Sitting of 21 February 1984

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

    Wages Council Employees
    Mr. Dixonasked the Secretary of State for Employment if he is satisfied that sufficient information is issued to wages council employees to guard against illegal underpayment.
    The Minister of State, Department of Employment (Mr. John Selwyn Gummer): A copy of the appropriate wages order is sent to all employers known to be affected. Employers are required by law to display it where it can be seen by their workers. These arrangements have applied since the inception of wages council legislation and are considered adequate.
    Mr. Dixon: How can the Minister be so complacent, bearing in mind that of the establishments inspected in 1981, over 41 per cent. were thought to be underpaying their employees? When will the hon. Gentleman answer the point that was made by my hon. Friend the Member for West Bromwich, West (Miss Boothroyd) in the debate on low pay last week when she referred to people who were working 45 hours a week for the princely sum of £30? Against that background, how can the Minister be so complacent when talking about low pay?
    Mr. Gummer: If I am being complacent, then every one of my Labour predecessors was complacent as well and the hon. Gentleman should have listened to the answer that I gave. Of the workers whose pay in 1982 was covered by checks, by visits and by other means, only 6·2 per cent. were found to be underpaid.
    Sir William Clark: As wages councils do not appear to be of much advantage or benefit to industry, when will they be abolished?
    Mr. Gummer: My hon. Friend will be aware that in the debate on low pay last week I said that when the time came to consider the opportunities—which would arise only when the ILO window occurred—we would look at the evidence extremely carefully and that if it seemed that the wages councils reduced opportunities for employment we would be wrong not to take appropriate action.
    Miss Boothroyd: Why does the Minister refuse to restore the cuts that he made in the wages inspectorate in the west midlands when, on his own admission, only 3,500 factories out of a possible 32,000 have been surveyed? Is he not neglecting his duties in this respect?
    Mr. Gummer: We are carrying out the same level of checking as has been the case generally under both Labour and Conservative Governments. The hon. Lady must realise, therefore, that we are not taking any different approach from that of the last Labour Government, and she did not make the same complaints against them.
    Mr. Ashdown: Does the Minister accept that the Government have a responsibility to protect the wages of the very low-paid? Does he further accept that in the absence of wages councils, or some similar mechanism, to protect wages, the Government will be party to workers getting as little as £30 or £40 before the tax man gets to them?
    Mr. Gummer: I do not think that the hon. Member for Yeovil (Mr. Ashdown) was present for the debate on low pay. Indeed, it was noticeable how few alliance Members were present.
    Mr. Ashdown: Answer the question.
    Mr. Gummer: This is, clearly, not a matter which concerns them until they can get some press for their remarks.
    We are concerned to see whether the wages councils protect the pay of the low-paid. That is why I said that we would proceed according to the evidence. The hon. Gentleman is asking me to give an undertaking before we have looked at the evidence.
    Mr. John Townend: Does my hon. Friend agree that wages councils are destroying jobs, in particular for the under-18s? Would it be possible to remove the under-l8s from the jurisdiction of the councils now, rather than wait 18 months or two years and many more lost jobs for young people?
    Mr. Gummer: It is most important that we do nothing that would make the position of the low-paid worse. It is because there is considerable concern that the present system reduces opportunity for employment, particularly of the young, that we have undertaken to look at the situation very carefully. It is a serious matter when Her Majesty's Opposition demand that we give undertakings without considering ways of improving employment opportunities for young people.
    Mr. John Evans: In view of the growing incidence of poverty wages in this country, why does the Minister not insist that all jobcentres display wages council minimum awards, so that affected workers may visit their nearest jobcentre to find out whether they are being underpaid?
    Mr. Gummer: The jobcentres have the same rules as I put forward before in reply to the hon. Member for West Bromwich, West (Miss Boothroyd). All the staff of jobcentres are fully aware of the details which they need to have. Each case is examined to see that the wages orders are not violated. These are complicated matters, because there are a large number of wages councils. In the last debate on this subject the hon. Gentleman complained that we had abolished some of them, so on this occasion he cannot object to their existence.

    Codes of Practice
    Mr. Marlowasked the Secretary of State for Employment what further codes of practice he is required to introduce by legislation; and by what dates he intends their introduction.
    The Under-Secretary of State for Employment (Mr. Alan Clark): None, Sir, but certain bodies may initiate codes for which they may need to seek my right hon. Friend's consent or approval.
    Mr. Marlow: As my hon. Friend has a great reputation as a parliamentarian and is especially concerned with the powers of the House, does he agree that it is appalling that various quangos have the power to put measures before himself and the Secretary of State which they and the House are unable to amend? Unelected bodies are able to make legislation for the House. What will my hon. Friend do about this?
    Mr. Clark: These codes do not have the force of law. I am obliged to my hon. Friend for the opportunity to reiterate that. There can be certain circumstances, although one would hope that humanity and common sense would govern the relationship between parties in such instances, where it is useful to have a code of practice to which either party — I hope that it will not be necessary—and in the last resort the tribunals, can refer.

    "Training for Jobs"
    Mr. Haselhurstasked the Secretary of State for Employment what representations he has so far received in response to his White Paper, "Training for Jobs".
    The Secretary of State for Employment (Mr. Tom King): The wide-ranging proposals in our White Paper "Training for Jobs" have been generally welcomed. Concern has, however, been expressed about the proposals on further education. My right hon. Friend the Secretary of State for Education and Science, I, and other colleagues met the local authority associations yesterday to discuss these aspects of the proposals.
    Mr. Haselhurst: Has my right hon. Friend heard about the anxiety of industries in which there are voluntary training arrangements that many companies may not be playing their full role in training and that the Government may need to show that they expect companies to take their responsibilities seriously if the White Paper's objectives are to be fully implemented?
    Mr. King: I believe—I hope that the whole House shares this view—that we have an urgent task to ensure that training is as relevant as we can make it. I was interested to see, against the background of concern about unemployment, an important article on the electronics industry entitled, "The Jobs They Can't Fill" and the amount of recruiting that is taking place overseas to prevent industries suffering severe impediments to their expansion because of the difficulty of getting people for these jobs. I accept the need for close co-operation, which the White Paper seeks to set out, in ensuring that we train people for the jobs that are needed.

    Industrial Disputes
    Mr. Knoxasked the Secretary of State for Employment how many days were lost in industrial disputes in the most recent 12-month period for which figures are available.
    Mr. Gummer: It is provisionally estimated that 3·6 million working days were lost through stoppages of work
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    due to industrial disputes in the United Kingdom in the 12 months ending 31 December 1983. This is the lowest annual total since 1967, apart from 1976.
    Mr. Knox: Does my hon. friend agree that that figure is a vindication of the Government's step-by-step approach to industrial relations reform? Will he confirm that the Government intend to continue to tread cautiously in this sphere?
    Mr. Gummer: I am sure that my hon. Friend is right and that he has followed the debates in Committee on the Trade Union Bill. He will have noticed that the Government's arguments are serious, sensible and well-founded, while those of the Opposition are conservative and reactionary.
    Mr. Barron: In view of those figures, does the Minister believe that it is about time he stopped messing about and looking for scapegoats in the trade union movement, as those figures are the lowest for a long time? Will he do something about other matters that bother industry, such as unemployment.?
    Mr. Gummer: The hon. Gentleman likes the effect but objects to the cause. The cause is largely the legislation to which he objects and against which he fought.
    Mr. John Evans: Will the Minister confirm that the majority of days lost in the 12 months ending 31 December 1983 were the result of unofficial disputes which were settled within two or three days by the intervention of full-time trade union officers? Is he aware that there is a great fear that the Trade Union Bill will prevent trade union officers from intervening in unofficial strikes and so worsen the position?
    Mr. Gummer: The figures do not exist which would make that proved or unproved. However, there is no widespread fear of the sort that the hon. Gentleman has described. It is a fear that has been invented by the Opposition and pushed hard.

    Labour Statistics
    Mr. Winnickasked the Secretary of State for Employment what is the latest number who are now unemployed in the United Kingdom; and how many of these have been unemployed for 12 months or over.
    Mr. Canavanasked the Secretary of State for Employment what is the total number of unemployed people in the United Kingdom.
    Mr. Tom King: On 12 January the number of unemployed claimants in the United Kingdom was 3,199,678. Of these, 1,188,039 had been unemployed for over 52 weeks.
    Mr. Winnick: Do not those figures, of which every member of the Cabinet should feel thoroughly ashamed, illustrate the immense human misery that is caused by continued mass unemployment? Is the right hon. Gentleman aware that many people in their 40s and onwards are finding it increasingly difficult even to be considered for a job, and thus face the prospect of 10 or 15 years on the dole before they become pensioners? Is that the sort of future the Tories promised in 1979 and 1983?
    Mr. King: I think that every hon. Member is aware of the real human tragedy that is contained within the figures

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    and the appalling difficulties that they represent for many people. Most hon. Members recognise the seriousness of the problem, which is shared by all countries in the Western world. The problem is not best met, in the interests of those suffering from it, by sloganising. The answer lies in a determination to make Britain competitive once more and to achieve an improved rate of growth. I hope that the hon. Gentleman will join my hon. Friends in welcoming the announcement that was made today that in 1983 Britain achieved the fastest rate of growth for the whole of the last decade.
    Sir Dudley Smith: Has my right hon. Friend noticed that the upturn in the economy is now accepted in most quarters? Does he think that this underlines the good sense of the Government's policies? At the end of the day, is this not the best way of dealing with the admittedly difficult problem of mass unemployment?
    Mr. King: As we have always said, Britain must first become competitive. That competitiveness will give us a better chance to improve our rate of growth. I was pleased to be able to announce in the figures supplied by my Department that now, at last, for the third quarter of last year, and for the first time in four years, there has been an increase in the numbers in employment. That is an important step forward in ensuring that there are more jobs for all our people.
    Mr. Crowther: What effect does the Secretary of State expect the White Paper on public expenditure to have on the unemployment figures? Is it not obvious that the Government's plans, which provide for virtually no increase in capital spending, but at the same time greatly reduce the spending of local authorities over the next three years, will necessarily put more people on the dole? What representations is he making to the Chancellor of the Exchequer to bring in an economic policy which actually gets people back to work?
    Mr. King: I do not know whether the hon. Gentleman decided on that supplementary question before listening to my earlier answers. The Government's policy of restraint on public expenditure is now leading to a much lower rate of inflation than was expected, and much lower interest rates than many forecasters predicted. It is leading to the best growth in the economy that we have seen for the past 10 years. For the first time there has been a real increase in the numbers at work. That shows that at last we are seeing some real prospects of making an impact on the serious problem of unemployment.
    Mrs. Rumbold: I sympathise with my right hon. Friend over the number of unemployed, but is he able to tell the House how many people each day get a job?
    Mr. King: It is significant that 7 million people obtained new jobs last year. There is a considerably greater turnover than many appreciate, and many people are able to get new jobs. We estimate that there have been about 250,000 new jobs in the service sector in the past year.
    Mr. John Smith: As unemployment remains stubbornly at well over 3 million, as the right hon. Gentleman has confirmed, and the Treasury has told the Government Actuary that there will be no change in 1984, who does the Government think is responsible for this
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    terrible situation? Are the Government responsible? If they are not after nearly five years of Conservative policies, who is to blame?
    Mr. King: It would be very difficult entirely to exonerate the Labour Benches from blame. I do not accept that the figures will necessarily stay stubbornly above 3 million. Some forecasters suggest that there may be a reduction this year. That will depend upon a number of factors. The biggest single cause of unemployment is the progressive decline in the competitiveness of British industry since the war. It is significant to note that if we had held on to the share of our own markets that we had 10 years ago, 1½ million more people would now be in work.

