a private supplier supplies electricity for any premises used for human habitation, he shall be obliged to provide the Electricity Council with such information as it shall from time to time reasonably request.
      (4) Where the owner or occupier of premises used for human habitation has a debt to a private supplier, then section 18 of the Electric Lighting Act 1909 shall not apply to the area board for the area in which the premises are located insofar as the debt to the private supplier is concerned.'.
      Mr. Eadie: Members who served on the Standing Committee will recall that we debated this matter at that time but did not press it to a Division as we wished to reflect on what the Minister had said. The Government's reply was not entirely unhelpful, but we felt that our arguments required further examination and debate and that the House should have the opportunity to discuss the matter further on Report.
      I am pleased to see that my hon. Friend the Member for West Stirlingshire (Mr. Canavan) is present, as he
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      presented a bill on the right to fuel, and I shall not trespass on the comments that he may wish to make. We had a very good debate on this in Committee. It is clear that the subject of disconnections and the code of practice relating to them is now occupying the minds of many people.
      In dealing with new clauses 4 and 5, it would be churlish of me not to refer to the contribution made by the hon. Member for Bedford (Mr. Skeet) in Committee. As usual, he was able to identify the problem. He said:
      "For the year prior to 30 September 1982, disconnections in England and Wales totalled 97,827. In Scotland there were. 16,525, making a total of 114,352."—[Official Report, Standing Committee G, 15 February !983; c. 489.]
      He identified a problem that the Government and the House cannot ignore. We know that there is a problem, that is why the House must contribute to the discussion of that problem today.
      It has been argued that the problem of disconnections and the code of practice may be exaggerated and that the relationship between the Department of Health and Social Security and the electricity board is good. From my experience as a Minister, I do not deny that the relationship is good, but it is also my experience, and no doubt that of many other hon. Members, that however good the relationship may be it has been known to break down. That being so, we have a responsibility to consider the problem afresh.
      The need to look at the problem afresh may result from the enormous social pressures caused by high unemployment. Indeed, the pressures caused by an official total of 3·5 million unemployed may well be more than the boards and the DHSS can handle. If that is true, it is the Government's duty to study how matters are operating at present and to put forward solutions because they are responsible for the high levels of unemployment.
      4.30 pm
      I know that the argument is advanced that one could alleviate the problem by installing more pre-payment meters. I have never been against pre-payment meters, but the Government would be foolhardy if they thought that their introduction would solve the problem. Some people say that if consumers had a greater freedom to choose prepayment meters the problem would disappear. I am sure that if the Minister looked at his brief he could tell the House of all the problems that might arise from the introduction of pre-payment meters. Criticisms of prepayment meters may have been harsh. When considering such a solution, we must be honest and say that people who have such meters pay more for their electricity. It is often those people who can ill afford to pay more who have to fall back on using them.
      A social problem is presented by pre-payment meters. One used to put sixpence or a shilling in the meter, but now it is about 50p. Some households therefore have a considerable amount of money which in some cases is not well protected. It may cause the family a great deal of worry if there are young children, depending upon the area in which they live. I am not arguing against pre-payment meters. I am arguing against those people who believe that the problem of disconnections can be solved by the panacea of introducing pre-payment meters.
      Mr. Spellar: There is considerable danger to meter collectors in a number of areas, which explains the boards' reluctance to install meters. My hon. Friend is talking

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      about vast sums of money. After he has made a few visits, a meter reader may be carrying several hundreds, if not thousands, of pounds.
      Mr. Eadie: I am grateful to my hon. Friend. He confirms the point that people should not believe that the introduction of pre-payment meters is a panacea for solving the problem of disconnections. My hon. Friend makes a good point. We can all be critical about disconnections. We can feel great emotion and compassion about them. We have all had people whose supply has been disconnected corning to our surgeries.
      My hon. Friend the Member for Bristol, North-East (Mr. Palmer) mentioned in Committee that we must consider the distasteful job we give our employees when we ask them to carry out disconnections. We are asking an employee who may be a trade unionist, as we are, to disconnect a supply. He may feel that he should not disconnect the supply, but he is under instructions from his employer.
      My hon. Friend the Member for Birmingham, Northfield (Mr. Spellar) makes the powerful point that we are talking about the collection of perhaps £50 or L£100 per household. The meter reader has to collect that money. It is not just the household that is at risk by having these comparatively unprotected sums of money in the house; the people who collect the money also run a risk. I must stress that I am not arguing against pre-payment meters; I am saying that they are not the solution to the problem of disconnections, although in some areas they may help more than in others.
      Many pressure groups were quoted in Committee. As the Minister knows, they are sometimes called one-party pressure groups. They are a legitimate part of our democratic procedure. Some of us have been grateful to pressure groups because they have sometimes identified problems that we have been unable to identify or, if we have identified them, by research and diligence the pressure groups have given us information, facts and figures and brought urgent matters to the attention of the House.
      There are many pressure groups. There are those involved with single-parent families, the unemployed or people who have problems. I chose the example of Age Concern because I had been invited to speak at a rally in Westminster hall. I quoted its slogan, which I felt was good, "To be old and cold". It then follows with the question, "for how much longer?" I know that people argue that the supply of few elderly people and pensioners is disconnected. Age Concern concedes that. However, one must accept that some are disconnected. When talking about the elderly, one disconnection is one too many.
      Pensioners and the elderly have a fear of disconnection. The result is that they economise more than they should in providing creature comforts and warmth. Few people understand that the elderly go through the winter with a fear of disconnection. I described it in Committee as "purgatorial misery". The elderly spend the winter in purgatorial misery because of the fear of disconnection.
      The House, the Government and the Opposition have a responsibility to study the problem of disconnections and the statutory code. One can be pretty emotional about this subject. I do not want to be. I want to give the facts. I do not allege that the Minister will be without compassion or
      724
      understanding. I impress upon the Minister that there is a problem which the Government should examine to see whether it is possible to find a solution. I hope that when the Minister replies he will not say that the elderly are protected by the code of practice. If the Government deploy that argument, they must concede that, although the elderly, under the code of practice, may be protected, they are not protected when staying with relatives.
      I wrote an article a fortnight ago on our efficiency in looking after the elderly. It seems to be the conventional wisdom that children or grandchildren do not give a damn for the elderly. That is not true. When one considers the percentage of the elderly in sheltered housing or old people's homes, it becomes clear that the vast majority are looked after by their children, their grandchildren or other relatives. It is not true to say that people are passing the buck to the Government and the state. That is a gross slander on the children, the grandchildren and other relatives of the elderly. The percentage of elderly people in state care is only 2·5. The Government must concede that the majority of old folk are looked after by relatives. That is not an assertion; it is a fact. Why are we not giving attention to the fact that elderly people living with relatives are not protected under the code of practice? The matter requires urgent examination.
      I have given an example to show how the system does not work entirely as we think it should work. I believe that the Minister gave in Committee—his remarks can be found in col. 497—a very understanding reply. However, anomalies arise from disconnections that show that something is wrong. Too much authority is given to the boards. I have recounted the story of a young girl, not a constituent of mine, who took a private rented flat. On the day she took the flat, she asked the electricity authorities to read the meter. Three days later, without checking, the electricity board broke into her home. When the girl came home, she found that the flat had been broken into. As she did not know who was responsible, she sent for the police. The police were able to inform her that the electricity authority had broken in, on the basis that the previous tenant owed money to the board. It was three days before the electricity supply was restored and four weeks before the damage to the door of the flat was repaired.
      That incident raises interesting possibilities. It is relevant to the new clause. I believe that the police, when they were aware of what had happened, should have charged the electricity board with illegal entry and with breaking into the flat. In his reply, the Minister agreed. I recognise that the Minister has asked me to give him details of the case. I am not able, on grounds of confidentiality, to do so. I can assure him, however, that the case is authentic.
      The chief constable was contacted several weeks ago on the basis that the electricity board should have been prosecuted. Nothing has been heard from the chief constable since then. If, as the Minister explained, it is laid down clearly that the electricity board can be prosecuted, I am puzzled why it has taken the chief constable so long to reply and to say what action is being taken. It is important for hon. Members to examine the powers of electricity boards.
      4.45 pm
      It is possible to produce many statistics when examining the consequences of disconnections. All hon. Members could give facts and figures to show the

      725
      magnitude of the problem. The seriousness of the problem has been illustrated by the Electricity Consumers' Council. The same evidence emerges from figures produced by the Office of Population Censuses and Surveys. In mild winters, there are on average 60,000 more deaths than in summer. In very cold winters, there are on average 300 more deaths daily, increasing the figure to 90,000. There is also a 50 per cent. or more increase in infant deaths in winter compared to summer. Such increases are not found in Sweden or other European countries that have efficient heating of houses and better nutrition. On a percentage basis, there is less central heating in houses occupied by the elderly. The fact that the elderly are more likely not to have centrally heated homes needs to he examined.
      I do not know the figures of deaths from hypothermia. I recall, however, the moving television interview with Dr. Geoffrey Taylor, who knew that he was dying when he gave the interview and who has since died. He had worked with the problem of heating and warmth for the elderly all his life. He gave figures of the numbers of elderly people who were likely to die in the winter due to the cold. I have never seen the figures that he gave in any publication. He argued that in a severe winter 15,000 elderly people would probably die due to inadequate heating in their homes. He stated that 10,000 elderly people would probably die in a mild winter. I do not know whether those figures are authentic, but elderly people certainly die in the winter because of inadequate heating.
      The Government have a responsibility to examine the statements that have been made and the figures that have been presented by reputable pressure groups, which are able by their own research—much of it is voluntary and is no worse for being so—to identify the tremendous problems that are created not only because of lack of adequate heating in the home but because of disconnection. The code of practice needs to be examined.
      New clause 5 is relevant to what I have said about new clause 4. I hope the Government are not going to go mad with privatisation. The private generator of electricity will not have to undertake all the statutory functions and practices that a public owned industry must statutorily undertake. Parliament has a responsibility to ensure that the private generator does not escape his responsibilities. The ideology of private generation must not be treated any differently whether one is considering disconnection, the statutory code or whatever. The Government have a responsibility to ensure that private generators are governed in the same way as the publicly owned industry.
      My hon. Friends and I feel strongly about this matter. The Government as well as the Opposition have had time for reflection. The Government have a responsibility to tell the House, on reflection, how they feel about the code of practice and disconnections.
      The hon. Member for Bedford advocated the introduction of mandatory codes and rules. He had a good point. He drew an analogy with what happened in other countries, especially the United States of America. His contribution masked the fact that the existing practice of disconnection and the code of practice are outdated. The Government have spent a great deal of time on this 36-clause Bill, and are entitled to write into it the modernisation of practices that would mean so much to many people. They may even be able to stop the
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      purgatorial misery that the elderly go through year after year and some of the misery that the unemployed are suffering.
      The Government have a responsibility to introduce a change and the Opposition will listen carefully to what the Minister has to say in reply.
      Mr. T. H. H. Skeet: I moved new clause 4 in Committee. I had the support of the hon. Member for Midlothian (Mr. Eadie). New clause 4 is being moved by him on Report and I support him. The right hon. Member for Lanarkshire, North (Mr. Smith), speaking on new clause 2, mentioned what a great privilege it was to be within 50 yards of a distribution main. If one is within 50 yards of such a main, an electricity board is obliged to connect one's premises to the main system of supply. Many people may overlook the fact that a monopoly has power to charge what it likes. The charges of the local electricity board for connection to the electricity supply system may well be exorbitant. A public body with monopolistic powers will not necessarily give justice to the people. The boards have power to cut people off at will for non-payment. There may be cases where a reasonable man when examining the circumstances would say that the suppliers should not have acted as they did.
      New clause 4 is simple in structure. The electricity boards should not have power to disconnect where a sum may be due except in accordance with the disconnection rules that have been laid down in regulations. There is a code of practice that should be implemented throughout the United Kingdom but, unhappily, many electricity boards have diverse ways of examining this matter. Some boards may be humane but others may be comparitively ruthless. Some may say that their responsibility is to ensure that the money comes in and that they are not particularly concerned with some of the welfare principles that should be observed.
      In 1976, the Commons Select Committee on Nationalised Industries reported:
      "the hardships of disconnection are such that if the incidence cannot be very considerably reduced we believe that the powers of the electricity and gas authorities may need to be circumscribed."
      That was fairly realistic. The Select Committee had received evidence and adjudged the issue. Hon. Members may have contacted the managers of their local electricity board asking, for instance, that a pensioner, someone who is ill, or someone who may be in personal difficulties should have an extended period of time in which to pay. I have recommended that, when a considerable sum of money was outstanding, there should be no disconnection and the outstanding sum should be written off. I am grateful for some of the facts that have been given to me: by the Right to Fuel campaign. It states that there are examples of the working of the voluntary code that are unsatisfactory. The code says that any repayment arrangement will take into account the consumer's circumstances and income.
      I want the House to consider the case of a married couple aged 71 with a total income of £51 a week. The electricity arrears were £18 and the current bill was £36, making a total outstanding of £54. The couple were putting aside £3 a week for electricity. The Eastern electricity board—which is my board—wanted £10 a week to ensure that the debt would be rapidly cleared. The couple spend, additionally £10 a week on coal. In total £23 a week was spent on fuel. Is it in accordance with the code that the

      727
      couple should be spending almost 50 per cent. of their income on fuel? The voluntary code of practice is not enforceable in the courts and the Minister would doubtless say that the code has been breached. I agree that in the private enterprise system there should be many voluntary codes of practice.
      However, I wonder whether statutory boards with monopolistic powers should exert such authority and power when dealing with two old age pensioners aged 71 who spend 50 per cent. of their income on fuel. Is it easy to say that I have cited only one case out of many, and that I should be fair to the various boards in the United Kingdom? However, the code states that the board shall install a prepayment meter when it is safe and practical to do so. I supported the Minister in incorporating the day schedule into the Bill. I must tell him that a lady ordered a slot meter, which was installed on 30 June 1982. It was calibrated at 12p per unit, because it was alleged that the previous bill had not been paid. However, the bill was received on 28 June 1982 and was paid immediately by Giro. The electricity board was informed and it said that the meter would be changed. However, 11 days later the lady was still paying 12p per unit, instead of 6p, because of the board's error. Of course, that is just another case out of many, but misery was endured by someone who could not fight the almighty body of a state corporation with its monopolistic powers.
      5 pm
      One family was disconnected six days after the fuel bill had been paid. The Yorkshire electricity board disconnected a single-parent family with one child on 3 December 1981, although the mother had paid the bill on 27 November 1981. The board refused to waive the £7·50 re-connection charge, stating that because of computerised accounting it was impossible to check whether payment was still outstanding before disconnection. We may have electronics and all the modern office equipment at our disposal, but what a tyranny they exercise over the homes and hamlets of our country if an electricity board is prepared to say that, unfortunately, the system has let it down and that that poor woman must pay, although she cannot afford to do so.
      If implemented, the code of practice would mean that someone should contact the DHSS in a case of genuine hardship. I make a plea on behalf of the blind, the sick, the disabled, those with young children, single-parent families, the unemployed, pensioners and all those facing genuine hardship. As a statutory body is involved, there should be some check on it. Is it not time that my right hon. Friend laid down a mandatory code of practice? I am sure that he would be prepared to accept, or think about, something along those lines. Those people want and require protection. If the electricity boards will not provide it, this House must do so. If the Minister prepared a statutory code, we would pass it. It would be standardised for all boards and there would be no discrepancies. If the boards administered it badly, the High Court could straighten things out on proceedings laid before it.
      There is a mandatory code in the United States of America, and that country is much bigger that the United Kingdom and has many private operators. However, it was thought to be a good idea to have a mandatory code to standardise procedures. I moved this new clause in
      728
      Committee and had thought that there would be some response from the Government, but, they were adamant that nothing could be done. The Opposition have now put the case forward and the Minister has had time to consider whether something could be done. I hope that he will listen carefully to the observations that are made and that he will take some of the advice of his Department. He should consider the humanitarian factors. It is people who count, not systems. Some people cannot afford to pay their bills. It is they who should be helped and not those who have millions of pounds and can afford to pay.
      Mr. Arthur Lewis: I pay a sincere tribute to the hon. Member for Bedford (Mr. Skeet) for his work and effort. Does the hon. Gentleman recall that for many years Governments of either party said that it was impossible to do away with the standing charge or to make reductions in it? However, due to pressure from those such as the hon. Member for Bedford, some improvement was eventually made. Therefore, if the will is there and if the Minister tells his higher paid civil servants—who are, by the way, all right—that they must get something done or else, something can be done.
      Mr. Skeet: I pay tribute to the Government, who are doing something about the standing charge for those who cannot afford to pay. The Secretary of State has done some extremely good work. However, we are discussing disconnections. If I provide services, I will charge a fee. If I am not paid, I will take the person involved to court. I shall hope to receive eventual payment, but I cannot put him in prison. However, those who supply electricity do not bother to take people to court—they just cut them off. Although a man may have four or five children, the board will see that they all use candles. The local office of the DHSS may then have to act to collect money on behalf of the electricity board.
      I say with some feeling that state bodies with monopolistic powers are accountable to the House and we should have some say, through the Minister, to ensure that the mandatory regulations that are laid down are appropriate.
      Mr. Gray: I have listened carefully to the debate, for which we had a rehearsal in Committee. I immediately acknowledge the points made by the hon. Member for Midlothian (Mr. Eadie) and particularly the case that he instanced. I fully accept his reasons for being unable to give me the details but unfortunately I can do nothing about it, because I do not know the person involved. The hon. Gentleman said that the person is not his constituent, so I cannot take the matter any further. However, if the hon. Gentleman can persuade the Member of Parliament who represents that individual to write to me, I shall certainly take up the matter with the area board concerned. The details that the hon. Gentleman gave the House cause all of us great concern. If the hon. Gentleman makes the necessary moves, I shall certainly pursue the matter further.
      My hon. Friend the Member for Bedford (Mr. Skeet) also gave a number of examples of cases where area boards appear to have been at fault. Again, if my hon. Friend will give me particulars of the cases, I assure him that the area boards concerned will be called to account.
      It is well understood by the House, and accepted generally, that electricity boards need the ultimate sanction of disconnection. They have a statutory

      729
      obligation to provide a supply of electricity. They cannot refuse a customer, no matter what doubts they may have about his creditworthiness. The majority of people pay on time. Less than half of 1 per cent. of nearly 20 million domestic consumers are disconnected annually. That relatively small number is a measure of the supply industry's concern to use disconnection only as a last resort to avoid as far as possible the hardship that it causes. It is a measure also of the effectiveness of the industry's code of practice, which governs the way in which it uses its disconnection powers.
      Much has been said today about the code of practice, and its operation in some circumstances has been criticised by hon. Members. Whatever the number of disconnections, I accept that it would be best if they could be avoided, and the considerable reduction sought by those who have moved the new clauses is a worthy objective. However, I very much doubt their ability to achieve that objective by the method proposed in the new clause.
      The purpose of the industry's code of practice was not to eliminate disconnections entirely. That is an unattainable objective. There will always be a hard core of bad payers among any group of consumers. The code is intended to help those who might suffer real hardship to avoid disconnection. It specifies those categories considered to be most at risk, such as the elderly, families with young children, the blind, sick and disabled, and people receiving supplementary or unemployment benefit. People in those categories are either protected directly—for example, pensioner households are not disconnected during the winter months—or referred to welfare agencies, which may be able to help them. Electricity boards liaise closely with the Department of Health and Social Security and the social services departments of local authorities to ensure that cases where hardship may arise receive all the help to which they may be entitled. They also hold back from disconnection while the welfare agencies pursue their inquiries.
      However, the boards and their staffs cannot reasonably be expected to act on their own judgments about the hardship that is likely to arise from particular consumers from disconnection. Of course they do their best, but as the code of practice points out, they do not seek to pry into their consumers' affairs. It would be rightly resented if they attempted to do so.
      When the code was independently reviewed by the Policy Studies Institute in 1981 one of its main findings was that a high proportion of those disconnected were among the potential hardship categories that it was designed to help. That was a valid criticism, and it was taken to heart by the industry. Essentially, it represented a communication failure. The code's message was not reaching the consumers that it was particularly aimed at. The industry is now contacting directly all consumers who are threatened with disconnection, offering them a specific repayment arrangement to help them to clear their debts. Where it is safe and practical, the industry will provide a slot meter.
      5.15 pm
      The hon. Member for Midlothian said quite a lot about pre-payment meters. He was sceptical about their advantages. Moreover, he illustrated some of the hardships that can arise from their use. I remind him that the Electricity Consumer Council has pressed for some
      730
      considerable time for boards to make greater use of prepayment meters. That was also recommended by the Policy Studies Institute in its independent review of the industry's code of practice.
      I believe that these measures are having beneficial effects, although it is too early to make a firm judgment. The downward trend in disconnections—they have fallen by nearly 25 per cent. over the past two years—appears to have increased. Moreover, the number of pre-payment meters installed has risen dramatically, by more than 40,000 in 1982. These changes to the code of practice are the latest in a series of improvements made over the years since the code was introduced in 1976. They reflect a growing awareness, not only of the potential hardship arising from disconnection, but of the difficulty for the industry in reconciling its genuine wish to avoid such hardship with its duty in the interests of all its consumers to ensure that bills are paid on time.
      That is the crux of the industry's problem, and the proposals in the new clauses to convert the code into statutory rules provide no real answer. Indeed, in many ways, they would add to the industry's difficulties without further helping those consumers whom the code is designed to protect.
      Mr. Skeet: Could my hon. Friend give me the figures for bad debts in the industry? What percentage are they of the total takings?
      Mr. Gray: I cannot give my hon. Friend those figures now, but I shall do my utmost to let him have them in due course.
      In some ways, the proposals in the new clauses would be a backward step. The original 1976 code was much criticised as being too formal and inflexible a document, written in language that was difficult for those it was designed to help to understand. The successive revisions have improved and greatly simplified the code's language and clarified and extended the groups that it is intended to help. As the report demonstrated, effective communication is essential if the code is to operate successfully, and to that extent statutory rules which would have to be written in formal unambiguous language would be a retrograde step.
      Beyond that, the code gives the boards' staffs considerable discretion in considering the circumstances of each case. No doubt it would be simple enough to prescribe in statutory rules which categories of consumers were to be assisted by the code. However, it would be exceedingly difficult to set out precisely how they were to be treated so as to cover all conceivable circumstances that might arise. In other words, such rules would make for a less flexible approach by the industry's staffs. They would find it difficult to apply the maximum individual sympathetic consideration to each case, according to the circumstances, particularly if the rules did not fit the circumstances.
      I told the Committee that I would reiterate most strongly in the House Ministers' concern about the problem of disconnections. The revised code of practice is being monitored by the Electricity Consumer Council, which will report later this year.
      We shall wish to consider carefully with the industry the results of the report. The whole question of disconnections and the effectiveness of the code will thus continue to be under scrutiny. If further action is warranted

      731
      it will certainly be taken. I believe that the recently revised code should be given an opportunity to prove itself before further steps such as legislation are contemplated. The practical effects of the new clauses would be unhelpful to those in whose interests they are tabled and I ask the House to reject them.
      Before I finish, I want to say a final word about the cases that have been referred to by my hon. Friend the Member for Bedford and the hon. Member for Midlothian. It is most distressing that such cases should be quoted and I am anxious to see that, where such practices have occurred, they should be rectified. I am sure that they are rare and that the general work of the boards is efficient. Those who work for them carry out a difficult job with a high degree of sensitivity. It would be wrong that the impression that we are dissatisfied with the way in which they handle their duties should go out from the House because that is simply not so. They have a difficult job to do and they do it well. However, where cases of unsympathetic and insensitive action by the boards do arise, I hope that I shall be made aware of them so that we can take them up with the boards and try to ensure that they are as infrequent as possible.
      Dr. J. Dickson Mabon: We have just listened to a mixture of ministerial compassion and an excellent Civil Service brief. No one can deny that over the years there has been progress as both sides have struggled to try to deal with the problem of disconnection. The Minister did not really refer to new clause 5 on private suppliers, who, after all, are the essence of parts of the Bill inasmuch as they are being introduced into the system. I have no doubt that, with the permission of the House, he could supplement his speech and say how he would deal with private suppliers but that he would refuse to introduce new clause 5 or any statutory mechanism to deal with private suppliers, just as he has refused to do in relation to public suppliers.
      That curious mixture does not answer the basic complaint that many innocent, poor people are suddenly faced with disconnection. They may be not sinful or wicked, but so alone in life that they are helpless. The Minister contradicts himself when he says that, on the one hand, we must not pry into an individual's affairs and, on the other, that the boards will contact each individual, although I understand that that is post hoc—after the event. That is not good enough because it is the event to which we are objecting.
      It is true that many people would exploit their fellow consumers by not paying their debts if there were no provision for disconnection. The intervention of the hon. Member for Bedford (Mr. Skeet) was pertinent. How much do such people represent in bad debts? I imagine that the figure is infinitesimal compared with the bills that are regularly paid by well-meaning, honest customers. Therefore, there is no economic argument that somehow or other the boards will be embarrassed by not disconnecting such people and seeing the exploitation of their supplies by a small number of individuals. The Minister has given the number and he boasts, rightly, that under the new system it has been reduced by 25 per cent.
      The hon. Member for Bedford was the first to table new clause 4 in Committee, and all honour to him for having done so, although he has not attached his name to new
      732
      clause 5. However, they both stand together. The Minister has not answered the hon. Gentleman's plea today. We know the origin of new clause 4. It was put forward by a perfectly respectable organisation and those hon. Members who supported it in Committee and here today have rehearsed its objectives. With respect to the Minister, who is a very able man, I have not heard, either in Committee or today, any real rebuttal of the essentially good part of new clause 4. Subsection (3)(a) says that regulations shall specify
      "the circumstances in which a supplier of electricity

      (i) shall not

      (ii) may

      disconnect any domestic premises."
      Why should not there be such a provision? Subsections (3)(b)and (3)(c) are impeccable. In reciting what he had to say, the Minister was repeating the essence of subsection (3)(b)(i) and (ii)—that the boards will take steps
      "to try to recover sums of money owed to him … by instalments or otherwise and to assist that customer to be able to meet the cost of his electricity supply".
      In other words, the Minister is accepting subsection (3)(b) (i) and (ii), and I assume that he would not object to subsection (3)(c). Why then does he resent putting subsection (3)(a) into the statute? Subsection (3)(a) is not saying that in no circumstances will there be disconnection, although, frankly, I would go along with that. I accept that there are those who would abuse the system, but they would be few compared with the harm done to so many relatively innocent people. That is a price worth paying. However, new clause 4 does not say that. All that the new clause is saying is that the reasons for disconnection should be spelt out.
      The Minister works hard but his officials cannot see how to make regulations which, inter alia, specify the provisions of subsection (3)(a)(i) and (ii). That is the essence of the Government's refusal to accept the new clause. I am sure that were the Minister to be advised that that was possible, he could be convinced that was desirable and adopt it. However, the Government have been convinced by the civil servants that it is not possible, although I cannot understand why. It is not an affront to the electricity boards or to the private suppliers that such regulations should exist. I cannot think of any other public utility the withdrawal of whose service has more disastrous consequences than the electricity supply. Water is not shut off if people do not pay their water rates, nor are they denied access to the sewerage system. That would be nonsense. Why should there be this somewhat primitive power—reminiscent of older days and different circumstances—to shut off somebody's electricity supply because he has not paid for it? As I say, we are talking of a tiny minority.
      The Government have failed, as previous Governments have, to grasp the nettle and to have such regulations. As I said, I would go further and bar the boards from disconnecting the electricity supply in any circumstances. I willingly concede that one would have to take other measures to recover the money owed by those abusing the system, but that is the other side of the coin. I would go along with the unpleasantness of that, but not with the unpleasantness of disconnection. The Minister has conceded that—any compassionate Minister would—by asking to be told of any cases of persons being unfairly treated or shamelessly disregarded by society. Of course, the Minister and the boards will intervene, but many such people are not known to Members of Parliament or to the

      733
      boards. The essence of new clauses 4 and 5 is to deprive electricity boards in any circumstances of the power to disconnect unless the circumstances under which they can do so are prescribed by regulation.
      Unless the Minister accepts the new clauses, we shall have to vote on them and hope that we can carry them. Let us hope that we carry the new clauses. If not, we have the Minister at his word. He will ask us to let the new code of practice be monitored. At some stage later today he will tell us what has happened. In the last analysis, some Minister at some time will have to put this reasonable request into statute.
      5.30 pm
      Mr. Dennis Canavan: My hon. Friend the Member for Midlothian (Mr. Eadie) referred to the private Member's Bill that I was given leave to introduce on 26 January. The People's Right to Fuel Bill is now published and available to hon. Members in the Vote Office, and is due for a Second Reading on 22 April. If my Bill were on the statute book there would be no need for new clauses 4 and 5 because it would prohibit disconnections unless there were a court order, and would ensure that there was a statutory code of practice and help to eliminate one of the root causes of disconnections—fuel poverty.
      I detected some complacency in what the Minister said. I do not know whether he deliberately under-estimated the magnitude of the problem. My hon. Friend the Member for Midlothian gave the statistic showing that in the 12 months ending September 1982, the latest period for which we have up-to-date statistics, nearly 100,000 households were disconnected. That is a disgrace. For any hon. Member to come to the Dispatch Box and say, "Everything in the garden is rosy. We have a code of practice as it is, it must be working fairly well but we shall monitor it", and so on, is not good enough, and neither is the total of nearly 100,000 homes disconnected in 12 months.
      We must not forget that 100,000 households affects several hundred thousand people because within these homes sometimes there are several people, and some of these people are the most deserving cases, people who should never be cut off in any circumstances, and categories of people specifically mentioned in the existing code of practice.
      The Policy Studies Institute recently estimated that 90 per cent. of the people who suffer disconnections fall into the categories specifically mentioned in the existing code of practice. These include, people receiving supplementary benefit or unemployment benefit, old age pensioners, people who are blind, severely sick or disabled, families with children under the age of 11 and families receiving family income supplement. If 90 per cent. of the disconnections involve such people, that shows that the code is not working and there should be no complacency in the Minister's speech. What is required is the implementation of a statutory code rather than a merely voluntary code which may be of some use, but which is inadequate.
      The Minister asked us to give him some cases. I do not want to name names on the Floor of the House because it is embarrassing for constituents and others whose cases have been referred to me, and whose supplies have been disconnected. Not all that long ago I had a constituent, a single parent with a baby—a category specifically
      734
      mentioned in the code of practice—who was out of the house when the electricity board employees called to disconnect the supply. She got back to the house and found herself with no electricity supply, and therefore no electric lighting, heating or cooking facilities.
      I managed to get the supply reconnected that afternoon through my intervention, because my constituent came to me, but people should not have to come to their Members of Parliament to get their supplies reconnected. The supply should not have been disconnected in the first place. Had there been a statutory code of practice in that case, the young woman would not have had her electricity supply disconnected.
      Another case concerned a landlord with four subtenants operating pre-payment meters for their electricity supply. This case was documented by Strathclyde regional council. In this instance, a bill of £770 had accrued., but it was the landlord's bill, not a bill for the tenants. The supply was disconnected, in clear breach of the code, leaving three pensioners and a student without lighting or electricity. This case had a very tragic ending because one pensioner died before the supply could be reconnected on the Tuesday following the disconnection on the preceding Friday, when the attention of the South of Scotland electricity board was drawn to the fact that the house should not have been disconnected under the terms of the code of practice because the debt had been incurred not by those suffering the disconnection, but by the landlord.
      The present voluntary code of practice is grossly inadequate and therefore these deserving cases require statutory protection. Under the terms of my Bill, there will be no disconnection without a court order. These new clauses do not go as far as that but they suggest rules for disconnection. I ask the Minister to give serious consideration to this.
      As the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) pointed out, one does not hear of anybody having their water supply cut off because of debt. Whoever heard of somebody being evicted from their house without a court order? If somebody is behind with their rent payments it is not open to a landlord, whether in the public or private sector, to say, "Out you go; you are in debt to me and you and your family must go out on the street." Landlords have to get a court order for an eviction.
      Particularly in dead of winter, an adequate fuel supply can be just as important as a roof over one's head and that is why a statutory form of protection is required.
      Mr. Arthur Lewis: I want to help my hon. Friend by telling him of a case about which I read over the weekend. It concerned a self-confessed millionaire tax dodger who had exiled himself but who came back when he owed £500,000 in tax. He should not have been here under the rules of the Inland Revenue. The Inland Revenue knew that he was here but did not take any action against him. It could and should have taken immediate action against him, but he was not an old-age pensioner or sick or disabled, but a deliberate tax evader. There are dozens of such people but we do not hear of actions against them.
      Mr. Canavan: My hon. Friend is right. Some of the biggest debtors and crooks, people cheating the Inland Revenue and other Government Departments out of money, seem to get off scot-free. However, Conservative Members seem to be obsessed with hounding and

      735
      harassing the small debtors, many of whom fall into debt through no fault of their own but because of unemployment in the family, or sickness or poverty of one kind or another.
      The Minister rightly referred to the liaison that is proposed in the existing code, and it is fair that we reply to that point. However, liaison seems to be inadequate because sometimes it does not take place, and sometimes even though it takes place, the people are still disconnected.
      Under my Bill I propose a scheme. If the House passes these new clauses, as I hope it will, when the Minister comes to publish the regulations proposed in the amendment I hope that he will include within them statutory liaison so that it will be mandatory on the part of the electricity boards to inform the DHSS and the appropriate social work authority, or the social services authority as it is called south of the border, to ascertain whether the people threatened with disconnection fall into any of the categories mentioned in the code: in other words, as my Bill says, to ascertain
      "(1) whether the consumer is receiving—

      (a) Supplementary Benefit or

      (b) Family Income Supplement or

      (c) Unemployment Benefit; and

      (2) whether the consumer is—

      (a) blind or

      (b) severely sick or

      (c) disabled; and

      (3) whether all the people residing in the house to which the supply refers are old pensioners; and
      (4) whether there are any children under the age of 11 years residing in the house to which the supply refers."
      The Minister seemed to imply in his earlier remarks that such action might mean undue interference, or even prying, into the private affairs of consumers. However, what is even worse and what is an intrusion into the private affairs of the consumer is that when cutting off the supply, some of the electricity boards seem to adopt a particularly draconian attitude. The South of Scotland electricity board seems to be worse that the average electricity board in the rest of the United Kingdom. It is an intrusion into people's privacy when the electricity board cuts off their electricity supply, sometimes even entering the house to cut off the supply without the express permission of the tenant or consumer. That is an unwanted intrusion into the privacy and liberty of the individual. I hope that the Minister will take that point on board.
      Mr. James Hamilton: This is an important point. Motherwell district council has written to my right hon. Friend the Member for Lanarkshire, North (Mr. Smith), my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) and myself about the South of Scotland electricity board breaking into people's houses. The local authority has to pay for the repairs to doors and so on, which is disgraceful.
      Mr. Canavan: I am glad that my hon. Friend intervened with that point. That should not be allowed to continue. I know that my hon. Friend looks after his constituents very well. However, it should not be left to individual Members of Parliament to make representations on behalf of individual constituents to the appropriate authorities.
      Ministers should lean on nationalised, publicly owned industries, which should listen to what the Ministers are
      736
      saying. They are supposed to be accountable to Ministers and Parliament. I hope, therefore, that the Minister of State and the Secretary of State, who, unfortunately, is not here, will lean on the electricity boards and tell them that enough is enough and that until we get a statutory code of practice, they should lay off some of the bully-boy tactics to which they are resorting.
      Mr. Bob Cryer: Does my hon. friend accept that the Government lean on the public sector industries only by forcing them to increase their charges? It was announced in January 1980 that the fuel supply industries would have to increase their charges. The Government are probably not averse to bully-boy tactics by the publicly owned industries as it brings such industries into disrepute. What we need is more of a service mentality from both the Government and the publicly owned industries.
      Mr. Canavan: My hon. Friend is absolutely correct. It seems that the only way in which the Government are willing to intervene in the running of the nationalised industries is to cut public investment in nationalised industries and also to tell them to put up their prices, which hurts the consumer and is one of the principal reasons why we are debating the tragic issue of disconnections. Many disconnections would not take place if the price of domestic fuel were a bit more reasonable.
      One of the root causes of disconnections is fuel poverty. The new clauses that we are discussing do not deal directly with that, but it is worth saying in passing that the additional heating allowance that is given to some, but not all, recipients of supplementary benefit amounts to the handsome sum of £1·90 per week. What can one do with £1·90 per week? One could not even buy half a bag of coal. It would not go far towards meeting the average electricity or gas bill for the average household. I hope that in the longer term the Department of Energy and the Department of Health and Social Security will get together and take up my suggestion of a more realistic fuel allowance, especially for the families and other consumers who are most in need.
      5.45 pm
      I shall make a brief reference to new clause 5. The ethos behind the Bill seems to be further privatisation or to give to people in the private sector the opportunity to generate and supply electricity. If that comes about to any degree—I hope that it does not, and I support those in the House and outside who will try to stop the mad, obsessive privatisation policy of the Government—and the domestic consumer is dependent upon the private supply, I hope that the Minister will extend the existing code of practice to the private supplier. It would be even better to implement a statutory code of practice here and now by accepting new clause 4, and to accept new clause 5, which extends that statutory code of practice to people who, unfortunately, may be completely dependent on a private supplier.
      Despite what I said about some people in the public sector, notably the draconian attitude of the South of Scotland electricity board, I have no doubt that if electricity generation and supply were completely privatised and the average domestic consumer were completely at the mercy of a private racketeer who wanted to make a fast buck without thinking of the social consequences, the number of disconnections would be several hundred thousand a year and not just 100,000 a year.

      737
      The Minister has a nice smile on his face. I should like to give him a complimentary copy of my People's Right to Fuel Bill. I remind him that it is due to have a Second Reading on 22 April. I hope that the Government will make a helpful response and say either that they will provide time for the Second Reading debate on my Bill by giving it Government support or that the Bill is so well drafted and good in principle that it does not even need a Second Reading debate. I hope that on 22 April, instead of the Government Whip shouting, "Object," it will receive an unopposed Second Reading and go straight to Committee.
      In the meantime, I urge the House to support my hon. Friends who have tabled new clauses 4 and 5, because they will go some way towards solving the problem, which will be more comprehensively dealt with in my private Member's Bill.
      Mr. Palmer: As I spoke at great length on other clauses, I do not propose to add much more than has been said already from both sides of the House in support of the new clause. When the Bill was in Committee, I claimed to be the only member of the Committee who had disconnected the supply of a consumer. It was a long time ago. The circumstances were somewhat bizarre, to say the least.
      We have all had the experience in our constituencies of some terribly hard cases, such as when the supply to elderly people or single-parent families is cut off, which is the last straw. Therefore, I endorse what has been said from both sides of the House, particularly by my right hon. Friend the Member for Lanarkshire, North (Mr. Smith), in support of the new clause. My reason for mentioning in Committee that there was an employee point of view on this matter was that it is an extraordinarily unpleasant task for electricity employees to enforce disconnections.
      My argument for new clause 4 is somewhat different from other arguments which have already been deployed, although I endorse them. I do not know whether there is some special harshness about the Scottish character that means that the electricity boards there act in a draconian way. I take cases to the South-West electricity board in Bristol, and I applaud the humanity with which it deals with them. Things may be different in Scotland.
      Electricity boards are business undertakings and it is difficult for them, with the best will in the world and the assistance of a statutory code, to act as welfare organisations. The boards and their employees would be assisted by a definite statutory code. They would then know where they stood. It is not the chairmen, but the employees of electricity boards who must carry out the unpleasant task of disconnection and they would be able to quote the authority of the House in support of their action. There is, therefore, a strong case for a statutory code from the boards' point of view. That point has not been made.
      Mr. Arthur Lewis: I had not intended to speak until I heard the speeches of the hon. Member for Bedford (Mr. Skeet) and the right hon. Member for Greenock and Port Glasgow (Dr. Mabon). Although I support the statutory approach, I wonder whether it is all worth while. The right hon. Member for Greenock and Port Glasgow was right when he said that we must consider the cost of all the paper, printing, advisory pamphlets and the rest. There must be an infinitesimal number of people who are
      738
      disconnected because they are dodging payment, either deliberately or accidentally. The costs involved cannot be worth the candle.
      I do not know what happens generally, but disconnection can be frightening for an old age pensioner who is not dodging. A pensioner may spend a few months during the winter with a son or daughter in the country and not be at home to receive the first bill or the reminder, only to arrive home and find that he is threatened with disconnection. If such a person has been away during the winter, he will not think of such a bill. It may be that that person is not up to date with his payments, but he may have previously paid bills regularly. However, on his return he may find a letter saying that the electricity board is obliged to cut him off unless he pays forthwith. Such a letter would frighten the life out of an old age pensioner.
      I do not know why that should be the case with energy bills—it does not happen with water rates. People are not threatened with the disconnection of their water supply because they have not paid the water rate. Why should anyone have the right to enter someone's house and cut off essential services?
      We give public bodies, such as electricity boards, opportunities that do not exist anywhere else. An ordinary person may have a mortgage and be in arrears with payments of that mortgage. Is a building society allowed to tell such a person that, because he is in arrears with mortgage payments, he will be evicted tomorrow —indeed, that it intends forcibly to enter his house and kick him out? It is ridiculous to believe that a building society could tell a person, "You have paid your mortgage religiously for the past 30 years but, because you are one month in arrears, by law, we are allowed to enter your home forcibly and kick you out." If that happened, the House would be up in arms and create hell. We should tell electricity boards, "Stop it. There will be no cut-offs for any reason." By all means let an electricity board take a genuine dodger to court and explain the case there and let the court decide.
      What happens to the man who is in arrears with income tax? Does the Inland Revenue go along to his firm and say, "He is a month in arrears with his income tax, so stop his wages next week."? Would the Inland Revenue do that, and would we stand for it? Of course not, so let us stop it. Let us say that no board or body is allowed to cut off an essential service unless it goes through the normal and proper channels of court action like everyone else. I am not referring specifically to either public or private electricity undertakings. We should treat them all in the same way. We should insist that the customer has the right to be treated decently. That is not happening at the moment.
      Mr. Cryer: I apologise for not being in the Chamber earlier, but, as Chairman of the Joint Committee on Statutory Instruments, one has other duties to perform.
      This issue is important. All Opposition Members deal with disconnections that cause much pain and suffering. Only recently, I arranged for the reconnection of a supply to a house where a family with three small children, one aged two, live. The two-year-old child had never seen that house lit by electricity. It had been cut off for so long because the family were unable to obtain the reconnection fee and a sufficient payment for the outstanding debt to satisfy the electricity board.

      739
      I recommend that a code of practice be instituted. Although boards have codes of practice which, by and large, they follow, the fact remains that such a code of practice is less satisfactory than one which has the backing of the House.
      New clause 4 suggests regulations and statutory instruments and, therefore, statutory enforcement. It is worth pointing out that the Government have applied their mind to a code of practice for closed shops. Not only have they produced a code of practice, which is at present before the House as a statutory instrument which must be approved by both Houses, but they have altered it. The Government have sought consultation on that code, received representations and, as a result, introduced an amended code of practice.
      An enormous quantity of administrative effort has been spent on something that is much less vital than the cutting off of electricity supplies. Some of that human and administrative energy should have been diverted towards allowing people to keep their electricity supply more often and stopping the disconnections.
      There is a problem about recipients of invalidity benefit which the private Member's Bill of my hon. Friend the Member for West Stirlingshire (Mr. Canavan) covers well. They are not allowed to have deductions made at source. Therefore, they get into financial difficulties and face disconnection.
      The Social Security and Housing Benefits Act, which will come into effect soon, will create more problems as it changes the administration of social security payments. I should have thought that a statutory code of practice for disconnections would make officials who operate on behalf of electricity boards think twice before continuing with disconnections because it has the stamp of Parliament. Ordinary people would therefore be afforded greater protection. That is not an unreasonable request.
      The Government can be accused of adopting the attitude that it does not matter if publicly owned industries are criticised. It is, after all, in the Government's interests to bring the publicly owned sector into disrepute. Therefore, if the Government do little about them and if some people who work in publicly owned industries behave high-handedly, the Government will have more propaganda for their case. If the Government are more worried about a public service and providing people with a decent service than about enjoining the public fuel supply sector, such as the electricity and gas boards, to increase their charges—as they have done in the past—they should accept new clauses 4 and 5.
      Parliamentary backing for a code of practice for those with the lowest incomes should be accepted by the Government. If they do not accept it, they are extremely hard-hearted.
      6 pm
      Mr. John Smith: The speeches that we have heard today show how important Parliament considers this matter to be. The Labour party was justified in moving the new clauses to focus the attention of the House on a serious and important social problem. The clauses also show a sensible and effective means of progress.
      Fuel poverty is a serious problem. Many people, especially poor families, have serious problems paying for their fuel. A recent important social change is that the cost
      740
      of energy in the average home is higher than the cost of either rent or a mortgage. Therefore, energy costs are perhaps the most important part of the family budget, apart from food.
      If Parliament is to be truly representative of the needs of many British people, as the Opposition wish, it must concentrate its attention on such serious social problems. As my hon. Friend the Member for West Stirlingshire (Mr. Canavan) said, the problem cannot be regarded as insignificant, because more than 100,000 households in Britain are disconnected during a year. The problem is not made easier by the recent large increases in energy prices. The Government are responsible for increasing the price of electricity by more than 84 per cent. in three years. That adds strain to the problems of families in financial difficulties.
      The present code of practice has been improved during the years. Sensible amendments have been made to it and experience has been gained, and no doubt the voluntary code of practice works better now than it did several years ago. It has been expanded to take account of circumstances and has been subject to criticism by the Policy Studies Institute and other bodies that have tried to improve it. With the new clauses we are trying to take the matter a step further. The time is right to put the voluntary code into statute form. It has been tested in the real and harsh circumstances of life, and has been amended, improved and refined. It is time to take it that important step further and to make it part of the legal rules by incorporating it in a statutory instrument.
      In Committee, the Minister gave the usual reply of Ministers in such circumstances—he has given it again today—that to move towards a statutory form would be inflexible. The new clauses seek to put the voluntary code into statute, but there is nothing rigid about that because flexibility is built into the scheme. The important difference has nothing to do with flexibility or rigidity; it has to do with giving people a legal right if they are disconnected. They would not then depend upon a voluntary code of practice that is not backed by law, but would be defended and have legal protection.
      That would be a more important step forward than the Minister recognised. It would mean that the community and Parliament recognised that disconnection was such a serious problem that those affected by it must have some legal protection. It would also be easier for the public authorities to administer the distasteful task, as my hon. Friend the Member for Bristol, North-East (Mr. Palmer) so sagely pointed out. If local authorities work within rules approved by Parliament, and revised occasionally in the light of changing social circumstaces and attitudes, they are in a much stronger position. They can say that they are carrying out a code approved by Parliament.
      If the code becomes enshrined in statute, I hope the House will not think that it has completed its job, but will take the opportunity, as circumstances change, to update it and to ensure that it is working. Much could be said for having a debate once a year or every two or three years to consider changes and whether disconnections should continue to be carried out in some circumstances. I have much sympathy for the proposition that no old age pensioner should be disconnected either in winter or in summer, which has much support in the country and the House.
      It is most important to give the code a statutory framework. My hon. Friend the Member for Bothwell

      741
      (Mr. Hamilton) mentioned an incident that shows the difficulties that occur. Motherwell district council, which covers both our constituencies, is currently in dispute with the South of Scotland electricity board about who should pay for doors broken down when the board arrives to disconnect tenants. If the board cannot gain entry to a council house, it knocks down the door and the tenant refuses to pay for the repair because he was not responsible for breaking it down. The local authority sees the force of the tenant's remarks, and asks the board to pay for the repairs. So far, the board has declined to take up that responsibility and has suggested, ingeniously, that the problem could be avoided if the district council provided a joiner when the board must knock down the door so that it can be done with the minimum of damage.
      An impasse has developed between Motherwell district council and the SSEB, and they have enrolled the assistance of myself, my hon. Friend the Member for Bothwell and other hon. Members. The next idea might well be that a Member of Parliament should be in attendance when the door is knocked down. My hon. Friend and I are not sure what to do next. The story may sound like low farce, but I have the letter that details the steps in this developing drama.
      As such silly incidents occur, we cannot claim, as the Minister did, to have refined the code of practice to the point where it works smoothly and effectively. The voluntary code is not perfect, but it is a good start and it has been improved. It is now time to take it an important step forward. We should not lose sight of new clause 5, because if we must suffer the private generation of electricity—I doubt whether it will ever make a major contribution to domestic consumption—it would be wrong if the private sector escaped the obligations that we heap upon public authorities. Private companies should be treated in the same way as public authorities.
      The Opposition are strongly against the main principles of the Bill, and although we secured some improvements at various stages we shall remain hostile to it. There is probably an irreconcilable difference of philosophy and opinion between both sides of the House, but the support of the hon. Member for Bedford (Mr. Skeet) in Committee and in the House today shows that there is wide support for the new clauses in the country and the House. Therefore, I hope that this will be one of the opportunities that Parliament takes from time to time to make a genuine, humane, modern and sensible improvement to the statute, and that we shall recognise the problems of disconnection, and the need to give those who suffer from it legal rights. They are the poor and dispossessed, and no Member of Parliament who does his job well is unfamiliar with the agonising problems of poor families, has not visited their houses and seen children huddled round a table by candle light, or visited a house that is heated by dangerous paraffin appliances because the family cannot pay for electric under-floor heating or other more expensive forms of heating. Many children are growing up in a twilight world because the family cannot afford the fuel, heating and lighting that are an essential background to proper family life. The lonely and many other groups are also suffering.
      The Government do not have to change their policy. The voluntary code does not have to change. The House must take the important step of giving these people the legal right, which they have not had before, and I hope the House will have the courage to do so this evening.
      Mr. Gray: I have already made a substantial contribution to the debate, so I do not intend to weary the House by reiterating what I have already said. However, a number of hon. Members have spoken since I sat down, so I will try to say something which may interest the hon. Member for Isle of Ely (Mr. Freud), even though he has not been present for very long.
      The hon. Members for Newham, North-West (Mr. Lewis) and for Keighley (Mr. Cryer) who were not members of the Standing Committee, were concerned about the methods used by some boards to gain entry to houses for the purpose of disconnection. I refer them to what I said in Committee:
      "I would further say that, under the Rights of Entry (Gas and Electricity Boards) Act 1954, the board concerned would have had to obtain a warrant from a magistrate and to have given the householder 24 hours' notice."—[Official Report, Standing Committee G, 15 February 1983; c.497.]
      So it is not just a case of giving 24 hours' notice. The board is supposed to have obtained a warrant. If that was not done, an investigation would be required.
      Mr. Arthur Lewis: Mr. X may go away perhaps a week or a month before Christmas without paying a heavy bill. He is away and the house is empty. The board could deliver anything it liked, including the 24 hours' notice, but Mr. X would be away. When he comes back he finds that the board has entered his house because he is in arrears. The board may have sent him one or two bills. He may have received the rates bill. This is unfair because he may not have paid his mortgage, but he does not return to find that he has been evicted because he has not paid his mortgage.
      Mr. Cryer: He may be in hospital.
      Mr. Lewis: Yes.
      Mr. Gray: The hon. Member for Newham, North-West makes a fair point, but he does not highlight the fact that this is the last stage. A lengthy procedure for the rendering of accounts must be gone through before this last stage is initiated. I hear what the hon. Gentleman says, but I cannot agree with him that hardship is involved. The case is answered.
      The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) has become extremely concerned about the code of practice and, indeed, about the whole situation. I remind the right hon. Gentleman that he was Minister of State, Department of Energy for more than three years during which his Government did nothing to improve the code of practice. It is worth recalling that.
      The right hon. Member for Lanarkshire, North (Mr. Smith), who, with the exception of his reference to electricity prices, was fair in his comments, pointed out that between 1979 and 1982 domestic electricity prices had risen by 84 per cent. The right hon. Gentleman was Minister of State, Department of Energy before the right hon. Member for Greenock and Port Glasgow. May I remind him that between 1974 and 1979 domestic electricity prices rose, not by 84 per cent. but by 147 per cent. while, at the same time, industrial electricity prices, which between 1979 and 1982 have risen by 49 per cent., rose by 115 per cent. It is easy to quote figures in the House, but first it is worth conducting some research.
      Dr. Mabon: Is it not the case that in different Administrations we try gradually to improve the codes? Have we not reached the stage when we must accept a statutory right in this regard and have no disconnections?
      Mr. Gray: I do not think that we have reached that stage. I said earlier that the recently revised code should be given an opportunity to prove itself before further steps, such as legislation, are contemplated. I believe that the practical effects of these clauses would be unhelpful to those in whose interests they are tabled.
      Mr. Clement Freud: For how long should the revised code prove itself?
      Mr. Gray: We must give it a reasonable chance. I shall not commit myself to a specific period at this time, but I think that a few years would be a reasonable time.
      The hon. Member for West Stirlingshire (Mr. Canavan) was kind enough to give me a copy of his private Member's Bill, which I shall study with interest. I shall not take up many of his remarks because I dealt with them earlier when the hon. Gentleman had to leave the Chamber. He will no doubt read them. He referred to 100,000 disconnections. The problem is serious but should not be exaggerated. I remind the hon. Gentleman that about 50 per cent. are reconnected within two or three days. It is a short period of disconnection. The problem is serious, but we should not get it out of proportion. To say that 100,000 people are disconnected and to give the impression that the disconnections last for a long time is not right. But I take the hon. Gentleman's point and he will no doubt pursue it further in his Bill.
      I do not wish to waste the time of the House. We have dealt thoroughly with the two new clauses. In Committee I was asked to consider the matter again. I gave no assurance whatever because I genuinely believed that it would be much better to allow the new code of practice to have a trial period. I am still of that opinion, and I must ask the House to reject the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 180, Noes 209.

      Division No. 85]

      [6.16 pm

      AYES

      Abse, Leo

      Cowans, Harry

      Adams, Allen

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

      Allaun, Frank

      Crawshaw, Richard

      Alton, David

      Crowther, Stan

      Anderson, Donald

      Cryer, Bob

      Archer, Rt Hon Peter

      Cunliffe, Lawrence

      Ashton, Joe

      Dalyell, Tam

      Atkinson, David (B'm'th,E)

      Davidson, Arthur

      Atkinson, N. (H'gey,)

      Davis, Terry (B'ham, Stechf'd)

      Bagier, Gordon A.T.

      Deakins, Eric

      Barnett, Guy (Greenwich)

      Dean, Joseph (Leeds West)

      Barnett, Rt Hon Joel (H'wd)

      Dewar, Donald

      Beith, A. J.

      Dixon, Donald

      Bennett, Andrew (St'kp't N)

      Dormand, Jack

      Bidwell, Sydney

      Dubs, Alfred

      Booth, Rt Hon Albert

      Duffy, A. E. P.

      Bradley, Tom

      Dunwoody, Hon Mrs G.

      Bray, Dr Jeremy

      Eadie, Alex

      Brown, Hugh D. (Provan)

      Eastham, Ken

      Callaghan, Rt Hon J.

      Ellis, R. (NE D'bysh're)

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

      Ellis, Tom (Wrexham)

      Campbell, Ian

      English, Michael

      Campbell-Savours, Dale

      Evans, Ioan (Aberdare)

      Canavan, Dennis

      Faulds, Andrew

      Carmichael, Neil

      Flannery, Martin

      Carter-Jones, Lewis

      Foot, Rt Hon Michael

      Cartwright, John

      Ford, Ben

      Clark, Dr David (S Shields)

      Forrester, John

      Clarke, Thomas (C'b'dge, A'rie)

      Foster, Derek

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

      Foulkes, George

      Cohen, Stanley

      Freeson, Rt Hon Reginald

      Coleman, Donald

      Freud, Clement

      Concannon, Rt Hon J. D.

      Garrett, John (Norwich S)

      744

      George, Bruce

      Palmer, Arthur

      Golding, John

      Park, George

      Gourlay, Harry

      Pavitt, Laurie

      Graham, Ted

      Penhaligon, David

      Grimond, Rt Hon J.

      Powell, Raymond (Ogmore)

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

      Prescott, John

      Harrison, Rt Hon Walter

      Race, Reg

      Hart, Rt Hon Dame Judith

      Radice, Giles

      Haynes, Frank

      Richardson, Jo

      Heffer, Eric S.

      Roberts, Albert (Normanton)

      Home Robertson, John

      Roberts, Ernest (Hackney N)

      Homewood, William

      Robinson, G. (Coventry NW)

      Hooley, Frank

      Rooker, J. W.

      Howell, Rt Hon D.

      Roper, John

      Hoyle, Douglas

      Ross, Ernest (Dundee West)

      Hughes, Mark (Durham)

      Rowlands, Ted

      Hughes, Roy (Newport)

      Sever, John

      Hughes, Simon (Bermondsey)

      Short, Mrs Renée

      Jay, Rt Hon Douglas

      Silkin, Rt Hon J. (Deptford)

      Jenkins, Rt Hon Roy (Hillh'd)

      Silverman, Julius

      Johnson, James (Hull West)

      Skinner, Dennis

      Johnston, Russell (Inverness)

      Smith, Rt Hon J. (N Lanark)

      Jones, Rt Hon Alec (Rh'dda)

      Snape, Peter

      Jones, Barry (East Flint)

      Soley, Clive

      Jones, Dan (Burnley)

      Spearing, Nigel

      Kaufman, Rt Hon Gerald

      Spellar, John Francis (B'ham)

      Kerr, Russell

      Spriggs, Leslie

      Kilroy-Silk, Robert

      Steel, Rt Hon David

      Lambie, David

      Stoddart, David

      Leighton, Ronald

      Stott, Roger

      Lestor, Miss Joan

      Strang, Gavin

      Lewis, Arthur (N'ham NW)

      Summerskill, Hon Dr Shirley

      Litherland, Robert

      Taylor, Mrs Ann (Bolton W)

      Lofthouse, Geoffrey

      Thomas, Jeffrey (Abertillery)

      Lyon, Alexander (York)

      Thorne, Stan (Preston South)

      Mabon, Rt Hon Dr J. Dickson

      Torney, Tom

      McDonald, Dr Oonagh

      Wainwright, E.(Dearne V)

      McElhone, Mrs Helen

      Walker, Rt Hon H.(D'caster)

      McGuire, Michael (Ince)

      Watkins, David

      MacKenzie, Rt Hon Gregor

      Weetch, Ken

      Maclennan, Robert

      Welsh, Michael

      McNamara, Kevin

      White, Frank R.

      McTaggart, Robert

      White, J. (G'gow Pollok)

      Marshall, D(G'gow S'ton)

      Whitlock, William

      Marshall, Dr Edmund (Goole)

      Wigley, Dafydd

      Marshall, Jim (Leicester S)

      Willey, Rt Hon Frederick

      Martin, M (G'gow S'burn)

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

      Mason, Rt Hon Roy

      Williams, Rt Hon Mrs (Crosby)

      Maxton, John

      Wilson, Gordon (Dundee E)

      Maynard, Miss Joan

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

      Millan, Rt Hon Bruce

      Wilson, William (C'try SE)

      Mitchell, R. C. (Soton Itchen)

      Winnick, David

      Morris, Rt Hon A. (W'shawe)

      Woolmer, Kenneth

      Morris, Rt Hon C. (O'shaw)

      Wright, Sheila

      Morton, George

      Young, David (Bolton E)

      Newens, Stanley

      Oakes, Rt Hon Gordon

      Tellers for the Ayes:

      O'Halloran, Michael

      Mr. James Hamilton and

      O'Neill, Martin

      Mr. Allen McKay.

      Orme, Rt Hon Stanley

      NOES

      Alexander, Richard

      Bottomley, Peter (W'wich W)

      Alison, Rt Hon Michael

      Braine, Sir Bernard

      Ancram, Michael

      Brinton, Tim

      Arnold, Tom

      Brittan, Rt. Hon. Leon

      Atkins, Rt Hon H.(S'thorne)

      Brooke, Hon Peter

      Atkins, Robert (Preston N)

      Brotherton, Michael

      Atkinson, David (B'm'th,E)

      Brown, Michael (Brigg & Sc'n)

      Baker, Kenneth (St.M'bone)

      Bruce-Gardyne, John

      Baker, Nicholas (N Dorset)

      Buck, Antony

      Beaumont-Dark, Anthony

      Budgen, Nick

      Bendall, Vivian

      Burden, Sir Frederick

      Benyon, Thomas (A'don)

      Butcher, John

      Berry, Hon Anthony

      Butler, Hon Adam

      Bevan, David Gilroy

      Carlisle, John (Luton West)

      Biffen, Rt Hon John

      Carlisle, Kenneth (Lincoln)

      Biggs-Davison, Sir John

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

      Blackburn, John

      Chalker, Mrs. Lynda

      Boscawen, Hon Robert

      Chapman, Sydney

      745

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

      McCrindle, Robert

      Clark, Sir W. (Croydon S)

      Macfarlane, Neil

      Clarke, Kenneth (Rushcliffe)

      MacKay, John (Argyll)

      Clegg, Sir Walter

      McQuarrie, Albert

      Cockeram, Eric

      Major, John

      Colvin, Michael

      Marland, Paul

      Cope, John

      Marlow, Antony

      Costain, Sir Albert

      Marten, Rt Hon Neil

      Cranborne, Viscount

      Mates, Michael

      Critchley, Julian

      Mather, Carol

      Crouch, David

      Maude, Rt Hon Sir Angus

      Dickens, Geoffrey

      Mawby, Ray

      Dorrell, Stephen

      Maxwell-Hyslop, Robin

      Dover, Denshore

      Mellor, David

      du Cann, Rt Hon Edward

      Meyer, Sir Anthony

      Dunn, Robert (Dartford)

      Miller, Hal (B'grove)

      Durant, Tony

      Miscampbell, Norman

      Dykes, Hugh

      Moate, Roger

      Eden, Rt Hon Sir John

      Monro, Sir Hector

      Eggar, Tim

      Montgomery, Fergus

      Elliott, Sir William

      Moore, John

      Fairgrieve, Sir Russell

      Morrison, Hon C. (Devizes)

      Fell, Sir Anthony

      Murphy, Christopher

      Fenner, Mrs Peggy

      Myles, David

      Fisher, Sir Nigel

      Neale, Gerrard

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

      Needham, Richard

      Fletcher-Cooke, Sir Charles

      Nelson, Anthony

      Fookes, Miss Janet

      Neubert, Michael

      Forman, Nigel

      Newton, Tony

      Fraser, Rt Hon Sir Hugh

      Onslow, Cranley

      Fraser, Peter (South Angus)

      Osborn, John

      Fry, Peter

      Page, John (Harrow, West)

      Gardiner, George (Reigate)

      Page, Richard (SW Herts)

      Gardner, Sir Edward

      Parris, Matthew

      Goodhart, Sir Philip

      Patten, John (Oxford)

      Goodhew, Sir Victor

      Pawsey, James

      Goodlad, Alastair

      Percival, Sir Ian

      Gorst, John

      Pink, R. Bonner

      Gow, Ian

      Pollock, Alexander

      Gray, Rt Hon Hamish

      Prentice, Rt Hon Reg

      Greenway, Harry

      Price, Sir David (Eastleigh)

      Griffiths, Peter (Portsm'th N)

      Proctor, K. Harvey

      Grist, Ian

      Raison, Rt Hon Timothy

      Gummer, John Selwyn

      Rees-Davies, W. R.

      Hamilton, Hon A.

      Renton, Tim

      Hamilton, Michael (Salisbury)

      Rhodes James, Robert

      Hampson, Dr Keith

      Ridley, Hon Nicholas

      Hannam, John

      Roberts, Wyn (Conway)

      Haselhurst, Alan

      Rossi, Hugh

      Hawksley, Warren

      Rost, Peter

      Hayhoe, Barney

      Royle, Sir Anthony

      Heddle, John

      Rumbold, Mrs A. C. R.

      Hicks, Robert

      Sainsbury, Hon Timothy

      Higgins, Rt Hon Terence L.

      Shaw, Giles (Pudsey)

      Hill, James

      Shaw, Sir Michael (Scarb')

      Holland, Philip (Carlton)

      Shelton, William (Streatham)

      Hordern, Peter

      Shepherd, Colin (Hereford)

      Hunt, David (Wirral)

      Shepherd, Richard

      Hunt, John (Ravensbourne)

      Sims, Roger

      Irvine, RtHon Bryant Godman

      Smith, Tim (Beaconsfield)

      Irving, Charles (Cheltenham)

      Speed, Keith

      Jessel, Toby

      Speller, Tony

      Johnson Smith, Sir Geoffrey

      Spence, John

      Jopling, Rt Hon Michael

      Spicer, Michael (S Worcs)

      Kaberry, Sir Donald

      Sproat, Iain

      Knight, Mrs Jill

      Stanbrook, Ivor

      Knox, David

      Stanley, John

      Lamont, Norman

      Steen, Anthony

      Lang, Ian

      Stokes, John

      Latham, Michael

      Stradling Thomas, J.

      Lawrence, Ivan

      Taylor, Teddy (S'end E)

      Lawson, Rt Hon Nigel

      Thomas, Rt Hon Peter

      Lennox-Boyd, Hon Mark

      Thompson, Donald

      Lester, Jim (Beeston)

      Thorne, Neil (Ilford South)

      Lewis, Sir Kenneth (Rutland)

      Thornton, Malcolm

      Lloyd, Ian (Havant & W'Ioo)

      Townend, John (Bridlington)

      Lloyd, Peter (Fareham)

      Townsend, Cyril D, (B'heath)

      Loveridge, John

      Trippier, David

      Luce, Richard

      van Straubenzee, Sir W.

      Lyell, Nicholas

      Waddington, David

      746

      Wakeham, John

      Williams, D,(Montgomery)

      Walker, B. (Perth)

      Wolfson, Mark

      Waller, Gary

      Young, Sir George (Acton)

      Warren, Kenneth

      Younger, Rt Hon George

      Watson, John

      Wells, Bowen

      Tellers for the Noes:

      Wheeler, John

      Mr. Tristan Garel-Jones and

      Wiggin, Jerry

      Mr. Douglas Hogg.

      Wilkinson, John

      Question accordingly negatived.

    New Clause 6

      OPERATIONAL CONTROL
      `Notwithstanding any other section, the Secretary of State shall make such regulations as he thinks fit for the purpose of ensuring that operational control of the system of supply of all electricity using the integrated national network remains vested in, and exercised by the electricity boards in order that they may carry out an efficient, safe and economical distribution of the supply of electricity.'.—[Mr. John Smith.]
      Brought up, and read the First time.
      Mr. John Smith: I beg to move, That the clause be read a Second time.
      Mr. Deputy SpeakerWith this it will be convenient to take the following: new clause 10—Operational control of the System of Supply—
      `Notwithstanding the provisions of any other section of this Act, the Secretary of State shall make regulations for the purpose of ensuring that operational control of the system of supply of all electricity using the integrated national network remains vested in and exercised by the Electricity Boards to ensure that they carry out an efficient and economical distribution of the supply of electricity to persons in their area who require it.'.
      Government amendment No. 3.
      6.30 pm
      Mr. Smith: Because of the importance of Government amendment No. 3, which is grouped with the new clause, I do not think that the debate will take long.
      When this Bill was first considered in the House on Second Reading, and during the Committee stage, it was pointed out repeatedly by members of the Opposition that to introduce private sector generation electricity into the public electricity supply system could create severe problems for that system, which had been built up over the years and was highly sophisticated. Anyone who has watched it in operation or has gone to see the national grid centre will realise the sophistication that is applied to its administration. To bring in, as this Bill does, the capacity for private sector generation, to give the private sector generator the right to come in to the public system and to put an obligation on the public system to take from him the electricity that he generates and transmit it for him, seems to us to create very severe problems. These were discussed in detail, almost relentlessly, in Committee, and eventually the Government were forced to come to terms with the reality of the circumstances of the industry.
      The idea behind this Bill was to privatise electricity production if at all possible, but they have come up against the great difficulty that it is extremely hard to do so. They have had to go in for all sorts of devices, including making the public sector boards the guaranteed market for the private sector generator. Eventually, however, after a lot of argument and a lot of pressure in Committee, the Government seemed to us to concede quite an important principle.