    Youth Training Scheme
    Mr. Lofthouseasked the Secretary of State for Employment what is the percentage planned reduction in mode B1 provision in the youth training scheme for next year.
    The Minister of State, Department of Employment (Mr. Peter Morrison): By the end of December 1983, only 54,300 of the 89,000 mode B1 places approved for this year were occupied. I am therefore satisfied that the reduced provision of 70,000 mode B1 places in 1984–85 should be more than sufficient to meet trainees' needs.
    Mr. Lofthouse: Does not the cutback in mode B1 mean that there will be a serious lack of provision for the less able youngsters, who need more schemes and schemes of the highest grade that can be provided?
    Mr. Morrison: I do not think that the hon. Gentleman can have heard my answer. Last year only 54,300 places were filled, and we are hoping to approve 70,000 places next year. In the Wakefield office area, covering Wakefield, Barnsley and Doncaster, 1,945 mode B1 places have been approved, and only 55 per cent. were occupied at the end of January. There is no need to worry about the trainees.
    Mr. Bottomley: Can my hon. Friend assure me that those who are writing to me about places in the area of the borough of Greenwich have nothing to fear, and that all the youngsters who, it is believed, would profit from mode B1 places will be able to get places in the local area?
    Mr. Morrison: Yes, I can assure my hon. Friend that that is so. Furthermore, for every unfilled place there is a cost of between £2,000 and perhaps £4,000. That money is being spent on bricks and mortar, not on relevant training for the trainees. It would be better if it were spent more effectively.
    Mr. Meadowcroft: Does not the Government's arbitrary decision to cut back nationally on voluntary sector places fly in the face of the reality that we have to help many young people to cope with unemployment and that those schemes help them to cope better than private industry? Also, many young people find permanent jobs from the voluntary sector schemes.
    Mr. Morrison: The hon. Gentleman cannot have heard my original response to the hon. Member for Pontefract and Castleford (Mr. Lofthouse). There are sufficient places this year, and planned for next year, for the estimated number of entrants into mode B1. I accept that

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    voluntary organisations, local authorities and many others have played an important role, but it is a useless waste of money to over-provide for the sake of bricks and mortar.
    Mr. Lawler: Will my hon. Friend outline his discussions with the probation service about safeguarding the number of people on schemes with which that service in involved?
    Mr. Morrison: I discuss the matter with many interested bodies. It is important that, as the programme develops over the years, the probation service, like others, should have the right of access to me whenever it wishes to see me.
    Mr. Sheerman: Is it not time that the Minister stopped misleading the House and owned up? The mode B1 provision throughout the country is being cut, and that means the voluntary schemes that have been extremely successful in helping the less able school leaver who would not get a mode A place. Will the Minister come clean and tell the House why good schemes which are fully occupied are being cut?
    Mr. Morrison: I resent the hon. Gentleman's suggestion that I am misleading the House. I am not doing so. I have pointed out that at the end of December 54,300 mode B1 places had been filled. It seemed to me, in the circumstances, a bad use of taxpayers' money to go on providing places which would not be taken up next year. Surely money should go to proper training rather than to providing bricks and mortar.

    Enterprise Allowance Scheme
    Mr. Wattsasked the Secretary of State for Employment if he will make a statement on the take-up of the enterprise allowance scheme since its expansion nationwide; and if he will make a statement.
    Mr. Alan Clark: By 7 February 1984, 24,272 people had joined the enterprise allowance scheme. This response has been most encouraging. As I announced in November, we are extending the scheme into the coming financial year and will provide resources for a further 35,000 unemployed people to receive the allowances.
    Mr. Watts: I welcome that encouraging reply. What plans does my hon. Friend have to give further publicity to the availability of the scheme, as I find that many constituents who might benefit from it are unaware of its existence?
    Mr. Clark: The success of the scheme, which has been one of the most important in generating jobs and in laying the foundations for future commercial and industrial enterprises, is such that it is substantially oversubscribed. To advertise its merits further would not be a prudent use of taxpayers' money.
    Mr. Rogers: In view of earlier optimistic answers by the Secretary of State, will the Minister tell us what proposals his Department has to import immigrant labour to meet the labour shortage in Britain?
    Mr. Clark: I do not quite see how that matter arises on a question about the enterprise allowance scheme, but were such people to be imported they would not be eligible until they had fulfilled the various criteria relating to benefit.

    Political Parties (Financing)
    Mr. Skinnerasked the Secretary of State for Employment what recent representations have been made by the Trades Union Congress and other bodies about the financing of political parties; and if he will make a statement.
    Mr. Tom King: Following discussions with the Government, the TUC general council will tomorrow be considering a statement of guidance which is designed to ensure that union members are fully aware of their statutory right not to pay a political levy and that they are able to exercise that right freely and effectively. I have made it clear to the TUC that, provided the statement is adopted by the general council and issued with its committed support, I shall not bring forward amendments to the Trade Union Bill to change the law on contracting out. However, I must emphasise that if the TUC guidance proves ineffective I have made it clear that the Government reserve the right to legislate.
    Mr. Skinner: Will the Minister extend that statement of guidance to the Tory party and to the big businesses which allocate millions of pounds to it each year? Will he also extend it to the Social Democratic party, as I have just seen a statement of its income for the year ending 31 March 1983? Although there has been a drop of £175,000 in members' subscriptions, there has been an increase in other donations to the tune of £310,000. Where does that money come from? [Interruption.]
    Mr. Speaker: Order. Perhaps the hon. Member for Bolsover (Mr. Skinner) will conclude his question.
    Mr. Skinner: As the Social Democrats and Liberals are so keen about freedom of information, does the Secretary of State not think that everyone in the country has a right to know where the money is coming from?
    Mr. King: As I understand that every effort is being made to encourage the hon. Gentleman not to go to Chesterfield, I wondered what his supplementary question would be. Very little of what he said has anything to do with me.
    Sir John Biggs-Davison: If there is to be this anachronistic political levy, would not any up-to-date trade union with a due regard for the long-term interests of its members see that it is paid to the Tory party?
    Mr. King: I agree 100 per cent. with my hon. Friend, but we must recognise that, in a free society, it is for union members to decide. In our manifesto we told the country clearly that we would ensure that union members had a free and effective right of choice and that we would invite the TUC to discuss the matter with us. That is what I have tried to achieve.
    Mr. Fatchett: Would not the Secretary of State have a better chance of persuading trade union members of the even-handedness of the Government if the Government were prepared to introduce legislation to subject political donations by companies to the Conservative party to equal scrutiny, and if shareholders were given the right to opt out from paying into the Conservative party?
    Mr. King: That has the fairly dread ring of a re-run of the debate that I have heard elsewhere on a certain Bill currently before the House. At present, directors of companies are liable to the criminal law with regard to

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    their duties in respect of disclosure of political donations. I have no proposals to bring trade unions within that same rule.
    Sir William Clark: Will my right hon. Friend at last kill the myth that the Conservative party is financed purely by big business? Will he confirm that, of every £1 spent by the Conservative party, 82p comes from the doorstep, and about 18p only comes from large donations — [Interruption.]—whereas in the Labour party something like 85 per cent. comes from the trade unions, and only 15 per cent. from the doorstep?
    Mr. King: I should like to say to my hon. Friend that some fairly active myth-killing is taking place upstairs in the Committee dealing with this matter. The degree of ignorance on the other side of the Committee on this matter is depressing, but I think that we are getting through.
    Mr. Wrigglesworth rose—
    Mr. Skinner: Tell us where you got the £300,000.
    Mr. Speaker: Order. Just because the hon. Member for Bolsover (Mr. Skinner) was interrupted, he must not interrupt the hon. Gentleman.
    Mr. Skinner: I had to go through it. They had an increase of £300,000—
    Mr. Wrigglesworth: Maybe the hon. Gentleman would like to look at our published accounts a little more closely, and he will learn a great deal more about it.
    Mr. Skinner: Three hundred thousand pounds — where did it come from?
    Mr. Speaker: Order. I must say to the hon. Gentleman that, if he continues in that vein, I shall have to—
    Mr. Skinner: The hon. Gentleman did say—
    Mr. Speaker: Order. I call the hon. Member for Stockton, South (Mr. Wrigglesworth).
    Mr. Wrigglesworth: The Secretary of State and his colleagues have poured scorn upon solemn and binding agreements of a voluntary nature with the TUC. Will he therefore tell the House why he will not introduce the only fair system applicable to the political levy, namely, a system of contracting in, which abolishes the inertia selling of the present system?
    Mr. King: I have to say to the hon. Gentleman—and I hope that it is not too big a shock to him—that Conservative Members believe in carrying out the Conservative manifesto. We specifically promised the country that we would institute proposals about periodic ballots for political funds, a provision that is included in the Bill currently before the House, and that we would have discussions with the TUC on the lines that I have set out. As the hon. Gentleman will also have heard, and as I have told the House, I have made it abundantly clear that, if the guidance does not prove effective, the Government reserve the right to legislate.
    Mr. Nicholls: What does my right hon. Friend make of the indignation of the alliance about this issue, bearing in mind that, when alliance Members of Parliament were in the Labour party, they voted for the Trade Union and Labour Relations Act in 1974, which was the most pro-union, anti-individual piece of legislation that the House has ever enacted? What has changed since then?
    Mr. King: I have always found it difficult to explain the actions of the alliance, and I fear that I must disappoint my hon. Friend once again.
    Mr. John Smith: As the Secretary of State has confirmed that trade unions are subject to unique restrictions, in that they must have a separate political fund, they must have a ballot, to be repeated regularly, and every member has the right to opt out, why are they singled out for special treatment? Why are the same restrictions not applied to companies?
    Mr. King: As I sought to make clear, and as I think the right hon. and learned Gentleman knows, companies and company directors are uniquely exposed to the risks of the criminal law, so there is no parallel in that respect.

    Young Workers Scheme
    Mr. Corbynasked the Secretary of State for Employment how many jobs have been subsidised, and at what cost, under the young workers scheme; and what has been the net addition to employment resulting from the scheme.
    Mr. Alan Clark: Two hundred and seventy nine applications had been approved up to 31 December 1983, at an estimated cost of about £80 million. A survey recently indicates that about a fifth of approvals were for jobs that would not otherwise have existed.
    Mr. Corbyn: Does the Secretary of State agree that the figures that he read out show that the cost of creating non-existent and non-permanent jobs is very high? Would not the Government do better to support local authorities, such as the Greater London council, in setting up such organisations as the Greater London Enterprise Board, which provides real opportunities for permanent jobs for youngsters, rather than the disgrace of consignment to short-term jobs and long-term unemployment which so many youngsters are forced to face because of Government policies?
    Mr. Clark: The hon. Gentleman has his views to which his doctrine—and, for all I know, the pressures of his general management committee—oblige him to subscribe. But if he had spoken, as I have, to youngsters on the scheme, and to their parents, he might moderate his views.
    Mr. Haselhurst: Notwithstanding the revised role that the Government have ordained for the young workers scheme, will my hon. Friend keep his mind open to the possibility that those resources could be better used to enhance the youth training scheme so that it could cover all in the age range 16 to 18?
    Mr. Clark: I believe that the youth training scheme will cover that whole range. Certainly there is scope for switching resources, and that may well happen.
    Mr. Sheerman: With the large subsidy to employers to employ youngsters on the young workers scheme, why is an obligation not placed on those employers to include an element of training in that year's scheme? Is it not a serious deficiency that the young workers scheme, deliberately introduced to reduce young people's wages, has no training element in it?
    Mr. Clark: The training element is principally present in the youth training scheme. The young workers scheme

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    has two objects — to effect a governing of young persons' wages so that more of them will be eligible for employment and, secondly—as frequently happens—to ensure that in 90 per cent. of cases they are retained in their job at the end of the period of eligibility.

    "Training for Jobs"
    Mr. Kenneth Carlisleasked the Secretary of State for Employment whether he will make a statement on the quality of the adult training which is to be expanded in line with the proposals in his White Paper, "Training for Jobs".
    Mr. Peter Morrison: One of the aims of the new strategy for adult training is to improve the quality and effectiveness of training provided or supported by the Manpower Services Commission by linking it more closely to the needs of industry and employment opportunities.
    Mr. Carlisle: Does my hon. Friend accept that it is good news that the number of places for adult training is to be doubled? Will he ensure that those workers who, unhappily, are made redundant in such industries as heavy engineering can find training in the skills that are in demand?
    Mr. Morrison: I am glad that my hon. Friend has recognised that the number of people trained every year will rise from 110,000 to 250,000. On his second point, of that 250,000, 110,000 will be unemployed, whereas at the moment there are 80,000.