      747
      We sought to put that principle into new clauses 6 and 10, but it appears to me to be largely, if not totally, covered by Government amendment No. 3. This means, as I understand it, that when electricity boards are discussing with the private generator the arrangement that is to exist between them they can include terms and conditions to secure control by the electricity board of the operation of the electricity supply system. There is written into the statute protection against impairment of the integrity of the electricity supply system. That is something that we fought very hard for in the Committee and I am very glad that it has been achieved through the concession that the Government have made in the amendment.
      It is a great pity that a similar sense of realism was not introduced into the proceedings on the Oil and Gas (Enterprise) Act, in which my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) took a notable and prominent part. Had we got a realistic acceptance of the facts of life such as is contained in Government amendment No. 3, incorporated into the Oil and Gas (Enterprise) Act, we would have made a better job of it.
      I am sorry that we need to have this Bill and the prospect of private sector generation of electricity, which is pretty farcical at the best of times.
      The Secretary of State for Energy (Mr. Nigel Lawson): It has been there for years.
      Mr. Smith: It has been there in a very modified form for years. I am seeking to reply to the Secretary of State, who has wandered in at last to listen to the proceedings on this Bill, which stands in his name. He has managed to avoid most of the proceedings, but I suppose I am obliged to comment on his sedentary interruptions and my comment on that last one is that it was very minimal in character and the Government have never given a very good reason why circumstances have so changed that now private sector generation of electricity is a desirable thing. I fear that the motivation is highly political and ideological and has a lot to do with the Secretary of State's desire to be in favour with the Prime Minister and to have on his report card "Very good" under the section of privatisation. He has privatised everything that he can lay his hands on.
      The difficulty with all these privatisation schemes is that they collide with the realities of life. I am very glad that one reality has been collided with in the sense that the Government have accepted the importance of maintaining the integrity of the electricity supply system. Although we do not think that amendment No. 3 is perfect, I certainly claim it as a very important victory for the Opposition in bringing the Government to terms with the realities of life.
      Dr. J. Dickson Mabon: I naturally associate myself with what the right hon. Gentleman has just said about the efforts of all of us in the Committee dealing with this matter. We have the testimony of the columns and columns of contributions on this matter.
      Let us look at Government amendment No. 3, because that is what we are going to accept even though technically we are discussing these two new clauses. I imagine that they will not be persisted with and that Government amendment No. 3 will be the one pressed upon us. It is a very good one and I think that the Government ought to get the credit for seeing the sense of putting something like
      748
      this on the amendment paper and including it in the Bill. I know that Ministers have protested that it was never otherwise and that this amendment is a clarification of their intentions. Many people outside the Committee were quite distressed that the Bill might be left as it was without this clarification.
      After all, however, this issue is only about the operation of the supply system. It is not, as I understand it—I am open to correction—dealing here with the argument referred to by the right hon. Member for Lanarkshire, North (Mr. Smith) on the parallel with the provisions of the Oil and Gas (Enterprise) Act. We were talking about the parallel with the participation agreements and the example given to us in the Oil and Gas (Enterprise) Act. If we had this new clause and some explanation on the question of the additional costs, if any—we are told that there are none, in effect, on balance—to the public system through the attachment of these private generators, we might go back and look at the Oil and Gas (Enterprise) Act and consider whether we should have better systems of tariffs for the gas being carried from the North sea within the gas grid system. Perhaps that is not strictly in order, however, although I see that the Secretary of State is anxious to intervene and argue this all over again.
      This amendment is about the operation of the system. We had a very elaborate and enlightening explanation from the CEGB as to how the system is worked and how it brings in stations on a merit order. That was explained outside the Committee. This amendment, I understand, is addressing itself to that point. We remember the letter from John Lyons, which was of considerable length and was read out in the Committee. He argued the case that the system could be seriously embarrassed. This is clarified by amendment No. 3.
      When the Minister is refuting the new clause—which will be easy—or commending the Government amendment—although I suspect that he will just formally move that, and perhaps he ought to take the opportunity now—I should like to know what happened to the argument about the tariffs, the no-profit, no-loss argument. The Minister went to considerable lengths in the Committee to assure us about this but I do not recognise on the amendment paper anything that is a companion to Government amendment 3 in this regard. I take it that that is the end of the story. Perhaps the Minister will confirm that. We will simply rest on ministerial assurances with regard to the financial side of this as distinct from the operational side.
      The amendment is a tribute to the House of Commons and the way hon. Members argue their case in Committee, to the persistence of individual Members in representing the interests of people outside, and to the reasonableness of Ministers in recognising that there is genuine concern here that ought to be met in some way in the statute. I think that this is what the Government are trying to do and I commend them for it.
      Mr. Deputy Speaker: Perhaps I should just make it clear, in view of what the right hon. Member has said, that we are discussing new clause 6, new clause 10 and Government amendment No. 3. They can all be discussed together. In due course we shall get to Government amendment 3 and I shall invite the Minister to move it formally.
      Mr. John Spellar: I listened with interest to the comments of the right hon. Member for Greenock and Port

      749
      Glasgow (Dr. Mabon) about the many columns in the Official Report of the Committee proceedings, although I doubt whether many of them report contributions from the right hon. Gentleman, which would be difficult in view of his great distance from this place when he chose not to participate in the Committee proceedings.
      Dr. Mabon: That is thoroughly unfair. I missed one morning sitting of the Committee and it did not relate to this matter. The hon. Gentleman must do me justice.
      Mr. Spellar: We shall have to examine the record to see whether the injustice is as great as the right hon. Gentleman suggests.
      My right hon. Friend the Member for Lanarkshire, North (Mr. Smith) spoke of the differences between the Bill and the Oil and Gas (Enterprise) Act. Interestingly, we heard a great deal about that Act in the early part of the Committee but much less in the later part. That may have been due to the change of Minister and the more positive attitude of the Government to our representations thereafter. I hope that I have not done the Minister a disservice by mentioning that.
      Like my right hon. Friend the Member for Lanarkshire, North, I am pleased that the Government have made this move with amendment No. 3. There was a significant change in attitude after most of the members of the Committee had visited the Bankside national grid switching centre and seen the great complexity of the operations and the dedication and technical sophistication of the staff. I believe that that experience had a major impact on the views of hon. Members on both sides of the Committee about the practicability of operating the scheme without taking into account the operation at Bankside and the work of the national grid.
      Two aspects of amendment No. 3 require amplification. The first is the technical integrity of the grid system—the balancing of power supplies, the maintenance of the correct cycles and the health and safety aspects. Correct power loads must be maintained at all times so that machinery is not damaged and works at the highest efficiency. That area is clear and is almost certainly covered by amendment No. 3, although further clarification would be helpful.
      The second aspect is that of merit order—bringing in stations according to the relative cost of the electricity that they produce, and the central control in bringing those stations on stream and into the system at a particular time. It is possible to run the national grid system by balancing supply without the considerations of merit order set out in John Lyons' letter about the financial contributions involved and the cost of the electricity. The question of merit order is important for the morale of the staff who year by year have managed to push up the thermal efficiency of the overall electricity supply system and to run a very effective and efficient system. I hope that the Minister will amplify this and confirm that amendment No. 3 will apply not only to maintenance of the technical integrity of the system but to the merit order system that has had such highly beneficial results not just for the industry but for the consumer.
      Mr. Palmer: I shall be brief, as the Government have made an extremely important concession which goes to the heart of the Bill. I am glad that the Secretary of State for Energy is here for a while. He said from a sedentary position that there had been private electricity generation
      750
      for a very long time. That is perfectly true. The original nationalisation Act of 1947 did not attempt to interfere with private generation when it was part of a normal industrial process.
      6.45 pm
      Interestingly, however, there is considerably less private generation today than there was 10 years ago Indeed, I dealt with this in an article. The amount of private generation has been shrinking constantly. If private generation as part of a general industrial process were that much more efficient, one would expect the proportion to increase, but the reverse has been the case. There is no mystery about that. It is not a matter of ideology. The electricity boards and the CEGB are specialists in generation, so they can produce electricity more cheaply than the average private generator. There is nothing new about the savings that come from specialisation. The latest example is the decision of London Transport to close its two stations at Lots road and Greenwich because it is cheaper to obtain its electricity supply entirely from the national grid. That is surely the correct test and adequately answers the Secretary of State's muttering from a seated position.
      Two main changes are being brought about in the Bill. First, the boards must link the private generators to the system. That decision is no longer a commercial matter. Secondly, private generators have a right to use the public network to supply private industrial consumers or others. The efficiency of achieving that at minimum cost has always depended on the operating circumstances. In other words, the boards should not have to take a high-cost supply at a time inconvenient to them from the merit order point of view. As a result of the Government's acceptance of merit order as the determinant, as I hope it will be, the tariff arrangements will be very different. This is part of the answer to the point made by the right hon. Member for Greenock and Port Glasgow. Electricity is not sold like little apples. Very often, it is sold according to the time of day. At peak times, electricity units are almost worth their weight in gold, but they are a glut on the market at 3 am on a warm June night. Thus, the operation order is the key not just to the integrity of the system but to pricing. Nevertheless, it would be less than generous of me if I did not thank the Government for making the change. Reality seems to be breaking through at every stage of the Bill, and that is all to the good.
      Mr. Gray: I announced in Committee our intention
      "to introduce a Government amendment to ensure that electricity boards retain operational control of their supply systems"—[Official Report, Standing Committee G, 1 February 1983; c. 345.]
      when responding to requests from private generators. We have now had detailed discussions with the Electricity Council about the exact wording and I am satisfied that amendment No. 3 affords the necessary protection. Due to the time taken in consulting the industry, we were not able to table our amendment before the Opposition new clauses were tabled but I am glad that, having seen our amendment, which has been agreed with the Electricity Council, the Opposition feel that we have met their very, reasonable concerns, although we have used a different approach to the mechanism for doing so.
      I readily respond to the comments of the right hon. Members for Greenock and Port Glasgow (Dr. Mabon) and for Lanarkshire, North (Mr. Smith) that this was an

      751
      example of the House of Commons doing its work properly. This has been achieved by argument and persuasion and does the Committee credit. I pay my respects to the Opposition for the constructive way in which they approached this part of the Bill. I shall not flatter them too much because on other parts of the Bill they were not perhaps so constructive. However, slowly and surely persuasion may bring them to our way of thinking.
      The amendment makes an addition to clause 5 and requires that an offer made by a board in response to a request from a private generator should include any reasonable terms and conditions which the board may consider necessary for it to retain control of the electricity supply system. The amendment is directed at the boards' ability to operate minute-by-minute control so that they can maintain constant supplies to consumers. It does not affect the boards' duty to respond to a private generator's request under clause 5 to provide supplies of electricity or permit him to use the transmission and distribution system, except on this minute-by-minute basis, nor does it affect the financial terms that will be offered to a private generator for the purchase of his electricity, which are governed by clause 7.
      The private generator or supplier will be required to conform with reasonable terms and conditions made by the board to ensure the continued safe and efficient operation of the system and thereby the regular supply of electricity to consumers generally. The boards have, of course, statutory obligations to give a constant supply and maintain frequency and voltage. The amendment will help avoid any conflict between these obligations and those towards private generators.
      Mr. Palmer: Surely the boards will have some say about the time within the 24 hours that the private generator comes on to the system. The board will not be obliged to take high-cost units when it can get cheaper units from its own sources of generation.
      Mr. Gray: I should have continued a little longer before I gave way, because I am about to deal with the point that worries the hon. Gentleman.
      The terms and conditions which a board may impose could include the timing of taking a private generator's supply into the board's system. In the case of a purchase from a large private station by the CEGB, the private generator may have to take his place in the merit order of generating stations. That is the point that concerned the hon. Members for Bristol, North-West (Mr. Palmer) and for Birmingham, Northfield (Mr. Spellar).
      We believe that the amendment offers boards necessary protection and, unlike the amendment proposed by the Opposition, allows the boards to decide what terms and conditions are desirable in each case. We believe that to be important. It should not serve as a deterrent to private generators. The clause already allows boards to impose reasonable terms and conditions. The amendment removes any doubt about whether the terms and conditions could include those relating to operational control. If a private generator considered that any term or condition was unreasonable, he would have access to arbitration under clause 9.
      I am sure that all right hon. and hon. Members will welcome the amendment, and I commend it to the House.
      Dr. Mabon: When the amendment mentions terms, does that include tariffs?
      Mr. Gray: No.
      Mr. John Smith: In view of the turn of events and the concession made by the Government, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 7

      GENERAL PLANS AND ARRANGEMENTS
      `(1) It shall be the duty of the Electricity Council and the Boards to inform, collectively or separately, those organisations recognised by them for the negotiation of terms and conditions of employment of the general plans and arrangements of the Electricity Council and the Boards for performing their functions in relation to the supply of electricity.
      (2) The Electricity Council and the Boards shall consider any representation or report made to them by the organisations as defined in subsection (1) above.'.—[Mr. Palmer.]
      Brought up, and read the First time.
      Mr. Palmer: I beg to move, That the clause be read a Second time.
      When the Bill was in Committee a useful new clause was tabled. It dealt with consumers' councils. There have always been statutory area consultative councils, but the Electricity Consumers Council is voluntary. The amendment was agreed in Committee. The proposal is that the Electricity Consumers Council should have statutory force. I believe that both sides of the House are in favour of that.
      I am not a syndicalist in these matters. I believe in the principle that if industries are brought into national ownership it should be for the good of the community. There may be those in other industries who would prefer to see their industries run on the syndicalist principle. I am not one of them. The British people are the owners of the electricity supply industry and it should be run in the consumers interests.
      There should, therefore, be a statutory consumers council to deal with grievances and to ensure that the electricity boards pay attention to those grievances and make any necessary changes. Where charges are thought to be unreasonable, consumers should have an opportunity, both nationally and locally, of making representations through consumers councils and perhaps finally of having the matter considered by the Minister. The principle is that the consumer should be brought intimately into association with the working of the industry.
      I do not believe that statutory bodies are enough. Electricity boards are often judged by the man and woman in the street by whether they get good service in electricity showrooms. Nevertheless, statutory machinery is important. We are not against the changes made in Committee which turned the voluntary, more informal Electricity Consumers Council into a statutory body, but the new clause proposes to extend the principle of giving maximum information to consumers to employees of the industry. Surely they should have just as much information about the working of the boards, costs, prices and policies as consumers. There should be a proper balance between the two. The new clause provides:
      "(1) It shall be the duty of the Electricity Council and the Boards to inform, collectively or separately, those organisations recognised by them for the negotiation of terms and conditions of employment"—

      753
      that is a way of describing trade unions, and is a form of words that has been used in previous legislation relating to the electricity supply industry—
      "of the general plans and arrangements of the Electricity Council and the Boards for performing their functions in relation to the supply of electricity."
      I believe that the principle which has ben applied to consumers should apply to employees through their representatives and trade unions. Therefore, the clause continues:
      "(2) The Electricity Council and the Boards shall consider any representation or report made to them by the organisations as defined in subsection (1) above.'."
      This is a perfectly reasonable new clause. We are told, and we read in all the books and pamphlets on management, that it is the first duty of modern management to consult employees through their elected representatives. I cannot see why there should be any difference of principle between the two sides of the House. All hon. Members are consistent in their belief in the need for maximum information and that where there are disagreements over policy the causes should be examined.
      7 pm
      It may be argued—I rather suspect that this will be the case—by Ministers that the right of employees to consultation through their trade unions is already enshrined in legislation which is common, I believe, to all nationalised industries, stating that the boards must consult the unions on the establishment of machinery for negotiation of wages, salaries and conditions. There is also the joint consultation provision which means in this case that the electricity boards must consult trade unions and bodies and organisations representing employees on health, safety and welfare and also, I believe, on the efficiency of the boards' services.
      A complaint of the unions often put to the boards is that the boards sometimes interpret the obligation as a duty laid upon them to consult on policy once that policy has been decided. It is not often that the boards say to the unions, "We are proposing to do this or that. What do you think?" The boards make up their minds and tell the unions what they propose, asking the unions whether they wish to modify or change the proposals and seeking their cooperation.
      That approach is usually defended under the old title of managerial prerogative. It does not amount, in my view, to full and modern consultation. Under the new clause, there would be a duty on the Electricity Council and the boards to inform collectively or separately. The boards would presumably inform the national consultative council and the regional consultative councils representing consumers of their plans in advance of decisions being made. I cannot imagine that many consumer representatives would be satisfied with a procedure under which the boards decided what to do before asking for views on that decision. I am using a parallel argument in justification of the new clause. I hope that I receive a favourable response.
      Mr. John Spellar: My hon. Friend the Member for Bristol, North-East (Mr. Palmer) has talked about consumer councils. Like my hon. Friend, I have no wish to underplay their role in monitoring and feeding into the work of the electricity supply industry the views of consumers. Inevitably, however, the link between 20 million consumers and those who sit on the body is slightly tenuous in spite of the good work that is done. The link between 150,000 electricity supply workers and their trade
      754
      union representatives is considerably stronger. There is a feeling that the consultative procedure for the unions in the industry should not merely be post hoc notification of decisions already taken but that greater involvement of representatives of the work force is needed.
      I am aware that arrangements already exist in the industry for consultation. Those arrangements are not always operated in the spirit that we hope would occur. There has only recently been the case of the cross-channel cable link and the ship that will be used to implement it. Those in the electricity supply industry feel keenly that it was only when this matter became the subject of strong debate that they were even informed that the CEGB was proposing to lease a cable-laying ship that would be bought in South Korea and that the building of the ship would effectively be financed by the CEGB.
      Many unions with an interest in the electricity supply industry feel strongly that the future market of the industry depends on the help of major basic industries such as shipbuilding and steel. It is fair to say that, following some initial problems, station closures are being handled better in the electricity supply industry than closures in other industries. Future investment and fuel policy have also been handled quite well. There is still obviously a need for improvement and refinement of the system. It would be appropriate, when discussing legislation that will give greater statutory teeth to the consultative council, to beef up the consultation between the industry and the representatives of employees in the industry.
      Mr. Gray: The Government are committed to the principle of managements informing and consulting employees about matters that affect them. They have constantly urged companies to develop the procedures which are appropriate to their particular circumstances. Section 12 of the Electricity Act 1957 already requires the Electricity Council and the Scottish electricity boards to consult employees' organisations with a view to concluding agreements about conditions of employment, safety, health, welfare, education, training of employees and other matters of mutual interest, including efficiency in the operation of the services of the council and the boards.
      I should like to say a few words about safety, a subject to which hon. Members attach special importance. We have had uppermost in our minds, in allowing for an expansion of private electricity generation, the need to maintain the highest standards of safety. We have had a full discussion on this subject, which the House always rightly treats with the greatest seriousness. I should like to emphasise the attention that we pay to the matter. We intend to replace the existing regulations with updated ones, to apply regulations both to the public and private sectors and to make new regulations as necessary.
      We shall consult the Health and Safety Commission before making any regulations on health and safety matters. We shall not make any regulations that conflict with the Health and Safety at Work etc. Act 1974 or its relevant statutory provisions. We shall be keen to ensure that all aspects of the supply and use of electricity are fully covered by the regulations. Naturally, we keep under review the adequacy of the regulations. In this process, we shall be looking carefully to see whether there is need to strengthen them. I hope that the House will accept my assurance on that matter. Various joint bodies consisting

      755
      of employees' and employers' representatives have been established and are adequate to deal with any problems that might arise.
      The duty of the Electricity Council and the CEGB to inform the Electricity Consumers Council of their general plans and arrangements follows on a national basis the existing duty already imposed by the 1947 Act on area boards which requires them to inform their area consultative councils of their general plans and arrangements. It also parallels provisions already contained in other Acts governing nationalised industries. None of these Acts provides a similar provision for consultation with the trade unions.
      The points made by the hon. Members for Bristol, North-East (Mr. Palmer) and for Birmingham, Northfield (Mr. Spellar) were made to me at a meeting that I had with trade unionists at which the respective unions were represented. It was a useful meeting. We discussed many aspects of the Bill. The trade unions expressed appreciation of the fact that their points of view had been considered by the Government. I warned the trade unionists whom I met at that time that I was not prepared to give any commitment about their wishes. They said they would be making arrangements to have their view aired in the House. They said they would return to that point at some future date, which no doubt they will.
      However, as I was saying, I see no reason to make an exception in the case of the electricity supply industry. Having registered their points, the Opposition might consider withdrawing the new clause.
      Mr. Palmer: We cannot withdraw this new clause.
      Mr. Skeet: Why?
      Mr. Palmer: In reply to my argument, the Minister said that this provision does not exist in the other statutes. That is not much of an argument. Time has passed. The new clause represents an advance. It can be argued that it means an additional instalment of consultations with employees in the electricity supply industry. That could well be extended to other industries. So the Minister's argument is as broad as it is long.
      The right hon. Gentleman acknowledged that he had listened to the views of the unions, which he thought were quite reasonable; that they are entitled to as much information as electricity consumers. The unions are arguing not for syndicalism, that they should run the industry, but for the interests of those who work in it. They feel a responsibility to the community as a whole. The chairmen of the board do not operate the industry in an everyday sense. All the employees from the managerial side, both technical and administrative, through the financial mechanism to highly skilled technicians, skilled employees and unskilled employees make up the living industry.
      When the unions met the Minister responsible, they argued that they should know just as much as the consumers so that they could serve them better. The right hon. Gentleman rejects that argument. He has not told the House why he rejects it. Perhaps he does not think it is necessary because such a clause is not in statutes affecting the other nationalised industries. When someone has listened to a good argument, he should accept that it is a good argument and consider it. I am sorry that the right
      756
      hon. Gentleman does not propose to support the new clause, and on behalf of my right hon. and hon. Friends I propose to divide the House.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 173, Noes 195.

      Division No. 86]

      [7.15 pm

      AYES

      Adams, Allen

      Haynes, Frank

      Allaun, Frank

      Heffer, Eric S.

      Alton, David

      Home Robertson, John

      Anderson, Donald

      Homewood, William

      Archer, Rt Hon Peter

      Hooley, Frank

      Ashton, Joe

      Howell, Rt Hon D.

      Atkinson, N.(H'gey,)

      Howells, Geraint

      Bagier, Gordon AT.

      Hoyle, Douglas

      Barnett, Guy (Greenwich)

      Hughes, Mark (Durham)

      Barnett, Rt Hon Joel (H'wd)

      Hughes, Roy (Newport)

      Beith, A. J.

      Hughes, Simon (Bermondsey)

      Bennett, Andrew (St'kp't N)

      Jay, Rt Hon Douglas

      Bidwell, Sydney

      Jenkins, Rt Hon Roy (Hillh'd)

      Booth, Rt Hon Albert

      Johnson, James (Hull West)

      Bray, Dr Jeremy

      Johnston, Russell (Inverness)

      Brocklebank-Fowler, C.

      Jones, Rt Hon Alec (Rh'dda)

      Brown, Hugh D. (Provan)

      Jones, Barry (East Flint)

      Callaghan, Rt Hon J.

      Jones, Dan (Burnley)

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

      Kaufman, Rt Hon Gerald

      Campbell, Ian

      Kerr, Russell

      Campbell-Savours, Dale

      Lambie, David

      Canavan, Dennis

      Leighton, Ronald

      Carmichael, Neil

      Lestor, Miss Joan

      Carter-Jones, Lewis

      Lewis, Arthur (N'ham NW)

      Cartwright, John

      Litherland, Robert

      Clark, Dr David (S Shields)

      Lofthouse, Geoffrey

      Clarke, Thomas (C'b'dge, A'rie)

      Lyon, Alexander (York)

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

      Mabon, Rt Hon Dr J. Dickson

      Cohen, Stanley

      McDonald, Dr Oonagh

      Coleman, Donald

      McGuire, Michael (Ince)

      Concannon, Rt Hon J. D.

      McKay, Allen (Penistone)

      Cowans, Harry

      McKelvey, William

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

      MacKenzie, Rt Hon Gregor

      Crowther, Stan

      Maclennan, Robert

      Cryer, Bob

      McNamara, Kevin

      Cunliffe, Lawrence

      McTaggart, Robert

      Cunningham, G. (Islington S)

      Marshall, D(G'gow S'ton)

      Dalyell, Tam

      Marshall, Jim (Leicester S)

      Davidson, Arthur

      Martin, M (G'gow S'burn)

      Davis, Terry (B'ham, Stechf'd)

      Mason, Rt Hon Roy

      Dean, Joseph (Leeds West)

      Maxton, John

      Dewar, Donald

      Millan, Rt Hon Bruce

      Dixon, Donald

      Mitchell, R. C. (Soton Itchen)

      Dormand, Jack

      Morris, Rt Hon A. (W'shawe)

      Dubs, Alfred

      Morris, Rt Hon C. (O'shaw)

      Duffy, A. E. P.

      Morris, Rt Hon J. (Aberavon)

      Dunwoody, Hon Mrs G.

      Morton, George

      Eadie, Alex

      Newens, Stanley

      Eastham, Ken

      Oakes, Rt Hon Gordon

      Ellis, R. (NE D'bysh're)

      O'Halloran, Michael

      Ellis, Tom (Wrexham)

      O'Neill, Martin

      English, Michael

      Orme, Rt Hon Stanley

      Evans, Ioan (Aberdare)

      Palmer, Arthur

      Evans, John (Newton)

      Park, George

      Ewing, Harry

      Pavitt, Laurie

      Faulds, Andrew

      Powell, Raymond (Ogmore)

      Flannery, Martin

      Race, Reg

      Ford, Ben

      Richardson, Jo

      Forrester, John

      Roberts, Albert (Normanton)

      Foster, Derek

      Roberts, Ernest (Hackney N)

      Foulkes, George

      Robinson, G. (Coventry NW)

      Freeson, Rt Hon Reginald

      Rooker, J. W.

      Freud, Clement

      Roper, John

      Garrett, John (Norwich S)

      Ross, Ernest (Dundee West)

      Ginsburg, David

      Sever, John

      Golding, John

      Short, Mrs Renée

      Gourlay, Harry

      Silkin, Rt Hon J. (Deptford)

      Graham, Ted

      Silverman, Julius

      Grimond, Rt Hon J.

      Skinner, Dennis

      Harrison, Rt Hon Walter

      Smith, Rt Hon J. (N Lanark)

      Hart, Rt Hon Dame Judith

      Snape, Peter

      757

      Soley, Clive

      Welsh, Michael

      Spearing, Nigel

      White, Frank R.

      Spellar, John Francis (B'ham)

      White, J. (G'gow Pollok)

      Spriggs, Leslie

      Whitlock, William

      Steel, Rt Hon David

      Wigley, Dafydd

      Stoddart, David

      Willey, Rt Hon Frederick

      Stott, Roger

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

      Strang, Gavin

      Williams, Rt Hon Mrs (Crosby)

      Summerskill, Hon Dr Shirley

      Wilson, Gordon (Dundee E)

      Taylor, Mrs Ann (Bolton W)

      Winnick, David

      Thomas, Jeffrey (Abertillery)

      Woolmer, Kenneth

      Thorne, Stan (Preston South)

      Wright, Sheila

      Torney, Tom

      Young, David (Bolton E)

      Wainwright, E.(Dearne V)

      Wainwright, R.(Colne V)

      Tellers for the Ayes:

      Walker, Rt Hon H.(D'caster)

      Mr. James Hamilton and

      Watkins, David

      Dr. Edmund Marshall

      Weetch, Ken

      NOES

      Alexander, Richard

      Fookes, Miss Janet

      Alison, Rt Hon Michael

      Fraser, Rt Hon Sir Hugh

      Ancram, Michael

      Fraser, Peter (South Angus)

      Atkins, Rt Hon H.(S'thorne)

      Fry, Peter

      Atkins, Robert(Preston N)

      Gardiner, George (Reigate)

      Atkinson, David (B'm'th,E)

      Gardner, Sir Edward

      Baker, Kenneth (St.M'bone,)

      Garel-Jones, Tristan

      Baker, Nicholas (N Dorset)

      Goodhart, Sir Philip

      Beaumont-Dark, Anthony

      Goodhew, Sir Victor

      Bendall, Vivian

      Goodlad, Alastair

      Benyon, Thomas (A'don)

      Gow, Ian

      Benyon, W. (Buckingham)

      Gray, Rt Hon Hamish

      Berry, Hon Anthony

      Greenway, Harry

      Bevan, David Gilroy

      Griffiths, Peter (Portsm'th N)

      Biggs-Davison, Sir John

      Grist, Ian

      Blackburn, John

      Gummer, John Selwyn

      Boscawen, Hon Robert

      Hamilton, Hon A.

      Bottomley, Peter (W'wich W)

      Hamilton, Michael (Salisbury)

      Braine, Sir Bernard

      Hampson, Dr Keith

      Brinton, Tim

      Hannam, John

      Brittan, Rt. Hon. Leon

      Haselhurst, Alan

      Brooke, Hon Peter

      Hawksley, Warren

      Brotherton, Michael

      Hayhoe, Barney

      Brown, Michael(Brigg & Sc'n)

      Heddle, John

      Bruce-Gardyne, John

      Hicks, Robert

      Budgen, Nick

      Higgins, Rt Hon Terence L.

      Burden, Sir Frederick

      Hill, James

      Butcher, John

      Holland, Philip (Carlton)

      Butler, Hon Adam

      Hunt, David (Wirral)

      Carlisle, John (Luton West)

      Hunt, John (Ravensbourne)

      Carlisle, Kenneth (Lincoln)

      Irvine, RtHon Bryant Godman

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

      Irving, Charles (Cheltenham)

      Chalker, Mrs. Lynda

      Jessel, Toby

      Chapman, Sydney

      Johnson Smith, Sir Geoffrey

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

      Jopling, Rt Hon Michael

      Clark, Sir W. (Croydon S)

      Kaberry, Sir Donald

      Clarke, Kenneth (Rushcliffe)

      Kimball, Sir Marcus

      Clegg, Sir Walter

      Kitson, Sir Timothy

      Cockeram, Eric

      Knight, Mrs Jill

      Colvin, Michael

      Knox, David

      Cope, John

      Latham, Michael

      Costain, Sir Albert

      Lawrence, Ivan

      Critchley, Julian

      Lawson, Rt Hon Nigel

      Crouch, David

      Lennox-Boyd, Hon Mark

      Dickens, Geoffrey

      Lester, Jim (Beeston)

      Dorrell, Stephen

      Lewis, Sir Kenneth (Rutland)

      Douglas-Hamilton, Lord J.

      Lloyd, Ian (Havant & W'Ioo)

      Dover, Denshore

      Lloyd, Peter (Fareham)

      du Cann, Rt Hon Edward

      Loveridge, John

      Dunn, Robert (Dartford)

      Luce, Richard

      Durant, Tony

      Lyell, Nicholas

      Eden, Rt Hon Sir John

      McCrindle, Robert

      Eggar, Tim

      Macfarlane, Neil

      Elliott, Sir William

      MacKay, John (Argyll)

      Fairgrieve, Sir Russell

      McQuarrie, Albert

      Fell, Sir Anthony

      Major, John

      Fenner, Mrs Peggy

      Marlow, Antony

      Fisher, Sir Nigel

      Marten, Rt Hon Neil

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

      Mather, Carol

      Fletcher-Cooke, Sir Charles

      Maude, Rt Hon Sir Angus

      758

      Mawby, Ray

      Shepherd, Colin (Hereford)

      Maxwell-Hyslop, Robin

      Shepherd, Richard

      Mellor, David

      Sims, Roger

      Meyer, Sir Anthony

      Skeet, T. H. H.

      Miller, Hal (B'grove)

      Smith, Tim (Beaconsfield)

      Miscampbell, Norman

      Speed, Keith

      Moate, Roger

      Speller, Tony

      Monro, Sir Hector

      Spence, John

      Moore, John

      Spicer, Michael (S Worcs)

      Morrison, Hon C. (Devizes)

      Stanbrook, Ivor

      Murphy, Christopher

      Stanley, John

      Myles, David

      Stokes, John

      Neale, Gerrard

      Taylor, Teddy (S'end E)

      Nelson, Anthony

      Thomas, Rt Hon Peter

      Newton, Tony

      Thompson, Donald

      Onslow, Cranley

      Thornton, Malcolm

      Osborn, John

      Townend, John (Bridlington)

      Page, John (Harrow, West)

      Townsend, Cyril D, (B'heath)

      Page, Richard (SW Herts)

      Trippier, David

      Parris, Matthew

      van Straubenzee, Sir W.

      Patten, John (Oxford)

      Waddington, David

      Pawsey, James

      Wakeham, John

      Pink, R. Bonner

      Walker, B. (Perth)

      Pollock, Alexander

      Waller, Gary

      Prentice, Rt Hon Reg

      Warren, Kenneth

      Price, Sir David (Eastleigh)

      Watson, John

      Proctor, K. Harvey

      Wells, Bowen

      Raison, Rt Hon Timothy

      Wells, John (Maidstone)

      Rees-Davies, W. R.

      Wheeler, John

      Renton, Tim

      Wiggin, Jerry

      Rhodes James, Robert

      Wilkinson, John

      Ridley, Hon Nicholas

      Williams, D.(Montgomery)

      Rippon, Rt Hon Geoffrey

      Wolfson, Mark

      Roberts, Wyn (Conway)

      Young, Sir George (Acton)

      Rost, Peter

      Younger, Rt Hon George

      Rumbold, Mrs A. C. R.

      Sainsbury, Hon Timothy

      Tellers for the Noes:

      Shaw, Giles (Pudsey)

      Mr. Ian Lang and

      Shaw, Sir Michael (Scarb')

      Mr. Douglas Hogg.

      Shelton, William (Streatham)

      Question accordingly negatived.

    New Clause 8

      DIRECTIONS BY THE SECRETARY OF STATE
      'The Secretary of State shall give to any person (other than the Electricity Boards) who has established or acquired an electricity generating station, such directions as he may give to the Electricity Boards under section 8(1) of the Electricity Act 1957 which may restrict their access to particular types or sources of fuel supplies.'.—[Mr. Eadie.]
      Brought up, and read the First time.
      Mr. Eadie: I beg to move, that the clause he read a Second time.
      We approached this issue on Second Reading, and to some extent in Committee, although for a time I was absent from Committee, because I was in hospital. Nevertheless, we attach great importance and significance to this new clause. It seeks to ensure that private generators will not be given blatant preference over the public sector in the use of fuels. As we have discussed this issue before, it is no secret that the main factor is coal.
      The issue is somewhat complicated by the fact that the Government have continually spelt out that the Bill is necessary because they are wedded to the cause of privatisation. The Bill's implications are another matter. Indeed, my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) made some very caustic remarks about the Bill. Nevertheless, the Government will have to tell us whether the privatisation to which new clause 8 refers will be implemented come hell or high water. It is possible to obtain cheaper coal from other countries. Indeed, on

      759
      Second Reading, the Liberals were very enthusiastic about the importation of foreign coal. I understand that the right hon. Member for Greenock and Port Glasgow (Dr. Mabon)—a member of the Social Democratic party—was a bit more cautious. He accused me of being rather hard on him. I think that I apologised to him at the Committee's first sitting, because he said that, with his anti-apartheid record he was not in favour of South African coal. My hon. Friends and I longed to see an amendment in Committee—or even now—saying that Liberal and SDP Members were in favour of importing foreign coal although the right hon. Member for Greenock and Port Glasgow was not in favour of importing coal from South Africa. The right hon. Gentleman has not clarified the issue. We are as perplexed as ever. I apologised to him during the first sitting of the Committee, but I do not know why I bothered. I seem to have been wasting my time.
      7.30 pm
      I used the phrase "come hell or high water" in connection with the importation of foreign coal. The Minister will recall the tripartite meetings that we held. At one time he was very much sold on the idea of tripartite meetings. In one of those meetings, the then Government agreed to stick to our indigenous coal industry, despite the short-term fluctuations of the market. In my view, it is a mistake to allow private generators to import foreign coal, bearing in mind the promises made by successive Governments to the miners and the general philosophy which seems to ignore the role that coal must play in our future energy needs.
      Mr. Skeet: If it is possible for public and private operators to have free access to oil from any part of the world, in spite of the fact that we produce it, and the same applies to gas which we import and also produce, why should not the same rule apply to coal?
      Mr. Eadie: I shall answer that question as I develop my argument. I am astonished at the hon. Member for Bedford (Mr. Skeet), whose knowledge of energy matters I greatly respect. He is a most diligent Member in this connection. However, I thought he understood that we are wasting our gas and oil assets. I thought he understood that coal is a fuel that we have in abundance. The reason that we should not allow the market to decide is that it would be disastrous to the nation.
      I was talking about our future energy needs. Of all the fossil fuels, coal is the most abundant in this country. It will still be available when gas and oil have all but disappeared. At one time it was recognised that an industrial nation must have secure and safe energy supplies—preferably indigenous energy supplies. It means economic strength. It can even mean economic prosperity for a nation that aspires to be in the industrial league of nations.
      That leads me to the strategic necessity for the country to preserve its energy supplies—particularly coal, which we have in abundance. I could develop the argument. I do not know what is happening at present in the OPEC negotiations. I do not want to talk too much about the middle east, but that is where most of the oil is and will be for some considerable time. Can we really say that there is political stability in the middle east on which we and the world can depend for our oil supplies? I could talk about
      760
      the history of the Yom Kippur war and the next energy crisis. The middle east is a boiling cauldron when it comes to political stability. I put it no higher than that.
      I am tempted to develop the speeches that I and my hon. Friends made from these Benches in the 1960s, when the contraction of the coal mining industry took place. We were voices crying in the wilderness. We tried to warn the House of the tremendous price that would be paid if the contraction continued. I suggest that we have been proved right. Our nation paid a terrible price for what, in my view, was the unnecessary contraction of the mining industry.
      It could be argued that the Government are complacent because at present we are self-sufficient in energy. The Government may be hooked on their complacency about self-sufficiency in energy, and to some extent they are hooked on privatisation. That is why they are prepared to imperil the future indigenous energy supplies of our nation. If we pursue that complacency and dismiss it, saying, "No, it is because we are hooked on privatisation," we shall betray the future comfort and economic prosperity of our children and grandchildren.
      The great fallacy that is perpetuated in the House—I have newspaper reports dealing with the present coal crisis—is that we can easily contract the coal industry. That is not true. Coal mines are not like factories where we can change production overnight. When a coal mine is closed it is closed for all time. There is no going back. The water comes in, the roof collapses, and there is no second chance.
      We must bear in mind that there are long lead times in the sinking of new pits. My major criticism of the Government is that they are pursuing a policy of inevitable contraction in the coal mining industry. I should describe their policy as a black site policy. They are developing new seams and reserves in existing coal mines. I do not criticise them for that. When I was a Minister I said that we should develop existing pits, look for new coal seams and apply new technology. Indeed, it is a worthwhile investment for the nation to develop existing pits. My major criticism of the Government is that their policy will inevitably lead to contraction because they have all but abolished the green field site policy for coal mining.
      How many new pits have the Government been responsible for sinking since they came to office? They have not sunk one new pit. There was the scandal about the vale of Belvoir. There are areas throughout Britain where new pits could be sunk, yet the Government have no energy or enthusiasm to pursue the green field site policy. My charge against the Government is that their black site policy inevitably means the contraction of the mining industry. Ministers come to the Dispatch Box and say that pits become exhausted in time; but, by not sinking new mines, the Government's policy means the inevitable contraction of the coal mining industry. I indict the Government for that policy.
      I say with some feeling that the Government have smashed to smithereens the oil from coal scheme. I know that the Minister will tell us about the modified scheme at Point of Ayr. However, he knows that I do not think much of that. I have already said in the House that I have grave doubts whether Britain will ever begin to make oil from coal. I hope that I am wrong and that we will, but, even if I am wrong, it is a modified scheme that will take place at Point of Ayr.
      The strongest indictment of the Government is that, since their election, they have failed even to begin the oil

      761
      from coal scheme. The Secretary of State and the Under-Secretary know that I signed the agreement in 1978 to start the oil from coal scheme. I obtained £20 million from the Labour Government to start that scheme. However, this Government have procrastinated and made excuses. They have produced report after report and the scheme has never been started. Other countries are going ahead, but Britain, as usual, is laggard in approaching the new technologies.
      The hon. Member for Bedford mentioned new technologies. We are years behind many countries in developing new technologies. We should be discussing the two pilot schemes, which are to be developed and finished in 1982, for the making of oil from coal. We should then go on to consider the commerial use of oil from coal plants. We have missed a wonderful opportunity.
      New clause 8 is an indictment of the Government. It is monstrous to discuss the importation of foreign coal to suit their friends—the private generators—in order to pursue their ideological system of privatisation. We shall listen carefully to what the Government have to say in reply, but it is deplorable that, at a time when the Government are telling us of all the problems of the British coal mining industry, their solution is to import foreign coal. We indict the Government for that and look forward to the Minister's reply.
      7.45 pm
      Mr. Skeet: The hon. Member for Midlothian (Mr. Eadie) normally makes a good speech, but his argument was a little thin tonight. I could not help reflecting that this morning Mr. Siddall said that we had to restructure the coal industry to adapt output to what our customers will buy from us and at what price. He indicted others, but he also commented on the National Coal Board's inability to close more than 1 million tonnes of uneconomic capacity over the past eight years against 3 billion to 4 billion tonnes called for in Plan for Coal. He went on to argue that the 1975 plan is as dead as a dodo. I do not want to do Mr. Siddall an injustice. That is my interpretation rather than what he said.
      I have considered new clause 8 carefully. The hon. Member for Midlothian wanted to give a specific directive to the industry generally about complying with certain conditions as to access to overseas supplies of coal. I understand that he is making use of section 8(1), (2) and (3) of the Electricity Act 1957 which gives the Secretary of State power to give directions of a general character. There is no clause in the Act that enables him to give a specific directive. He may give directives as to
      "the use or disposal of any assets vested in the Board which are not connected with the generation, transmission or distribution of electricity."
      The Act goes on to deal with consultation with the Electricity Council.
      There is no point in using that provision. It is miles away from what is required. It is desirable for everybody in the United Kingdom, including the CEGB, to go to the most desirable market for their fuel. The Government want to keep an eye on what their customers require. Clause 7(3) of the Bill provides that purchases by the board
      "should be on terms which will neither increase nor reduce the prices payable by customers of the Board for electricity supplied to them by the Board."
      Amendment No. 10 provides:
      "An Electricity Board, in fixing tariffs … shall not show undue preference to any person or class of persons and shall not exercise any undue discrimination against any person or class of persons."
      762
      That is to ensure that the people who are dealt with get the fairest and the best possible deal. We are seeking to look after the customer.
      New clause 8 wants a special directive to be issued to the National Coal Board and others saying that they shall not buy foreign coal even though it may have many advantages. For example, if we can buy coal abroad at a cheap price, is it unreasonable to customers in the United Kingdom that it should be imported?
      The value of imported coal from the United States between January and September 1982 worked out at $39 a tonne. Approximately the same figure applies to Australia. The National Coal Board's average cost per tonne of deep mined coal was about $57 per tonne Assuming that somebody is about to set up a private power station, will he arrange to use fuel that is so expensive that he cannot afford to run the power station, or will he run it profitably and for the benefit of the people in industry that he is intending to serve? It seems absurd that we should say to private industry that it cannot do this.
      I make it clear to the hon. Member for Midlothian that the Secretary of State has not given a specific directive to the CEGB that it should not buy Australian coal. He can twist the arm of the CEGB and say that, even though it has contracts to buy from 2 million tonnes to 4 million tonnes of Australian coal over the next two years, it must use its discretion and accumulate half on the European market and take the other half to the United Kingdom. However, he cannot give a directive to the CEGB. Therefore, why should he be in a position to give a directive to anybody else?
      It is important that the National Coal Board monopoly should be breached, particularly as the CEGB is forced to buy 80 per cent. of its fuel from that one source. Imported coal is less costly than that of the coal board. I shall not quote the figures, but I refer to the CEGB's statement of case given to the Sizewell inquiry. On page 53, note 10.12, the case shows National Coal Board coal in one column and imported coal in the other, and gives projections for 1980–81 of 2,000 and 2,030. The point to be made from these figures is that whereas the price of coal from the National Coal Board goes up, the price of imported coal always keeps a differential on the cheaper side from coal mined in the United Kingdom. Therefore, it would be advisable in the longer term if the CEGB bought some coal from abroad.
      Mr. Eadie: The hon. Gentleman is playing a rather doubtful game with statistics in estimated costs. Would he care to guess what the price of a house, of a motor car or of petrol would be within his time scale? One can suggest a whole range of items. The hon. Gentleman is indulging in some doubtful playing with statistics.
      Mr. Skeet: I do not think so, if people such as Scargill are going about the country suggesting further strikes over closures when the chairman is trying to make the National Coal Board profitable. If the coal board is to be profitable, it must reduce its prices to its customers and make it possible for the consumer to buy cheaper electricity. If the miners are to strike all the time—we have one threatened strike after another from Scargill—I forecast that the price of coal will escalate and inevitably the price of electricity will rise.
      I have already mentioned the availability of coal by the end of the century. I know that this year the CEGB has

      763
      agreed to buy 70 million tonnes, which is a substantial part of the coal board's output. The CEGB is going to buy a further quantity of 3 million tonnes at a different price. It can go above that if it has the requirement. Mr. Colin Robinson has given evidence on this matter. He is a well-known professor of economics at Surrey university. His calculation is that by 2000 AD the sales to power stations will drop to between 40 million and 60 million tonnes. These are not my figures, but they are possibilities that are taken seriously in the industry. If this is right, and if the National Coal Board cannot supply, it must be open to individuals to buy the best coal where they can find it in a market that can supply it.
      I know that the hon. Member for Midlothian is extremely optimistic, in spite of all the circumstances, but he will have noticed the decline in the oil price. The price is coming down steadily. It may settle at between $28 and $30 a barrel initially, but it could go down to perhaps $25. If it comes down to that, fuel oil will begin to become competitive with coal. With those energy trends, the CEGB would burn more fuel oil and perhaps a little less coal.
      Taking all this into account, one can see the absurdity of having a specific directive cajoling people to buy coal from stocks in the United Kingdom. If there is free availability from overseas suppliers who would put the coal on the shores of the United Kingdom at advantageous prices for burning in power stations, those stocks should be used.
      The suggestion in the new clause would conflict with an EC directive of 14 April 1975
      "concerning the restriction of the use of petroleum products in power stations".
      Petroleum products can be used in power stations in the following cases, and
      "Authorisation may be granted only in the following cases:—if the power station has a capacity of less than 10 MWe".
      We are now being told that this must be contradicted by the Secretary of State, who must tell the industry involved that it cannot use petroleum products, as has been laid down by the directive, but must use coal that has been stacked up in some part of the United Kingdom, simply for the convenience of the miners who want to ensure that their coal is used, whatever the price.
      We must not fall into this trap. I have the greatest regard for the miners and for an extremely healthy coal industry in the United Kingdom, but the mining industry may have to be trimmed to a suitable size, because we cannot go on subsidising the industry, with capital investment or whatever to the tune of £1,000 million per year, which is a considerable sum. We must enable people to buy, if they can, and give them freedom of choice. This is what competition is all about.
      I appreciate the argument of the hon. Member for Midlothian. The hon. Gentleman, as an ex-miner, puts forward his case with great feeling. Having said that, we have to appreciate that we represent our constituents who are the users of electricity. My constituents complain to me about the high price of electricity, and that is because of the high price of coal. If we are to have a private sector, we must ensure that it has the opportunity to buy the cheapest fuel in the market.
      Dr. J. Dickson Mabon: The burden of the argument of the hon. Member for Bedford (Mr. Skeet) is that the
      764
      new clause is not valid and that section 8(1) of the Electricity Act 1957 does not restrict access to particular types and sources of fuels by direction of the Secretary of State. Given that that is not so and the clause is valid, it strikes me as being a reasonable one. It is even-handed. If it is true that the Secretary of State has or should have these powers with regard to the public sector, and if it is in the national interest to direct the public sector to behave in a certain way with regard to certain fuels and certain sources of fuel, it is only reasonable and even apt that that power should be at his hand with regard to the private sector.
      The only thing that is wrong with the clause is that it does not seek to achieve what its author wishes to achieve. He wishes the Secretary of State to direct that only British coal be consumed.
      Mr. Skeet: The right hon. Gentleman has got it wrong. He will remember that with regard to BNOC there is a clause that enables a general and a specific directive to be given. Section 8 of the Electricity Act 1957 allows only directions of a general character, and gives no power to make a specific direction, which will be necessary if this amendment were to be carried.
      Dr. Mabon: I always said that the hon. Member for Bedford should be a Minister. I am willing to accept on second hand that he may be right, and perhaps the Minister will confirm that there is no necessity for specific directions.
      If there is some way in which the Secretary of State can influence these matters—let us not be confined in thought to this legislative action—it is conceivable that other instruments of government and statutes are available by which this can be achieved. I should be surprised if the Government could not find a way in certain empirical circumstances to prescribe a specific fuel from a specific source for a specific reason. That is possible. It may not be done in this way.
      8 pm
      A valid case is being made to treat the private sector, which is being introduced into the public industry, in an even-handed way. What is unreasonable about that? If Ministers want to object to the new clause, they can object on the ground that it is badly drafted. That is not my fault. I have found it difficult to enter into the debate on the new clause. The hon. Member for Midlothian (Mr. Eadie) excelled himself in introducing the new clause. However, it has nothing to do with the case that he is making. His case has nothing to do with the importation of Polish coal, South African coal and so on. It has nothing to do with oil. Oil is not supposed to be included in the Bill. The new clause is about the consumption of British coal. It is wrong. It means that one can choose to import oil from Venezuela or take in gas from Norway. In other words, the clause is so open-ended that one can do anything one likes, but one does not have to do what the hon. Member for Midlothian is dedicated to doing. It is extraordinary. The hon. Gentleman is riding a bicycle that is taking him in the opposite direction.
      I am prepared to vote for the new clause to please the hon. Gentleman. He apologised, which was a generous thing to do. He demands payment for an apology. I shall repay him by voting for the new clause, but as it stands it is meaningless.
      Mr. John Spellar: The hon. Member for Bedford (Mr. Skeet) argued that the increase in the coal price was forcing up the price of electricity. That was an interesting argument, especially if one looks at the figures that were presented to the Select Committee on Energy. On 21 July the hon. Member for Melton (Mr. Latham) asked the Secretary of State for Energy:
      "Can we turn to areas of 'Where there is no genuine market—as in electricity …' The Chief Secretary to the Treasury on 14 July gave the following information in Hansard. He said that for the period of July 1980–1981 the RPI went up 10·9 per cent., coal went up by 9 per cent. and electricity went up by 22 per cent."
      Therefore, the increase in the coal price was less than the increase in the RPI and the increase in the electricity price was dramatically greater. The argument of the hon. Member for Bedford that the price of British coal is forcing up the price of electricity is not valid. The Select Committee report also says:
      "For the period May 1981–1982 … the RPI went up by 9·5 per cent.; coal went up by 8 per cent. and electricity went up by 10 per cent. That is to say that in both years electricity exceeded the RPI and in the first year it exceeded it by double but in each case coal was below the level of the RPI."
      Therefore, coal has not been driving up the price of electricity. We would argue that that has been deliberate Government policy, but it has been aided by the Government-led recession. The Secretary of State said in the Select Committee:
      "Electricity is a very highly capital intensive industry. It follows that when there is a fall-off in demand as a result of the recession, this has a particularly serious effect on the electricity industry with its very high fixed costs."
      Therefore, the hon. Member for Bedford's argument against the hon. Member for Midlothian looks a little thinner. He argued that the coal industry was driving up the price of electricity. Now, as in Committee, the hon. Gentleman is missing all the arguments about the way in which the Government plan their energy policy. It takes about 10 years from the taking of a decision to when the coal is got out of the pit, with long planning inquiries, as with the vale of Belvoir. Inevitably those periods extend. The Government, of necessity, have to make an estimate of demand and the amount of investment that they will have to put in. We are now saying that a sector of the market will be able, irrespective of long-term strategy issues and the need for long-term investment, to buy on the free market.
      I was interested in the hon. Gentleman's arguments about buying into oil. We have seen the immense instability in the oil price and the problems that it has created for the CEGB. Even now stations are being completed, which we started to build when oil was cheap on the basis of the then prevailing price of oil, which are still uneconomic on the declining price of oil. Therefore, to make decisions in industries, such as the energy industry, with long lead times merely on the basis of spot pricing and to disrupt those markets on the basis of spot pricing is neither good economics in the long run nor good strategic planning for the future of the country.
      We cannot have the major industries with the substantial public investment in the energy sector being dependent on the vagaries of fringe producers who will be able to bring in at any time coal from other areas but who do not have a long-term obligation to provide electricity for their consumers. Although the consumers might be in a slightly more difficult position as a result of the passing of a previous clause, they will not have a right to perpetual
      766
      supply from the private producer. If economics change, perhaps the private producer will switch back or go out of business. The CEGB is not in that position, nor is it in the same position as the private producer in relation to the National Coal Board. There are different relationships between bodies the size of the CEGB and the South of Scotland electricity board and Ministers and Ministers' potential relationships with a considerable number of private electricity producers. The continuing relationship between the Department of Energy and the CEGB leads to informal discussions and pressure of a gentle or not so gentle nature. That pressure is exerted so that there is stability in the industry and in the investment programme and to try to achieve stability in production.
      It would be extremely undesirable in this as in a number of other areas if the public sector were to be the investor and provider of last resort, but subject to the vagaries of the decisions made by independent and fringe producers. Not just with oil but with coal there is political instability in many areas of production. Not long ago we saw the effect on the spot price of coal of the uncertainty in Poland. South Africa, another major coal producer, is not necessarily stable in that respect.
      We must also look towards the turn of the century when oil supplies will not be so plentiful, the battle for coal supplies will become much more intensive and coal prices will become much more volatile not just because of production but because of the lack of facilities for loading and offloading all round the world.
      Finally, we should consider natural gas, which has certain advantages for power production as it is easy to bring on stream rapidly. However, it is also extremely useful for space heating and as a chemical feedstock. It would be undesirable if the general dissuasion from using natural gas except as an emergency fuel were extended to its being used as a base load fuel in view of its long-term future.
      Mr. John Moore: We have had a most interesting and enjoyable debate. I shall start, as one always must, by commenting on the speech of my hon. Friend the Member for Bedford (Mr. Skeet)ֵ. The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) was quite right to commend him. All Conservative Members know the diligence with which he brings his attention to energy matters. He has also applied it to constitutional detail. I am almost certain that he is right in that he is probably one of the few hon. Members who seems to have read new clause 8. In a Freudian way, new clause 8 does not refer to imports at all. It merely says
      "which may restrict their access to particular types or sources of fuel supplies."
      My hon. Friend the Member for Bedford was right about the definition of the limitations of the clause and the ways in which the general powers of direction might be used. Powers of direction have never been used and if we tried to use them, it is extremely unlikely that they could be used in the proposed way.
      As an ardent pro-European, the right hon. Member for Greenock and Port Glasgow will, I am sure, be delighted to know that, even if we attempted to use such powers., we cannot discriminate against European coal under European Coal and Steel Communities rules. We should remind ourselves that we have relationships there. Last year we imported about 431,000 tonnes of coal from the EC, although, of course, we are exporting many millions of tonnes to the Community.

      767
      I was intrigued by the Social Democratic party's approach to the subject. I listened with a sense of growing bewilderment when I tried to understand what its views were. I listened to the right hon. Member for Greenock and Port Glasgow talk about being even-handed—in other words, being pernicious in both directions or applying pressure negatively in both directions. I assumed, as he continued, that he was about to tell us that the alliance, or whatever it calls itself these days, embraces import controls. But no, he happily slipped away from that subject and went into what we must all remember from today's debate as a classic phrase that we shall carry to every part of the country. He said—I must quote him as his words will go down in parliamentary history, "I shall vote for this because it is meaningless." That must be the most perfect definition of a party that tries to be so even-handed as not to have a view on any subject under the sun.
      Mr. Arthur Lewis: Is the Minister aware that there are four potential leaders in that set-up and that they are dithering about who shall be the Prime Minister designate when there is no such animal and cannot be any such animal? I have never heard of such a thing.
      Mr. Moore: Like all hon. Members, I am a diligent reader of the Order Paper and I have noticed the early-day motion in the name of the hon. Member for Newham, North-West (Mr. Lewis). He needs do no more than remember always that they will vote for this new clause because it is meaningless. That covers all manner of sins, irrespective of which candidate stands for which office.
      Dr. J. Dickson Mabon: I am sure that Hansard is more fair than the Minister. He will see that preceding the remarks to which he refers, I referred to the apology that the hon. Member for Midlothian (Mr. Eadie) insisted that he generously made to me and demanded that, in return, I support a clause of this type at this stage of the Bill. I said that I would do that and I am doing it.
      Mr. Eadie: This is the first time that the Opposition have supported a meaningless clause.
      Mr. Moore: It is interesting to give way to such extraordinary interruptions. The whole country will be interested in this exchange. In the absence of detailed discussion on the new clause, the right hon. Gentleman can address himself not to any argument in logic but, apparently, to some sentimental connection that he might still have with the Labour party. I respect the relationships that might still linger on the other side of the Chamber, but his conclusion on behalf of his party was that he would vote for the new clause because it is meaningless.
      Much of the debate has concerned the coal industry, which deserves much more serious consideration. New clause 8 would help to entrench the coal industry in its past. I am the first to agree with the hon. Member for Midlothian, who knows the industry well from his own experience, that the coal industry has a distinguished past. Its contribution to Britain's industrial growth as a cornerstone of the industrial revolution is well documented. The coal industry can no more live in the past than can the rest of Britain and our economy and industry as a whole.
      8.15 pm
      Opposition Members, in supporting new clause 8, are motivated by a negative and defensive attitude to the
      768
      coal industry. They appear to believe that the industry can and should remain isolated from its wider economic environment, with limited markets that are protected and subsidised, because they believe that our coal can never compete freely in Britain and the world. Surely our coal industry deserves greater confidence in its future and its potential than is evidenced by Opposition Members who support this new clause. The Government do not believe that the Opposition's way is the best way forward for the coal industry. Indeed, their way is backwards, which would mean retrenchment and retreat rather than progress.
      The assumptions that underlie new clause 8 about British coal's competitiveness with oil and non-United Kingdom coal is not only defeatist and negative but fundamentally misconceived. At present, coal enjoys a significant price advantage over oil for industrial steam-raising, industrial power generation and a wide range of industrial processes. The Government's coal-firing scheme, which has already created an additional 631,000 tonnes of industrial coal demand from the 110 schemes that have so far accepted £11·2 million in grants, is helping private industry, at a time of tight capital availability, to overcome the capital cost penalties of switching to coal.
      Not only is NCB coal highly competitive with oil for industrial use, but it is generally competitive with the price at which imported coal can be delivered to industrial customers in the United Kingdom. That is why they buy NCB coal. They do not buy it because there is constraint on the source of the coal. Thousands of industrial customers willingly buy NCB coal. Private generators of electricity will have to take their own decision about which fuel to use.
      The aim of this legislation is to lift restrictions on private generators, who should be free to make their own decisions about which fuel to use on commercial and economic grounds. We do not wish to impose more restrictions. The hon. Member for Birmingham, Northfield (Mr. Spellar) referred to gas. He knows that controls already exist under the Energy Act 1976. The Secretary of State must be notified of any proposals for the construction or conversion of power stations to burn oil or gas or to enter into or renew a contract to supply gas. Moreover, he may direct that such a proposal should not be carried out or may attach conditions to that proposal.
      The challenge for the coal industry is to make and keep itself efficient and competitive. Only then will it retain existing markets and win new ones. The chairman of the NCB recently drew attention to some important and encouraging indicators of the industry's potential. He announced that the first Selby coal would come on stream in two to three weeks, building up to a full output of 10 million tonnes a year at an average output per manshift that is about five times the present national average. He also announced that, recently, overall productivity in the coal industry had created all-time records. Productivity per face worker is consistently exceeding 10 tonnes per manshift.
      I do not believe that the coal industry can or should live in the past, but it has the potential to stand on its own feet and win a good future for itself. The Bill can create new opportunities for the coal industry. Therefore, it has the potential to help the future development of its industrial market, provided that coal can be supplied competitively and reliably. The board already supplies about 8 million

      769
      tonnes a year to the private sector industrial market, some of which is already being burnt for private sector industrial power generation and combined heat and power schemes.
      More companies, including household names such as Dunlop, Ford UK and ICI, are converting their major plants to coal with the help of the Government's coal-firing scheme. The assumptions about the coal industry on which the proposed new clause is based are misguided. The coal industry continues to work hard to make itself more competitive and productive, and it must maintain that approach to capture new and to hold existing markets, and to move forward to the viable world that we see for it. Neither it nor the country can afford it to remain static and to rely on defending its existing markets and its uneconomic capacity by recourse to the taxpayer, who is already investing heavily in the industry to help it progress.
      As to competition with other fuels, the paper published last week by the CEGB on comparative generation costs shows that in 1981–82, taking into account capital as well as operating costs, the CEGB's modern coal-fired stations had no less than a 70 per cent. cost advantage over its modern oil stations. It is hardly surprising that the CEGB relies on coal for more than 80 per cent. of its fuel, almost all of which comes from the National Coal Board.
      As to competition with foreign coal, the NCB must look to the world market in setting its prices. It is in that market as an exporter. Far from being insulated from external pressures, the coal industry is well used to seizing opportunities to develop its markets. If the Bill opens markets in private electricity generation, I am sure that the NCB will seize that opportunity. Its present position in the market for power station coal is hardly weak. Despite the world recession and depressed world coal prices, the NCB competes successfully with other producers at most power stations in its delivered price. The coal imported by the NCB under its present contracts is an economic proposition only at coastal power stations.
      The CEGB has agreed to limit its imports for the time being. However, no direction was issued to it by the Government. The NCB and the CEGB have negotiated commercial arrangements for the supply and price of NCB coal. The CEGB is being compensated for its additional costs by the taxpayer, so that in this interim period no extra burden falls on the electricity consumers.
      Dr. J. Dickson Mabon: The Minister contradicts himself. He said at the beginning of his 'speech that specific powers in the new clause do not exist. Now he suggests that he can achieve the objective in some other way and can compensate the CEGB for any loss that it incurs in doing what the Government wish. That is a substantial change in argument. The new clause seeks to treat both private and public generators in the same way. If the Minister says that he can do that by means other than new clause 8, will he also say that he will do it for the private supplier? That is the essential point of the debate.
      Mr. Moore: One cannot distinguish between the capacity of a company such as the CEGB, that absorbs more than 70 million tonnes of one main producer's supply, and individual producers who enter the market on normal terms. It is unrealistic for the right hon. Gentleman not to recognise that the relationship between the Government and a nationalised industry must, even without powers of direction—as the hon. Member for
      770
      Northfield, with his experience, recognised—be different. We are debating whether statutory powers should be used to enforce conditions when there seems to be no need for statutory directions.
      The new clause is negative and backward and its assumptions about the coal industry's potential to stand on its own feet and to win markets competitively are misguided. I hope that the House will reject the new clause.
      Mr. Eadie: The Minister made a stuffy defence of coal with which I would not quarrel, but it is a bit much to suggest that I was looking backwards. In my speech, I looked to the future, but the Minister tended to ignore that. He did not say that he had smashed the oil from coal system to smithereens. That is new technology and a new use for coal. He knows that Opposition Members advocated the introduction of new technology to the mining industry and considered other uses for coal. Whatever arguments the Minister may wish to advance, he cannot say that our arguments were backward. We tried to push the industry towards new technologies and ideas for developing coal.
      Although the coal industry receives grants from the Government, I hope that the Minister was not trying to deceive the House by suggesting that all the money that the coal board gets for investment is by way of Government grant. It receives money, but it must pay interest on what it borrows and that is an additional financial burden on the industry. It is nonsense to suggest that the Government only give to the coal industry.
      The Minister's arguments were unconvincing. The Opposition have looked to the future, but the Government have looked back and have tried to constrict the industry. I advise my right hon. and hon. Friends to vote for the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 162, Noes 196.

      Division No. 87]

      [8.26 pm

      AYES

      Adams, Allen

      Cunliffe, Lawrence

      Allaun, Frank

      Dalyell, Tam

      Alton, David

      Davidson, Arthur

      Anderson, Donald

      Davis, Terry (B'ham, Stechf'd)

      Archer, Rt Hon Peter

      Deakins, Eric

      Ashton, Joe

      Dean, Joseph (Leeds West)

      Atkinson, N. (H'gey,)

      Dewar, Donald

      Barnett, Guy (Greenwich)

      Dixon, Donald

      Beith, A. J.

      Dormand, Jack

      Bennett, Andrew(St'kp't N)

      Dubs, Alfred

      Bidwell, Sydney

      Duffy, A. E. P.

      Booth, Rt Hon Albert

      Dunwoody, Hon Mrs G.

      Boothroyd, Miss Betty

      Eadie, Alex

      Bray, Dr Jeremy

      Eastham, Ken

      Brown, Hugh D. (Provan)

      Ellis, R. (NE D'bysh're)

      Callaghan, Rt Hon J.

      Ellis, Tom (Wrexham)

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

      English, Michael

      Campbell, Ian

      Evans, loan (Aberdare)

      Campbell-Savours, Dale

      Evans, John (Newton)

      Canavan, Dennis

      Ewing, Harry

      Carmichael, Neil

      Faulds, Andrew

      CarterJones, Lewis

      Flannery, Martin

      Clark, Dr David (S Shields)

      Ford, Ben

      Clarke.Thomas (C'b'dge, A'rie)

      Forrester, John

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

      Foster, Derek

      Cohen, Stanley

      Foulkes, George

      Coleman, Donald

      Freeson, Rt Hon Reginald

      Concannon, Rt Hon J. D.

      Freud, Clement

      Cowans, Harry

      Ginsburg, David

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

      Golding, John

      Crowther, Stan

      Gourlay, Harry

      Cryer, Bob

      Graham, Ted

      771

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

      Race, Reg

      Hart, Rt Hon Dame Judith

      Richardson, Jo

      Haynes, Frank

      Roberts, Albert (Normanton)

      Heffer, Eric S.

      Roberts, Ernest (Hackney N)

      Home Robertson, John

      Robinson, G. (Coventry NW)

      Homewood, William

      Rooker, J. W.

      Hooley, Frank

      Roper, John

      Howell, Rt Hon D.

      Ross, Ernest (Dundee West)

      Howells, Geraint

      Rowlands, Ted

      Hoyle, Douglas

      Sever, John

      Hughes, Mark (Durham)

      Silkin, Rt Hon J. (Deptford)

      Hughes, Robert (Aberdeen N)

      Silverman, Julius

      Hughes, Roy (Newport)

      Skinner, Dennis

      Jay, Rt Hon Douglas

      Smith, Rt Hon J. (N Lanark)

      Johnston, Russell (Inverness)

      Snape, Peter

      Jones, Rt Hon Alec (Rh'dda)

      Soley, Clive

      Jones, Barry (East Flint)

      Spearing, Nigel

      Jones, Dan (Burnley)

      Spellar, John Francis (B'ham)

      Kaufman, Rt Hon Gerald

      Spriggs, Leslie

      Kerr, Russell

      Steel, Rt Hon David

      Kilroy-Silk, Robert

      Stewart, Rt Hon D. (W Isles)

      Lambie, David

      Stoddart, David

      Leighton, Ronald

      Stott, Roger

      Litherland, Robert

      Strang, Gavin

      Lofthouse, Geoffrey

      Summerskill, Hon Dr Shirley

      Mabon, Rt Hon Dr J. Dickson

      Taylor, Mrs Ann (Bolton W)

      McGuire, Michael (Ince)

      Thomas, Jeffrey (Abertillery)

      McKay, Allen (Penistone)

      Thorne, Stan (Preston South)

      McKelvey, William

      Torney, Tom

      MacKenzie, Rt Hon Gregor

      Wainwright, E. (Dearne V)

      McTaggart, Robert

      Wainwright, H.(Colne V)

      Marshall, Dr Edmund (Goole)

      Walker, Rt Hon H.(D'caster)

      Marshall, Jim (Leicester S)

      Wardell, Gareth

      Martin, M (G'gow S'burn)

      Weetch, Ken

      Mason, Rt Hon Roy

      Welsh, Michael

      Maxton, John

      White, Frank R.

      Maynard, Miss Joan

      White, J. (G'gow Pollok)

      Mitchell, R. C. (Soton Itchen)

      Whitlock, William

      Morris, Rt Hon A. (W'shawe)

      Wigley, Dafydd

      Morris, Rt Hon C. (O'shaw)

      Willey, Rt Hon Frederick

      Morris, Rt Hon J. (Aberavon)

      Williams, Rt Hon Mrs(Crosby)

      Morton, George

      Wilson, Gordon (Dundee E)

      Newens, Stanley

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

      Oakes, Rt Hon Gordon

      Winnick, David

      O'Halloran, Michael

      Woolmer, Kenneth

      O'Neill, Martin

      Wright, Sheila

      Orme, Rt Hon Stanley

      Young, David (Bolton E)

      Palmer, Arthur

      Park, George

      Tellers for the Ayes:

      Pavitt, Laurie

      Mr. Walter Harrison and

      Powell, Raymond (Ogmore)

      Mr. James Hamilton.

      NOES

      Alexander, Richard

      Butcher, John

      Alison, Rt Hon Michael

      Butler, Hon Adam

      Ancram, Michael

      Carlisle, John (Luton West)

      Arnold, Tom

      Carlisle, Kenneth (Lincoln)

      Atkins, Rt Hon H.(S'thorne)

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

      Atkins, Robert (Preston N)

      Chalker, Mrs. Lynda

      Atkinson, David (B'm'th.E)

      Chapman, Sydney

      Baker, Nicholas (N Dorset)

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

      Beaumont-Dark, Anthony

      Clark, Sir W. (Croydon S)

      Bendall, Vivian

      Clarke, Kenneth (Rushcliffe)

      Benyon, Thomas (A'don)

      Clegg, Sir Walter

      Benyon, W. (Buckingham)

      Cockeram, Eric

      Berry, Hon Anthony

      Colvin, Michael

      Bevan, David Gilroy

      Costain, Sir Albert

      Biggs-Davison, Sir John

      Cranborne, Viscount

      Blackburn, John

      Critchley, Julian

      Boscawen, Hon Robert

      Crouch, David

      Bottomley, Peter (W'wich W)

      Dickens, Geoffrey

      Braine, Sir Bernard

      Dorrell, Stephen

      Brinton, Tim

      Douglas-Hamilton, Lord J.

      Brittan, Rt. Hon. Leon

      Dover, Denshore

      Brooke, Hon Peter

      du Cann, Rt Hon Edward

      Brown, Michael(Brigg & Sc'n)

      Dunn, Robert (Dartford)

      Bruce-Gardyne, John

      Durant, Tony

      Buck, Antony

      Eggar, Tim

      Budgen, Nick

      Elliott, Sir William

      Burden, Sir Frederick

      Fairgrieve, Sir Russell

      772

      Fell, Sir Anthony

      Morrison, Hon C. (Devizes)

      Fenner, Mrs Peggy

      Murphy, Christopher

      Fisher, Sir Nigel

      Myles, David

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

      Needham, Richard

      Fletcher-Cooke, Sir Charles

      Nelson, Anthony

      Fookes, Miss Janet

      Newton, Tony

      Forman, Nigel

      Onslow, Cranley

      Fraser, Peter (South Angus)

      Osborn, John

      Fry, Peter

      Page, John (Harrow, West)

      Gardiner, George (Reigate)

      Page, Richard (SW Herts)

      Gardner, Sir Edward

      Parris, Matthew

      Garel-Jones, Tristan

      Patten, John (Oxford)

      Goodhart, Sir Philip

      Pattie, Geoffrey

      Goodhew, Sir Victor

      Pawsey, James

      Goodlad, Alastair

      Percival, Sir Ian

      Gow, Ian

      Pink, R. Bonner

      Gray, Rt Hon Hamish

      Pollock, Alexander

      Greenway, Harry

      Prentice, Rt Hon Reg

      Griffiths, Peter (Portsm'th N)

      Price, Sir David (Eastleigh)

      Grist, Ian

      Proctor, K. Harvey

      Gummer, John Selwyn

      Raison, Rt Hon Timothy

      Hamilton, Hon A.

      Renton, Tim

      Hamilton, Michael (Salisbury)

      Rhodes James, Robert

      Hampson, Dr Keith

      Ridley, Hon Nicholas

      Hannam,John

      Ridsdale, Sir Julian

      Haselhurst, Alan

      Rippon, Rt Hon Geoffrey

      Hawksley, Warren

      Roberts, Wyn (Conway)

      Hayhoe, Barney

      Rost, Peter

      Heddle, John

      Rumbold, Mrs A. C. R.

      Hicks, Robert

      Sainsbury, Hon Timothy

      Hill, James

      St. John-Stevas, Rt Hon N.

      Hogg, Hon Douglas (Gr'th'm)

      Shaw, Giles (Pudsey)

      Holland, Philip (Carlton)

      Shaw, Sir Michael (Scarb')

      Hunt, David (Wirral)

      Shelton, William (Streatham)

      Hunt, John (Ravensbourne)

      Shepherd, Colin (Hereford)

      Irvine, Rt Hon Bryant

      Shepherd, Richard

      Godman

      Sims, Roger

      Irving, Charles (Cheltenham)

      Skeet, T. H. H.

      Jessel, Toby

      Smith, Tim (Beaconsfield)

      Johnson Smith, Sir Geoffrey

      Speed, Keith

      Jopling, Rt Hon Michael

      Speller, Tony

      Kaberry, Sir Donald

      Spence, John

      Kimball, Sir Marcus

      Spicer, Michael (S Worcs)

      Knight, Mrs Jill

      Sproat, Iain

      Knox, David

      Stanbrook, Ivor

      Latham, Michael

      Stanley, John

      Lawrence, Ivan

      Stokes, John

      Lawson, Rt Hon Nigel

      Stradling Thomas, J.

      Lennox-Boyd, Hon Mark

      Taylor, Teddy (S'end E)

      Lester, Jim (Beeston)

      Thomas, Rt Hon Peter

      Lewis, Sir Kenneth (Rutland)

      Thompson, Donald

      Lloyd, Ian (Havant & W'loo)

      Thornton, Malcolm

      Lloyd, Peter (Fareham)

      Townend, John (Bridlington)

      Loveridge, John

      Townsend, Cyril D, (B'heath)

      Luce, Richard

      Trippier, David

      Lyell, Nicholas

      van Straubenzee, Sir W.

      McCrindle, Robert

      Waddington, David

      Macfarlane, Neil

      Wakeham, John

      McQuarrie, Albert

      Walker, B. (Perth)

      Major, John

      Waller, Gary

      Marlow, Antony

      Warren, Kenneth

      Marten, Rt Hon Neil

      Wells, Bowen

      Mates, Michael

      Wells, John (Maidstone)

      Mather, Carol

      Wheeler, John

      Maude, Rt Hon Sir Angus

      Wickenden, Keith

      Mawby, Ray

      Wilkinson, John

      Maxwell-Hyslop, Robin

      Wolfson, Mark

      Meyer, Sir Anthony

      Young, Sir George (Acton)

      Miller, Hal (B'grove)

      Younger, Rt Hon George

      Miscampbell, Norman

      Moate, Roger

      Tellers for the Noes:

      Monro, Sir Hector

      Mr. John Cope and

      Montgomery, Fergus

      Mr. Ian Lang.

      Moore, John

      Question accordingly negatived.

    New Clause 9

      PARLIAMENTARY REPORTS UNDER SECTION 3 OF THE ACT
      'It shall be the duty of the Secretary of State, before giving any consent in terms of section 3 of this Act, to cause any proposal to construct or extend a nuclear powered generating station to lay a Report before Parliament containing the details of any such proposal within one month of receiving it.'.—[Mr. John Smith.]
      Brought up, and read the First time.
      Mr. John Smith: I beg to move, That the clause be read a Second time.
      The new clause relates to one of the important features of the Bill, clause 3, which deals with the permission that the Minister must give for any project to build a private nuclear power station. Some will find the notion of a private nuclear power station a quite alarming prospect. The Opposition put themselves in that category.
      So far the development of nuclear power in Britain has been wholly within the public sector, although internationally that has not always been the case. However, most countries are dominated by public sector projects.
      The Government have said that they are freeing the private sector from some legal inhibitions so that there can be private sector power stations. They take the argument further, and say that if there is to be a private nuclear power station it needs special ministerial consent under clause 3. At one stage, the Government sought to argue, a little disingenuously, that it was possible for a person to apply to build a nuclear power station and that they were imposing some control by requiring ministerial consent. But until the Bill was introduced it was not possible to generate electricity for use as a main business on any basis—neither nuclear nor non-nuclear. Because that inhibition is removed by the Bill, it opens the door to the possibility of the building of a private sector nuclear power station for the generation of electricity as a main business. [Interruption.] I hear the Secretary of State for Energy yet again muttering from a sedentary position. I think that he keeps muttering "Ridiculous" as I explain what his Bill means. He may be quite right. I think the Bill is ridiculous. I have not been arguing, I have merely been describing, and it is odd that even at this late stage the Secretary of State finds the description of his own Bill ridiculous. I wholeheartedly agree with his very wise assessment of the proposition before the House.
      Surely one thing we can be clear about is that very few people would think it desirable to have a private nuclear power project. It is not likely to happen. The lead times are enormous in all major energy projects. They are particularly long, and necessarily so, in nuclear power generation. The inquiry at Sizewell into the PWR plant which is proposed there is considering some very longterm-projections of energy supply. It would be a very bold person indeed who would contemplate the massive investment that is involved in a private nuclear power project and calculate and assess energy demand 10 years or so from now. Frankly, it is beyond the capacity of the private sector to embark upon a major private nuclear power project.
      That makes it all the less sensible for the Government to contemplate the possibility. It is not likely to happen, but we ought to make it clear that it should not happen.
      774
      We ought to take a decision that we will keep nuclear power firmly within the public sector. The containment of nuclear power within the public sector is a guarantee to the public that the necessary safety factors will be observed. I think that the public generally would be surprised to find that there was thought of moving in any other direction.
      I believe in the balanced development of nuclear power. I do not think that this country has to rush its fences in the development of nuclear power, unlike some other countries which do not have the supplies of gas, oil and coal that fortunately we are blessed with in this country. Therefore, we can provide with some caution and care for the safety factors which the public demand in respect of nuclear power. To introduce a new joker into the pack—the possibility of a private nuclear power station—is to raise public concern and to cause doubts to enter the minds of the public about the observation of safety factors.
      I know that it will be said that there is an inspectorate and a very competent inspectorate, which enforces the highest standards, and no doubt these should be applied to any project. Since we know, however, that it is not really a practical possibility to have a private nuclear power station, and since I think we can agree that it has the possibility at least of causing unnecessary public concern. there is very little point in contemplating it. It would be wisest to make it quite clear, and to do it as a matter of political consensus, that there should not be a private nuclear power station project.
      Mr. Skeet: I ask the hon. Gentleman to assume that a company decided to build a very small nuclear power station. If it did that and if, by accident, his party was elected in the next general election, would he nationalise that power station?
      Mr. Smith: I do not 'think that will happen between now and then, but I would most certainly make sure that it came back into the public sector. I have stated a principle to which I wish to adhere and to which I am sure my party wishes to adhere, which is that nuclear power generation should be wholly within the public sector, and we should maintain that as a principle for the development of our energy policy. So the answer to the hon. Gentleman is, "Yes, we would take it back into the public sector if that were to happen."
      The proposition in the new clause is that we ought to have a report to Parliament in respect of any applications made to the Minister under clause 3. This would allow some parliamentary control to be brought to bear on the situation and, if we did gel: such an approach, there would be an opportunity for Parliament to consider it and to debate the report laid before it. That seems to me to be a desirable extension of parliamentary control over the executive in an area which is particularly sensitive to public opinion. I hope, therefore, that the House will approve the new clause.
      8.45 pm
      Dr. J. Dickson Mabon: I agree with the intention and wording of new clause 9, and I am sure that my right hon. and hon. Friends will support it if the Government are foolish enough to cause a Division by refusing to incorporate it in the Bill.
      As we made clear on Second Reading and at great length in Committee, however, the proposal in the new

      775
      clause does not go far enough. We believe that a new Bill should be required if private sector nuclear generation were to be allowed. I agree wholeheartedly with the right hon. Member for Lanarkshire, North (Mr. Smith) on that. The official Opposition however, made it clear in Committee and reiterated beyond peradventure today that private industry should not be allowed to generate electricity through nuclear energy. We do not take that position.
      We take the view that the Bill should in no way allow the Secretary of State to permit any kind of nuclear generation in the private sector. We believe that such a development would be so important as to warrant separate legislation, even if it were a one-clause Bill. I do not know why the Secretary of State is laughing. A Bill would at least require a Second Reading, Committee, Report and Third Reading, as well as the comments of the other place. In other words, it would require an extensive public debate on the proposal for the first private company to generate nuclear energy which, in our view, would be a major new step in relation to nuclear energy in the past quarter of a century.
      We do not regard the nuclear debate lightly. I am surprised that some hon. Members think that the general public are not interested. In our view, the new clause does not go far enough. We all know what happens to reports submitted to Parliament by Secretaries of State. Sometimes it does not suit the Opposition to debate them. Well-intentioned though it is, the new clause is not an adequate instrument to deal with the situation, but it is the only instrument to hand today.
      In view of what was said in Committee, it is impossible to amend the Bill at this stage to take our fundamental point into account. If there had been a different Minister on Second Reading, or if the Minister had reacted differently in Committee, the Government might have been persuaded to concede that the Bill should not touch the licensing of private companies to generate electricity by nuclear energy. In the early stages, that might have been possible. Certainly we argued strongly on Second Reading, and some but not all Ministers took us seriously, that the subject should be a matter for parliamentary debate in extenso.
      The right hon. Member for Lanarkshire, North has done us a favour in proposing one more step. The then Under-Secretary of State boasted that the Bill was an improvement on the previous statute in that the Secretary of State would now have to licence any private nuclear power stations. I agree that the Bill is an improvement in that respect. The new clause would further improve the situation, but it does not meet our fundamental criticism. The British people want substantial public inquiries for Sizewell and any similar proposal and they want full parliamentary consideration of the matter. The new clause is good, but it is not enough. Perhaps it is too late for Ministers to change their minds, but I still hope that they may.
      Mr. Skeet: Is the right hon. Gentleman suggesting that the private Bill procedure should be used if a private operator wishes to set up a nuclear power station, or is he saying that a full inquiry of the Sizewell type would be required to satisfy his constituents?
      Dr. Mabon: As the hon. Gentleman should know, if the Bill is passed in its present form—with or without the new clause—a full planning inquiry and the full panoply of the nuclear installations inspectorate would be involved in any case. Enormous hoops would have to be jumped through by the private company concerned. That is why it is incredible to make out that there would not be time to introduce new legislation. It would not be a private Bill. I hope that the Minister will discourage any attempt at private legislation in this regard and insist on a public Bill sponsored enthusiastically by the Government. The Government would have to be convinced that it was the right time for private industry to enter nuclear power generation. The Government would then ensure that all the safeguards were observed. That is the essential point that we are making.
      I want to be fair to the Government—though they are not always fair to us—and say that, even if they are persuaded by the right hon. Member for Lanarkshire, North to accept new clause 9, for which I and my hon. Friends will vote, it would not be enough to make the Bill acceptable. This fundamental step can be taken only by Parliament.
      Mr. Palmer: If I remember correctly, the Social Democratic party, small though it is, did not vote against the Bill.
      Dr. Mabon: It is a great sadness to me that we are often criticised by people who have not read the record. The record is there to be seen. If hon. Members read the debate on Second Reading closely they will see what we said. The official Opposition were distressed that we voted for the Bill on Second Reading. I must be fair to Ministers. We were not given any encouragement on Second Reading to believe that Ministers would change their minds. We did not understand, either from private conversations or in Committee, that Ministers would concede our point. We warned the Government that consequently we could not vote on Third Reading for a Bill that allows this proposal without further parliamentary process in the form of a public Bill.
      Mr. John Smith: If clause 3 is as crucial to the alliance as the right hon. Gentleman says, why was there the extraordinary circumstance that neither the Liberal Member nor the right hon. Gentleman were in Committee during the debate on clause 3 and did not vote?
      Dr. Mabon: In fairness to the right hon. Gentleman, I believe that he was not present during the first few sittings of the Committee because he was not a member of it.
      Mr. Smith: Who, me?
      Dr. Mabon: As far as I remember, the right hon. Gentleman was not there.
      Mr. Smith: I was.
      Dr. Mabon: Very well, the right hon. Gentleman was on the Committee. I ask him, therefore, to refresh his memory about the debate on clause 1. The debate on this matter was taken with clause 1. During the debates on clause 3, the right hon. Gentleman complained that the matter should have been taken then. However, the voting had taken place on clause 1.
      I shall not read the speeches again. It would take another two hours to recite all the comments and

      777
      complaints that we were taking too long. I made it clear then, and I am making it clear again tonight, that I support the right hon. Gentleman, but he is doing his best to persuade me not to support him. Unless the Government make a fundamental change in another place and remove any reference to private industry being allowed to generate nuclear electricity, we should not be able to support the Bill. If those changes were made, we should want to support it.
      The Bill has many advantages. However, even with this new clause, it does not satisfy us. We are not taking sides. We believe that the full parliamentary process should be undertaken before we assent to private industry taking part in nuclear generation. The right hon. Member for Lanarkshire, North and his hon. Friends say that they would not support such a Bill in any circumstances. We argued at great length that there may be circumstances where it would be valid for private industry to embark on nuclear generation. We were only willing to agree to that in certain circumstances—who, when, what, where and why. We even asked questions in Committee about the possible sponsoring industry, boiling it down to three or four options. All these matters, we felt, should be brought within legislation. It should not be a matter of debating reports, questioning the Secretary of State about licensing decisions, hoping that the nuclear installations inspectorate will stop it or seeing that planning inquiries are conducted. That is the case that we have been making.
      I welcome the new clause, but it is still not adequate. I plead with the Government to examine the matter again. Is it not possible for the Government, even at this late stage, to change their mind and to say that private industry generating nuclear electricity should be licensed by a separate Bill, not by this back-door method.
      Mr. John Moore: I am sure that the right hon. Member for Lanarkshire, North (Mr. Smith) will not mind if I refresh his memory of Second Reading, when the hon. Member for Truro (Mr. Penhaligon), who has not graced us with a Liberal party presence today, said:
      "It is clear that the Social Democratic and Liberal parties are united. We are in favour of the Bill but opposed fundamentally to clause 3".—[Official Report, 24 November 1982; Vol. 32, c. 903.]
      The right hon. Member for Lanarkshire, North may also wish to be reminded of the vote in Committee at the seventh sitting—when we were not blessed with the company of the Liberal and Social Democratic parties—on the fundamental clause 3 that we had been told would determine their attitude towards the whole Bill. It was a key clause but they were not present with the official Opposition to vote.
      Dr. J. Dickson Mabon: Will the Minister now read those parts of the Second Reading debate when I suggested that it would be possible to amend clauses 1, 2, and 3—[Interruption]. I was present on Second Reading. I am referring to my speech on Second Reading. I am asking the Minister to give the quotation and also the references to sittings in Committee on clauses 1 and 2 concerning this matter.
      Mr. Moore: I apologise to the right hon. Gentleman, who is clearly getting into difficult water. We had been led to believe—I can quote only the Second Reading—that there was an alliance and that the alliance had made it clear that clause 3 was the key. It was therefore not surprising that hon. Members serving on the Committee found those
      778
      absences so odd when it came to the actual vote. I recognise that the right hon. Gentleman was present during discussions on clauses 1 and 2. It was, however, on clause 3, when the Opposition honourably sought to divide the Committee, that the alliance parties were absent.
      Our discussion has confirmed the Labour party' s obsession with public ownership. I am bewildered, however, by the role and views of the official SDI) spokesman for the alliance. It seems that alliance members cannot make up their minds on the principles whether private or public ownership is viable. They are legitimately concerned about their own inability to get together on nuclear power. Out of it all has emerged art unusual ducking of decisions and principles. Instead they have embraced the new principle of introducing a Bill. There is no view. Somewhere between now and never, there is the undertaking to introduce a Bill. This is apparently a policy argument upon which the alliance feels able to associate itself with the official Opposition.
      The new clause shows a complete failure by its movers to understand the system of licensing and the protection that exists in the United Kingdom to ensure safe nuclear power. As we have often stated in Committee and on Second Reading, it is not the ownership of plant that governs this but the regulatory control system. It is crucial to get this on the record. The evident strength of that control system in the United Kingdom gives us safe nuclear power.
      9 pm
      First, any proposal for a private nuclear station would come before the Secretary of State for consent under the new procedure in the If the Secretary of State considered it desirable, he could cause an inquiry to be held. I shall come back to that later. If consent is granted the Secretary of State could impose any necessary conditions regarding, for example, the safeguarding of nuclear fuel and security generally.
      Secondly, the proposal for any nuclear power station—this is crucial as the right hon. Member for Lanarkshire, North rightly observed—would come be fore the nuclear installations inspectorate, which would have to grant a nuclear site licence. The proposal would receive detailed and thorough scrutiny from the inspectorate, which is experienced in all matters relating to nuclear safety. No nuclear power reactor may be constructed or operated without a nuclear site licence granted by the NH, which carries out a monitoring process that starts at the initial planning stage, continues throughout the design, engineering and commissioning stages, covers the operation of the plant throughout its lifetime and ends only when, after decommissioning, there is no longer considered to be any radiation hazard at the site. Staff, members of the public and the environment generally, are protected against the risks associated with nuclear material.
      I have spoken before of the crucial role that the NII plays in this process, but it may be useful if I remind the House of the way in which the inspectorate operates, and in particular of the independent nature of the inspectorate. The NII forms part of the Health and Safety Executive. The HSE is a unique organisation independent, not only of all other Government Departments but of Ministers in its day-to-day operation. The commission provides,

      779
      through its executive, independent advice to the Government on all aspects of industrial safety including nuclear safety.
      Thirdly, the private generator would have to apply for planning permission and would be subject to all the planning procedures of the local authority and the Department of the Environment. A local authority may impose conditions on the granting of planning permission. If there are sufficient objections to a proposal, a public inquiry is usually called. If planning permission is refused, the developer can appeal to the Secretary of State for the Environment who may also call in for decision by him an application made to the local authority. In this case, a public inquiry will be held and the Secretary of State will usually impose conditions.
      The most important scrutiny of a private nuclear proposal will, of course, take place when a nuclear site licence application is being considered, and the framework governing nuclear safety applies equally to the public and private sectors. Given this background, what role could Parliament be expected to play? What expertise does it have in comparison with fully trained personnel whose role is to monitor every step of the development of a nuclear power station?
      Mr. Palmer: I gather that the Minister was saying that the nuclear inspectorate would look at the site licence and make an assessment of the proposal before the local planning inquiry started. Is he aware that the nuclear inspectorate is not ready with its assessment on Sizewell?
      Mr. Moore: I could go into detail on that. The hon. Gentleman, from his extensive knowledge, will know that the licensing process is a continuing process through to decommissioning. There is no point at which the NII has concluded its work. This is a crucial feature of the safety relationship.
      If Parliament is to scrutinise nuclear power station proposals, should it not also examine in depth all other power station proposals and, perhaps, other developments too, which already require ministerial consent and are subject to similar monitoring and safety requirements? On what basis would it come to a decision? I am not denying the constitutional ability of Parliament, but in the assumption of a parliamentary role there is presumably the belief that Parliament could decide favourably or unfavourably on the construction or operation of a nuclear power station. I question whether Parliament could or should have the opportunity to overrule a decision of the NII—a decision that would have been taken in full knowledge and understanding of all the technical and safety factors involved. There is no suggestion of any new constitutional theory.
      All I am seeking to do is to illustrate the opportunity that is being sought for Parliament potentially to overrule the very important, established NII procedures. To suggest that Parliament could properly perform that role is patently absurd. I am satisfied that there is ample opportunity for proper examination of any proposal for a private nuclear station and would ask Opposition Members to withdraw the motion and clause.
      Mr. John Smith: I was surprised to hear the Minister say in the latter part of his speech that, since the experts were to be let loose on any project, that was good enough
      780
      and that Parliament should therefore stand aside and let them decide. In substance, that is what was being argued. I do not doubt for a moment the expertise of the nuclear inspectorate. We are fortunate to have it in this country and it is excellent. However, Parliament will increasingly insist on playing a role in decisions, and that is precisely what the new clause offers us.
      The new clause requires a report to be made to Parliament and allows it to be discussed. In the last Parliament it was important to discuss Windscale and decisions were taken after proper and full parliamentary debate. The Minister fell below his usual high standards of debate in his latter remarks, and if for no other reason than to maintain the robust independence of Parliament we shall press the new clause to a Division.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 167, Noes 204.

      Division No. 88]

      [9.5 pm

      AYES

      Adams, Allen

      Ford, Ben

      Allaun, Frank

      Forrester, John

      Alton, David

      Foster, Derek

      Anderson, Donald

      Foulkes, George

      Archer, Rt Hon Peter

      Freeson, Rt Hon Reginald

      Ashton, Joe

      Freud, Clement

      Atkinson, N.(H'gey,)

      Garrett, John (Norwich S)

      Barnett, Guy (Greenwich)

      Ginsburg, David

      Beith, A. J.

      Golding, John

      Bennett, Andrew(St'Kp't N)

      Gourlay, Harry

      Bidwell, Sydney

      Graham, Ted

      Booth, Rt Hon Albert

      Hamilton, James (Bothwell)

      Boothroyd, Miss Betty

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

      Bray, Dr Jeremy

      Harrison, Rt Hon Walter

      Brown, Hugh D. (Provan)

      Hart, Rt Hon Dame Judith

      Callaghan, Rt Hon J.

      Haynes, Frank

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

      Heffer, Eric S.

      Campbell, Ian

      Home Robertson, John

      Campbell-Savours, Dale

      Homewood, William

      Canavan, Dennis

      Hooley, Frank

      Carmichael, Neil

      Howell, Rt Hon D.

      Carter-Jones, Lewis

      Howells, Geraint

      Clark, Dr David (S Shields)

      Hoyle, Douglas

      Clarke Thomas (C'b'dge, A'rie)

      Hughes, Mark (Durham)

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

      Hughes, Robert (Aberdeen N)

      Cohen, Stanley

      Hughes, Roy (Newport)

      Coleman, Donald

      Jay, Rt Hon Douglas

      Concannon, Rt Hon J. D.

      Johnston, Russell (Inverness)

      Cook, Robin F.

      Jones, Rt Hon Alec (Rh'dda)

      Cowans, Harry

      Jones, Barry (East Flint)

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

      Jones, Dan (Burnley)

      Crowther, Stan

      Kaufman, Rt Hon Gerald

      Cryer, Bob

      Kerr, Russell

      Cunliffe, Lawrence

      Kilroy-Silk, Robert

      Cunningham, G. (Islington S)

      Lambie, David

      Dalyell, Tarn

      Leighton, Ronald

      Davidson, Arthur

      Lewis, Arthur (N'ham NW)

      Davis, Terry (B'ham, Stechf'd)

      Lewis, Ron (Carlisle)

      Deakins, Eric

      Lofthouse, Geoffrey

      Dean, Joseph (Leeds West)

      Lyon, Alexander (York)

      Dewar, Donald

      Mabon, Rt Hon Dr J. Dickson

      Dixon, Donald

      McGuire, Michael (Ince)

      Dormand, Jack

      McKay, Allen (Penistone)

      Dubs, Alfred

      McKeivey, William

      Duffy, A. E. P.

      MacKenzie, Rt Hon Gregor

      Dunwoody, Hon Mrs G.

      McNamara, Kevin

      Eadie, Alex

      Marks, Kenneth

      Eastham, Ken

      Martin, M(G'gow S'burn)

      Ellis, R. (NE D'bysh're)

      Mason, Rt Hon Roy

      Ellis, Tom (Wrexham)

      Maxton, John

      English, Michael

      Maynard, Miss Joan

      Evans, loan (Aberdare)

      Millan, Rt Hon Bruce

      Evans, John (Newton)

      Mitchell, R. C. (Soton Itchen)

      Ewing, Harry

      Morris, Rt Hon A. (W'shawe)

      Faulds, Andrew

      Morris, Rt Hon C. (O'shaw)

      Flannery, Martin

      Morris, Rt Hon J. (Aberavon)

      Foot, Rt Hon Michael

      Newens, Stanley

      781

      Oakes, Rt Hon Gordon

      Stoddart, David

      O'Neill, Martin

      Stott, Roger

      Orme, Rt Hon Stanley

      Strang, Gavin

      Palmer, Arthur

      Summerskill, Hon Dr Shirley

      Park, George

      Taylor, Mrs Ann (Bolton W)

      Pavitt, Laurie

      Thomas, Jeffrey (Abertillery)

      Powell, Raymond (Ogmore)

      Thorne, Stan (Preston South)

      Race, Reg

      Torney, Tom

      Richardson, Jo

      Wainwright, R.(Co1ne V)

      Roberts, Albert (Normanton)

      Walker, Rt Hon H.(D'caster)

      Roberts, Ernest (Hackney N)

      Wardell, Gareth

      Roberts, Gwilym (Cannock)

      Weetch, Ken

      Robinson, G. (Coventry NW)

      Welsh, Michael

      Rooker, J. W.

      White, Frank R.

      Roper, John

      White, J. (G'gow Pollok)

      Ross, Ernest (Dundee West)

      Whitlock, William

      Rowlands, Ted

      Wigley, Dafydd

      Ryman, John

      Willey, Rt Hon Frederick

      Sever, John

      Wilson, Gordon (Dundee E)

      Silkin, Rt Hon J. (Deptford)

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

      Silverman, Julius

      Winnick, David

      Skinner, Dennis

      Woolmer, Kenneth

      Smith, Rt Hon J. (N Lanark)

      Wright, Sheila

      Snape, Peter

      Young, David (Bolton E)

      Soley, Clive

      Spearing, Nigel

      Tellers for the Ayes:

      Spellar, John Francis (B'ham)

      Mr. George Morton and

      Spriggs, Leslie

      Dr. Edmund Marshall.

      Stewart, Rt Hon D. (W Isles)

      NOES

      Aitken, Jonathan

      Dover, Denshore

      Alexander, Richard

      du Cann, Rt Hon Edward

      Alison, Rt Hon Michael

      Dunn, Robert (Dartford)

      Ancram, Michael

      Durant, Tony

      Arnold, Tom

      Eggar, Tim

      Atkins, Rt Hon H.(S'thorne)

      Elliott, Sir William

      Atkins, Robert (Presron N)

      Emery, Sir Peter

      Atkinson, David (B'm'th.E)

      Fairgrieve, Sir Russell

      Baker, Nicholas (N Dorset)

      Farr, John

      Beaumont-Dark, Anthony

      Fell, Sir Anthony

      Bendall, Vivian

      Fenner, Mrs Peggy

      Benyon, Thomas (A'don)

      Fisher, Sir Nigel

      Benyon, W. (Buckingham)

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

      Berry, Hon Anthony

      Fletcher-Cooke, Sir Charles

      Bevan, David Gilroy

      Fookes, Miss Janet

      Biggs-Davison, Sir John

      Forman, Nigel

      Blackburn, John

      Fraser, Peter (South Angus)

      Boscawen, Hon Robert

      Fry, Peter

      Bottomley, Peter (W'wich W)

      Gardiner, George (Reigate)

      Braine, Sir Bernard

      Gardner, Sir Edward

      Brinton, Tim

      Garel-Jones, Tristan

      Brittan, Rt. Hon. Leon

      Goodhart, Sir Philip

      Brooke, Hon Peter

      Goodhew, Sir Victor

      Brotherton, Michael

      Goodlad, Alastair

      Brown, Michael(Brigg & Sc'n)

      Gow, Ian

      Bruce-Gardyne, John

      Gray, Rt Hon Hamish

      Budgen, Nick

      Greenway, Harry

      Burden, Sir Frederick

      Griffiths, Peter (Portsm'th N)

      Butcher, John

      Grist, Ian

      Butler, Hon Adam

      Gummer, John Selwyn

      Carlisle, John (Luton West)

      Hamilton, Michael (Salisbury)

      Carlisle, Kenneth (Lincoln)

      Hampson, Dr Keith

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

      Hannam, John

      Chalker, Mrs. Lynda

      Haselhurst, Alan

      Chapman, Sydney

      Hawksley, Warren

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

      Hayhoe, Barney

      Clark, Sir W. (Croydon S)

      Heddle, John

      Clarke, Kenneth (Rushcliffe)

      Hicks, Robert

      Clegg, Sir Walter

      Hill, James

      Cockeram, Eric

      Holland, Philip (Carlton)

      Colvin, Michael

      Hunt, David (Wirral)

      Cope, John

      Hunt, John (Ravensbourne)

      Costain, Sir Albert

      Irvine, RtHon Bryant Godman

      Cranborne, Viscount

      Irving, Charles (Cheltenham)

      Critchley, Julian

      Jessel, Toby

      Crouch, David

      Johnson Smith, Sir Geoffrey

      Dickens, Geoffrey

      Jopling, Rt Hon Michael

      Dorrell, Stephen

      Kaberry, Sir Donald

      Douglas-Hamilton, Lord J.

      Kimball, Sir Marcus

      782

      Knight, Mrs Jill

      Raison, Rt Hon Timothy

      Knox, David

      Rhodes James, Robert

      Lang, Ian

      Ridley, Hon Nicholas

      Latham, Michael

      Ridsdale, Sir Julian

      Lawrence, Ivan

      Rippon, Rt Hon Geoffrey

      Lawson, Rt Hon Nigel

      Roberts, Wyn (Conway)

      Lennox-Boyd, Hon Mark

      Rost, Peter

      Lester, Jim (Beeston)

      Rumbold, Mrs A. C. R.

      Lewis, Sir Kenneth (Rutland)

      Sainsbury, Hon Timothy

      Lloyd, Ian (Havant & Who)

      St. John-Stevas, Rt Hon N.

      Lloyd, Peter (Fareham)

      Shaw, Giles (Pudsey)

      Loveridge, John

      Shaw, Sir Michael (Scarb')

      Luce, Richard

      Shelton, William (Streatham)

      Lyell, Nicholas

      Shepherd, Colin (Hereford)

      McCrindle, Robert

      Shepherd, Richard

      Macfarlane, Neil

      Sims, Roger

      McQuarrie, Albert

      Skeet, T. H. H.

      Major, John

      Smith, Tim (Beaconsfield)

      Marlow, Antony

      Speed, Keith

      Marten, Rt Hon' Neil

      Speller, Tony

      Mates, Michael

      Spence, John

      Mather, Carol

      Spicer, Michael (S Worcs)

      Maude, Rt Hon Sir Angus

      Sproat, Iain

      Mawby, Ray

      Stanbrook, Ivor

      Mawhinney, Dr Brian

      Stanley, John

      Maxwell-Hyslop, Robin

      Stokes, John

      Meyer, Sir Anthony

      Stradling Thomas, J

      Miller, Hal (B'grove)

      Tapsell, Peter

      Mills, Iain (Meriden)

      Taylor, Teddy (S'end E)

      Miscampbell, Norman

      Thomas, Rt Hon Peter

      Moate, Roger

      Thompson, Donald

      Monro, Sir Hector

      Thornton, Malcolm

      Montgomery, Fergus

      Townend, John (Bridlington)

      Moore, John

      Townsend, Cyril D, (B'heath)

      Morrison, Hon C. (Devizes)

      Trippier, David

      Murphy, Christopher

      van Straubenzee, Sir W.

      Myles, David

      Waddington, David

      Needham, Richard

      Wakeham, John

      Nelson, Anthony

      Walker, B. (Perth)

      Newton, Tony

      Waller, Gary

      Onslow, Cranley

      Warren, Kenneth

      Osborn, John

      Wells, Bowen

      Page, John (Harrow, West)

      Wells, John (Maidstone)

      Page, Richard (SW Herts)

      Whitney, Raymond

      Parris, Matthew

      Wickenden, Keith

      Patten, Christopher (Bath)

      Wilkinson, John

      Patten, John (Oxford)

      Williams, D.(Montgomery)

      Pattie, Geoffrey

      Winterton, Nicholas

      Pawsey, James

      Wolfson, Mark

      Percival, Sir Ian

      Young, Sir George (Acton)

      Pink, R. Bonner

      Younger, Rt Hon George

      Pollock, Alexander

      Prentice, Rt Hon Reg

      Tellers for the Noes:

      Price, Sir David (Eastleigh)

      Mr. Archie Hamilton and

      Proctor, K. Harvey

      Mr. Douglas Hogg.

      Question accordingly negatived.

    Clause 3

      NUCLEAR-POWERED GENERATING STATIONS
      9.15 pm
      Mr. John Moore: I beg to move amendment NO. 1, in page 2, line 28 leave out 'or extend' and insert
      ', extend or become the operator of.
      Mr. Speaker: With this we may take Government amendment No. 2.
      Mr. Moore: I am pleased to introduce amendment No. 1, which demonstrates the value of discussing a Bill in detail in Committee. In response to a point raised by the right hon. Member for Lanarkshire, North (Mr. Smith) and the hon. Member for Truro (Mr. Penhaligon), we considered whether there might be a case for a private sector company requiring ministerial consent to become

      783
      the operator of a nuclear power station. We have decided that it would be desirable to bring this into line with the existing provisions on the construction or extension of a private nuclear station.
      The amendments have the effect of requiring anyone other than the CEGB to obtain ministerial consent before becoming the operator of a nuclear power station. Failure to do so would be an offence.
      Amendment agreed to.
      Amendment made: No. 2, in page 2, line 40, leave out `or extension' and insert extension or operation'.—[Mr. John Moore.]

    Clause 5

      PRIVATE GENERATORS AND ELECTRICITY BOARDS
      Amendment made: No. 3, in page 4, line 3, at end add—
      '(3A) Every offer under this section shall include such reasonable terms and conditions as the Board may consider necessary to secure that the control by Electricity Boards of the operation of the electricity supply system is not impaired. '.—[Mr. John Moore.]

    Clause 7

      CHARGES FOR PURCHASES BY ELECTRICITY BOARDS
      Mr. John Moore: I beg to move amendment No. 4, in page 5, line 3, leave out 'purchases' and insert 'a purchase'.
      Mr. Speaker: With this we may take Government amendments Nos. 5 to 9.
      Mr. Moore: These are amendments to clauses 7 and 8 which deal with prices and charges. Clause 7 is concerned with tariffs and prices for the purchase of privately generated electricity. Clause 8 deals with tariffs and charges for the use of electricity boards' transmission and distribution systems. Those are the key financial clauses of the Bill.
      We had a thorough discussion of the rather complicated issues in Committee and I promised to table amendments on Report to clarify and refine the expression in the Bill of the relevant economic principles. The fundamental principle is that electricity boards' dealings with private generators should not result in higher electricity prices to consumers generally.
      I shall briefly explain the intention of the present amendments and deal first with tariffs and prices for the purchase of privately generated electricity. The key principle here is that the prices paid should be based on an electricity board's avoidable costs at the margin. Three of the detailed amendments are intended to clarify this principle. The most important is amendment No. 7, which introduces a new paragraph (b) to clause 7(3). This stipulates that the purchase by an electricity board of privately generated electricity should be on terms that reflect the costs that would be incurred by the board but for the purchase.
      Two other amendments, Nos. 4 and 5, effect drafting changes that help emphasise that the approach is to be concerned with what happens on the margin. A further change that we believe to be necessary on purchase terms for privately generated electricity is related to the effect
      784
      that such purchases may have upon electricity prices generally. We envisage the possibility that purchasing privately generated electricity may, over time, enable the board to lower prices to consumers because it has been able to scrap old, high-cost plant earlier than would otherwise have been the case. It is, therefore, appropriate, in recognising this potential benefit, to delete the condition in the existing clause 7(3) that a purchase of privately generated electricity should not reduce prices to consumers, which is the basis for amendment No. 6. Nevertheless, private generators will receive the full value of their electricity sold to the board because of the provision that prices paid must reflect the cost that would have been incurred by the board but for the purchase, as I have explained.
      The second element that needs to be refined is the return that the electricity board may seek from its assets used to meet a private generator's request either for the board to purchase his electricity or to use the board's transmission and distribution system. At present the Bill provides for boards to seek a payment for the use of these assets no greater than sufficient to provide a return comparable to the return received by the board on its assets generally.
      Electricity boards have a variety of assets used for different purposes. Some of these yield a return higher than the board's past average return on its assets overall while others, although essential to maintain services to the consumers, in practice yield a lower rate of return. We believe that it would be right to relate the return that boards may seek to obtain from assets used to meet a private generator's requirements to the return that the board would expect to receive if it were employing the assets wholly for its own purposes. The intention, therefore, is to make a like-to-like comparison.
      Amendments Nos. 8 and 9 to clauses 7 and 8 respectively are intended to achieve this aim. Instead of comparison being made with the return received by the board's assets generally, comparisons will be made with the return that the board expects to receive on comparable assets. These amendments to clauses 7 and 8 are intended to clarify the principles on which prices and charges are to be set by electricity boards in their dealings with private generators. It will help to ensure fairness to private generators as well as to consumers generally and I commend the amendments to the House.
      Amendment agreed to.
      Amendments made: No. 5, in page 5, line 4, leave out `requests' and insert 'a request'.
      No. 6, in page 5, line 5, leave out from beginning to `the' and insert—
      '(a) will not increase'.
      No. 7, in page 5, line 6, at end add
      `and
      No. 8, in page 5, line 18, leave out from 'return' to end of line 19 and insert
      'that the Board expects to receive on comparable assets'.—[Mr. John Moore.]

    Clause 8

      CHARGES FOR USE OF TRANSMISSION AND DISTRIBUTION SYSTEMS
      Amendments made: No. 9, in page 5, line 36, leave out from 'assets' to end of line 37 and insert
      `(taking into account any payments of the kind referred to in section 5(4) above) comparable to any return that the Board expects to receive on comparable assets'.—[Mr. John Moore.]

    Clause 10

      FURTHER PROVISIONS AS TO CHARGES UNDER SECTIONS 7 AND 8
      Mr. John Moore: I beg to move amendment No. 10, in page 7, line 22, at end insert—
      '(6) An Electricity Board, in fixing tariffs and proposing prices or charges in accordance with section 7 or 8 above, shall not show undue preference to any person or class of persons and shall not exercise any undue discrimination against any person or class of persons.'.
      Mr. Speaker: With this it will be convenient to take Government amendments Nos. 16, 17, 20 and 21.
      Mr. Moore: The amendments that we seek to make to clause 10 will prohibit electricity boards from showing undue preference to, or exercising undue discrimination against, any person or class of persons: this will apply to both the actual provision of the services that boards will be obliged to offer to private generators under the Bill and to the prices and charges that they offer to or seek from private generators in respect of these services.
      We wish to see no unfairness of treatment as between the public and private sectors, but it is also important that any individual or class within the private sector should be treated precisely as any other individual or class whose circumstances are the same. I believe that the electricity supply industry welcomes this extension of the concept that justice should not only be done but be seen to be done. It has always been applied by the industry to the provision of supplies of electricity to other consumers and to the prices charged for those supplies.
      Amendment agreed to.

    Clause 13

      INSPECTION AND TESTING OF LINES ETC.
      Amendment made: No. 11 in page 8, line 17, at beginning insert—
      '(1) In section 24 of the Electric Lighting Act 1882 (which empowers Electricity Boards to enter premises to which electricity is supplied by them) for the words "by the undertakers" in the second place where they occur there shall be substituted the words "(whether by the undertakers or by any other person) directly through electric lines belonging to the undertakers": —[Mr. John Moore.]

    Clause 16

      COMBINED HEAT AND POWER
      Mr. Gray: I beg to move amendment No. 12, in page 10, line 45, at end add—
      "Production and use of heat and electricity.
      '(3) For section 15 of the Electricity (Scotland) Act 1979 (research into heating from electricity) there shall be substituted—
      15.—(1) It shall be the duty of each Board to adopt and support schemes—
      786

      (a) for the combined production of heat and electricity, and

      (b) for the use of heat produced in combination with electricity, or incidentally from its generation, for the heating of buildings or for other useful purposes.

      (2) For the purposes of a scheme under subsection (1), a Board may, in accordance with a scheme submitted by them to the Secretary of State and appoved by order made with or without modification by him, exercise the powers conferred by section 13(8) for the purposes of that section, and section 13(9) shall apply in relation to the manner in which the powers are exercisable.
      (3) Nothing in subsection (1) shall require a Board to undertake expenditure in conection with a scheme which does not meet the financial criteria applied by the Board in relation to other expenditure of the Board.".'.
      We were pleased to accept in Committee an amendment tabled by my hon. Friend the Member for Derbyshire South-East (Mr. Rost), which imposed duties on electricity boards to adopt and support schemes for combined heat and power and the use of heat generally. This is now clause 16 of the Bill and it amends section 50 of the Electricity Act 1947, which applies only in England and Wales. In accepting the amendment we also undertook to table an amendment which would bring the duties of the Scottish boards into line with those in England and Wales.
      The amendment adds a new subsection to clause 16 and amends section 15 of the Electricity (Scotland) Act 1979. The working is slightly different from that in subsection (1) since it is necessary to apply the powers to break up streets contained in section 1.3 of the 1979 Act to these new duties. The effect is the same.
      I am sure that both sides of the House will welcome the inclusion in the Bill of those duties which remove any existing doubt about the attitude that boards should adopt towards CHP schemes and the use of heat from ordinary power stations.
      I invite the House to accept the amendment.
      Amendment agreed to.

    Clause 20

      ANNUAL REPORTS
      Mr. John Moore: I beg to move amendment No. 1.3, in page 13, line 7, leave out clause 20.
      Mr. Speaker: With this it is convenient to take Government amendment No. 25.
      Mr. Moore: In response to the moving speech and appeals by the right hon. Member for Lanarkshire, North (Mr Smith) in Committee, this amendment and the consequential amendment to the schedule remove clause 20 from the Bill, thus retaining the requirement in section 10(6) of the Electricity Act 1957 for the Secretary of State to lay before Parliament an annual report in respect of the performance of his functions under the electricity legislation.
      Mr. John Smith: I appreciate the fact that the Minister has moved amendment No. 13 to restore clause 20—
      Mr. Lawson: It does not.
      Mr. Smith: —which obliges the Secretary of State make an annual report to Parliament.' shall resist the temptation to go into the matter in depth. We never had any doubt that the Minister would carry out the undertaking that he gave in Committee. That proves that

      787
      persuasion on the part of the Opposition is not yet dead and comprehension on the part of Ministers is still faintly alive.
      Amendment agreed to.

    Clause 36

      SHORT TITLE AND EXTENT
      Mr. Gray: I beg to move amendment No. 14, in page 20, line 7, leave out from beginning to 'do' and insert—
      '(2) The following provisions of this Act, namely—

      (a) Part I (except paragraph 11 of Schedule 1), and

      (b) Part I of Schedule 3,'.

      This is a minor, consequential amendment which has become necessary because of the inclusion in Committee of clauses 18 and 19 and schedule 1 giving statutory status to the Electricity Consumers Council. The provisions in those clauses and the schedule do not extend to Northern Ireland because the ECC has no locus there. However, paragraph 11 of the schedule amends the House of Commons Disqualification Act 1975, which applies in Northern Ireland. A limited exception is therefore necessary to extend paragraph 11 to Northern Ireland.
      I commend the amendment to the House.
      Amendment agreed to.

    Schedule 2

      ELECTRICITY: MINOR AND CONSEQUENTIAL AMENDMENTS
      Amendments made: No. 15, in page 23, line 2, at end insert—
      'The Electric Lighting Act 1882
      In section 25 of the Electric Lighting Act 1882, for the words from "supplying" to "special Act" there shall be substituted the words "a supply of electricity (whether by the undertakers or any other person) directly through electric lines belonging to them".'.
      No. 16, in page 23, leave out line 21 and insert—
      '2.—(1) Section 1 of the Electricity Act 1947 shall be amended as follows.
      (2) In subsection (4)—'
      No. 17, in page 23, line 28, at end insert—
      (3) At the end of subsection (6)(c) there shall be inserted the words "and in complying with requests under section 5 of the Energy Act 1983"'.—[Mr. John Moore.]
      Mr. Gray: I beg to move amendment No. 18, in page 24, line 26, at end insert—
      'The Clean Air Act 1956
      7A. In section 10(4) of the Clean Air Act 1956, for the Words from "a generating" to the end there shall be substituted the words "an electricity generating station by an Electricity Board (as defined in section 24 of the Energy Act 1983)"'.
      Mr. Speaker: With this it will be convenient to take Government amendment No. 19.
      Mr. Gray: Section 10(4) of the Clean Air Act 1956 and section 6(10) of the Clean Air Act 1968 exempt electricity board generating stations and private stations whose output is mainly for sale to others from the requirements of those sections which relate to the height of chimneys.
      Those stations were exempted from those requirements since control could be exercised in connection with the consent of the Secretary of State, either under section 2 of the Electric Lighting Act 1909 for electricity boards or section 11 of the Electricity (Supply) Act 1919 for private operators. Since clause 1 of the Bill proposes to abolish
      788
      the need for private operators to obtain the Secretary of State's consent, this amendment is proposed so that all privately operated generating stations will have to meet the requirements of those sections of the Clean Air Acts.
      I am sure that the House will accept this safeguard against pollution, and I commend the amendment to the House.
      Amendment agreed to.
      Amendments made: No. 19, in page 24, line 29, at end insert—
      'The Clean Air Act 1968
      8A. In section 6(10) of the Clean Air Act 1968, for the words from "a generating" to the end there shall be substituted the words "an electricity generating station occupied by an Electricity Board (as defined in section 24 of the Energy Act 1983)".'.
      No. 20, in page 24, line 30, at end insert—
      '8A. In section 4 of the Electricity (Scotland) Act 1979, at the end of paragraph (c) there shall be added the words "and in complying with requests under section 5 of the Energy Act 1983".'.
      No. 21, in page 24, line 31, leave out the words
      'the Electricity (Scotland) Act 1979' and insert the words 'that Act'.—[Mr. Gray.]

    Schedule 3

      ENACTMENTS REPEALED
      No. 22, in page 26, line 10, column 3, at end insert—

      'in section 2, the words from "forty-nine" to "fifty-eight".'.

      No. 23, in page 26, line 42, at end insert—

      '26 Geo. 5 & 1 Edw. 8 c. 20.

      The Electricity Supply (Meters) Act 1936.

      In section 1(1), the words "by authorised under-takers".In section 1(3), the words "by any consumer or the undertakers as the case may be".'.

      No. 24, in page 27, line 15, leave out 'section' and insert 'sections 49 and'.
      No. 25, in page 27, leave out lines 28 and 29.
      No. 26, in page 27, line 29, column 3, at end insert—

      'Section 30(5) to (8).'. —[Mr. Gray.]

    New Schedule

      ELECTRICITY: AMENDMENTS RELATING TO METERS
      The Electricity Lighting (Clauses) Act 1899
      1. The Schedule to the Electric Lighting (Clauses) Act 1899 (as incorporated with the Electricity Act 1947) shall be amended in accordance with paragraphs 2 to 14 below.
      2. At the end of section 1 (interpretation) there shall be added—
      "The expression 'private supplier' means a person other than an Electricity Board who supplies electricity generated otherwise than by an Electricity Board.".
      3. In section 2 (definition of "the Undertakers") the words from "forty-nine" to "fifty-eight" shall cease to have effect.
      4. For section 49 there shall be substituted—
      "Meters to be used except by agreement
      49.—(1) This section applies to—
      (a) a supply by the Undertakers to an ordinary consumer, and
      (b) a supply by a private supplier to a person (other than the Undertakers) who takes the supply directly from electric lines belonging to the Undertakers,

      789
      unless otherwise agreed between the Undertakers and (in a case within paragraph (a) above) the consumer or (in a case within paragraph (b) above) the private supplier.
      (2) The value of a supply to which this section applies shall be ascertained by means of an appropriate meter duly certified under the provisions of this Schedule, and fixed and connected with the Undertakers' lines in some manner approved by the Secretary of State.
      (3) References in this section and the following sections to the value of a supply are references to the amount of energy supplied or (according to the method of charging) the electrical quantity contained in the supply.".
      5. In section 50 (certification of meters) for the words "electric inspector appointed under this Schedule" there shall be substituted the words "authorised person".
      6. After section 50 there shall he inserted—
      "Persons authorised to certify meters
      50A.—(1) The reference in section 50 above to an authorised person is a reference to—

      (a) a meter examiner appointed under the Electricity Supply (Meters) Act 1936, or

      (b) a person authorised by the Secretary of State under this section.

      (2) The Secretary of State may authorise a person who manufactures or repairs meters to certify, in accordance with section 50 above, meters manufactured or repaired by him.
      (3) An authorisation under this section may be given subject to such conditions as the Secretary of State thinks fit and may be withdrawn before the end of the period for which it is given if any of those conditions is not satisfied.
      (4) The Secretary of State may make regulations prescribing fees to be paid to him by applicants for or holders of authorisations under this section towards administrative expenses incurred by him by virtue of this section; and different fees may be prescribed in relation to different areas and different cases.
      Uncertified meters—offences
      50B. —(1) If the Undertakers or a private supplier install a meter for the purpose of ascertaining the value of a supply to which section 49 above applies and that meter, at the time when it is installed, is not a certified meter, the Undertakers or the supplier shall be guilty of an offence.
      (2) Where a meter used for the purpose of ascertaining the value of a supply to which section 49 above applies ceases to be a certified meter, the person providing the supply shall as soon as practicable take all reasonable steps either for causing the meter to be recertified or for causing it to be removed or (if its removal is not reasonably practicable) for ceasing to supply energy through it.
      (3) A person who fails to take the steps required of him by subsection (2) above shall be guilty of an offence unless he shows that the meter ceased to be a duly certified meter by reason only of its being altered or moved without his knowledge.
      (4) A person guilty of an offence under this section shall be liable on summary conviction to a fine not exceeding level 2 on the standard scale (within the meaning of section 75 of the Criminal Justice Act 1982).
      (5) Proceedings for an offence under this section shall not, in England and Wales, be instituted except by or with the consent of the Secretary of State or the Director of Public Prosecutions.".
      7. In section 51 (meter examiners to certify meters)—

      (a) for the words "or by any consumer" there shall be substituted the words ", the person supplied with energy or, where the supply is by a private supplier, that supplier";

      (b) for the words "the supply" there shall be substituted the words "a supply to which section 49 above applies"; and

      (c) for the word "service" in both places where it occurs there shall be substituted the word "Undertakers—.

      8. In section 52 (Undertakers to supply meters if required to do so) for the words "the supply" there shall be substituted the words "a supply by the Undertakers".
      9. For section 53 there shall be substituted—
      "Meters not to be connected or disconnected without notice
      53.—(1) No meter used or to be used for ascertaining
      790
      the value of a supply to which section 49 above applies shall be connected with, or disconnected from any electric line belonging to the Undertakers by the Undertakers, the person supplied (or to be supplied) with energy or, where the supply is by a private supplier, that supplier unless the person intending to connect or disconnect the meter has given to the other pe:':son or persons mentioned above not less than forty-eight hours' notice in writing of the intention to do so.
      (2) A person who contravenes this section shall be guilty of an offence ar.d liable on summary conviction to a fine not exceeding level 2 on the standard scale (within the meaning of section 75 of the Criminal Justice Act 1982).".
      10. In section 54(1) (consumer to keep meters in order) for the words, "the supply" there shall be substituted the words "a supply by the Undertakers".
      11. In section 55 (power of Undertakers to let meters) for the words "the supply" there shall be substituted the words "a supply of energy".
      12. In section 56 (Undertakers to keep meters let for hire in repair) for the words "the supply" there shall be substituted the words "a supply by the Undertakers".
      13. For section 57 there shall be substituted—
      "Questions as to correctness of meter to be determined by meter examiner
      57.—(1) Any question—

      (a) whether a meter, by which there is ascertained the value of a supply to which section 49 above applies, is in proper order for correctly registering that value, or

      (b) whether the value of such a supply has been correctly registered by any meter,

      may be referred by any of the persons concerned to a meter examiner appointed under the Electricity Supply (Meters) Act 1936 for determination by him; and in this section 'the persons concerned' means the Undertakers, the person supplied and, where the supply is by a private supplier, that supplier.
      (2) Before determining a question referred to him under this section, the meter examiner shall give notice to the other person or persons concerned; and his decision shall be final and binding upon all the persons concerned.
      (3) A meter examiner determining a question referred to him under this section may make awards of costs or expenses as between the persons concerned.
      (4) In the case of a supply by the Undertakers the register of the meter used to ascertain the value of the supply shall, except as provided by this section, be conclusive evidence in the absence of fraud of that value.
      (5) The Secretary of State may by regulations—

      (a) prescribe a fee to be paid to the Secretary of State by a person other than the Undertakers referring a question for determination under this section;

      (b) specify circumstances in which the fee may be refunded; and

      (c) make provision requiring the Undertakers to pay sums determined by the Secretary of State towards any administrative expenses incurred by him (and not recovered as mentioned in paragraph (a) above) in connection with the determination of questions under this section.".

      14. For section 59 there shall be substituted—
      "Undertakers may place meters to measure supply or to check measurement
      59.—(1) Subject to subsection (2) below, the Undertakers may place upon the premises of any person supplied with energy directly from electric lines belonging to them such meter or other apparatus (in addition to any meter to ascertain the value of the supply) as they may desire for the purpose of ascertaining or regulating the amount of energy supplied to him, the number of hours during which the supply is given, the maximum power taken by him or any the]. quantity or time connected with the supply.
      (2) A meter or apparatus placed upon premises under this section—

      791

      (a) shall be of a construction and pattern approved by the Secretary of State and shall be fixed and connected with the Undertakers' lines in a manner so approved;

      (b) shall, where the supply of energy is by the Undertakers, be supplied and maintained entirely at the cost of the Undertakers; and

      (c) shall be placed between the Undertakers' mains and the ends of the Undertakers' lines at which the supply of energy is delivered unless otherwise agreed between the Undertakers, the person supplied with energy and, where the supply is by a private supplier, that supplier.".

      The Electricity Supply (Meters) Act 1936
      15.—(1) Section 1 of the Electricity Supply (Meters) Act 1936 shall be amended as follows:
      (2) In subsection (1)—

      (a) after the words "charged with", there shall be inserted the words "such duties as the Secretary of State may determine in connection with"; and

      (b) the words "by authorised undertakers" shall cease to have effect.

      (3) In subsection (3), the words "by any consumer or the undertakers as the case may be" shall cease to have effect.
      16.—(1) Section 2 of that Act shall be amended as follows.
      (2) In subsection (1), for the words "by those undertakers" there shall be substituted the words "(whether by the undertakers or by another person) directly through lines belonging to the undertakers".
      (3) In subsection (2), for the words "by the other parties" (in both places where those words occur) there shall be substituted the words "through lines belonging to the other parties".
      (4) In subsection (3), for the words "by the undertakers" there shall be substituted the words "through lines belonging to the undertakers".
      The Electricity Act 1957
      17.—(1) Section 30 of the Electricity Act 1957 shall be amended as follows:
      (2) In subsection (1)(c), for the words "the supply" there shall be substituted the words "a supply".
      (3) After subsection (4) there shall be inserted—
      "(4A) Where a person other than an Electricity Board submits a meter to a meter examiner for certification under the provisions of the Schedule of 1899, the meter examiner may certify the meter, notwithstanding that he has not himself examined or tested it, if—

      (a) the meter was manufactured or repaired by the person submitting it;

      (b) that person has obtained the consent of the Secretary of State to the submission; and

      (c) any conditions subject to which the consent was given have been satisfied."

      (4) Subsections (5) to (8) shall cease to have effect.
      (5) In subsection (9), for the words "the supply" there shall be substituted the words "a supply".'—[Mr. Gray.]
      Brought up, read the First and Second time, and added to the Bill.
      9.29 pm
      Mr. Lawson: I beg to move, That the Bill be now read the Third time.
      The Bill is complex and has been skilfully steered through its Committee and Report stages by my right hon. Friend the Minister of State and my hon. Friend the Under-Secretary of State. I commend them both for that. Although the Bill is complex, its purpose is simple—to encourage the private generation of electricity in Britain. As I reminded the right hon. Member for Lanarkshire, North (Mr. Smith), private generation is not new in Britain. At present, industry generates about 15 per cent.
      792
      of its own electricity requirements. However, that is less than in many other countries and the proportion has been declining in recent years.
      The purpose of the Bill is to reverse that trend by enabling the private sector to compete on fair terms and so help to reduce the extent of the nationalised electricity supply industry's monopoly power. The greater the amount of competition, the greater the spur to efficiency and the greater the benefit to the consumer.
      Many of my hon. Friends are disappointed that the Bill does not go further and reorganise the entire electricity supply industry. That is an important subject that has received much attention in the past and will no doubt continue to do so. But meanwhile, whatever the eventual shape of the electricity industry, the Bill is needed. It opens up the national transmission and distribution network as a common carrier for the first time and private electricity generators will have access through the network to any customers, including plants that they own, for the first time. The state-owned industry will have a clear duty to accept privately generated electricity at a fair price and to provide a standby supply. The arbitrary and unnecessary ban on the private generation of electricity as a main business will be removed.
      One important consequence of the encouragement of private generation will be the boost that it gives to combined heat and power schemes that are normally the most economic and energy-efficient form of generation for industry. In many cases it will be only by putting to good use the otherwise waste heat produced as a by-product of electricity generation that industry can secure a worthwhile return from generating its own power.
      Although about two thirds of existing private industrial electricity generation takes the form of CHP schemes, the nationalised industry, at least outside the midlands, has shown little enthusiasm for the idea. Accordingly, the Government were happy to accept in Committee a new clause moved by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost)—I congratulate him on the way in which he has consistently ploughed that furrow for many years—extending the statutory duties of the electricity supply industry to encompass economic—I stress the word "economic"—CHP schemes.
      The Government further demonstrated their open-mindedness in Committee—I am glad that the right hon. Member for Lanarkshire, North, who is a little grudging in his acceptance of the way in which we responded to his points, had the grace to say that we had been open-minded throughout the passage of the Bill—
      Mr. John Smith: I did not say that.
      Mr. Lawson: —by accepting a new clause moved by my hon. Friend the Member for Exeter (Mr. Hannam) to place the Electricity Consumers Council on a statutory basis for the first time.
      Mr. Smith: The Secretary of State's recollection of today's events is imperfect because he has not been here much. I congratulated Ministers in one instance on their acceptance of reality. I did not give them the extensive congratulations suggested by the Secretary of State, because I am sorry to see most of the Bill still intact.
      Mr. Lawson: I am sorry to say that my characterisation of the right hon. Gentleman as grudging is truer than I envisaged.

      793
      Clause 3, and the possibility of privately owned nuclear power stations, has also generated a great deal of heat. Contrary to what the right hon. Member for Lanarkshire, North (Mr. Smith) said, I have been present for much of today. His argument—I flatter him by so describing it—was completely demolished by my hon. Friend the Under-Secretary of State. So well did my hon. Friend demolish that argument that the right hon. Gentleman was hard put to it to find any reason for voting for his own new clause. However, I shall return to the main theme of the Bill, which is the encouragement of private generation.
      The Bill does not confer any privileges on private generators, but ensures a fair deal for them from the state-owned monopoly. Too often that has not been the case—I have had several representations to that effect. Great care has been taken to ensure that the electricity supply industry's customers suffer no net disadvantage. The industry has been consulted exhaustively and it is satisfied that the proposed regime is both workable and fair.
      The electricity supply industry does not fear the spur of competition. The irrational fear of competition is, alas, a chronic condition from which the Opposition suffer and, I suspect, one of the many reasons why they stand in such low esteem with the electorate.
      However, the Opposition's protestations will not divert us from our purpose. The Government were elected to increase the consumer's freedom of choice, to reduce the role of the state in the economy, to curb monopoly power and to open state-owned industries, as far as is possible, to the discipline of the market place. The Bill offers useful progress in that direction in the crucial business of electricity supply.
      As I have already acknowledged, the Bill does not go as far as some of my right hon. and hon. Friends would like, but it breaks important ground. It establishes the fact that, where a private supplier can match the state-owned monopoly on quality, price, safety standards and the like, he should have every opportunity to compete on fair and equal terms. Unregulated monopolies will always exploit their market power to prevent competition, and an element of regulation is the price that they must pay for monopoly privileges. The Bill strikes a proper balance between the rights and obligations both of the electricity supply industry and of the private generators of electricity. I commend it to the House.
      9.37 pm
      Dr. J. Dickson Mabon: The trouble with the Bill is that it is an exaggeration for the Secretary of State to claim that it does all that he says it does, even though there is a suggestion that his right hon. and hon. Friends do not believe that it goes far enough.
      The Committee stage was not entirely agreeable, but it provided a great deal of information. The point that there is no substantial development in private generation in the near future—[HoN. MEMBERS: "Rubbish".] I am sorry, but that is what the Minister told us. If called upon to do so, I can quote the exact column of the sixth sitting of the Committee. It is an exaggeration to suggest, as have the official Opposition, that the Bill will open up such a supply of generation as will wreck the system. The two great parties are characterising the Bill in opposite ways to the point where it is almost unrecognisable.
      My party has no objection to the Bill in regard to the introduction of the private supply of electricity. To that extent, I agree with the Secretary of State that it is breaking
      794
      new ground, but the idea that the Bill will introduce a substantial factor is nonsense. It is nonsense for the Secretary of State to pretend that it will do that and it is nonsense for the Opposition to suggest that it will privatise or even nearly privatise the generation of electricity in Britain. It merely opens up competitiveness. If the Bill were entirely even-handed—it is not—that could be true.
      The Secretary of State and his Ministers have piloted the Bill through well. I freely acknowledge their industry, attentiveness and co-operation, with the exception of one, who is not here. Nevertheless, the fact remains that the Bill is not all that important in terms of its physical impact on the economy of our country. It may lead promisingly in the area of combined heat and power, but I do not believe that even the wildest expectations of the hon. Member for Derbyshire, South-East (Mr. Rost) will be fulfilled by what the Secretary of State proposes in the Bill. A more substantial measure is needed. I am only sorry that the Bill is not of the stature that the demands of the hour require.
      We made it clear on Second Reading that our fundamental objection at this stage was that the generation of nuclear power should be in private hands. We submitted our case on Second Reading. Members have tried hard to decry what we said and suggested that we did not believe it. We believe profoundly in what we said. It is for Parliament to decide whether or not we take this fateful step to allow private industry to go into nuclear power generation.
      We tried in Committee to amend not only clause 2 but clause 1. The votes in Committee taken on 21 December, in Divisions Nos. 5 and 6, show emphatically that the Government would not change their mind on the subject. We tried earlier to persuade them that they might change their mind in proceedings in the other place, but clearly the Secretary of State is immovable.
      We shall vote against the Bill as a protest. We shall vote against it because it seeks to deprive Parliament of its full role. In the last few minutes of the debate on Report the Under-Secretary of State uncharacteristically gave the show away by saying that Parliament would play a role. The Secretary of State nods his head vigorously. Parliament should play the role of allowing private industry to be involved in nuclear power generation. Surely we have learnt that over the past quarter of a century.
      On this fundamental point there is no reason why we should continue to support the Bill. For that reason, my right hon. and hon. Friends in the Social Democratic and Liberal parties will vote against the Bill on Third Reading.
      9.42 pm
      Mr. Peter Rost: I have sat silently and patiently throughout the day, so I hope that the House will allow me three minutes to lend my support to this excellent Bill.
      I believe that the Bill will prove to be far more important and will lead to more important reform than the House, and certainly the outside world, realise. Industry will come to see the advantages of being able to generate cheaper power and cheaper heat. I believe that the consumer, too, will come to see the advantages. This will provide a fair deal for the private generation of electricity and in doing so will offer the opportunity for competitive heat and power generation in this country. It will provide a grid for joint use and will encourage the private generator to sell electricity not only to himself but to anyone else to

      795
      whom he wishes to sell it. It will allow fair prices for surplus electricity going from the private sector to the public sector.
      I have no doubt that on the industrial side it will lead to the development of combined heat and power. I am particularly grateful to my right hon. Friend the Secretary of State for accepting the amendment to clause 16 which will do a great deal to set the scene for the development of larger scale district heating using the reject heat from our power stations, which is so shamelessly wasted in this country compared to the 3,000 cities in Europe that are provided with relatively cheap heat.
      The electricity industry is also adopting a new attitude. It is now beginning to see the advantages of trying to market heat as well as electricity. In the east midlands, in particular, there is a new mood of enthusiasm towards combined heat and power and district heating schemes.
      I wish to quote from a letter that lends support to the legislation in a more relevant and precise way than the Opposition are prepared to accept. There are already enterprises in Britain in the private sector that promote the production of heat and electricity. There is one publicly quoted company which is already in the business, and has been for a number of years—Associated Heat Services, a £20 million public company. The National Coal Board owns one third of the equity. It has already installed heating equipment and service, manages boiler houses and produces electricity in more than 1,000 installations. For example, it has installed a district heating scheme in Nottingham which produces heat from refuse and provides electricity. It has recently modernised the Battersea district heating scheme.
      The chairman of the company, in welcoming the legislation, said:
      "we look forward to the opportunities provided by the proposed new legislation contained within the Energy Bill. This will enable us to accelerate the application of CHP in the industrial sector and help reduce energy costs to the industrialist.
      During the last few years we have found that the 'buy-back' and standby tariffs indicated by the CEGB have been weighted to effectively prevent the development of CHP, whilst in other countries evidence of the greater competition created amongst power generation companies has resulted in lower increases in electricity costs. This, of course, means that goods produced in this country are often uncompetitive in consequence.
      We are ready and eager to play our part—indeed, we are already doing so in developing ways in which heat and steam can be produced from waste. I am confident that we can similarly offer lower energy costs to industry by building, financing and operating CHP schemes which will be made possible only provided the Energy Bill is adopted."
      That is a positive evidence from someone already in the business, who has achieved a great deal in providing cheaper heat and electricity in Britain. His company welcomes the legislation and, in due course, consumers will do so also.
      9.47 pm
      Mr. Palmer: The Secretary of State is proud of his child, but there are few apart from him who take that view. In my humble judgment, it is a poor little waif of a Bill. Who really wants it?—certainly not the electricity supply industry. For a time, Ministers tried to pretend that the Electricity Council was not actively opposed to the Bill. In fact, both the council and the boards detest it. The documents quoted in Committee by the Opposition proved that.
      796
      The trade unions in the electricity supply industry are as responsible a bunch as anyone is ever likely to meet. They have campaigned actively against the Bill and have taken their objections to the Minister's office many times, as he well knows.
      The hon. Member for Derbyshire, South-East (Mr. Rost) had to wait until this last moment to find one witness to support his thesis of demand from private industry. The Confederation of British Industry stated, briefly, that the Bill could do no harm, and left it at that. It is said that the Bill will encourage the production of combined heat and power. There was nothing in the original Bill to that effect. Indeed, the Secretary of State, who is no friend of the nationalised industries—he makes little secret of his enmity towards the electricity supply industry—has had to include extra powers to start combined heat and power schemes.
      The irony is that the Bill has been badly drafted, as was displayed clearly in Standing Committee, with no thought for economic realism or its technical consequences in practice. Indeed, the amendments accepted by the Government are so drastic that it is now doubtful whether the Bill has any life left in it at all. The right hon. Gentleman gave the game away very plainly in the remarks that he made tonight from the Dispatch Box. He said again what he had said already on Second Reading, that the aim is not to constrict private generation in any way but rather to make the electricity boards allow for private generation when planning their own investment.
      I have followed electricity legislation over many years and I believe that this Bill is a break in the normal evolutionary tradition of the industry in this country to which all parties and many individuals of varying opinions have contributed. Far from reducing the real price of electricity, it is, I am sure, going to increase it. Certainly the ordinary consumer will not get in future the reliability of supply which he has enjoyed in the past. I am sorry that the House is not in a position to reject the Bill.
      9.52 pm
      Mr. John Smith: Throughout the discussion of this Bill there has been a clash of approach towards our publicly owned industry. Perhaps the most interesting thing we have seen this evening is the attitude of the members of the SDP-Liberal alliance to this Bill. Having voted for the Second Reading of the Bill, they inform us that they are voting against the Third Reading because of clause 3 of the Bill, which has not been amended as they wanted. The amusing thing is that they were the only party to absent themselves and fail to vote on clause 3 when the matter was decided in the Committee. So the pivotal factor which made the difference between supporting the Bill and opposing the Bill was one on which they deliberately abstained. So they had not only a vote one way and a vote another way but a crucial abstention in the middle. It must make the SDP-Liberal alliance very happy to have covered every point in the political compass.
      Dr. J. Dickson Mabon: That is absolute nonsense, as usual.
      Mr. Smith: The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) will not get very far shouting abusively from a sedentary position. These are the facts of the matter and I hope that they will be more widely known throughout the country than the right hon. Gentleman would wish.
      Dr. Mabon: Would the right hon. Gentleman do me the kindness of reading the report of the proceedings of the second sitting in Committee where he will see the reference to the Chairman's ruling that amendment No. 1 should be diverted from clause 3 to clause 1 or clause 2. The critical votes were taken at the sixth sitting. Will the right hon. Gentleman apologise now?
      Mr. Smith: I have defended many alleged criminals in my time, but never one with such a weak defence, and I hope that I never have the right hon. Gentleman for a client. The truth of the matter is that when we discussed clause 3 the right hon. Gentleman and the hon. Member for Truro (Mr. Penhaligon) were at junketings in Central Hall to do with the alleged revival of the SDP-Liberal alliance. They absented themselves from their duties in Parliament and therefore missed the vote on the crucial clause.
      It is much more important for the House to concern itself with the substance of the debate, which does not come from that quarter.
      The Secretary of State put the best face that he could on the justification for this Bill, but neither he nor any of his Ministers, nor indeed any of his hon. Friends who have taken part in this debate, have been able to prove that there is anybody in the private sector who wishes to generate electricity as a main business. Time and again we have asked where the proposals are and what companies are lurking in the wings waiting to generate private sector electricity. The answer is that there is none. So this is not a Bill to meet some demand, wise or unwise, for private sector electricity generation. This is a Bill—
      Mr. Rost rose—
      Mr. Smith: No, I shall not give way.
      This is a Bill to indulge the ideological impulses which drive the Secretary of State for Energy. I am sony that those ideological impulses have led him into grave error in other areas of our energy policy, into the disastrous Amersham sale, into the disastrous Britoil sale, into the forced disposal of Wytch farm—public asset stripping on a scale never seen before.
      We know that there is no demand for the Bill. The Secretary of State was motivated entirely by an ideological impulse. His description of the Bill suggested that its purpose was to introduce fair competition between the private sector and the public sector, but when I remind the House of exactly what the Bill does it will be clear that that description is false.
      First, the Bill provides that whenever anybody generates electricity in the private sector the public sector will be obliged to take the electricity. That is not fair competition. It is carving out a special guaranteed market for the favoured private sector. Secondly, private generators will have statutory access to the transmission system built up by the public sector. Thirdly, the public sector must guarantee private generators a standby supply of electricity if they run out of their own. If that is fair competition, Adam Smith must be revolving in his grave. It is carving a favoured position for the private sector out of the public sector.
      It may be thought that there must be some lack of generating capacity in this country, but in fact there is overcapacity, so any substantial addition from the private
      798
      sector is unnecessary and wasteful. It is not needed for any public purpose and the lack of demand suggests that it is not needed for any private purpose either.
      Why, then, has the Bill been introduced? It is irrelevant to the needs of the electricity supply industry and to the public need for an electricity supply. Its purpose is not to provide combined heat and power schemes, which the Opposition would welcome. If that were the purpose, a combined heat and power scheme Bill could have been introduced. It would have had a very speedy passage as it would have received widespread support from all parts of the House. Indeed, combined heat and power only came into the Bill as a result of amendment in Committee. There was no provision for it or Second Reading. Moreover, as that amendment changed only the public sector responsibility in relation to combined heat and power, it is not really connected with the private generation case.
      I fear that the Bill has been introduced because Ministers and especially the Secretary of State feel an obsessive need to ingratiate themselves with the Prime Minister by privatising anything within reach in their statutory domains. The present Secretary of State has been a disaster for energy policy. He has left our oil policy in ruins through the wicked, stupid and senseless destruction of the British National Oil Corporation and the asset stripping now taking place in the gas industry.
      I hope that the Bill will not amount to much in the short or the long term and that because there is no demand and no obvious use for private sector generation the provisions will not be used. Whether the Bill is used or not, however, it will remain a testimony to the absurd ideological obsessions of the Government—no better typified than by the present lamentable Secretary of State for Energy.
      9.58 pm
      Mr. Lawson: We have very little time, as there is business later this evening that is particularly close to the hearts of the official Opposition. Despite the posturing of the right hon. Member for Lanarkshire, North (Mr. Smith), the only real acrimony came when he engaged with his former right hon. Friend and successor as Labour Minister of State, Department of Energy, the right hon. Member for Greenock and Port Glasgow (Dr. Mabon). If, as I suspect, they carried on in that way when they were in the same party, it is no wonder that things have reached the pass that they now have in that party.
      The right hon. Member for Lanarkshire, North accused the Government of introducing an ideological Bill. He fails to understand that it is for him to show why there should be a statutory ban on the private generation of electricity as a main business. He has made no case whatever, although as long ago as 1980 my predecessor, now Secretary of State for Transport, committed the Government to removing that ban.
      The additional element in the Bill gives the autogenerator—someone who is generating in the private sector not for his own purposes but to supply other people on the grid—a fair crack of the whip. It is not ideological. I have received many representations about it. If the right hon. Member for Lanarkshire, North (Mr. Smith) knew anything about the matter, he would know that private sector generators feel that they have not been having a fair crack of the whip. The Bill will provide useful advantages, increased competition and opportunities for industry where they are badly needed.

      799
      I ask the House to support the Bill with a handsome majority.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Energy Bill and the Motion relating to Financial Assistance to Opposition Parties may be proceeded with, though opposed, until any hour.—[Mr. Cope]

Energy Bill
10 pm
Mr. David Penhaligon: The trouble with the right hon. Member for Lanarkshire, North (Mr. Smith) and many of his profession is that they confuse accuracy with confident assertion. The line taken by the Liberals and Social Democrats on the Bill has been clear from the beginning. The few hon. Members who have taken any interest in the Bill will be aware of that.
The Bill will encourage private generation and allow it to be a main business. I believe that is right and I am pleased that the Government have introduced that concept. It will be interesting to see what happens during the next 12 months, not least in my part of the county, where the CEGB is planning to close a number of power stations. One presumes that the private sector will be allowed to take them over and, one suspects, generate electricity economically. In Plymouth and north Devon there are a number of opportunities for the private sector to take over power stations, save jobs and provide the south-west with some much-needed electricity.
It is strange that the Secretary of State's full point in favour of the Bill was the amendment tabled by the hon. Member for Derbyshire, South-East (Mr. Rost). I congratulate him on his success. The amendment was broadly welcomed and I am pleased to see it in the Bill.
My party will vote against the Bill on Third Reading, although we voted for it on Second Reading. We said that would happen if the Government did not introduce amendments in Committee or on Report to make it illegal for someone to own a nuclear power station privately. We have made that clear throughout the Bill's passage. The day may arrive when the private ownership of nuclear power stations is safe and to be welcomed. We do not believe that that is the position today. We do not believe that it will happen in the immediate future. When it does happen the House should pass new legislation according to the circumstances at the time.
We welcome part of the Bill. We have made it quite clear which clause we are against. We cannot understand why the Government have been so stubborn about it. We cannot believe that the public would welcome private ownership of a nuclear power station and we shall vote against the Bill.
10.3 pm
Mr. Gordon Wilson: I also said on Second Reading that if the Government did not withdraw the lunatic provision contained in the Bill for the private ownership of nuclear power stations my right hon. Friend the Member for Western Isles (Mr. Stewart) and I would reconsider our vote. I regret that the Government have not taken any action to change the Bill. I do not think that it is a practical proposition for a nuclear power station to be
800
in the private sector. I regard it as a matter of principle. A private nuclear power station is a highly dangerous concept. I am not prepared to accept it for that reason. My right hon. Friend the Member for Western Isles and I will vote against the Bill on Third Reading.
Question put, That the Bill be now read the Third time:—
The House divided: Ayes, 279, Noes 227.

Division No. 89]

[10.5 pm

AYES

Aitken, Jonathan

Farr, John

Alexander, Richard

Fell, Sir Anthony

Alison, Rt Hon Michael

Fenner, Mrs Peggy

Amery, Rt Hon Julian

Finsberg, Geoffrey

Ancram, Michael

Fisher, Sir Nigel

Arnold, Tom

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

Atkins, Rt Hon H.(S'thorne).

Fletcher-Cooke, Sir Charles

Atkins, Robert(Preston N)

Fookes, Miss Janet

Atkinson, David (B'm'th,E)

Forman, Nigel

Baker, Kenneth(St.M'bone,)

Fowler, Rt Hon Norman

Baker, Nicholas (N Dorset)

Fraser, Rt Hon Sir Hugh

Beaumont-Dark, Anthony

Fraser, Peter (South Angus)

Bendall, Vivian

Fry, Peter

Benyon, Thomas (A'don)

Gardiner, George (Reigate)

Benyon, W. (Buckingham)

Gardner, Sir Edward

Berry, Hon Anthony

Gilmour, Rt Hon Sir Ian

Bevan, David Gilroy

Glyn, Dr Alan

Biffen, Rt Hon John

Goodhart, Sir Philip

Biggs-Davison, Sir John

Goodhew, Sir Victor

Blackburn, John

Goodlad, Alastair

Bonsor, Sir Nicholas

Gow, Ian

Boscawen, Hon Robert

Gower, Sir Raymond

Bottomley, Peter (W'wich W)

Grant, Sir Anthony

Boyson, Dr Rhodes

Gray, Rt Hon Hamish

Braine, Sir Bernard

Greenway, Harry

Brinton, Tim

Grieve, Percy

Brittan, Rt. Hon. Leon

Griffiths, Peter (Portsm'th N)

Brooke, Hon Peter

Grist, Ian

Brotherton, Michael

Grylls, Michael

Brown, Michael(Brigg & Sc'n)

Gummer, John Selwyn

Browne, John (Winchester)

Hamilton, Hon A.

Bruce-Gardyne, John

Hamilton, Michael (Salisbury)

Budgen, Nick

Hampson, Dr Keith

Burden, Sir Frederick

Hannam, John

Butcher, John

Haselhurst, Alan

Butler, Hon Adam

Hastings, Stephen

Carlisle, John (Luton West)

Havers, Rt Hon Sir Michael

Carlisle, Kenneth (Lincoln)

Hawksley, Warren

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

Hayhoe, Barney

Chalker, Mrs. Lynda

Heddle, John

Channon, Rt. Hon. Paul

Henderson, Barry

Chapman, Sydney

Heseltine, Rt Hon Michael

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

Hicks, Robert

Clark, Sir W. (Croydon S)

Higgins, Rt Hon Terence L.

Clarke, Kenneth (Rushcliffe)

Hill, James

Clegg, Sir Walter

Hogg, Hon Douglas (Gr'th'm)

Cockeram, Eric

Holland, Philip (Carlton)

Colvin, Michael

Hooson, Tom

Cope, John

Hordern, Peter

Costain, Sir Albert

Howe, Rt Hon Sir Geoffrey

Cranborne, Viscount

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

Critchley, Julian

Hunt, John (Ravensbourne)

Crouch, David

Hurd, Rt Hon Douglas

Dickens, Geoffrey

Irvine, RtHon Bryant Godman

Dorrell, Stephen

Irving, Charles (Cheltenham)

Douglas-Hamilton, Lord J.

Jenkin, Rt Hon Patrick

Dover, Denshore

Jessel, Toby

du Cann, Rt Hon Edward

Johnson Smith, Sir Geoffrey

Dunn, Robert (Dartford)

Jopling, Rt Hon Michael

Durant, Tony

Joseph, Rt Hon Sir Keith

Dykes, Hugh

Kaberry, Sir Donald

Eden, Rt Hon Sir John

Kimball, Sir Marcus

Edwards, Rt Hon N. (P'broke)

Knight, Mrs Jill

Eggar, Tim

Knox, David

Elliott, Sir William

Lang, Ian

Emery, Sir Peter

Langford-Holt, Sir John

Eyre, Reginald

Latham, Michael

Fairgrieve, Sir Russell

Lawrence, Ivan

801

Lawson, Rt Hon Nigel

Ridley, Hon Nicholas

Le Marchant, Spencer

Ridsdale, Sir Julian

Lennox-Boyd, Hon Mark

Rippon, Rt Hon Geoffrey

Lester, Jim (Beeston)

Roberts, Wyn (Conway)

Lewis, Sir Kenneth (Rutland)

Rossi, Hugh

Lloyd, Ian (Havant & W'loo)

Rost, Peter

Lloyd, Peter (Fareham)

Royle, Sir Anthony

Loveridge, John

Rumbold, Mrs A. C. R.

Luce, Richard

Sainsbury, Hon Timothy

Lyell, Nicholas

St. John-Stevas, Rt Hon N.

McCrindle, Robert

Shaw, Giles (Pudsey)

Macfarlane, Neil

Shaw, Sir Michael (Scarb')

MacKay, John (Argyll)

Shelton, William (Streatham)

Macmillan, Rt Hon M.

Shepherd, Colin (Hereford)

McNair-Wilson, M. (N'bury)

Shepherd, Richard

McNair-Wilson, P. (New F'st)

Shersby, Michael

McQuarrie, Albert

Sims, Roger

Madel, David

Skeet, T. H. H.

Major, John

Smith, Sir Dudley

Marland, Paul

Smith, Tim (Beaconsfield)

Marlow, Antony

Speed, Keith

Marshall, Michael (Arundel)

Speller, Tony

Marten, Rt Hon Neil

Spence, John

Mates, Michael

Spicer, Michael (S Worcs)

Mather, Carol

Sproat, Iain

Maude, Rt Hon Sir Angus

Squire, Robin

Mawby, Ray

Stanbrook, Ivor

Mawhinney, Dr Brian

Stanley, John

Maxwell-Hyslop, Robin

Steen, Anthony

Mayhew, Patrick

Stokes, John

Mellor, David

Stradling Thomas, J.

Meyer, Sir Anthony

Tapsell, Peter

Miller, Hal (B'grove)

Taylor, Teddy (S'end E)

Mills, Iain (Meriden)

Tebbit, Rt Hon Norman

Mills, Sir Peter (West Devon)

Temple-Morris, Peter

Miscampbell, Norman

Thatcher, Rt Hon Mrs M.

Moate, Roger

Thomas, Rt Hon Peter

Monro, Sir Hector

Thompson, Donald

Montgomery, Fergus

Thorne, Neil (llford South)

Moore, John

Thornton, Malcolm

Morrison, Hon C. (Devizes)

Townend, John (Bridlington)

Morrison, Hon P. (Chester)

Townsend, Cyril D, (B'heath)

Mudd, David

Trippier, David

Murphy, Christopher

van Straubenzee, Sir W.

Myles, David

Vaughan, Dr Gerard

Neale, Gerrard

Waddington, David

Needham, Richard

Wakeham, John

Nelson, Anthony

Waldegrave, Hon William

Neubert, Michael

Walker, Rt Hon P.(W'cester)

Newton, Tony

Walker, B. (Perth)

Onslow, Cranley

Wall, Sir Patrick

Oppenheim, Rt Hon Mrs S.

Waller, Gary

Osborn, John

Walters, Dennis

Page, John (Harrow, West)

Ward, John

Page, Richard (SW Herts)

Warren, Kenneth

Parris, Matthew

Watson, John

Patten, Christopher (Bath)

Wells, Bowen

Patten, John (Oxford)

Wells, John (Maidstone)

Pattie, Geoffrey

Wheeler, John

Pawsey, James

Whitelaw, Rt Hon William

Percival, Sir Ian

Whitney, Raymond

Pink, R. Bonner

Wickenden, Keith

Pollock, Alexander

Wiggin, Jerry

Porter, Barry

Wilkinson, John

Prentice, Rt Hon Reg

Williams, D.(Montgomery)

Price, Sir David (Eastleigh)

Winterton, Nicholas

Prior, Rt Hon James

Wolfson, Mark

Proctor, K. Harvey

Young, Sir George (Acton)

Raison, Rt Hon Timothy

Younger, Rt Hon George

Rathbone, Tim

Rees, Peter (Dover and Deal)

Tellers for the Ayes:

Rees-Davies, W. R.

Mr. David Hunt and

Renton, Tim

Mr. Tristan Garel-Jones.

Rhodes James, Robert

NOES

Abse, Leo

Anderson, Donald

Adams, Allen

Archer, Rt Hon Peter

Allaun, Frank

Ashley, Rt Hon Jack

Alton, David

Ashton, Joe

802

Atkinson, N.(H'gey.)

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

Bagier, Gordon A.T.

Harrison, Rt Hon Walter

Barnett, Guy (Greenwich)

Hart, Rt Hon Dame Judith

Barnett, Rt Hon Joel (H'wd)

Haynes, Frank

Beith, A. J.

Heffer, Eric S.

Bennett, Andrew(St'kp't N)

Holland, S. (L'bth, Vauxh'll)

Bidwell, Sydney

Home Robertson, John

Booth, Rt Hon Albert

Homewood, William

Boothroyd, Miss Betty

Hooley, Frank

Bray, Dr Jeremy

Howell, Rt Hon D.

Brocklebank-Fowler, C.

Howells, Geraint

Brown, Hugh D. (Provan)

Hoyle, Douglas

Brown, Ronald W. (H'ckn'y S)

Huckfield, Les

Brown, Ron (E'burgh, Leith)

Hughes, Mark (Durham)

Buchan, Norman

Hughes, Robert (Aberdeen N)

Callaghan, Rt Hon J.

Hughes, Roy (Newport)

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

Hughes, Simon (Bermondsey)

Campbell, Ian

Janner, Hon Grevilie

Campbell-Savours, Dale

Jay, Rt Hon Douglas

Canavan, Dennis

Johnson, James (Hull West)

Cant, R. B.

Johnson, Walter (Derby S)

Carmichael, Neil

Johnston, Russell (Inverness)

Carter-Jones, Lewis

Jones, Rt Hon Alec (Rh'dda)

Clark, Dr David (S Shields)

Jones, Barry(East Flint)

Clarke,Thomas(C'b'dge,A'rie)

Jones, Dan (Burnley)

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

Kaufman, Rt Hon Gerald

Cohen, Stanley

Kerr, Russell

Coleman, Donald

Kilroy-Silk, Robert

Concannon, Rt Hon J. D.