    Labour Statistics
    Mr. Chapmanasked the Secretary of State for Employment what is his estimate of the latest number of women employed; and how this figure compares with the number and percentage of the total employed 10 years previously.
    Mr. Alan Clark: In September 1983 there were 9,054,000 women in employment in the United Kingdom. That is an increase over September 1973, when there were 8,902,000.
    Mr. Chapman: Bearing in mind the sad, but great, increase in the total number of jobless during a similar period, is not the fact that there are more women registered as employed today compared with 10 years ago a remarkable trend? Does that not underline the quite dramatic and shifting patterns of employment in our country? Putting the question as neutrally as possible, as I see my right hon. Friend the Prime Minister about to enter the Chamber, does my hon. Friend welcome that trend?
    Mr. Clark: My hon. Friend is right. Changes in employment patterns reflect changes of emphasis in productivity. I am certain that as these changes come to fruition they will have a good effect on employment as a whole.
    Ms. Richardson: Does not the Minister recognise that the number of women unemployed would be greater if the statistics had not been fiddled, with the result that a number of women are not able to register? Does he accept that cuts in public expenditure, and, therefore, in community services which especially help the elderly and
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    the disabled, force many women who would like to have a job—and, in many cases, need a job—to stay at home and look after dependent relatives?
    Mr. Clark: The number of women in employment has gone up. The reluctance of Opposition Members to accept good news never ceases to amaze me; if anything good is offered, the Opposition feel obliged to reject it.
    Mr. Bill Walker: Is my hon. Friend aware that some changes in women's employment have resulted from changes in technology and in consumer demand? In my constituency, a canning factory and two spinning mills closed and many hundreds of women were laid off in 1978, when the Labour Government were in office. Many of those women are still unemployed today, but the changing attitude towards service industries will give them an opportunity of finding jobs.
    Mr. Clark: My hon. Friend is right. This is part of the changing employment pattern, which in turn reflects changes in emphasis in industry and technology. In the long run, that is bound to be beneficial.

    Wages Councils
    Mr. Cohenasked the Secretary of State for Employment if he accepts the conclusions reached by a study into the effects of the abolition of wages councils, commissioned by his Department and carried out by the department of applied economics at Cambridge.
    Mr. Gummer: I broadly accept the basic results of this research, conducted between 1976 and 1979 and originally published in 1979 and 1980. I do not accept all the wider conclusions independently drawn by the department of applied economics at Cambridge in its 1982 publication based on this research, notably on the need for a national minimum wage.
    Mr. Cohen: Does the Minister agree that if the wages councils were abolished workers in small firms, women and youth workers, ethnic minorities and homeworkers would lose, as the department of applied economics found? The bad employers would gain. As the late Sir Winston Churchill said when he introduced the first trades boards, the good employers would be undercut by the bad, and the bad by the worse. Is not that view still relevant in respect of wages councils?
    Mr. Gummer: I do not believe that the hon. Gentleman has read the report, because it clearly says that wages councils have made little overall difference to levels of pay, employment or trade union membership. The hon. Gentleman's premise is wrong.
    Mr. Robert C. Brown: Is the Minister aware that from 30 to 95 per cent. of lower-paid workers receive less than half the national industrial wage? Is that not a clear sign of the need to strengthen wages councils rather than weaken them?
    Mr. Gummer: With respect, I do not agree that that figure is a clear sign of the need to strengthen wages councils. It does, however, show that the present system does not have the effect that the Opposition believe it should have. The Government are merely saying that it is much better to consider the system before saying that it does not have disadvantages. If the system produces higher unemployment, we ought to change it. Otherwise, we must consider whether it helps the lower-paid.
    Mr. Couchman: Is my hon. Friend aware that increases in wages and improvements in terms and conditions of employment forced by the licensed and nonresidential wages councils some three years ago caused a considerable review of staff levels within the public house trade?
    Mr. Gummer: I am aware that that criticism has been laid at the door of the wages councils. If such criticisms are well founded, it would be a gross dereliction of duty for the Government to ignore them.
    Mr. Leighasked the Secretary of State for Employment what recent representations he has received about the Government's intention to abolish wages councils.
    Mr. Gummer: The Government have taken no final decision on the future of wages councils. We have received a number of representations recently from hon. Members and others, some urging abolition and others in favour of reform.
    Mr. Leigh: Has my hon. Friend noted the representations, especially from small business men, that the wages councils price the lower paid out of the market by protecting the jobs of established trade unionists, and force many small business men not to employ young people?
    Mr. Gummer: I am aware of those representations. Once again the Opposition are reactionary and conservative in their refusal even to consider the evidence. The Government are saying, simply, "Let us look at the evidence, and make up our minds based on the facts rather than on reactionary views."
    Mr. John Evans: Is the Minister not aware that the cynical campaign carried on by some Tory Back Benchers to abolish the wages councils is being taken as a nod and a wink by some unscrupulous employers to under-pay their already impoverished workers? That is because nobody is being prosecuted nowadays for flouting wages council awards and because employers are waiting for the Government to abolish the wages councils as soon as they possibly can.
    Mr. Gummer: If it is cynical for Ministers to try to find ways of reducing unemployment, that is an odd definition of cynicism. I made it clear in the low-pay debate last week that the Government stand by the rule of law. There is no question of a nod and a wink being given to anybody. The hon. Gentleman did not listen to the answer that I gave earlier, saying that the level of operation and actions of the wages councils are similar to those existing under the Labour Government for many years.

    Vocational Training
    Mr. Sheermanasked the Secretary of State for Employment what discussions he has had with the Secretary of State for Education and Science about vocational training.
    Mr. Peter Morrison: My right hon. Friend is in regular contact with his right hon. Friend the Secretary of State for Education and Science to discuss vocational education and training matters that involve both their interests.
    Mr. Sheerman: Does the Minister think that the right way to get a strategy for vocational education in future is
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    not to consult or ask the opinion of the vested interests, which have done great service over past years—such as the trade unions, the Youth Training Board, the Manpower Services Commission, the Association of Metropolitan Authorities and the Association of County Councils—as the Government have done in the White Paper "Training for Jobs"? The Government have introduced the White paper with no consultation. Is that the way to develop co-operation in future?
    Mr. Morrison: The hon. Gentleman may like to know that my right hon. Friends the Secretary of State for Employment and the Secretary of State for Education and Science met the ACC and the AMA to discuss those very points—
    Mr. Barron: When?
    Mr. Morrison: Yesterday. Those points were discussed in a helpful and co-operative way.

  PRIME MINISTER

    Engagements
    Mr. Duffyasked the Prime Minister if she will list her official engagements for 21 February.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Duffy: How does the Prime Minister reconcile the continuing assumption in last week's public expenditure White Paper of nearly 3 million unemployed, based on social security calculations, with the continuing constraints on public sector capital spending, excluding defence? What is the sense of depriving town halls of resources and neglecting housing and infrastructure investment when the relevant resources, including workers, are lying idle?
    The Prime Minister: Because the resources would then have to be taken out of the private sector, where they could well be effectively and productively employed, and put into the public sector. The public expenditure White Paper contained the figures on which we fought the election, when we received a massive majority.
    Mr. Kinnock: Has the Prime Minister personally agreed to the procedure whereby the recently announced concessions on housing benefit are to be financed by withdrawing benefits from other groups of needy people?
    The Prime Minister: My right hon. Friend the Secretary of State for Social Services made it perfectly clear that some of those increases in housing benefit from the figure previously announced would be financed by economies elsewhere. That is perfectly right. Otherwise, there would be a general increase in public expenditure and sooner or later that would call for a general increase in taxation or national insurance contributions.
    Mr. Kinnock: Does not the Prime Minister agree that those concessions are to be financed partly by taking housing benefit from people who need it and that the remainder will come from cuts in other benefits to people who have demonstrated their need by qualifying for them? If the right hon. Lady needs additional revenue to pay for

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    those who need such help, why does she not take it off the very rich? Why does the right hon. Lady always make the poor pay for the poor and the sick pay for the sick?
    The Prime Minister: Absolute nonsense. We are spending about £3·7 billion on housing benefit, which is about 80 per cent. more than was spent in the lifetime of the Labour Government, so the right hon. Gentleman should be the last person to complain.
    Mr. Haselhurst: Will my right hon. Friend have the opportunity to study the latest offerings of the Leader of the Opposition on the treaty of Rome? Does she agree that the use of the words "rejection", "revision" and "re-writing" show no retreat from hostility towards the Community, which view does great damage to Britain's interests in the long term?
    The Prime Minister: I saw what the Leader of the Opposition wrote about rejecting, revising or re-writing the treaty of Rome. That was absolutely cloud-cuckoo-land. There are now 10 members of the EEC, and the number is about to go up to 12. The prospect of solemnly re-writing the whole thing means that the right hon. Gentleman utterly rejects the EEC, and this is merely a ploy to get him over the European elections.
    Mr. J. Enoch Powell: Can the Prime Minister give an assurance that there will be no question of Her Majesty's warships being engaged in the Persian Gulf in co-operation with American forces?
    The Prime Minister: I cannot give that assurance because in certain circumstances—we do not know what those circumstances might be—it might be in Britain's interests to join with the United States forces to protect that part of the world and the oil supplies that are so vital to the West.
    Mr. Ian Lloyd: Is it the Government's policy to attempt to confer credibility, legitimacy and dignity on terrorist leaders, who have the blood of thousands on their hands, by arranging for them to be received by the Foreign Secretary, and for offers of scholarships to be made to those whom they purport to represent? I refer to Mr. Sam Nujoma.
    The Prime Minister: My right hon. and learned Friend the Foreign Secretary will have heard my hon. Friend. My hon. Friend knows full well Her Majesty's Government's policy towards terrorism. We are totally and utterly against the use of violence.
    Mr. Flanneryasked the Prime Minister if she will list her official engagements for Tuesday 21 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Flannery: Does the Prime Minister realise that her coming out against the working people at GCHQ Cheltenham having the right to join a union is seen as a continuation of the anti-trade union legislation which her Government have been passing for some time? Does she also realise that that is bound to give aid and comfort to the anti-trade union groups, such as the pro-Nazi group that is deeply entrenched in the bowels of the Tory party? [Interruption.] It sounds bigger than I thought. Will she explain why the Government are so passionately fond of free trade unionism in Poland, but will quite definitely kill it in Britain if they can?
    The Prime Minister: The hon. Gentleman must be hard put to it for a question. I remind him that hon. Members from all parts of the House fought deeply against Nazi socialism. Hon. Members from every part of the House fought against it and we would all resent any implication to the contrary. The majority of GCHQ staff have now accepted the Government's offer and a minimal number have refused it.
    Mr. Leigh: Has the Prime Minister noted the remarks made in Chesterfield by the Leader of the Opposition that he would kick the Americans out of their nuclear bases in Britain? Has she noted that that policy is totally at variance with the remarks made earlier by the right hon. Member for Leeds, East (Mr. Healey)? Will she advise the voters at Chesterfield that they should reject the Labour party now in the same way they rejected a totally split Labour party at the general election?
    The Prime Minister: Yes, I noticed the right hon. Gentleman's remarks that he would dismantle our own nuclear deterrent and send back all nuclear weapons on British soil. That would mean that he would go back totally on the policy of NATO. Doubtless he has pleased Mr. Benn, but not the sounder members in his own party.
    Mr. Farrasked the Prime Minister if she will list her official engagements for 21 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Farr: Has my right hon. Friend seen the notable indicators today of further economic improvement, especially the fact that our gross domestic product in 1983 increased by the biggest amount in the past 10 years, and the greater optimism expressed by many owners of small businesses? With those two facts, which have just come to light today, does the Prime Minister not agree that the economic position has taken a marked turn for the better?
    The Prime Minister: Yes, I agree with my hon. Friend. The economic situation is improving, and is improving in a sustainable way. That is what the Opposition cannot stand.
    Dr. Marek: Does the Prime Minister agree that where there is legitimate public doubt or general public anxiety over instances where a Minister has or has not separated his ministerial duties from his private interests, it is in the general public interest—[Interruption.] I am trying to help the right hon. Lady—not just for that separation to be made, but for it to be publicly seen to be made?
    The Prime Minister: I have answered question after question on this matter. There is nothing I can usefully add to what I have already said.
    Mr. Pawseyasked the Prime Minister if she will list her official engagements for 21 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Pawsey: What advice would my right hon. Friend give to the Chesterfield electorate at the present time?
    The Prime Minister: There is no difficulty about that—Vote Conservative.
    Mr. Ron Lewis: Is the Prime Minister aware that Shaw's guide to recently published price increases shows

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    over 1,400 increases this month alone? The price rises in gas and electricity, fostered by the Government, must be added to that. Bearing in mind her wealth, is she conscious that the unemployed, the poor and the pensioners have to shop in the same markets as the wealthier sections of society? What will she do about that?
    The Prime Minister: I point out that under the Labour Government food prices rose by 122 per cent. and that this Government's record on inflation is the best for 15 years.
    The following question stood upon the Order Paper:
    Mr. Loydenasked the Prime Minister if she will list her official engagements for Tuesday 21 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Speaker: Order. I am not certain that the hon. Member is here.