Lambie, David

Conlan, Bernard

Lamond, James

Cook, Robin F.

Leighton, Ronald

Cowans, Harry

Lestor, Miss Joan

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

Lewis, Arthur (N'ham NW)

Crawshaw, Richard

Lewis, Ron (Carlisle)

Crowther, Stan

Litherland, Robert

Cryer, Bob

Lofthouse, Geoffrey

Cunliffe, Lawrence

Lyon, Alexander (York)

Cunningham, G. (Islington S)

Mabon, Rt Hon Dr J. Dickson

Dalyell, Tam

McDonald, Dr Oonagh

Davidson, Arthur

McGuire, Michael (Ince)

Davies, Rt Hon Denzil (L'lli)

McKelvey, William

Davis, Clinton (Hackney C)

MacKenzie, Rt Hon Gregor

Davis, Terry (B'ham, Stechf'd)

Maclennan, Robert

Deakins, Eric

McNamara, Kevin

Dean, Joseph (Leeds West)

McTaggart, Robert

Dewar, Donald

McWilliam, John

Dixon, Donald

Marks, Kenneth

Dormand, Jack

Marshall, D(G'gow S'ton)

Douglas, Dick

Marshall, Dr Edmund (Goole)

Dubs, Alfred

Marshall, Jim (Leicester S)

Duffy, A. E. P.

Martin, M(G'gow S'burn)

Dunnett, Jack

Mason, Rt Hon Roy

Dunwoody, Hon Mrs G.

Maxton, John

Eadie, Alex

Maynard, Miss Joan

Eastham, Ken

Meacher, Michael

Ellis, R. (NE D'bysh're)

Mikardo, Ian

Ellis, Tom (Wrexham)

Millan, Rt Hon Bruce

English, Michael

Mitchell, R. C. (Soton Itchen)

Ennals, Rt Hon David

Morris, Rt Hon A. (W'shawe)

Evans, loan (Aberdare)

Morris, Rt Hon C. (O'shaw)

Evans, John (Newton)

Morris, Rt Hon J. (Aberavon)

Ewing, Harry

Moyle, Rt Hon Roland

Faulds, Andrew

Mulley, Rt Hon Frederick

Flannery, Martin

Newens, Stanley

Foot, Rt Hon Michael

Oakes, Rt Hon Gordon

Ford, Ben

O'Neill, Martin

Forrester, John

Orme, Rt Hon Stanley

Foster, Derek

Palmer, Arthur

Foulkes, George

Park, George

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

Parker, John

Freeson, Rt Hon Reginald

Pavitt, Laurie

Freud, Clement

Pendry, Tom

Garrett, John (Norwich S)

Penhaligon, David

George, Bruce

Powell, Raymond (Ogmore)

Gilbert, Rt Hon Dr John

Prescott, John

Ginsburg, David

Price, C. (Lewisham W)

Golding, John

Race, Reg

Gourlay, Harry

Radice, Giles

Graham, Ted

Richardson, Jo

Hamilton, James (Bothwell)

Roberts, Albert (Normanton)

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Roberts, Allan (Bootle)

Thorne, Stan (Preston South)

Roberts, Ernest (Hackney N)

Tilley, John

Roberts, Gwilym (Cannock)

Torney, Tom

Robinson, G. (Coventry NW)

Varley, Rt Hon Eric G.

Rooker, J. W.

Wainwright, E(Dearne V)

Roper, John

Wainwright,R.(Colne V)

Ross, Ernest (Dundee West)

Walker, Rt Hon H.(D'caster)

Rowlands, Ted

Wardell, Gareth

Ryman, John

Watkins, David

Sever, John

Weetch, Ken

Sheldon, Rt Hon R.

Welsh, Michael

Short, Mrs Renèe

White, Frank R.

Silkin, Rt Hon J. (Deptford)

White, J. (G'gow Pollok)

Silkin, Rt Hon S. C. (Dulwich)

Whitehead, Phillip

Silverman, Julius

Whitlock, William

Skinner, Dennis

Wigley, Dafydd

Smith, Rt Hon J. (N Lanark)

Willey, Rt Hon Frederick

Snape, Peter

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

Soley, Clive

Williams, Rt Hon Mrs(Crosby)

Spearing, Nigel

Wilson, Gordon (Dundee E)

Spellar, John Francis (B'ham)

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

Spriggs, Leslie

Wilson, William (C'try SE)

Steel, Rt Hon David

Winnick, David

Stewart, Rt Hon D.(W Isles)

Woodall, Alec

Stoddart, David

Woolmer, Kenneth

Stott, Roger

Wright, Sheila

Strang, Gavin

Young, David (Bolton E)

Straw, Jack

Summerskill, Hon Dr Shirley

Tellers for the Noes:

Taylor, Mrs Ann (Bolton W)

Mr. Allen McKay and

Thomas, Jeffrey (Abertillery)

Mr. George Morton.

Thomas, Dr R. (Carmarthen)

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

Financial Assistance to Opposition Parties
10.16 pm
The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): I beg to move, That the Resolution of the House of 20th March 1975 shall have effect from 1st January 1983 with the substitution of the following paragraph for paragraph 2 of that Resolution:—
'That for the purpose of determining the annual maxima of such assistance the following formular shall apply:
£1,080 for each seat won by the party concerned plus £2·16 for every 200 votes cast for it at the preceding General Election, provided that the maximum payable to any party shall not exceed £325,000.'.
Mr. SpeakerI have not selected the amendment on the Order Paper.
Mr. Biffen: It may be for the convenience of the House if I just, very briefly, outline the general background to the motion and its effect.
No new principle is being established. As hon. Members will recall, financial assistance to Opposition parties to help them in carrying out their parliamentary business was first confirmed by the House in 1975. Both the Conservative and Labour parties have been beneficiaries of such a provision. The maximum amount payable to an Opposition party was initially fixed at £150,000. Since 1975 there have been two rises in the annual amounts payable. The first was in February 1978,when the maximum was raised by 10 per cent. to £165,000, with corresponding changes in the cash amounts related to seats and votes won, by which entitlements falling short of the maximum are calculated.
The second and latest rise was approved by the House in November 1980, with retrospective effect to July 1980, when the maximum amount payable to any party was raised to £290,000, with similar proportionate rises for the smaller Opposition parties. These provide for the Liberal party to be entitled to about £52,000 a year and the other Opposition parties some £20,000 between them.
The effect of the present motion would be to raise, as from the beginning of this year, the maximum amount payable annually to any Opposition party from £290,000 to £325,000. This represents an increase since July 1980 of just over 12 per cent., together with similar proportionate rises in the formula by which the amounts payable to parties getting less than the maximum are calculated. The Liberal party would thus become entitled to something over £58,000, and the other Opposition parties together to about £23,000.
As the House is aware, this scheme is designed to help Opposition parties in carrying out their work here at Westminster. The purposes for which these sums may be used are accordingly confined by the original 1975 resolution to paying for expenses incurred with regard to a party's "parliamentary business". With that qualification, however, its allocation is entirely at the discretion of the parties themselves. I understand that the principal purpose to which the money is in fact allocated is for office expenses, staffing costs and research assistance.
The reason for the present proposal to raise the amounts payable by approximately 12 per cent. is the increased cost of support services since the present rates took effect in July 1980. One of the principal purposes of this scheme

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is to provide for Opposition parties some counterbalancing support to that provided for the Government by the Civil Service. It would, therefore, seem appropriate that the amount of the increase now proposed should be generally in line with increases in Civil Service Staff costs since 1980.
Mr. Ivor Stanbrook: Will my right hon. Friend tell the House in what way this expenditure is controlled and monitored, so that the money is actually spent for the purposes to which he referred, bearing in mind that a former treasurer of the Labour party said that the money should be paid direct to the Labour party itself, and not to the Labour party parliamentary section?
Mr. Biffen: It is available for investigation by the Comptroller and Auditor General and the Public Accounts Committee. I hope that the Comptroller and Auditor General will be considered by the House to be a reasonable authority as to the propriety with which the money is spent.
As the House will be aware, in order to qualify for this financial assistance, a party must have at least two Members elected to the House as members of that party at the preceding general election, or have one such member and have received at least 150,000 votes at that election.
Mr. K. Harvey Proctor: Will my right hon. Friend say whether he sees any purpose in that particular qualification?
Mr. Biffen: Yes. The reason for having it was to strike a balance in the demands that are made on the resources of a party, having regard to the number of seats that it had in the House and the number of votes that it had in the country. These points were argued when the moneys were first made available, and I see no reason to suppose that it is not a reasonable working arrangement to have a broad assessment of the demands that are made on the parties in this House.
Mr. Proctor: I wanted to know whether my right hon. Friend thought it possible that one Member of Parliament might gain financial assistance by getting the 150,000 votes.
Mr. J. W. Rooker: The right hon. Gentleman does not say that. Why does the hon. Gentleman not read it?
Mr. Biffen: It is perfectly possible for there to be one Member of Parliament and support for the party represented by that Member in excess of 150,000 votes. I am not sure, but I think that that was true of the SDLP in the last Parliament. If my hon. Friend is agonising about the matter, he need not peer into the crystal-if I might plagiarise-he can study the book.
These qualifications do not vary between Parliaments, nor do they take account of the formation of parties whose memberships did not contest the previous general election as members of that party. This basis has stood since the scheme was first approved by the House. I would not propose any change.
Nor, in conclusion, does this proposed uprating alter in any way the Government's stated opposition to the general financing of political parties that has been proposed in the past by Lord Houghton's committee and others. The present scheme does not provide state aid for the general activities of political parties in the country but only in this
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strictly limited area of Opposition parliamentary work here at Westminster. The cost of this necessary support has, however, undoubtedly risen substantially in recent years, and I believe the increase now proposed to be generally equitable.
10.24 pm
Mr. John Silkin: I should declare what may be termed a collective interest on behalf of the Opposition and perhaps also an indirect subjective interest, because, as a member of the parliamentary Labour party and as a Front Bench spokesman, clearly I am bound to benefit from the financial assistance given to the Opposition.
The Leader of the House has clearly told us the history and the principle of the measure. It may be for the convenience of the House, and perhaps of the hon. Member for Orpington (Mr. Stanbrook), if I explain how the allocation of funds in the Labour party is made. The Leader of the House is right to say that it must be related to the work of the parliamentary Labour party in the House of Commons. That is what it is about. The allocation of funds is made by four trustees—the chairman of the parliamentary Labour party, my hon. Friend the Member for Easington (Mr. Dormand), the leader of the Labour party, my right hon. Friend the Member for Ebbw Vale (Mr. Foot) and by two of my hon. Friends, elected as the occasion arises to the parliamentary Labour party. The secretary of the parliamentary Labour part} acts as secretary. That is all clear, open and available for discussion and consideration inside the parliamentary Labour party, and, as the Leader of the House has said, the accounts are also open and above board.
I believe that I am right in saying that when the Conservative party was in opposition the funds were solely at the discretion of the leader of the Conservative party—the Prime Minister. As far as I know, she no doubt acted in the best possible interests of work in the House. What she did with the money was a matter for her party but not, I suspect, for anybody else, provided that it was within the framework of work in Westminster.
The Leader of the House has told us that the funds available for the Labour party fall into the maximum provision, and therefore our funds go up from £290,000 to £325,000. My arithmetic was never very good, but I make that an increase of about 12·5 per cent. Borrowing, if I may, from the wise words that I took the precaution of looking up of the hon. Member for Islington, South and Finsbury (Mr. Cunningham) when he stood at the Dispatch Box on behalf of the parliamentary Labour party in the debate in July 1980, the uprating then was about 87 per cent. of the increase in costs. However, I understand that the increase in costs has been 17 per cent. I always follow the dictum of the late lain Macleod. I do not believe in shutting out a one-legged Father Christmas. I ant glad to have Father Christmas and I am not in any way complaining. That would be ungracious and wrong. What I am trying to say is that the uprating is not an absolute maximum.
As to the principle, the question of our performance in the House depends on our being as well informed as we can be and as able to take as independent and experienced point of view as we possibly can. That is why the salary of Members of Parliament was introduced 74 years ago. I believe that we were the first assembly in the world to do that. That step was taken by David Lloyd George when £400 a year was given to Members of Parliament. We have

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moved a long way since then. The Leader of the Opposition was paid and I do not think there has ever been any dispute or anxiety about that. Two Whips were paid, and so it has gone on. Hon. Members have their parliamentary salaries. We have our disputes and discussions about that, but all of us accept that there must be payment for research, secretarial assistance, and so on, so that we can do our job.
The Leader of the House is right. The Government, particularly in a very technical and complex society, invariably get greater advantage as time goes by. It is right that an Opposition should also be given the means by which they may carry out the duties that the constitution imposes on them, that of challenging, of opposing, and of representing the other point of view. I am glad to be able to second the motion.
10.30 pm
Mr. K. Harvey Proctor: The last occasion on which I rose to try to catch your eye, Mr. Speaker, on the subject of financial assistance to opposition parties was at 11.49 pm on the evening of 7 August 1980, and I resumed my seat at 5.35 pm on 12 November 1980. That was a lengthy contribution, with a parliamentary summer recess in between, because of an adjourned debate. I assure the House that I shall not try its patience for so long on this occasion.
However, I should like to place on record my opposition to aid for political parties, both in principle and in detail, whichever political parties may be involved. I did not sit in previous Parliaments, but had I done so, on each of the occasions when this subject came before the House, my view would have been the same, even if I were sitting on the Opposition side of the House.
I note that the debate tonight is about detail rather than principle. Therefore, I shall try to address most of my remarks to the detail of the increase. Notwithstanding the modest manner in which my right hon. Friend the Leader of the House proposed the motion, we are still considering quite considerable sums of taxpayers' money. My right hon. Friend very kindly gave me answers in yesterday's Hansard about the sums of money that have been paid in recent years to the various Opposition parties represented in the House.
The tables of the amounts show clearly the quantity of the increases. There is £35,000 for the Labour party, giving it an increase from £290,000 to £325,000, an extra £6,361 for the Liberal party, an extra £827 for the Scottish National party, an extra £886 for the Ulster Unionist party, for Plaid Cymru another £390, and for the Democratic Unionist party £435. In total, the increase proposed, if I understand it correctly, is an increase from the 1980 provision of £362,915 to an estimated £406,816. We are talking not in terms of small sums, but of reasonably substantial sums that the taxpayer is being asked to contribute towards the parliamentary business of Opposition parties.
Mr. Clement Freud: Will the hon. Gentleman translate the size of the increase into the number of assisted places that this would pay for?
Mr. Proctor: I have not made that estimate, but no doubt I can do so at a later date, although not without notice.
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The increases come in three sections. The maximum increase has been referred to by both my right hon. Friend the Leader of the House, and the right hon. Member for Deptford (Mr. Silkin). That went up since 1 January 1975 from £150,000 by 10 per cent. on 1 January 1978. One of the things that caused considerable concern on Conservative Benches was that on 1 July 1980 it went up by 75 per cent. to £290,000. Now it will go up to £325,000
The amount per seat that each Opposition party could receive has similarly increased over the years. On 1 January 1975 each party could receive £500 per seat. That was increased by 10 per cent. on 1 January 1978 to £550, and went up on 1 July 1980 to £962.50, an increase of 75 per cent. There is now a 12 per cent. increase from 1 January 1983 to £1,080. The amount per 200 votes cast was fixed at £1 on 1 January 1975. It went up by 10 per cent. on 1 January 1978 to £1·10. Again it went up on 1 July 1980 to £1·92, an increase of 75 per cent. It is now proposed to go up to £2·16, an increase of about 12 per cent.
Those increases are substantial. The House should not support or agree to them. Last time that we debated those increases I and other hon. Members questioned the extent to which indexation of the increases to inflation should take place. I am opposed in principle to indexation to inflation because I believe that as long as politicians continue to index things to inflation, the motive force for getting rid of inflation is taken away. I am glad that my right hon. Friend and the right hon. Member for Deptford said that the link with inflation has been broken.
It is because of the Conservative Government that we have such low rates of inflation. Inflation worried many Conservative Members in 1980. Therefore, the debate is taking place in a different atmosphere. However, the credit for the reduction in the rate of inflation lies not with the Opposition parties, which seem to be benefiting tonight, but with the Treasury Bench and Treasury economic policies.
Mr. Gordon Wilson: The hon. Gentleman said that he opposed the increases in principle partly because of indexation to inflation. If that is so, would it not be appropriate for him to vote against the resolution outright? Why is he seeking to promote an amendment to postpone it to another date?
Mr. Proctor: As the House will know, hon. Members frequently table amendments that get half or a quarter, but not the full, loaf. I in no way criticise you, Mr. Speaker, for not selecting my amendment. Had the amendment been called I would have spoken to it. I shall say a few words about it, if that is in order.
My argument is one of total opposition in principle to the idea of the taxpayer funding Opposition political parties in their work as Opposition political parties. It is different for the taxpayer to contribute sums of money to individual Members of Parliament for their constituency and parliamentary duties. If they wish to pool their collective funds to aid the political party that they represent, so be it. That is my suggestion for the way to go about it. Taxpayers' money should not be given to the political party. I am glad that my right hon. Friend underlined some of my suspicions that this might be the thin end of the wedge. He said that the Government had set their face against increasing the funding of political parties-those outside the country, for example.

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With regard to whether the funds are necessary, I understand what my right hon. Friend and the right hon. Member for Deptford (Mr. Silkin) said. However, one cannot consider the subject in isolation from what other sources of funds might be available to political parties. Funds are available from voluntary fund raising, industry, trade unions and so on. I wonder whether the Labour party is so short of funds. I am merely a disinterested spectator. I have noted that it has recently concluded a fairly expensive and lengthy legal action in the courts about boundary changes.
Mr. Rooker: Get your facts right.
Mr. Proctor: I understand what Opposition Members feel, and I shall qualify my statement shortly. The leaders of the Labour party have just concluded an expensive and lengthy legal battle.
Mr. Norman Atkinson: Not the Labour party leaders.
Mr. Proctor: Perhaps the leader of the Labour party does not represent the hon. Member for Tottenham (Mr. Atkinson) as our leader represents Conservative Members. The legal action cannot have cost much less than £80,000 to £90,000. I am sorry that some hon. Members are touchy about the issue.
Could not that money have been used more wisely on some other form of parliamentary activity by the Labour party than denying my constituents' wish for boundary reform? I represent one of those large constituencies that have more than 120,000 electors. Why do we need to give the Labour party an extra £35,000 when its leaders obviously have access to large sums of money? The House should consider that before it passes the motion.
I noted that nearly every time my right hon. Friend referred to the resolutions, there was an element of retrospective legislation in them. Some people want to give extra money to Opposition parties. Why cannot our affairs be organised more tidily so that we decide one year what will take effect the next? Better still, would it not be a good idea for Parliament to decide how much should be given to Opposition parties, if that is its decision, at the end of one Parliament, to take effect in the next? That would get away from the problem of which party will form the Opposition. Some of the minority parties will sit on those Benches for ever, but for the Labour and Conservative parties that may be a better way to proceed. Therefore, I tabled a small amendment suggesting that the increases should not come into effect until 1 January 1984, which will probably be after the next general election.
My right hon. Friend said that there were two qualifications in the original legislation—[Interruption.] I might be tempted to speak for a little longer if Opposition Members continue to heckle me from a sedentary position instead of contributing something meaningful to the debate. The qualifications mentioned by my right hon. Friend stem from the original resolution. The one in which I am interested is that which mentions two or more Members of Parliament. I should be grateful if my right hon. Friend would clarify the position regarding one Member of Parliament who receives more than 150,000 votes at the election. Is that qualification superfluous? Has consideration been given to the fact that this legislation is narrow with regard to increasing the amounts payable to Opposition parties? Have the Government considered
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whether the qualifications should be revised in the light of the past eight years and of the new political parties that have been established?
I could not allow this legislation and this evening to go by without putting on record my objection to what we are doing.
10.47 pm
Mr. David Stoddart: I am chairman of the trustees of the Labour party, who administer the funds for Opposition parties, so I have some knowledge of how those funds are distributed, and the difficulties that the Opposition face because of a shortage of funds.
I was most surprised by the opposition of the hon. Member for Basildon (Mr. Proctor) to the motion, because I believed that he was a great supporter of parliamentary democracy and wished to give every facility to its continuation and development. I remind him that the British constitution is based on Her Majesty's Government and Her Majesty's Opposition. Her Majesty is entitled to have an efficient, well-serviced Opposition as well as an efficient, well-serviced Government. Therefore, we must provide the Opposition parties with the wherewithal to provide that efficent and searching opposition.
Mr. Proctor: I do not disagree with what the hon. Gentleman has said, but does he believe that the Opposition were any less efficient before 1975?
Mr. Stoddart: I do not know about that. What I do know is that we are living in a highly complex industrial and technological society in which Opposition parties, in the same way as the Government, need information and research into developments. Without that information at their fingertips, they cannot properly carry out the role of Opposition.
Therefore, it is right that the Opposition parties should be financed by the people so that the Government of the country can properly proceed under the constitution. Until 1975, when funds for Opposition parties were introduced, the political parties subsidised our constitutional processes and the work of the House. That was corrected in 1975. I am glad that it was corrected and it is right that the House should ensure that the Opposition parties are properly financed so that they can assist in the efficient government of this country.
Before I sit down, I should like to say a few words about the disbursement of the funds. The amount available is little enough for the Front Bench spokesmen of Opposition parties to be able properly to carry out their work. Even now, with these funds available, Opposition Front Bench spokesmen have to subsidise their work from their own allowances and indeed, in some cases, from their own private pockets. The amount under discussion tonight is little enough. I hope, therefore, that in the light of all the circumstances, and because of the need for Opposition parties to be efficient and well serviced, the House will agree to the motion.
Question put and agreed to.
Resolved,
That the Resolution of the House of 20th March 1975 shall have effect from 1st January 1983 with the substitution of the following paragraph for paragraph 2 of that Resolution:—
`That for the purpose of determining the annual maxima of such assistance the following formula shall apply:

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£1,080 for each seat won by the party concerned plus £2·16 for every 200 votes cast for it at the preceding General Election, provided that the maximum payable to any party shall not exceed £325,000.'.

ESTIMATES
Ordered,
That this House agrees with the Report of the Liaison Committee [3rd March].—[Mr. David Hunt.]

Islington Borough Council
Motion made and Question proposed, That this House do now adjourn.—[Mr. Hunt.]
10.52 pm
Mr. George Cunningham: My purpose in this debate is to draw attention to the improper use of public funds by Islington borough council, to ask the Secretary of State for the Environment to use his powers under the Local Government Act 1972 to order an extraordinary audit of the accounts of the council, and, failing that, to invite him to refer the evidence that I shall present tonight to the district auditor and the new Audit Commission so that they can initiate proceedings to compel Islington councillors to pay the cost of some of these improper expenditures out of their own pockets, in accordance with the law of local authority spending.
Because of the shortage of time, I shall stick closely to my notes in order to include as much material as possible. Islington council prides itself on being in the forefront of the movement for a more hard Left-wing dominance of the Labour party. It has taken over from the Lambeth Labour party in that respect. One of the Labour councillors told his colleagues that good housekeeping should not be an Islington council priority. It is in the forefront, too, in the hard Left-wing Labour move to suppress and cease to recognise the distinction between party activity and state or local authority activity. To them the two are fused, as they are in east Europe. This has led the council to use public funds for Labour party purposes, as I shall show. The fact that it has 51 of the 52 seats on the council, and that there will be no election for three years, has led it to spend prodigiously in accordance with its political inclinations without regard to propriety, due economy or the interests of residents and other ratepayers.
The council received an application from a body called the Islington News Co-operative, whose purpose is to produce a free give-away newspaper for distribution on a large scale in the borough. The group applying for financial assistance included one Labour councillor, one employee of the council and others of known Labour party active connections. Documents in my possession say that the editorial advisory board of the paper must include a representative of the local Labour party. Money has now been voted by Islington council for that purpose. The amount is uncertain because the council is being secretive, even towards the one SDP councillor in Islington, but it appears to be about £20,000.
In putting a request to the Department of the Environment for part of that sum to be financed under urban aid, the council broke the rules on urban aid that forbid politically connected projects. The council concealed the political connection when the request was made. The intention is that the Labour paper should be funded in the end by about £80,000 from Islington council and the GLC.
When my constituents want repairs done in their council flats, they often have to wait weeks or months. When the application was put in for money, for the Labour newspaper, it was dealt with more rapidly. I have a copy of an internal memorandum dated 6 September last year, marked "urgent and confidential", saying
"The enclosed application was delivered to me this morning. Could you please process it for tomorrow's Grants Sub-committee."

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That was signed by one of the chairmen of committees. The urgency is that the Labour party thinks that a free newspaper following the Labour line will be extremely handy in the coming general election.
The leader of the council has defended the provision of the money on the grounds that nine people will be employed on the newspaper. On that basis, I could decide that I want 10 agents in Islington operating for the SDP, and could justify the provision of public finds for that purpose.
The council is using money to help finance the London leaders group—that is, meetings of the leaders of Labour-controlled local authorities, plus the GLC and ILEA. In common with a dozen other London authorities, Islington decided to help itself to £2,000 of rates to finance the purely Labour party meetings, which will have £2,000 from each of the boroughs. The other boroughs were to hand their £2,000 each to Islington as the ringleader of the gang. Islington's £2,000 appears formally in its expenditure plans for next year as item BPP 10 in these words:
"London Labour Leaders-contribution towards one post in Finance Department and one in Borough Secretary's Department to provide support to the London Labour Leaders Group."
The remainder or the cost of the two staff will I presume, come from the other Labour boroughs, but the House should note that the staff are to be employed on party work, financed by councils and to be based as officers in the councils. That appears in the expenditure papers for next year under the heading "Higher priority Extensions to Existing Services".
Islington's rate rise, decided this evening, is 30 per cent. Because of waste on other matters, to get the figure down to 30 per cent. from the earlier crazy notion of a 78 per cent. possible rise, the leading councillors proposed to cut out plans for improvements to homes for the elderly where there is a serious deficiency of staff, but the money for the Labour party meetings is included in the high priority category and gets through. In addition, Islington has acquired premises at 135 Upper Street to be made available to the Labour leaders group. Councillor Hyams of the SDP has asked for full information on funding this organisation but is having difficulty in getting it. There seem to be no minutes yet on the decisions taken.
Islington has expanded the staff in its press department, which is now, of course, called the campaigns department. To appreciate the significance of that we have only to read item 3 of the record of the secret meeting of Labour leaders on 7 December last year, when leaders agreed that they would
"ensure that press and publicity staff participate fully in the campaign"—
that is, a political campaign on rates run by the Labour party.
In Islington the campaigns department, which is headed at the moment by a council officer who is a prominent and active member of the London Labour briefing team, has taken to issuing dishonest press releases. One recently gave the impression that councillors were forgoing increases in their personal allowances when in fact they were considerably increasing them, including, it seems, allowing themselves to claim up to three times a week for just popping into the town hall for a discussion with an officer on this or that. Another suggested that the district
814
audtor had criticised the old SDP council when he had in fact criticised the new Labour council on the subject of the appropriate level of balances of local authorities.
Then there is the Baggshott Co-operative story. This is a group of ex-prisoners who set themselves up to do small building work. The council gave them £10,000. The business went bust, owing among other things £13,000 in unpaid PAYE money. The book-keeper, whose work was said to have been entirely unsupervised, walked off with £2,000. There had been other irregularities. Despite that, I have in my papers a record of a meeting, marked "strictly confidential", in which Councillor Chris Bromley, formerly chairman of the development committee—and, by the way, recently appointed to a high-level post in the GLC—is authorised to tell the co-op that they should liquidate themselves and
"reconstitute themselves as a new co-operative, preferably under another name",
whereupon consideration might be given to giving them more money "towards setting up and rent".
Then there is the trip to Grenada. The hard- left-wing council in Islington has decided that the post-revolutionary government in Grenada, well-known for not holding elections and for ignoring human rights, is one with whom it wants to identify. It has twinned with Grenada. A project in Islington called the Ujima project, already given council money, has been given £3,250 more to finance trips to the island on the anniversary of the revolution by a dozen of its members and two staff. The Department told Islington that urban aid money could not be used for that purpose and that it would also be improper for Islington to use its own resources for it. So Islington gave a grant to the Commonwealth Youth Exchange Council and fixed it with that body that the money would be used to finance the trip. Well might the chairman of finance scrible at the bottom of the submission made to him, as I have seen with my own eyes, "Have we the power to do this?" It was done.
There was the trip to Italy by children in council care and the social workers, of course, in charge of them. The trip greatly exceeded the council's own guidelines for the cost of such holidays. An internal audit showed that there had been irregularities in money control in the home in question. The deposit for the trip was paid in cash and in spite of a committee decision that it should not take place the decision was overturned when the staff took the matter to the Labour group. The staff accompanying the children had the gall to claim hundreds of pounds in sleeping away allowance because they were in Italy looking after the children.
Last year, under pressure from social workers, the Labour party reopened at a cost of about £20,000 a tiny, and therefore extremely uneconomic, home for children in council care in Highbury New Park. I am told that at present there are only four children in that home.
The old Labour council, in 1982, negotiated a settlement on staff ratios at children's homes. The new Left-wing council has negotiated a new one which imposes a burden of £800,000 on the rates. The deal was negotiated in part by Councillor Victor McGeer, chairman of the personnel committee, and on the other side of the table was another Mr. McGeer, the first one's brother, who is a NALGO shop steward himself employed at one of the homes. No declaration of interest was made in accordance with standard Department of the Environment guidelines for proper behaviour by councillors.

815
Then there is the money being given to London Voice Limited, the company which publishes the magazine City Limits, based in Islington and supported by the council as well as by the GLC against its rival Time Out. London Voice has received at least £13,500 from Islington council and the DoE has been foolish enough, or careless enough, to accept this for financing under urban aid. The GLC has given about £180,000 in loans to the paper and the GLC's finance comptroller told the council formally:
"there is unlikely to be any repayment of the loan".
Then there is the IDEAL project to set up a company called the Islington Development and Economic Agency Limited with directors appointed by the council to do things that the council would not be able to do in its own name. This has been approved by the leader's policy committee, and seven directors have been appointed. I understand that the legality of this move has been questioned by advisers to the council.
Islington council likes to claim that it is improving services for people in need. This year it has in fact slightly underspent its budget on homes for the elderly. Its budget for homes for the elderly in 1983–84 is less than 20 per cent. higher that that of two years ago. That is to be contrasted with the planned rise in spending on the council's so-called campaigns unit, the purpose of which is to push the council's political views. In 1981–82 expenditure on the predecessor of the campaigns unit was £81,000, in the present year the expenditure was doubled to £166,000 and in 1983–84 it will go up by 50 per cent. to £245,000—just under a quarter of a million pounds and a threefold increase since Labour took power. In the same period, the cost of the members secretariat, commonly referred to by watchers of Islington council as the Labour party minders, will rise from £30,000 to £84,000.
Another worrying fact is that a large part of Islington council's expenditure these days is authorised not by the relevant committee but by the chairman, allowing the chief officer to use his delegated power on grounds of alleged urgency. Since the Labour council took over last May, twice as such expenditure has been authorised under the heading of urgency on capital account as in the regular way—£10·7 million as against £5 million. On revenue account, chairmen have authorised £2·1 million as against just £400,000 in the regular way.
I have in my dossier a paper in which Islington's borough solicitor advises councillors not at that time to take a certain decision because they did not have the requisite facts before them and therefore any decision could be unlawful. Councillors ignored that legal advice and took the decision.
There is, therefore, the use of public funds for overtly party political purposes, the use of public funds to create and sustain a free newspaper with overt Labour party connections, suppression of facts when application was made to the DoE when those facts would have disqualified the application, waste of funds on councillors' pet projects with little of no relevance to the borough, lack of financial control over social workers in parts of the council complex and excessive payments for the kinds of purpose that I have listed.
I wrote to the leader of the Labour party asking whether he approved of this kind of use of public funds by Islington council, the GLC and other Labour-controlled authorities. In a reply dated 28 February he simply draws my attention
816
to the Local Government Act and says that ratepayers have a legal right to challenge expenditure. The Labour party has gone a long way down into the swamp of corruption when its national leader, on being given irrefutable proof of these abuses, refuses to use his authority to condemn them.
Ten years ago, talking about the Crown Agents, I told the House that there was a scandal in that organisation just waiting to blow. I was not believed, but we all know now that the outcome was hundreds of millions of pounds of public money down the drain, improperly spent. I hope that I shall be believed this time when I say that in Islington and in some other Labour-controlled authorities in London there is a new scandal waiting to blow, which needs immediate investigation, exposure and punishment.
My purpose is to secure that these matters are investigated. My view is that some of the expenditures that I have mentioned are irresponsible waste and that some are actually illegal. I do not want the hard-pressed residents of Islington, who face a 30 per cent. rate rise next month, to have to wait a year and more for the audit process to take its normally slow course. I therefore call on the district auditor and the new audit commission, to be set up next month, to investigate these cases without delay.
It is extremely unusual, I know, for the Secretary of State to order an extraordinary audit. It is right that he should be loth to use that power, but I believe that it is justified and I ask the Minister to say that he will give it serious consideration.
Islington councillors who have voted for these improper and wasteful expenditures should be made to pay for them out of their own pockets and should be debarred from holding office, in accordance with the provisions of the Local Government Act 1972.
The district auditor has the power to set those processes in motion and I look to both him and the Secretary of State to use their powers in the interests of my long-suffering constituents.
11.11 pm
The Under-Secretary of State for the Environment (Sir George Young): The House will have listened with care, and I suspect with a sinking heart, to all that the hon. Member for Islington, South and Finsbury (Mr. Cunningham) has said. It is clear that those ratepayers in his constituency who are unhappy with their lot have a hard-fighting champion; and even clearer that the majority group of Islington borough council has a stern opponent. It is hardly surprising, against the background of what the hon. Gentleman has told us, that all three Islington Members left the Labour party. Perhaps I might congratulate the hon. Gentleman on the cogency and force with which he has put his case tonight. Indeed, I would expect nothing less.
The subject of the debate is the case for a special audit of the accounts of the London borough of Islington. From what I have heard tonight, and from what I have learnt previously about Islington, it seems exactly the sort of behaviour that is driving people in droves from the Labour party. I shall lose no sleep over that, but I regret that it is not just the Labour party but local government as a whole whose reputation suffers from the sort of behaviour about which we have heard tonight. My sympathy goes to the hard-pressed ratepayers who have to finance it and who will be reeling from the 30 per cent. increase for which Islington has apparently just voted.

817
Only last Friday I was reading in the London press about Left wingers on the council trying to bankrupt the borough, which apart from being ill advised is illegal. I understand that they were seeking a confrontation with Government. One councillor was reported as saying:
"These people are straight out of the Russian revolution."
They seemed heedless of the fact that they were using other people's money; money paid by ordinary people and local businesses-the sort of undertakings which provide employment and can do so much to provide real help to the unemployed in the borough.
I shall leave the general question of Islington's Left and deal with the particular question of a special audit. The technical legal term is "extraordinary audit", and it might be helpful if I explain the legal and practical considerations that apply.
First, I deal with the law. Section 165 of the Local Government Act 1972 says that the Secretary of State may direct a district auditor to hold an extraordinary audit either on the application of a local government elector, or if it appears to him from an auditor's report to be desirable, or if it appears to be desirable for any other reason. There is no doubt that the Secretary of State has considerable scope in deciding whether or not to call for an extraordinary audit.
In practical terms, I should make it clear that an extraordinary audit is really just an ordinary audit at an extraordinary time; that is to say, the auditor has no more than his usual powers, which of course are quite wide ranging enough for him to do a thorough job. It needs to be borne in mind that an extraordinary audit is not a magic weapon; it does not give the auditor a special form of X-ray audit eye. It is essentially a matter of timing. Indeed, it is open to the auditor to take action at any time during the course of an audit. The islington audit for 1982–83 will be under way in the next couple of months, with the public inspection period in the autumn. So an extraordinary audit, for all its apparent drama, may not necessarily be essential for prompt action. This debate will serve to draw the issues of which the hon. Gentleman is complaining to the auditor's attention.
An extraordinary audit, of course, costs money. My right hon. Friend the Secretary of State will consider a request for an extraordinary audit carefully. He will want to consider whether it will achieve what an ordinary one will not and whether the costs and disruption will be justified. I make no apology for reserving my right hon. Friend's position, but I can give the hon. Gentleman the undertaking for which he asked towards the end of his remarks. My right hon. Friend will certainly consider seriously whether it is in the public interest for all to see quickly what has been going on in Islington.
One issue that the auditor will be considering in due course is the legality of the expenditure which the hon. Gentleman has complained about. Indeed, in deciding on the request for an extraordinary audit, the Secretary of State is bound to ask himself whether there is at least a prima facie case of illegal spending. It is not for me to pronounce here on what is, or is not, legal. That is for the auditor and the courts. I do not wish to become embroiled in a debate on what is a party political piece of spending and what is genuinely aimed at getting a better deal for Islington. But local authorities must act in accordance with the law and they must satisfy the auditors that their spending is lawful.
Mr. George Cunningham: I hope that the Minister will not make the distinction between party political interest and something that is thought to be in the interests of residents. I believe that my political party is in the interest of residents. That would not justify me in using public funds for it.
Sir George Young: The point is that local authorities have a certain amount of discretion in their spending powers. They will undoubtedly argue that some of the things that the hon. Gentleman has mentioned were in the interests of a better deal for Islington. At the end of the day, it wll be for the auditor and the courts to decide who is right.
The district auditor is independent by law and has to form his own view of the merits of any particular case he comes across. The hon. Gentleman has a perfect right to ask me what I personally think about this sort of behaviour by a local authority. I hope that I have given that view in my opening comments. If the comments were not clear enough, I say once more that I deplore the attitude of Islington and other Labour authorities like them. It is not just a question of party politics. Everyone knows that Islington takes a different political line from the Westminster Government. It has that right. What we are talking about is waste of other people's money—waste on fatuous projects like "Save London from Heseltine week". Who except the committed Lefties ever knew that was happening? There is waste on contributions to trendy newspapers. I wish that Islington councillors had the sense to see that the real way to help the unemployed is to stop piling rates on industry.
As the hon. Gentleman knows, I replied to him on 28 February on the spending on the Labour council leaders' meetings. I told him that the Secretary of State would refer to the appropriate district auditors the decision of the leaders of the Labour councils and of the GLC to use council funds to finance the administrative costs to which he has referred. On the Baggshot building co-operative, I wrote to Councillor Hyams on 21 February asking him to consider sending the papers to the metropolitan district auditor who would then investigate any item of the local authority's accounts. In view of the possibility of police involvement, I said that it would not be appropriate for me to comment at that stage on the paper's contents.
The hon. Gentleman mentioned several topics relating to the Islington partnership and the way the council is operating the urban programme regime. As I think he knows, I am looking into the matters that he has raised with me and I am in touch with the council on some of their policies in this sphere. I shall be pursuing any aspects that seem to be misconceived or wrong in other ways. The very essence of partnership is that the Government, local authorities and other parties should work together to achieve agreed objectives to assist the deprived inner areas. The Government are providing money to schemes which we believe are supportive of the agreed partnership objectives and partnership money must be used only in that way.
From what the hon. Gentleman has said and, indeed, from other information which has come to my knowledge, it would appear that Islington is not fully accepting its duty to operate wholly within the guidelines laid down and the spirit of partnership. If that is, in fact, the case and governmental partnership money granted has been used for the support of schemes unacceptable to the Government,

819
we shall take steps to redress the position. As chairman of that partnership, I am taking a close interest in the situation locally and I can assure the House that I shall not shrink from taking prompt and effective action if it should sadly prove to be necessary.
I am conscious that the hon. Gentleman will have wanted a quick decision from me tonight. I hope that I have explained why I do not think it would be right to make a snap judgment, but I can promise him that my colleagues and I will consider everything that he has said, and we will consider it all the more carefully because of the force with which he has said it and the evidence that he has produced to sustain it.
Before I conclude, I wish to acknowledge once again the efforts the hon. Gentleman is making on an issue where he clearly feels very strongly indeed; and I should also mention the hon. Member for Islington, Central (Mr.
820
Grant) who has also been in touch with my colleagues and myself on a number of audit issues in recent months. They have done a lot to alert the public and the auditor.
Very recently my noble Friend the Minister of State for Local Government, Lord Bellwin, has undertaken to draw the auditor's attention to certain matters which the hon. Gentleman recently raised in this House in a rather noisy application for a debate under Standing Order No. 9. I can promise him that, whatever the Secretary of State's decision on an extraordinary audit, the matters which have been raised here and elsewhere will be put to the district auditor. Therefore, the spending to which the hon. Member for Islington, South and Finsbury so objects—and I sympathise—will indeed be carefully examined as part of the audit procedure.
Question put and agreed to.
Adjourned accordingly at twenty minutes past Eleven o' clock.

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Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
>Prayers—Read by the Lord Bishop of Oxford.

Iran: Persecution of Baha'is
Lord Whaddon: 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 have recently made representations, either on their own account or in concert with other Governments, to the Government of Iran concerning the continued persecution of Baha'is.
Lord Skelmersdale: My Lords, on 27th December 1982, the Danish Ambassador in Tehran, acting on behalf of the Ten, made a démarche to the Iranian Foreign Ministry to draw their attention to the level of international concern at reports of persecution of the Baha'is. Following reports that sentences of death on 22 members of the Baha'i community in Shiraz had been confirmed, the Ten decided to make a further approach to the Iranian authorities to express their deep concern.
Lord Whaddon: My Lords, while I express thanks to the noble Lord for that reply, can he tell the House whether the Shiraz 22 are still alive, and, if they are, does not this show some effect of protest from the West? Is the noble Lord aware that under the Iranian constitution Article 13 treats the Baha'is as non-people and allows only Jews, Christians and Zoroastrians to be recognised as religious minorities? Will he press the Secretary-General of the United Nations to make representations that this article of the constitution be altered to recognise the existence of this legitimate independent religion?
Lord Skelmersdale: My Lords, to the best of my knowledge the Shiraz 22 to whom the noble Lord has just referred are still alive. With regard to the Baha'is not being recognised as a religious grouping in Iran, of course the Government are well aware of this. I would like to refer the noble Lord to the speech that my noble friend Lord Colville of Culross made the other day during the human rights debate of the United Nations, in which he pressed the very points to which the noble Lord has alluded.
Lord Cledwyn of Penrhos: My Lords, on the point of the United Nations, is it not the case that the Iranian Government has now agreed to accept an envoy from the United Nations to investigate these alleged appalling violations of human rights? Can the noble Lord confirm that, and also confirm that the Government would support such a move?
Lord Skelmersdale: My Lords, I was not aware of that fact, but if it is so, most certainly the Government would support just such a move. I should point out that Iran has subscribed to United Nations Covenants on Human Rights, and I would say that it is only reasonable for the world community to encourage countries to observe the undertakings which they sign.
Lord McNair: My Lords, can the noble Lord confirm that it is the policy of Her Majesty's Government that no Iranian Baha'i shall be repatriated against his or her will from this country to Iran?
Lord Skelmersdale: My Lords, an Iranian who is a member of the Baha'i faith would qualify for recognition as a refugee in this country and would therefore be protected from return to Iran. So the answer to the noble Lord's question is, yes.
Lord Elwyn-Jones: My Lords, is not Iran plainly in breach of those conventions which the noble Lord has said its Government ratified in 1976? Has any complaint been made to the United Nations Commission of Human Rights, which has some sort of supervision over breaches of this kind? If that has not been done, can Her Majesty's Government take some initiative in that regard?
Lord Skelmersdale: Yes, my Lords. The speech of my noble friend Lord Colville to which I referred earlier included these points. It is exactly for the reason that the noble and learned Lord has adduced that this international pressure is being put on the Iranian Government at the moment.
Lord Renton: My Lords, is it not a fact that our own country has an impeccable record of religious tolerance, and should not that strengthen the hands of Her Majesty's Government in these matters?
Lord Skelmersdale: Yes, my Lords, absolutely, but in this respect we are acting, as I said in my original Answer, through the good offices of the Ten.
Lord Kilbracken: My Lords, are the Government equally concerned about persecution by the Iranians of the Kurdish people and other minorities?
Lord Skelmersdale: My Lords, human rights are human rights, wherever they occur.

Overseas Aid: Statistics
2.42 p.m.
Lord Hatch of Lusby: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what expenditure is proposed for overseas aid in 1983–84, what percentage this represents of Britain's gross national product and how these figures compare with those of 1978–79.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): My Lords, the net aid programme for 1983–84, as published in the recent White Paper on the Government's expenditure plans (Cmnd. 8789), is £1,057 million. The percentage this represents of Britain's 1983–84 GNP will depend on the performance of the economy for that year. For 1978–79 net aid was £723 million, representing 0.42 per cent. of GNP.
Lord Hatch of Lusby: My Lords, does the noble Lord recall that on 30th November last, when I asked a similar Question, I was also then given what are now called the cash figures as distinct from the cost figures? Is he aware that he has again, in his comparison between last year and 1978–79, given the cash figures, not the cost figures? Is it not a fact that the cost figures bear out the assertion that I made on 30th November, that this Government have reduced overseas aid by something in the region of 15 per cent?
Lord Belstead: My Lords, the answer to the noble Lord's first question is, yes, I have, so far as the figures are concerned, given cash and not cost. As regards the noble Lord's second question, if one takes an index setting out the real value of our aid as compared with 1981–82, the figure which the noble Lord has given to the House is not far out, although I do not have the exact figure. But the fact of the matter is that aid has been reduced in real terms between 1978–79 and the current year because it could not be immune from the necessity to make public expenditure cuts.
Lord Mackie of Benshie: My Lords, can the noble Lord tell us how much of this amount is in food aid? Can he give the Government's view on the expert opinion which is beginning to be widely held that in many cases food aid has been harmful in destroying local agriculture and, indeed, local culture?
Lord Belstead: My Lords, I do not have the figure for food aid but I will certainly write to the noble Lord, Lord Mackie of Benshie. The Government would not go that far down the road which the noble Lord presents, but I think we would be very hesitant in feeling that the distribution of food aid is an answer compared with the improvement of the agricultural structure of countries. To that extent the Government would certainly agree with the noble Lord.
Baroness Macleod of Borve: My Lords, may I ask the Minister whether his figures include the amount of aid, both financial and in food, that is given by voluntary organisations from this country?
Lord Belstead: My Lords, I am giving the figures from the public expenditure White Paper. I am sorry that I must again admit to my noble friend that I am not sure whether they include the figure for voluntary organisations—a figure which, incidentally, I remember my noble friend Lady Trumpington pointing out to the House a few weeks ago as one of which we should be proud. I am sorry, therefore, that I do not have the exact figure with me.
Lord Oram: My Lords, may I first thank the Minister for having set out in a Written Answer a few
82
weeks ago, at my request, the aid totals over a period of 10 years? May I ask whether he himself had a chance to study those figures? If so, did he notice that in every year when Labour were in office there was an increase over the previous year and in every year when a Conservative Government were in office there was a decrease over the previous year?
Lord Belstead: My Lords, the noble Lord may feel that that represents the case, but, as I have pointed out on more than one occasion to your Lordships' House, when we get into the next financial year, in less than a month's time, the expenditure on the aid programme will increase, both in cost terms and in cash terms.
Lord Brockway: My Lords, may I ask the Minister two questions? First, how far is capital investment included in the figures for aid? Secondly, while aid is deeply necessary for the poorest countries, are the Government giving their mind to proposals for a new world economic order as indicated yesterday in the splendid speech by Mrs. Indira Gandhi to the nonaligned nations?
Lord Belstead: Yes, my Lords; capital investment, so far as it attracts aid, is included in the figures that I have given. I am not aware that we are thinking of a new economic order.
Lord Hatch of Lusby: My Lords, I normally ask questions in order to obtain information from the Government. Perhaps I should reverse the roles and ask the noble Lord whether he is aware that the answer to the question of the noble Baroness sitting behind him is that the voluntary organisations provide about £50 million a year for overseas territories but that that is not included in the figures that I have asked for this afternoon, because I asked for the official figures.
May I probe the Minister one stage further on the first answer that he gave me, when he repeated the suggestion that aid had to be cut because of the cuts in public expenditure—due, presumably, to the depression? I have asked this question of him before. At the end of the period of office of the Labour Government in 1979 the Minister was able to say that overseas aid from this country produced 40,000 jobs inside Britain. If the Ministry was able give those figures in 1979, is it now possible for the Overseas Development Administration to give similar figures? Have they been cut by the 15 per cent. which the noble Lord admits has been the cut in overseas aid?
Lord Belstead: My Lords, I have replied to that question on previous occasions in the House; that is, that I am not aware that what the noble Lord asserts in asking that question represents the truth. What I mean by that is that I do not think either the noble Lord or I can be certain of the fact of the matter as the noble Lord puts it to the House. However, I would add that the importance which the Government attach to the giving of overseas aid is reflected by the fact that only the United States, the Federal Republic of Germany, France and Japan are bigger OECD aid givers than the United Kingdom. If I may go back to the noble Lord's original Question, our aid as a percentage of our gross national product is above the level of the OECD countries.
Lord Hatch of Lusby: My Lords, is it not the case that that percentage is lower than the percentage in the Netherlands, Norway, Sweden and Denmark?

NHS: Scope of Inquiry
2.50 p.m.
Baroness Lane-Fox: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the scope of the work to be carried out by the management inquiry team examining the National Health Service.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, the management inquiry team will advise my right honourable friend the Secretary of State on further action that needs to be taken, within existing funding, to secure the most effective use and management of NHS manpower and related resources. The inquiry will not cover doctors and dentists and it will not deal with clinical matters as such.
Baroness Lane-Fox: My Lords, in acknowledging that very interesting reply, may I ask my noble friend the Minister whether the aim of the inquiry will be to get better value for money combined with better patient care, particularly since I understand that in the year 1983–84 the National Health Service will cost the record figure of £15frac12; billion?
Lord Trefgarne: My Lords, my noble friend is quite right that the sum of money anticipated is of the order of the figure that she mentioned. Certainly it is one of the purposes of the inquiry to ensure that we get the very best value for money. There are others, too, such as the ones that I described in the Answer.
Lord Molloy: My Lords, may I ask the noble Lord whether he would be prepared also to recommend to the Secretary of State that he should point out to the inquiring body that the fundamental feature ought to be that all doctors, nurses, specialists of all kinds and ancillary and ambulance staffs, should be provided with conditions of work that will create a great harmony which will be of benefit and increase the efficiency of our National Health Service to our fellow countrymen?
Lord Trefgarne: My Lords, nobody underestimates the importance of the point that the noble Lord makes, but of course there is other machinery for determining the conditions of work. For example, there is the review board for doctors and dentists and the Whitley Council machinery for the other workers in the Health Service. I do not think that it would be right to expand the inquiry that I have referred to in that way.
Baroness Gaitskell: My Lords, would it not be true to say that, despite all the criticism of the National
84
Health Service, most people who use it—I am one of those who has used it recently—do not find as much to blame as comes out in this Chamber? It is a real boon to most people. It is a great pity that we are always running it down in this Chamber.
Lord Trefgarne: My Lords, I am certain that the noble Baroness is quite right to put her question in that way, if I may say so. It is very easy to criticise the National Health Service, but we hear compliments less often.
Baroness Faithfull: My Lords, may I ask my noble friend the Minister whether the management team is to visit every region and every district, and how long that will take?
Lord Trefgarne: My Lords, the question of how the team seizes itself of the problems that it is to consider is a matter for the inquiry team itself. I cannot say whether it will be visiting all the regions or indeed any, although doubtless it will be visiting some. As for the time-scale, we hope to get a preliminary assessment of the way things are going towards the end of June and I cannot say quite how long it will take after that, if at all.
Lord Winstanley: My Lords, may I ask the noble Lord whether the management inquiry team will be able to examine the Elephant and Castle district and the Department of Health and Social Security centrally in addition to the hospitals and the health service in the regions?
Lord Trefgarne: My Lords, I certainly see no reason why not.
Lord Prys-Davies: My Lords, will the Minister confirm whether or not the Secretaries of State for Wales and Scotland are to establish a team for their respective countries parallel to this management inquiry team?
Lord Trefgarne: No, my Lords. This inquiry will particularly address itself to the problems of England but the conclusions which it reaches will of course be made available by my right honourable friend to his colleagues responsible for the other regions.
Baroness Hornsby-Smith: My Lords, can my noble friend—
Lord Molloy: My Lords, is the noble Lord aware that reformation and examination of the Whitley Councils—their scope broadened—must be part of the examining inquiry's writ?
Several noble Lords: Order, order!
Baroness Hornsby-Smith: My Lords, may I ask my noble friend whether this inquiry will study very closely the enormous increase in the administrative staff, because we hear so many speeches about how much better it was in the past than now, which I for one do not accept? But, nevertheless, there has been a monumental increase in administration and what we are really interested in is seeing that the people who

85
deal with the patients are there. Many of us think that the administration has become overburdened and I hope that this inquiry will deal with that.
Lord Trefgarne: My Lords, I am afraid that I have to tell my noble friend that she really is not correct in her assertion that there has been a massive increase in administrative staff within the National Health Service. On the contrary, there has been a reduction in grades in the particular area in recent times. But my noble friend might care to ponder on this particular point: is it really right, for example, that an experienced and highly trained specialist should spend his time typing his own letters when it might be better if someone was employed for the purpose?
Lord Wallace of Coslany: My Lords, is the Minister aware that I should like to ask him three questions? What will be the relationship between this team and the management efficiency groups which have been set up in England? Secondly, what use will be made by the Government of the findings and conclusions of the team, and in particular is it intended that they should link in with programmes or measures for the privatisation of the National Health Service? Finally, what is the cost involved and will that fall on NHS budgets? Finally, is the Minister aware—
Several noble Lords: Fourth question!
Lord Wallace of Coslany: That is right, my Lords, four. Finally, is the Minister aware that it is about time that the Government ceased messing about with the National Health Service and let the dedicated people in the service get on with the job?
Lord Trefgarne: My Lords, may I in answer to the last point suggest that the noble Lord consults the noble Baroness, Lady Gaitskell, who I think took a slightly different view on that matter than the noble Lord now advances. My Lords, the inquiry will of course be separate to the other matters that the noble Lord referred to. The purpose of the inquiry will be to enable my right honourable friend to implement the recommendations that it makes to improve the management, efficiency and, above all, the value for money that we get out of the health service. The inquiry has no relation whatever with any privatisation proposals, as the noble Lord said. As for cost, the four members of the inquiry are giving their services free of charge.
Lord Renton: My Lords, will the inquiry be concerned with the rather disquieting information which has come to light about the care and treatment of the mentally handicapped in some of the National Health Service hospitals?
Lord Trefgarne: My Lords, the inquiry will not be specifically concerned with the matter to which my noble friend refers because, as I said, it is concerned with the management of the Health Service and the value for money considerations to which I referred earlier. But of course it will not be debarred from considering those particular problems with the sector to which my noble friend referred.
Lord Davies of Leek: My Lords, is the noble Lord aware that during all these supplementary questions and all this simple analysis that we have heard one vital social factor has not been taken into account: namely, that whatever this may cost, it must be balanced against the saving of life and limb and economic productivity by keeping people healthy and well? That side of the balance sheet should be put against any expenditures.
Lord Trefgarne: My Lords, naturally I agree that the primary purpose of the National Health Service is to provide the care that sick people need. The purpose of this inquiry is to assist us in doing that better.
Lord Avebury: My Lords, will the inquiry look at the development of computing within the National Health Service?
Lord Trefgarne: My Lords, it will certainly not be disbarred from looking at that matter if it wishes to do so.
Lord Davies of Penrhys: My Lords—
The Lord Privy Seal (Baroness Young): My Lords, we have been nearly nine minutes on this Question. I know that the noble Lord, Lord Davies of Penrhys, has been trying to speak. Perhaps we might take his question and then move on to the next one.
Lord Davies of Penrhys: My Lords, will the Minister not accept that there is a problem here? Next Sunday I shall be going into a national health hospital for the removal of cataracts, but I have been able to do so only because I am connected with a brewery which will pay. Unless that were so, it would be impossible for me to be admitted. I was told by the specialist—
Several Noble Lords: Order!
Lord Davies of Penrhys: My Lords, is the noble Lord aware that I was told by the specialist that that was the only way in which I could have them dealt with quickly? Is it not wrong that someone who has been against this system for so long should have to resort to this type of thing?
Lord Trefgarne: My Lords, it is unhappily the case that the waiting lists for non-emergency treatment—which I gather is the cause of the difficulty with which the noble Lord is faced—are longer than we would wish. Up to the beginning of the dispute last year we had succeeded in significantly reducing those waiting lists, but naturally as a result of the dispute they again lengthened. I hope that one of the results of this inquiry will be that improved management efficiency in the health service will emerge, which will again assist us in reducing the lengths of the waiting lists.

Truancy: Local Authority Records
3.2 p.m.
Baroness Macleod of Borve: 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 which local education authorities had the worst records as far as truancy is concerned in the last period for which figures are available.
The Earl of Swinton: My Lords, the Department of Education and Science has no recent information regarding levels of truancy. The primary responsibility for monitoring school attendance and for tackling problems of truancy lies with individual local education authorities.
Baroness Macleod of Borve: My Lords, I thank my noble friend the Minister for that Answer. Is he aware that in the parents' magazine Where? it is reported that just under 5,000 children are in care because they have been truanting and that many of them are in community homes where the available standard of education is said to be not very high? Would my noble friend agree with me that if children are not in school it is very likely that they will become juvenile delinquents?
The Earl of Swinton: My Lords, I really cannot comment on the figures in the magazine, Where? and nor would I comment on what type of education is being provided in community homes, but presumably if children are in community homes they are at least being educated. The link between truancy and juvenile delinquency is a very complex and difficult one. It is primarily a local matter, and there are no national figures. However, I understand that in one urban area, Leeds, where there is a most interesting project taking place with the juvenile courts, the records of some 450 youngsters appearing before the juvenile courts as young offenders indicate that about three out of four had attendances of at least 70 per cent. and about one in 10 had attendances of at least 90 per cent. I should like to add that in this case the figures did not distinguish between those absences which were justified and those which were not. I know that those are figures for Leeds only, and I do not know whether they are repeated throughout the country. However, they go to show that this is a very complex problem and that there is not naturally any type of link between truancy and juvenile delinquency.
Baroness Fisher of Rednal: My Lords, can the noble Earl say whether the education system itself is at fault regarding truancy? When I say "at fault", I am referring to the problem of non-academic pupils perhaps attending education establishments which are geared completely to academic students. The figures I have from one local authority in the country prove quite conclusively that its truancy figures are some of the lowest in the whole of the area, and that is an area of high unemployment and one that is geared to perhaps a much more vocational type of training for the non-academic pupil.
The Earl of Swinton: My Lords, I am very grateful to the noble Baroness for drawing that matter to your Lordships' attention. There is little general agreement as to any overriding reason for truancy. Research evidence suggests that such factors as social
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background, disillusionment with the school curriculum, temperamental qualities and lack of interest and support by parents all contribute. A particular cause of concern is the fact that a significant number of parents seem to condone unjustified absence. The point which the noble Baroness has made about the vocational education of children is something that the Government are pursuing very much at the moment.
Lord Alexander of Potterhill: My Lords, would the noble Earl agree that it is a comforting thought that the figure of 5,000 which the noble Baroness quoted represents one-sixteenth of 1 per cent.?
The Earl of Swinton: My Lords, I am very grateful to the noble Lord, Lord Alexander, for producing a figure like that from thin air. Again, I would not know whether he was right, but it sounds jolly good.
Lord Winstanley: My Lords, would the noble Earl agree that perhaps the figures for truancy among teachers are just as revealing about the conditions in the schools concerned as are the figures for truancy among pupils?
The Earl of Swinton: My Lords, I am afraid I have no figures for absences—I prefer that word to "truancies"—of teachers.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I now announce that dinner will be available this evening at the usual time. The Committee stage of the Water Bill will be adjourned at approximately 7.30 p.m. for approximately one hour. During this adjournment the Second Reading of the Civil Aviation (Eurocontrol) Bill will be taken.
British Fishing Boats Bill
Brought from the Commons; read a first time, and to be printed.

Mental Health Bill [H.L.]
3.6 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I beg to move that the House do now resolve itself into a Committee upon the said Bill. In doing so I must apologise for having a Committee stage on a consolidation Bill. However, a certain number of drafting errors have emerged and they will be put right in the Committee stage if your Lordships will pass this Motion. I beg to move.
Moved, That the House do now resolve itself into Committee (on Re-commitment)—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee (on Re-commitment) accordingly.
[The LORD ABERDARE in the Chair.]
Clauses 1 to 22 agreed to.
Clause 23 [Discharge of patients]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 1:
Page 22, line 13, leave out ("Area Health Authority").
The noble and learned Lord said: I beg to move Amendment No. 1 and to speak at the same time to Amendments Nos. 2 to 6. The object of these amendments is to remove redundant references to area health authorities from the Bill. Prior to 1st April 1982 the National Health Service had a three-tier structure of regional health authorities, area health authorities and health districts. On that date area health authorities were abolished and their local management functions were devolved to district health authorities. References to area health authorities or their functions in the Bill as drafted are therefore redundant, although this was overlooked at the earlier stage. The unnecessary references are removed by Amendments Nos. 1 to 6. I beg to move.
Lord Elwyn-Jones: Bearing in mind the quantity and speed of consolidation, it is not surprising, and it is forgivable, that there should be an occasional error.
On Question, amendment agreed to.
Clause 23, as amended, agreed to.
Clause 24 [Visiting and examination of patients]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 2:
Page 22, line 34, leave out ("Area Health Authority").
On Question, amendment agreed to.
Clause 24, as amended, agreed to.
Clauses 25 to 31 agreed to.
Clause 32 [Regulations for purposes of Part II]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 3:
Page 30, line 18, leave out ("Area Health Authorities").
On Question, amendment agreed to.
Clause 32, as amended, agreed to.
Clauses 33 to 139 agreed to.
Clause 140 [Notification of hospitals having arrangements for reception of urgent cases]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 4:
Page 107, line 6, leave out ("every Area and")
On Question, amendment agreed to.
The Lord Chancellor The Lord Chancellor moved Amendment No, 5:
Page 107, line 8, leave out ("area")
On Question, amendment agreed to.
Clause 140, as amended, agreed to.
Clauses 141 to 144 agreed to.
Clause 145 [Interpretation]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 6:
Page 110, line 7, leave out ("Area Health Authority")
On Question, amendment agreed to.
Clause 145, as amended, agreed to.
Remaining clauses agreed to.
Schedules 1 to 3 agreed to.
Schedule 4 [Consequential amendments]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 7:
Page 127, line 17, leave out ("143") and insert ("126")
The noble and learned Lord said: This amendment merely rectifies a drafting error,and the correct clause is Clause 126 and not Clause 143. I beg to move.
On Question, amendment agreed to.
Schedule 4, as amended, agreed to.
Remaining schedules agreed to.
House resumed: Bill reported with the amendments.

Matrimonial Homes Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Conwy Tunnel (Supplementary Powers) Bill
Lord Lucas of Chilworth: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, on behalf of my noble friend the Lord Privy Seal, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Lucas of Chilworth.)
On Question, Motion agreed to.

Water Bill
3.14 p.m.
The Minister of State, Department of the Environment (Lord Bellwin): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Bellwin.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 2 agreed to.
Clause 3 [Dissolution of National Water Council and Water Space Amenity Commission]:
Lord Nugent of Guildford Lord Nugent of Guildford moved Amendment No. 13:
Page 3, line 26, at beginning insert ("Except as provided by section (Pension schemes) below").
The noble Lord said: I beg to move Amendment No. 13. With permission, I shall speak also to Amendments Nos. 14 and 51 in the Long Title. My amendments are designed to ensure that the new

91
structure for managing the pension fund is constituted on a national basis which is satisfactory to all 10 regional water authorities and to their employees, and to ensure that this large fund—the fund is worth about £800 million—continues to be satisfactorily managed with regard to investment and continues to be sound and satisfactory. I should mention that this not inconsiderable item has so far received no mention at all in the proceedings in the Commons, nor in the Government's original consultation paper. Therefore, I am sure that noble Lords will agree that it deserves at least to be mentioned here to ensure that this pension fund has a satisfactory future.
I shall be able to be very brief because in the interval I have spoken with my noble friend and heard that Ministers are now aware that the management of this fund requires catering for as well as the administrative machinery for the payment of pensions. I have heard that they have an arrangement in mind which, by a somewhat circuitous route, will achieve roughly what I have proposed in my Amendment No. 14, which would be a board of trustees set up by the Secretary of State and representatives of both the employers and the employees in the regional authorities. So I move my amendment and speak to the other two to give my noble friend the opportunity to inform the Committee of this new arrangement, which I gather will achieve the end which I require. I beg to move.
Lord Skelmersdale: My noble friend Lord Nugent spoke also to Amendments Nos. 14 and 51. With permission, I should like to do the same. As the first chairman of the National Water Council, there is no one in this Committee who speaks more knowledgeably than my noble friend on matters relating to the water industry pension fund, which is at present a responsibility of the council.
There are two main points I would like to make in response to what my noble friend has said. The first is that the water industry pension fund is one of the funds established under local government superannuation regulations made under the Superannuation Act 1972. It is, in effect, a branch of the local government scheme. The regulations control in some detail the contributions which must be paid by members of the scheme and by the employers, and the benefits which in their turn are payable. However, I must remind him that no scheme has ever been established under Section 27 of the Water Act 1973, although that section does indeed empower the water authorities to establish and administer pension schemes and funds.
The second point I should like to make is to confirm that this very large pension fund, standing at present at over £800 million, is a vital matter for over 60,000 employees in the water industry and many thousands of pensioners. Proper arrangements must be made for the management of the fund and, as my noble friend has mentioned, for the collection of contributions and the payment of benefits once the National Water Council ceases to exist.
The Government have, of course, had this very much in mind from the moment the decision was taken to abolish the council. In the consultation paper that we published on 7th July last we suggested that the appropriate arrangement would be to continue with the fund which was part of the local government
92
scheme. We suggested the designation of one of the water authorities to administer the fund on behalf of the whole industry.
The chairmen of the water authorities have considered this suggestion and I am pleased to inform the Committee that they are agreed that one of the water authorities will be asked to take on the role of administering body. Fresh regulations will be made under the 1972 Act transferring the existing fund to the designated authority, together with all the responsibilities for administering the scheme.
It may be asked why it is necessary to choose a water authority. The answer quite simply is that the chosen body must be a statutory body—that is, one which cannot go out of existence without legislation. In view of the massive responsibilities attaching to this position, I am sure your Lordships would agree that that is a prudent course. It is, of course, well precedented that one body should act on behalf of others in this way (for example, a county council is normally responsible for the superannuation not only of its own employees but also of those of the district councils within its area).
The chairmen are, however, concerned to ensure that there is proper involvement of all the water authorities in the administration of this fund and of the scheme. I understand that arrangements will be made with the designated water authority to ensure that a committee representing all the authorities—perhaps the water authorities' association or a committee of it—will have delegated to it the main pension functions. The ultimate responsibility will rest with the designated water authority, just as at present it rests with the council. But the other water authorities will all be closely involved, as I have indicated.
In the longer term, we understand that the water industry is likely to move towards an independent scheme, established under Section 27 of the 1973 Act. If they do so, paragraph 7 of Schedule 2 to the Bill provides that they must first obtain the consent in writing of the Secretary of State. I should like to offer the Committee the assurance that, before granting such consent, the Secretary of State would need to be assured that proper arrangements had been made for protecting the interests of all concerned—and that, as he has explained, is the purpose of my noble friend's amendment. I hope that my noble friend will agree with me that the Government are proceeding along the right lines in this matter, and will not have to pursue this particular set of amendments.
Lord Nugent of Guildford: I thank my noble friend for his answer. I recognise that the somewhat complicated machinery that my noble friend has contemplated and described to us will indeed provide what is required. It has to be done in this curious way because the noble Lord is abolishing the National Water Council, and therefore he has to find some other statutory body to take its place. It does do it. It brings in all the other water authorities. It will bring in the trade unions as well, and therefore it will provide a similar structure to what we have now. For myself, I am perfectly satisfied. Does the noble Baroness wish to speak?
Baroness Fisher of Rednal: I was supporting the noble Lord, Lord Nugent of Guildford, and I should like to clarify one of the things which the noble Minister said in reply to the amendment. Is it the Yorkshire or the South Yorkshire Water Authority—I have forgottin which—that may be the authority that takes over the trusteeship of the fund? I thought when the noble Lord replied that he said that the representatives on the new body which will be looking after the pension fund would be representatives from other water authorities, so they would be members of a water authority.
If that is the case, how will employee representation be safeguarded as the noble Lord, Lord Nugent, wanted in his amendment? I understand that there are four employee representatives on the body as it is now established under the National Water Council. I know that the noble Lord had three in his amendment. However, I think it is on the record that, after the eight and a half years which the noble Lord, Lord Nugent, took us back when he was the first chairman, there is a skill and expertise that has been set up with that organisation, and there has been nothing untoward with the employee representation on that body.
I should like to clarify the position. Is it what the Minister has said? Will the representatives be only from water authorities? As there was no specific number that the Minister would accept as employee representatives when I moved the amendment on the first day of Committee, will he tell me whether that point will be covered?
Lord Skelmersdale: When I replied to the opening speech of my noble friend Lord Nugent I was careful not to say which particular water authority would carry out the functions, because that is still a matter for discussion. The noble Baroness is quite right when she says that the Yorkshire Water Authority would be appropriate, but that has not been decided. The reason that it is appropriate is that most of the pension staff are employed in Sheffield, which is within the area of the Yorkshire Water Authority.
So far as representatives of the employees being on the pension administering body, whoever that may finally end up to be, there is, as I understand it, absolutely no reason why they should not be involved in whatever the new arrangement is in exactly the same way as they are now. There are two sides to a pension fund. One is the administration, or trusteeship, if you like, of the capital sum. The other is the actual paying out and receiving of personal contributions at, as it were, the other end. One of the things that my noble friend Lord Nugent was particularly worried about was the trustee arrangement which, as I say, will be done collectively by all the national water authority chairmen.
Lord Nugent of Guildford: I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
[Amendment No. 14 not moved.]
3.27 p.m.
Lord Nugent of Guildford Lord Nugent of Guildford moved Amendment No. 15:
After Clause 3, insert the following new clause:
("Water Industry Arbitration Board.
.—(1) The Secretary of State shall appoint a Water Industry Arbitration Board (hereinafter referred to as "the Board").
(2) Any dispute concerning any matter relating to the remuneration or other terms or conditions of employment of persons employed by the Water Authorities shall be referred to the Board.
(3) It shall be the duty of the Board—

(a) to consider representations from the parties to any dispute referred to them under subsection (2) above;

(b) to consult with any individual or organisation appearing to them to be appropriate; and

(c) to adjudicate on the dispute.

(4) Any adjudication by the Board under subsection (3) above shall form part of the contract of employment of employees of the Water Authorities and be enforceable accordingly.").
The noble Lord said: I beg to move Amendment No. 15, and I understand that it will be for the convenience of the Committee to debate Amendments Nos. 16 and 50 at the same time. In my Second Reading speech I indicated that the experience of the water strike showed that the present industrial relations structure was not satisfactory. Clause 3, by abolishing the National Water Council, also abolishes the existing NJIC and NJC structures and the agreements. Therefore, a new structure has to be created in its place. I am informed that current thinking by the DoE and the RWAs is a new structure of NJIC and NJC and agreements similar to the existing National Water Council structure, with the Association of Regional Water Authorities replacing the National Water Council.
In my opinion, this would not be adequate. The strike was an experience which has left a lasting mark. It lasted nearly five weeks. Over 90,000 households, some quarter of a million people, were during that period cut off from a piped water supply. That means that they had to get all their water supplies from a local standpipe, and that in the house where they lived there was no water-operated appliance working. This, in mid-winter, is a considerable hardship. You can imagine—I am sure some of your Lordships will have visited streets where the water supply had been cut off—just what it means.
Take a young household where the only hot water is the kettle which the housewife boils, and getting the children ready to go to school. What absolute hell it must have been for her struggling with all those problems without a normal hot water supply or, for that matter, a normal cold water supply except for what came out of a bucket which her husband had probably fetched the night before. No washing machines working. All the water appliances that most of us live by nowadays cut off. For old people probably depending on a hot water radiator system to heat the house, there would be a stone cold house and no hot baths. That is hardship. I reckon that a plentiful supply of pure water piped to the house is one of the basic necessities of life, and to have it cut off is barbarous and not acceptable in a civilised country. To make the domestic household the battleground for an industrial dispute is something we should obviate completely for ever.
That is my justification for seeking more robust machinery for settling disputes in the water industry. The existing machinery is set out in the Green Book, which some of your Lordships may have, which is the manual of the water industry which I negotiated when the new water industry came into being in 1973–74. It provides an arbitration clause, in Clause 12 of the agreement, but this arbitration system works only if both sides are willing to work it. I would add—because it is a major factor—that there is no sanction if there is a breach of the clause.
Amendment No. 16 virtually reproduces the clause in the existing agreement to which I referred. It is effective, because it was negotiated and agreed between employers and employees 10 years ago. It looked as if it would work all right, but in the recent dispute it simply did not protect people from the hardships I have indicated because it fails when either side is not willing either to go to arbitration or to accept an award when an award is made, as happened in this case. The first arbitration, the Buchanan arbitration, made an award but the trade union leaders announced they could not accept it, and went into strike action.
My amendment does not pretend to be perfection in drafting or in a legal fashion, but it is a peg on which to hang this debate, which I suggest is a proper debate for Parliament to have, giving us a chance to consider whether we can find a better way of settling a dispute in this vital field. My concept is a statutory arbitration board with a specific duty to adjudicate on disputes in the water industry. My thought is that the chairman might be someone above the political battle, such as a High Court judge or Law Lord, assisted by two other members experienced in industrial relations, one from the employers' side and one from the employees. Their terms of reference would be broadly to examine the submissions of both sides in terms of the intrinsic needs of the industry and against the background of current conditions in the national economy.
The award of the tribunal would have force—as subsection (4) of my amendment says—as "part of the contract of employment", which means it would be legally enforceable. Support for that legal enforcement is to be found in the Employment Act 1982, where there are substantial penalties for a breach. The 1982 Act appears to my lay mind to indicate that it is the employer who would have the right of action, but I feel it would be desirable that the injured party should have the right of action; that is, the consumer, the housewife, who has been cut off. Therefore, I should like to see the law extended in that fashion so that those who had suffered could go to court and get their case heard and get the damages that were fitting. That is no more than common justice, in my opinion.
In case doubt be cast on the effectiveness of such a civil penalty, I recall the strength of discipline in the trade union movement in the winter of 1977–78, when we ran into certain difficulties, and I was in the chair of the Water Council. The union leaders had come to agreement with me on what the award should be, which was acceptable to the Government of the day, and some of the union members in the North-West had refused to accept it. But the union leaders, very courageously, visited those dissidents and had quite a
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rough meeting. They stood up to them and they made it stick. I have no doubt, therefore, that if the union leaders want to make it stick, they will. And if there are substantial damages which they might run into in the event of a breach, I feel sure that the union leadership would be well able to make such a situation effective.
I should have mentioned that I am not suggesting that we should go back to the 1875 Act, a measure which I suppose one must consider in this context. The Committee may recall that that was repealed some 12 years ago. The effect of that Act was to make a strike in the water service a criminal offence, automatically and without reference to any tribunal, but I am sure that noble Lords in all parts of the Committee would agree that that would be too one-sided and therefore not acceptable.
I recognise, of course, that a statutory arbitration board carries major political implications. For' my noble friend and the Government, it means conceding an area of wage negotiations to be outside Government influence. Experience indicates the danger sometimes of inflationary awards, which are therefore objectionable and a major concession in regard to Government policy. I also recognise that noble Lords opposite, and trade union supporters generally, would have serious objection to any section of the trade union movement giving up the right to strike for this body of employees; it would be a major policy concession. However, it is relevant to observe that in this particular case the workforce did not gain very much by their strike. The difference between the Buchanan award, the first one, which they rejected, and the Johnston award, which they accepted, was only £3 a week, from £10 to £13, so it will obviously take two or three years for them to make up what they lost in wages during the weeks of the strike. Therefore, the amount at stake in this case was not large.
I have set out the case and the objections which are likely to come from both Front Benches. It may be they will both unite against me. On the other hand, it might be that some political sacrifice from each side is the path to consensus, and this is a field where we badly need consensus. It might, then, dispose both sides to recognise that our people deserve something better than their domestic lives being made the battle-ground for an industrial dispute. I therefore hope that my amendment will be considered to deserve further consideration.
Lord Irving of Dartford: I should first declare an interest, having an association with NALGO. I wish to speak in support of Amendment No. 16 which, stripped of all legal verbiage, requires the authorities to seek consultation in respect of the establishment and maintenance for the settling by negotiation of terms and conditions of employment, with the provision for reference to arbitration in default. In other words, the amendment is designed to reinstate Section 26(2), (3) and (4) of the Water Act 1973, as the noble Lord, Lord Nugent, inferred. Like him, I too deplore the inconvenience which was caused to many people by the strike. The difference between the noble Lord, Lord Nugent, and myself, is that I do not believe that his solution would provide a better state of affairs, and it might lead to a worsening of the conditions, not only in that industry, but in other industries, too.

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It is very attractive indeed to believe that one can regulate everything, including industrial relations, by law. But the fact is that the law does not provide good industrial relations; they have to be worked for. The noble Lord, Lord Nugent, has said that the structure, as he called it—the arrangements—had not worked. I do not think that NALGO would believe that, certainly not in regard to the white collar workers; they have worked very well.
During the strike to which the noble Lord referred, the newspapers spoke about the industry having a long history of industrial peace. The manual workers claimed that they refused to go to arbitration because the intervention of the Government and the Secretary of State had made impossible free negotiations, as provided in the Act. Noble Lords may argue as to whether or not there was an intervention, but the fact is that the unions believed passionately that that was so, and unlike the noble Lord, Lord Nugent, they would consider that they gained more from the action that they took, however deplored it might have been, than they would have secured through free negotiation. But it is not our purpose to argue that point this afternoon. The whole business was aggravated by the mistakes of the management, and their exaggerations and miscalculations, which I believe must have puzzled many private employers.
What the strike proved was that in a vital industry, such as the water industry, men or women cannot be coerced into falling in line if they have a strong sense of grievance; and that is true also of the legal sanction. The unhappy fact of the matter was that of themselves the Government were quite powerless to bring the strike to an end by sitting it out, as they did in the case of the National Health Service workers, or in any other way; and no compulsory arbitration board could change that fact. In the end there had to be a voluntary coming together. The tragedy was that it took so long.
Now the noble Lord wishes to abolish the arbitration procedure and introduce an arbitration board which, in a simple, easy, clean way, would virtually hand down decisions from above. Why should the workers in key industries accept, any more than they would accept it under the other arrangements, something that they find utterly unacceptable? The truth is that there are no substitutes for good will and good industrial relations, which, as many employers know only too well, have to be earned. It may be that in some industries Mr. Tebbit can use the law, or a large Conservative majority to get workers into line. But after the recession he will not be able to do without the willing co-operation of unions and workers, not just in the water industry, but in all industries, if we are to produce at the quality, the pace, and the price which will match those of our competitors.
It is also true that it is very difficult for trade unions not to be suspicious of a board of this kind, particularly following the Government's action in suspending the Civil Service Pay Unit and Schedule 11 to the Employment Protection Act 1975. If the decisions being handed down by the arbitration board are unacceptable, why should the Government not do exactly what they did in those two cases? As I have said, there are no substitutes for good industrial relations. They have to be earned through effective
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consultation and negotiations, with arbitration as a fallback, and certainly with a strike as the weapon of last resort. I hope that the Minister will not take the retrograde step of leaving out of the Bill provision for proper procedures, including arbitration.
These amendments were moved during the Report stage in another place. The Minister, Mr. Shaw, stated that Ministers considered it "unnecessary" for there to be statutory requirements for the arrangements to be made for the negotiation and agreement on pay and other terms and conditions of service. As reported at column 263 of the Official Report, he added that it is up to—
"the chairmen of the regional water authorities, as now formed into the association, in negotiation … with the trade unions"
to
"determine what form of central or regional bargaining structure they wish to have".
As Mr. Howell pointed out, that leaves it up to any regional water authority, if it so wishes, to attempt to establish its own wage negotiating machinery outside the scope of any national agreement—a move which would be strongly opposed by the TUC-affiliated unions concerned with the water industry. The TUC supports national determination of pay and conditions of service in the water industry and deplores the Government's failure to make a clear statement on the need for some form of agreed national bargaining machinery. Not only NALGO, but also all other unions with members in the water industry, attach great importance to the maintenance of national joint negotiating machinery in the industry. Therefore, I hope that the Minister will reject Amendments Nos. 15 and 50, and accept Amendment No. 16.
3.47 p.m.
Lord Campbell of Alloway: I should like to say a few words in opposition, in particular to Amendment No. 15. But before doing so, like other noble Lords, I should like to pay tribute to the expertise of my noble friend Lord Nugent of Guildford, to whom I of course defer. I am sure that all of your Lordships, on whatever side of the Committee you sit, are grateful to him for giving us the opportunity of a valuable peg on which to hang a constructive debate on a question which transcends the particular problems of the water industry—the subject matter of the Bill.
Before dealing with the reasons that I have in mind, so as not to exacerbate the situation, I should like to say, with respect, that I do not agree with the analysis of the noble Lord, Lord Irving of Dartford. It is true that there were mistakes of management—perhaps there always are—but there was an element of union policy dedicated to show a degree of muscle against the present administration which has manifested itself over the last two years. During the last two years there have, I think, been only two months when there has not been some dispute in the public sector, and that is why the public has been trapped, like a pawn, in the power struggle.
I agree with my noble friend Lord Nugent that the present structure of the water industry is not satisfactory. I agree with the noble Lord that something must be done to seek to avoid stoppages not only in this essential service, but, I would suggest, in

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essential services in general. Some of your Lordships may remember my Amendment No. 54 at the Report stage of the Employment Bill (when I was supported by my noble friend Lord Renton), which reflected this anxiety during the hospital workers' dispute Curiously enough, that amendment was opposed by my noble and learned friend the Lord Advocate on the ground that Section 5 of the Act of 1975 remained on the statute book and that that rendered it a criminal offence to break a contract of employment, inter alia, to endanger human life, or to cause serious bodily injury—
Lord Renton: If there is a conspiracy.
Lord Campbell of Alloway: Of course, if there is a conspiracy to do so. In the context of labour law as it has developed in those circumstances—I am grateful to my noble friend—there is the conspiratorial element in the organisation of the industrial action. But I agree unreservedly with my noble friend Lord Nugent that it is nonsense to seek to have resort to the criminal law and, with the utmost respect, I wholly disagree with the view advanced by my noble and learned friend the Lord Advocate. It is high time we had no criminal sanctions against workmen in connection with industrial relations. Some other means must be devised. The civil courts will never, should never, must never, order a man to work. That is slavery. The criminal law is inappropriate. Some other means must be found; and they must carry with them a requisite degree of acceptance.
All noble Lords appreciate that there is no fail-safe mechanism, that there is no universal panacea. It is apparent that this subject is under active consideration by my right honourable friend the Secretary of State at this moment; and, indeed, was so long before paragraphs Nos. 59 to 60 of the Green Paper appeared, and was so in the light of the recent events to which the noble Lord, Lord Nugent, referred. But the question is this. What is to be done? Perhaps a cooling-off period. That involves a temporary withdrawal of the right to strike. Perhaps statutory, arbitral machinery, such as is proposed by Amendment No. 125 in particular. That is a permanent withdrawal of the right to strike. Perhaps other means.
I would urge your Lordships to reject this amendment for five reasons. First of all, it pre-empts the options available to my right honourable friend the Secretary of State at the present time, and it is apparent from the interview that he gave on television last night that he has not yet made up his mind which option he is going to take. Secondly, it affects a single-service industry, the water industry, whereas we must come to grips with the problem in all service industries generally. Thirdly, as it stands, and as has been recognised by my noble friend, it affords no right of action to the consumer because Sections 15 and 16 of the 1982 Act probably do not afford any locus standi to the consumer to pursue. Fourthly, which is very important, it forecloses on due consultation with the unions, which must be had before any massive change of direction is to be made in industrial relations law—another point fully acknowledged by my noble friend Lord Nugent.
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Lastly, and perhaps least, it could be that this option, the mandatory statutory machinery, the arbitral machinery proposed by this amendment, would not be acceptable because of its inflationary aspect, which adds an inflationary bonus above the ordinary cut and thrust of negotiation between employers and workers. But for all these reasons at this stage I would respectfully suggest that it would be premature to carry such an amendment, and that this Bill at this time is not an appropriate vehicle in which it should be carried.
Lord Shinwell: It occurs to me (but I may be proved to be wrong when I so surmise) that we are engaged in a debate which extends far beyond the management and administration of the water industry. It seems to me that we are debating two principles which either, on the one hand, have been accepted and partly rejected, or, on the other hand, have been rejected in their entirety—depending very largely on what may be described as a political point of view. We are debating to some extent what kind of society we would regard as civilised; one that satisfies perhaps a modest percentage of the population but might have the effect of improving industrial relations.
My noble friend spoke of the possibility of dealing with this subject in the context of views on industrial relations. If one recalls what happened at the outset of the water dispute, it will be within the recollection of most noble Lords who read the newspapers on the subject and who gave it some concern that those who were threatening a strike or were about to embark on an industrial dispute seemed to be hesitant about it, seemed not quite certain whether they should take a drastic course of action or to wait for a decision by Her Majesty's Government or even by those who were responsible for the management and administration of the water industry.
This was largely because of the attitude—I regret to have to say this, but I think I am justified in making reference to it—of the press. It seemed to me at the time that the press were looking forward to a dispute which might have an effect on our political situation in readiness for what may happen in the course of the several months that would pass before June or October, or what-have-you, was reached. It was a pity that the press did not give it the consideration that it deserved instead of seeming to provoke the waterworkers to undertake all that is associated with an industrial dispute, thereby imposing severe hardships, as undoubtedly it did, on a very large section of the community. No one can deny that. I would say that every Member of your Lordships' Committee regrets that that should have happened.
I mentioned two principles. One of them is that those engaged in labour have a perfect right within the law to withdraw their labour as and when they think it necessary. That cannot be denied. It is embodied in our legislation. Almost from the beginning of this century a number of people associated together in what was then described as the Labour Movement to oppose anti-trade union legislation. As the result of various incidents—the Taff Vale dispute, the Osborne judgment and a number of other matters which I recall—the Labour Party was formed. The Labour Party was in fact formed out of the anti-trade union legislation, as they understood it.

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That has been going on throughout the years with amendments to legislation, new legislation, advanced legislation, new ideas, new concepts and the like. Now we have reached the stage where this dispute has come to an end and we are considering what is best in the circumstances in order to avoid a similar dispute. We must endeavour to prevent any hardships being imposed on the population of our country, our industries, our general body of consumers. That is why I ask: what can be done?
It has just occurred to me that the subject we are discussing extends far beyond the administration and management of the water industry. This is a matter for discussion between the Government of the day—either the present Government or some future Government, of whatever political opinion—and those responsible in the trade union movement; that is, to a large extent (probably 80 per cent.; it may be more, it may be less) those associated with the Trades Union Congress. Why should there not be discussions among those associated with the General Council of the Trades Union Congress, members of the Government and perhaps a number of industrialists associated with water supply? Why should that not happen and develop in some form a more satisfactory concept than that which now operates? Why is that not done?
The other principle, of course, apart from the one I have mentioned of the rights of those engaged in labour to withdraw their labour as and when they think necessary, concerns those who believe, whether rightly or wrongly, that what is regarded as essential in the interests of the general body of consumers and the industry should not lead to an industrial dispute. Indeed, that was developed in the course of the recent trouble in the press, in your Lordships' House, in the other place and elsewhere. What should be regarded as essential is something that the noble Lord opposite referred to in relation to the trouble that occurred over the health service. He referred to the trouble that occurred over the health service and that some people regarded the withdrawal of labour by those associated with the National Health Service as interfering with something that was regarded as existing essentially in the interests of those who required the service. What is essential? What is not essential? Who is to say what is right and what is wrong in either case? It is very difficult to find a solution to that aspect of the problem.
Therefore, what occurs to me—if I may venture to offer a proposal to your Lordships—is that whatever may happen in the course of this debate (whether we accept the amendment or oppose it, or whether we oppose what the noble Lord, Lord Nugent of Guildford, has proposed and what has been said by my noble friend on this side of the Committee) I propose setting that aside or coming to some conclusion of a temporary character until those bodies who have a status in the country can discuss the matter: first of all, Her Majesty's Government, of whatever political complexion, and also the trade union movement, which, whether some people like it or not, also has a status in the country as one of our national institutions.
Lord Renton: The noble Lord, Lord Shinwell, speaking from the depth of his great experience, has
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very clearly indicated the dilemma which faces the community and faces Parliament in considering two conflicting principles, both of which are well established. One is the right to strike, the other is the right of the community to continue to receive essential services for which it pays. In the case of the police of course we do not acknowledge the right to strike.
These two principles surely should not be beyond the wit of Parliament and of the trade unions somehow to resolve. It was quite intolerable that a whole civilised nation like ours, nearly 60 million people, should have been held to inconvenience, hardship and, it could be said, to ransom, by a small body of essential workers numbering fewer than 30,000, because we had not devised adequate means to deal with such a situation.
On the amendment of my noble friend Lord Nugent of Guildford and the alternative amendment of the noble Lord, Lord Irving of Dartford—to whom I always listen with sympathy for I was born at Dartford—we now have the opportunity of considering this matter, but in relation to the water supply industry only, whereas it is a much bigger question than that, as my noble friend Lord Campbell of Alloway has pointed out. My noble friend Lord Nugent has an amendment which indirectly might be thought to solve the problem. If he has it in mind that making the adjudication part of the contract of service and the breach of the contract leading to civil action against those people who individually or collectively break the contract, then it could be said that a sanction is being introduced which overcomes the difficulty about interfering with the right to strike. It provides a sanction. But having listened to my noble friend Lord Campbell of Alloway and the five reasons which he gave, I must confess that though I felt great sympathy with my noble friend Lord Nugent, I think that my noble friend Lord Campbell was right to point out, for the reasons that he gave, that we cannot deal with this matter in this way on this Bill.
I wonder whether I may make just two further comments. One arises from the speech of the noble Lord, Lord Irving, and also the speech of the noble Lord, Lord Shinwell. The noble Lord, Lord Irving, expressed the point by saying that there is no substitute for good industrial relations. I regard that as a counsel of perfection. Alas, it is almost a counsel of despair because although good industrial relations are, fortunately, the more general rule, experience has shown that there are things which enter into good industrial relations which sour them, which prevent them from providing the answer for the community. One has only to consider politically motivated people, especially I am sorry to say when there is a Conservative Government in power. One has only to consider the way in which the endeavours of honest, good, moderate trade union leaders are impeded by the action of militants. We have had to put up with that sometimes in essential services also. So we must not—we dare not—rely simply upon that counsel of perfection.
My other comment is this: that, alas, the system of industrial negotiation that we have, even when it is accompanied by compulsory arbitration, provides a built-in guarantee of more or less inflation, as my

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noble friend Lord Campbell of Alloway pointed out in regard to his fifth point. When my noble friend Lord Nugent suggested that there should be an adjudication board consisting of an independent chairman, perhaps of our profession (a lawyer or, more eminently, a judge), one representative of the trade unions and one of the employers, I thought: "Oh, there is going to be the usual horse-trading, the usual compromise and the usual contribution towards inflation."
If I may make a general point in conclusion, I hope that if we are going to rely upon compulsory arbitration or adjudication on any occasion in future, we should always have five people, not three. We need an independent chairman and representatives of both sides of industry and we need to have represented the consumers and the national economic interest. I therefore think there should always be a representative of the Treasury or the Department of Trade on any such tribunal; and then we may get solutions which will not be a guaranteed contribution to inflation. I think we owe a great debt to my noble friend Lord Nugent for raising this matter. I have not widened the debate too much: I have only followed what others have said. But, valuable though this debate may be, I doubt whether it can result in a Division which would provide a solution.
4.12 p.m.
Lord Rochester: I very much welcome the constructive nature of the debate that has taken place so far. I am sorry that, like the noble Lord, Lord Campbell of Alloway, in particular—with whom, not for the first time, I found myself very much in agreement—I cannot support the amendment moved by the noble Lord, Lord Nugent of Guildford. I simply do not think that it is practicable, without a greater degree of consent than is at present apparent, to invoke the law to prevent people directly involved in disputes, even where they may endanger life or limb, from withdrawing their labour if they are determined so to do. I do hope that in saying that I shall not be accused of caring more about the right to strike than about the right to live, because that is not true.
The great majority of ordinary British working people, in my view, do not want to strike and will normally do so only if they feel they are being exploited or treated unfairly. What is necessary, as the noble Lord, Lord Campbell of Alloway, said so aptly, is to find some means whereby the pay and employment conditions of people engaged in these essential services can be so determined that they no longer perceive the need to take industrial action and are willing instead to behave with sufficient responsibility to ensure that the community does not have to suffer continuing disruption. I doubt very much whether that means is to be found by imposing immediate statutory arbitration in the water industry alone.
In the debate on the gracious Speech last November, I suggested in some detail a possible way in which pay determination arrangements for people employed in key occupations might be introduced with general agreement. I will not elaborate on that suggestion now, except to say that in my view any such arrangements need to cover many more people than those engaged in the water industry. A great deal more consultation will
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be necessary—and here I agree very much with what the noble Lord, Lord Shinwell, had to say- before any such arrangements can be implemented. I repeat that a great deal more consultation is required.
The noble Lord, Lord Nugent, said—and I thought it was typical of him so to do—that he would like to see a consensus in this matter. So would I; and since I do not feel able to vote for his amendment as it stands I can only hope that he will not place me in the position of having to vote against it. Somehow it is in the nature of the discussion that has taken place so far that I do not think I shall be put to that test.
I am glad to support, so far as it goes, the amendment which was moved by the noble Lord, Lord Irving of Dartford. In my view, it is highly desirable that there should be consultation with the relevant unions with a view to establishing, after the reorganisation of the water industry, an agreed negotiating procedure under which unresolved disputes should ultimately be referred to arbitration. But I feel that a lot more education is needed before negotiators are sufficiently convinced of the desirability of making collective agreements legally enforceable contracts for them to be workable in this country. That difficulty, it seems to me, is recognised in the amendment moved by the noble Lord, Lord Irving.
At the same time, the feature of the recent water dispute which was most objectionable to me—and I daresay to many of your Lordships—was the failure of the unions to honour the undertaking in their current procedural agreement to go to arbitration. Against that background, I should like to revert, if I may, to a suggestion which I made in a debate in this House on trade union immunities nearly two years ago: namely, that the Government should consider introducing a further code of practice dealing specifically with negotiating procedures. Basically the idea was that throughout British industry arrangements should be established like those operating elsewhere in Europe, under which disputes concerning agreements already entered into should be settled ultimately by arbitration instead of by industrial action.
The provisions of such a code might thus become admissible in evidence and taken into account in proceedings before an industrial court or a tribunal. In that way I thought it might gradually, and with a sufficient degree of consent, be possible to reach a position where the organisers of industrial action taken in breach of collective agreements would no longer have legal immunity and could be sued for damages.
In reply to that debate, the Government spokesman—I think it was actually the noble Earl, Lord Gowrie—was kind enough to say that serious consideration would be given to that proposal. Yet when, during our discussions on last year's Employment Bill, I reminded the Government of that undertaking, I was told that there was no plan to advance the matter. I have told the noble Lord, Lord Bellwin, that I was going to raise this matter again and therefore I shall quite understand if he does not feel able to give me an immediate answer; but if that is still the position, I should like to know why it is.

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For the rest, it is my view that in essential services such as water supply, as elsewhere in industry, the best hope of making progress lies in increasing employee involvement, and particularly in achieving a common awareness on the part of all employees in these undertakings of the relationship between pay, prices and jobs. That may sound an unexciting and lengthy process, as indeed it is; but I fear that any attempt prematurely to enforce collective agreements by law will, as the Donovan Commission concluded and as was demonstrated by the outcome of the 1971 Industrial Relations Act, fail until such time as changes in our dual system of collective bargaining arrangements have been effected and the incidence of unofficial industrial action has been greatly reduced.
Lord Howie of Troon: I want to do something which it never occurred to me in my wildest dreams I would ever dare to do, and that is to disagree with both of my noble friends Lord Irving of Dartford and Lord Shinwell at the same time, and to go further than that and agree with the noble Lord, Lord Nugent of Guildford, who is clearly in the right in this instance. I hope that, whether or not he is successful in carrying the amendment today, he certainly carries the idea and persuades the Government, whom we know to be open-minded in all matters.
But, first, like my noble friend Lord Irving of Dartford, I should like to declare an interest. He declared an interest in that he had a relationship with a trade union, and a very important one at that. The interest that I declare is the interest which we all have in this House and elsewhere as consumers. We are all occasional users of water—in moderation, it is true—and we cannot escape it. But this fact, that we are all consumers of water, highlights the weakness in the case of my noble friend Lord Irving.
He, to my mind at least, laid out clearly, strenuously and convincingly the generalised argument in favour of trade union activity in the normal relationship between employer and employee. But the case that we are considering today is not of that order. Because water is an essential, the strike or the industrial activity, whichever form it takes, moves beyond being a dispute between employer and employee and becomes, by its very nature, a dispute between the employee and the consumer. That means that the strong arguments, which my noble friend Lord Irving used in one context, do not survive when they are translated into this new context.
By its very nature, a strike in an essential service industry of this kind, regardless of the intentions—however pure they are—of the unions, must be directed against the consumer, and these are the very consumers whom the noble Lord, Lord Campbell of Alloway, and the noble Lord, Lord Renton, desired to be drawn into this. I think that, in some respects, the noble Lord, Lord Renton, was correct. In so far as there is some kind of tribunal, it must be a tribunal of five, if you can have such a thing, rather than a tribunal of three. So I think that there is great strength in the argument that, in these essential industries, strikes should be forbidden or, if not forbidden entirely, subject to the strictures of this amendment.
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But that, of course, as my noble friend Lord Irving rightly hinted, lays employees open to great danger. It is not always the case that people who give up the right to strike find that they are rewarded by justice; and under some Governments the justice would be less than under others. I do not name any Government in particular in that respect. So that means that if employees give up the right to strike and to attack the neighbours—which is what they do, however well-meaning they may be—they must be given some other kind of safeguard, which must be some form of comparability in their earnings with the earnings of others. That comparability has to be worked out through some kind of public board. Whether the public board is the tribunal, as instanced in this case, or whether it is some longer-standing organisation, this is not the place to argue today. But there should be a machinery which replaces the strike weapon as a means of acquiring, or hoping to acquire, justice and which does it instead.
I thought that the recent strike in the water industry was an almost total shambles. It was an almost total shambles, because neither side really wished to be involved at all in a strike. I think both sides realised in their heart of hearts that they were in the wrong context for striking and, consequently, everything in it was handled badly. The only element of professionalism which I, as an outsider, could discern in the strike was the performance of Mr. Jim Dickens, who at one time was a notable and persuasive advocate of the Tribune view in another place—and a most admirable Member of that other House he was, as all of us who were colleagues of his in those days will readily agree. He shone through that whole amateurish shambles as the only professional in sight. But, be that as it may, in the end the strike had to be resolved by something not unlike the kind of thing which I dare say underlay the amendment put forward by the noble Lord, Lord Nugent. It may not have been exactly what he had in mind, but it was an ad hoc version of something like what he had in mind.
I have only one last point to make before I resume my place. In the course of his remarks, the noble Lord, Lord Nugent, said that both Front Benches were probably agreed to oppose him on this matter. Of course they are. In the face of sense, the two Front Benches always combine to oppose it. I hope that, whether or not the noble Lord, Lord Nugent, succeeds today, the idea that he has in mind succeeds and that it will not be too long delayed.
Viscount Massereene and Ferrard: I heartily agree with everything that the noble Lord, Lord Howie, has said. In fact, I myself have used his words in the past. We are inclined to forget that we are talking about a public utility. We ourselves are composed of nearly 90 per cent. water and for 29,000 workers in a public utility to hold the nation to ransom is deplorable. It is a question of what I call the last link in the chain. These water board workers have not invented water. They have not manufactured water. It is a gift of God or, if you prefer, nature, which comes out of the ground. They have not even erected the buildings or invented the machinery that pumps up the water. Yet they have this vast power. They can hold the whole nation to ransom, except for parts of Scotland where you just put a pipe in a burn. In other countries,

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employees in public utilities, especially water, have to sign a special agreement to the effect that they will not strike. It is time that we in this country had something like that, because we are out of date. I shall not go on, because I came in at the end of the debate. But if my noble friend Lord Nugent of Guildford takes this amendment to a Division, I will vote for him.
4.29 p.m.
Lord Bellwin: We have had a very good debate, although some may think that it was more appropriate to a Second Reading than to a Committee stage. But that seems to be a fate to which I am committed. I am sure that my noble friend Lord Nugent will be gratified by the very constructive nature of the debate and, certainly, I welcomed it for that. I, too, am speaking to Amendments Nos. 15, 16 and 50. Perhaps I may say at once that my noble friend Lord Nugent has clearly thought out his proposals with great care, as we would expect of him. Nobody underestimates the importance of this subject.
To deal first with Amendment No. 16, your Lordships will notice that it seeks to reinstate provisions which are in the Water Act 1973 and which will disappear when the Bill becomes law. These provisions relate to negotiations over terms and conditions of service. Even when the Bill was first drafted the Government considered it undesirable and unnecessary for there to be statutory requirements as to arrangements to be made for the negotiation of agreements on pay and other terms and conditions of employment. The Government's view has been, and remains, that employers and trade unions should be free to establish whatever machinery they consider appropriate and to change it by mutual agreement, if and when circumstances require.
It is too early, perhaps, finally to draw any general lessons from recent events about industrial relations in the water industry or how they are to be improved in the future, but the all-out strike, which ended when it was halfway into its fifth week, can hardly be regarded with equanimity. The Government's mind is not closed to any possible further measures needed in the context of such strike action. We shall not hesitate to take any measures, statutory or otherwise, which we are convinced would be both effective and beneficial.
Section 26 of the Water Act 1973 provides for the National Water Council, which is comprised as to half its members by the chairmen of water authorities, to seek arrangements for the negotiation of conditions of employment, in very much the same way as this amendment proposes in respect of the water authorities, one and all. The recent strike and the recent difficult negotiations on pay occurred within a framework similar to that which would result from the present amendment. I am sure the Committee will agree that this statutory framework has not proved entirely satisfactory and that at the least the two sides should be free to seek any other framework which will serve them, and the public interest, better. Whatever views may have been expressed before, both by the parties and by others, I have no doubt that the right course is for all concerned now to think out afresh what negotiating framework is needed. I hope that my noble friend will accept that what is proposed is not
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bound to help the establishment of the proper dialogue between management and employees in the water industry which is in the best interests of good industrial relations. In the light of that reply to my noble friend's amendment, I hope he will accept the Government's view.
To turn to my noble friend's Amendment No. 15, I am sure that we all understand well the wish to establish a means of resolving disputes in the water industry. I, too, share his concern—as must we all—in the light of the recent dispute and the way it remained unresolved for a considerable space of time before being finally settled in the way that it was. Partly with these events in mind, therefore, and partly for more general reasons, I must question this amendment which would have the effect, as my noble friend has told us, of setting up an arbitration board which would hand over to a third party the responsibility for determining the industry's wages bill, whatever the wishes of the two sides.
There is already provision for arbitration in the industry's national agreement—for example, if the two sides of the water industry's National Joint Industrial Council cannot resolve a difference. That provision rests on a statutory basis. Subsection (2) of Section 26 of the Water Act 1973, to which I have already referred, includes the words "with provision for arbitration" in its specification for the negotiating arrangements to be procured by the National Water Council. The NJIC agreement provides for arbitration by the Advisory, Conciliation and Arbitration Service, or some other body as may be agreed between the two sides. The national agreement is that arbitration shall take place on the reference of either side and will be binding on both.
Whatever its foundations, however, arbitration is the last stage in the resolution of a disagreement and is only practicable where both sides are ready to resolve their difference in that way. That is a clear lesson from the recent dispute. It is to be expected that when the employers and unions consider what their negotiating arrangements are to be, they may wish to include provision for arbitration when other processes are exhausted. But the formulae must take account of the rest of their procedures and cannot be considered, let alone legislated for, in isolation.
I can illustrate this point by referring to the amendment itself, which says:
"Any dispute concerning any matter relating to the remuneration or other terms or conditions of employment…shall be referred to the [arbitration] Board".
It is impossible in legislation to specify who will refer disputes to the arbitration board, and on what basis. And what would happen should one party not wish to seek arbitration at a particular stage in negotiations? There are other problems to be faced. What is a dispute? Does it include a dispute involving only one worker? Who are the parties to a dispute? It is hardly practicable to work backwards from a particular form of arbitration to establish the rest of the negotiating machinery. Arbitration is an integral part of the machinery itself and cannot be considered in isolation. The Government do not wish to impose a particular form of negotiating machinery and so restrict the options available to the parties. ACAS is in being and available, with a wide range of experience and facilities.

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Why is it inherently less suitable to ask ACAS to appoint arbitrators than to constitute a new body to carry out such arbitration as my noble friend proposes?
We also recognise—this point was brought out in several of the speeches which were made earlier, notably in the speech of the noble Lord, Lord Shinwell, who speaks with such authority on these matters—that in a matter of this kind it is impossible to deal in isolation with one essential service. The essential point for the Government—and for the unions, come to that—in deciding how to pursue wage claims is surely that the interests of the consumer and the national economy must be paramount. We, for our part, will be bearing this point well in mind as we reflect on the recent sad events.
One other point is that there is nothing in the amendment which would prevent a strike from starting or continuing, once started. In that respect, does it not miss one of the intentions which may have given rise to it? With these considerations in mind, which derive from both recent experience and a more general view of what is politic and realistic, I have to say that the Government consider it inappropriate to prescribe in this legislation the form or framework, or the final tribunal, for the negotiation of terms and conditions of employment in the water industry or the resolution of disagreements about them. We remain of the view that, within the general framework of law and practice, each industry should be free to make and adopt its own arrangements.
In conclusion, I applaud—who would not?—my noble friend's motivation in bringing forward these amendments. With his background in the water industry, few, if any, can be better qualified to speak on the subject. I have answered at length, and in doing so I hope I have indicated to my noble friend and to others who have spoken the importance which the Government attach to the matter. There will be further consideration of it, and my noble friend's contribution will be of immense value, as will the observations of all noble Lords who have spoken, including my noble friend Lord Campbell of Alloway, my noble friend Lord Renton, the noble Lord, Lord Rochester, and the noble Lord, Lord Howie of Troon. This matter is of considerable importance, whose significance lies beyond just this Bill. For that reason, I am particularly grateful to my noble friend. While the future is all to play for, I hope he will understand why the Government do not feel inclined to go for the arrangement which he has proposed in the amendment.
Baroness Fisher of Rednal: I think the noble Lord, Lord Nugent, has great knowledge and great experience, and he has drawn that to our attention with the amendment. He I think is in the same predicament as noble Lords on this side of the Committee. What concerns everybody is: what will happen to the procedures when the National Water Council is abolished? I want to reiterate something that the noble Lord, Lord Nugent, said: it is a topical amendment, it is topical because we have just had a recent water dispute. I am not so sure that you change legislation because you have a topical interest, because 50 years of collective bargaining in the water industry has not
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produced any national dispute until 1983—I repeat, 50 years of collective bargaining and not a strike until 1983!
In this amendment we are trying to set up an arbitration on one strike. I accept what noble Lords have said about the inconvenience—in some cases the hardship—but I would not accept that 60 million people were held to ransom. I come from a very large city and I do not think those people in that large city, about 1 million of them, were held to ransom; I think a few hundred were inconvenienced. If we think of 50 years' of collective bargaining without any disputes, does not that reflect well upon the effectiveness and the lasting acceptability of the existing negotiating machinery? How the negotiating machinery should carry on was spelled out by the noble Lord the Minister. What we see in this amendment is an intent to interfere in that agreed collective bargaining arrangement. Of course, if one reads the newspapers, if one listens to the radio and the other media, we are all well aware that the Government are considering a review of public sector arbitration arrangements, those arrangements where employers should be encouraged to end unilateral access. If I was cynical—and I am not—I might pose this question to the noble Lord, Lord Nugent: is this initiative on his part to further the Government's intention? Is this laying down the path? Is a Water Bill one way in which perhaps the Government would get satisfaction? The noble Lord the Minister has said that he does not want it through a Water Bill, and that I would accept.
If we look at the amendment—and I know the noble Lord, Lord Nugent, said that he did not think the wording was correct and could be amended—it reads as follows:
"The Secretary of State shall appoint a Water Industry Arbitration Board …"
Dear, dear! We had enough on Second Reading about the people the Secretary of State was going to appoint to the regional water authorities; we would be going into another debate if we were thinking who was going to be appointed to an arbitration board.
Though noble Lords have said how many persons there might be, there is nothing in the amendment that says one, two, three, four or five. There is nothing to say what qualifications. It does not say that the trade union movement shall be consulted, it says
"any individual or organisation"
which would be appropriate. Is it going to be a supposedly independent body? As the noble Lord the Minister said, it covers "any dispute". What disputes! Might it be a dispute on protective clothing? Might it be a dispute on safety? There are all these matters about which I think nobody would wish to go to such a board although they would have to do so.
Then we find in the amendment:
"… to consult with any individual …"
Does this mean a general chat round a table? Does it mean that the unions would no longer be able to negotiate? Then we have:
"… adjudication by the Board … shall form part of the contract of employment …"
I would have said, speaking from this side of the Committee, that this could only mean compulsion, and legally imposed settlements of disputes in

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industrial relations matters are rejected by the British trade union movement. There might be one or two Members on this side of the Committee who perhaps do not agree wholeheartedly with that, but the British trade union movement think it is an abrogation of basic rights in a free society. Decades of collective bargaining as they have gone on do not in my view merit an arbitration board of this description.
Of course, as noble Lords on both sides of the Committee have said, "and be enforceable accordingly", obviously means that the workforce would not be allowed to withdraw their labour. As my noble friend Lord Irving said—and of course I am in full support of his amendment—a compulsory arbitration system which is foisted on either side, whether the employer or employee, will not work. The only way arbitration can work is by mutual principled acceptance of the system. As the noble Lord, Lord Irving, said—and I repeat—legally imposed arbitration is a recipe for conflict and not for conciliation.
I think all of us recognise that arbitration in public utilities tends to militate against the fuller consideration of the wider issues behind a dispute. They tend to degenerate into a technical discussion on the amounts of monies available which the Government feel the employer can pay. In that way there is no room for argument when the negotiations start, no consideration of social justice. Nobody can possibly say that in the recent dispute the water workers were in any way in what one would call the higher paid parts of employment in this country. Even if one uses the very maximum figures that were used, they do not come up to the average weekly earnings of the manual employees in the country.
I think what we have to say to ourselves is that we have in this country a system for settling disputes that go to arbitration. As the noble Lord the Minister has said—he uses ACAS as the example—there is the existing machinery in ACAS which the water industry can use and does use for settling disputes. Disputes of course can only come about when the two sides are failing to agree. ACAS has that machinery, and if we accept this amendment it will mean that ACAS are in a very difficult position regarding the water industry. They will be placed outside of what is a public utility, and I would have thought that that was not an acceptable position for ACAS to be put in because they will find themselves with a duty to uphold the existing procedures. Therefore, those in a public utility find themselves at a disadvantage as compared to every other aspect of industry.
There may be a great deal of concern regarding what might arise if fixing of wages and conditions is carried out by the individual regional water authorities in the future, and we shall have to come to that at a later stage. At the present moment the fixing of wages and conditions is carried out nationally. However, if—as perhaps might happen in the future—this will be in the hands of the regional water authorities, that might be another forum where one will get greater activity, where one might even get leap-frogging by trade unions trying to get better wages and better conditions. A much harsher water authority might try to clamp down on the workers in that area. I do not accept that the answer to the problems of the water workers' wages
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lies in individual water authorities taking over the responsibility of the national organisation. It is also important to say that the amendment that has been moved would be extremely difficult to impose, and it could be well-nigh impossible to enforce on angry workers, at the most.
Perhaps there is an argument—and I could use it quite easily—that there needs to be a more coherent approach to public sector pay and conditions. But with the abolition of the National Water Council we are obviously getting ourselves into all these problems. Until the Government spell out quite clearly what will arise from the passing of this Bill, with all the functions that the National Water Council used to operate, we shall be continually having these debates, because there is nothing in the Bill that tells us who is to take over the responsibilities.
Noble Lords have talked about compulsory arbitration, but that does not guarantee swift settlement of disputes. As witness of that we need to look only at the protracted procedures in the Railways Staffs' National Council, and at how those arbitrations go on and on.
I wish to support the amendment of my noble friend Lord Irving of Dartford. We have tabled this amendment to make quite sure that there is a negotiation procedure after the passing away of the water councils. There is nothing in what the noble Lord has told us. It will be left to individual water authorities to make their own arrangements. Therefore, it is important for us to put down something that will safeguard the interests of those who work in the industry.
I conclude by saying that all of us know—and I repeat what I have said previously—that the Prime Minister and the Government are of a mind to enact legislation against strikes in essential industries and to generally curb trade union power. We all know this, and we know that in the next few days or weeks we shall be discussing in this Chamber democracy in the trade unions—the Green Paper. The amendment that we have before us pre-empts that kind of discussion. If the Government, at some later date, think that it is wise to bring before Parliament a Bill that will curb trade union power, the correct procedure to do that is through a Bill which should be brought forward just on those lines—an amendment on trade union activity. It will then be debated in both Houses and a full exposition of the total case will be put forward. That can be debated, and that is the way I suggest it should be done. I reiterate what other noble Lords have said. It will be quite wrong, in my view, to start off that legislation by agreeing to this amendment. In other words, I think it would be a backdoor method of trying to get in that kind of legislation.
Therefore, I have to say that I oppose the amendment of Lord Nugent of Guildford and give my support to the amendment in the name of my noble friend Lord Irving of Dartford.
4.55 p.m.
Lord Winstanley: Before the noble Lord, Lord Nugent of Guildford replies may I make a very brief point? I understood that the advice given to us by the noble Lord, Lord Bellwin, was to the effect that he felt

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it would be extremely unwise to deal piecemeal with this very important matter of pay determination in vital public services by singling out one section of vital public service workers—the waterworkers. I should like to know: what is the precise meaning of the noble Lord, Lord Bellwin? Does he offer that advice as a justification for doing nothing at all, or are we to take it that he and the Government intend at some later date to do something more collective to cover these vital public services as a whole? In other words, I am again putting to the noble Lord the question that was put to the Government by my noble friend Lord Rochester during the debate on the gracious Speech, and on a later occasion. It was a fairly specific question regarding the Government's intentions in general. What I am saying is that the point made by the noble Lord, Lord Bellwin is a vital one. It really is unwise to single out one section of vital public service workers and deal with them.
I also think that it is perhaps unwise to use that as a justification for doing nothing at all about an extremely important subject. So I should like to know from the noble Lord which way he wants us to take it. Does he want us to take his advice as meaning that the Government intend to do something about this subject as a whole at a later date and not that they merely want to ask us to do nothing at all ourselves?
Lord Bellwin: I shall respond equally briefly to that point. I made it clear—at least I thought I did—that I was responding to an amendment tabled by my noble friend—and, indeed, to the noble Lord, Lord Irving of Dartford. I said quite clearly that I thought it would be wrong to deal with this in isolation for this industry. But we must also recognise that my noble friend is fully justified in bringing forward this amendment because here we have a new situation that is arising, through this Bill, for the water industry. What pertained previously will no longer apply. That is, previously there was the National Water Council, which conducted negotiations, but this will not be there in future under this Bill. Therefore, it is perfectly proper at this time for my noble friend, or anyone else, to bring this forward as an alternative. It is not for me to answer for my noble friend, he will do that much more competently than I can, but that is how I understand it.
As to the Government's line on the kind of situation that has arisen in industries of this kind, I think I said that I welcome debate in terms of the future. I think I used the expression, "it is all to play for", and that is why it is constructive that all that has been said should be said. We shall take note of it. To say that we will do nothing is to pre-empt the kind of things that the Government have talked about. As I said on another matter only last week in your Lordships' House, just a little more patience and—who knows?—we may yet see something which your Lordships can debate.
Lord Howie of Troon: Would it not be more valuable to deal with a matter such as this piecemeal and get it right a bit at a time rather than try something more all-embracing and get the whole thing wrong at once?
Baroness Birk: I agree that this has been an extremely interesting and wide-ranging debate. It
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seems to me that what we are left with now is an amendment moved by the noble Lord, Lord Nugent of Guildford, which has been very highly praised but generally turned down, I think, by most people, for different reasons. We are then left with the amendment in the name of my noble friends. If that amendment is not accepted it means that the Bill will go forward—and the Minister has just said so himself—without any form of replacement for the type of machinery that has been operated until now by the National Water Council. It is perfectly true that in this Bill we cannot, and should not, be dealing with a whole code of practice for the trade union movement and employers, and for everything generally. That must be for the future, but I think that we on these Benches would feel very unhappy if this Bill went forward without anything in it at all.
The way we read it, at the moment it means that each of the authorities would be left to decide themselves and to make their own arrangements, so that there would be, as my noble friend Lady Fisher pointed out, the possibility—indeed, I would say even more than that, the probability—of leapfrogging. There could also be great differences between different parts of the country and different authorities. Therefore, I think that the only solution is for this amendment to be accepted or for the amendment standing in the name of my noble friends to be pressed, so that we have at least some machinery in the Bill for dealing with these problems at the present time.
Lord Nugent of Guildford: As my amendment was the start of this interesting discussion I should like to thank your Lordships for making it such a worthwhile debate. I confess that my motive for putting it down was not really in the belief that my amendment would be accepted. Back-Bench amendments are very seldom accepted in any circumstances, and, as I anticipated in my opening speech, both Front Benches united against me, so I was sunk from the start. My only noble friend was Lord Howie of Troon on the Back-Benches at the opposite end of the Chamber, who saw that there was some validity in the point that I was putting forward. Any suspicion that the noble Baroness, Lady Fisher, might have had that this was some deep-laid plot which was to bring in by the back door the start of the Government's new policy on the matter must have been completely swept away by the gallons of cold water which were poured on my amendment, very charmingly, by my noble friend Lord Bellwin.
I really come back to where I started. I felt—and I believe all noble Lords feel the same—that we had had an experience of a very unpleasant kind which we would like to see our people spared from in the future; that is, a future water strike. It is therefore incumbent on my noble friend and on his noble friends and his right honourable friends to give the deepest possible thought to the method that can be found to strengthen the negotiating machinery to safeguard the public against such a happening in the future.
The noble Baroness, Lady Fisher, made the point that the existing machinery has lasted for 50 years. In fact, it has not; it has lasted for only ten years. The existing structure was created by the Water Act 1973, which made the water industry a national industry and

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therefore made these negotiations national in a way that they had never been before. Before, there were 166 individual water undertakings, I think it was, 29 water companies and 1,400 sewage authorities, and the whole thing was fragmented. Therefore, the punch which the three trade unions could bring to the negotiating table has been in action only for the last ten years.
Although I would entirely agree with the noble Baroness that these men in the water industry are peaceful, public-spirited men, they are not badly paid. With the increases now, their average earnings with overtime—a good deal of overtime—are up to about £150 a week, which is not too bad with an index-linked pension and security of job.
They are a peaceful lot. I am bound to say that when I had the privilege of conducting the negotiations for the employers' side we had some pretty long and arduous negotiations. In fact, it is a way of life to conduct an NJIC and an NJC, and I spent a great deal of my time doing it; but I found the men in the water industry very good to deal with. We won each other's confidence. I would never have thought that this industry would have drifted into such a national strike. But if ever a series of negotiations was mishandled from the start, this one was. The less said about it the better, I think. Nevertheless, it has happened, and I think it is essential that my noble friend and his ministerial colleagues should now really apply their minds to finding some way to safeguard the country against the same thing happening again.
Of course, I understand what a major concession it would be if the trade unions concerned here, or, indeed, in any other part of the public sector, gave up the right to strike. In the splendid speech of the noble Lord , Lord Shinwell, we heard the authentic voice of the man who fought for the trade unions to have the right to strike. I understand that that is sacrosanct, and something very solid has to be given if there is to be agreement—because there must be at the end of the day—to bring the trade unions and the employers' side together to find a better solution. But it is not going to be easy.
The noble Lord, Lord Irving, is absolutely right in saying that the major part of industrial relations is just hard work: hard work understanding each other's problems; considering them; giving where you can; where you cannot, explaining why you cannot; and throughout fostering human relationships, so that the machine works satisfactorily—because it is working continually. The employers must learn to be as professional as the employees—and the employees, in the voice of the trade union leaders, are very professional indeed. So that is the basis of it, whatever machinery one has. But my concern is to try to have some ultimate safeguard which would save our people from the experience they have recently suffered.
I feel that in that spirit this debate has perhaps added something. It has certainly given us some notable speeches. It has given us, from my noble friend the Minister, a reply with at any rate some comforting words. Like my noble friend Lord Campbell of Alloway, I heard the Secretary of State last night, and he is obviously thinking of it, too. I guess that he may not be thinking of quite such a consensus as I should
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like to see, but evidently the Government are thinking about it and realise that something needs to be done. In that spirit, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Irving of Dartford Lord Irving of Dartford moved Amendment No. 16:
After Clause 3, insert the following new clause:
Negotiations.
(".—(1) It shall be the duty of each water authority and other statutory water undertaker to seek, either in conjunction with every other such authority or undertaker or by means of such association or other person or organisation as may represent all of them for this purpose, consultation with any organisation appearing to them to be appropriate with a view to the conclusion between them and that organisation of such agreements as appear to the parties to be desirable with respect to the establishment and maintenance of machinery for the settlement by negotiation of terms and conditions of employment of persons employed by the water authorities, other statutory water undertakers and any person referred to in section 3(4) of this Act with provision for reference to arbitration in default of such settlement in cases as may be determined by or under the agreements.
(2) It shall be the duty of every water authourity and all other statutory water undertakers and all employers coming into existence as a consequence of this Act to comply with any such agreement.
(3) Copies of any such agreement and of any instrument varying the terms of any such agreement shall be sent to the Secretary of State.")
The noble Lord said: I think that it would be out of order if I opened the debate again, so I shall confine myself to moving formally that Amendment No. 16, the new clause, be set in the Bill. I beg to move.
5.8 p.m.
On Question, Whether the said amendment (No. 16) shall be agreed to?
Their Lordships divided: Contents, 77; Not-Contents, 120.

DIVISION NO 1

CONTENTS

Aberdeen and Temair, M.

Houghton of Sowerby, L.

Ardwick, L.

Howie of Troon, L.

Aylestone, L.

Irving of Dartford, L.

Bacon, B.

Jacques, L.

Banks, L.

John-Machie, L.—[Teller.]

Beswick, L.

Kirkhill, L.

Birk, B.

Lee of Newton, L.

Bishopston, L.

Listowel, E.

Blease, L.

Lloyd of Hampstead, L.

Blyton, L.

Lloyd of Kilgerran, L.

Boston of Faversham, L.

Longford, E.

Brockway, L.

Lovell-Davis, L.

Brooks of Tremorfa, L.

McNair, L.

Bruce of Donington, L.

Mayhew, L.

Burton of Coventry, B.

Melchett, L.

Byers, L.

Milford, L.

Chitnis, L.

Molloy, L.

Cledwyn of Penrhos, L.

Ogmore, L.

Collison, L.

Oram, L.

Davies of Leek, L.

Peart, L.

Davies of Penrhys, L.

Phillips, B.

Diamond, L.

Pitt of Hampstead, L.

Donaldson of Kingsbridge, L.

Ponsonby of Shulbrede, L.—[Teller.]

Elwyn-Jones, L.

Ewart-Biggs, B.

Prys-Davies, L.

Fisher of Rednal, B.

Roberthall, L.

George-Brown, L.

Rochester, L.

Gladwyn, L.

Ross of Marnock, L.

Hale, L.

Seear, B.

Hampton, L.

Shinwell, L.

Hatch of Lusby, L.

Simon, V.

117

Stedman, B.

Underhill, L.

Stewart of Alvechurch, B.

Wade, L.

Stewart of Fulham, L.

Wallace of Coslany, L.

Stone, L.

Wells-Pestell, L.

Strabolgi, L.

White, B.

Taylor of Gryfe, L.

Wigoder, L.

Taylor of Mansfield, L.

Winstanley, L.

Tordoff, L.

Wootton of Abinger, B.

NOT-CONTENTS

Allen of Abbeydale, L.

Maclehose of Beoch, L.

Allerton, L.

Macleod of Borve, B.

Ampthill, L.

Malmesbury, E.

Auckland, L.

Mancroft, L.

Avon, E.

Mansfield, E.

Behaven and Stenton, L.

Mar, C.

Bellwin, L.

Margadale, L.

Beloff, L.

Marley, L.

Belstead, L.

Massereene and Ferrard, V.

Bessborough, E.

Merrivale, L.

Boyd of Merton, V.

Mersey, V.

Caccia, L.

Mills, V.

Campbell of Alloway, L.

Molson, L.

Cathcart, E.

Morris, L.

Cockfield, L.

Mottistone, L.

Cottesloe, L.

Mowbray and Stourton, L.

Cullen of Ashbourne, L.

Moyne, L.

Daventry, V.

Newall, L.

Davidson, V.

Norfolk, D.

De La Warr, E.

Northchurch, B.

Denham, L.—[Teller.]

Nugent of Guildford, L.

Dilhorne, V.

Onslow, E.

Dormer, L.

Orkney, E.

Duncan-Sandys, L.

Porritt, L.

Ellenborough, L.

Radnor, E.

Elliot of Harwood, B.

Rankeillour, L.

Elton, L.

Renton, L.

Energlyn, L.

Richardson, L.

Faithfull, B.

Rochdale, V.

Ferrers, E.

Romney, E.

Forester, L.

St. Aldwyn, E.

Fortescue, E.

St. Davids, V.

Fraser of Kilmorack, L.

St. John of Bletso, L.

Gainford, L.

Salisbury, M.

Gainsborough, E.

Sandford, L.

Geoffrey-Lloyd, L.

Sandys, L.

Gibson-Watt, L.

Selkirk, E.

Glanusk, L.

Sempill, Ly.

Glenarthur, L.

Sharples, B.

Gray, L.

Shaughnessy, L.

Gridley, L.

Skelmersdale, L.

Hailsham of Saint Marylebone, L.

Somers, L.

Stamp, L.

Henley, L.

Stanley of Alderley, L.

Hives, L.

Stodart of Leaston, L.

Home of the Hirsel, L.

Strathcona and Mount Royal, L.

Hornsby-Smith, B.

Hylton-Foster, B.

Strathspey, L.

Ingrow, L.

Swinfen, L.

Kilmany, L.

Swinton, E.—[Teller.]

Kinloss, Ly.

Taylor of Hadfield, L.

Kinnaird, L.

Terrington, L.

Lane-Fox, B.

Tranmire, L.

Lauderdale, E.

Trefgarne, L.

Lawrence, L.

Vaux of Harrowden, L.

Long, V.

Vivian, L.

Loudoun, C.

Wakefield of Kendal, L.

Lucas of Chilworth, L.

Ward of Witley, V.

Lyell, L.

Westbury, L.

McAlpine of Moffat, L.

Wise, L.

Mackay of Clashfern, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.17 p.m.
Lord Melchett Lord Melchett moved Amendment No. 17:
After Clause 3, insert the following new clause:
("Reservoir construction and the conservation of water supplies.
.It shall be the duty of each Water Authority, before seeking planning permission to construct new reservoirs which involve the loss of grade I and II agricultural land, or land within a Site of Special Scientific Interest or National Park, to satisfy the Secretary of State—

(a) that no alternative source of supply exists from neighbouring Regional Water Authority reservoirs or plant, and

(b) that all reasonable steps are being taken by the Authority to conserve water, and to make the most efficient use of existing water resources and supplies.").

The noble Lord said: I beg to move Amendment No. 17, which also follows on from the provisions of Clause 3 of the Bill and the dissolution of the National Water Council and the Water Space Amenity Commission, but which deals with a point which is certainly as important but rather broader than the amendments which your Lordships have just spent some time discussing.
In previous debates during the Committee stage and throughout the debates on the Bill there has been general recognition that it made sense to organise water authorities on a regional basis taking into account river systems, catchment areas and so on. There has been no real dispute about that division of responsibility. But it is fair to say that, although that is accepted, there is fairly widespread concern that there is not enough co-ordination and liaison between water authorities even under the existing system with the Water Space Amenity Commission (WASAC) and the National Water Council in existence, and in particular not enough co-operation and consultation on the points about which this amendment aims to do something. The intention is that all these different regional water authorities should take into account over-supply in one area and attempt to do everything possible to match over-supply with under-supply before a particular region decides to make a massive investment of public funds in new capacity, in new reservoirs in particular.
Another worry which is shared—I almost said "for once" but the noble Lord, Lord Stanley, would complain if I did so and, indeed, it would not be true—both by nature conservationists and those involved in agriculture concerns the loss of rural land. Very often it is extremely agriculturally productive land and on other occasions land of great importance either for amenity or for wildlife interests. There is a fairly widespread feeling in both agricultural and conservation and amenity camps that water authorities are rather too ready to invest in the large new reservoir instead of tackling what may be more difficult, more time-consuming, involve more difficult management decisions and involve smaller amounts of expenditure over a longer period—namely, taking steps to conserve water rather than provide more of it.
Let me give an example of reservoir building which has caused concern. First, in the early 1970s there was the Cow Green Reservoir in Upper Teesdale, where, from a nature conservation point of view, an enormous amount of damage was done and large amounts of alpine flora, which are very rare in this country, and some endemic species were destroyed. Rutland Water, by contrast, concerned the loss,

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largely, of extremely productive agricultural land. I know that there is a great deal of quite justified concern nowadays among the farming community and people who farm in that area in particular, that Rutland Water, having swallowed up huge amounts of agricultural land, is not being used to anything like full capacity. As I understand it, very little use has been made of the Rutland Water Reservoir, and I hope that the noble Lord may be able to confirm that this huge area of agricultural land has been taken for a reservoir which is now not really being used to anything like full capacity in any event.
Rutland Water was a reservoir which was built in the late 1970s, but more recently Kielder was opened. This was built on the basis of plans which foresaw increasing industrial demand. The plans have been proved to be wrong. As I understand it, there is virtually no demand for the water from that reservoir. Not only is industry suffering from the depression, but in that area it is having to pay higher water rates to pay for a new reservoir which was to provide it with water which it does not actually want.
To take a current case, considerable arguments are going on in the Dartmoor area about the proposal to build a reservoir there—arguments between those who want the reservoir to be in the upland area and those who prefer it to be in the lowland area. Nevertheless, once again it raises the issue: is it necessary that more rural land be lost to reservoir construction and is each individual water authority really taking sufficient account of the overall picture in the country? That is why the amendment would put a duty on the water authority to consider that; and, in particular, where a site of special scientific interest or a national park on the wildlife or amenity side were concerned or, on the agricultural side, the loss of grade I or grade II agricultural land. I think that the amendment should be changed to include grade III agricultural land, which is the bulk of it. My own view is that in these cases water authorities should have to take special care and have a special duty in this regard before going ahead with their plans.
The second part of the duty that would be laid upon them, apart from looking at alternative sources of supply already in the national system, would be to look at the possibilities for conservation of water. It is a well known fact that a very large proportion of the water which is actually stored in these reservoirs—and I hope that the noble Lord who will reply for the Government can give an up-to-date figure—once released into the system, simply runs straight back into the ground because of leaks from the mains. So this huge loss of productive land, wildlife or amenity interests is being swallowed up by water which is then simply poured back underground because the pipes leak so much and because not enough money is being spent on keeping the distribution system up-to-date and in good order. So the distribution system is one side of it.
On the other side, measures can be taken to reduce the use of water. I have seen a quote from a study which showed that if London's toilets were converted to variable flushing so that they sometimes used more water than on other occasions, that would save an amount of water equivalent to the contents of a large
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scale new reservoir. In other words, it would make the construction of one new reservoir unnecessary for about the same or a lower cost. I hope that the noble Lord will be able to confirm that that is correct; that the Thames Water Authority, in fact, did such a study; that the results showed that that was the case; and that unfortunately, so far as I know, no water authorities have adopted that approach, whereby, instead of looking round for some new area of rural land to swallow up with water, they tried to encourage customers to use rather less water and therefore to reduce the demand.
This is a very reasonable request to put to water authorities and in the end it does not preclude them from building a reservoir should one be shown to be necessary—I would not attempt to do that. I am simply asking them to take special care and to give special consideration to these areas of rural land. I hope that the Government will welcome this and will see it as a way of allaying some of the fears which have been expressed about what appears to be a move in this Bill towards even more fragmentation of the water supply industry in this country. I beg to move.
Lord Gibson-Watt: I should like to speak to this amendment quite quickly; I shall not take up very much time. I certainly have some sympathy with the thinking of the noble Lord, Lord Melchett, although I cannot in fact support his amendment. I should like to draw noble Lords' attention to two comments that he made in his opening remarks. One is that nobody wishes either good agricultural land or anything to do with nature conservation to be unnecessarily lost to water. But, equally, nobody will argue against the necessity of good water supplies not only for domestic but also for industrial use.
Secondly, in his remarks the noble Lord rather suggested that water authorities did not have sufficient contact one with another. Of course, his experience may be different from mine, but I happen to know that the role of a water authority and, particularly the chairman of any water authority, is a very invidious and difficult one. They are always criticised for something. In mid-Wales in the Elan Valley reservoir complex, which was once owned by the Birmingham Corporation, before the economic recession there was a plan for an extra reservoir above Craig-goch. Indeed, for a long time it was going to come about. This plan was to be carried out by the Welsh Water Authority in conjunction with the Severn-Trent Water Authority. I only wish to say to your Lordships that there is perhaps rather more co-operation between authorities than the noble Lord, Lord Melchett, said in his opening remarks.
The Earl of Onslow: I should like to rise to support what the noble Lord, Lord Melchett said, not because I think that my noble friend is incorrect in saying that there is consultation between water authorities, but land use in this country is extremely critical and we are not very good at it. Since the war we have created quite a lot of unusable land by bad planning; we have created quite a lot of derelict land. At the moment farmers are criticised for over-producing; that is, actually for doing what the taxpayer and Parliament have asked them to do. But when the world comes out of recession—and history teaches us that one day it

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will come out of recession—we must be very careful before we use up permanently good agricultural land.
When my noble friend Lord Mowbray was answering for the Department of the Environment I asked him a Question about the Rutland reservoir, which I believe has now dropped by something like seven feet round the edges, although I am not absolutely sure that I have the figure right. But there is a form of dead beach round the edge. Next door, just over the watershed, in, I think, the Severn-Trent Authority, a reservoir is definitely being built on which at the time—and this was about two years ago, towards the beginning of the life of this Government—the Guardian published a very strong leading article saying that this was rather a silly way in which to go about things. I am not saying that water authorities do not consult, but I suggest to noble Lords that if it is put in the Bill, they will have to consult. They will then have a duty upon them to consult. It is really a question of good housekeeping, and this is something in which we all ought to encourage everybody to indulge.
5.30 p.m.
Baroness White: I should like in general terms to support my noble friend Lord Melchett, although I would say to him that so far as the Principality of Wales is concerned there is virtually no grade I land. We have very little grade II land, and any reservoirs that we have are likely to be built on grade III or even a lesser categorisation of land. From our point of view that part of his amendment is almost irrelevant.
Lord Melchett: I do not know whether my noble friend heard me, but I have had that comment made to me and it is a good argument for saying that the amendment should cover grade III agricultural land as well, and I said that.
Baroness White: I listened to my noble friend with the utmost attention. I heard him refer to Grade III land, but it is not in the amendment as it is proposed. I am in a little difficulty about advertising the report of the Select Committee on Science and Technology in a debate on the water industry because unfortunately we have been pre-empted by this Bill, and the report has not yet been debated in the House as a report. But as we pass through the various stages of this Bill it is helpful to remind noble Lords that their own Select Committee, under the chairmanship of the noble Lord, Lord Sherfield—who unfortunately is abroad at the moment, and hence I am speaking in a sense for the Select Committee—has made a fairly thorough study of, among other matters, the question of methods of water storage. We reached the conclusion, as we state in this report, that most water authorities are satisfied that their resource needs will be met without major reservoir construction at least during the rest of this century, and several of them are fairly confident that it will be some distance into the next century before they are obliged to turn to reservoir construction for their water resources.
This is partly because of a new look in the storage of water. Among other things, considerable progress is being made in the combination of ground water—that is, underground aquifers—with river sources, and the techniques for using the underground waters to top up
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river resources when they are low, and so on, are being developed the whole time. There is also what is called in the jargon "conjunctive use". We had a number of instances of this brought to our notice. For example, in Lancashire the North-West Water Authority are very proud of one of their schemes.
They are convinced that by bringing together several resources into an operationally integrated scheme the total quantity of water made available for supply was more than the sum of the yields of the individual resources if they had been operated separately. They admitted that the scheme was relatively costly both in investment and in operating costs. Nevertheless, it had provided water supply to meet the authority's needs into the next century with scarcely any works above ground. The only two new service reservoirs were underground and covered.
When we are discussing this matter of reservoirs we should recognise that considerable attention has been paid to new operational techniques in the matter of water storage. This is encouraging. We reached the conclusion that reservoirs are likely to be built in the future only where they are absolutely essential.
As someone who, like the noble Lord, Lord Gibson-Watt, took a great interest in the proposed Craig-goch scheme, I think one can say that that was deferred not only because of economic recession but because the Severn-Trent Water Authority decided to use its underground aquifers as a first source before going to the expense of building the Craig-goch reservoir. I would further say that if in the western part of the kingdom more water supplies are needed in the future, then the Craig-goch scheme is one of the best that could be undertaken. It is in an area where we already have considerable reservoir installations and where there would be a minimal disturbance of either agriculture or population.
Lord Winstanley: I too should like to support this amendment moved by the noble Lord, Lord Melchett. It is a simple amendment. It does no more than require the water authorities to do in advance the kind of things which they are invariably asked to do when, at the end of the day, their proposals have to go to a public inquiry. Every time there is a public inquiry—and frequently there is on proposals such as this—the questions asked of the water authorities, and upon which evidence is given, are, have they demonstrated the need? Have they explored alternative sources? Are they making the optimum use of existing sources of water, and so on?
The noble Earl, Lord Onslow, is right to underline the importance of land as a resource within our community. There is no resource under such desperately heavy demand and in such short supply in these islands as land. Once land is submerged under water, then from the point of view about which I am talking, whether it is agriculture or nature conservation, or whatever, it ceases to be land. I am not saying that it does not then have other values, of course it does, but we have to conserve our supplies of available land not only in national parks, which are referred to specifically in the amendment, but in agricultural areas, and in fact throughout the country as a whole.
I acknowledge that the kind of forecasts which water authorities have to make are extremely difficult. One

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can tell that by considering the experience which we all enjoy every year. Wherever we happen to live, we tend to find that for part of the year we are being told that we must not have baths, and we sometimes have to get our water from standpipes, and then within a matter of weeks we are all wandering about in wellingtons or taking to the boats. Plenty of water falls on our country, but we do not always collect it or conserve it as well as we might.
I acknowledge that it is difficult to make accurate forecasts. The noble Lord, Lord Melchett, referred to Kielder. There, of course, we had this enormous reservoir constructed on the assumption of, and in the anticipation of, an enormously increased demand for water from Redcar Steel and from ICI at Billingham—both places which are either closed now, or diminished so much that the demand for water in that area has been very much less. Therefore, an alternative use has had to be found for the Kielder reservoir until the time, perhaps 40 or 50 years' hence, when its water will be required for water purposes. Alternative uses are now being found. I merely underline that to show that I acknowledge that it is difficult to make accurate forecasts.
That being acknowledged, I am sure that with regard to the kind of land considered in this amendment—and it refers to grade I and grade II agricultural land—there is not a lot of either of those grades of land knocking about in Britain going spare, as it were, that we could afford to have submerged under water. I acknowledge that in the National Parks mentioned specially in the noble Lord's amendment there is very little grade I or grade II agricultural land, but there is land which is of immense value for other purposes. However, the difficulty of forecasting is acknowledged.
The noble Earl, Lord Onslow, was right in what he said about Rutland Water. That was a matter on which there had been major errors of forecast. If we once acknowledge that, and acknowledge the vital importance of seeing to it that valuable agricultural land is cherished and protected, and also acknowledge the importance of preserving sites of special scientific interest, sites which are important for wildlife, and also in preserving countryside land in our national parks, then surely we have a right to insist that the water authorities, by one means or another, take the kind of steps envisaged in this particular amendment.
At the end of the day, when disputes over proposals for new reservoirs, such as the one on Teesside to which the noble Lord, Lord Melchett, referred, come to a public inquiry, it is invariably these points upon which the water authorities are cross-examined. It is invariably on these points that evidence is brought forward. The amendment merely requires the water authorities to satisfy themselves with regard to these points in advance. If, on every occasion and with regard to every possible future project, the water authorities satisfy themselves on these particular points, then the decisions which will be taken are more likely to have public approval, and less likely to result in conflict at the end of the day.
Earl De La Warr: I find this a sensible and important amendment for reasons I shall not rehearse
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again because they were adequately given by the noble Lord, Lord Melchett, and more particularly on the agricultural side by my noble friend Lord Onslow. I have only two points to make. First, I agree with the noble Lord that grade III land should be included, and I hope he will find a way of doing that. Secondly—I say this because I am so seized of the importance of the amendment—I suggest we consider bringing in the Ministry of Agriculture at the point at which the Secretary of State is informed. It may be that the noble Lord has thought that out and there is some reason why that should not be done, in which case I should be interested to hear it. I am simply saying that, if anything, I want to make the amendment stronger.
The Earl of Gainsborough: I wish briefly to support the amendment because I have myself had close knowledge of Rutland Water, living close to it and being, at the time, chairman of the local authority in whose area the reservoir was being constructed. The noble Earl, Lord Onslow, was right to say that that reservoir has now been reduced in size because the water level has run down by about 12 feet all round. So much water was running out of the reservoir back into the limestone that it was costing a fortune to pump water out of the river to keep the reservoir level up.
That was one matter that was not properly looked into before and is one of the reasons why an amendment like this should be considered by the Committee; not enough was done at that time to look into all the possibilities that might occur, with the result that today only about 10 per cent. of the water is being used, and the rest is just nice to look at. People sail boats over it and go in for all sorts of other activities, but that was not what the reservoir was built for; it was built to provide water for the anticipated demand of the South-East.
I hope the amendment will be given consideration by the Government. It is true that most of the land that was taken by Rutland Water was grade III—some of it belonged to my family, but that is neither here nor there; we were quite prepared to see it being used if it was going to be for the benefit of the country—but some of it was grade II. If the Government consider that this is worthy of consideration as a principle, grade III land should be included in the amendment, as several noble Lords have suggested.
Lord Stodart of Leaston: I can see no possible reason for not supporting the principle of the amendment, though, as the noble Lord, Lord Melchett, suggested, the wording may not be entirely perfect. I also support the suggestion that, when the point at issue comes to be decided, there is a case for bringing in the Ministry of Agriculture.
One cannot but be somewhat appalled by the fact that, I think to this day, about 50,000 acres of agricultural land are going out of production every year in England and another 5,000 in Scotland. The most greedy devourers of it are not reservoirs but, I suspect, motorways and roads. Just as when land is submerged with water it will never return to agriculture, the same happens when it is submerged with concrete, housing or roads. Therefore, considering that at 50,000 acres a year, the equivalent of the County of Norfolk has totally disappeared, since the war, it is of crucial

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importance that we pay more attention not only to the preservation of land but, as my noble friend Lord Onslow said, to its proper use, be it for farming, forestry or the needs of the population in terms of water.
I think the idea is that at least one must convince the powers-that-be that one has examined grade I, grade II and grade III agricultural land, sites of special scientific interest and the national parks. Having done that, I am wondering where reservoirs will be put because I can think of little land that would be left. I recall my time at the Ministry of Agriculture and a plan to build a reservoir on, I suspect, either grade II or grade III agricultural land in the West Country. The alternative suggestion was made that land for it should be taken either from Dartmoor or Exmoor, and the roof went off with indignation from people who said it would be an outrage to put water in either of those places. While I support the principle of the amendment, it needs careful tidying-up.
Lord Davies of Leek: While I support what the noble Lord, Lord Stodart, has said, I would add a few caveats. I was pleased when my noble friend Lady White referred to the Select Committee which went into the question of science and water. It is a pity that we did not have an opportunity, before discussing this Bill, to debate the valuable report produced by the committee chaired by the noble Lord, Lord Sherfield. I read the report and the debates that have taken place on the subject of reservoirs—despite the fact that I have not been in your Lordships' House lately—and it is clear that a number of reservoirs are almost unknown today. There are others which need masonry work and general attention; just like the sewers, they have been neglected. Research should be conducted into the matter.
I support the main contention of the Bill, but I must introduce the caveat that if we are to have an authoritative authority which, as part of its set-up does not like the attendance of the public or the press at its meetings, there could be problems. We know how at present farmers and people in certain areas can have vital information thrust on them too late. The Ministry of Agriculture should be brought in, but I would go further. The most active defender of the farmers, especially the small ones whom I represented (although not all of them voted for me; that did not matter because I liked them) is the NFU, and it too should be brought into the forefront of any great changes in this area.
In that way farmers generally, and particularly the small farmers on the contour line above 600 feet or, as in the Lakes and Pennine areas, those on the 1,200 foot contour—where there are some of the highest villages and highest country pubs in England—will have a better chance of knowing what is going on. Water is of paramount importance above the 1,000 foot contour level, enabling the small farmer to get water to his cattle at the right time. Consequently, reservoirs are often needed in hilly country. When we are thinking of reservoirs, let us also bear in mind the small, hardworking farmer in marginal areas who sometimes has to get by on less than 100 acres. There were 3,000 farms in my area, 1,400 of them under 30
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acres. That is hard work. Those farmers should be kept informed about what is going on.
Lord Energlyn: It seems to me that the amendment is somewhat unnecessary and to some extent rather naïve. The noble Lord, Lord Davies, made a pertinent point when he said that many of these parts of Britain are above the 1,000 foot contour. They are the very ones the noble Lord, Lord Melchett, wants to preserve. Those areas will be producing reservoirs at high levels. They will provide water not only for the farms but also for the hydro-electric power for those farms. Many of those proposals have been held up by admittedly well-meaning objections to the formation of the reservoirs, which ostensibly are claimed to disfigure, or alter, the wildlife of the area. There is a naïve suggestion contained in paragraph (b), and therefore personally I should not approve of the introduction of the paragraph, because I should have thought that it referred to one of the natural functions of a water authority.
5.50 p.m.
Lord Skelmersdale: I hope that your Lordships' Committee will accept that I am second to none, inside or outside the Chamber, in my determination to see the principles of conservation prosper. I hope that the Committee will also accept the fact that I appreciate the concern, which the Government most definitely share, that land should not be taken either unnecessarily or arbitrarily for the purpose of reservoir construction. It is therefore with sincere regret that I must tell the Committee that the effect of the proposed new clause would be damaging to the interests which, quite naturally, its sponsors wish to protect. It would succeed in ensuring neither that certain kinds of land are taken for a reservoir only when absolutely necessary, nor—as the noble Lord, Lord Melchett, has said he requires—that a reservoir is built only if water from existing resources is used to the utmost. The planning legislation as it stands, together with Section 22 of the Water Act 1973, do that better, and I hope that your Lordships' Committee will agree not to disturb it.
As the noble Lord, Lord Winstanley, pointed out, proposals to build a new reservoir, or to extend an existing reservoir, have to be the subject of planning applications to the local planning authority. Invariably there is then a local planning inquiry into the water authority's application. The inquiry will be held by an inspector, and in a case such as we are talking about he will be supported by expert assessors. The kind of issues with which the proposed new clause is concerned can be—and if they applied in a particular case, I am quite certain would be—thoroughly discussed by the parties at the inquiry. The important point here is that the discussion would be in public and what was said would be testable. The inspector would report to my right honourable friend with a recommendation, and my right honourable friend would reach a decision. He may or may not agree with the inspector's recommendations; but he would know that the water authority's case and the objections to it had been fully and publicly considered, and he would be able to reach a decision balancing the evidence.