    General Belgrano
    Mr. Dalyellasked the Prime Minister why she will not set up a public inquiry into the circumstances surrounding the sinking of the Belgrano.
    The Prime Minister: The Government have explained very fully and on numerous occasions both in this House and in another place the reasons for the attack on the General Belgrano. An inquiry into the affair would therefore serve no useful purpose.
    Mr. Dalyell: As the captain of the Conquerer has said in print that he was following the General Belgrano for at least 30 hours and the Government persist in claiming that the General Belgrano was detected on the same day as it was sunk, who is telling the truth or, bluntly, is it the submarine commander or the Prime Minister who is lying?
    Mr. Speaker: Order. The hon. Member must not use that word. I am sure that he will rephrase that final comment.
    Mr. Dalyell: Is it the submarine commander or the Prime Minister who is telling the truth?
    The Prime Minister: The full facts were given in several replies in the House and, I believe, in an Adjournment debate, in an article by my right hon. Friend the former Foreign Secretary and one by the former ambassador to the United States. All the facts are there. They support the Government's case.

    Engagements
    Mr. John Townendasked the Prime Minister if she will list her official engagements for 21 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Townend: Is my right hon. Friend aware that there will be disappointment at the Home Secretary's statement that no action will be taken to remove the Greenham
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    common women, although they are causing a gross nuisance in that area? Is she further aware that great resentment is felt by taxpayers, in that they are subsidising the women to the extent of £800 a week in social security payments?
    The Prime Minister: I am very much aware of the distress caused locally by the continued presence of those people. I have stated previously that the Government are expecting to give some help towards the cost. I share my hon. Friend's anxiety and will, of course, consider the matter again.
    Mr. Wrigglesworth: Will the Prime Minister accept that the events of the past few weeks have seriously damaged the interests of GCHQ? In view of the unprecedented steps that the civil service unions have been prepared to take to try to meet the Government's conditions, will the right hon. Lady be prepared to negotiate seriously with them to try to achieve a settlement to repair the damage?
    The Prime Minister: I do not accept that serious damage has been done to GCHQ recently. That was done when there were the disruptions 1979 to 1981, and to our security. The essence of the Government's case is that intelligence and security have always been treated differently, and when GCHQ was avowed as an intelligence and security organisation, it was brought into line with the other treatment. As I said earlier, the majority of people at GCHQ have accepted the option before them.
    Mr. Bottomley: On a point of order, Mr. Speaker. It will be within your knowledge and that of most of the House that in the past the Leader of the Opposition has normally risen at Question Time after a Member from the Government Benches. Will it be possible for the Leader of the Opposition to consider reverting to this rather than coming in after a Labour Member?
    Mr. Speaker: That is entirely a matter for the Leader of the Opposition.
    Mr. Kinnock: Further to that point of order, Mr. Speaker. I am sorry, but I did not hear what you said in response to the point of order.
    Mr. Speaker: I said that this is entirely a matter for the Leader of the Opposition.
    Mr. Kinnock: I should not want to put the House to any inconvenience, and when I attempt to rise I require and seek absolutely no privilege other than that accorded in your judgment and your consideration—[Interruption.]
    Mr. Speaker: Order. The right hon. Gentleman is trying to make a point.
    Mr. Kinnock: —your judgment and consideration as to when the Leader of the Opposition should rise. I can only hope that all hon. Members will seek to facilitate the business of the House in a similar way.
    Mr. Speaker: I thank the right hon. Gentleman, and I entirely agree. I hope that everybody else will be as helpful.

Scottish Shipping Subsidies
3.32 pm
The Secretary of State for Scotland (Mr. George Younger): With permission, Mr. Speaker, I should like to make a statement—[Interruption.]
Mr. John Maxton: On a point of order, Mr. Speaker—
Mr. Speaker: Order. The Minister cannot be heard.
Mr. Maxton: That was exactly the point of order, Mr. Speaker. I cannot hear a word
Mr. Speaker: Order. I hope that right hon. and hon. Members will leave the Chamber as quickly as possible.
Mr. Younger: With permission, Mr. Speaker, I should like to make a statement on my proposals for financial assistance in 1984–85 for shipping services to the Scottish islands, and also to announce my conclusions on the future system of shipping subsidy.
I propose to give deficit grants of £7·2 million to Caledonian MacBrayne and of £900,000 to the Orkney Islands Shipping Company. These grants will limit the need in both cases for the companies to increase their fares to approximately 5 per cent. overall for the year. I propose also to increase support offered to P and O and to the various bulk shipping companies with which I have undertakings to allow them to continue to rebate the fares and charges on their services. The rebates are estimated to cost £3·65 million in the case of P and O and £1·6 million in the case of the bulk shippers.
In total, Government revenue support in 1984–85 will amount to some £13·35 million, an increase of 9·9 per cent. over the current financial year, and more than a threefold increase since 1978–79. I hope that this will be recognised as an excellent deal for the users of these services and for the island communities that they support.
I am also able to announce today that I have completed my review of the future system of shipping subsidies and have concluded that a change to a road equivalent tariff-based system of subsidy should not be pursued. I have taken this decision after detailed consideration of the difficult practical issues that would arise if RET were implemented. In particular, full implementation would not distribute the greatly increased subsidy that would be required to where support is most needed. Moreover, since the subsidy system would still have to be adapted to be acceptable to all communities affected by it, the system would not be objective or above dispute. The required adaptations would also increase the cost, and there would be considerable confusion during the necessarily lengthy transitional period.
I have also taken into account several other developments since 1979. First, it has become clear that a period of major new capital investment lies ahead, in new ships and in the associated terminals, for both Caledonian MacBrayne services and those serving Orkney and Shetland. There is, therefore, substantially more public expenditure to be committed on our shipping services than is indicated by the annual revenue grants alone, and it is vital for the maintenance and improvement of these services in the longer term that resources be made available for these capital works.
Second, I attach much importance to the Monopolies and Mergers Commission's general recommendation that,
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in the interests of efficiency, Caledonian MacBrayne's fares should be related to costs incurred. This adds weight to the practical objection to RET. Besides offering no encouragement to efficient operation it would, by stimulating demand, itself increase the need for new investment in shipping capacity. Since the subsidy requirement would be calculated automatically by reference to a formula unrelated to shipping costs, that requirement could change considerably from one year to the next. Sudden increases in subsidy could be achieved only at the expense of other services for which I am responsible.
It is, however, important to have a fares system that is clearly understood. P and O and the bulk shippers are private sector operators who fix their fares and charges on a commercial basis, the charges being rebated with the benefit of subsidy. These arrangements will continue. In the case of Caledonian MacBrayne, the Monopolies and Mergers Commission noted the company's policy that fares on one route should be comparable with those on another, and that a standard fare scale should be adopted consisting of three elements: pier dues, toll charges—reflecting the cost of loading—and distance charges. Such a system should produce a structure of fares tapering with distance. The commission noted that no recent progress had been made with this system and that as a result significant anomalies now exist in the fare structure. It recommended that Caledonian MacBrayne should make renewed progress towards such a system, starting with an up-to-date examination of the structure of costs. I have asked the company to proceed on this basis. The new fares system will take some years to implement fully, but a start will be made in fixing the charges for 1984–85, which the company will be announcing shortly. The result will be a standard fares system which should be more equitable than at present.
The question I have had to address is how, in the light of some significant developments since 1979, we can offer the best long-term guarantee of services to the Scottish islands. My subsidy proposals for 1984–85, together with my substantial capital support to ships and terminals, confirm the Government's continuing commitment to the maintenance and improvement of these services.
Mr. Donald Dewar: Will the Secretary of State note that any increase in support for these services is welcomed by the Opposition but that there will be less of a welcome for any suggestion of increased fares?
So that we may put into perspective the figures that the right hon. Gentleman has given, will he note that in May 1982 the Select Committee on Scottish Affairs, in recommending a road equivalent tariff on a running cost basis, estimated that the annual costs would be £19 million to £20 million? So the shortfall on those figures is still very apparent.
Will the right hon. Gentleman note that we rather admire the splendid euphemism of his announcement that RET "should not be pursued"? That must mean that it has been totally abandoned. Will he accept that there will be widespread disappointment about that in many quarters? The Select Committee favoured it on the ground of equity, in response to the problems of island life. Will he further accept that there are many real problems of which he should be aware?