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What the new clause proposes would be a backward step in two respects. First, it would mean that my right honourable friend had already heard the water authority's case and had reached a view on it before, as part of the normal procedure for seeking planning permission, the inspector's report came to him. That would seriously prejudice my right honourable friend's quasi-judicial position when considering the inspector's report.
My noble friend Lord Stodart of Leaston suggested that the Ministry of Agriculture, Fisheries and Food be brought in. I would tell him that we cannot do that when, as in this case, the Secretary of State for the Environment acts in a quasi-judicial capacity. Of course the other ministries' evidence on the importance of land is significant at any local planning inquiry.
Secondly, the new clause would mean that my right honourable friend would have had to be satisfied, or would have been able to have been satisfied, that the conditions which the new clause would impose had been met in private. That, I submit, would not be the best way of reaching decisions on these important matters. Not only my right honourable friend but also public opinion should be satisfied that all the issues have been fully and properly aired, and that at the very least there had been an opportunity to put counter-arguments. Otherwise it would be quite unfair—I should even go so far as to say, improper—to everybody, including my right honourable friend.
The noble Lord, Lord Melchett, and other noble Lords supporting him, asked various questions. I am afraid that I must say at the beginning that, with a new move afoot on public inquiries generally under the planning law, all the specific instances and suggestions which the noble Lord, Lord Melchett, and other noble Lords have made—on, for example, the use or otherwise of existing reservoirs; the adequacy of the piping system; and the various other points that have been mentioned—would be taken into account. In other words, all these inquiries would be very wide-ranging indeed. I suppose that, thinking of another subject, one could equate such an inquiry with the current Sizewell inquiry—
Lord Melchett: I am listening very carefully to what the noble Lord is saying; it is very interesting and helpful. He said that the question of the condition of a distribution system would be a matter which could be considered by future public inquiries. Would the noble Lord also include in the list the other question that I specifically mentioned: whether it would be as cost-effective, or more cost-effective, for an authority to take steps to reduce the demand for water, for example, for domestic use?
Lord Skelmersdale: I think that I should have to consider that point and return to it, if I may.
I am afraid that I cannot agree that Rutland Water is surplus to needs. It was designed originally to meet projected needs over a very long period, and that applies also to the Kielder Reservoir, which, as the noble Lord, Lord Melchett, reminded us, was planned at a time when anticipated industrial needs were much greater than they now are—
Lord Winstanley: Will the noble Lord allow me to intervene? On that particular matter, surely the point made by the noble Earl, Lord Onslow, was with regard to the surplus water in Rutland Water which in fact is no longer in Rutland Water. I think that the noble Lord the Minister has to accept the point that water which may not have been surplus is no longer there because the level has been reduced by about 12 feet.
Lord Skelmersdale: Yes, but I would suggest that that is rather off the basic point of the argument, in that the reservoir has already been built. There is a perfectly good argument—which I have a feeling the noble Lord, Lord Melchett, might well accept—that in the reduction of the amount of water in the particular reservoir to which my noble friend and the noble Lord, Lord Winstanley, have been referring, there is increased opportunity for conservation of wildlife and plant life.
Before the noble Lord intervened I was going on to talk about Kielder Reservoir. The sad industrial decline of the area (to which the noble Lord, Lord Melchett, referred) has meant that the demand is now much less than had been expected, but Kielder will meet projected needs well into the next century as an important reserve and resource for the North-East.
In what I hope he will consider as a slightly unfortunate phrase, the noble Lord, Lord Winstanley said—and I think that I have his words correctly—that alternative uses are now being found for the Kielder Reservoir. I hope that he did not mean that had the reservoir not been there the need would therefore not arise, and that these uses would not now be identified. I hope that he did not mean that; I assume that he did not mean it. Much—
Lord Winstanley: I am most grateful to the noble Lord for giving way. Perhaps I did not make myself clear, and since the noble Lord did not understand me, it would appear that I did not. All I said was that, since there has been a reduction in demand for water, to which the noble Lord has referred—and I acknowledge that; I also acknowledge that it could not have been forecast—alternative uses have been found. In other words, the Kielder Reservoir has become an extremely important centre for water-based recreation. That is quite valuable, and it is a very sensible thing to do with a piece of water that is not now used for the purpose for which it was originally provided.
Lord Skelmersdale: I am very grateful to the noble Lord. I had indeed entirely missed the point of what he had been saying, and I am obliged for that elaboration.
To return to my basic theme, I would say that public inquiries can take account of all these factors; such as, for example, does a particular reservoir meet a proven need? Can the water be piped satisfactorily from somewhere else to supply the same need? Can the need be met in some other way? I said that I would look into the fact of conservation of water supplies for the noble Lord, Lord Melchett, and I meant just that.
Lord Melchett: Was the noble Lord answering the point? I was talking about reduction of demand by consumers. It would be helpful to have it on the record if he is saying that that will be something that a future public inquiry would consider.
Lord Skelmersdale: Yes, I did understand that noble Lord correctly—the reduction of demand by the use of conservation measures (if I may put it that way) within a particular industry or a particular domestic user. I am not able to give an off-the-cuff answer to that tonight but I will write to the noble Lord. I have spoken of the worthy objectives of this amendment. That they are worthy has been evidenced by the general support received from all quarters of the Committee. As I have said, without further thought, I believe that the amendment does not achieve its stated objectives and that existing legislation is adequate to achieve them. I hope the Committee will agree with that.
The Earl of Onslow: Perhaps my noble friend could help us a little further. He says that existing legislation is adequate to achieve the objectives. I think the reason why this amendment was put down is that that has actually proved not to be the case, because we have an imbalance of water supply in some parts of the country. The question of Rutland has been proven. If you knock 12 feet off (I do not quite know how many acres) it is a monumental amount of water. I suspect that nobody now would start to build Kielder. There is also the Trent area reservoir. If I had had the time, I would have done my homework properly. I apologise for not doing so. They wanted to build this just over the border. We then had the problem (in a way) of too many reserviors in Wales—mostly for Birmingham, saving the noble Baroness. Then the poor Welsh were the ones who had to pay the highest amount for their water. Again it is in the West Country where the largest amount of rain falls, yet they are the ones who suffer. At the moment there is a drought. My noble friend Lord Nugent went around producing water "out of the air" in 1976, the year of the drought. I just wonder if this legislation has achieved its objective.
I can understand that the drafting of Lord Melchett's amendment leaves a lot to be desired. Perhaps it could be changed or we could consider coming back at Report stage with a clause which would place a duty on water authorities to consult with their neighbours to see if they could find surplus water from their sources. That would help. I think it is important to put something in the Bill at some stage. I hope that the noble Lord, Lord Melchett, will come back at Report with something.
Lord Skelmersdale: My noble friend is confusing two situations. What he is looking at at the moment is past reservoir building in today's conditions. What I am saying is that the planning law was perfectly adequate at the time to give the necessary safeguards—safeguards which the noble Lord, Lord Melchett, and my noble friend who put his name to this amendment, genuinely and sincerely desired. I must say that I agree with them.
Lord Melchett: I think there is a real problem here. The noble Lord, Lord Skelmersdale, said some interesting things. I would like to consider what he said and think about it before the next stage of the Bill and, in particular, I look forward to having something in writing on the one question he was not able to answer. The point is that, however comprehensive the planning machinery was in the past, and however
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many issues could be considered at public inquiries, two things are nevertheless the case—and I would suggest that he think about this before the next stage.
First, some very bad decisions have been made. I say this, I admit, with the benefit of hindsight in changed economic circumstances. Nevertheless, they were decisions which were catastrophically wrong. It is all very well for those who defend decisions like Rutland and Kielder to say that they are going to be jolly useful in the next century. There are 1,001 things which are going to be jolly useful in the next century and which cost millions and millions of pounds. That is no good reason for spending public money on them today or for having done so last year. I do not think that argument is good enough.
The second thing that I would put to the noble Lord (and I think it was reflected in the debate that we have had on the amendment) is that there is widespread concern about this among many different interests. One has only to read the farming press at the moment about the proposed reservoir near Dartmoor to see that it is a current concern and not one that arose in the past. These decisions are not being taken after sufficient consideration of the points which the amendment covers. What was said in the debate today supported that. I think it was the noble Earl, Lord De La Warr, who said that MAFF should be included. That is a good point—although it may be that neither the Minister of Agriculture nor the Secretary of State is the right one for the amendment to mention in view of what Lord Skelmersdale has said about the semi-judicial role which the Secretary of State plays following a public inquiry.
Perhaps the right thing—and I would have to think about this—would be to place a duty on an inspector at a public inquiry to give special attention to the particular points I mentioned. I would certainly wish to include—and my noble friend Lady White has emphasised that I should do so—agricultural land, for that is important in Wales. As the noble Earl, Lord Onslow, has said, it is Wales which has either suffered or benefited—and I think that the general consensus is that it has suffered—from a large number of reservoirs in the past.
If I could deal with one other point raised in the discussion, the noble Lord, Lord Stodart, said that if you took all these areas into account, there are not many places left where you could put a reservoir. I want to emphasise that the amendment does not stop a water authority or an inspector or the Secretary of State from finally deciding to put a reservoir in the middle of a site of special scientific interest which is capable of being grade I agricultural land in the middle of a national park. But they will have to take a great deal of trouble and care before reachig that decision. A great deal of extra trouble and care is what the amendment is asking for as opposed to putting it in some place where none of those other considerations applies. I think that that remains a good point and one that we should put in the Bill. I will take account of what the Government have said and the comments of other noble Lords and come back to this at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
6.10 p.m.
Lord Melchett Lord Melchett moved Amendment No. 18:
Before Clause 5, insert the following new clause:
("Duties of water authorities etc. with regard to nature conservation and the countryside.
. Section 22 of the Water Act 1973 as amended by section 48 of the Wildlife and Countryside Act 1981, is amended as follows:
At the end of subsection 4 there are inserted the following words:
"In the case of a proposed land drainage improvement scheme, the authority shall provide the Council, on request, with the detailed cost-benefit appraisal for that scheme.".").
The noble Lord said: We now come to a series of amendments which deals with the question of land drainage and improvement schemes. All of them raise separate points. I will try to introduce them briefly for I know that your Lordships have a good deal to get through. Amendment No. 18 deals with the question of cost-benefit appraisals and the fact that these are not available either to the general public or to other interested statutory or local government organisations concerned with particular land drainage schemes. These schemes are invariably withheld from public scrutiny and yet they contain the financial data by which the scheme is justified, and which it rests and on which expenditure of very large sums of public money rests as well. Every land drainage proposal of this sort is subjected to a cost benefit appraisal and these appraisals, as I have said, are regarded as secret, once they have been done, between the land drainage authority, the regional water authority or the internal drainage board, the Ministry of Agriculture and the Treasury.
This has been subject to very widespread concern by people of all parties and of many different interests; those whose primary concern is to contain the wasteful expenditure of public money; those whose primary concern is to prevent land drainage schemes which will damage the environment and show no real public benefit and those who show both interests or a range of interests in between.
The reason, under pressure, which the Ministry of Agriculture and the Government have given for this secrecy, to justify the withholding of this information which is gathered at public expense and which justifies the expenditure of public money, is that some of the information contained in these cost benefit appraisals is given by private individuals, on the whole farmers or landowners, who are, incidentally, potential beneficiaries of the schemes and, because this information is given in confidence, it cannot be released. The noble Earl, Lord Ferrers, said that when we were debating the Wildlife and Countryside Bill in November 1981 and it has been repeated more recently in another place. I shall come back to that in a minute.
There is widespread concern not just because secrecy in principle is wrong but it is being used to hide a number of fundamental flaws in the methodology of cost benefit appraisal, which means that, while a typical scheme will be presented as achieving more than the required test rate of discount, which is 5 per cent., more often the true rate of discount or return will be around 2 or 3 per cent. or even less.
Very briefly, there are a number of ways in which this can be achieved in drawing up a cost benefit appraisal. First, the financial benefits are assessed on the value of increased agricultural production, but the calculations exaggerate the economic gain estimation, because no allowance is made for the fact that the prices of many farm products are themselves subsidised by the taxpayer. In other words, the subsidised price of extra production is taken as wholly of benefit under the scheme, whereas, in fact, part of that price will, not always but very frequently, contain a small or even a very large element of public subsidy. That is therefore a cost to the nation not a benefit. Secondly, figures on the rate of return are distorted because forecasts of the realisation, in other words the take-up of agricultural improvement and increased production under schemes, are over-optimistic.
Thirdly, products subject to producer quotas—for example, potatoes and sugar beet—are treated in the cost benefit appraisal as if they were quota-free. In other words, it wrongly is assumed that an unlimited extra acreage of such crops can be grown once a land drainage scheme has been completed, even though there is a quota on that acreage, let us say, of sugar beet, which is a crop I know myself, and it is impossible for the farmer to grow any more of the crop at the rate of return which would normally be available.
Fourthly, projected yields used in cost benefit analysis are those which are theoretically attainable and they are not, as far as I know, ever based on actual yields obtained in the area where the scheme will take effect.
I would add a final point which has been put to me by someone who has been involved in drawing up such cost benefit appraisals, and that is that it is an extremely simple matter to make sure that the rate of return comes out at the magic 5 per cent. or more. All that is needed, if the rate of return looks a bit on the low side, is to put into the scheme an extra field of some crop which is particularly high yielding. Celery is apparently the Ministry of Agriculture's answer to everybody's problem in cost benefit appraisal. The yields are enormous. In any scheme which is showing less than a 5 per cent. rate of return, you bung in a field of celery and all your problems are solved. As I say, that was said to me by somebody who has been involved in the process. Nevertheless, the feeling that these schemes are widely and wrongly being drawn up to justify public expenditure must be met. The fact that they are so assiduously kept secret raises very widespread and legitimate concern.
It is my view that disclosure of cost benefit appraisals should be the norm—public disclosure to everybody. The amendment I put forward is a great deal more limited than that. At the moment, even bodies which are governed by the Official Secrets Act, which are quite clearly capable of honouring confidentiality, are not allowed to see a cost benefit appraisal. There is a case in point at the moment over a scheme in Norfolk which affects local authorities, the Nature Conservancy Council, a national park authority, the Broads Authority and the Norfolk County Council. Those organisations have all, as I understand it, been told that they may not see the cost benefit appraisal on the Yare barrage scheme—a scheme

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which will involve considerable expenditure by ratepayers in the area, by the Ministry of Agriculture and others—because the water authority's money does not come from the water authority but from the ratepayers, the Government or a levy put on local authority rates. Yet the people who may be raising the money for the water authority—the local authority—are not allowed to see the cost benefit appraisal to justify the expenditure. That cannot be right.
As I say, the one argument, the first line of defence as it were, that the Government have on this is to say, "Well, the cost benefit appraisals contain confidential information". The Parliamentary Secretary at the Ministry of Agriculture, Mrs. Fenner, said in another place on 17th February:
"Cost-benefit appraisals for land drainage improvement schemes are compiled from information obtained from individuals on a confidential basis and it would be a breach of confidence to make this information public". [Official Report, Commons, 17/2/83; col. 461.]
My amendment avoids that problem by allowing the information to be made available only in very specific cases and to an organisation whose staff are themselves covered by the Official Secrets Act and no more or less likely to leak the confidential personal information given than members of the staff of the regional water authority, the Ministry of Agriculture or the Treasury.
There is a second quite simple answer to this; and that is simply to aggregate the information. There is no need, in publishing a report or providing a cost-benefit analysis to another party, for the information to be indentified by farm, by landowner or by field. It is perfectly possible to provide a summary of the cropping pattern that is expected after the land drainage proposal is complete, and the extra income which is likely to be produced by that cropping pattern. That argument seems to me a non-starter, even if my amendment went much wider. As I say, it does not arise in this amendment.
The next argument used by the Government—and this is at column 462 on 17th February—is that cost-benefit appraisals are not the only thing taken into account. One might be able to aggregate the information, but many other things are taken into account and, therefore, "We do not need to bother to see these". That seems to me to be way behind the last line of defence. If the thing is not important, why bother to produce it? If it is not important, why do the Treasury make it a test of whether such a scheme can go ahead or not? If it is not important why bother about letting people see it? There really is no argument at all. It is an argument of desperation. I therefore hope that the noble Lord will not be driven to use it or the argument about confidentiality tonight and that he will accept my amendment. I beg to move.
The Earl of Onslow: I want to support the amendment to which I have put my name, which I suppose is not so surprising. I wish to say two things about it. First, this country is totally obsessed with secrecy in Government and it does not really seem to matter whether it is noble Lords opposite who are advising the Queen or my noble friends on this side in their advice to Her Majesty. It seems that we have this
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obsession with secrecy which, as it is taxpayers' money, is the wrong way round.
Secondly, regarding confidentiality, if I am going to be the beneficiary of a drainage scheme, as a farmer, I do not see that I have anything to be ashamed of and I cannot really see that it is very confidential. If it were a case of industrial confidentiality, where you are seeking a market for something new and you want to hide your marketing strategy, I could understand that. But because of the method of agricultural marketing and support systems, I would think that the fact that my field is gong to increase its yield from two tonnes to three tonnes of wheat per acre, for the sake of argument, is not something that I particularly want to hide from my fellow farmers, from the taxpayer, from the land drainage authorities or anybody. I do not see that there is anything to be confidential about.
Furthermore, it would seem to me that this is a perfectly good, sound, Thatcherite argument. I must say that I never thought I would see the noble Lord, Lord Melchett, producing Thatcherite arguments, and it gives me a certain amount of pleasure to watch him. But if it is a question of public scrutiny of these figures and more accountability for them ending up by showing that some land drainage schemes are not worthwhile, then public money is going to be saved and we can then spend it on supporting some of the dotty things the Greater London Council spends money on or on something else. But at least we would know where the money was going, and that seems to me a very important, sound, Thatcherite argument. I am sure that is something which my noble friend, who is anxious for promotion, will follow with the greatest ease.
6.22 p.m.
Lord Skelmersdale: Perhaps on this amendment particularly I can produce yet another Thatcherite argument for not accepting it. I would refer the Committee to the actual wording of the amendment:
"In the case of a proposed land drainage improvement scheme, the authority shall provide the Council, on request, with the detailed cost-benefit appraisal for that scheme.".
What on earth do the noble Lord, Lord Melchett, or my noble friend Lord Onslow think the Nature Conservancy Council are going to do with this? Are they suggesting in all seriousness that this is going to produce better conservation of a particular piece of land? Are they suggesting that the Nature Conservancy Council will be diverted in any way from the strict scientific criteria which Parliament has imposed upon them for deciding such things? I simply cannot believe that. But even if I am wrong on that, as the noble Lord, Lord Melchett, said at length, I have other reasons why I cannot accept the amendment. As part of their general duties to further conservation, the drainage authorities are already required to consult the Nature Conservancy Council before carrying out works in any area of land which has been notified to them by the council as being of special interest by virtue of its flora, fauna and geological or physiographical features.
Over and above this, land drainage matters are currently subject to a review by an inter-departmental committee and Ministers are intending to publish a discussion paper in due course. I suggest therefore that it would be inappropriate to impose on water authorities

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any further responsibilities in relation to land drainage prior to the publication of this paper, when all the interests concerned will have the opportunity to comment. This amendment would require the disclosure of a cost-benefit assessment for any proposed land drainage improvement scheme when this is requested by the Nature Conservancy Council.
Also these assessments are compiled from information obtained on a confidential basis—the noble Lord has already attacked my argument but perhaps I may give it in a slightly different way from the standpoint from which he attacked it. It would therefore be a breach of confidence to disclose this information either to individuals or public bodies, whoever they may be, and it would be likely to hamper effective scrutiny by reducing the willingness of the individuals concerned to co-operate.
The cost-benefit assessment is only one of the factors taken into account in deciding whether to approve a scheme for grant. It is no more than a basic test of economic viability which every scheme must pass. Financially unquantifiable effects such as damage to wildlife, the risk of people drowning and the advantages to public health are also taken into account. Disclosure of the assessment would therefore serve little real purpose, as it would not provide the whole picture.
This amendment obviously revolves around exactly what are cost-benefit appraisals, and, in my opinion, they are no more than these basic tests, as I have said. The Minister of Agriculture, in considering whether to offer grants, and hence to use these, has also to take account of the duty imposed on him and on water authorities and internal drainage boards by Section 22 of the Water Act 1973, as amended by Section 48 of the Wildlife and Countryside Act, to further the interests of conservation and to lessen the risk to the public.
The objections to disclosure are twofold. First, the assessment of benefits to agricultural areas is based largely on returns to farmers from the increased production made possible by the improved drainage. Information on their future business plans is given by farmers in confidence and it would really not be proper for it to be disclosed, even on a restricted basis. Secondly—
Lord Melchett: Before the noble Lord goes on, would he deal with the suggestion I made that the cost-benefit appraisal would be just as useful if the information were aggregated? In other words, if particular copies of plans were not identified with particular land-holdings but just given as a total acreage summary of whatever it happened to be in the appraisal, that would completely get over the problem that he has.
Lord Skelmersdale: I am afraid it would not get over my basic hurdle of what the Nature Conservancy Council is to do with this information once it has it. Considerable delays could well be caused by opponents of sensitive schemes requiring detailed discussion of what is, as I have said several times in my reply to this short debate, no more than a basic test of economic viability. On all these counts, I would ask the noble Lord to reconsider this amendment.
Lord Beaumont of Whitley: It really is an appalling situation when we come across these objections to having the kind of information that the general public needs and that Members of your Lordships' House need when it comes to putting into operation any of these particular schemes. This seems to be—I will not say one of the last havens, but one of the most obvious and dreadful havens of secrecy for no known reason. It seems to me that the noble Earl, Lord Onslow, and the noble Lord, Lord Melchett, between them have thoroughly demolished the case that there is any real need for this confidentiality. Admittedly, once the thing has been entered into on a confidential basis the authorities do find themselves in a difficult position, but of course it ought never to have been entered into on such a confidential basis. Landowners and farmers are the trustees of the land for the community—a concept which I think is very well taken and indeed accepted widely by people of all political parties. As the noble Earl, Lord Onslow, said, there is very little in what I might call the industrial details—the economic details—of the agricultural plans which by being made public is going suddenly to mean great disaster, or that kind of thing, for the individual farmer.
It is becoming increasingly impossible for the public as a whole, for Members of Parliament and for everyone who has to deal with these drainage plans—some of which, as the noble Lord, Lord Melchett, said, are being pushed through with gravely inflated ideas as to the benefits that are going to flow from them. One is before your Lordships' House at the moment—the Severn-Trent scheme, with which I have something to do—and I do think it is intolerable all round that we should not have publication of these details.
What is the Nature Conservancy Council to do with the information that it gets? That is what the noble Lord, Lord Skelmersdale, asked. The answer is to publish it. It may not be the right answer. This may not be drafted exactly right. It may be that the Nature Conservancy Council should be first. But that we should all have it is really a reform that is very necessary.
The Earl of Onslow: The whole point of the amendment is that the Nature Conservancy Council do not intend to get hold of the information by the back door and put it on the front page of the Muddlecombe-under-Slosh Advertiser. They will use it for their own purposes, and when the noble Lord has finished I will suggest a very sound and money-saving use for that information.
Lord Beaumont of Whitley: I shall look forward to hearing that, and I have no doubt that that can be so. But what I am saying is not necessarily that just the amendment by itself is something which I support. I do not have my name to it, but I think that the idea behind it is a reform which is absolutely necessary, and which we in the legislature must do something about as soon as possible. This is a prime way of tackling this matter, and I hope that the Government will have another thought about it before the next stage.
Lord Stanley of Alderley: I am getting in a terrible muddle now. As I read the amendment, it is only the

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council which will get this cost benefit analysis, whereas the noble Lord, Lord Beaumont, wants to publish it, and I get the feeling that my noble kinsman Lord Onslow also wants to have public government. But this amendment does not say that; it refers to just the council. I hope that the noble Lord, Lord Melchett, agrees that I have interpreted it correctly—
Lord Melchett: I am grateful to the noble Lord for giving way, and he has interpreted it correctly. What I certainly feel—and my view is clearly shared by the rest of your Lordships—is that it would be much better if this information were widely disseminated. But the noble Lord will appreciate that, because of the usual way of drafting amendments in your Lordships' House, I have tried to be modest and to make as small a change as I could envisage, in the hope of getting, as I am sure I will, the noble Lord's wholehearted support.
Lord Stanley of Alderley: I thank the noble Lord, Lord Melchett. I always try to understand what he is thinking, as opposed to what he is writing. But I can only understand what he has written in the amendment, so we are on the same net. If I may continue, if that is the case, the people who will get the cost benefit analysis are the NCC and they will look at it. My question—and I am going to answer my noble friend Lord Skelmersdale—is: what will they do with it? Here we are giving a cost benefit analysis to an organisation—I am sure that I shall now get into trouble—which is greatly over-pressurised. Many are great experts on birds, butterflies and bees, but one thing that they are not experts on is human nature and the whole set-up in agriculture. Until they get to that stage—and they will, given 20 years like the Ministry of Agriculture, who took that time before they were confident—there is no point in giving them this information. Their job is to advise the Minister—which they do—on the scientific side of a particular development; not to have the final veto.
Baroness Seear: Would the noble Lord explain why knowing about bees prevents the NCC from knowing about human beings?
Lord Stanley of Alderley: I can see that the noble Baroness was at school much more recently than I was. Of course, it does not prevent them. But what I am saying is that they are trained in that way and they are not trained in agriculture as such. Meet any of them and they will be the first people to admit that. They are not given an overall training.
My first objection—and I shall not keep your Lordships waiting any longer—is that by this amendment you are putting a quango, like the NCC, above the Minister. I have reservations about Ministers—I am sure that all of your Lordships do—but to elevate the NCC into a position above an elected Minister of the Crown seems to me a crazy thing to do.
The Earl of Onslow: I promised your Lordships another session on this wretched thing, but I shall try to be as brief as I can, because we want to get on and we have been 25 minutes on this amendment. The
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Nature Conservancy Council, who have a duty to enter into management agreements where sites of special scientific interest are concerned, have to know about farming, cost-benefit analyses and human beings. If they see a cost-benefit analysis which turns out to be faulty, they will offer less of the taxpayers' money on a management agreement.
I do not think any of your Lordships would recommend that a farmer should be compensated by more than the amount that we, in Parliament, have said he should be paid under the Wildlife and Countryside Act. We do not want to give him extra money. We have enacted that the Nature Conservancy Council shall give him fair and reasonable compensation for any notional loss of profit, in the event of the NCC objecting to an improvement scheme on grounds of conservation. If the council have the cost-benefit analysis they can then argue that it is wrong and they will not have to give so much of the taxpayers' money to a farmer in the event of a management agreement. I should have thought that that was something which your Lordships would support on grounds of both equity and fiscal prudence.
Lord Melchett: Some calculations which I have seen suggest that farmers contribute less than 10 per cent. to the cost of land drainage schemes from their drainage rates. All the other 90 per cent. comes from the public purse generally. It seems to me, therefore, that in this case there could be some argument for elevating somebody or other above the Ministry of Agriculture, before such decisions are taken, but that is not what this amendment does. If I may say so to the noble Lord, Lord Stanley, it is going over the top a little to suggest that simply providing some body with some information, which is available to the Minister anyhow, and on which the Minister makes the final decision unencumbered by anybody else, is to put them above the Minister. That is patently not the case. The NCC can only give advice and make representations about something which, at the moment, they cannot even see.
The noble Lord, Lord Skelmersdale—as I am afraid I thought he would—relied on the two tired old defences of this monstrous secrecy. First, he said that this information is given in confidence by individuals, and therefore should not be disclosed. He did not adapt his defence to take account of the wording of the amendment, which he might have had the courtesy to do, because the amendment suggests only that the information goes to a statutory body, the NCC, and it does not seem to me that the defence is useful in this situation. But when I pressed him—and I shall have to look at Hansard tomorrow—and suggested that, anyhow, the information could be lumped together, so that individuals' land and cropping programmes could not be identified, the noble Lord said that that would get over the problem. So at least that defence can be forgotten.
The noble Lord said something extremely important. He said that the cost-benefit analysis was the basic test of economic viability which every scheme must pass. He said that in a way which was attempting to say that this is not at all important; that there are other things after that which we consider. But a basic test which every scheme must pass is of

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fundamental importance. To use that form of words to suggest that this is not at all important, and that we should not be worrying about it, is ridiculous. If the noble Lord looks at what he said, he will see that he was contradicting himself as he spoke. This is of fundamental importance. No scheme can proceed without overcoming the basic test of viability, and that is why so much concern is expressed about it. It may not provide the whole picture, but the picture does not even get shown until it gets over that test, and that is why it is important.
Finally, the noble Lord asked: what are the NCC going to do with this? The noble Lord, Lord Stanley, said that they will look at it with a very inexpert eye. But, as the noble Earl, Lord Onslow, pointed out, the NCC are looking at much more detailed confidential information—such as farm management accounts over three years and the whole detail of the accounts; not just the proposed cropping on certain fields, but every item of expenditure on a farm—in order to negotiate management agreements under the Wildlife and Countryside Act. So the NCC are bound to develop expertise in this field. In any event, in public inquiries where the cost-benefit analysis has been made available, particularly at Amberley Wildbrooks, it is clear that there are consultants who are available to the NCC, and who can look at these matters and advise the NCC if they do not have their own expertise.
The noble Lord, Lord Skelmersdale, made the extraordinary suggestion that it did not matter whether or not the NCC saw this: that they are able to express their own view about the scheme and that is all that matters. It is rather like saying that someone can be adequately defended in court without ever hearing the prosecution case. "So long as a defence can be put up, it does not matter what the other chap says", is what the noble Lord is asking us to believe. That cannot be acceptable to your Lordships' Committee and I hope noble Lords will accept the amendment.
6.41 p.m.
Lord Skelmersdale: Before the noble Lord decides what to do with this amendment, he has not commented very carefully upon my statement that the land drainage matters are currently subject to review by the inter-departmental committee, upon which Ministers intend shortly to publish a discussion paper. Will not the noble Lord therefore agree with me that it will be inappropriate to write this into the Bill, either at the Committee stage or at the next stage, before the matter can be considered by that review committee and a discussion paper published upon it?
The Earl of Onslow: I did hear that point and I believe it to be extremely important. I apologise to your Lordships for not having commented upon it. If we can get the satisfactory land drainage plan about which the noble Lord has spoken and if there is time to introduce legislation as a result, I would not wish to push this amendment into the Bill. That is not to say I do not believe that the arguments put forward by the noble Lord, Lord Melchett, and those of us who feel that there is a much stronger case to be made for much more careful scrutiny of land drainage schemes, are
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valid. If, however, an inquiry is to take place, that would be a very good reason for not trying to push the amendment into the Bill—provided always that anything which comes out of the review results, if possible, in legislation.
Baroness Fisher of Rednal: I wonder if the noble Lord could say whether the land drainage findings will be published and made available before Report stage. Otherwise my noble friend will be in some difficulty, because at a later date there will have to be amending legislation, which for Back-Benchers is almost an impossibility. If therefore the noble Lord could say that at Report stage the Government will be able to say how the land drainage committees might be reorganised, it might help to solve the problem.
Lord Skelmersdale: The review began at the end of last year and it is impossible for me to be definitive as to when the discussion paper might be published. The review is not yet finished. The Report stage is due to take place I believe at about the beginning of April. I very much doubt whether the discussion paper will have been published by then. If, however, the Committee is beginning to be swayed by this part of my argument, the normal way of conducting these affairs would be to allow the inter-departmental committee to report, to have discussions on the document, to have proposals submitted to my right honourable friend the Minister of Agriculture and subsequently to legislate, if it is agreed so to do. That, I should have thought, would be the reasonable procedure to follow in this case.
Lord Melchett: I, too, apologise to the noble Lord for not dealing with this point when I spoke earlier. It is a serious one, although promised consultation documents arising from inter-departmental reviews which are not yet completed are fairly nebulous creatures at the best of times. In a year when an election is due and the Government are going to change, they become even more nebulous than in ordinary circumstances. Nevertheless, I take the noble Lord's point. If he is putting it forward as a serious reason, could he give us a little more information about why amendments to the Bill on land drainage matters should not be made at this stage by the Committee? It would be helpful, for example, if the noble Lord could say that the inter-departmental committee or review group are looking at the question of cost-benefit appraisals, that they are aware of the concern and that they have looked at the three or four points which I mentioned when I introduced the amendment about the way in which cost-benefit appraisals can be modified to meet particular rates of return.
Perhaps the noble Lord could say whether the Treasury are represented on the committee so that we know that a fairly keen eye is looking at this matter. If it should be a Ministry of Agriculture-Department of the Environment inter-departmental committee of some sort, it might not have quite the same sharpness of financial scrutiny applied to it as would otherwise be the case, although I accept that both departments will be governed by Ministers in the attitude which they take regarding public expenditure. It would be even more helpful—I hope the noble Lord does not feel that

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I am pressing him too far, but it makes a great deal of difference as to whether or not the argument he is putting forward is relevant to the amendment—if he could say that he expects the consultation document which is to be issued to mention cost-benefit appraisals and to be made available either to the general public or at least to interested statutory bodies like the NCC and local authorities.
Lord McIntosh of Haringey: Before the noble Lord answers those questions, I wonder whether he would undertake to give consideration to the point which seems to arise from my noble friend's amendment and the Minister's reply: that many other parts of the Bill could be thought to prejudge the decision of the interdepartmental committee. I wonder therefore whether the noble Lord would undertake to go through the Bill with the usual fine toothcomb and come back to the House on Report and indicate what other parts of the Bill would be affected in this way and whether or not they ought to be withdrawn as well.
Lord Skelmersdale: I thought that I was going to start by being grateful to the noble Lord, Lord McIntosh of Haringey, for his acute observations, because I was going to make a rather different point: that Amendments Nos. 19 to 21 also have the same defence, although there are other specific defences which I shall make to those amendments, if they are moved. It is rather difficult to stand here and answer hypothetical questions from the noble Lord, Lord Melchett, about what may or may not be in a review which is being conducted at the moment. To suggest that the committee will have a sharp edge only if it has Treasury approval and has Treasury representatives upon it is going a little far. So often have I heard the noble Lord use exactly the opposite argument. However, I can assure him that even if they were not going to do so before today's debate, the interdepartmental committee will most certainly look at every word which has been said in this short debate on the subject of cost-benefit appraisals. What I cannot do is to prejudice the outcome of their investigation.
Lord Melchett: I do not want to prolong unnecessarily this debate, but subsequent amendments are to some extent affected by it and to deal with the matter now may speed up the process in the long run. Therefore, I should be grateful if the noble Lord could answer one other point, which troubles me at least. I do not know whether it troubles anyone else. If an inter-departmental committee is to take a disinterested look at the issue of cost-benefit appraisals and whether they should be published, why are the Government fighting tooth and nail to defend the existing practice while the committee is sitting? If they read the debate and what the noble Lord has said on behalf of the Government, will that not prejudice the officials who are conducting the review? The noble Lord said, first, that it is ridiculous to give it to the NCC, secondly, that these documents are full of confidential information and cannot be released, and, thirdly, that they are not important enough to justify release. The noble Lord, speaking on behalf of the Government, has tried in every way to suggest that there is absolutely no case whatever for making them
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public while an inter-departmental committee is meant to be looking at this in, I hope, an even-handed way.
Lord Skelmersdale: Perhaps I do not have quite the same respect for Governments as the noble Lord, Lord Melchett, but I cannot see any good reason whatever why the inter-departmental committee should not examine my words just as they might examine his words or those of my noble friend Lord Onslow. With regard to his general point about the interdepartmental committee, I did not say it was a committee looking at cost-benefit appraisals. What I said was that the committee was looking at the whole field of land drainage and I would now make sure that it also looked at the cost-benefit appraisals.
The Earl of Onslow: I should like to thank my noble friend for that answer. If we could all look at the consultative paper when it comes out, it would seem to me that after the next election—when presumably my noble friend will be sitting in exactly the same place—this will be a very suitable Bill which could start in your Lordships' House. There seems to be a certain amount of knowledge on the subject of land drainage. I think it would be seriously and constructively criticised by Members on both sides. I thank the noble Lord, Lord Melchett, for putting down the amendment in both our names and for a very useful debate. I personally am satisfied with my noble friend's undertaking on the question of the interdepartmental report, the fact that it will read what has been said and will produce a consultative White Paper, and if legislation is needed it will flow from that consultative document.
Lord Melchett: I think that is a sensible course in the circumstances. I still have one worry and it may be the noble Lord can clear it up if I put it more precisely. He said that the people conducting the review will read his words as well as mine. He represents the Government; I do not. They are likely to place a great deal more weight on his words; indeed, he has simply repeated what Ministers in other places and in your Lordships' House have said on numerous occasions in the past. It would be useful to have an assurance that although the Government have defended the existing practice, as is the Government's wont, nevertheless they will approach anything that comes from the review with a completely open mind and will be prepared to consider recommendations, if the review makes them, for cost-benefit appraisals to be made more widely available. If the noble Lord can say yes to that, I shall withdraw the amendment.
Lord Skelmersdale: I am not sure whether it will be the review or the subsequent consultation that will bring up the noble Lord's points, but I am convinced that by whatever method they will be looked at both objectively and fairly.
Lord Melchett: I am grateful to the noble Lord. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Melchett Lord Melchett moved Amendment No. 19:
Before Clause 5, insert the following new clause:
("Power to hold inquiries under Land Drainage Act 1976.
The Land Drainage Act 1976 is amended in section 96 by the deletion of subsection (1) and by the substitution of a new subsection as follows:
"(1) The Secretary of State for the Environment or the Minister may cause to be held such inquiries as they consider necessary or desirable for the purposes of this Act".").
The noble Lord said: This amendment also affects questions of land drainage, and in fact more directly because it would amend the Land Drainage Act 1976. The amendment is very simple. It simply extends the power to call a public inquiry, which at the moment in land drainage matters rests solely with the Minister for Agriculture, Fisheries and Food under Section 96 of the Land Drainage Act, to the Secretary of State for the Environment, so that either the Minister or the Secretary of State is empowered to call a public inquiry about a land drainage scheme, should they wish to.
We have discussed earlier this afternoon the merits or otherwise of public inquiries, and I think that the noble Lord, Lord Skelmersdale, in suggesting that they provided sufficient safeguards so far as conservation and water supplies and loss of agricultural land are concerned, said that at public inquiries all the issues can be considered in the open and the various points assessed. I agree with that; it was a good point on that amendment, and it was one of the reasons why I withdrew it. What this amendment is trying to do is to make sure that wherever there is a good case for a public inquiry, whether on agricultural or environmental grounds, the relevant Minister can call for one and derive the benefits which flow from public inquiries which the noble Lord himself mentioned earlier.
The concern which lies behind this is the feeling that the Ministry of Agriculture have taken at least a policy decision—it may be one that can be subsequently overturned by the inter-departmental committee or not—that public inquiries into land drainage issues are unnecessary and should be avoided. There has been only one public inquiry into a land drainage proposal since 1976, which was the one where the Southern Water Authority had a drainage scheme for Amberley Wildbrooks, which I mentioned, which was held in March 1978. In that case the inspector found against the proposals to conduct the drainage and the recommendation was endorsed by the Minister.
After that one failure to get a land drainage scheme through a public inquiry, there has not been one subsequently and Halvergate Marshes and the proposal for a land drainage scheme there was the subject of a long, bitter, acrimonious dispute which stretched over months and months, and must have become as wearisome to the Ministers involved in various departments as I am sure it was to the farmers whose land was affected; and it certainly was to those of us trying to take an intelligent interest in the progress being made from a conservation or landscape point of view. It seemed to me that at the end of the day it would have been much simpler, quicker and cheaper if we had had a public inquiry at the outset and the matter could have been determined by public debate one way or another.
It may be that the noble Lord will feel that this is
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covered by the inter-departmental review and the need for public inquiries may be something which falls within their terms of reference. If he can confirm that they are looking at this, that will be helpful, but I hope he will also agree with me on this occasion, so that the officials can read views which coincide rather than disagree, that it would be a useful power for the Secretary of State to have. I beg to move.
Lord Skelmersdale: I must be in an unduly cynical frame of mind this evening. I hope the noble Lord will accept that, even if other parties do not, the Government speak with one voice at any one time. The decision to hold a public inquiry is made by a Minister on behalf of the entire Government. It is very difficult for me to see the practical advantage in increasing the number of Ministers involved. Government policy in regard to potential conflicts between the interests concerned with or likely to be affected by a land drainage scheme is to encourage maximum consultation between the different interests in order to secure a solution acceptable to all.
A public inquiry can be unhelpful to all the interests involved and is only considered if reconciliation proves difficult. The Minister takes all relevant factors into account in deciding whether to hold such a public inquiry, which in this case he is empowered to do under Section 96 of the Land Drainage Act 1976. He naturally consults his ministerial colleagues if necessary. There is nothing to be gained by extending the power in the manner proposed. However, I am most grateful to the noble Lord for raising this point. As we now know at great length, we have an interdepartmental committee studying this and related issues, and I am sure that they will discuss this aspect as well.
Lord Stanely of Alderley: Before the noble Lord, Lord Melchett, replies, I think I am correct—I am sure he will correct me if I am not—in saying that over Halvergate, which he mentioned, the Minister of Agriculture and the Secretary of State did consult together. The noble Lord nods, so I think again we are on the same net. If that is done, this amendment would have no relevance.
Lord Melchett: It would have no relevance if it was invariably the case that a Minister of Agriculture who received a request from the Secretary of State to hold an inquiry simply did it there and then, I agree; but anyone who has been involved either directly in Government or indirectly through reports in newspapers with rows between different Government departments and Ministers at various times knows perfectly well that life is not like that.
In any event, I am afraid that, while there was consultation on Halvergate, that was an area where a great deal of public attention was being focused on a large-scale scheme. There are other examples, and Sedgemoor is one, where there have been a number of land drainage schemes affecting a large area—18 capital works since 1977 which have been proposed for the area—all of which have been approved and grant-aided by the Minister of Agriculture. I do not know whether every one has been approved after consultation between the Minister and the Secretary of

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State, but I very much doubt it. This is despite causing an extremely damaging impact on the wildlife of that area. There is a great deal of concern in the public mind about the impartiality with which the Ministry of Agriculture would look at such proposals and deem them worthy of public scrutiny.
The noble Lord said that the interdepartmental committee will look at this. I hope it can so redefine the criteria under which land drainage schemes are proposed in the first place that these conflicts will not arise and will not need to go to any sort of ministerial or public inquiry, because the schemes will be put forward only where they are really justified and in the general public interest. That would solve a great many problems and reduce public expenditure and the number of schemes that are likely to be put forward, if not to zero then very close to it. However, in the light of what the noble Lord said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7 p.m.
Lord Melchett Lord Melchett moved Amendment No. 20:
Before Clause 5, insert the following new clause:
("Wildlife and landscape representatives on regional land drainage committees.
. Section 2 of the Land Drainage Act 1976 is amended as follows:
After subsection (1) (c) insert:
"(d) 2 members appointed by the Secretary of State being persons with a special knowledge of wildlife or landscape conservation.".").
The noble Lord said: Once again we are on the Land Drainage Act, and this amendment would require the Secretary of State to appoint two people to the regional land drainage committees who have a special knowledge of wildlife or landscape conservation. It seems to me that this amendment raises a point much more directly concerned with changes made in the Bill. For that reason I do not think that it will be satisfactory for the noble Lord to say that the interdepartmental committee will consider this. In this Bill we are making major changes to the composition of regional water authorities. We are greatly reducing the number of elected representatives on the authorities and thereby greatly reducing the opportunities for public access to members of the authorities.
There is no doubt that access to a very large number of people—I agree, incidentally, that it is sometimes far too large on occasion—has been very useful in allowing people to question particular land drainage schemes which are of concern to them. It seems to me that with smaller, more secret authorities—if the noble Lord does not feel that is being unfair, but I think it is inevitable—which will be in charge in future it will be much more difficult for interested organisations and members of the public to put pressure via the authority on to their regional land drainage committees.
Given the changing composition of the regional water authority, it appears to me that the regional land drainage committees are likely, if anything, to have rather more power over land drainage matters than they do already. I think it is generally accepted that they are extremely influential, if not the determining factor, in making decisions on land drainage proposals. These committees vary in size between 13
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and 20 members at the moment, and I hope that the suggestion that two members should be appointed with the specialist knowledge that I have mentioned will not seem unduly onerous to the noble Lord, Lord Stanley, or to anyone else who might be concerned about a very small minority voice being heard.
I think it would be overdoing it to go into any detail about the extent of the interests which wildlife and landscape conservation bodies and members of the public interested in this subject have in land drainage matters. I think that is generally accepted on all sides of the Committee. What we are discussing is the best mechanism for seeing that that interest is taken into account by the regional water authorities—we will come to that later in, I think, my noble friend's Amendment No. 34—and, in the case of this amendment, by the regional land drainage committees. I beg to move.
Lord Skelmersdale: I am afraid that yet again I must disagree with the noble Lord, Lord Melchett, on the subject of this amendment. He must, I feel, be prepared to distinguish between two different things: one is the membership of the water authorities themselves and the second is the membership of the regional land drainage committees. They are two completely separate entities.
Incidentally, the noble Lord goaded me by suggesting that our attitude to water authorities will now be a lot more secretive. My answer, of course, is that we will be a lot less secretive in that we are setting up not only consumer consultative committees but also recreation and conservation committees. Subject to the will of the Committee we have now reconsidered the position of the local ombudsman on water authorities.
Water authorities and other drainage bodies, like the Minister, are already required to further the interests of conservation and they carry out extensive consultations with conservation and wildlife interests. The Minister is always concerned to take into account all relevant factors when assessing land drainage schemes for grant aid and seeks to ensure that all concerned have made their views known on any particular scheme and have had those views taken into account.
The amendment asks specifically for two members appointed by the Secretary of State on the regional land drainage committees to be persons with a special knowledge of wildlife and landscape conservation. In my view, this is not necessarily due to the general statute that the regional land drainage committees have to take account of conservation and wildlife interests, as I have said. Over and above that, I agree that it is a separate point, but this is also something which would come within the remit of the interdepartmental committee on land drainage.
Lord Winstanley: Before the noble Lord sits down, can he explain further the point he made about the noble Lord, Lord Melchett, confusing the new water authorites with the land drainage committees? It seems to me that the amendment is perfectly clear. It asks for these two people with special knowledge to be on the regional land drainage committee. I am wondering if by his words the noble Lord was

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suggesting that we would have the remotest hope of getting two members with this specialised knowledge put on to the water authorities. I should have thought that that was a very vain hope indeed, but it appeared to be the suggestion behind the noble Lord's comment on what the noble Lord, Lord Melchett, said.
Lord Skelmersdale: Perhaps we should not preempt the discussion on a subsequent amendment. What I meant was that the noble Lord announced his remarks by saying that we now come rather closer to the main purport of the Bill, or words to that effect. I was merely pointing out that I disagreed slightly with him.
Baroness White: I hope that the noble Lord will nevertheless think again about this matter, because those of us who have some experience of environmental questions in certain parts of the country are not always convinced that the land drainage authorities take full account of their obligations under Section 48 of the Wildlife and Countryside Act. This is partly because of the composition of these particular bodies. It is an historical anomaly in many ways that in their relationship with the regional water authorities, as such, the water authorities really have no jurisdiction over what the land drainage committee does unless its activities in some way impinge upon the direct responsibilities of the water authority.
I know that that causes a good deal of concern to members of the water authority who happen to be interested in conservation, landscape or wildlife matters. I should have thought that to secure the representation on the drainage board of someone who had an interest in those questions would lead to a much more realistic discussion when they were taking their own decisions than can always be ensured as things are at the moment.
I do not want to delay the Committee, because I am quite sure that Members would like to resume and have their dinners. But this relationship between the water authorities and the land drainage boards is one which has caused considerable concern, and I am not at all surprised that my noble friend Lord Melchett has sought to make an amendment to the Bill.
Lord Stanley of Alderley: I want before my noble friend replies just to put the record straight, although the noble Baroness, Lady White, I am sure will not believe me. But many farmers, believe it or not, think that the drainage committees bend over backwards against their interests and in favour of the conservation interests. It is not just on the one side. We also feel sometimes that they lean over backwards the other way. The other point that I would make, which was made by my noble friend on the Front Bench, is that the drainage committees are duty bound by statute to do that and presumably, if they offend against that statute, they can be taken to task.
Lord Melchett: Before the noble Lord, Lord Skelmersdale, replies to my noble friend Lady White, may I just put another point to him? It is a question which arises out of what he and the noble Lord, Lord Stanley of Alderley, said. If it is simply enough to have
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a statutory duty to take account of a particular interest, why are there two members appointed by the Ministry of Agriculture on regional water authorities? Regional water authorities have statutory duties in regard to agriculture and fisheries, and yet agriculture and fisheries interests insist on a statutory obligation and upon the Minister appointing two people to those authorities. Really, it cannot be that people have it both ways.
Lord Howie of Troon: I wonder whether I may say just a very brief word here. As a civil engineer who has spent many years trying to build things, I have always found conservationists and people of that sort extremely tiresome. I say that with the kindest thought for my colleague, my noble friend Lord Melchett. But tiresome or not, they have a right to be heard and I grant them that entirely.
I wonder whether the noble Lord the Minister has thought of this: if he follows the course of action proposed by my noble friend Lord Melchett he will find that these tiresome people will be properly heard in the machinery and will therefore be relieved of that sense of injustice which very often permeates their thinking and makes them even more tiresome than they would otherwise be. I am not saying that we should take the bite out of their teeth. That is not what I am saying at all. But these people should be properly heard; they should be heard out in the open and should have removed from them any sense of injustice under which they may labour. Then honest civil engineers such as myself could get on with making the country much better than it would otherwise be.
Lord Skelmersdale: I take the point of the noble Lord, Lord Howie of Troon, that to him and his colleagues in the civil engineering field the conservationists are tiresome people, but without entering into an argument on the subject, perhaps he will accept that in the conservationists' eyes the boot is on the other foot.
Lord Howie of Troon: Not at all.
Lord Skelmersdale: Land drainage is one of the fundamental duties of the water authorities and conservtion is also a duty, but that is one, I am told, which is incidental to their functions. But I do very much take the point of the noble Baroness, Lady White, and I have absolutely no doubt that that will be considered at some stage during the consultation process to which we have already referred on numerous occasions.
Lord Melchett: I really have not been having much luck with the noble Lord today. I do not claim that that entitles me to any special privileges. But this is a simple amendment and it might even be one, if the noble Lord took it away and looked at it, which could be achieved by the Government giving an assurance or, after consultation with the water authorities, saying that when making appointments to regional land drainage committees those factors will be taken into account. It could be met without the need of an amendment. I really do think that it is a sensible point,

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for the reasons which my noble friends Lady White and Lord Howie of Troon and others have put forward.
I know that it must be very difficult if somebody has said, "Do not accept anything on land drainage; there is a committee sitting. That is all you need say". The noble Lord is more intelligent than that, I am sure, and will listen to the arguments put forward. I just wonder whether he might be prepared on this one to take it back, consider it and perhaps explore whether it is something on which the Government are prepared to give an undertaking that at least it will be taken into account when appointments are made by others to these committees. If he would do that, I think that it would meet some quite genuine concern which, after all, will possibly exist for a very long time. We do not know when the interdepartmental committee will report, let alone when the legislation that flows from it, if it ever does, will reach the statute book.
Lord Skelmersdale: With such a tutor as my noble friend Lord Bellwin sitting beside me on this Bench, most certainly I shall take every opportunity to reconsider both what I have said and what the noble Lord, Lord Melchett, and others have said during the course of this short debate. I shall certainly take it away and look at the whole thing, but I must in all fairness and honesty say that, as far as I can see at the moment, the prognosis is not particularly good.
Lord Melchett: I am grateful to the noble Lord the Minister for that. I think that it would be very helpful if he could do that and perhaps in particular look at the suggestion that, if there is this veto—I will not say from where—which says, "No legislation on land drainage", it is something where a few kind words and good intentions might go a long way towards solving the problem. That might help the noble Lord; it will certainly help me and others who are concerned about this. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.17 p.m.
Lord Melchett Lord Melchett moved Amendment No. 21:
Before Clause 5, insert the following new clause:
("Exemptions from drainage rates levied under Land Drainage Act 1976.
. After subsection (9) of section 68 of the Land Drainage Act 1976 (Differential drainage rates and exemptions: power to make orders), there shall be added the following subsections—

"(10) Where any hereditament comprises land which is the subject of a notification under subsection (3) of section 22 of the Water Act 1973 (duties with respect to nature conservation and amenity) and is managed as a nature reserve by the Nature Conservancy Council or other approved body, an internal drainage board shall not levy any owners' drainage rates in respect of that land.

(11) In subsection (10) "approved body" means any local authority under the meaning of section 270(1) of the Local Government Act 1972 or any body registered under the Charities Act 1960 which has as one of its principal objects the management of land for nature conservation purposes.".")

The noble Lord said: This is a point which I think that we should and can take fairly quickly. As it would affect nature conservation bodies and the amount of tax in the form of drainage rates that they pay, I should declare an interest as someone involved in the Royal Society for the Protection of Birds and other conservation
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bodies, although I think that that is the one among those with which I am associated which will be most beneficially affected if the amendment is accepted by the noble Lord.
Wetlands are extremely important for wildlife. Many of them in this country are owned by nature conservation bodies, in particular, as I say, the Royal Society for the Protection of Birds. In many cases, along with county naturalist trusts, it owns significant areas of wetland in the Ouse washes near where I live in Norfolk. The wetland is owned jointly by the Royal Society for the Protection of Birds, the Wildfowl Trust and the Cambridgeshire Naturalist Trust. That is a very good example. It is a huge area of wetland owned not entirely but very nearly exclusively by nature conservation interests.
The amendment will have the beneficial effect of directly assisting the owners of important nature reserves who are subject to land drainage charges. Only areas which are sites of special scientific interest and are managed as nature reserves would benefit, as these are, by their designation as SSSIs, recognised as being of national importance. The amendment would remove the owner's drainage charge which is levied to meet part of the cost of improvement works, the rest being covered by the Ministry of Agriculture. If that were removed, conservation bodies would no longer be asked to contribute financially to works which are inevitably damaging to the wildlife interests of the land that they own.
What is happening under the existing regime is that conservation organisations which own land as land owners are being asked to pay for work which has the effect of destroying the purpose for which they own the land. It is like a farmer who owns land which is about to be flooded for a reservoir being made to pay in large part for the reservoir at the same time. However keen anyone may be on reservoir building, and however unsympathetic to farmers for that matter, all of us would feel that that was going a bit too far.
The amendment would not reduce or introduce any exemption from the occupier's drainage rate which goes towards the cost of maintenance works. In other words, maintenance works will continue to be necessary whether or not the land is owned and managed as a nature reserve. The exemption is sought from the owner's drainage charge which covers the cost of improvement—that is, capital works. It goes without saying that nature reserves do not make a profit; and, in fact, to manage them properly requires a great deal of money being spent on them which is raised by public subscription by the bodies I have mentioned. Despite this, internal drainage boards levy the same capital drainage charges on areas managed as nature reserves as they do on highly profitable farmland. If the press reports from the Ministry of Agriculture are to be believed, somebody may have been making in the past year huge profits from farming land which is drained, and the owner's drainage charge—the capital levy—will be a relatively insignificant charge. But for a nature reserve which is already costing an organisation a great deal of money, to have to pay a capital improvement owner's charge as well really can be going over the top.
I reckon that the loss to drainage board funds as a result of the amendment will be of the order of

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£30,000 a year. That will be the benefit to nature conservation organisations. It may not sound a great deal, but for very hard-pressed voluntary organisations—which are, particularly in time of economic recession, finding it very difficult to raise sufficient funds—it represents a real benefit. They have difficulties raising funds from the public simply to keep pace with inflation, let alone increase the expenditure which they are now being called upon to do as a result of, in part, the Wildlife and Countryside Act, the debates we have had on it, and the changes in the law that have flowed from it. As I have said, it may be a small sum to your Lordships and the Government, but it would nevertheless represent a real benefit to the organisations concerned. I beg to move.
Lord Skelmersdale: The noble Lord, Lord Melchett, has just said that he has not had very much luck with me as regards his previous amendments. I must say that I am beginning to feel that I have an eel as my kinsman. Be that as it may, I am afraid that I must tell the noble Lord that in my view this particular amendment is rather akin to a house that is based on sand. I appreciate the concern of the noble Lord—let us get that straight right away. This amendment seeks to provide an exemption from liability to some of the drainage rates which are levied in respect of land which has been designated as a nature reserve, and so on. The amendment as drafted probably does not meet the noble Lord's intention as it only provides exemption in respect of drainage rates which are made to meet the costs of new and improvement works. But even if that were not the case, I would have—
Lord Melchett: I am sorry to interrupt the noble Lord but with respect that was exactly the case I was making. I was saying: okay, it is quite reasonable to pay drainage rates which meet maintenance costs, because maintenance will be needed however the land is managed and it is fair for conservation bodies to pay towards that. It is the capital improvement expenditure which sticks in the gullet, and the amendment is solely and deliberately aimed at that.
Lord Skelmersdale: Perhaps I was not enunciating clearly—but in any case the noble Lord did not let me finish my sentence. I was saying that this amendment only provides an exemption in respect of the costs of new and improvement works. Even if that were not the case I would have reservations about the proposal.
The main reason why I oppose the adoption of this amendment is that all land within drainage districts which is below certain heights above sea level, and which thus derives benefit from the works carried out by the drainage board, has always been liable for drainage rates. No statutory exemptions have ever been made to this general rule. I do not consider that it would be right to begin now with land which has been designated as a nature reserve. However, in any case, since drainage rates are already calculated on the basis of the annual value of the land and property within a drainage district, reduced drainage rates will already be being paid in respect of such land which is being managed solely as a nature reserve. This is because the land which such reserves occupy will have
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a much lower annual value than that which is used for farming or is in urban occupation.
In my view we have heard quite enough about the inter-departmental committee this evening, but I hope that the noble Lord will accept that that is a basic reason why the amendment really is not appropriate.
Lord Melchett: No, I do not; and, with great respect to the noble Lord, I think that the amendment deserved a little more care and attention in responding to it than it has been given. First, the noble Lord implied that I drafted an amendment to attempt to achieve a complete exemption from rates and that I had failed to do so. However—as I said in introducing the amendment—I deliberately drafted it in a way so that it was intended simply to allow conservation bodies not to have to pay for capital improvement works which in effect destroyed the very reason for their owning the land in the first place. I was not suggesting that they or anybody else should be exempt from drainage rates which pay for maintenance works in an area which the noble Lord said everybody was liable to pay.
The noble Lord did not, with respect, deal at all with the argument—and I think this argument was based on absolutely solid foundations, whereas the noble Lord's argument was based on some pretty soggy sand—that it really is very unfair for an organisation which has bought land to manage in a certain way to have to pay capital charges which will go towards schemes which will destroy the land for the purpose for which it is holding it. The noble Lord did me an injustice in not dealing with that point.
Secondly he said, "Well, in any event it is no real problem because the annual rate charge will be based on the capital value of the land"—the noble Lord will correct me if I have it wrong—"and that will be lower because it is a nature reserve". With respect to the noble Lord, that is simply not true in a very large number of cases, particularly as regards wetland sites. In fact, it can be the case that land of scientific interest will actually be worth more in capital value than land of a similar agricultural quality which is not of scientific interest. That is because it is already clear that in some areas the capital value on the open market of such land reflects the fact that it may be eligible for compensation payments under the Wildlife and Countryside Act.
If the noble Lord cares to go and try to buy some land on West Sedgemore at the moment, he will see exactly what I mean. The capital value of that land on the open market is very high indeed. It is high because of the nature conservation interest and the likelihood that the people owning the land will be eligible for compensation payments. So in fact, if anything, the reverse is true of what the noble Lord said. Conservation bodies are not only having to pay to destroy their land, but they are having to pay more than a farmer nearby who is still able to farm the land profitably. If the noble Lord were to tell me that it would be possible to levy drainage rates on the basis of the income generated from the land, then that would be fine and would meet the point entirely—or, if not entirely, at least in part. But, so far as I understand it, that is not the case at present.
Lord Skelmersdale: I must say that I really cannot agree with the noble Lord, Lord Melchett, that the land value is high necessarily because of the nature conservation interest. The noble Lord says, "Go to West Sedgemoor". The fact is that one simply cannot buy any large areas of West Sedgemoor because it is split up into very small areas often owned independently by absentee landlords and because the almost Napoleonic code has applied to that particular area of the country. I suggest to the noble Lord that the reason why land prices in West Sedgemoor are so high is that the individual plots of land are so small. It has nothing to do with conservation interests whatever. However, I accept that there is a problem here with which I have not been able to deal satisfactorily this evening; I readily concede that. I should like to take the matter away and look at it.
Lord Melchett: I am very grateful to the noble Lord for that, but I think he is wrong about land values in West Sedgemoor and a number of other areas in the country. This is a sensitive issue for those concerned in both selling and buying the land, but I am sure that there are organisations that would be able, in confidence, to provide the noble Lord with some information. I know that, with his keenness on confidentiality in these matters, he would respect that, which would support what I have said.
The noble Lord has very generously said that he will look at this again. It was a narrow point at which I was aiming, and the aim may not have been as accurate as I intended. Amendments drafted by Back-Benchers never are, but in introducing it I did try to make it a little more precise. I am very grateful to the noble Lord for his offer to look at the point again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Glenarthur: I think that this might be a convenient moment for the Committee to break for dinner until 8.30 p.m. I beg to move that the House be now resumed.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Civil Aviation (Eurocontrol) Bill
7.31 p.m.
Lord Lyell: My Lords, I beg to move that this Bill be now read a second time.
The purpose of the Bill before your Lordships is to give effect in United Kingdom law to certain requirements of the protocol amending the 1960 convention which created the European Organisation for the Safety of Air Navigation and the Multilateral Agreement on Route Charges, both signed on 12th February 1981, and also to enable Her Majesty's Government to ratify the protocol and agreement which were presented to Parliament by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs as long ago as last October. Most of the provisions of the protocol and agreement can be implemented under existing legislation, and in particular under the Civil Aviation
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(Eurocontrol) Act 1962, as amended, and now consolidated in the Civil Aviation Act 1982. If enacted, this Bill will amend and add new provisions to the 1982 Act.
In nearly 20 years of its existence the Eurocontrol Organisation has established an experimental centre at Bretigny in France, a training centre in Luxembourg and air traffic control centres at Karlsruhe, Shannon and Maastricht. A central route charges office has been set up in the headquarters building in Brussels which is responsible for billing the airlines and other airspace users for flights, by aircraft over two tonnes all up weight, in the airspace of states which have signed the Multilateral Agreement on Route Charges, and in the Oceanic Flight Information Region for which Portugal is responsible. Most of this work will continue.
The principal change made by the protocol is to transfer back to member states the formal responsibility for the provision of air navigation services above 25,000 feet. The original concept of the split functioning of the control of airspace, with national control at lower levels and Eurocontrol at the upper level, had been out-moded by the rapid development of the operation of jet aircraft in the short time between the convention being signed in 1960 and the organisation commencing its operations in 1963. This was particularly so for some of the members, including the United Kingdom, who were satisfied that with the changing pattern of both military and civil operations, resulting from advances in aircraft design, such a split would have been both uneconomic and inefficient. Furthermore, in the United Kingdom it had become clear that it was no longer possible to reconcile the split level concept with the joint civil and military air traffic control arrangements operated by our national air traffic services.
The arrangements for sharing capital costs, which it was found necessary to introduce once it had been agreed to raise charges for what we call en route air navigation facilities and services, were also very complex. Succeeding United Kingdom Administrations, therefore, pressed for amendments to the convention with the aim of reducing its complexity and removing anomalies. Agreement was finally reached with the other member states and the amending protocol resulted.
The new protocol will enable Eurocontrol to expand and strengthen its role as the focus for co-operation between member states in the future development of air navigation services in addition to continuing with tasks ranging from basic research and development to the training of controllers and engineers. Eurocontrol is still permitted to undertake any tasks which states might entrust to it, including the running of air traffic control centres. The future of the organisation is secure and it will play an important part in the co-ordination of air traffic control in Europe.
The new arrangements have been criticised because some people consider that existing ties are being loosened. However, I consider that we have gained flexibility as well as enabling Eurocontrol to respond to the differing requirements of member states. This should also make it easier for states who have held back until now to join the organisation. This would not have been the case if the alternative of the transfer of responsibility for the whole of national airspace to

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Eurocontrol had been agreed. The enlarged bureaucracy with supra-national powers which would have resulted would have been costly in manpower and money and have no more expertise than is currently available within the Eurocontrol Organisation and the national administrations of member states.
Responsibility for the Shannon and Karlsruhe Air Traffic Centres will be transferred to the Republic of Ireland and the Federal Republic of Germany respectively. Eurocontrol will continue to operate the Maastricht Centre but as an agent for Belgium, Luxembourg, the Netherlands and the Federal Republic of Germany.
The amending protocol has been signed by the current seven member states: Belgium, the Federal Republic of Germany, France, the Republic of Ireland, Luxembourg, the Netherlands and the United Kingdom, and by Portugal who will become a full member when the protocol is ratified.
Associated with the amending protocol is a new Multilateral Agreement on Route Charges which has also been signed by Austria, Spain and Switzerland as well as the eight states who signed the protocol. This replaces the previous agreement which signified the intention to set up a common charging scheme and codifies the system for collecting charges for en route navigation facilities which resulted. It also strengthens the legal procedure whereby the states and Eurocontrol will assist each other in the collection of debts.
The amending protocol and the multilateral agreement were due to come into force on 1st March 1983, but this could only have occurred if all the signatory states had ratified by then. Somewhat naturally delays have occurred in most of the member states, but all expect to be able to ratify in the first half of 1983, with the possible exception of the Federal Republic of Germany where their parliamentary processes have been further delayed by their general election. Failure by the United Kingdom to ratify could lead to embarrassing criticism from our Eurocontrol partners in view of our leading role in the amendment of the convention.
The main effect of the Bill will be to enable the United Kingdom to play its part in the strengthening of the machinery for the enforcement of claims on behalf of Eurocontrol. There are four clauses in the Bill, the first three of which take the form of textual amendments to the Civil Aviation Act 1982. Clause 1 provides for the enforcement and recognition in the United Kingdom of judgments given in foreign courts and determinations by administrative tribunals in respect of route charges and air navigation services in accordance with the multilateral agreement.
Clause 2 makes alterations to the existing immunities and privileges of Eurocontrol. It updates the provision conferring inviolability on the archives and premises of Eurocontrol to correspond with the provisions in paragraph 2 of Schedule 1 of the International Organisations Act 1968, and gives effect to new provisions concerning immunities and privileges contained in the Protocol. These cover the requirement of advance notice before entering its premises and inspecting its documents, and the
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immunity of its property and assets. The clause also removes disputes between Eurocontrol and its personnel from the jurisdiction of the courts of the United Kingdom to that of the Administrative Tribunal of the International Labour Organisation. In fact Eurocontrol has no premises, property or staff based in the United Kingdom and we do not envisage that there would be any in the future.
Clause 3 makes a textual amendment to the definition of the Eurocontrol Convention to make clear that it covers all amendments to the convention made with the agreement of the contracting parties. This is necessary because there is some legal doubt as to whether the wording of the definition in the 1982 Act covers amendments to the convention made prior to the passage of that Act. This is important since the protocol was signed in 1981. All future amendments made with the agreement of the contracting parties, not requiring changes in United Kingdom law, will also apply. The clause also confirms that charges may be imposed on owners of aircraft when operators cannot be traced. Clause 4 gives the title, commencement and extent of the powers of the Bill.
In conclusion, I would suggest to your Lordships that this Bill will enable the United Kingdom to play its full part in making Eurocontrol an efficient organisation to meet the needs of the community of civil aviation. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Lyell.)
7.41 p.m.
Baroness Burton of Coventry: My Lords, I thank the Minister for having taken us through this Bill so clearly. As this is a Second Reading debate, I should like to speak probably more generally than he has, but of course dealing with the terms of the Bill. The Parliamentary Under-Secretary of State brought the Civil Aviation (Eurocontrol) Bill before the Second Reading Committee of another place just before the House rose for the Christmas Recess. He said that it became clear almost as soon as the Eurocontrol organisation began its operations in 1963 that the system envisaged was not a satisfactory one from the point of view of some of the members, including the United Kingdom.
Just to take one problem, and without going into too much detail—and I think that the noble Lord, Lord Lyell, referred to it—it was soon realised that the split functioning of the control of United Kingdom airspace, with national control at lower levels and Eurocontrol at the upper level would have been uneconomic and inefficient. In addition, Mr. Sproat said that the suggested split functioning would have conflicted with our joint civil and military air traffic control arrangements through national air traffic services.
Going back to 1980 I remember one of the witnesses to the European Communities Committee on European Air Fares telling us that the agreement on Eurocontrol expired in 1983, and that there did not seem to be any firm policy about either the control or what should happen to it. He thought that surely member states must make up their minds as to what they wanted done with the European organisation. This they now seem to have done, and this is what we are discussing tonight.

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However, various points are still being raised—and queried. IATA and the airlines believe that only if the air traffic control system were the responsibility of a single central authority would it be possible to claim a reduction in costs on its behalf. It is felt by some that nothing in the Bill prevents a continuing fragmentation of the European system. As I said in our debate in July 1980, I believe that the air traffic control is one area where we in this country lead Europe. I thought then, and think now, that it would be beneficial if we could take the initiative in the co-ordination of air traffic control in Europe.
Since that debate, and particularly during the last year, I have tried to find out more about air traffic control. The director and his colleagues of the National Air Traffic Services have been most helpful in trying to educate me, but I would not wish blame to attach to them for any mistaken statements that I may make. This is not an easy subject for the layman.
The Secretary of State also has been most helpful in an area concerned with this matter, and that is the one known as "dog-legging". This of course is another aspect of air traffic control. I think that the most simple example is to cite the actual distances flown between two points in Europe. This on average is 15 per cent. longer than need be. In the USA, one country with one administration, the tolerance is between 2 per cent. and 3 per cent. In Europe it is 15 per cent.
Governments in Europe have drawn up the air routes which result in such deviation, and here we have two problems. First, there are those countries with national air traffic control organisations not fully co-operating with their opposite numbers. Secondly, there is national sovereignty, with the additional point that Eurocontrol of course is not comprised of members of the European Community. Some members of the European Community are members of Eurocontrol. One state which signed the amending protocol that we are discussing tonight is not a member of the European Community.
So, my Lords, I would submit that it is not really a European Parliamentary matter, and I accept that the Government—that this Government, in fact—are trying to be practical and to bring more practicality to matters of air traffic control. If I may go back to the noble Lord, Lord Cockfield, and how he helped on "dog-legging", it was in October last that I asked him whether he could help on the detailed suggestions from IATA concerning 10 routes within the European Economic Community which suffered from considerable deviation in distance flown. On 27th January the Secretary of State told the House that agreement in principle had been reached at the meetings arranged by the European Air Navigation Planning Group on a number of route improvements—including changes to all 10 routes singled out by IATA.
So, although the airlines and, I think, IATA say that they would like a united authority, it is recognised by the Government that the members of Eurocontrol are not prepared, for various military reasons, among others, to hand over their control. For the moment I think that we have to accept this, but I should like to stress that it is "for the moment."
Charges have been complained about. We all know that charges are always a bone of contention, and I
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think it is recognised by the Government that there could fruitfully be discussions on these and, of course, on those costs to which charges are said to be related. But I consider that we must accept that it is not possible to compare Europe with the USA. On some points such comparison is possible, but not here.
The difference between air traffic control charges levied by the United States and those levied by the members of Eurocontrol could hardly be bigger. As Mr. Sproat said, the United States does not levy any such charges, because it has decided to pay for air traffic control facilities by a different method. The United States pay through a tax on fuel, a tax on departing passengers, and out of general taxation.
One of my knowledgeable friends told me that there was no straightforward way of comparing the cost efficiency of different air traffic control centres in Europe—or in the USA. They all have different airspace structures, different traffic mixes, and different equipment.
I am wondering whether the noble Lord, Lord Bruce, will have something to say about debts still outstanding. This was referred to in debates in another place, and referred to particularly during the Committee stage there on 8th February. Not being an accountant, I felt that I would accept the statement given at column 12 on that date; namely, that the debts were, "Neither longstanding nor high". At the end of the 1981 calendar year the debts outstanding amounted to 1.4 per cent. To quote the Under-Secretary, this,
"figure was the amount of debt incurred in 1982 that had not been paid, plus debts that had been incurred earlier and had still not been paid".
I must comment, before leaving the question of costs, that there are some mistaken statements around. In the Economist of 15th January, I noted the statement that air traffic control amounted to some 14 per cent. of the total cost of air fares. That seemed an unduly large proportion and, on making inquiries, I was informed that in Europe air navigation charges on scheduled services accounted for about 4 per cent.—not 14 per cent.—of total operating cost, which of course is what dictates the price of the ticket. There is a wide difference between 4 per cent. and 14 per cent.
Obviously one cannot go into all the various aspects that have been raised, many of which require attention. But I must say that many times in the past year I received complaints about the cost of Eurocontrol and the salaries paid. I am not competent to pass judgment on those, but it seems to me better to work on bringing the various national organisations into closer co-operation in the first place, rather than trying to weld them into one organisation—against their will—with greatly enhanced costs.
Reverting to a point made at the beginning—that of airspace, to which the Minister referred—the Bill and the protocols transfer back to member states the formal responsibility for the provision of air navigation services above 25,000 feet. I believe, from discussions I have had with various people, that that may well mean that other states will join the organisation, and I think the creation of an enlarged bureaucracy has been avoided, and at this stage that is useful.

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Eurocontrol is now pledged to play a key role in the development and operation of a European system of air traffic flow management, in collaboration with the International Civil Aviation Organisation. To take one example, I gather that much progress has been made by the United Kingdom and France working together to improve the route structures and general handling of civil air traffic. As a result, some cross-Channel air routes will benefit and route capacity will be improved. I support the Bill, with as much prodding as possible from our Government, from the National Air Traffic Services and from the Secretary of State for Trade.
7.53 p.m.
Lord Bruce of Donington: My Lords, we on this side of the House do not see fit to oppose the Bill, which in effect ratifies the protocols to which the noble Lord, Lord Lyell, referred. However, I have the strongest misgivings concerning the further fragmentation of the whole machinery of air traffic control in Europe. It is a matter which fills me with some dismay, and while my views on the subject will probably evoke no support from members of the Government or from members of my own party—or, for that matter, of any other party—I feel it my duty to present to the House the truth of the matter as I see it.
In March 1979, when I was president of the European Parliament's Committee on Regional and Transport Affairs, I had the honour of presiding at a large conference which took place in Paris to consider the whole question of air traffic control. It was a very long and, some said at the time, important conference. I did not have the advantage of the advice which my noble friend Lady Burton has evidently received from her own sources. But we at that conference had the benefit of the advice not only of the Commission of the EEC but of the Assembly of the Western European Union, representatives of the aircraft industry, the International Air Transport Association (IATA), the International Civil Airports Association (ICAA), the International Civil Aviation Organisation (ICAO), the International Federation of Airline Pilots' Associations, the International Federation of Air Traffic Controllers' Associations, the Italian Military ATC authorities, the North Atlantic Treaty Organisation represented by Air Vice-Marshal Tedder, the Parliamentary Assembly of the Council of Europe and the Union of European Communities.
The reason for the calling of that conference was that there was in the public mind throughout Europe grave anxiety about air safety particularly in the light of the tragedies at Zagreb and Tenerife. Great public alarm was around because of the tragedies that were involved in those, and the system of air traffic control was in both instances called severely into question. The name Eurocontrol carries with it possibly the connotation of being a bureaucratic organisation concerned with some kind of control. It is in fact short for the European Organisation for the Safety of Air Navigation. Air traffic in Europe has been increasing rapidly, and at the conference we had in Paris some hair-raising information was given to us about the very precarious state of air safety generally which would
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arise from the proliferation of traffic as well as from the system of aircraft control itself.
In this, one makes no reflection at all on air traffic controllers. Anybody who has been to an operations centre where air traffic control functions must realise the terrific strain that is placed on air traffic control personnel because the safety of thousands lies largely in their hands, outside those normal hazards that are within pilot control. One of the conclusions reached by that conference, and notified in due course to the European Parliament, was that the existence of a whole number of separate authorities, largely on national lines, for the handling of traffic across Europe, presented an inconvenience to passengers (in terms of extra time taken), extra strain to pilots and additional responsibility for air traffic controllers. Although I am not a technician in this field, perhaps I should explain that in a little more detail
If one goes by plane from a place in Sweden across to Spain, one may have to cross no fewer than 18 boundaries or sectors independently controlled by separate sets of air traffic controllers, often speaking with a different idiom and not always operating in accordance with standard instructions. It means frequent frequency changes by the pilot himself. It means handing over from one sector to another throughout, and there can always be scope for misunderstanding. That and many other things were proved at the conference to which I refer.
Moreover, the equipment at various airfields, in different air traffic control centres, varies considerably. Some pieces of equipment are much more efficient than others. Where there is a form of computerised control, as there is in one or two countries, the computers are not always compatible with those in other air traffic control centres, and therefore information is very difficult to pass.
IATA itself came to a conclusion which, in view of what the noble Baroness has already said, I should like to read to the House. It is contained in evidence given to the committee in Paris, on 19th March 1979. IATA's representative, Mr. Hammerskjöld, stated:
"Eurocontrol was, I believe, created directly as a result of the airlines' desire to have unified control of the upper European airspace. Now, 16 years after its creation, Eurocontrol has not been able to perform its basic function (of controlling air traffic) except in a very limited area over Belgium, Luxembourg, and part of the Federal Republic of Germany. This is no way the fault of the present or past Directors-General of Eurocontrol or its staff. The member states simply would not permit Eurocontrol to do its job, in spite of the clear mandate in its Convention".
Mr. Hammerskjöld went on to say:
"We would support and welcome a new Eurocontrol with expanded membership as an effective executive arm in planning and managing the air traffic system in Europe".
He continued:
"Europe does not require a technological breakthrough. The technology, the skills, the dedication are already here. Nor do we need a new organisational structure under the EEC to tackle this problem. What is lacking in Europe as a whole at the moment is the political will to develop and manage a fully co-ordinated air traffic system".
The steps that it is proposed to take under the protocol fragment the system even further. There is no case on the alleged difficulties arising from the duality of the civil air traffic controller and the controller of military traffic. If there is one thing the Eurocontrol

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has proved, particularly in its operation at Maastricht—which I had the opportunity of visiting—it is that so far as West Germany, Holland, and Belgium are concerned, the arrangements work quite satisfactorily. There the military traffic controllers and the civil air traffic controllers sit side by side, and the arrangement has worked perfectly satisfactorily.
Moreover, the technical equipment at Maastricht is probably the most advanced in the world, complete with a back-up duplicated system in the case of breakdown. I saw it in operation. I watched the progress of flights right the way across the screen, from the time when they left the ground traffic control at their own airports, to the time when they landed at their destination. Do not let us underestimate the facilities that are available at Maastricht, for example, under Eurocontrol. There is an automatic operation in which a dangerous situation is indicated on the screens very many minutes before it actually arises. That is due to the feed-in from radar control of any variation in direction and speed, or height, which conflicts with the flight instructions and the flight plan originally communicated. On the screens one can actually see aircraft converging, or getting too near to one another, and the pilots can then be notified.
Eurocontrol has nothing to do with the EEC—nothing to do with it at all. It is for Europe as a whole, and it was warmly supported by the Council of Europe. That is what I had in mind when, about a year ago, possibly in more controversial fashion, I said that we should opt out of the EEC and back into Europe. Is it not ironic that in the one field where the establishment of a completely integrated international control is vitally necessary, not only for the reduction of costs, but above all for the safety of the air travelling public, those who are prepared to support the whole idea of a European Community growing closer and closer together all the time, should, in the one vital field where human safety is involved, decide to go back into their national shells? That may appear even more than ironic; it is almost inexplicable. Perhaps the reason for it is that there is no profit anywhere in air traffic control. It is essentially a service. I must say that when those Members of your Lordships' House who most devoutly support the EEC through thick and thin complain about the salaries paid to Eurocontrol personnel, I am filled with amazement. I say that because, if there is one international organisation which manifestly overpays and undertaxes its officials, it is the EEC itself.
The whole trouble with Eurocontrol is that it has no one, no body, to which it is directly politically reponsible. It has no parliamentary voice anywhere on an international scale. Only those in the various member countries that operate within systems of parliamentary democracy can raise a voice on its behalf. The result is that in some countries—not Germany, which has recently supported the extension of Eurocontrol—civil servants who know that their masters bear no political responsibility whatsoever and do not even understand the political implications, see fit to perpetuate what national Civil Service control remains within their hands. That applies, I regret to say, in the United Kingdom. In terms of the
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programme "Yes, Minister", with which all your Lordships are quite familiar, I can imagine that the papers relating to Eurocontrol are relegated to the bottom of the fourth box, which a tired Minister probably does not reach until about two in the morning. As indeed IATA has pointed out, the trouble is that there is a lack of political will.
We on this side of the House cannot oppose the Bill. It was not opposed in another place. It received very perfunctory attention there. I sincerely hope that there will never be another air disaster on the lines of Zagreb or Tenerife. But if there is, and if there is very considerable loss of life, neither the families of the bereaved, nor the public will thank those who seek to diminish the effectiveness or to reduce the capacity of probably one of the best air traffic control organisations in the world which, but for the rather queer nationalism of member states supposedly believing in the great European ideal, would have become even more efficient than it now is. They will think, and I am sure that your Lordships will think, that, rather than reverting to narrow nationalistic lines, we ought to have sought with every means in our power to extend both the operational control and the administrative efficiency of one of the best organisations of its type in the world.
8.10 p.m.
Lord Lyell: My Lords, I am sure your Lordships will be very grateful for the very interesting and in no way perfunctory role which has been carried out by your Lordships in examining this Bill, and indeed, the amount of hard work and study and (as I think the noble Lord, Lord Bruce, would concede) the expertise of the noble Baroness in this particular field. I certainly am very grateful for the tone of the debate on this Bill this evening. I am very grateful for all the encomiums which have rained down, especially from the noble Baroness, upon the Director of the National Air Traffic Services and my honourable friend. I have been asked to stress that my honourable friend the Minister represents the United Kingdom on the Permanent Commission of Eurocontrol; so, clearly, my honourable friend will be grateful for the support that this Bill has gained from your Lordships this evening.
My honourable friend the Minister, I am sure, will once again be pleased to know of the apparent success of the noble Baroness's campaign in eliminating what she and your Lordships will have come to know as air dog legs. This has nothing to do with delightful animals but far more to do with safety and efficiency and, above all, fuel saving in civil aviation.
The noble Baroness drew our attention to the United States. I am sure that she, your Lordships and, indeed, my honourable friend in another place were able to suggest that the entire sea-air space and civil aviation air control in the United States is to certainly a very major extent different from Europe and, above all, from the areas which are covered or which might be dealt with by Eurocontrol. I am sure your Lordships will allow me to stress once again that the role of Eurocontrol and its organisation, as we hope it will be in future, will be to concentrate its efforts on increasing co-operation in such matters as research, development and training, and developing an air traffic flow management system in Europe and reviewing the

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scope for performing air traffic control tasks on a joint basis. Thus we hope that it will be enabled to devote its resources to the task for which it was originally intended; that is, the co-ordination of air traffic services within all member states.
I think that your Lordships will bear with me if I stress the Government's feelings on Eurocontrol. We believe that the arguments for greater Europeanisation of air traffic management which would be implemented through a single executive authority (and in this case, it would be Eurocontrol) are primarily political and, indeed, sometimes emotive. Such a policy of unifying all air traffic control matters will not of itself solve the practical problems. Above all, I would stress that to the noble Lord who is a practical and indeed intellectual man himself; and I am sure that the noble Baroness would agree, too, that these are very serious practical problems of air traffic control in the air space of Europe which, as all of your Lordships will know, is especially congested.
We believe that there is nothing to support the view that an expensive supra-national authority would give a more effective service than that which is provided by the various national authorities. I am sure that your Lordships would not wish to hand over the sovereignty of this House to the extent of disclaiming responsibility for the allocation of air space to the various interests who make use of it. We could not agree to hand over the responsibility of organising our national air space and, above all, the right to adjudicate between the rival claims on it.
This problem of Eurocontrol brings me to another aspect of the practical outlook of air traffic control; and that is what we would call the vertical fragmentation of air space. This is unavoidable because the alignment of what we call the flight information regions—and I see that in my preliminary remarks I referred to the oceanic flight information region which was administered by Portugal—with national boundaries may be inefficient; but there will always be a requirement for flight information regions and the existing patterns simply cannot be changed overnight even if there was the political will to do so. It might make some operational sense to abolish the Geneva and Zurich flight information regions, but I am sure your Lordships would accept that it would be difficult to persuade our Swiss friends (who are, of course, neutral) to hand over control of their air space to the great nations which surround them, namely, France, Germany and Italy.
The noble Lord, Lord Bruce of Donington, of course, had most interesting views, as he tends to have, and I happen to know that he has worked extremely hard on the Bill and on these particular matters. In the course of his remarks this evening he has shown great expertise and he took us back to the conference in which he was so deeply involved. It was clear that the conference he referred to made a forum for very valuable discussion. I was fascinated and wondered whether the noble Lord had indeed been on the flight deck of some civil aircraft on a holiday journey from Sweden to Spain, as it would clearly be covering all the various flight information regions. But, of course, the points and the difficulties that the noble Lord raised were quite correct and very valid. I would suggest that
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Eurocontrol has not been entirely successful or as successful as we or others would have wished it to be because of the operational fallacy of splitting air space into upper and lower air space and putting them under different authorities.
The noble Lord mentioned the case of Maastricht. We believe that it does work in the special geographical circumstances. Indeed, we could possibly (if any of your Lordships wished) to take this up afterwards and examine the excellent Times Atlas of the World in the Library. Anybody who consulted the geographical location of Maastricht would see that the geography of the national boundaries forms and interesting jigsaw at that point. We would agree that Maastricht works in its role as far as that is concerned and we believe it is efficient in the role that it performs.
The basic unit of air traffic control is the sector, which is controlled by one or a team of controllers. These will be grouped in centres. It is our opinion that there is no feasible method of co-ordinating traffic other than on this sectoral basis. The noble Lord, Lord Bruce, referred to the Zagreb and Tenerife disasters, which were appalling and gained headlines around the world. But I think that even he would agree that these would not and could not be attributed to any basic defect in the air traffic control system. We believe that these were due to human error which unfortunately is not completely eradicable.
I hope that I have covered the points raised. I have been most grateful for the expressions of gratitude and the expressions of approval which have emanated from your Lordships this evening. As your Lordships will have noted, it is a complicated Bill but we hope it will achieve what we intend it to achieve. I hope that without further ado I may move that it be read a second time.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
The Earl of Swinton: My Lords, I beg to move that the House do now adjourn during pleasure until 8.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.20 until 8.30 p.m.]

Water Bill
House again in Committee.
Clause 5 [Overseas activities of water authorities and statutory water companies]:
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 22:
Page 4, line 34, leave out from ("assistance") to ("skill") in line 35 and insert ("in respect of matters relating to manpower training and operation within their").
The noble Lord said: With Amendment No. 22 I shall try to encourage your Lordships and particularly the Government to consider—indeed, even after dinner to face—the stark commercial realities of international trade in very large overseas schemes and

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projects relating to water supply, drainage and sewerage—
Lord Skelmersdale: At the risk of putting the noble Lord, Lord Lloyd of Kilgerran, totally off his stride, would it be convenient to the Committee to take the subsequent two amendments with this amendment?
Lord Lloyd of Kilgerran: I am much obliged to the noble Lord for clarifying that situation; but at the present time I would rather address myself to this one amendment first of all. If they are muddled up I shall lose the impact that I wish to make in relation to the amendment.
The amendment is intended to safeguard the huge overseas business built up over the years with such outstanding success by our United Kingdom consultants and contractors. It is an amendment which is directed towards avoiding the potentially serious damage to that overseas trade of the United Kingdom at present dealing with projects costing thousands of millions of pounds each year.
This great overseas United Kingdom industry and the high reputation of United Kingdom consultants are likely to be put at risk if the present terms of Clause 5 are allowed to stand as they are. Indeed, quite simply Clause 5 in its present form could result in a loss of international reputation of United Kingdom consultants in this field and lead to huge losses in the overseas income to the United Kingdom, seriously affecting our balance of payments.
Clause 5(1) has been put in by the Government, if I may say so somewhat naïvely, so as to enable water authorities and water companies to give advice, and to encourage them to give advice or assistance, to overseas customers in respect of any matter in which, so the clause states,
"they have skill or experience".
It is necessary to consider the scope, skill, and experience of the water authorities and companies. It has always been recognised worldwide that the public sector—that is, the water authorities and the water companies—has a unique experience and expertise in the field of the operation of works, their management and manpower training. That is unchallenged. However, the experience of water companies and authorities does not so far extend to overseas activities, except in a minimal way. I shall be supporting that statement by drawing your Lordships' attention to what was said in another place in this connection.
Perhaps it may not be inappropriate to say that I have had the honour of being a member of the Select Committee on Science and Technology which studied, under the chairmanship of the noble Lord, Lord Sherfield, the distribution of water and sewerage schemes in this country. We found in visiting these places that, as the Minister in the other place indicated, their expertise in overseas activities was minimal and almost negligible compared with that of the private consultants.
It is accepted that the private sector consultant firms have established a worldwide reputation for the United Kingdom industry in the specialised field of engineering studies, design feasibility studies and contract supervision associated with these big schemes
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for water supply and sewerage. As I have said, water authorities do not at present have a great deal of experience in these matters overseas.
May I give examples of the extent of this huge business? I am advised, particularly by Professor Isaacs, the distinguished engineer who acted as the specialist adviser to the House of Lords Select Committee to which I have just referred, that in 1981–82, United Kingdom consultants brought in fees of the order of £500 million in that year. United Kingdom consultants over a period of five years were responsible for capital work of £10,000 million. These works have an average life of about five years, so that overseas business involved something of the order of £2,000 million per year linked up with the tremendous reputation which British consultants now have.
I have in my hand the volume for 1982 issued by the Association of Consulting Engineers about its overseas work. I turn, if I may for a moment, to the section dealing with water supply and I look at one page. There I see the estimated costs in sterling with which the United Kingdom consultants and contractors have been concerned. If I run down the list the figures show £16 million, £25 million, £28 million and £70 million. I turn to the next page and there it refers to projects costing £16 million, £10 million, £12 million, and so on. On the next page it refers to projects costing £450 million, £250 million and £350 million. This is a huge business and the reputation of the United Kingdom consultants is worldwide and of a very high order.
May I draw your Lordships' attention to what was said in the other place on 9th December. The Minister, Giles Shaw, stated:
"The present activities of the water authorities are really of very small cash value".
He then went on to cite specific projects and referred to the largest one:
"None of those activities is greater in value than £100,000". Thus the right honourable gentleman and the Committee can see that most of the activities that have been undertaken are of a relatively small amount in value and they provide important contacts largely of a managerial or advisory nature in the various territories. The other activities being conducted by the international advisory service are of a much greater value. This involves providing training or management expertise in various countries overseas, the majority of them being in the third world and they have been involved in a range of projects to the value of some £2,200 million".
I hope I have those figures right. But it is a vast order of about £2.000 million per annum, and that was verified by the Minister in the other place.
This vast amount of business is undertaken by United Kingdom consultants in a highly competitive and sensitive international area. There is real anxiety among consultants that Clause 5, as it stands, may result in serious damage and loss of business to British industry. It is quite simple to see why that loss of reputation might take place. What I am saying now is in no way to denigrate the British public sector in their activities. They are the experts in relation to training and the operation of their works, but if they have not got this experience in overseas trade damage is obviously likely to be done to the reputation of present United Kingdom consultants in the business.
I should mention that Clause 5(2) contains, so it says, certain safeguards in allowing water companies and water authorities to deal with overseas business in

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this general way. This clause says that the power to do this business overseas shall only be done—
"with the consent in writing of the Secretary of State".
It goes on to say that the approval of the Treasury is needed. Your Lordships can imagine how difficult it would be to get the Treasury to accept responsibility for projects of the order of these hundreds of millions of pounds to which I have referred.
We have heard that the Minister proposes to issue some guidelines, and indeed he has issued them and I have seen some of them; but they are wholly inadequate, and if they are to be introduced they should be introduced into the text of the Bill in order that proper safeguards may be obtained. Of course, private industry and the United Kingdom consultants are always anxious to co-operate wherever possible with the public sector. I pause here, because I notice that the Government Front Bench is at present vacated. I feel that this is such an important matter that I am pleased to see it now does claim the attention of at least one member of the Government Front Bench. Of course, private industry is most anxious to co-operate wherever possible with the public sector and it is recognised that foreign Governments may wish to deal with British Governments directly; but I understand that government-to-government projects in this field do arise, though only on a small scale, and that in most of those cases the private sector is usually brought into discussions.
On another important aspect of overseas business in which water authorities and water companies have no experience, consulting engineers have to be particularly well qualified to prepare documentation of performance contracts, to analyse and compare tenders and to supervise their execution. British consultants have been involved in a large range of contract types. They are being exposed over the year to a variety of environments and the different levels of technology which are appropriate. Skills and long experience, therefore, are essential in a competitive technological and contractual environment of overseas business of this kind, where water and sewage developments can be so vital to a foreign community.
I apologise for making such a long speech, but I hope the Government realise the importance of these matters and will perhaps agree that in respect of overseas business at the present time Clause 5 goes too far. I well recognise that where public money has been expended for the purposes of research it is not in the public interest that all that expertise which has been developed at public expense should be locked up in Government departments. Subject to the usual safeguards, the Ministry of Defence, for instance, have a great amount of expertise which they disclose to the industry. Therefore in principle it is a good thing, where public money is being expended on extensive research, that such research and such experience should be made available wherever possible to the public. As the noble Lord, Lord Sherfield, said during the first day of this Committee stage, very little research in relation to overseas business is being done by the water authorities or the water companies; so in regard to the water companies we are not in the position that within them is locked up vast experience
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in relation to overseas activities of the kind with which the consultants are concerned.
I emphasise again that so far as manpower training is concerned, and the operation of works, the public sector has this great expertise and it is not matched by that in the private sector. Therefore, I beg to move that there should be inserted in Clause 5 the limitation that, in their assistance and advice to overseas customers, the water companies and water authorities should at present be limited to matters relating to manpower training and operation within their experience and skill. I beg to move.
8.46 p.m.
Lord Howie of Troon: As someone who has spent 20 years of his life in consulting engineering before degenerating into being a publisher of a civil engineering magazine, I am basking in the warm praise which the noble Lord, Lord Lloyd of Kilgerran, has bestowed on my profession—every bit of it absolutely deserved. British consulting engineers are quite clearly, beyond peradventure, the best in the world and the noble Lord has indicated just why we should regard them as such.
There was, however, one thing he did not say. When he spoke of the immense contribution which consulting engineers have made to our overseas earnings, he did not actually say that it was made by a relatively small number of firms and by a relatively small number of people—perhaps about 150. It is a very small group and the per capita overseas earnings among consulting engineers must be very nearly as high as in any other group in the country. I think that the praise which the noble Lord, Lord Lloyd, bestowed on consulting engineers is very well earned, and I am delighted to thank him for it on the strength of the 20 years or so that I spent in that profession.
I noticed at one point that the strength of his argument was so vigorous that the Front Bench opposite was entirely vacated. I was not quite sure what that meant in terms of the conventions or rules of order of this Chamber, but I did wonder for a moment whether it would have been appropriate for us on this side to cross the Floor and, by a coup, seize power! But we were not quick enough and the Minister in charge returned to his post in time to prevent such an eventuality. However, I think it was a chance not only for us but for the country as a whole that was missed.
Nonetheless, I believe that the noble Lord, Lord Lloyd, has actually claimed too much in his amendment here. I support very strongly the sentiments which lie behind the amendment and I think I support entirely what I believe to be his ultimate intention; but I have to say that the British Consultants' Bureau already has in its membership something like 15 or 20 nationalised industries functioning as quasi-consultants. They include obvious people such as the British Airports Authority, the Civil Aviation Authority, British Rail and numerous others, all of whom apply the civil engineering expertise which they have in their organisations as quasi, not-quite-nationalised consultants. They do so within the rules and with, at least, the partial blessing of their fellow members of the British Consultants' Bureau.

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I see no reason why water authorities should not be in exactly the same position as these others who already exist. My reason for saying that is that the engineering side of all these organisations, no matter how narrow their specialisation appears to be in the water industry, is manned by people who were educated and trained in the total range of civil engineering. They can turn their hand to just about anything that comes their way. That is the real key and that is the real worry. I do not think it would be right if the water authorities', or other national authorities', engineering departments turned their minds or their hands to anything that came their way. However, I think it is right that the maximum use of that engineering expertise and resource should be made in the national interest, and it already is in the 15 or 20 cases which I have mentioned.
Where the noble Lord, Lord Lloyd, got it right was when he talked about the guidelines. It is important that the private consulting profession should feel that they are not open to unfair competition from a nationalised consultant, and that guidelines should be drawn to protect them. That has already been done in the case of the other nationalised industries which I have mentioned, and there is no reason at all why it should not be done in this case, too.
I very strongly agreed with the noble Lord, Lord Lloyd, when he said that the guidelines should be in the text of the Bill. Generally speaking, they are not in the text of the other legislation which guides the fortunes of the other nationalised consultants, if I may call them that, though that is not quite what they are. They are guidelines which are separate from the legislation. I should always like to have guidelines of that sort in legislation. I must admit that I was very tempted to put down a set of guidelines in Clause 5. That would have taken 30 or 40 pages of the Marshalled List so I did not do so, but I might be inclined to do so at Report stage.
This is a case where both the Government are right in the intention of their legislation, and the noble Lord, Lord Lloyd, is right in what he interprets their legislation to mean. The key to the whole thing is in the guidelines. We will reach very speedy agreement here, if the Government will undertake to look at the amendment of the noble Lord, Lord Lloyd, and consider whether or not the guidelines themselves can be incorporated at a later stage as a schedule to the Bill. That would clear everybody's mind and would reach, very speedily, the maximum agreement on both sides of the House. Not only that, it would reach agreement with the consulting engineering profession which, as the noble Lord, Lord Lloyd, has rightly said, is one of our major export earners.
Lord Sandford: I wonder whether I may just intervene very briefly, before my noble friend replies. We have been discussing the assistance and advice which the water authorities can give overseas by way of large scale commercial contracts. But I mentioned on Second Reading that there is considerable scope for them to give assistance overseas to much smaller scale projects by way of a charitable and voluntary effort. That is an issue which I wanted to raise when we discussed Clause 5; but, in view of the lateness of the hour and the considerable amount of work that we still
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have to do, I prefer to give notice that it is a matter which I should like to raise when we get to this clause at Report stage.
Lord Skelmersdale: As the noble Lord, Lord Lloyd of Kilgerran, has said, the question raised by Amendment No. 22 was fully debated in Standing Committee on the Bill in another place on an amendment which, he did not say, was identical in phraseology to the one moved by the noble Lord today. He referred to the Official Report of the Committee stage. In responding to the debate on that occasion, my honourable friend the Parliamentary Under-Secretary of State pointed out the very substantial opportunities which are opening up for British exporters in the water field, and emphasised the importance which we, as a Government, attach to a combined approach by the private sector and the public sector.
Water authorities and water companies have operational, management and technical expertise which is in demand in developing countries. Meeting this demand can draw in British firms, which can also use this expertise to strengthen and complement their bids for overseas business. The aim is to win a larger share of the export market. The noble Lords, Lord Lloyd of Kilgerran, and Lord Howie of Troon, have both said how large the business is already. The Government are fully cognisant of this fact, but accept, too, that the scope for expansion is still very large indeed.
The noble Lord, Lord Howie of Troon, referred to a relatively small number of firms. Incidentally, there is a rather grey area in this respect between the public and the private sectors. I was interested to see, when I was in Costa Rica the other day, that the Common-wealth Development Corporation was one of them, in that it was financing and operating water work, through a consulting engineer, for the capital there. We of course accept—
Lord Howie of Troon: Surely, it is not a grey area at all. Those in private consulting know where they are, and those in the public sector know where they are. Sometimes they work in harmony and that is delightful, but there is nothing grey about it.
Lord Skelmersdale: What I was trying to point out was that, although in certain respects, the Common-wealth Development Corporation is well within the public sector, and of course comes within the remit of the public sector borrowing requirement, the activity in which it is engaged in Costa Rica has a very private face.
We accept that the phrase in the Bill, to which the noble Lord, Lord Lloyd, has taken obvious exception, and which will enable the provision of
"advice or assistance, including training facilities, as respects any matter in which they have skill or experience"
might be considered to mean that water authorities could become competitors of the private sector, and we recognise that this is a worry. That is why we have made it clear to the water authorities that the private sector must remain the overall leader in this field, although there should be a partnership; as indeed there is at the moment. Clause 5 will as we have heard,

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require the consent in writing of the Secretary of State before the water authorities or companies will be able to avail themselves of their new powers.
The debate has centred on the guidelines, which were published the week before last. These have been produced to give clear advice as to the basis on which that consent will first be given and secondly operated. They include a commitment to protect the private sector from unfair competition. This will ensure that the Government's intentions are respected, without writing unnecessary restrictions into legislation; restrictions which might very well prevent water authorities from offering help which consultants would like them to offer.
In short, we recognise the concern which has been expressed by noble Lords and the consultants themselves. We agree that the water authorities and the companies should not become competitors of the private sector; and, indeed, they have no intention of so doing. We see co-operation between public and private sectors as the key in all this, and we have ensured that this is to be the approach through the guidelines on the way in which the Secretary of State will grant consents that we have issued. For those members of the Committee who do not have them, copies of the guidelines are available in the Library.
The noble Lord, Lord Howie of Troon, referred to the general point of putting guidelines into legislation. I agree that on the face of it this might be considered to be a very desirable objective, although other nationalised industry guidelines, where appropriate, were not put into primary legislation, for one very good reason: that once they are put into primary legislation they are fixed; it is impossible to change them without changing the primary legislation. In a situation which is developing as we go along, as I hope this very close relationship betweeen the private and the public sector is and will be, it would be a mistake to have fixed guidelines. It would be sensible to have them in such a form that they can be amended.
9.2 p.m.
Lord Howie of Troon: I am not at all convinced by the concluding remarks of the noble Lord, although I am grateful for them, because he dealt precisely with what I said. I am a little alarmed by the fact that in the case of a good deal of legislation—employment legislation is a very good example—we have legislation and codes of practice which are not binding. The same applies in this case. The legislation is binding and the guidelines are not, although the guidelines are useful and agreeable. I wonder whether it would be terrible if we had to amend legislation from time to time. If we were amending legislation in the way the noble Lord the Minister seems to have in mind—that is changing the guidelines when they were incorporated in legislation—we should be dealing with one-clause Bills. They would take up about a minute of the time of this House. Even if we were hard-pressed, we could surely spare a minute for Bills of that kind. It would be neither impossible nor difficult. Indeed, the result would be much more important. It would give reassurance to those people who are affected. Surely that is one of the reasonable purposes for which
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legislation is passed. The guidelines are valuable, but if the guidelines were in the legislation they would be even more valuable. That must be desirable. If to change them from time to time—I cannot believe that it would happen very often—were a burden, it would be a burden which would be placed upon us, not upon somebody else, and once in a while it would not do us a great deal of harm to have to do a little extra work.
Lord Winstanley: I am not at all sure about my noble friend's intentions with regard to the amendment. I wish to say that I support very fully what my noble friend Lord Lloyd of Kilgerran has said. This is a matter which concerns me, as it concerns noble Lords in all parties who spoke at Second Reading on Clause 5 and who have spoken on it at other times. Having listened to the reply of the noble Lord, my difficulty is that I find that the second half of his speech is in direct conflict with the first half. The first half seemed to be totally without sympathy for the arguments advanced by my noble friend, but when the noble Lord reached the second half of his answer he sounded very much more amenable and understanding. I shall want to look very carefully at his speech to find out whether I can see on which side of the fence he comes down.
The noble Lord concluded his remarks by referring to the guidelines. I have not studied the matter with the care my noble friend has devoted to it. However, I looked through the reports of the proceedings in another place and saw that the matter arose there at Report. The Minister who replied to the debate made much of the question of the guidelines being an answer to the point which had been raised. It seemed to me that the Minister accepted the force of the argument behind the amendment but felt that the situation was probably best met by the guidelines. It appeared to me that a moment ago the noble Lord repeated that view and asked, "Why write that into the legislation? Surely it is better just to have guidelines, bearing in mind that they relate to the circumstances in which the Minister will give or will withhold consent". This is rather different from the purely advisory guidelines to which the noble Lord, Lord Howie of Troon, referred.
I am not sure how much comfort I derived from listening to the noble Lord's justification for urging us to rely upon the guidelines. He said that the difference with guidelines as against writing this into the legislation is that we can change them whenever we feel like it. The Government prefer guidelines because they are not fixed; therefore if they are not suitable we can alter them. I should feel happier about the guidelines if they were not subject to alteration behind the scenes, as it were, without warning and without further debate.
I make these few remarks in order to give my noble friend time to think about what he is going to do and to express the hope that whatever he does do will enable us to return in a practical and productive sense to this point at another stage of the Bill.
Lord Skelmersdale: I rather think that the noble Lord, Lord Winstanley, is in danger of putting the cart before the horse, because he has reversed the argument I was trying to make. This was not that one should be suspicious of the guidelines because they are not

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embodied in legislation but rather the opposite: that if they were embodied in legislation one would find it extremely difficult to alter them. Were there general agreement, I am not suggesting that my right honourable friend the Secretary of State would do a one-man alteration at the flick of a pen to guidelines which had become well established. This is not the intention and to my knowledge has never occurred with any set of non-statutory guidelines.
The noble Lord, Lord Howie of Troon, said that it would be very easy to find the odd minute here or there in one House or the other to amend statutory legislation by means of a one-clause Bill. After slightly over two years in this job I am beginning to understand that it is not so easy as the noble Lord would have us believe. There are all sorts of constraints on the legislative timetable. Three Cabinet committees are sitting permanently on various aspects of legislation, to say nothing of other discussions which go on all the time. It may well be that the consensus of opinion is that that one minute—which, incidentally, we have noticed this evening can very quickly turn into a hundred—is prevented by what is generally regarded as more important legislation. So, with the greatest respect, I am afraid that particular piece of the argument of the noble Lord, Lord Howie, does not hold water.
Similar guidelines were issued in relation to the British Airports Authority when legislation on that body was recently being enacted. As I have said, the difficulty of putting them into the legislation is the inflexibility of that course. As the noble Lord himself said, the guidelines would have taken 20 or 30 pages of the Marshalled List. In fact these are somewhat shorter, so they would not have taken quite that much. It is axiomatic that they would have taken that amount of space in the final Act, assuming that it gets the Royal Assent. It would, therefore, be difficult at best, impossible at worst, to introduce new limits, if that were necessary. In spite of the confusion of the noble Lord, Lord Winstanley, over what I actually said and the marrying of my three different points together, I can assure him that I have taken this point very firmly on board and the guidelines do reflect it.
Lord Howie of Troon: Having spent several years in the Whips Office in another place, I do not really think the noble Lord, Lord Skelmersdale, should teach his grandmother how to suck eggs, as it were.
Lord Skelmersdale: If the noble Lord will give way, I said I was beginning to understand. I did not say I had anything like the experience of the noble Lord, Lord Howie of Troon.
Lord Howie of Troon: So I noticed, and I really think that will not do. If the Government wish to find a minute here or there, they certainly can. The noble Lord is quite right; a minute on the Order Paper sometimes turns into ten or twenty. But we do sit something like eight months out of the year, and out of the other four months they could find the half-hour needed for this. That is not really the point. The point lay in my reference to the reassurance to a particularly useful body of people, big earners of overseas incomes, almost the biggest per capita there are—they might
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well be the biggest, I am not quite sure. For that kind of reassurance we as legislators can spare the odd half-hour or half-day, even if it means, as has sometimes happened in my recollection, that the House sits as late as 12th August.
Lord Lloyd of Kilgerran: Like my noble friend Lord Winstanley, I was somewhat confused by the initial speech made by the noble Lord, Lord Skelmersdale, in reply to my opening speech. Perhaps I may ask the noble Lord a couple of questions in order to try to clarify the position. I am very grateful to him for the care he has taken in replying. He did refer to a combined approach between the public sector and the private sector, and he referred to what the Minister in the other place said—that they did not want to have competition between the public and private sectors but there were opportunities for them to combine together in relation to overseas business.
Do I understand that the Minister is really saying that there should be a specific requirement that the water authorities and the water companies, when operating outside the fields of manpower training and operations in which they have very special skills and expertise, should undertake the other aspects of overseas work jointly with the private sector; in other words, that there should be no schemes or projects undertaken by the water companies and water authorities, outside manpower training and operations work in which they have these special skills, without the support of the consultants? I am not sure I quite understand what the noble Lord is saying, but I believe that was the tenor of his speech.
With regard to guidelines, the consulting engineers in this big business industry are mistrustful of guidelines in any form and would infinitely prefer to have the safeguards included in the legislation itself. I am not going to press this matter any further in relation to guidelines, particularly having regard to what the noble Lord, Lord Howie of Troon, has said, but I should like to have an answer from the noble Lord, Lord Skelmersdale, about this specific requirement, as I understood him to say, that bodies in the public sector should always combine with the private sector, with private consultants, when dealing with business outside manpower training and operations in which the public sector has such skills.
Lord Skelmersdale: If we look at the guidelines and indeed Clause 5 of the Bill—which I have temporarily mislaid, but I think I remember it correctly—the Secretary of State has to give his consent before the public sector is allowed to do anything in connection with Clause 5. What my honourable friend said the other day in another place, and what I am saying now, is that, in cases of danger of competition between the public and private sectors, this is something he would have very much in mind, and he would see the public sector as being an adjunct to and not a competitor of the private sector. I hope that answers the noble Lord's question.
Lord Lloyd of Kilgerran: The noble Lord mentioned the guidelines associated with the overseas activities of the British Airports Authority. There, as the noble Lord knows, the authority is instructed to arrange its

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overseas business so as to gain an improvement in the total facilities which consultants, contractors and suppliers in the private and public sectors together are able to offer for overseas project work. In the particular guidelines to which the noble Lord referred, it is laid down—and I am reading from those guidelines—that,
"There shall be the two private and public sectors working together in relation to a particular project".
Is that the kind of guideline which he thinks should be included?
Lord Skelmersdale: That is the sort of thing which will be going through the Secretary of State's mind. What I will have to take advice on, if I may write to the noble Lord, is whether it ought to be specifically written down.
Lord Howie of Troon: I wonder whether the noble Lord will write to me as well. I am a terrible reader.
Lord Skelmersdale: Most certainly.
Lord Lloyd of Kilgerran: In view of the late hour I do not think I should press this matter further. I understand from what the noble Lord said that the guidelines are still in draft form and that nothing has yet been finalised. May I ask whether that is the position?
Lord Skelmersdale: No, I did not say anything of the sort. What I said was that I was not sure whether the points raised by the noble Lord would be more appropriate to be in the mind of the Secretary of State or in the guidelines, and that I will take advice, which is very different.
Lord Howie of Troon: Is there any way in which we can get them out of the mind of the Secretary of State and into the guidelines?
Lord Skelmersdale: That remains to be seen. It is exactly what we aim to discover.
Lord Lloyd of Kilgerran: I think that the noble Lord and myself are at cross purposes. I was asking whether the guidelines have been finalised, whether the Government will consider representations in relation to them, or whether the Secretary of State has finalised the guidelines?
Lord Skelmersdale: Yes, until this evening we did consider the guidelines as final, but after today's short debate I will, of course, consider whether they are totally final.
Lord Lloyd of Kilgerran: I am much obliged to the noble Lord. In view of that assurance that the matters raised during this short debate will be considered, all that remains for me is to thank those who have supported me in regard to this important matter. I will reconsider what the noble Lord has said and also the guidelines, which I have not yet fully studied, and reserve the right to come back on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.18 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 23:
Page 4, line 36, at end insert ("; and for the purposes of this section, statutory water companies shall have the same powers as water authorities have by virtue of paragraph 2(1) of Schedule 3 to the Water Act 1973.").
The noble Lord said: In another place it was put to us that the statutory water companies had no powers to form subsidiary companies and that without such powers there was a risk to their customers of their being involved in overseas work.
When this matter came up the Government spokesman, my honourable friend the Parliamentary Under-Secretary of State, commented that it was not clear to us that the water companies in fact lacked the powers in question. We have, however, looked further into this matter and are now satisfied that the point which was being put to us is valid; namely, that the water companies do not have powers to create subsidiary companies.
In our view it is important that they should have these powers in order to minimise the risks to their customers. The purpose of the amendment, therefore, is to provide those powers in respect of export activities only. The effect of it is that the water companies in relation to their overseas activities shall have the power, and I quote:
"to do anything (whether or not involving the expenditure, borrowing or lending of money or the acquisition or disposal of any property or rights) which in the opinion of the company is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions".
This confers on the companies in relation to export work precisely the same powers as the water authorities now have. It embraces the power to form subsidiaries. I beg to move.
On Question, amendment agreed to.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran had given notice of his intention to move Amendment No. 24:
Page 4, line 44, at end insert—
("( ) In the exercise of the powers conferred by subsection (1) above a water authority or statutory water company shall—

(a) keep and publish separate accounts to show that in respect of overseas work and taking one year with another their income exceeds their total outgoings by an amount sufficient to meet the financial targets set for their business as a whole, and report to the Secretary of State any loss likely to be incurred as soon as it becomes apparent;

(b) take out relevant insurances and enter into such bonds as are necessaary;

(c) in cases involving feasibility studies, design work or contract supervision as distinct from manpower, training and operations act in association with a firm in the private sector so as to gain an improvement in the total facilities which consultants, contractors and suppliers in the private and public sectors together are able to offer for overseas project work.").

The noble Lord said: This amendment concerns three aspects of the powers which should be introduced into the Bill in order to limit the activities of the water authority. In view of what the Minister has said about the issue of guidelines, I do not think that I would wish to press this amendment at the present

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stage or to talk about it at any great length. Therefore I do not propose to move this amendment at this stage.
[Amendment No. 24 not moved.]
On Question, Whether Clause 5, as amended, shall stand part of the Bill?
Baroness Fisher of Rednal: On Clause Stand Part I will not keep the House very much longer, but I have listened with great interest to what the noble Lord has been saying. At Report stage will he outline to the Committee the activity which is expected from the International Advisory Company Limited, which was made mention of in the other House during the course of Committee B? The main arm of the National Water Council, which had been doing all this work under the guise of the International Advisory Service, has now been formed into the International Advisory Company Limited. I just ask the noble Lord whether on Report he can perhaps bear that in mind.
Lord Skelmersdale: Most certainly. I am not quite sure whether it is an appropriate subject for Report, because of course an amendment would need to be moved to do it, but I shall certainly find out about this and at the very least write to the noble Baroness. Perhaps it may be appropriate to put it in Hansard in one form or another, but perhaps we can liaise afterwards on that one.
Baroness Fisher of Rednal: I am very grateful to the noble Lord.
Clause 5, as amended, agreed to.
Clause 6 [Arrangements for carrying out sewerage functions]:
Baroness White Baroness White moved Amendment No. 25:
Page 5, line 9, leave out from ("functions") to end of line 13 and insert—

("(a) in subsection (1), for "Subject to subsection (6) below, it shall be the duty of a water authority and every relevant authority whose area is wholly or partly situated in the water authority's area to endeavour to" there is substituted "A water authority and every relevant authority whose area is wholly or partly situated in the water authority's area may";

(b) in subsection (2), line 1, for "shall" there is substituted "may";

(c) for subsections (4) to (7) there is substituted:

"(7A) The parties to any arrangements in force by virtue of subsection (1) above may vary or end the arrangements but in default of agreement the relevant authority may apply to the Secretary of State for a direction that arrangements in force shall continue.

(7B) On any application under the preceding subsection the Secretary of State may direct that arrangements in force shall continue, subject to any variation specified in the direction, and such direction shall be binding on the parties until revoked by the Secretary of State by a further direction.

(7C) In considering whether to give a direction under subsection (7B) the Secretary of State shall").

The noble Baroness said: I now move the amendment standing in the name of the noble Lord, Lord Sherfield, and myself. I do so because the noble Lord, Lord Sherfield, as I explained at an earlier stage, is abroad. We very much regret that he is not able to put the case to your Lordships with the authority which he can command on this particular subject of agency.
This is a very important part of the Bill because it affects the relationships between the water authorities
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and local authorities in this question of sewerage. I would hope that nobody speaks in this debate tonight who has not read and fully digested at least Chapter 14 of the report by the Monopolies and Mergers Commission on the sewerage functions of the Anglian Water Authority and the North-West Water Authority. There is no doubt at all that it is in that chapter that one has set out in, I think, very effective detail the intricacies of this particular relationship which was established in the principal Act of 1973. As it rightly says, the central question is whether the arrangements under the existing Section 15 of the principal Act provide a satisfactory framework for achieving efficiency. Your Lordships will recall that the arrangement at present pertaining is that the water authorities are under a duty to endeavour to make an arrangement with the councils partly within their area, for the carrying out of the repair and maintenance of existing sewers, the monitoring and maintenance of pumping stations and the capital investment in both sewers and pumping stations which may be required. As the Monopolies Commission says, the so-called agency prescribed by Section 15 is an odd one—I use their phrase. It is odd because the principal has no choice about whom he employs as agent and sees great difficulty in dismissing him if his performance turns out badly.
I should perhaps explain that the Select Committee on Science and Technology, which has recently reported on the water industry, including this aspect of sewerage, did not feel that it was suitable or desirable for it to go into the totality of the intricacies of this relationship because the Monopolies and Mergers Commission had done, we thought, a very thorough and basically very satisfactory job. I will come on in a moment to the particular issues with which the Select Committee on Science and Technology was concerned within its own remit. But it would be only fair, in the light of the succeeding amendments which are on the Marshalled List, for one to refer a little further to the Monopolies and Mergers Commission's much more comprehensive investigation into the matter.
Having said on the one hand that the relationship was an odd one and clearly in many respects not satisfactory to the water authorities, on the other hand the Monopolies and Merger Commission also were at pains to point out that any terminations of this relationship in particular instances could bring considerable disadvantages and hardships to the local authorities. They make a very well balanced case coming down quite firmly on the view that the savings which are available—particularly technologically and organisationally—should the water authorities take over the responsibilities directly themselves, might be achieved without the general abolition of Section 15 arrangements. They also point out very fairly that while there can be technological and, therefore, ultimately financial advantages in a much more centralised organisation under the water authorities, nevertheless there are undoubtedly likely to be significant residual costs and difficulties of deployment of manpower and resources for local authorities. That is all very fairly and fully set out.
But the Monopolies and Mergers Commission were also perfectly clearly aware of the facts which were

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brought constantly to the attention of the Select Committee indicating that there is a very uneasy relationship and that this stems largely from the historical fact that before the Act of 1973, it was the local authorities which themselves undertook these particular sewerage functions. It has proved extremely difficult for many local authorities, although by no means all, to accommodate themselves to the idea that they are not in fact principals in this area but that they are agents and therefore must accept that it is the responsibility of the water authorities to propose both a strategic plan for dealing with sewerage problems and also to further, as rapidly as may be, the pursuit of technical innovations which might be of general advantage.
They put it quite clearly in their report that the councils must recognise that the water authorities have the right to supervise their activities as closely as is necessary to achieve cost-effectiveness and qualitative standards. Moreover, the councils must accept that they are acting as agent and must work to achieve the objectives set them within the cost, technical and design parameters laid down by the water authorities.
Chapter 14 then proceeds to point out that there are in fact doubts as to the precise powers which a water authority can legally exercise under the model arrangements—that was presumably a previous term for "guidelines"—which were established following the passing of the 1973 Act. The report comments that these doubts as to the legal position and powers of the water authorities are an important obstacle to the efficient operation of Section 15. Their resolution ought not to be left to a dialogue between the councils and the water authorities or to the test of court proceedings.
It then goes on to list various situations in which the water authorities are in doubt as to their precise position. It mentions other areas of uncertainty which I think we would not perhaps wish to go into tonight, beyond pointing out that there are very serious doubts as to the precise legal relationships between them. Finally, they say that they were in no doubt that, not merely on recurrent work but on the selection and control of capital works, the water authorities did not have a satisfactory position; they indicated that the two authorities which they had been especially commissioned to investigate—the Anglian Water Authority and the North-West Water Authority—said that they found it impossible to carry out their responsibilities in capital operations under the existing Section 15 arrangements.
For example, the North-West Water Authority said that it cannot rely on the districts to identify projects to establish the correct priorities, and it believed that it should be given direct control of capital programmes and the furthering of their progress. The Anglian Water Authority was perhaps not quite so emphatic, but I must say that on the Select Committee we had other evidence which reinforced the opinions recorded here of these two major water authorities.
At paragraph 14.19 the Monopolies Commission says that these arguments of the water authorities are serious and substantial. They conclude that model arrangements do not unambiguously give the water
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authorities the authority they need to establish regional strategy or capital programme, and that the model arrangements should be varied. I recognise that model arrangements are not by statute; nevertheless, they are the conditions under which these agency arrangements have hitherto been working. The Monopolies Commission says that the preferred solution of the two authorities—and I should have thought, from the evidence that we received, that it was the preferred solution of if not all, then certainly the majority of the water authorities—that all agencies be terminated is unnecessary. With this the Select Committee concurred.
The commission also said that the existence of the residual cost argument must not be used as a general argument against change, and it says finally that, apart from various amendments to the model arrangements, it was likely that amendment to Section 15 itself would be necessary.
I have gone into this at some length because I think it is very important in this question that we should have the background. There are 10 water authorities in England and Wales. There are more than 350 agency authorities, which are well and skilfully organised and led. Therefore, it is important that we should be quite clear that there are very considerable and substantial difficulties in the existing situation. Of course, the Select Committee itself was primarily concerned with the extent to which the present agency arrangements are impediments to improving the scientific and technological basis of our arrangements for sewerage. As the noble Lord, Lord Sherfield, himself said on Second Reading, the conclusion to which we came in our endeavour to establish whether the agencies affected the water industry's technical capacity, was that the agencies were undoubtedly a "hindrance". That I think was a carefully chosen word.
We took evidence not only from water authorities themselves in addition to those that were so fully examined by the Monopolies Commission, but from other sources, including, for example, the hydraulic research station. As we say in terms, their evidence to us was that in their experience agent authorities are much more reluctant than water authorities to use modern methods—computer based programmes and flow analysis—which have now become possible because of modern communication systems. It is disturbing to find that they should suspect that many local authority agents are using what they called outdated tools in analysing the hydraulic performance of their sewerage system, and were not in a position to take advantage of new methods of analysis of flow, and so on, which are of course bringing about a revolution in the administration of this particular kind of function as they are in so many other directions.
The Severn-Trent Water Authority—and it is after all one of the largest in the country—said in its evidence at paragraph 442:
"There is some resistance by district councils to the introduction of new technology because of staffing implications and because some of these developments represent a loss of autonomy. The argument usually proffered is one of local response and immediacy, but the underlying reason is thought to be a feeling of loss of power of control."
This is understandable if one looks at the historical background.
However, the fact remains that if one is going to take advantage of modern technology one can do it effectively in many situations only on a scale which is larger than that at least of the smaller authorities. One cannot possibly employ some of the modern methods which are now available without extending the field of operations, for example, to a division of a water authority which would normally embrace a number of the smaller authorities. This would not necessarily apply to a metropolitan authority, but in the rural areas particularly one is not likely to find smaller authorities which can be employed effectively in this way.
For the reasons on which I have just touched, while the Select Committee agreed with the Monopolies Commission that one did not want to bring the whole agency concept to an end, we felt that the water authorities were being put under constraints which they found certainly irksome. This is why in the amendments on the Marshalled List which, had he been here, the noble Lord, Lord Sherfield, would have moved, it is proposed that instead of maintaining the words in the existing Act which impose a duty, it would be a permissive function of the water authority to come to an arrangement with the councils within its area.
I am not certain where we stand on discussing the related subsequent Amendment No. 27 in the name of the Minister, the noble Lord, Lord Bellwin, or Amendment No. 28 in the name of my noble friend Lady Fisher. I understand that the Government are not proposing to press their own amendment this evening, which puts one in a slightly ambivalent position. I have made, so far as I am able, the position of our Select Committee clear, but I am not sure how far it would be appropriate to continue to discuss the attitude as expressed in the present Government amendment, with which I think the Select Committee would have been sympathetic, or the somewhat different stance taken by my noble friend. I do not know whether the Minister wishes to intervene at this point to explain his intentions?
Lord Bellwin: That might be helpful. I had intended to speak to this amendment and to Amendment Nos. 27, 27A, 28, 46, 47 and 48. I understand that the usual channels have discussed the matter so, with the leave of the Committee, I will deal with those also.
I listened to the noble Baroness very carefully and perhaps I might take this opportunity to set out the Government's position on the various proposals for amending Clause 6. The 1973 Act provided for sewerage arrangements between water authorities and local authorities, recognising that there were links between sewerage and local authorities' other functions and that there were benefits in local knowledge. However, there has been unease, as the noble Baroness fairly said, from time to time since then over whether the arrangements were such as to result in an efficient service.
In March of last year we asked the Monopolies and Mergers Commission—again, as she rightly pointed out—to investigate the efficiency of the two authorities concerned, Anglian and North West. The commission concluded that sewerage arrangements should,
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generally, continue, but that in order to improve efficency, changes should be made to give water authorities better control. They noted with concern the attitude of some district councils who resented what they saw as interference from water authorities.
We consulted the water authorities, local authorities and others about the proposed amendments to Section 15 arising from the MMC report and there was a large and varied response. We also noted carefully the conclusions of the Select Committee on Science and Technology, who commented on sewerage agencies in their recent report on the water industry.
The Government's guiding principle is that the sewerage functions required by the Public Health Acts should be carried out as effectively and efficiently as possible. We also believe that water authorities should retain overall responsibility for sewerage, in line with the principle underlying the 1973 Act, which gave them unified management of the whole water cycle. We accept the MMC's conclusion that local authorities should, generally, continue to carry out sewerage on behalf of water authorities under the Section 15 arrangements.
Within this framework we need to consider carefully how to strike the right balance so that water authorities will be able to control the activities of their agents and secure the efficient operation of sewerage without losing the benefits of local involvement.
We have tabled an amendment which would remove the duty on water authorities to endeavour to enter into arrangements, would change the procedures for ending or varying arrangements and would make other changes. This is similar in effect to Amendment No. 25 standing in the name of the noble Lord, Lord Sherfield, which of course reflects the report of the Select Committee which was chaired by Lord Sherfield.
The Government are concerned about the continuing unease among local authorities regarding the effects of the amendments. We have never envisaged any general termination of sewerage agencies. We want them to continue unless there are good reasons why, in specific cases, they should end. But we also need to ensure that the wording of the statute is consistent with our aim of improving efficiency.
The question of the right of appeal for local authorities who seek to establish new arrngements, in cases where they do not exist already, is also a matter of concern. We consider that perhaps such an amendment should be incorporated into an amendment such as the one that we have tabled to remove the existing duties on water authorities to seek to enter into arrangements. This is another point that we want to look at again, and that is why this evening I shall not be moving my amendment.
We feel that we ought to consider these detailed points more carefully, not least in the light of what the noble Baroness said. I was so pleased that she went to the trouble of putting the matter in such detail, and we shall note it carefully. We believe that we should also consider the points more carefully not least in the light of further representations made, so that we can try to make sure that we are striking the right balance. In the thousands of amendments with which we deal we are

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told that we ought to consider the representations more carefully, and we always try to do so. There are times when perhaps we ought to give even extra consideration, and so we shall certainly return to this matter at Report stage. That is an undertaking that I give. The noble Baroness, as well as the noble Baroness, Lady Fisher of Rednal, my noble friend Lord Sandford, and others, have expressed concern. I hope that, in the light of the assurance that I have given about returning to the matter at Report stage, it will be agreed not to proceed with the amendment. We intend to return to the matter at Report stage, once we have been able to give it additional consideration.
9.47 p.m.
Baroness Fisher of Rednal: I have listened very attentively to what the Minister has said. As he rightly said, this is an important issue. It was discussed at very great length in committee in another place, and there was all-party support for the need to consider very seriously the Section 15 agency arrangements. I should like to thank the Minister for the amendment that he has placed on the Marshalled List, but not yet moved. That is in line with an agreement in the other place that there would be an amendment when the Bill came to your Lordships for consideration. So we thank the Minister for going that far, and we look forward to the Report stage, bearing in mind the undertaking that he has just given to us.
I want to spell out one or two points which I think it is important for your Lordships' Committee to understand. My noble friend Lady White went into great detail with regard to this matter. I, too, have read Chapter 14 of the report very diligently. It covers a great number of points. What the noble Lord has said accorded with what was said during the Committee stage in the other place. It was stated that many of the observations in the Monopolies and Mergers Commission's report were accepted, and it was not envisaged that many local authorities or water authorities would move away from the arrangements.
I accept what the noble Baroness, Lady White, said. Obviously, she read the various sections of the report that suited the case that she was putting forward, and I do not blame her for doing that. But parts of the report are very much in favour of the district councils and other local authorities, and that point was I believe made clear when the Minister spoke in the other House on Third Reading. I shall not delay your Lordships' Committee for very long, but Chapter 14, paragraph 7, of the report states:
"We must consider particularly the effect on DCs of the residual costs which they may have to absorb"—
and the noble Baroness made that particular point—
"if part of their manpower and equipment is not taken over by the RWAs. In addition, there are the possible increases in costs to DCs of discharging their own responsibilities for drainage, council-owned private sewers and public health, which may arise because economical scheduling of gangs becomes more difficult when their work level is reduced".
It is important for us to recognise that many of the large local authorities—those that are in the AMA—have large housing estates, with council-owned sewers. In those instances the councils' own arrangements apply. Therefore, it would not become
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part of Section 15 even if there was a change of agency. I think I am correct in that point of view.
Another point that was brought out by the Monopolies Commission was that it is important that sewer repair and maintenance are linked with highways and local planning. The two things very often can go together. There are always the grievances from the general public who say: "Who dug that hole? It was filled in last week and it has been dug again this week". If the local authorities are in charge, there can be greater co-ordination regarding highways and local planning.
Obviously the maintenance of the sewers fits in quite naturally with their existing responsibilities under the Health Act 1936 to which the noble Lord the Minister drew attention. Perhaps I may say that the Monopolies Commission drew attention to how emergency services can very quickly be brought into action by local agencies. The local authorities normally have standby personnel—a phrase mentioned during our debate on the water dispute. Standby duties are part of emergency arrangements and they are part of emergencies that might happen with sewerage. Therefore, the local authority in that capacity can quickly respond to emergencies.
Therefore, I think one has to ask oneself this question. If the agency arrangements are terminated, who is going to undertake the work? That is the question that has to be posed and that is what the Government have to face up to. Will it be the direct labour of the water authority? Is that what is envisaged? Or will it be some private enterprise group that moves in and undertakes the work in the local authorities? I think the answer to that is a very important one; because district councils (as the noble Lord the Minister has said) are responsible for public health in their area and a variety of allied duties under the Public Health Act revolve around maintaining sewers and all the problems that could arise in connection with public health if they are not maintained correctly. The public have to be secure in the knowledge that any change in procedure will not give cause for concern. That is why I posed the question of who will take over if the agency is not kept by the local authority.
If we come particularly to the amendment in my name, I know that the amendment is only proposing a revision to Section 15 as it was originally drawn in the 1973 Act. But also we are trying to recognise the needs of the water authority, as they have become more identified and as they have been established since 1973. In acknowledging that, we are acknowledging that district councils also have a right to be treated fairly. To this end it is essential that future agency arrangements should rest on a secure basis without the unsettling factor of a constant threat of permanent termination by application of the water authority to the Secretary of State. There has been a lot of unease in local authorities since this report was made because there is this feeling that at any stage they might be told, "Your agencies are going to be terminated". That cannot make for good working arrangements between the water authorities and the local authorities.
We have in our amendment in subsection (6) a provision which seeks to give to a council time to

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correct any serious default which may be alleged against it by the water authority concerned. If there is a serious default or a criticism of a local authority, the water authority should give time for the local authority to correct that fault before an appeal to the Minister to end the agency. But if the local authority does not measure up well, that is up to it. It then runs the chance of losing its agency when it makes its appeal to the Minister. I think perhaps that notification and time to rectify a fault must be given to it.
That is why we feel our amendment merits support. I know there is an implication that we still include "duty to endeavour". But it is a duty to endeavour to seek, to try to enter. The duty is to endeavour to have an arrangement. Quite obviously, it might mean that the endeavour does not come off. We are asking that the duty should be there to try to get the agency arrangement through the local authority, but, if for some reason that endeavour does not pay off, we fall back on an option, as the noble Lord has in his amendment.
The association has a fear, on the part of the larger metropolitan authorities in particular, that if water authorities have this amendment of ours it will give an opportunity for local authorities to look in terms of their own manpower. There is a great unease that if they lose their agencies their loss of manpower will be quite substantial, because they will lose the flexibility of using the men on sewers to work on something else for the water authorities. Not only will they lose the manpower that gives them flexibility, but they may also find themselves in difficulties in attracting and holding in the local authorities the engineers whom we were talking about at great length earlier. It is important for professional and career-minded engineers operating in local authorities to have a variety of interests. Therefore, sewers become one of their interests, amongst others. There are problems for local authorities of which I know the noble Lord is fully aware. We ask him to consider these problems when he returns with a further amendment.
My final and important point comes out in the Monopolies and Mergers Commission's report. It states:
"We must therefore be careful not to recommend changes which may turn out to be ill-advised in a few years when there is available improved knowledge of the sewerage system, as a result of the work we have described".
One of the proposals of the report is that we should not be hasty at this stage after such a short period of time, less than 10 years, in considering changing the system. I am grateful to the noble Lord for the observations he has made. I shall not be pressing the amendment
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because I feel sure that he is trying his very best, as he says, to get the thing completely right. In that spirit, I accept all he has said.
Lord Sandford: I was sorely tempted to stir up the squabble which I thought was developing between the two noble Baronesses opposite, but I will resist that temptation and say that the acceptance by the Government of the idea of a power rather than a duty which results from the studies of our Select Committee and the report of the Monopolies and Mergers Commission is the correct stance to adopt. It only required the modification which my noble friend on the Front Bench indicated that he would add to the amendment he originally tabled to produce the accord which I ventured to suggest at Second Reading could be reached if we all applied our minds to this matter. Therefore I am very grateful for what my noble friend has said and I look forward to the amendment.
Baroness White: I think this has been a useful discussion even though it has led at the moment to no statutory conclusions. I was most grateful to the Minister for explaining clearly the position of the Government and their endeavours to square the circle or solve the insoluble. I am also grateful to my noble friend for her very clear exposition of the main points of the amendment standing in her name.
I do not think any good purpose will be served by pursuing the arguments further this evening, but perhaps I may just suggest to my noble friend that the one thing which really disturbs me in her own amendment is in subsection (6), in which it is suggested that a water authority should wish to terminate an agreement which might be a partial agreement—because it is extremely important to note that the Monopolies and Mergers Commission suggest that there are ways of terminating part of an agreement and not the entire agreement, for example, to take advantage of technological change. She suggests that it is always a question of serious default, but I would beg her to believe that it is not necessarily that at all. It is a situation in which you may need to have a change in the arrangements because of telemetry, for example, which permits remote recording and monitoring of local data in a way which is just inappropriate if you have a large number of separate authorities with agency arrangements. However, I will not pursue that at the moment and I think the sensible thing is to ask leave to withdraw Amendment No. 25.
Amendment, by leave, withdrawn.
[Amendments Nos, 26, 27 and 28 not moved.]
Clause 6 agreed to.
10.4 p.m.
Lord Sandys Lord Sandys moved Amendment No. 29:
After Clause 6, insert the following new clause:
("Civil liability of statutory water undertakers for escapes of sewage.
.—(1) Where an escape of sewage, however caused, from a sewer of statutory water undertakers causes loss or damage, the undertakers shall be liable, except as otherwise provided in this section, for the loss or damage.
(2) Statutory water undertakers shall not incur any liability under subsection (1) above if the escape was due wholly to the fault of the person who suffered the loss or damage or of any servant, agent or contractor of his.
(3) Statutory water undertakers shall not incur any liability under subsection (1) above in respect of any loss or damage suffered by any excepted undertakers for which they would not be liable apart from that subsection.
(4) The Law Reform (Contributory Negligence) Act 1945, the Fatal Accidents Act 1976 and the Limitation Act 1980 shall apply in relation to any loss or damage for which statutory water undertakers are liable under this section, but which is not due to their fault, as if it were due to their fault.
(5) Nothing in subsection (1) above affects any entitlement which statutory water undertakers may have to recover contribution under the Civil Liability (Contribution) Act 1978; and for the purposes of that Act, any loss for which statutory water undertakers are liable under that subsection shall be treated as if it were damage.
(6) Where statutory water undertakers are liable, under any enactment or agreement passed or made before the coming into force of this section, to make a payment in respect of any loss or damage, they shall not incur liability under subsection (1) above in respect of the same loss or damage.
(7) For the purposes of this section—

(a) "damage" includes the death of, or injury to, any person (including any disease and any impairment of physical or mental condition);

(b) "excepted undertakers" means—

(i) statutory undertakers within the meaning of section 290(1) of the Town and Country Planning Act 1971;

(ii) any highway authority within the meaning of the Highways Act 1980;

(iii) any bridge authority, bridge managers, street authority or street managers within the meaning of section 39(1) of the Public Utilities Street Works Act 1950; and

(iv) any person on whom a right to compensation under section 26 of the said Act of 1950 is conferred;

(c) "fault" has the same meaning as in the Law Reform (Contributory Negligence) Act 1945; and

(d) "statutory water undertakers" has the meaning assigned to it by section 11(6) of the Water Act 1973.

(8) This section shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint.").
The noble Lord said: We have left Clause 6 and we now come on to the matter of civil liability of statutory water authorities for escape of sewage. A new clause of this length and complexity should have some reliable antecedents and I hope that I can assure your Lordships that this is the case because we are looking at a part of a statute which is in fact an adaptation of Section 6 of the Water Act 1981.
During the passage of this recent piece of legislation, civil liability of statutory water undertakers for escapes of water from water mains was accepted as a suitable amendment, and tonight I hope that my noble friend will consider favourably the equivalent civil liability of statutory water undertakers for escapes of sewage, which would rectify what we considered to be a glaring anomaly.
Here I should declare an interest both as a householder and as a landowner and pass on to the history of civil liability in this field. In this regard, a certain case has astonishingly great importance. This dates back to the case of Green v.Chelsea Waterworks of 1894, in which it was held that an action does not lie in respect of the flooding of land by water escaping from water pipes when the body exercising its statutory powers did so without negligence. Thus, unhappily, there was a requirement for the plaintiff to prove negligence.
The situation was reversed in Section 6 of the Water Act 1981, which shifts the burden of proof from the shoulders of the plaintiff to rest upon the much broader shoulders of the undertakers. The comparison between water mains and sewers is a close one, and I think my noble friend will acknowledge from the discussions which have taken place on this subject that this is, happily, the case. The amendment seeks to do the same for sewers, and to shift the burden of proof from the plaintiff to the undertakers.
The extent of the problem of burst sewers is considerable, and it will be valuable if I draw your Lordships' attention to a Written Answer given by the Under-Secretary of State for the Environment, Mr. Giles Shaw, on 10th March, 1982, when he said:
"investigations by the Water Research Centre indicate that the number of excavations to carry out repairs to collapsed sewers is of the order of 2,000 per year in England and Wales."—[Official Report, Commons; col. 454.]
I know that many of your Lordships are very well aware of that in parts of the country where you live. My noble friend will also be aware that this matter was discussed at a meeting which was held at the department on 22nd July, 1981, and was carefully considered by his honourable friend Mr. Shaw, who took the chair on that occasion. Without further ado, I beg to move.
Lord Skelmersdale: Although a vaguely similar provision for damage from water escapes is in the Water Act 1981, as my noble friend Lord Sandys has said, the Government are not able to accept this amendment. I specifically use the word "vaguely", because there is some similarity here so far as the issue of principle goes, but we do not believe that the two cases have any similarity as regards the practicalities of the matter.
The first and fundamental point is that water authorities and companies have absolute control over what is put into their water mains. They have to maintain the pressures and they add the necessary substances to purify the supply. That is not the case with sewers. The water authorities are of course receiving agents so far as sewage is concerned. They do not control, except in relation to such matters as industrial discharge, what is placed in their sewers and, in particular, they do not control quantities and flows.
They are, moreover, at a particular disadvantage in this respect, since there is a virtually unrestricted statutory right, conferred by Section 34 of the Public Health Act 1936 on:
"the owner or occupier of any premises, or the owner of any private sewer …to have his drains or sewer made to communicate with the public sewers …and thereby to discharge foul water and surface water from those premises or that private sewer."

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In a word, a water authority can do very little to prevent additional connections to their sewers, even where these will overload the system, as my noble friend remarked they sometimes do.
Section 17 of the 1936 Act and Section 15 of the Water Act 1973 together enable local authorities to adopt sewers without reference to the water authority. Indeed, this point was made by the noble Baroness, Lady Fisher, on the last amendment. This, too, presents an additional problem for water authorities, giving them less control than in many respects they would wish over their own sewerage network. The sewerage system is not designed to cope with every eventuality. In particular, if it was designed to discharge all the surface water which there might be in freak storm conditions, we would need massive sewers compared with those which we have at present.
Of course, the existing sewers cope with normal rainfall or even exceptionally heavy rainfall without too much trouble, but to prevent flooding altogether would be enormously expensive. My noble friend's amendment would conceivably give rise to liability in the event of freak weather which is entirely outside the control of water authorities. The amendment would not cover escapes of sewage from the numerous private sewers which exist. My noble friend referred to his own position as both a householder and a landowner. I should be interested to know whether the sewers are his own or whether they belong either to the local authority or to the water authority.
The demand for this amendment has always been expressed in relation to water supply: that is, the amendment now incorporated in Section 6 of the 1981 Act, to which my noble friend referred. We are not aware that failure to extend it to escapes of sewage has given rise in practical terms to major loss. My noble friend drew the Committee's attention to the meeting in July 1981, chaired by my honourable friend the Parliamentary Under-Secretary, with Mr. Ted Graham, an Opposition environment spokesman in another place, and representatives of the water industry, the local authority associations, the Country Landowners' Association and the National Farmers' Union at which all these matters were discussed.
It was recognised that there was very little evidence that individuals were disadvantaged in significant respects by the absence of this provision. It was agreed that the various parties would collect information on cases, but I must point out to the Committee that no information has been submitted to my department since that time. Futhermore, we are still in the first year of operation of Section 6 of the 1981 Act. Until we have some idea of the cost which this has imposed upon the water industry, it would be most imprudent to extend the principles into the area of sewers, even if that were thought desirable.
For all these reasons, I do not feel that the amendment is reasonable in the circumstances. I hope my noble friend will agree with me.
Lord Sandys: I am grateful to my noble friend for going in such detail into a matter of both law and costs. The questions he raised with regard to freak weather conditions are materially important. He referred to private sewers. It will be of interest to my noble friend
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to know that it has been estimated that over 90 per cent. of properties in this country are connected to the public sewer. A number of rural areas are not so fortunate. I happen to be included in the very small percentage of those not connected. This is a matter for further consideration. While I should be only too willing to beg the leave of the Committee to withdraw the amendment at this stage, may I reserve my position for a later stage of the Bill? In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.14 p.m.
Lord Winstanley Lord Winstanley moved Amendment No. 30:
After Clause 6, insert the following new clause:
("Ownership of sewers.
. Where, prior to 1st April 1974, a local authority adopted a private street under the provisions of the Highways Act 1959, or any enactment consolidated in that Act, that adoption shall, unless the contrary intention on the part of the local authority appears, be deemed to have vested in that local authority any sewers serving that street.").
The noble Lord said: In moving Amendment No. 30, I think I am right in assuming that this new clause has not been overtaken by the events announced in the reply of the noble Lord, Lord Bellwin, to Amendment No. 25, which was moved by the noble Baroness, Lady White. The noble Lord, Lord Bellwin, said that matters had been discussed through the usual channels. I hope it will be understood that when sewers are being discussed noble Lords on these Benches would not believe it very logical to object to not being regarded as part of the usual channels. However, the fact that we were not informed of that development was, I am sure, purely an oversight.
Lord Skelmersdale: This amendment stands very definitely on its own. It was never proposed, either 10 days ago or again today, with the revamp of ideas from both Opposition and the Government, that the noble Lord's amendment should be included in any block grouping.
Lord Winstanley: I had deduced that this amendment should not be included in any grouping, but where there are discussions through the usual channels I should like to hope that usually this Bench will be regarded as part of them. In normal circumstances, I am sure that it would. The amendment seeks to deal with what I generally believe to be a nationwide problem. As a Lancastrian, I should confess that information regarding this problem has come to me from Yorkshire where I understand the problem has caused particular trouble. Having said that, I think perhaps I may safely assume that the noble Lord, Lord Bellwin, will know all about the particular problem, and may very well plan to deal with it in some way, perhaps by accepting my amendment or in some other way of his own.
The reasons for this amendment are best explained by an example. The Deanhouse Estate in the village of Netherthong in the Kirklees Metropolitan District Council area of Yorkshire was built in the years 1971 to 1972. The highways were adopted under the 1959

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Highways Act by the former Holmfirth Urban District Council, and the councillors who were a party to that resolution say that they were under the firm belief that by adopting the highways under this procedure they were at the same time adopting the sewers. The chief executive of the Kirklees Metropolitan District Council confirms this belief. He says:
"I am informed that it was common practice in former authorities prior to reorganisation to use the powers contained in the Highways Act 1959 to adopt the highway in the belief that in doing so they were also adopting the sewers beneath the highway".
It now appears that nearly all the former urban district councils which constitute the Kirklees Metropolitan District Council followed the same procedure as that in Holmfirth.
However, the Yorkshire Water Authority does not accept this practice as either legally or morally binding. Instead, the Yorkshire Water Authority insists that before it will accept such sewers as public sewers evidence must be brought forward in the shape of either (a) a record or a minute of the sewers separate adoption under the 1936 Public Health Act, or, alternatively, (b) evidence on the sewer map maintained by the local authority showing the sewers concerned as public sewers even though they may only have been adopted under the 1959 Highways Act.
Neither of those alternatives seems to offer much comfort to the householders concerned. In regard to the first one, a record or a minute of the sewers separate adoption under the 1936 Act, I am told that in some areas officials and councillors of former urban district councils are convinced that a separate minuted adoption of sewers took place under the 1936 Public Health Act, but they tell me that the records have been lost in the transition from urban district council to metropolitan and non-metropolitan district council status. Therefore, all those minutes having been lost, there is no relief for the householders by that route. With regard to the other alternative, evidence on the sewer map, I am told that in the early 1970s, during the housebuilding boom and the changeover in local government, many of the maps were more or less neglected. Indeed, the sewer map for the Deanhouse Estate area, maintained by the Yorkshire Water Authority offices and not by the local authority offices, still shows a hospital standing on the site of the estate. So there is not much help via that route either.
Although the water authority has adopted this legal stance in all cases, in practice it has only applied this rigid approach in those cases where the sewers have been found to be defective. In those cases the residents are told that the expense of repairing the sewers is their own, and that the water authority will not consider adoption until such time as these repairs, often very expensive repairs, have been carried out to the satisfaction of the water authority. This has caused immense problems and financial hardship to the residents on the various estates affected, and I am told there are many such estates. It lowers house prices; people have difficulty in selling their houses at all, and when they do sell they are often forced to leave substantial sums of money in the hands of their solicitors as a bond in case the residents are proved to be liable for the repair of the estate's sewers.
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Land searches done on houses on that particular estate have given the answer, "Yes" to questions asking whether the land is drained to a public sewer. More recently the answer has been "Yes, so far as can be determined". Residents on the estates affected all pay full water and sewage rates. At present such disputes can only be resolved by appeal to the Secretary of State under Section 17 of the Public Health Act 1936. That course of action, in fact, has been successful in places like Richmond, in Yorkshire. But it is an expensive business and necessitates a public inquiry for each separate case. That, surely, is a very unsatisfactory way of handling these matters.
Perhaps I should finally make it clear that this amendment is designed only for those pre-1974 local authorities which had a unitary responsibility for both sewage and highways. Some authorities had responsibility for only one or the other. Also, it is to apply where sewers and highways were constructed over the same period. I am quite sure that this problem has already come to the notice of the noble Lord, Lord Bellwin, particularly as it has been a problem that has caused so much aggravation in Yorkshire, However, I understand that it is a general problem and I hope that the noble Lord will have found a solution to it. I beg to move.
Lord Skelmersdale: The noble Lord, Lord Winstanley, seems to be making a habit this evening of shooting my foxes before I even see them. However, we shall see how we get on with this one.
I obviously sympathise with the noble Lord's reasons for proposing this new clause to the Committee, but I am afraid I cannot accept it for the following reasons. Reorganisation of the water industry in 1974 transferred sewerage and sewage disposal responsibilities to the new water authorities. However, prior to that, local authorities were frequently both the sewerage and highway authority, as well as having responsibility, incidentally, for building control, housing and planning. It was quite common for the separate statutory agreements concerning the adoption by the authority of private roads and sewers to be combined in one document. Provided they were clearly drafted, no confusion should have arisen. However, I am aware that this was not always the case and, for one reason or another, the intentions of the predecessor local authority have been lost sight of.
I understand from what the noble Lord, Lord Winstanley, said that one of the purposes of this clause is to remedy any such problem by requiring the private sewers lying beneath highways to be adopted by the public authority and so be maintained at public expense. I am also aware that there are variations on this proposition, to which I shall come later.
Legislation already exists, and has done since as long ago as 1936, to enable private sewers and sewage works to be adopted into the public system. One avenue is by agreement at the time of construction between the water authority and the development—Section 18 of the Public Health Act 1936 refers here—and the other by request from an owner of any sewer; that is, under Section 17. There is a right of appeal to the Secretary of State if the water authority refuses the request.