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Will the Secretary of State accept that many Tories will be embarrassed by this announcement because they have used the RET commitment on many occasions in elections in the past few years? It is a long, sad retreat from the heady days of the 1979 manifesto commitment and, like the rating review and a number of others, is yet another example of broken promises.
Will the right hon. Gentleman say a word or two about the suggestion that Caledonian MacBrayne fares should be related to costs incurred? Will he give an assurance that there is no suggestion that fares will be artificially forced up or that there will be bad news for the more remote communities whose services are more lightly used?
Will the right hon. Gentleman also accept that we are surprised at the argument that is used against RET that it would increase demand for new shipping capacity? I should have thought that we would want more people to use the ferries and for them to carry the maximum possible traffic.
Having abandoned RET and left only an ill-defined commitment to a new fare structure for Caledonian MacBrayne and ad hoc arrangements for the other carriers on those routes, may I warn the right hon. Gentleman that we shall continue to monitor closely the policy as it develops to ensure that the island communities obtain the support that they deserve?
Mr. Younger: I am most interested in the hon. Gentleman's points. First, may I clear up precisely the question of what was said in the Conservative party's manifesto as there seems to be some doubt about it. Our policy was made perfectly clear. The words used were:
"We will re-examine the structure of the subsidies and are prepared to increase them in real terms as part of the process of moving closer to road equivalent tariffs."
That undertaking has been fully carried out, and the hon. Gentleman cannot get away from that.
The hon. Gentleman's point about the Select Committee's support for RET and its introduction has to be seen against the background that it is perfectly clear that a number of important island communities would have been adversely affected by the introduction of RET in the sense that they would have had to pay higher fares than they are paying at present. The hon. Gentleman must address himself to that fact if he is to advocate the full introduction of RET, leaving aside for a moment the considerable extra cost of about £10 million above the figures that I have announced today.
The hon. Gentleman mentioned comparisons and said that he will monitor carefully what happens. May I remind him that in the last three years of the previous Labour Government the subsidy to those shipping services was reduced in real terms every year. The Government have increased them in real terms every year. That is the measure of our support for the islands.
Mr. John Corrie: Will my right hon. Friend accept that there will be bitter disappointment among the island people that, after looking at the matter so closely, we have not managed to find a formula that is fair to all the routes throughout the islands? Will he also accept that they will be delighted to hear that the subsidy is again to be increased and that so much money is to be spent on piers, harbours and new boats?
Will my right hon. Friend monitor how Caledonian MacBrayne will restructure the fares? There is no doubt that the island people of Arran and Cumbrae are convinced
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that they subsidise the rest of the west coast of Scotland and that the present structure is not fair to certain routes and needs to be changed.
Mr. Younger: I appreciate that some communities which thought that they would benefit from RET will be disappointed that it will not be brought in. Conversely, other communities which clearly thought that they would not benefit and, indeed, would be worse off will be glad to know that we have not dogmatically forced that solution upon them.
I am grateful to my hon. Friend for what he said about subsidies. It is worth reminding the House that they are now three times the level that they were when we came into office. I am sure that my hon. Friend and his constituents will greatly appreciate that, together with the large amount of capital expenditure that we are now putting into those services, in particular into the new ship for the island of Arran which is shortly to come into service.
Mr. Donald Stewart: I acknowledge the subsidy that the Government have given to coastal shipping in the past four years, but is the Secretary of State aware that his statement today will be a greater disappointment to those looking forward to the implementation of the suggestions of the Highlands and Islands Development Board, the Western Isles Council, the Select Committee and others that RET should be introduced?
Is he aware that this represents a betrayal of his election promise? The statement that there would be a move towards RET was taken, and was meant to be taken, as a development that would occur in due course. What has happened will be regarded as a complete sell-out of that promise.
Mr. Younger: I cannot agree with the right hon. Gentleman. He might have done rather better, for example, by acknowledging that we have vastly increased the subsidy to his constituents and their ferry services. As for his disappointment, I did not expect him to take that line because several important communities in his constituency would have been very adversely affected by the change.
The right hon. Gentleman might also have mentioned that we are proposing to build a new vessel as a replacemnt for the Hebrides, which serves some of his constituency, and that we are proposing new pier works costing up to £5 million at Uig, Tarbert and Lochmaddy. I should have thought that the right hon. Gentleman would have something good to say about so much good being done for his constituency.
Mr. Barry Henderson: Will my right hon. Friend accept that not just Consevatives but all fair-minded people believe that he has gone far enough in the direction of road equivalent tariff, because, although it sounds fine, there are real difficulties, and possibly disadvantages, for many communities? Does he agree that more important as a commitment to the fair treatment of the islanders is the sums of money that he is providing to support their activities, rather than any formula or theory?
Mr. Younger: I strongly agree with my hon. Friend. It must be borne in mind that the considerable cost of road equivalent tariff is way beyond even the much-increased levels of subsidy which we have now given. As my hon.

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Friend implied, it is worth bearing in mind that, thanks to increases in subsidy, most ferry services have not had an increase in fares since April 1981. That puts into perspective the increase that will take place this year of about 5 per cent. There are communities in many other parts of Western Europe that would be glad to be treated in that way.
Mr. David Lambie: Is the right hon. Gentleman aware that his statement will cause much anger and dismay among the island communities off the west coast of Scotland, especially as the all-party Select Committee on Scottish Affairs, in its unanimous report on ferries, recommended the introduction of RET in the financial year 1984–85?
How can the Minister justify the Conservatives reneging on their 1979 election promise, and on the evidence that Ministers gave to the Select Committee, to move towards a system of RET? How can he say today that he will no longer carry out those promises when he gave evidence to the Select Committee to the effect that it was a definite commitment not only of the Tory party in Scotland but of the Government of the United Kingdom?
Mr. Younger: The hon. Gentleman's first question was about our election manifesto commitments. I hope that I have made it clear that we have fulfilled absolutely and in full the undertakings that we gave on this matter in the manifesto.
Secondly, the hon. Gentleman asked how I could justify these decisions. I can justify them by the fact that we have increased, by three times, the subsidy level and that we have secured a freeze on fares for at least the past three years. Had the island communities been told five years ago that that was what they would get in the coming five years, they would never have believed it, yet they have got it, thanks to the Government.
Mr. James Wallace: I welcome the Secretary of State's announcement of the subsidies for 1984–85. However, is it not a fact that his statement represents a complete backtrack of previous statements made by Scottish Office Ministers, including one made as recently as October 1982 in response to the Select Committee's report, which highlighted many of the structural problems on which the Government have made a U-turn and which they are trying in this statement to cloak over?
The right hon. Gentleman said that an RET system, with the required adaptations, would cost more. With those adaptations — which would take account of the difficulties of many of the separate island communities—how much more would it have cost? By knowing the sum, the people of the islands will be able to know by how much the Government have short-changed them as a result of their U-turn in policy.
Mr. Younger: Of all the hon. Members I would expect to say something like that, the hon. Gentleman is the last. He did us the grace to start by welcoming the Government's actions. He has done so on previous occasions, and I thank him. I point out to him that, if the Government were backtracking in his constituency, they would return to having no subsidy of any kind. The Government brought in a subsidy for shipping services,
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and the hon. Gentleman ought to recognise that. If he thinks that there is any justification in his remarks, I am sure that his constituents take a different view. They will recognise that the percentage grant going to the Orkney and Shetlands shipping services is of major assistance to everyone who lives on those islands.
Mr. Michael Hirst: Does my right hon. Friend agree that the Scottish people will welcome the increase in real terms in the subsidy, and especially the support for future capital expenditure? Will he take this opportunity of reminding the Scottish people, in considering the Government's record on this point, of the shabby treatment that they received from the Labour Government?
Mr. Younger: I agree with my hon. Friend's latter point. I am trying to remind the Scottish people of that shabby treatment, and I hope that we shall see no more of it.
It is worth mentioning the widespread nature of capital investment. The new Arran vessel is due shortly to come into service. There is a further new vessel to replace the MV Hebrides and the St. Clair will be refurbished for Shetland service. There is soon to be a decision on a replacement for the MV Orcadia. There are terminal developments at Uig, Tarbert and Lochmaddy. There is reconstruction work at the ferry terminal at Scrabster. Recently work has been completed on pier improvement at Tiree, and further financial assistance will be required to improve the steamer berth at Mallaig and the pier at Tobermory. No one could say that that is neglect. If it is, people previously suffered much more neglect.
Mr. John Maxton: Has the Secretary of State received the resignation of the Under-Secretary of State for Scotland, the hon. Member for Argyll and Bute (Mr. MacKay), who must feel bitterly disappointed about the statement in view of the pressure about the ferries he applied for his constituents? Is the right hon. Gentleman aware that there will be considerable disappointment on the island of Arran, especially when it is linked with the threatened closure of the station at Ardrossan harbour? Does he not think that there is an anomaly between building a new boat for the island service and at the same time closing the vital railway link with the boat and with the island?
Mr. Younger: I believe that my hon. Friend the Under-Secretary of State will feel that the extra subsidy given for the ferry services in his constituency is widely appreciated and will continue to be appreciated by his constituents.
I hope that this year the hon. Gentleman will greatly enjoy his holiday visit to Arran on a new vessel provided by the Government. I am sure that he will write me a letter of thanks.
Mr. Albert McQuarrie: I am sure that my right hon. Friend's welcome news on the subsidies for the shipping lines will be appreciated by those who use them. Will he give an undertaking that the work on the new vessels, plus the refurbishment of other vessels, will be carried out in Scottish yards and not in other places?
Mr. Younger: I appreciate my hon. Friend's point. The replacement vessels and other vessels will be put out to competitive tender in the normal way. Naturally, I hope

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that Scottish yards will obtain all the orders, but I cannot give a guarantee unless, in every case, they are competitive.
Mr. Tam Dalyell: The Secretary of State preens himself on the £5 million that will go to Uig, Tarbert and Lochmaddy. He lectures us by saying that we should see things in perspective. How about comparing that £5 million with expenditure on those other islands in the south Atlantic—
Mr. Speaker: Order. I believe that the hon. Member is about to say something with which I must disagree.
Mr. Dalyell: I believe that the point has been made.
Mr. Younger: I am glad to say that the many responsibilities of the Scottish Office do not include subsidising activities in the Falkland Islands.
Mr. Bill Walker: Does my right hon. Friend agree that February 1984 will be seen by the Scottish people, especially those living in the Highlands and islands, as being a good month, when the livestock compensatory allowances were announced and very generous allowances are being given so that services to the islands may be maintained at a satisfactory level?
Mr. Younger: I am grateful to my hon. Friend, and I agree with him. I am sure that those involved in agriculture on the islands will greatly appreciate the extra subsidies that we have announced today.
Dr. Norman A. Godman: The right hon. Gentleman mentioned a few moments ago a vessel that was built by Fergusons at Port Glasgow for Caledonian MacBrayne, which was launched by his daughter. Speaking as an ex-shipwright, may I say that it was a brilliant launch. I would not expect to have to ask the Secretary of State for an assurance that the vessels will be built in Scotland. I want to see them built in Scotland and, of course, on the Clyde. If orders for the new vessels are placed this year, when can we expect answers to our questions on the orders?
Mr. Younger: I am grateful to the hon. Gentleman for his comments about the launch and I shall pass on his congratulations to my daughter. It is intended to place an order for the replacement vessel for the MV Hebrides,
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which I announced when I was in Port Glasgow. and it is expected to place that order fairly soon. Naturally, I hope that Scottish yards will tender and be successful. It will have to be considered in the normal way whether the Scottish yards' tenders are competitive with all the bids that are received in due course.
Mr. David Harris: I do not begrudge the generous grants and loans that are given to the Scottish islands, but will my right hon. Friend have a word with his fellow members of the Cabinet and remind them that there is another island community in the United Kingdom—the Isles of Scilly, in my constituency—which does not receive a penny in operating costs for its ferry services yet has similar problems to those experienced by the Scottish isles? Will he do his utmost for the Isles of Scilly and join me in correcting this unjustice?
Mr. Younger: I am grateful to my hon. Friend for the comparison that he has made. I appreciate entirely the constituency issue which he has raised, which I shall draw to the attention of the Minister who is responsible.
Mr. Russell Johnston: The Secretary of State suggests that there are structural faults in RET which cannot be overcome. If that be the case, why is it that as recently as 1982 the Government supported the principle in Select Committee? Why is it that the main and most informed body in the north, the Highlands and Islands Development Board, continues to support RET, and how is it that the Norwegian Government can overcome these alleged problems?
Mr. Younger: I appreciate the hon. Gentleman's points. The structural problems arise when we apply an absolutely clear system of relating the distance travelled by sea to the theoretical distance travelled by road. That system makes the journey more expensive for a number of important island communities. That is the major structural problem which we have been trying to overcome. We have found no satisfactory method of doing so and we consider it better to move on to the new system which. I have announced, which will provide security and a sensible system for the future that will be related to the costs involved.

Scotts Bakery (Bootle)
3.58 pm
Mr. Allan Roberts: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the sacking of 700 workers at Scotts Bakery, Bootle, Merseyside and the proposed closure of this factory, which will increase the already massively high unemployment level on Merseyside."
I apologise to the House for having once again to raise the issue of a major closure on Merseyside. The House is becoming too accustomed to this having to be done as Merseyside has closure after closure. It was on Monday 16 January that I raised the issue of a dispute at Scotts, which I then predicted would be used by the management as an excuse to close the factory. That has now happened.
This is a specific matter as the 90-day redundancy notices have already been served. They were served on the work force at the end of last week. The management of Allied Bakeries have announced the closure of their Merseyside factory following the industrial dispute that all objective observers claim and admit to have been precipitated by the management.
The matter is urgent because of the hardship that will be visited upon the employees at Scotts and their families by the sackings and the closure. It is another major blow to Merseyside. Once again, another long-established family company on Merseyside is to be closed by a multinational company which took over the factory and has no commitment to the local work force or to the Merseyside area, its headquarters being situated elsewhere. The matter is urgent because of the actions of management who, throughout the dispute, have behaved in a high-handed and contemptible manner, confronting
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the work force with totally unacceptable demands and behaving not even like Victorian employers but more like medieval barons. The job losses and the shut-down are only the latest in a long list of closures and redundancies which are announced weekly on Merseyside. They are usually announced on Fridays. Fridays are known on Merseyside now as black Fridays. My hon. Friend the Member for Liverpool, Riverside (Mr. Parry) recently raised the question of the closure of British American Tobacco, which also employs many of my constituents. When will the closures and redundancies cease?
The matter is urgent because of the scale of the crisis on Merseyside. A debate is needed to enable us to call on the Government to intervene in order to create and save jobs.
The events at Scotts Bakery have a national significance because they are likely to be the cause of a national bread strike. The Bakers Union is to ballot its members on the issue. I hope that you, Mr. Speaker, will grant an emergency debate at this stage in the sad saga rather than wait until you can no longer buy bread because of a national bread strike.
Mr. Speaker: The hon. Member for Bootle (Mr. Roberts) has asked leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the sacking of 700 workers at Scotts Bakery, Bootle, Merseyside and the proposed closure of this factory, which will increase the already massively high unemployment level on Merseyside."
I have listened carefully to what the hon. Gentleman has said. I appreciate that further unemployment in Merseyside is a very serious matter. Nevertheless, I regret that I do not consider that the matter he has raised is appropriate for discussion under Standing Order No. 10, and I cannot therefore submit his application to the House.