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The noble Lord, Lord Winstanley, said that he is not terribly happy with this avenue. Nonetheless, it exists in law, has been used and has proved to be effective in by far the majority of cases. Although this latter option does not guarantee adoption in every case, it is an avenue always available to the owner of any post-1936 sewer or sewage disposal works to be exercised at any time, including where the intention of the predecessor authority has been lost sight of.
An important feature is that this latter option obliges water authorities, and the Secretary of State on appeal, to have regard to specific considerations which indirectly protect the public purse; namely, the method of construction of the sewer, its state of repair and its adaptability to the public system.
May I say at this point how interested I was by the noble Lord's reference to Kirklees. There is, as he knows, an appeal case currently before the Secretary of State relating to this particular area. I would ask the noble Lord to accept that I am precluded, because of my right honourable friend's quasi—judicial position in this, from saying anything on that particular case.
Having said that, to return to the more general points in the amendment, I appreciate that house-owners may unexpectedly find that they have a private sewer liability that they may not have known about, usually when something goes wrong. I sympathise with that. However, I do not think, as I was trying to explain earlier, that that problem can be attributed to the legislation. I am bound to say, therefore, that the proposed clause takes no account of the considerations arising on adoption, nor of the open-ended public expenditure implications that would arise, particularly if water authorities were obliged to adopt defective systems, and nor of the views of some owners, albeit perhaps a minority, who may not want adoption of their particular sewers.
Nevertheless, I am aware of the various criticisms made of existing legislation and the suggestions made for its improvement—that all sewers should be constructed to adoption standards, that adoption should be mandatory and that sewers beyond the curtilage of private property should be publicly owned. All those points deserve consideration, but in the context, as I hope the noble Lord will agree, of a comprehensive study so that all the implications can be considered properly. I can assure the Committee that we shall undertake that as soon as there is an opportunity to do so. In the meantime, perhaps the noble Lord may agree with me that it would perhaps not be right in the circumstances to pursue this particular amendment.
Lord Winstanley: I am most grateful to the noble Lord for the care and the detail with which he has replied to this particular amendment. I shall read his reply with very great care and I hope that he will also read what I have said with similar care at a later stage. But I am bound to say that I cannot accept that his answer is wholly satisfactory, in so far as it appeared to suggest that the existing remedy—namely, an appeal to the Secretary of State under Section 17 of the Public Health Act 1936—was an altogether satisfactory
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safety net for that particular solution, especially when I bear in mind that that method is very expensive and necessitates a public inquiry on each separate case.
I cannot believe that the noble Lord the Minister really thinks that it would be helpful to anybody to have a multiplicity of appeals to the Secretary of State, followed by multiplying public inquiries, which have, as the noble Lord acknowledged, turned out in favour of the appellant on a number of occasions. I fully accept that he cannot comment on the case in Kirklees to which he referred or indeed on any other case that may be pending. But it is a fact that cases that have gone to a public inquiry have in the end ended in favour of the complainant. I should have thought that we ought perhaps to find a more suitable method of dealing with the situation. I accept that the method which has been contained in the new clause which I moved may very well not be the right method. There may be other ways of doing it. On the understanding which I seem to get from the noble Lord that this whole matter is being looked at in general terms, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.28 p.m.
Lord Sandys Lord Sandys moved Amendment No. 30A:
After Clause 6, insert the following new clause:
Power to lay mains.
(". Section 19 (power to lay mains) of Schedule 3 to the Water Act 1945 shall apply as if the substitution made for paragraph (b) of subsection (1) by Article 7 of the Local Authorities etc (Miscellaneous Provisions) Order 1977 had not been made.")
The noble Lord said: With your Lordships' permission, I should like to speak to Amendment No. 38B at the same time as Amendment No. 30A. I think that it will be in the interests of the House if I condense my remarks as much as possible at this late hour, but perhaps I should say that the present law is that public sewers may be laid across private land by virtue of Section 15 of the Public Health Act 1936 and water mains may be laid under paragraph 19 of Schedule 3 to the Water Act 1945, as amended by the Local Authorities (Miscellaneous Provisions) Order 1977. These sections enable a water main or a sewer undertaking to enter land after giving "reasonable notice" in writing to owners or occupiers. There is no right of appeal or opportunity to object or to make representations on these proposals.
These powers are quite unlike any others. They seem abnormal when compared with what one would normally expect to find in English Law. For example, under the Pipelines Act 1962 (which does not of course apply to water mains or sewers), interested parties can make objections to pipeline schemes and an inquiry can be held.
As to compulsory purchase, the standard procedure is that an inquiry must be held if an owner wants one. The latitude given to water and sewage authorities is illustrated by the Court of Appeal case of Hatton v. Esher Urban District Council in 1973—the reference is 1973 2 AER 1123—where the local authority wished to construct a large pipeline across an area to alleviate flooding. The scheme involved the demolition of a bungalow, and the householder applied to the court claiming that the authority did not have so farreaching

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a power as to be entitled to demolish a dwelling without having the right to object. The Court of Appeal rejected that argument; the authority was obliged simply to give reasonable notice and to pay compensation, even though a person's home was to be demolished.
That case is really startling. There are other examples which I will cut because of the eye of my noble friend the Chief Whip. But one of the extraordinary features of the situation is the way in which the power to lay waterpipes has been amended. I hope that your Lordships will observe what has happened because it is very interesting. Paragraph 19 of Schedule 3 to the Water Act 1945, as originally enacted, required that water undertakers should obtain the consent of every owner and occupier through whose land the pipe would run. If consent was withheld, the matter would be referred to the Minister for determination.
However, that paragraph was amended in 1977 by the Labour Government by subordinate legislation. A miscellaneous provisions order, dealing with a curious assortment of subjects from Mortlake Crematorium to Biggleswade Market, made a fundamental shift in the procedures for laying mains by removing the requirement to obtain the owner's consent. The order was laid on 3rd March 1977 and came into operation on 1st April. So the change slipped through practically unnoticed before anyone realised what had happened. I presume, although I may be wrong, that the change was made in order to equate the powers for water mains with those for sewers under the Public Health Act; and, coming as it did after the Hutton case to which I referred, it enabled water authorities to capitalise on the submissive decision of the Court of Appeal.
I think we can say that these powers which are enshrined in the present legislation are both harsh and far-reaching. I feel that the amendments which I have proposed to your Lordships may indeed bring the situation in regard to both more into line with what is current public feeling on the subject. I beg to move.
Lord Skelmersdale: I am very grateful, as I know my noble friend the Chief Whip is, to my noble friend Lord Sandys for speaking to both of his amendments together. My noble friend has referred to the historical background of this matter, and I therefore need not repeat it. However, I would add one very important point in case there should be any doubt on the matter. The water authorities and their predecessors have always been obliged to compensate people for any damage they may have sustained in the course of their sewer or main-laying activities.
On the face of things, the powers to which my noble friend referred are wide ones. For more than 100 years it has been found useful not to allow the water authorities' main-laying and sewerage programme to be jeopardised by the refusal of landowners to allow mains and sewers to be built, and we can at the moment see no reason for changing the position.
Let me say very gently to my noble friend that I do not think, in spite of what he said this evening, that he has produced any evidence of the abuse of these
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powers and we in Government are certainly not aware of any major problems. What is more, to a large extent water authorities prefer to reach agreement with landowners, at least for their water main-laying programmes, and to enter into deeds of easement. I am quite sure that this is a sensible approach; but it is important that the water authorities and water companies have their statutory powers in reserve for use if necessary. In the unlikely event of abuse of these powers, they would be subject to the jurisdiction of the courts or the Ombudsman, depending on the particular circumstances.
It is true that under my noble friend's amendment there would still be a right of appeal to the Secretary of State if consent were unreasonably withheld. But it is of no great help where a programme has to be implemented quickly—for instance, where there is a massive renovation programme on hand, or new development is to be serviced, or where an extensive rationalisation of a water main system is being undertaken, as from time to time happens. It is important not to hold up these programmes.
Finally, my noble friend's amendment on water mains would lead to precisely the problem that the 1977 order, to which he has referred, was intended to overcome. There would be a patchwork of different powers. In the old local authority areas, there would be no need to obtain landowners' consent, nor would there be in a number of areas where private legislation or amendments to Section 19 of the third schedule to the Water Act 1945 have been incorporated in water undertakers' enactments. This House has criticised precisely this patchwork effect in water legislation in its comments on private legislation in the past, and I suggest that it is hardly appropriate for us to be adding to this problem at this stage.
In short, while I understand my noble friend's intention, I do not think that his amendments begin to achieve what he has in mind. As I said at the beginning, even if I did, I am afraid that I cannot accept that they are right in principle, and I hope he will be able to see his way to withdrawing them.
Lord Sandys: I feel that perhaps my noble friend's last statement, that they were not right in principle was the most sweeping. There is here a principle of equity which goes beyond the matter of administrative convenience, and I understand what my noble friend has alluded to in regard to patchwork ownerships in a housing redevelopment area. Nevertheless, there are situations in which it is a question of much greater consideration than perhaps he is aware of at the moment, whereby it would be beneficial and in the public interest both to advise and inform owners prior to the arrival of contractors on the site.
At this stage I do not wish to press the amendment. Nevertheless, I should like to urge the question of the scale of the operation upon my noble friend. Prior to 1973 the scale of these undertakings was not anything like so great as it is today. Very often at the present time the scale of the operation may take hundreds of acres of farm land in order to accomplish a very major sewerage works or a pipe-laying operation of considerable complexity. I think that this matter is worthy of further consideration. I would wish to

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reserve my position; but, in the meantime I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
[Amendment No. 30B not moved.]
Clause 7 [Arrangements by water authorities for representation of consumers' interests]:
10.39 p.m.
Lord Sandford Lord Sandford moved Amendment No. 31:
Page 5, line 26, at end insert—
("( ) Arrangements under subsection (1) above shall require each water authority to establish committees, called Consumer Consultative Committees.
( ) The number of committees to be established shall be determined by each water authority after consultation with each relevant local authority whose area is wholly or partly in the area of the water authority.
( ) The water authority shall secure, as respects each Consumer Consultative Committee, that—

(a) at least one member thereof is appointed by each relevant local authority;

(b) at least half of the members thereof shall consist of persons appointed by those relevant local authorities;

(c) the Chairman thereof shall be elected by the members from one of their number;

(d) the appointment of a person to act as Secretary thereof shall be made by the Consumer Consultative Committee;

(e) the expenses reasonably incurred by the Consumer Consultative Committee are approved and paid.

( ) In this section, "relevant local authority" means, in relation to a Consumer Consultative Committee, the council of a London Borough or of a county or district as defined in relation to England in section 270(1) of the Local Government Act 1972 or of a county or district mentioned in section 20(3) of that Act (which relates to Wales) or the Common Council of the City of London of which the area or part of it is in each case included in the area of the Consumer Consultative Committee.
( ) Each water authority shall supply to a Consumer Consultative Committee such information and documents relating to its functions as such Committee may reasonably request.")
The noble Lord said: I beg to move Amendment No. 31. However, before deploying the case for it, I should like to question whether it is sensible to proceed with the Bill further at this particular moment. In coming to this clause, we come to the matter on which the main criticism of the whole House was concentrated at Second Reading This is the point on which all our misgivings from all over the House were focused—namely, at the lack of accountablility which would be available and applied to the newly-constituted regional water authorities. The fact of the matter is that after six hours of debate on this Bill we are less than half way through the amendments on the Marshalled List. We have dealt with 18 out of the 38 amendments. Here we are coming to one of the most important parts of the Bill. I have a fairly long speech, and I dare say that other Members of the Committee have, too. I do not know whether it would be appropriate for me to just sit down while the Chief Whip or the Leader respond to what I have just said?
Lord Denham: It is always agreed through the usual channels exactly how much time should be convenient for the Committee to take on a Bill such as this. If at an earlier stage I start agitating and suggesting that
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your Lordships are taking too long, I get criticism and people say, "Why don't you leave it and then everything will come all right?" But I have not been agitating today. Your Lordships have been taking quite a lot of time on these amendments. It is up to your Lordships how long you want to take. We finish the Bill today, and if my noble friend wishes to deploy his points I hope he will now do so.
Lord Sandford: It is certainly not the Chief Whip's fault that we took over an hour and a half on a single amendment earlier today; but nor is it my fault. I feel that we have now reached an important part of the Bill and we shall have to spend some time on it. This is an amendment which bears the name of myself, the noble Baroness, Lady Fisher, who is leading for the Opposition, and my noble friend Lord Ridley. When my noble friend and I table amendments it is sometimes assumed that we are speaking respectively with the interests of the ACC and the ADC in mind. In this particular case I have to say that my noble friend Lord Ridley wants me to start by dissociating the Association of County Councils from the whole conception of consumer consultative committees because he thinks they will be totally ineffective. I share that view to the extent that as at present constituted they will be totally ineffective, and I think that in Parliament we have a duty to do what we can to remedy that situation rather than abandon it.
The present amendment is merely a probing one designed to elicit from my noble friend on the Front Bench his explanation and justification for what the Government are currently proposing in this field. In the light of our Second Reading debate, in the light of consultations since then, in the light of growing public concern about this Bill which has been expressed since then—and in that period we have seen the water strike—I can see that this amendment is only illustrative, and nowhere near strong enough or emphatic enough and does not put enough detail on the face of the Bill.
However, there is time for Her Majesty's Government to respond to the mood of the Committee, the concern of the public, and the evident need to provide in the Bill for the provision of really effective watchdogs over Lady Fisher's watercress. These are watchdogs that can be more effective than any similar consultative committees associated with any of the nationalised industries that we have seen so far. They must be able to raise standards in terms of giving value for money; to raise standards all over the industry to the level of the best; to encourage the highest possible day-to-day efficiency; and to secure the effective pursuit of long-term strategies. The committees will also need to ensure the proper pursuit of complaints. They will need to expose maladministration, and to be able to promote proper scrutiny of public expenditure throughout the industry. They will not need to handle all this work themselves; the best practice in operational performance will, when it is achieved, deserve publicity, and that can be disseminated by the press, though perhaps not as effectively in the new authorities as it could have been in the old. Value for money achievements can be established by reference by the CCCs either to the Audit Commission or to the Comptroller and Auditor-General, and the pursuit of

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long-term and broad strategy is a matter that can be referred by the CCCs—for an accolade or criticism, whichever is deserved—to one or other of the specialised Select Committees of either House of Parliament. Maladministration, as we have now heard, can, as I say, be referred by the CCCs to the ombudsman.
In such ways, the CCCs can and should be able to make use of a number of agencies already expert in various fields of scrutiny and investigation. So they need not do all this themselves; they can do it in alliance with other appropriate agencies. It seems to me that Parliament must see to it that that is provided for in the statute.
All experience in this field—as we constantly hear from the noble Baroness, Lady Burton of Coventry, in respect of the British Airports Authority and the Civil Aviation Authority—is quite conclusive that it cannot and must not be left to a public sector industry itself or to its sponsoring department, and certainly not to a partnership between the two.
Nevertheless, I am sure the Committee would be interested to hear from my noble friend Lord Bellwin his justification of what is proposed so far in the Bill and his plans, in response to the considerable concern expressed in all parts of the House on Second Reading, for offering us something more acceptable at the next stage. If he can do that in a short debate now, we shall then know what more your Lordships' House will have to do over the next weeks, between now and the end of the Easter Recess, when I understand the Report stage of the Bill will be taken. I beg to move.
Baroness Fisher of Rednal: I rise briefly to support the comprehensive remarks of the noble Lord, Lord Sandford. As he rightly said, this is a probing amendment. On Second Reading, noble Lords in all parts of the House voiced the desire that the consumer consultative councils should be not just watchdogs but watchdogs which were capable of biting. That is what we need to be assured of by the Minister: how far will the consultations take us in achieving real consumer consultative councils? Perhaps our proceedings on the Bill have taken rather longer than might otherwise have been the case because whenever something comes up for discussion we are told, "The draft guidelines are being considered" or "People are being consulted on that", and so on. The Bill's passage would have been speedier if the guidelines and consultations had been completed before this stage. Indeed, we should not need probing amendments such as this if the Bill explained what the CCCs will comprise and what their duties will be.
Lord Beaumont of Whitley: My noble friend Lord Winstanley regrets that he cannot be here to support the amendment; he has been called away. I wish briefly to support the amendment because it brings us back to an extremely important area which I raised earlier in the Bill. If consumers are to have access to the affairs of the various authorities—which we have been maintaining they must have—it is extremely important that the arrangements that are made are efficient, above board, and written onto the face of the Bill. That is why I think that the amendment is important in itself. I very much regret that the whole idea of the authorities is such that there cannot be
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consumer representation on them. But, if that is so, there certainly ought to be consumer consultative committees.
So far as I am concerned, the most important part of the amendment is what I presume would be subsection (5), which states:
"Each water authority shall supply to a Consumer Consultative Committee such information and documents relating to its functions as such Committee may reasonably request".
The right to have access to documents and information is absolutely essential, if the consumer consultative committees are not to be mere wastepaper baskets for the complaints of the public, unable to do anything about them.
10.52 p.m.
Lord Stanley of Alderley: My amendment follows Amendment No. 31 and is very much on the same lines. Therefore with the permission of your Lordships' Committee, and in order to save time, I should like to speak to it at this stage. My concern in my amendment is that members of consumer committees as proposed in the Bill, though nominated from organisations outside the water authority, can be vetoed by the water authority. I hope, and indeed, judging from what I have heard so far, I believe, that your Lordships will agree that such a state of affairs is not a good principle.
Although I accept that in practice the water authority will probably not exercise the power, for obvious reasons—not least that of making its own watchdog into a pet poodle dog—it would be better if the water authority did not have a power of veto. My amendment would make sure that the water authority does not have the power to reject members properly proposed by local authorities and other bodies for membership of consumer committees, though, as is customary, it would allow a veto by the Secretary of State. I hope that your Lordships' Committee will agree with my amendment, which would help to ensure that consumers committees are at least sheepdogs, if not Alsatians, rather than the lap-dogs which at the moment they appear to be under the Bill.
The Earl of Shannon: Like the noble Lord, Lord Stanley of Alderley, I, too, seek the leave of your Lordships' Committee to speak to my own amendment, No. 33. It would probably be for the convenience of the Committee if I make a few comments on my amendment, and then all the contributions can be answered together, since they are very much on the same subject. My amendment is essentially a probing amendment in order to find answers to two particular questions. First, the Bill still contains references to the consumer committees, and I was wondering whether the noble Lord, Lord Skelmersdale, would now be prepared to enlarge on what he said during the Second Reading debate. I should like to quote part of what he said, as reported at column 1074 of the Official Report:
"What we feel is needed at the regional level is that there should be established in all water authority areas sport and recreation committees to provide a link between the water authorities and the recreational conservation bodies. These will be regional committees, not part of the consumer cunsultative committees".
There is no mention of such committees in the Bill; there is no amendment down about them, and I was

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wondering whether the noble Lord would be prepared to enlarge on that statement which he made.
In my amendment I have included one particular class of recreational user, the reason being that I was interested to know exactly how the Secretary of State is to view recommendations for appointment to these committees of representatives of recreational users. Many waterways are navigations. They have been navigations traditionally; in fact some are even called navigations. It may be that on one of these there is only a small quantity, say, 100 navigators, but there are probably 500 people who like to sit along the banks dangling bent pins with worms on them. Equally there may be another 500 people who like walking their dogs. It could be claimed that the navigators have absolutely no right to be represented because they are totally outnumbered by the others. Is there any form of wording that is likely to be used in the guidelines (which as yet we have to see) showing that mere numbers of people do not on small committees occupy all the seats to the exclusion of others who are equally well entitled to be there?
Lord Skelmersdale: Perhaps I might presage what I have to say by saying that no one has been casting what my five-year-old son calls "nasturtions" on the length of speeches of noble Lords. The first point I must make in all this is that Clause 7 imposes a clear duty on the water authorities to prepare a report on arrangements to represent the interests of consumers. Once that report is approved by the Secretary of State, it will be the duty of the water authority to implement the arrangements. It is quite clear that this imposes an obligation that arrangements are to be established and must be arrangements to represent the interests of consumers; or the water authority will be in breach of its statutory duty.
I accept that from Second Reading onwards, and also in discussion in another place, there has been a lot of concern over exactly how the Government envisage that these consumer committees will be set up and how they will operate once they have been set up. The short answer to this and to the noble Earl, Lord Shannon, is that on 22nd November last the Government published draft guidelines on the basis of the arrangements and the scope of the committees' activities.
Subsequent discussion in another place, and on Second Reading here, has led us to believe that there must still be considerably more discussion before these guidelines are finalised. I take note in these discussions of everything that has been said this evening on the point and on earlier stages. The Government position on these guidelines is far from final. I hope the Committee will be able to accept this. Even now, we have made various changes to the guidelines and given various commitments. I am not sure whether, in view of the lateness of the hour, the Committee would like me to go through them but I am perfectly prepared to do so.
Baroness Fisher of Rednal: Were those the guidelines that were made available to Members, some of which were placed in the Library?
Lord Skelmersdale: No. This is very complicated. There are three different sets of guidelines attached to this Bill. I am talking about those published on 22nd November last while the Bill was in another place. I have them in my hand at the moment. They have been available since that time. If any members of the Committee have not got them, it would perhaps be wise not to speak much more until they have had time to consider them. I do not know what the Committee feels on that score.
While the noble Baroness is cogitating on that, may I turn to my noble friend Lord Stanley of Alderley and the noble Earl, Lord Shannon, on the subject of the recreation and conservation committees? We have accepted the arguments which have been put to us by many organisations involved in this area, notably the Inland Waterways Association, but many others, including, as the noble Lord, Lord Melchett, will know, the conservation bodies. But it is wrong simply to graft the representation of recreational conservation and amenity interests on to the divisional level consumer consultative committees which are to be established under Clause 7. We therefore envisage these as being totally separate entities with their own specific responsibilities and their own particular access to the water authorities.
We have amended Clause 7 in another place to make clear that, in making proposals to represent the interest of customers, water authorities should include those who are likely to use water, or land associated with water, for the purposes of recreation.
If the noble Earl, Lord Shannon, will turn to subsection (9) on page 6 of the Bill he will see the definition of the word "consumers", which includes,
"persons who use or are likely to use, for the purposes of recreation, any water or land associated with water in respect of which the water authority in question are under the duty imposed by section 20 above".
In other words, navigators would be just as much consumers as would the fishermen with the bent hook, the conservationists, the boating fraternity, the water skiers. They are all consumers, so I assure the noble Lord that they are covered by his amendment which subsequently becomes unnecessary.
There is one other general point that I should like to make at this stage. That is that we are now clear that the chairmanship of both sets of committees should not be at the discretion of the water authorities themselves, but the committees should appoint their own chairmen. This has been something which I know has caused concern and I hope the Committee will agree with this view of the Government.
As I say, I can go into this matter at very great length. I am entirely in the hands of the Committee. I should like to know its wishes.
Lord Melchett: I have one question. The noble Lord said "both sets of committees". Was he referring to the consultative committees and the regional consultative committees involving conservation and recreation interests?
Lord Skelmersdale: Yes, that is what I meant by "both sets".
Lord Melchett: It would be better if I pursue this because it will save time on the next amendment. Would that allow the committees to choose a member of the authority to chair them, or not?
Lord Skelmersdale: It has not, as I understand it, yet been decided whether automatically a member of the water authority would be on the committees at all. But I understand that it would be totally within their power to co-opt a member of the water authorities to sit with them. It would then be up to the committees themselves to decide whether that water authority member—whether he was co-opted or not—should be chairman. I do not think it is desirable in all cases that the water authority appointee or member, however he gets there, should necessarily become chairman of the committee.
Baroness White: May I ask the Minister a small practical point? he referred to three sets of guidelines and he used the word "published". Does he mean that in the normal sense of the word—in other words, we can get it from the Printed Paper Office—or does he mean that copies have been laid in the Library? If copies have been laid in the Library all that one can obtain, as I have already found, is an awkward photostat which is bulky and heavy and is nothing like as convenient as the kind of document which ought to be available in the Printed Paper Office.
Lord Skelmersdale: I take the noble Baroness's point. To the best of my knowledge and belief copies are available, or were available, in the Printed Paper Office. If not, I shall most certainly make it my business to make sure that they are available there from now on.
Lord Sandford: It does put us in rather an awkward position because this, of all the clauses, is the one to which Parliament should be paying the most attention, but I hesitate to invite my noble friend to read what looks like a fairly formidable speech. I wonder if I might suggest to him that it might meet the case if he caused the lengthy remarks, which he says he has at his disposal, to be published in the Official Report. Then we should at least be able to see tomorrow what he would have said, and so will all the people who are interested in this but are not present with us at the moment. It may be that he can add to that in the Official Report either the guidelines or a summary of them, which we really need in order to have a substantive and effective discussion of all these points. That is the first suggestion I should like to make.
The other thing is that I think there will be a general welcome for the concept he has now expressed, that the consumer consultative committees should be separate entities—that is to say, we are not going to see an extension of the arrangement prevailing in Wales at the moment, where the consumer committees are an integral part of the water authority, which I think most noble Lords would agree is totally unsatisfactory. It is also an advance that the chairman is to be appointed by the committee itself. These are all things we shall want to see spelt out in the Bill. We do not want these matters left to the publication in guidelines which are not yet complete.
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The Bill as drafted at the moment requires reports to be submitted to the Secretary of State after the passage of the Bill, which he will then be free to approve or modify. By that time the whole arrangement will be beyond the control of Parliament, and that will not do either. So there is a lot of work still to be done on this clause. I think it would help us in the consideration that we have got to give to this between now and the Report stage if the noble Lord would refrain from giving us a long speech now but cause what he would have said to be published in the Official Report.
Lord Skelmersdale: I am advised that it would be quite improper, not to say out of order, in your Lordships' Committee to have included in the Official Report remarks that I might have made. However, obviously I understand the concern expressed by my noble friend Lord Sandford, and I can undertake to write to each and every member of the Committee, if that would be its wish.
Lord Melchett: Another alternative which the noble Lord, Lord Sandford, might care to consider before the Committee rises is the possibility of a Question for Written Answer being asked that would get it into the Official Report in a manner which I am sure would cause no problems for the authorities.
Lord Sandford: In the light of that response, with some reluctance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 32:
Page 6, line 14, at end insert ("; and
(c) to appoint to any consumer body specified by the arrangements such representatives of the interests of consumers in the area as may be nominated by local authorities or other bodies in accordance with the arrangements, unless the Secretary of State directs otherwise.")
The noble Lord said: May I just ask my noble friend whether he will also write to me specifically on this amendment? Secondly, may I confirm that what he said about the recreation committees, if I may call them that, is that they may have a right to ask for a member who is on the board to serve on their committee? Those are the only two points that I wish to raise. I beg to move.
Lord Skelmersdale: The answer is "Yes" to both questions.
Lord Stanley of Alderley: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Shannon The Earl of Shannon had give notice of his intention to move Amendment No. 33:
Page 6, line 30, at end insert ("navigators and all")
The noble Earl said: In view of the answers given by the Minister to me previously, I do not wish to move this amendment.
[Amendment No. 33 not moved]
Clause 7 agreed to.
11.9 p.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal moved Amendment No. 34:
After Clause 7, insert the following new clause:
"Conservation sport and recreation
( .—(1) Each water authority shall establish a committee whose task it shall be to advise the authority and which shall consist of representative sport and recreation interests in the area covered by the authority.
(2) In the annual report required by paragraph 40 of Schedule 3 to the principal Act, each water authority shall include an account of—

(a) its activities in the fields of conservation, sport and recreation; and

(b) the manner in which it has fulfilled its obligations under section 48 of the Wildlife and Countryside Act 1981.)".

The noble Baroness said: This is another probing amendment and it is unfortunate that we have to have perhaps some of the more important matters that have been raised during the Committee stage rushed through at the very last minute. There are difficulties, because the Committee is concerned about what will happen with the abolition of the Water Council. The Minister referred on Second Reading to regional committees for recreation and conservation, and the noble Lord, Lord Skelmersdale, also mentioned the setting-up of regional committees to provide a link between water authorities and the recreational and conservation bodies.
By tabling this amendment, we wish the Minister to tell the Committee how he envisages that these committees will function, to whom they will be accountable and who will compose them. I am fully aware that the consultation procedures have not yet finished, but I am concerned about the fact that recreation has been included in the consumer consultative bodies. This is a little strange, because most of the recreational bodies prefer the thought that the regional committees will be set up for recreation and conservation, as the Minister said on Second Reading. It does not appear that that will happen.
As I said, this is a probing amendment, and perhaps the Minister will be able to help us regarding the setup, especially of those bodies which were under the aegis of the Water Space Amenity Commission. We understand, from reading the reports of the other place, that it is accepted that the work of that commission will continue in some way or other. But there is a whole range of activities, such as liaison committees and joint committees covering conservation, sport and recreation, which are broken down into working groups on angling, sailing, water ski-ing and nature trails. So it is important for us to know what will happen to all the various bodies which were co-ordinated under the previous organisation. Therefore, in the discussion of this amendment we should like to find out what will be coming forward to satisfy conservationists and recreationalists.
I know that the amendment, as tabled, is not satisfactory to the conservationists. They do not wish to be linked with the recreationalists and sports people. Perhaps they are not good bedfellows, so that may cause a difficulty. But I put down the amendment for the simple reason that we wish to inquire what will happen. Are we to have separate regional committees for conservation, for sport and for recreation? I should
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have thought that the needs of the recreationalists were now, automatically, almost damned, by the very fact that they will be on the consumer consultative committees, where they feel that their interests will be very much overlooked.
The noble Lord the Minister shakes his head. But the opinion that I have received from sporting bodies is that the majority of the people who will be sitting on the consumer consultative committees—and we do not vet know how they will be composed, so I am only surmising—will be those who are more interested in getting the cheapest possible water supply or a pure water supply, and they will have the point of view of the householder, the industrialist or commerce. Surely, too, there will be local authority representatives in great numbers, who will also be concerned about a pure water supply.
The people who are interested in recreation feel that, more often than not, they will be fighting a very difficult case. They believe that their interests will be regarded as less important than the very much wider issues that will be discussed on these committees. Therefore the fear is that minority views will not be completely discussed by the consumer consultative councils. My noble friend Lord Melchett will explain why he feels that conservation should not be part of sport and recreation. I leave that matter to him. There is a range of activities which the National Water Council and the National Water Space Amenity Commission have conducted up to now. By means of this amendment we are trying to ascertain how the Government view the continuation of these services in the future.
A standing technical advisory committee on water quality consists of representatives of the department and the National Water Council. This committee has shown quite recently that nitrate levels are causing great concern and that they are largely the result of the increased use of fertilisers in agriculture. Will that committee be moving over from the National Water Council, and is it to become part and parcel of another body? It is a most important committee which is concerned with water purity and water safety. The observations of all these organisations will not be received until 31st March, but we want to be sure that the thousands and thousands of people who are directly interested in all kinds of sport, recreation and conservation will have their voice heard in the future as it has been heard in the past. I beg to move.
11.16 p.m.
Lord Melchett: Perhaps I may briefly underline the point which my noble friend has raised about the possibility that the new regional committees which the noble Lord, Lord Skelmersdale, mentioned—I think for the first time at Second Reading—will cover both recreation and conservation interests. As my noble friend has said, the conservation bodies are not at all happy about this, not because recreation and conservation are in conflict or are unhappy bedfellows but because there is already a very well established working relationship between conservation bodies and water authorities at regional level. The consultations involve representatives of the Nature Conservancy Council, the County Naturalists' Trust (covered nationally by the Royal Society for Nature

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Conservation) and the Royal Society for the Protection of Birds. Those three organisations have established together, voluntarily and statutorily, very good working relationships with water authorities at officer level.
There is a very strong feeling in all those organisations that the new proposal of the Government, if it destroyed the existing relationships, or replaced them or tried to run alongside them, would spoil something which is working reasonably well at the moment. This was recognised by the Government in yet another set of guidelines, issued following the Wildlife and Countryside Act as recently as 8th November of last year. Paragraph 10 of those guidelines says that the arrangements which I have described and which the Government recognise in the document provide a useful opportunity for water authorities to discuss their medium-term capital works programmes and annual maintenance schedules. The document goes on to say that, where necessary, site meetings are arranged. These are quite different sorts of consultation, with site meetings, a whole day being spent looking at a land drainage proposal, or whatever. It is quite a different sort of consultation from the kind that people with recreation interests would want to be involved in or would benefit from. The same will go for wildlife interests, where recreation issues are being discussed: how sailing facilities can be improved on a particular reservoir.
The Government have gone quite a long way to recognise one of the fears about the Bill in making the proposal the noble Lord has, and for my part, unlike the discussion on the consumer consultative committees under Lord Sandford's amendment, I would be quite happy if the Government could give us an assurance that the guidelines will say that there will have to be in every water authority—and it must be this definite or it will need amendment of the Bill itself, and I say that with the full backing of the people who have been involved in these meetings—separate committees at regional level, and that the committee dealing with conservation will build on the existing consultative arrangements the Government themselves have recognised as recently as November last year as working very well and providing great benefits to both sides. If the noble Lord can say that now, or at Report stage, I think he will set a lot of minds at rest.
So far responses from the Government have not been nearly clearcut enough to allay these fears. I know the RSPB had a response either today or yesterday from the Government, and I honestly do not think it is enough. They must say definitely that they will, as it were, honour existing arrangements and ensure that at every water authority these two things are kept separate at regional level.
Baroness White: Other bodies also have similar arrangements to those mentioned by the noble Lord, Lord Melchett. In Wales we have close relationships with the Welsh Water Authority on the part of the Council for National Parks, and the Council for the Protection of Rural Wales, of which I am a member. We certainly would not wish to have any disturbance in that kind of informal consultation, which is what it is at the moment.
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The guidelines I have are published in October, not November; whether they are the same ones I am not quite clear; I think they are. Possibly I have a Welsh version published earlier than the English one. When we did have discussions relative to these guidelines, as recently as January of this year, with the Welsh Authority we found that there was considerable dubiety in their minds as to the interpretations of where their duty really lay in relation to Section 48 of the Wildlife and Countryside Act, which amends Section 22 of the principal Act. I found a semantic debate going on within the water authority, and I have the notes issued subsequent to our meeting, in which the chief scientist, who was present, said that the authority had yet to take a view on the interpretation of Section 48, as to whether conservation was to be considered as a duty, a function or purely an interest to be taken into account as appropriate. Even at this time of night it must be obvious that there is some slight difficulty when the water authority does not know what the guidelines really mean.
This was followed by a remark by the chairman of the Welsh Water Authority, that while there was great sympathy on the part of the authority, any proposals which required financing by the authority which were not statutorily required would be difficult to justify. If one looks at these guidelines, they appear to me to suggest functions, on the one hand, and take away any possible expenditure, on the other. I think it is too late at night to discuss what is a very important section of this Bill. I noticed that my noble friend did not refer to the second part of her amendment, in which it is suggested that it should be made a duty for the water authorities, in their annual reports which they are statutorily obliged to produce, to indicate the manner in which they have fulfilled their obligations under Section 48 of the Wildlife and Countryside Act. I think this would be an invaluable provision and I very much hope that it is one which the Government can accept.
11.25 p.m.
Lord Skelmersdale: We now get from the general, I suppose in a sense, to the specific although I have been at pains on the earlier amendments to point out that we are talking about two, or possible more, totally separate committees. I shall come to that in a moment. The consumer consultative committees are designed to deal with the broad policy and, as the noble Baroness said, the methods, costings, prices charged, local authority interests, and so on, of the water authorities themselves, However, the recreation and conservation committees, as I said—and I repeat—will be on a regional basis because we do not see that it is appropriate either to duplicate the Water Space Amenity Commission at the one end or to have them in such small units that they are sub-regional at the other end.
We amended Clause 7 in another place to make clear that in making their proposals to represent the interests of consumers water authorities should include those who are likely to use water or land associated with water. There is a specific reference now in Clause 7 to the duty of water authorities in respect of recreation. I should like to emphasise to the Committee that water authorities continue under

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exactly the same duties as regards recreation, conservation and amenity as they have been under hitherto. There is no change at all. We shall amend the guidelines to be used under Clause 7 to secure that these committees are established. We do not, however, see the need to make them statutory as the amendment proposes. At the moment there is no reference in Clause 7 to committees.
Perhaps at this point I can comment on something that the noble Baroness, Lady Fisher of Rednal, mentioned—the standing technical advisory committee on water quality. This is really not relevant to this amendment. We have decided however that where committees of this kind are doing a useful job they should be continued, either by the water industry itself or by the Department of the Environment.
Baroness Fisher of Rednal: I am not sure what the Minister means by "the water industry itself ". Does he mean the Chairmen's Association? What does " the water industry itself " mean?
Lord Skelmersdale: In this connection it would indeed mean the water authorities' Chairmen's Association or one of the water authorities nominated by it, whichever was appropriate. However, the point I seek to make is that whoever ends up doing it will not go out of existence if they are currently doing a useful job, which that particular committee is most certainly doing.
Baroness Fisher of Rednal: I do not want to keep on interrupting the noble Lord, but that is what we are trying to find out with the amendment. Where are all these different things going to? We know at present where they are; they are with the Water Space Amenity Commission or with the National Water Council. We want to know where they will go in the future.
Lord Skelmersdale: What I am trying to say to the noble Baroness is that this standing technical advisory committee on water quality has no relevance to consumer consultative committees.
Baroness Fisher of Rednal: It might do.
Lord Skelmersdale: My understanding is that it does not, and there is no need for it to have such a relationship. It will be continued, but as a completely separate entity from the committees that we are discussing in this and previous amendments.
Baroness Fisher of Rednal: All that I would say is that if one looks at the Hansard in the other place one sees that it was quite emphatically raised only last week by a Member of Parliament as a question regarding water purity.
Lord Sandford: I wonder whether my noble friend could just confirm what he said or perhaps correct a point which I may have misheard. I thought that he started off his response to Amendment No. 34 by saying that we are dealing with two quite separate bodies, and I agreed with him there. There is the committee which is referred to in the amendment of
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the noble Baroness, Lady Fisher, which is to deal with recreation, sport and conservation, which the amendment would require to go on the face of the Bill. My noble friend then went on to resist that by saying that it would be dealt with otherwise and that it would be dealt with by amendments to the guidelines to Clause 7. But Clause 7 is not dealing with those committees; it is dealing with the consumer consultative committees. I wonder whether my noble friend can help me.
Lord Skelmersdale: Yes, I do agree that this is, on the face of it, confusing. The point is that, as my noble friend has just said, Clause 7 deals with consumer consultative committees. What I am saying, and the Government have been saying since, I think, the Committee stage in another place, is that there are various kinds of consumer and there are two sorts of consumers' committee—first, what I call the general consumer consultative committees, which I described just now to the noble Baroness, Lady Fisher, and, secondly, the specific ones which are those on recreation and conservation, which up to as recently as, I think, the beginning of last week it was intended should be rolled together as one body. But I am now able to tell the Committee that we are considering with some urgency the points that have already been put to us this evening on whether in fact the recreation, amenity and conservation bodies are compatible.
Over and above that, I should make it clear that it is not intended that the Government's proposals should cut across existing arrangements which work satisfactorily to the various parties. If therefore there are existing links between conservationists, for example, and water authorities on specific conservation matters, the authorities and the organisations may well wish these to continue, and it is not the Government's intention to prevent that. Alternatively, the new committees may wish to make their own arrangements, such as the establishment of sub-committees for the separately identifiable interests of conservation.
This amendment again revolves around guidelines which, to use a rather unparliamentary expression, and indeed to paraphrase what I have already said, are up for grabs. In other words, they are under discussion at the moment. The matters that have been referred to this evening will of course be considered in a redrawing of the guidelines in a definitive method.
The noble Baroness—
Baroness Birk: All this consultation is going on and the guidelines are being considered. Will they be available certainly to members of the Committee who are interested before Report stage? How will it be possible to draw up amendments ready for Report unless we know quite definitely what are the intentions of the Government? I really must support what the noble Lord, Lord Sandford, said about the two separate committees, which, with great respect, seem to have got a bit confused in the Government's mind as well.
Lord Melchett: I know that the noble Lord has just given way and I would be quite happy to sit down again if he would prefer it, but rather than ask him to make a second speech after he has finished this one,

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may I say that he has responded to my point, I am afraid, in a way that is not adequate, as I see it? Indeed he repeated some phrases which I recognised from his Second Reading speech.
Since that time the Royal Society for the Protection of Birds has written to the department and the department has written back. A point is being made about splitting these regional committees. Let us stick with regions, for Heavens sake! and regional committees, because that is what the amendment is about. I cannot think why anybody, least of all the Government, who want to get a move on should keep talking about the local consumer consultative committees in this amendment when they do not even come up and we have dealt with the matter. Anyway, let us stick with the regional committees which the Government proposed at Second Reading in this House would consist of recreation and conservation interests. The noble Lord used the phrase then—and he has again tonight—that this would not cut across existing consultative arrangements if they were working to the satisfaction of all parties, or if they existed.
As I have said tonight, the Government themselves issued a circular last November pointing to the arrangements which have been worked out between the three organisations on the conservation side—the RSPB, the RSNC or the local naturalist trusts—and the Nature Conservancy Council on the one hand, and regional water authority staff on the other. As I understand it, in almost all regional water authorities—although now it may be all—this arrangement works well, and the Government have recognised that in a circular.
It is not a question, with respect to the noble Lord, of coming back to your Lordships' House at this stage of the Bill and saying "If there are arrangements which work well and if people are satisfied with them, then they can continue". We are in a different ball game. There are these arrangements and they do work well—the Government said so in a circular last November. It seems to me that they ought to be able to come along now and say: "If that is the case, all right, we will amend what we said earlier in the debates on this Bill. There will be separate arrangements. We will not allow the Bill to be used as an excuse by some water authorities which were not very happy about these arrangements being established to scrap them or to go back to something". The arrangements have been established over a long period of time with a great deal of difficulty and negotiation in some cases, and it is seen as extremely important that they should continue—not because, let me stress, of any incompatability between conservation and recreation, but because conservationists want to consult about different things in different ways and in far greater detail. They want to go on site visits to look at areas where land drainage proposals are going to be made.
If people in the department and the Government cannot understand the point that has now been made several times, it really seems to me that we ought to think about writing it into the Bill. With respect to the noble Lord, he has not picked up the point that I am making. It is not a question of incompatability: it is a different type of exercise. It is working well in every regional water authority area. The Government have
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recognised that in a circular that they themselves have issued. So it is not a question of saying: "If it is going all right, we will let it continue". They know that it is.
I really do think that it is not asking too much, if it cannot be done tonight, that the noble Lord should drop the form of words that he used on Second Reading and say,"We will take a fresh look at this". He should forget all this stuff about, "Well, if it is going okay, we will let it continue", which is not relevant to the argument, and then say, "We recognise these arrangements; they will continue to exist. They will not be duplicated or superseded by some other committee involving a much wider range of interests whose members want to talk about different things in different ways at different places".
Lord Sandford: I really must urge my noble friend to take that advice and also to make provision on the face of the Bill. It does confuse the matter enormously if he continues to suggest to the Committee, which I really do not think he meant to do, that what is contained in Amendment No. 34 plus the additional factors which are quite appropriately being introduced by the noble Lord, Lord Melchett—all of which require to be dealt with on a regional level corresponding to each regional water authority—can somehow be dealt with not on the face of the Bill, but by guidelines relating to Clause 7 which have to do with consumer consultative councils which, although we do not know as much as we want to know about them, we know are going to be organised on a divisional basis. They cannot possibly be dealt with in one and the same package.
Lord Skelmersdale: I am obviously not making myself in the least bit clear. The consumer consultative committees are totally separate from those committees that we are discussing at the moment. Those that we are discussing now will be on a regional basis, whereas the consumer consultative committees, as my noble friend has just said, will be in very much smaller local areas, which one might call either districts, sub-regional, or whatever.
Lord Sandford: Divisional.
Lord Skelmersdale: Yes, fine. As regards the point made by the noble Lord, Lord Melchett, perhaps I could have phrased my remarks more felicitously and instead of saying "if there are" existing links between conservation bodies and water authorities that work currently, the situation will not change, I should have said "where there are". I am sure the noble Lord will accept that not every rose in this particular garden is quite as beautiful as every other rose. In other words, there are occasions when things are not working quite satisfactorily. However, the Government do not propose to change things which are working well. I hope that that makes the point absolutely clear.
Lord Melchett: It is late at night and we want to get on, but, with respect, I really think that the noble Lord ought to agree to take this away. The fact is that the Government issued guidelines—these infamous guidelines—from another Bill last November, which said at paragraph 10—and I shall quote again to the noble Lord because this is the important point:
"Consultation procedures.
So far as nature conservation is concerned, established patterns of consultation already exist between most water authorities and

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the NCC and voluntary nature conservation bodies through regional-divisional liaison meetings. These provide a useful opportunity for water authorities to discuss their medium-term capital works programmes and annual maintenance schedules. Where necessary, these existing arrangements should be improved so as to ensure that any proposed works with a significant implication for nature conservation can be identified well in advance. Where appropriate site visits should take place"—
and so on. There are established procedures which the Government have recognised and which, as I understand it, have the full support of the Nature Conservancy Council and certainly of the two royal nature conservation societies, the RSPB and the RSNC, who are involved.
The particular arrangements do not involve anybody else on the nature conservation side; just those three organisations are involved. There are others which the circular covers for amenity and landscape; I say that because I hear my noble friend Lady White making noises, if she will forgive the expression. But the point I am making is that these consultation procedures on nature conservation work well and are established. If not dealing with this tonight, then at least the Government really must go away without any 'ifs' and 'buts' and think about it and be prepared to say, " Yes, we realise these are arrangements which exist; they are working well; nothing in the new regional committees will be allowed to disturb these in any way at all ". It may be that these arrangements can have a regional committee for nature conservation on top of them; it may be that that is not necessary. I am quite happy to leave that to the Government. But they really must be prepared to say not just that where it is working all right they will let it continue, but that these arrangements for all water authorities do work well and they will continue. There is a very important difference.
Lord Howie of Troon: Will the noble Lord the Minister not have mercy on us and just give an undertaking to take all this away and take a very quiet, restrained look at it, and, in so far as there is strength in the representations of my noble friend Lord Melchett and others, he will accede to these, and in so far as what they think is strength is weakness, he will reject them? I think that that might help us quite a hit.
Lord Skelmersdale: I am very grateful for the advice of the noble Lord, Lord Howie, but I was, I hope, in the process of making it quite clear that there was nothing in Clause 7 to stop the existing arrangements. I hope that this goes as far as even the noble Lord, Lord Melchett, would like me to go. They will continue. Having said that, I will most certainly consider the point.
Baroness Fisher of Rednal: I am not satisfied with the remarks that the noble Lord has made. I am even more muddled now that he has finished than I was when he started. I thought I had it clear in my mind. Because of the lateness of the hour it is important for us to get on. I know that my noble friend Lord Melchett has spoken about the field of conservation. But there are all kinds of sport that go on now, and their interests are equally important because they will clash on many occasions with those of the conservationists.
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Angling, water skiing, and all such sports might affect the conservationists at some time.
I shall read what the noble Lord has said, but I hope that any information that the Government can give us concerning guidelines or anything else will be forthcoming so that at the Report stage we shall be able to understand the implications of the Government's measures, including the abolition of WASAC, and the National Water Council. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.45 p.m.
Lord Beaumont of Whitley Lord Beaumont of Whitley moved Amendment No. 34A:
After Clause 7, insert the following new clause:
("Minutes to be open to inspection.
The minutes of proceedings of a water authority shall be open to the inspection of any local government elector and any local government elector may make a copy of an extract from the minutes.").
The noble Lord said: This is a probing amendment and returns to the question of the publicity of the proceedings of the water authorities. I have abandoned, at any rate for the time being, the attempt to persuade the Government to in any way alter the integrity of these new bodies which have their own particular form and functions. I am not entirely certain that I accept the arguments. What I should like to do is to explore the situation where, accepting the arguments deployed by the noble Lord, Lord Bellwin, in the first part of this Committee stage, we managed to establish as much of the openness of the work of the committee as we could, and its openness to electors, ratepayers and those who are paying water rates.
To that end I have tabled the clause, which many people will recognise—and not least the noble Lord, Lord Bellwin—as being the first part of Section 228 of the Local Government Act 1972. The object of the exercise is not that these would necessarily be exactly the right words to put into this Bill, but that if it was acceptable to the Government that some kind of procedure along the lines of Section 228 of the 1972 Act, the inspection of documents, should be put in the Bill, that possibly the Government would take the amendment away and see whether this was the right way of dealing with the matter and perhaps expand it to have all the provisions of the section in the Bill. Perhaps it could be so altered that it did not necessarily refer to local government electors.
What I wish to discover now is whether the Government will accept that ordinary members of the public who pay their water rates have a right of access to the proceedings of the local water authority whence they can proceed to seek publicity, write to the papers, and be in touch with all the local committees we have been discussing for the last hour or so. I beg to move.
Lord Bellwin: I am not without sympathy to what the noble Lord has just said. The Government are not in the business of concealing what the water authorities are doing. It is just as important that the public have access to information about the authorities' decisions in the future as at the present. Perhaps I could quickly outline what we are doing to secure the objective.

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As your Lordships may recall from our discussions about the press and the public, we intend that the press shall receive advance information about the items under discussion at board meetings and, following the meetings, there will be, as a matter of routine, press conferences. As part of this arrangement, we have decided to require the water authorities to produce a note of the decisions reached on the various items under discussion, and this note will be available to the press and will also be available, as the minutes are now, for inspection by the public. The same note will be issued to the consumer consultative committees. We will be requiring the water authorities to implement these arrangements when we issue a revised version of the guidelines on consumer representation.
Given that the proposals are not identical to what is proposed in the amendment, as the noble Lord, Lord Beaumont, fairly said, that was not the major part of what he was seeking to ascertain. As my noble friend said earlier, it is difficult at this hour to go into detail. But if the noble Lord wants to know our intentions, I am equally anxious that they should be understood. I suggest that there is no major difference between us on this; there may be a difference of emphasis, and perhaps of degree, at the end of the day, but basically we are in the business of seeing that information is available. What concerned us so much on the previous matter was the ability of the committee to function in a different style from the way the local government one did, but we need not go into all that again now. Outside of that—outside the executive style of the boards—we are indeed anxious that there should be the maximum information in the best possible way. I shall not, unless I am pressed, go into more detail on that now, but I hope that will satisfy the noble Lord. I repeat, I feel that on this point there is not much between us. Indeed, I go further and say that any suggestions that are made would be welcome.
Baroness Birk: I understood the Minister to say that there would be a report of the minutes of the proceedings. A report of minutes is quite different from the minutes themselves; a report, as I understand it, would be an edited version. Or have I misunderstood the noble Lord?
Lord Bellwin: I said there would be a note of the proceedings.
Baroness Birk: Anote is not the same. Does he mean the actual minutes will be repeated? Otherwise a note could mean a selective version.
Lord Bellwin: Perhaps this is a matter we should discuss. We have an open mind on it because we agree it is important. The noble Baroness will appreciate that minutes can be written in all sorts of ways.
Baroness Birk: Exactly.
Lord Bellwin: Indeed, and it will not be easy to get an exact clarification, because it is something that needs to be in the Bill; I accept that. Perhaps we can pursue the matter, and the noble Baroness will not find the Government unwilling to consider it.
Lord Beaumont of Whitley: I thank the Minister for his remarks. His opening statement about the relationship of the authorities with the press was one of the few cheerful things we have heard this evening. I thank him for outlining the intentions of the Government, which I hope have been sharpened during our debates. I shall not pretend that the whole thing is nearly as satisfactory as it should be, but I think the Government are trying to do the best they can in the entrenched position that they have adopted. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Lord Howie of Troon Lord Howie of Troon moved Amendment No. 34B:
After Clause 8, insert the following clause
"Amendment of Reservoirs (Safety Provisions) Act 1930.
( .—(1) The Reservoirs (Safety Provisions) Act 1930 shall have effect with the following amendments.
(2) For section 1 there shall be substituted section 6 of the Reservoirs Act 1975, and after that section there shall be inserted, as section 1A, 1B and 1C, sections 7, 8 and 9 of the Reservoirs Act 1975.
(3) For section 2 there shall be substituted section 10 of the Reservoirs Act 1975.
(4) For section 5 there shall be substituted section 22 of the Reservoirs Act 1975.")
The noble Lord said: Both this amendment and No. 34C are probing amendments, and I hope that the Government will regard them exactly in that light and will not investigate the drafting of them, since they are drafted entirely as probing amendments. The inadequacies of the drafting are clear to me and to the Public Bill Office, and I do not think that there is any need to go into that at all. They indicate a direction in which the Government's mind might go, if they feel so inclined.
The amendments follow intimations that I gave at the Second Reading of the Bill, in the light of the report of the Select Committee on the water industry, which I think came out before Christmas—or at least some little while ago. I should like to make a slight correction to my Second Reading speech, if this is the right place in which to do so. I notice that at the top line of column 1058 of the Official Report I am attributed with referring to "Keynesian Ministers". I should be extremely happy if there were any Keynesian Ministers to be seen, but what I in fact said at the time was "changing Ministers", which is quite different; it means something entirely different.
Leaving that point aside, what we are dealing with here is the means of controlling the design, construction, inspection and so on of reservoirs. It arises under the Bill because it deals with water, and because the Select Committee had suggested that the Bill was an appropriate place to deal with the Reservoirs Act 1975, which is the most recent legislation on the safety of reservoirs. It is the most recent legislation in the historical sense, but in another sense it is not, because it has not been implemented; so it is not recent at all. This is rather sad.
The history is laid out in my Second Reading speech, and so I shall not dwell on it, and it is laid out much more elegantly, and in Much more detail, in the Select Committee's report; but basically it is as

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follows. The control of these elements of reservoir design rests in the Reservoirs (Safety Provisions) Act 1930. That was by no means a hurried Act, because although it came after one or two accidents in the 'twenties, it followed somewhat belatedly after a Royal Commission report in the 1860s. That report had been neglected; the disasters of the 1920s drew it to people's minds, and the 1930 Act followed.
In the period since 1930 those civil engineers and others who had been operating the Act came to believe that it was inadequate for their purpose and in 1966 the Institution of Civil Engineers reported on the functioning of the Act and suggested a number of ways in which it could be improved. Arising from that report, the Government produced the 1975 Act. What I have to say specifically is this. The 1975 Act was supported by both sides of the House. I see sitting in the Chamber this evening my noble friend Lady Birk who, throughout the Committee and Report stages of the Bill carried on a dialogue with the noble Baroness, Lady Young, whom I saw earlier this evening and who, for quite understandable reasons, is not present at the moment. These two noble Baronesses discussed the Bill in total amity and in agreement that it was necessary. In the end it was passed. It was not implemented, and for the feeblest of all reasons; that is, that successive Governments—and I blame no particular party here, for all parties are to blame—thought that it was too expensive to put it into operation. That is the only reason why the Act has not been put into operation.
The Select Committee studied the matter and took evidence from engineers, who had been trying to operate reservoirs under the 1930 Act. Almost without exception, they found that engineers thought the 1975 Act ought to be implemented. The only people who did not think so were the Government, who did not want to spend the money, a number of local authority politicians who did not want to spend the money, either, and a very small number of engineers, an insignificant number.
It is quite clear from the evidence presented to the Select Committee that the 1930 Act is not up to the job and that the 1975 Act ought to be implemented. The Select Committee suggested that amendments to (they said) the 1975 Act ought to be brought in under this Bill. They chose this Bill merely because it was convenient, because it was there, because it was a way in which the thing could be done now instead of waiting until Heaven knows when, when people thought they might find time.
My amendments do not tackle it in the same way as the Select Committee. I have suggested, first, that the 1970 Act ought to be repealed. I do not believe that at all. What I wonder is this. The Government have suggested that the 1930 Act is adequate. If the Government are right and the 1930 Act is adequate, then the 1975 Act is unnecessary and ought to be repealed. If it is unnecessary, it encumbers the statute book and ought to go. I do not believe that. I want the Government to tell me how it comes about that, on the one hand, the 1930 Act is adequate and, at the same time, the 1975 Act remains on the statute book unimplemented. That is all I want to know there.
If the Government do not wish to implement the 1975 Act in its entirety, then I suggest in Amendment No 34B no more than the bare bones of a way in which the Government might go about it. They might take the 1930 Act and delete from it such parts as are inadequate for their purpose and put into the 1930 Act such parts of the 1975 Act which would bring the 1930 Act up to date and make it a reasonable and usable piece of legislation. That is all I have to say to the Government. I wish them to explain why they do not want the 1975 Act in operation. What else could there be which makes them think that the heavily criticised 1930 Act is adequate, and what ought they to do about it? Unless the Minister is in a condition of alarm and despondency, I do not intend to divide the Committee.
Baroness White: I make no apology for rising even at this late hour. It is because this Bill has been inadequately thought through. This was made plain on Second Reading. It is a matter of complete astonishment that this particular issue has not been dealt with in this piece of legislation. My personal view is that it would be better, when we have heard what the noble Lord the Minister has had to say, for my noble friend to withdraw his amendment so that we can have a proper debate at a reasonble hour on Report. I see that the noble Lord the Government Chief Whip is rising to his feet.
Lord Denham: I thought the noble Baroness was suggesting that we were at an unreasonable hour. We have taken quite a lot of time in discussing previous amendments and some of them have been moved at very great length. That is why the hour is not as reasonable as it might be.
Baroness White: I repeat my charge to the Government that it is because the Bill has been inadequately thought through in the first place. There are lacunae in this Bill which ought never to have occurred.
There is one matter which I should have thought would have caused shame to all of us. We have an Act which has been on the statute book now for almost eight years which has not been implemented in any way at all. This is surely something which, as legislators, we should feel ashamed of. It is utterly unprofessional to have legislation completely unimplemented remaining on the statute book. We have an opportunity in a Bill which is certainly germane, but apparently no effort has been made by the Government to deal with an issue of which all of us concerned with these things are perfectly well aware and which all of us, I believe, feel should be properly tidied up.
We devoted a chapter of the report of the Select Committee to this issue and made it quite clear. The committee considered that positive enforcement duties, such as proposed in the 1975 Act, should be brought into effect. I could quote various other passages.
I feel that it is not reasonable at this time to go into great detail. We should seek another occasion, and we shall certainly do so at Report stage, so that we can have a sensible discussion on an issue which ought to have been tackled by the Government in this legislation and which they show no sign whatever of

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facing. It is not exclusively the Government's fault. The dilatoriness applied to the previous Administration too, but as parliamentarians we ought to take this matter rather more seriously.
12.7 a.m.
Lord Skelmersdale: I would not dream of taking it anything but seriously, especially after the remarks of the noble Baroness. The noble Lord, Lord Howie of Troon, is about to provide the Government with the opportunity to respond positively to the conclusion of your Lordship's Select Committee that the Reservoirs Act 1975 should not be left on the statute book unimplemented.
I should perhaps first point out to the noble Lord, Lord Howie, that the Reservoirs Act 1975 differs from the Act of 1930 in many respects. The key provisions are first that it would make county councils in England and Wales and regional councils in Scotland, not district councils, responsible for enforcement and gives them an explicit duty of enforcement rather than a power. These enforcement authorities are required to keep registers of reservoirs in their area, and are given powers to satisfy themselves that the Act is being complied with. Secondly, the 1975 Act requires reservoir owners to appoint a named supervising engineer to keep a reservoir under continual supervision between inspections. Thirdly, reservoir undertakers are required to furnish information to enforcement authorities so that they can effectively ensure that the Act's essentail provisions are complied with.
It is a severe weakness in the 1930 Act that the public authorities concerned have powers, but not duties of enforcement, as the noble Lord has told us. Therefore, it is clear to the Government that a more effective system of securing reservoir safety must place a clear duty of enforcement on some responsible authority. Next, if enforcement is to be active, there must be a clear duty on reservoir undertakers not only to take the necessary measures for safety's sake, but also to provide necessary information to the enforcement authority. In terms of the 1975 Act, this requires bringing into effect parts of Section 2 of that Act, and of Section 21. These seem of greater priority than the replacement of the 1930 Act's provisions in relation to inspection by those of the 1975 Act; or than the creation of a new criminal offence.
Accordingly, I am able to tell the House today that the Government's decision is that the time has come to implement the 1975 Act, phasing its introduction so that an early contribution is made to reservoir safety, and so that adequate data are available to local authorities to carry out their enforcement function. This is an important decision, affecting many interests—reservoir owners and undertakers, local authorities, and others. The practical implications need to be considered, and therefore appropriate consultation will be carried out on the timing and nature of the implementation of the 1975 Act.
The Government wish to emphasise that in their view most importance should be attached to ensuring that all reservoirs are inspected as provided for in the Act; it is the large number of reservoirs for which no one appears to take responsibility which gives rise to the greatest concern; so we envisage that consideration
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will be given later to the implementation of the provision for routine supervision between major inspections.
I could continue in this vein for several more minutes, but I do not think it is appropriate. I hope the Committee will accept that I am doing exactly what the noble Lord, Lord Howie of Troon, and your Lordship's Select Committee wanted, at least in this respect.
Baroness White: I suppose we should be grateful to the Minister even at ten past midnight-not exactly the most appropriate hour to announce a decision which is welcome in itself and of which I think I am right in saying that we were given no warning at Second Reading. However, one only hopes that this good intention will be turned into actuality during the currency of the present Administration and that it will not then be upset should there be a change in the Administration in the relatively near future.
Lord Howie of Troon: I am rather glad I stayed! Did I understand the Minister to say that he intended to implement the 1975 Act? If so, can he tell me when? I know it is churlish to look a gift horse in any part of its anatomy, but let me say this: if the Minister does in fact intend to implement the 1975 Act and to implement it within a reasonable time, it would satisfy me entirely if he were to write to me. I would make sure that his letter was published in The New Civil Engineer magazine, where it will be read by all those engineers who worry about these things. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 34C, 35 and 36 not moved.]
Clause 9 agreed to.
Remaining clauses agreed to.
Schedule 1 [Provisions substituted for Part I of Schedule 3 to the Water Act 1973]:
12.13 a.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal moved Amendment No. 37:
Page 9, line 15, at end insert—
("( ) A water authority shall join with other water authorities in making arrangements for the co-ordination at national level of the following matters—

(a) the provision of training,

(b) carrying out negotiations relating to the conditions of employment of persons employed by them,

(c) safety regulations and practices, and

(d) the provision of pensions and superannuation arrangements for their employees.")

The noble Baroness said: This again is a probing amendment. We are concerned over what will replace the central joint negotiating machinery for workers inside the water industry. We are concerned that the break-up of the Water Council might be regarded as an opportunity to move away from pay bargaining at the centre and move it down to the regions. The part about negotiations, conditions of employment and the persons employed by them is important to us, and we want to know where the new arrangements envisaged in the Bill will go.
On training provisions, has the Minister anything further to tell us? I accept of course that the water

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authorities will be considering appropriate regional training, but does the Minister accept that there is a need for central training where the mixed disciplines at senior staff and management levels are quite justified? Will he be able to tell us any information tonight regarding the establishment of the new limited company that was talked about in the other place at Report stage, which might be taking over the training assets of the National Water Council?
Safety regulations and practices are important and we need to know where they will go because there is concern at the moment that the authorities are trying to cut corners to save finance. That is something which is important to us, and we want to know where the safety regulations and practices will be going. We have already touched on pensions and superannuation arrangements, so I shall not mention them. Those are the points that I particularly want to draw to the attention of the Minister and I shall be glad if he can elucidate. I beg to move.
Lord Skelmersdale: We have already covered a good deal of the ground in this amendment on Amendments Nos. 13 to 16, which seems a long time ago. But, nonetheless, we did. As my noble friend Lord Bellwin and I have explained on various occasions during the course of the evening, the water authority chairmen have agreed to establish a water authorities' association. The purposes of this association are to be as follows.
First, it is to be an organisation for water authorities to discuss among themselves, and with representatives of Government and other bodies, any matters relating to the water authorities, their functions, powers, duties and so on; secondly, to co-ordinate any necessary joint action on the part of the industry; thirdly, to act as trustee or administrator in relation to pensions schemes established for the industry; fourthly, to provide public relations and public information services; fifthly, to examine the need for research and to promote research where necessary; and, sixthly, to encourage training and education, although there will be separate arrangements to establish a water industry training association.
The Committee will note that what the noble Baroness is asking for in this amendment is already explicitly covered, or capable of being covered, under one of the broad categories which I have just mentioned.
We have already debated the future of negotiations on pay and conditions of service, and the new pension arrangements for the water industry, and I do not think it would be appropriate at this late hour to say any more on those subjects. Training is undoubtedly an important function for the water industry employers, and the Government are encouraged that the chairmen have agreed to establish a water industry training association, to which the noble Baroness referred, which will make central provision for training in the water industry.
We are aware of feelings in the water industry that the provision of training by the National Water Council—and training is one of the Council's statutory functions at the moment—has been on a rather more lavish scale than is always appropriate. In particular,
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there has been criticism, not only within the industry but also from the Manpower Services Commission, that training has been supply led rather than demand led. In other words, there has been insufficient attention at the local level to determining what the training needs are and building courses around them. This approach has been reinforced by the system of financing the National Water Council's training activity; a system of levies and grants for the most part.
These are generalisations, and I am aware that they are not the whole story. Nevertheless, they underline the problems of establishing statutory bodies to carry out work such as training. The body will exist, come what may; and, in particular, it will exist whether or not it is providing exactly the service which is required.
The water industry training association will be a company limited by guarantee. The water authorities will still be obliged to provide training for their staff—there will still be a statutory requirement—and they will still be obliged to conform with general legislation on safety regulations and practices. Indeed, much of what I have been saying about training is relevant to safety procedures, since many of the courses provided by the National Water Council deal with safety matters. There will be a continuing need for such courses. The water authorities will still wish to provide them, whether centrally, or, as happens to a considerable extent already, at the local level.
As the Committee will have gathered, we do not feel that there is a need for a statutory body or fresh statutory requirements in connection with any of the functions mentioned in this amendment. One of the difficulties with statutory requirements for coordination, such as is proposed here, is that they lead to an inevitable growth in bureaucracy. The essence of our proposals is to let the water authorities, who are the paymasters and have all the relevant functional responsibilities, decide on the level of central activity required. There will be economies to be made—substantial economies—and we must not allow the scope for such economies to be dissipated by amendments such as the one currently proposed. I took the point which the noble Baroness made about this being a probing amendment. I am not sure whether she considers she has probed far enough. Perhaps she will let us know.
Baroness Fisher of Rednal: I thank the noble Lord for that information. He said " capable of being covered " as well as " being covered ". Certain matters have not yet, presumably, been defined, and they are capable of being covered. I shall read what the noble Lord has said in reply. It is an important issue. When the Bill becomes an Act and these guidelines and details are set down, will the names of the chairmen of the water authorities be announced and also the names of the chairmen of the committees? Everybody knew that the noble Lord, Lord Nugent of Guildford, was the chairman of the National Water Council. If people know who is the chairman of X, Y or Z, they can make approaches at that level, if desired.
Lord Skelmersdale: Whether this would be appropriate generally, as in the case of my noble friend Lord Nugent of Guildford, who is absent at this late

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hour, or whether the regional water authorities and district committees would have that information circulated generally in their own areas, I shall have to consider. But most certainly I take the point which the noble Baroness has made.
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): If Amendment No. 38 is agreed to, I shall be unable to call Amendment No. 39.
Baroness Fisher of Rednal: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 agreed to.
Schedule 2 [Provisions relating to dissolution of National Water Council and Water Space Amenity Commission]:
12.22 a.m.
Lord Irving of Dartford Lord Irving of Dartford moved Amendment No. 38:
Page 12, line 14, leave out from (" but ") to end of line 17 and insert—

(" (a) it shall be the duty of the Secretary of State to ensure that an offer of employment to commence not later than the day following the date of the Council ceasing to exist, is made by a water authority or other employer to each person who is an employee of the Council on the passing of this Act; and the terms of each such offer must be such that they are, taken as a whole, not less favourable to the person to whom the offer is made than the terms on which he is employed on the date when the offer is made;

(b) an offer made in pursuance of this paragraph shall not be revocable during the period of three months beginning with the date on which it is made; and ")

The noble Lord said: My noble friend Lady Fisher and I have put down six amendments. With the agreement of the Committee, I beg to move Amendment No. 38 and I shall speak to the other amendments at the same time. They concern matters of great importance. The amendments deal with matters of interest to employees regarding the continuation of their employment and the terms of that employment. They also cover important related matters. The Minister in another place was unable to comment on most them because they were still being negotiated. Tonight I hope the noble Lord the Minister will be able to say something about them and that he will accept the amendments.
Amendment No. 38 is self-explanatory. It is designed to protect employment after the cessation of the National Water Council. Amendment No. 39 is designed to ensure the transfer of National Water Council staff to the bodies which will respectively take over the National Water Council's functions. It is designed in any event to ensure that every member of the staff who wants it will have employment after dissolution. The amendment does not preclude voluntary severance or early retirement, arrangements for which will still be made by the National Water Council before it is wound up. It would also have the effect of preserving continuity of employment for employment protection Act purposes, because a transfer under it would probably satisfy the requirements of paragraph 17 of Schedule 13 to the Employment
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Protection (Consolidation) Act 1978. A general provision relating to continous employment is set out in another of our amendments.
The Bill, as drawn, will simply consign the entire National Water Council workforce to unemployment, leaving each employee to make such efforts as are possible in the present economic climate to find a job elsewhere. The Bill gives no guarantee whatever that any such persons will obtain a job with a water authority or a new representative body of authorities, and it is simply unheard of for public servants to be treated in this way when their employer created by statute is abolished by statute. Parliament is free to create and abolish public bodies as it thinks fit but must surely recognise its obligation to employees who in good faith have entered the public service without expecting to be dropped into unemployment at parliamentary will.
The amendments are inspired by Section 255 of the Local Government Act 1972 and also by paragraph 8(1) of Schedule 3 of the Local Government Finance Act 1892. During Report stage in another place, the Parliamentary Under-Secretary of State for the Environment said, on the subject of staffing levels after abolition of the National Water Council, that the abolute numbers to be employed centrally will be significantly fewer than those employed currently in the National Water Council, although he nodded when Mr Denis Howell expressed the hope that natural wastage would be used and jobs found for people who had served the industry well and whose livelihood is in jeopardy. The position remains that the jobs and livelihoods of these public servants will disappear on the dissolution of their employer, and, unless the Bill is amended, they will have no protection at all. I hope the Committee will realise how important and how necessary this amendment is.
Amendment No. 40 is consequential on acceptance of Amendment No. 38. No. 41 should be self-explanatory, althought it is not quite as simple as would perhaps appear. It is relevant and necessary whether or not the two previous amendments in regard to transfer or offer of employment are successful. In the consultation paper (paragraph 39) it is said that the National Water Council staff re-employed by another employer in the undustry shall be regarded as having continuity of employment for the purpose of the Employment Protection Consolidation Act 1978. I venture to ask, by whom will they be so regarded? Probably not by an industrial tribunal in the event of a subsequent claim for unfair dismissal, because paragraph 17 of Schedule 13 to the Act refers to transfer of an undertaking (or part of it) from one employer to another, or statutory modification of a contract of empolyment. The dissolution of the National Water Council will have neither of those two effects, so continuity may not be preserved unless specific provision is made for it in the Bill.
This amendment is important for safeguarding rights in the event of dismissal, particularly as to the qualifying period for eligibility to apply to an industrial tribunal and in the event of a finding of unfair dismissal. If the correct provision is not made in the Bill, there could be a risk for up to about twenty years of adverse effect on the basic award due to someone who is subsequently unfairly dismissed.
Amendment No. 42 concerns the transfer of staff whose terms and conditions after transfer are the same as before. This sub-paragraph is enabling only. It seems logical to include contracts of employment in the enabling provision in case it should be necessary or appropriate in due course to use this sub-paragraph in relation to contracts of employment. Amendment No. 43 is designed to ensure that any new association, company or other organisation that might be set up to do some or all of the work now done by the National Water Council will make pension arrangements for staff no less favourable than the scheme applicable to water authority employees. It may be that such provision is already envisaged by the existing subparagraphs of paragraph 7 of Schedule 2, but they appear not to go far enough and we wish to be in no doubt that suitable pension arrangements will be made.
On 18th January, the Under-Secretary, Mr Shaw, said in another place that administration of the water industry pension fund would pass to the Yorkshire Water Authority and the machinery for payment of pensions would be preserved intact. That is all very well in relation to staff of existing water industry employers, but no guarantee has been given that a new body, presumably an association of water authorities, and/or a limited company or several of them, will make the same pension provision for their staffs. If pension provisions by a newly created employer are not the same, staff will run the risk of losing heavily on transfer to it from the local government scheme, which is the scheme currently applied to staff of water authorities and the National Water Council, or earning significantly worse benefits from their future service with the new employer than they have earned to date in the water industry. It is unfortunate that we have to deal with such important matters so late at night, but I nevertheless hope that the Minister will be able to give an adequate reply.
Lord Skelmersdale: I shall certainly do my best. We very much appreciate the concern expressed by these amendments and I hope that your Lordships will agree that what I have to say will allay at least some of that concern. However, I am afraid that the Government cannot accept Amendment No. 38. Its purpose is to secure continuity of employment for all National Water Council employees. We believe—and this is important—that some considerable economies in staff and resources will be made by the Bill.
As I have already explained, we envisage the need for some functions of the National Water Council to be continued centrally. However, economies and improvements in efficiency are part of the reason for our proposals and we cannot, therefore, accept this amendment. I should add that Mr. Len Hill, Chairman of the Chairmen's Industry Committee, has advised that in the proposed new Water Authorities' Association all posts except that of the secretary will be protected for existing National Water Council staff, so long as they are suitable.
The National Water Council is a party to the water industry's generous 1977 scheme for the payment of compensation on severance. This compensation is in addition to redundancy payments payable under
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employment protection legislation. Under the water industry's 1977 scheme the employer pays compensation where an employee is made redundant, provided that he has not unreasonably refused a reasonable offer of alternative employment within the water industry. What is a reasonable offer would be a matter for consideration in the light of particular circumstances. But if the terms offered were much less favourable than those currently enjoyed by the employee I would not expect this to be regarded as reasonable. Staff will also have the protection afforded by the Employment Protection (Consolidation) Act 1978, to which the noble Lord has already referred.
As I understand it, Amendment No. 40 is consequential on Amendment No. 38. I am advised that Amendment No. 41 is unnecessary. The 1978 Act operates on the basis that either there is a break in someone's employment, in which case questions of compensation arise, or there is not, in which case they do not arise.
In our view, any of the operations of the National Water Council which are transferred in whole or in part to some other organisation—be it a water authority or, say, the proposed Water Authorities' Association—are likely to represent the transfer of a business, or part of a business, within the terms of Section 94 of the 1978 Act. In these circumstances, continuity of employment would be preserved, provided that the new employer made job offers to the staff before dismissals by the National Water Council took effect and provided that employment with the new employer began within four weeks of that date.
As for Amendment No. 42, I can assure the noble Lords that the exclusion of contracts of employment from the agreements to which sub-paragraph (3) of paragraph 4 applies does not in any way adversely affect the interests of staff. I think that is something that particularly concerns the noble Lord, Lord Irving of Dartford.
This particular sub-paragraph is concerned with the possible need to clarify the construction of references in agreements to which the council are a party where rights and liabilities arising from those agreements are transferred to a water authority or other body. References to the council in such agreements could need to be treated as references to the body to which the rights or liabilities are transferred.
In the case of contracts of employment, we do not consider that it would be appropriate to transfer to a water authority or other body any liabilities of the council which may remain. There may, for example, be a claim against the council for compensation for an industrial injury. We consider that the proper course is for the Secretary of State to assume any such rights and liabilities of the council which may arise under contracts of employment. We have provided for this in sub-paragraph 3 of paragraph 3 of Schedule 2.
We do not propose, therefore, that any order under subsection (4) of Clause 3 should transfer any rights and liabilities in relation to contracts of employment to a water authority or other body. The purpose of the words to which this amendment relates is simply to make this exclusion clear in relation to sub-paragraph 3 of paragraph 4, which is concerned with consequential provisions in cases where rights and

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liabilities under other types of agreement may be transferred.
Finally there is the question of superannuation for those who become employees of bodies established as a consequence of this Bill. This is Amendment No. 43. As I said at the beginning, I share the concern of noble Lords that the staff should be fairly treated and I am sure that proper pension provision will be made by these bodies. I expect that any new bodies established would wish to bring their employees within the same superannuation arrangements as apply to staff in the water industry.
If any bodies established as a consequence of this Bill did not come within the criteria in the present regulations for " admitted bodies " under the local government superannuation scheme, my right honourable friend would propose amendments to those regulations in order to bring the new bodies within scope. It would then be for those new bodies to negotiate an admission agreement, which I would expect to be with the administering authority for the water industry pension fund.
In the medium term, I understand that the water authorities intend to set up their own pension arrangements, independent of the local government scheme, under Section 27 of the Water Act 1973. The Bill will require that no arrangements of this kind can be established without the Secretary of State's consent—that is achieved by paragraph 7(2) of the schedule—and I can assure the Committee that he would not give consent unless the position of employees of any bodies of the kind under discussion was adequately safeguarded.
I hope that the noble Lord, Lord Irving of Dartford, will accept the Government's view that the proposed amendments are neither necessary nor in this case appropriate. I hope that, in the light of this explanation, the noble Lord will not seek to probe too much further at this late hour.
Lord Irving of Dartford: I think that the noble Lord will understand if we find the answer to Amendment No. 38 wholly unacceptable. The other matters are, as I think that he will agree, matters of great complexity. He would, I am sure, wish to allow us to have time to examine his reply in some detail and perhaps come back at another stage. In view of that statement, I beg leave to withdraw Amendment No. 38.
Amendment, by leave, withdrawn.
[Amendments Nos. 39 to 43 not moved.]
Schedule 2 agreed to.
Schedule 3 agreed to.
Schedule 4 [Repeals and Revocations]:
[Amendment No. 44 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 45:
Page 19, line 17, column 3, at end insert ("In section 17(5) the words "under section 6 above".")
The noble Lord said: This is a very minor amendment. One of the provisions of the Bill is to repeal Section 6 of the Water Act 1973. Section 6 is unnecessary because water authorities will have a free hand in making arrangements for their functions to be discharged—whether by committees, joint committees, officers and so on; there is no need for any express provision on the subject. Since Section 6 is being repealed, a reference to it in Section 17(5), which deals with maintaining the standards of our rivers, is also redundant and should be repealed. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 46 to 48 not moved.]
Schedule 4, as amended, agreed to.
[Amendment No. 49 had been withdrawn from the Marshalled List.]
[Amendments Nos. 50 and 51 not moved.]
House resumed: Bill reported with amendments.
House adjourned at twenty minutes before one o'clock.

  CROWN TENANTS: HOUSING ACT 1980
  CROWN TENANTS: HOUSING ACT 1980