GCHQ (Lobby of Parliament)
Mr. Tony Banks: On a point of order, Mr. Speaker. It was brought to my attention this morning by one of my constituents who is a civil servant that instructions have been issued by the Civil Service Department than no civil servant will be allowed to take a day of his or her annual leave entitlement in order to attend the lobby of Parliament this Thursday, 23 February, in respect of the GCHQ trade union ban.
I believe that the instruction from the Civil Service Department represents a gross interference in the right of constituents to approach their Members of Parliament and, even more important from the point of view of the House, the right of access of Members of Parliament to their constituents on a matter of national significance. Would you, Mr. Speaker, use your good offices with the Ministers concerned to bring about the withdrawal of the instruction, which is fundamentally anti-democratic and an interference in the rights of the House with regard to access?
If disciplinary action is taken against my constituent because he attends the lobby in order to lobby his Member of Parliament, I intend to make representations to you, Sir, that that would be a breach of parliamentary privilege. This is an interference in the rights of Members and of their constituents.
Mr. Tam Dalyell: Further to the point of order, Mr. Speaker. Is there not an element here of sauce for the goose and sauce for the gander? Is it not important to consider that, if the argument were deployed that Cheltenham should not be disrupted, it would apply no less to Sir Brian Tovey, the former director of GCHQ, who, since he joined Plessey, has been trying to tempt key employees away from GCHQ to his present company? If he is allowed to get away with that, how can it be suggested that employees of Cheltenham, Brora or elsewhere cannot take a day off to exercise their democratic duty to see their Members of Parliament?
Mr. Speaker: A question was answered on this matter yesterday. I thank the hon. Member for Newham, North-West (Mr. Banks) for giving me notice of his point of order. It has enabled me to look into it. I assure the hon. Member that the rules governing access to the House on Thursday 23 February will be no different from any other day.
Mr. Dalyell: Further to that point of order, Mr. Speaker. Do we understand that you will look into this matter from the point of view of parliamentary privilege?
Mr. Speaker: No; that is a different matter.
Matters of privilege must be raised with me in writing.
Mr. Banks: Further to that point of order, Mr. Speaker. Do I understand that the instruction issued by the Civil Service Department, which clearly impinges upon the rights of constituents, to lobby their representatives will be withdrawn?
Mr. Speaker: No, I cannot say that, because I am not responsible for any decisions of the Government Department. What I am saying is that I am satisfied that access to this House will be no different on Thursday from any other day.
Mr. Dalyell: Further to that point of order, Mr. Speaker. I understand that this matter has been sprung upon you at a fairly late stage. Would you consider the matter with your advisers and perhaps, after 24 hours, make a ruling at 3.30 pm tomorrow?
Mr. Speaker: My concern is about access to this House. I am not concerned with any instructions that may or may not have been given to members of the Civil Service. A question was asked yesterday, and the hon. Member can see the answer. I am concerned to ensure that there is proper access on Thursday, and I can say that that will be the case.
Mr. Allan Roberts: Further to that point of order, Mr. Speaker. Have you addressed your mind not only to the question of access to the House but to that of access of constituents to their Members of Parliament? I address you in your capacity as protector of the tights of Back-Bench Members. Are not the Executive trying to prevent access by constituents to their representatives? Whether there is access to the House or not, the Government are interfering with the rights of our constituents to take leave in order to see their hon. Members. Whether our constituents see us in the House or elsewhere, that seems to border on a breach of privilege.
Mr. Speaker: If it is a matter of privilege, the non. Member must raise it with me in the appropriate way. The Member must not involve me in a matter of political controversy.

GCHQ (Lobby of Parliament)

  BUSINESS OF THE HOUSE
  Ordered
  That, if the Tourism (Overseas Promotion) (Scotland) Bill [Lords] be committed to a Committee of the whole House, further proceedings on the Bill shall stand postponed; and that as soon as the proceedings on any Money Resolution come m by the House in relation to the Bill have been concluded this House will immediately resolve itself into a Committee on the Bill. —[Mr. Neubert.]

  EUROPEAN COMMUNITY DOCUMENTS
  Ordered,
  That European Community documents Nos. R/67/75, R/55/76 and R/804/78 concerning construction plant and equipment, be referred to a Standing Committee on European Community Documents.—[Mr. Neubert.]

  WELSH GRAND COMMITTEE
  Ordered,
  That the matter of transport and communications in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee.—[Mr. Neubert.]

Parents' Aid
4.8 pm
Mr. Jerry Hayes: I beg to move,
That leave be given to bring in a Bill to give rights to parents whose children have been taken into care.
There are many people in the Strangers' Gallery and in the Central Lobby today who have come here from far and wide at their own expense—and they are not wealthy people —to lobby their Members of Parliament. They have one aim in common and that is justice. They ask only that, when parental rights and parental access are dealt with, they should be dealt with in a court of law and not behind closed doors. They ask, too, that the parent be properly represented, and that the parents should be made party fully to the proceedings and, where necessary and subject to the usual criteria, should receive legal aid.
The problem is enormous. About 100,000 children are in care at the moment, and about 26,000 children are taken into care every year. Yet every day decisions are made behind closed doors. There are clandestine meetings between social workers. There are secret dossiers passed between social workers and lay counsellors in the social services. Is the parent entitled to be there to challenge the social workers' evidence? No. Is the parent entitled to listen to the evidence or even to know that the meeting is taking place? Sadly, the answer once again is no.
In the Jubilee Room today I heard some moving stories. The sad fact is that they were not stories but true accounts of what has been happening in social services departments. One lady had her son taken away for nine months on the basis of a secret report which she never had the opportunity to see, let alone cross-examine. The decision to take the child away was made secretly behind closed doors and after a bitter and hard struggle the social services department admitted that it had made a mistake. That is not democracy and British justice as I understand it, nor, I am sure, as many other right hon. and hon. Members understand it.
I am glad that my hon. Friend the Under-Secretary of State for Health and Social Security, with his usual courtesy, understanding and sympathy, is present. He was welcomed by many of the parents who came to lobby us today, and he showed a great deal of sympathy. The Government must be given due credit in that they now accept that when access has been terminated it should be possible to go to a court of law. The difficulty is that, whereas in 1979 26 per cent. of children were put in care and the local authority assumed parental rights, by 1981 that number had increased to 43 per cent.
Local authorities are quite prepared to flout even the new proposals that the Government have advanced. They
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say that they do not want to be taken to court, that they do not want the bother or the expense, and that rather than terminate access they will provide it once, twice or perhaps three times a year. That is utterly unacceptable. How can it be right in a country which has a democracy as old as ours and which is the home of the mother of Parliaments to allow parents to be prosecuted for sending Christmas cards, birthday cards and gifts to their children? That also is unacceptable. The matter should be decided in a court of law. A parent should be legally aided when necessary, be properly represented and be party fully to the proceedings.
If there has been a termination of parental rights and those rights have been assumed by a local authority, a parent has the opportunity to go to the juvenile court after 28 days, but by then the dice are loaded against the parent. It might be many months before the parent has the opportunity to go to court, and when he or she gets to court, he or she has not had the right of access to the child. That is a major factor when the court decides. When the parent gets to court he or she discovers that he or she is not even a full party to the proceedings and must rely on the good will of the court as to the types of questions which can or cannot be asked. That is utterly abhorrent to the British judicial system which I understand and have been practising for the past seven years.
The Government's plans for a code of conduct for social workers must also be welcomed. However, it has no teeth or force of law. Already one director of social services has gone on record as saying that he will leave it up to individual social workers to decide what to do about the code of conduct.
The Bill is not a charter for the baby batterer. Social services must be vigilant and be sure that there is no parental abuse, but they wield great power and authority. That power and authority must be checked in a court of law. I ask the House to give me leave to present the Bill as it provides the same right that a criminal, a rapist or a burglar has to have his case decided in a court of law and to be represented.
Question put and agreed to.
Bill ordered to be brought in by Mr. Jerry Hayes, Mr. Andrew Rowe, Mr. Gerald Bowden, Mr. David Alton and Ms. Clare Short.

Parents' Aid
  PARENTS' AID
  Mr. Jerry Hayes accordingly presented a Bill to give rights to parents whose children have been taken into care: And the same was read the First time; and ordered to be read a Second time upon Friday 23 March and to be printed. [Bill 106.]
Orders of the Day

  Tourism (Overseas Promotion) (Scotland) Bill [Lords]
  Order for Second Reading read.
  4.15 pm
  The Under-Secretary of State for Scotland (Mr. John MacKay): I beg to move, That the Bill be now read a Second time.
  I am pleased to have the opportunity to present to the House this modest but nonetheless important measure which will be to the considerable advantage of Scottish tourism and to Scotland generally. The Bill gives effect to the commitment in the Government's Scottish election manifesto to extend the powers of the Scottish tourist board to include promotional activity overseas. Our desire to press ahead in this Session with the necessary legislation reflects our belief in the importance of the tourist industry in Scotland and our commitment to developing Scotland's overseas tourism trade. The Bill is intended to meet the growing need of the Scottish tourist industry for some independence in the marketing of Scotland abroad while ensuring that coherent promotional efforts on behalf of Britain as a whole are maintained.
  I should like to remind the House that, in Scotland, tourism generates more than £800 million revenue per annum, and provides at least 50,000 full-time equivalent jobs. Overseas tourism is disproportionately valuable to us. Although overseas visitors represent only 9 per cent. of all visitors to Scotland, they account for nearly 27 per cent. of all expenditure. An estimated 1·3 million overseas visitors came to Scotland in 1983 and our overseas earnings from tourism are expected to reach £250 million this year. Against this economic background, there is a clear case for making our overseas promotion effort as effective as possible.
  The Bill is designed to be consistent with current arrangements elsewhere in the public sector for the promotion of Scotland overseas. The House will know, that under the Local Government and Planning (Scotland) Act 1982, district and islands councils and area tourist boards in Scotland may promote themselves overseas subject to the consent of the Secretary of State. This consent condition prevents duplication of overseas effort and ensures value for money from local authority visits abroad. The Highlands and Islands Development board also has powers, under its enabling statute, to carry out overseas promotion at its own hand. Most of the overseas promotional work done by the board is carried out in conjunction with the British Tourist Authority. The Scottish tourist board is now co-ordinating local authority and area tourist board promotions overseas. As a result, a coherent and effective overseas marketing programme is rapidly taking shape.
  Overseas promotion initiatives by private tourist operators are not, of course, regulated by statute. However, many of the smaller operators—which make up the bulk of Scotland's tourist industry—cannot afford to promote themselves fully without assistance from public funds. That is where we confront the statutory framework for overseas tourism promotion by the tourist boards.
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  Under the Development of Tourism Act 1969, responsibility for the overseas promotion of Great Britain and all its parts lies principally with the British Tourist Authority. The Scottish Tourist Board, like the other national tourist boards, is expressly prevented from acting abroad unless as the agent of the British Tourist Authority and using the authority's funds. This means that the Scottish Tourist Board may not in its own right incur expenditure on overseas promotion of Scotland, or give financial assistance to Scottish tourist operators trying to sell their products abroad. The sole source of such assistance has hitherto been the British Tourist Authority.
  Much has changed since the 1969 Act came into force, and these arrangements now seem unduly restrictive. Scotland now has a separate and distinctive tourist image, and is a commercially identifiable and saleable product in a number of important and potentially valuable overseas markets. For expatriate Scots around the world, for example, and also for many Europeans and north Americans, Scotland has unique attractions. Scotland has to be promoted vigorously and with a view to the holiday opportunities which it alone offers if these markets are to be fully tapped. The Scottish tourist board has an intimate knowledge of the Scottish product. We believe that it should be allowed to undertake at its own hand promotions of Scotland overseas. This is what the Bill before the House is intended to achieve.
  Clause 1 of the Bill contains the two main operative provisions. Subsection (1) s the 1969 Act restriction on overseas activity by the Scottish tourist board, and enables it to undertake, in its own right, the promotion of Scotland overseas. I wish to make it quite clear that the effect of this provision is to allow the Scottish tourist board to supplement, not to replace, the efforts of the British Tourist Authority on Scotland's and Britain's behalf. The proposed extension of STB's powers will not deprive the Scottish tourist industry of the advice, expertise or financial assistance it currently receives from BTA. Nor will it in any way diminish BTA's power under the 1969 Act to promote Scotland and Britain abroad. We expect the British Tourist Authority to continue to devote at least as much of its promotional spend and effort to Scotland as it has done in the past. It will, however, no longer be the only tourist board with power to promote Scotland overseas.
  Mr. Nicholas Fairbairn: My hon. Friend was reading so fast that he may not have managed to hear his own thoughts, far less my intervention.
  When he says, "to supplement, not to replace", what is the guarantee in the Bill that what will not be replaced! will not be diminished or removed altogether? In other words, what is the hold on the British Tourist Authority, which will have the same chairman as the English tourist board, to promote Scotland at all?
  Mr. MacKay: The position will be what it has been for many years, whereby the British Tourist Authority will have the responsibility of promoting Britain overseas. Despite the fact that the chairman of the BTA and the chairman of the ETB will be one and the same person, the British Tourist Authority will still have the responsibility to make propaganda for all parts of the United Kingdom. The chairman of the Scottish tourist board is one of the members of the British Tourist Authority, and will continue to be.
  Mr. Martin O'Neill: Would not the Minister view with some alarm the fact that the Secretary of State for Trade and Industry is looking at the prospect of merging the English tourist board and the British Tourist Authority?
  Mr. MacKay: The new chairman is being asked to look at that possibility. May I make it clear to the House, as did my right hon. Friend the Secretary of State for Trade and Industry, that no decision has yet been taken? A decision has been made only to ask him to look at the possibility of a merger. We shall have to wait to know what comes out of the new chairman's review, and what he proposes, and then we shall have to consider the matter.
  In the debate in the other place, it was suggested—this may relate to what some hon. Members are beginning to ask me — that it might be more beneficial to the Scottish tourist industry if entire responsibility for promoting Scotland overseas were transferred from the British Tourist Authority to the Scottish tourist board—if, in other words, STB had sole, independent power to market Scotland abroad. I should like briefly to explain to hon. Members why the Government remain opposed to such a move. "Britain" is, and is likely to remain, the most saleable product in very many overseas markets. To promote Scotland only as "Scotland" would mean a substantial loss of overseas visitors and of tourism revenue. We are convinced that it makes commercial sense to identify those markets where the most saleable product is simply "Britain", and those other markets, particularly some parts of Western Europe, Scandinavia, North America, where there are expatriate Scots, Australia and New Zealand, where, in addition to marketing Britain, Scotland can be marketed effectively in its own rights. We therefore remain committed to a coherent all-Britain approach to promotion overseas for the undeniable commercial benefit that this brings to Scotland. However, at the same time, we recognise the need to supplement this approach with more aggressive promotion of Scotland as Scotland in certain selected markets, and this is what the Bill will enable us to achieve.
  Mr. Michael Forsyth: At the risk of repetition, does my hon. Friend not think that it would be odd if the chairman of the new Scottish tourist board was also the chairman of the English tourist board, and if he did not spend most of his time promoting Scotland? If this apparatus is to be set up, would it not be reasonable to give it all the resources to hand to promote Scotland, on the basis of the argument that my hon. Friend has put forward?
  Mr. MacKay: I have explained to my hon. Friend that, if we were to go down the road of disbanding the British Tourist Authority—I am not sure what my hon. Friend would like to do—there would be promotion abroad presumably by the English tourist board, the Welsh tourist board and the Scottish tourist board, all separately, in an attempt to have offices round the world. Their budgets individually would not stretch nearly as far as is possible when they combine their efforts in one British office in overseas capitals.
  It is interesting that Mr. Alan Devereux, the chairman of the Scottish tourist board, is reported in The Scotsman of 19 November 1983 to have said:
  "We have no ambition to duplicate the work of the British Tourist Authority and we are happy that the BTA will continue to use their best efforts to promote Scotland as a tourist destination within the context of Britain as a whole."
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  That is Mr. Devereux's opinion, and his track record with the STB shows that he has a good deal of knowledge of the Scottish tourist scene and of the kind of marketing that is needed to encourage tourists to come to Scotland.
  Mr. Tam Dalyell: Before the hon. Gentleman leaves the question of offices, has he, or have any of his ministerial colleagues, ever visited the British office in New York? Unlike the offices of every other European country, the office in New York is on the 37th or 57th floor in some obscure place, and does not even start with street marketing. Is it not about time, since we are so full of enthusiasm, that there was a Scottish input into the way that the British tourist board conducts its affairs?
  Mr. MacKay: I must admit that, unlike the hon. Gentleman, I have not been to the BTA office in New York. Let us say that I am invited to explore the possibility of the Scottish tourist board having a major shop front position in New York. This would use up a considerable part of its budget, and little money would be left for promotions that have to be made elsewhere around the world.
  The Government are, however, conscious of the need to ensure that any overseas activities carried out by the Scottish tourist board complement in practice BTA's promition efforts for Great Britain, that there is no wasteful duplication of effort between the Scottish tourist board and the British Tourist Authority, and that the overall promotion of Britain remains the principal role of the BTA.
  To meet this need, the Bill provides, in subsection (2) of clause 1, that the Scottish tourist board's power to promote Scotland overseas shall be exercisable only with the consent of the Secretary of State who will, before giving or withholding such consent, consult the British Tourist Authority. This consent condition is broadly similar to that already applying to Scottish local authorities and area tourist boards. It does not represent a BTA veto, but it will ensure that STB's overseas activities complement BTA's promotion programmes and its continuing effort on Scotland's behalf.
  Mr. Donald Dewar: In the Local Government and Planning (Scotland) Act it is stated that local authorities must have the permission of the Secretary of State. There is not the double permission—or double qualification—of direct consultation with the BTA that is now thought necessary. Some of us are left with the rather uncomfortable feeling that the very restrictive view of the importance of the Bill, which was clearly reflected in the statement by the Minister of State, Department of Trade and Industry, is now in the ascendant.
  Mr. MacKay: I do not think that it is restrictive—it is simply a method by which the efforts abroad of the STB can be fitted in with what the BTA is doing. Surely it would be foolish if the BTA had, for example, devised a programme in New York in October, and the STB tried to devise another programme — although necessarily smaller — in New York at another time of the year. Would not it be better to co-ordinate the two so that they can pull together? That is why the Bill includes a duty for my right hon. Friend to consult the BTA when he receives the STB programme for its promotional exercises overseas in the following year.

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  That link from the STB to the BTA, through my right hon. Friend, will serve to ensure that the STB effort complements the work of the BTA and reinforces it, rather than duplicates it. Surely no one in the House wants to duplicate the effort abroad.
  Mr. Jim Craigen rose—
  Mr. MacKay: I shall not give way. There will be a Committee stage when, no doubt, this matter will form a major part of the discussions.
  The BTA will continue to exercise lead responsibility for the overseas promotion of Great Britain and all its parts. We believe that the STB's efforts should be a constructive addition to the authority's main marketing programme overseas. In our view, it is consistent with the BTA's role and responsibilities that it should be consulted, as of right, on all the STB's overseas proposals. The requirement on the Secretary of State ensures that the BTA is guaranteed an opportunity to offer its views. Such views are properly a relevant, though not a determining, factor in the Secretary of State's ultimate decision whether to approve the STB's plans. We are confident that the consultation procedure will work swiftly and effectively. No heavy-handed bureaucratic procedures are envisaged. Our experience in approving local authority overseas proposals under the 1982 Act, in which the BTA plays an advisory role, confirms that the authority can be relied on to offer its comments promptly.
  The Government envisage that the STB will undertake an overseas programme costing about £200,000 per annum at 1983 prices. We have already announced that from 1984–85 onwards an additional allocation of that order will be made to the board for that purpose. That extra money comes on top of the £2·1 million of the BTA money spent each year on promoting Scotland within the authority's overall Great Britain programme. In the same way as with the BTA's expenditure, we expect that the £200,000 available to STB will draw out additional funds from the private sector, generating up to half as much again to give total additional promotion of Scotland overseas of about £300,000. This will allow the STB, by its own assessment, to mount a small but effective supplementary programme of specialised Scottish overseas promotions, and thus to make an important contribution to the marketing of Scotland abroad.
  I know that some in the House will want to break Britain apart in the tourist industry, as they would do in other industries and politically. That policy in tourism, as in other industries, would be damaging and costly. It would be costly because we would need considerably more money to maintain a separate Scottish effort all over the world to replace the BTA, and damaging because we would not be plugging Scotland into the undoubted tourist attractions of, say, London or Stratford-upon-Avon. The Government's aim is to encourage the growth of Scotland's overseas tourist trade while guarding against fragmentation of the total Great Britain promotion effort abroad. The proposals in the Bill reflect this aim, and I commend it to the House.
  4.35 pm
  Mr. Jim Craigen: I was intending to seek the assistance of the Under-Secretary, who is responsible for health matters, for my throat problem until I realised how little he knew about health or about the tourist industry in Scotland.
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  The objective of improving the prospects of Scotland's tourist industry through the new scope for overseas promotion deserves broad welcome, but I cannot enthuse about the entire drafting of the Bill, or the modest £200,000 that the Government propose to make available as additional funds for overseas promotion. We shall take up the points in detail in the ensuing Committee stage.
  As the Minister said, the industry is of great importance to Scotland. It employs about 80,000 full-time equivalents, with about 100,000 jobs being supported by the industry. It was interesting to note that the Minister referred to £800 million of business arising from the tourist industry in Scotland. The figures appear to vary. However, I take his point that about 9 per cent. of tourists in Scotland come from overseas, giving the economy of Scotland a boost of about £250 million in overseas earning, equalling about 28 per cent of total tourist spending in Scotland.
  The chairman of the Scottish tourist board, Mr. Alan Devereux, was quoted in The Scotsman on 19 November 1983 as saying that the aim is to double the number of overseas visitors in the next five years to 2·5 million. He anticipated that that could create some 25,000 new jobs. We believe that there is considerable scope and potential for developing the tourist industry in Scotland. It is reckoned that for every £5 spent by the tourist, £1 ends up in the public purse. For every £1 million expenditure on accommodation, about 220,000 jobs are supported in the economy.
  The industry is important also to Scotland's small business sector because about two thirds of firms in the industry employ fewer than five people. The STB is able, willing and ready for the lifting of the restriction as proposed in the Bill, which will enable it fully to develop potential abroad. Mr. Devereux has said that the Bill will allow the STB to supplement, not to replace, the efforts of the BTA on behalf of Scotland and Britain. Theoretically, the BTA spends £2·1 million on overseas promotion for Scotland. We want to ensure that the BTA is in no way seeking to ease out of that commitment. We are looking for a firmer assurance from the Minister than he has given today.
  We agree that the STB has the ability to concentrate on the distinctive marketing of Scotland where that is required. I have no doubt that the STB will seek to utilise the facilities of the BTA for its international network. In other words, we might avoid that classic howler when the British Tourist Authority gave the impression that Barra was "a rugged and uninhabited Hebridean island". Its ruggedness is a matter of judgment and, having cycled round the island, I hold my own views, especially about the hillier parts. But uninhabited the island is not. I can verify that Barra has some of Scotland's friendliest people.
  The British Tourist Authority has a continuing role for Scotland. Eighty-nine per cent. of visitors to Scotland come from the rest of Great Britain. I hope that the British Tourist Authority will pay due heed to the Scottish tourist dimension in that respect. I sometimes get the impression that the BTA does not suffer from hypertension caused by the way in which it goes about its business. It is undesirable in principle that the Chairman of the British Tourist Authority should at the same time be chairman of the English tourist board. It is bad for Britain, and not good for England either. Perhaps it would be better for the chairman to be a Welshman. The holder of that office—not the personality of the office—should be able to give

  717
  independent judgment about the affairs of both the BTA and the English tourist board. He or she should be able to bring the kind of perspective required where one is dealing with three distinct and separate tourist authorities. I hope that the Government will reconsider the matter carefully, because it would be undesirable for the British Tourist Authority to be subsumed into the English tourist board.
  The Scottish tourist board's extra powers can be given only with the consent of the Secretary of State, who will consult the British Tourist Authority beforehand. Will there be a double veto on the activities of the Scottish tourist board? Why was the instruction included in the Bill, when there is a more sensible way to deal with the powers? Is it really necessary to spell them out in legislation, when in practice there would be consultation behind the scenes? For example, the Highlands and Islands Development Board has got on quite well since it was set up in 1965. It does not have recourse to consultation yet, with typical Highland judgment and good manners, that is its practice. It consults the British Tourist Authority as well as the Scottish Development Agency, in the interests of both economy and effectiveness of purpose.
  The Stodart report, after the committee of inquiry into local government in Scotland, emphasised the commitment of Scottish local authorities to tourism and the economic and employment opportunities that it afforded. My hon. Friend the Member for Monklands, West (Mr. Clarke) was a member of that committee. No doubt he hopes to say a few words tonight about the way in which he sees subsequent development of local authority activity in that field.
  The area tourist boards, as I understand it, have been working out fairly well. However, tourism cannot be compartmentalised. It is a part of the economy, like a running corridor, if I may use that train of thought. About 50 per cent. of Scots are said to take their holidays at home, but with declining employment opportunities and reduced purchasing power many families can no longer take holidays, either at home or abroad. Package holidays abroad sometimes seem far more economic than some packages offered in Great Britain.
  I hope that the Government will not underestimate the importance of local authority services and other provisions for tourists in the areas to which the Scottish tourist board wishes to attract them. Local authority support for the arts is under pressure, and the facilities available in museums, art galleries and other recreational areas are very important for attracting tourists, as well as for the local communities.
  I gather that the Burrell gallery in Glasgow has attracted more than 250,000 visitors. That is no small feat for a gallery that might not have opened, but for the will power of the Glasgow district council, working in the face of a very difficult financial position.
  Mr. John Maxton: Many visitors to the Burrell collection come from surrounding areas—the peripheral schemes, as I call them—of Eastwood, Bearsden, Milngavie, and from other authorities that have paid nothing towards the cost of setting up or maintaining the Burrell gallery.
  Mr. Craigen: I did not intend to digress and talk about Eastwood. The Scottish tourist board was almost forced to
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  come to the rescue of Rouken Glen park, which shows another aspect of the financial difficulties facing Scottish local authorities in the provision of services.
  Over the years, the Edinburgh festival has acted as a magnet for tourists but it, too, depends on the type and resources of the local authorities. That is true also of the Pitlochry festival, another welcome event in the Scottish calendar.
  It is important to recognise the need for adequate rail services. Useful talks have taken place between the Highlands and Islands Development Board and British Rail about lines north of Inverness, and the line from Inverness to Kyle of Lochalsh. There is no sense in encouraging the tourist industry if we cut down the provision of adequate railway links, or fail to recognise the importance of good road links in Scotland. There is a job to be done. We want to know that it will be done by the Scottish tourist board and can be done without too much blue tape. That point might usefully be taken up later in Committee.
  As far as I can gather, about one third of the tourists from overseas arrive in Scotland from Canada or the United States. The Scottish tourist board has recognised the importance of tapping the ethnic market as far as possible. A further third of visitors to Scotland come from EEC countries, especially from West Germany. When I have been in the Highlands, the number of West Germans over for a holiday has always been noticeable. The quiet of the Highlands is an important aspect.
  Mr. Dalyell: I do not have a constituency interest in the matter, but I have an interest as a National Union of Railwaymen-sponsored Member of Parliament. I should like to emphasise the importance to the tourist industry, particularly for those who come without cars, of the line between Aberdeen and Inverness, which the hon. Member for Moray (Mr. Pollock) knows well. It is of considerable importance not only to the railway industry but to the Scottish tourist industry. I hope that we shall receive an assurance that it will remain open.
  Mr. Craigen: I hope that the Minister will give my hon. Friend that assurance. I have travelled on that line, going the other way.
  Many visitors come from Scandinavia as well as from Australia and New Zealand. It will be important for the Scottish tourist board to continue to try to improve our prospects in those areas. However, what about Japan? [Interruption.] I do not know why Conservative Members laugh. The whole point of the Bill, of which the Minister made such great play, is that it will do so much for promoting tourism for Scotland overseas. Therefore, I should have thought that Conservative Members would not laugh. There is a considerable potential market in Japan for the Scottish tourist industry, but it is largely untapped. I was in Japan about 18 months ago and I got the impression that many of the Japanese are golf mad. My wife has rediscovered golf. I hasten to add that I have not followed her in that pursuit.
  Mr. Barry Henderson: In view of the importance of the Japanese tourist trade and the fact that many of them come to play golf at St. Andrews, does the hon. Gentleman agree that the expression "golf mad" is inappropriate, because they are enthusiastic about that admirable sport?
  Mr. Craigen: I knew that the hon. Member who represents St. Andrews would want to intervene on that point. It is a lovely town. The hon. Gentleman knows full well the context in which I used the expression "golf mad". I am sure that he is alert enough to appreciate that it would be cheaper for many Japanese to fly to Scotland for a week's golf, even at St. Andrews, than to pay a year's fees for playing golf in Japan.
  We often hear that the Japanese are smarter than us. I dispute that. I think that the Scots are more innovative than the Japanese as a society. However, the Japanese are good at sitting down, drawing up a plan and getting on with the job. I hope that the Scottish tourist industry will adopt that Japanese style, do its homework on the potential abroad and go out and win the necessary markets.
  I may be digressing, but I shall take as an example Paisley museum and art gallery, which, in collaboration with museums in Greenock, Perth and Inverness, promoted last November a Scottish landscape painting exhibition in Hankyo, a Japanese department store in Osaka. About 250,000 people visited that exhibition. The curator of Paisley museum, Mr. David Shearer, told me that he hopes that some benefits will result for Paisley from that venture later this year.
  The Minister said nothing about improving the standards in our hotels in Scotland. Perhaps the Minister who winds up will refer to that topic. I gather that work is proceeding apace on grading hotels, but it would be useful if the Minister referred to the Government's view on improving standards of accommodation available to tourists, whether they come from abroad, Scotland, or other parts of Great Britain.
  The Under-Secretary also said nothing about how he views training in the tourist industry in Scotland. Perhaps we may hear something on that score in the winding-up. The evidence is that there are many newcomers to the industry. Few of the business men have formal qualifications, but they have a great deal of personal commitment. There is more scope for training.
  The Minister did not say much about the scope for historic buildings. My hon. Friend the Member for Linlithgow (Mr. Dalyell) takes a great interest in that matter. I am not suggesting that a placard should go up at the Binns. I am making the serious point that Scotland has a great heritage of castles and houses. There must be considerable scope for overseas tourists, especially ex-patriots.
  I shall quote again from The Scotsman of 19 November 1983, in which Mr. Devereux said:
  "Once the Bill becomes law the onus will be on us."
  That shows the way in which Mr. Devereux and his colleagues view the assignment that the Bill offers to them, although £200,000 is not a great deal to work on. The Minister might be able to tell us how much it would cost to have a full-page colour advertisement in Time magazine, not that I recommend that that should be the way in which tourism to Scotland be promoted. The Minister is mumbling away. Let him answer the points raised during the debate, and we shall be happier than we normally are when he replies to debates.
  Scotland is already on the map. It is expected of the Scottish tourist board that it will induce more people throughout the world to visit Scotland, who will be facilitated to do so by direct entry to Scotland, not, in the main, via the congested labyrinthine corridors of Heathrow airport. There is a job of work to be done by the
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  Scottish tourist board, in facilitating direct entry by airlines, by charter flights to airports in Scotland. Mr Devereux said that the onus would be on the Scottish tourist board. The onus will also be on the Minister and the Secretary of State for Scotland in how they use their powers and handle consultation with the British Tourist Authority. My hon. Friends and I believe that they are on
  probation because it remains to be seen how positively they use the Bill. I hope that for the sake of promoting Scotland overseas they will do so in as positive a fashion as possible.
  4.48 pm
  Lord James Douglas-Hamilton: The hon. Member for Glasgow, Maryhill (Mr. Craigen) touched on an important point when he said that the chairman of the British Tourist Authority might also become the chairman of the English tourist board. It is essential in those circumstances that when he is acting in his capacity as chairman of the British Tourist Authority, he is entirely impartial. I shall take the point a stage further. If he were to advocate amalgamating the English tourist board with the British. Tourist Authority, I venture to suggest that that would be the wrong course. Were there a potential conflict of interest between the Scottish tourist board and the English tourist board, that situation would make it extremely difficult for the chairman of the British Tourist Authority to act impartially. That could not be justified.
  I heartily welcome the Bill. At present the British Tourist Authority spends £2 million on the promotion of
  Scotland overseas, but only £13,000 has been allocated to the Scottish tourist board when it acts as an agent for the British Tourist Authority. That sum will not go far. It could not assist small tourist operators in the private sector, who make up the large proportion of Scotland's tourist industry. Many of those small operators could not afford to promote themselves in the absence of Government assistance. In his report my predecessor, Lord Stodart, strongly recommended:
  "the distinctive attractions of Scotland and its high dependence economically on tourism merit a separate promotional effort abroad. We are in no doubt but that that can best be done by the Scottish Tourist Board. Such an extension of the board's powers is clearly logical as the Highlands and Islands Development Board already has those powers and uses them with success."
  He strongly recommended that the Scottish tourist board should be given the powers that the Bill seeks to give it. At the time the Government did not go all the way and give the Scottish tourist board those powers, but later they gave limited powers, with the consent of the Secretary of State to local authorities to go abroad and engage in promotional activity. That meant that both the HIDB and the local authorities, acting with consent, had those powers. It is desirable that the Scottish tourist board's role should be enhanced because of those circumstances and because tourism is Scotland's largest currency earner after whisky and oil. About £760 million was generated this year by tourism, which has also led to the employment of about 50,000 people.
  The hon. Member for Maryhill asked, "What about Japan?" Like him, I have visited Japan. The consent clause is necessary because when I was there the Japanese complained about the plethora of local authorities that were coming and clamouring for inward investment and various other Japanese activities in Scotland. If too many

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  deputations go at the same time, it can be counterproductive. Therefore, it is necessary to have proper consultations with the British Tourist Authority, which will continue to represent Scotland's interests.
  Mr. Dewar: What rubbish. There are inconsistencies in the hon. Gentleman's remarks. He praised the HIDB arrangement—it does not need permission from anyone. The HIDB can act by its own authority. Does the hon. Gentleman suggest that the HIDB should be put on the same basis that the Scottish tourist board will be on? Does he not think it desirable that the Scottish tourist board should be given the powers that are entrusted to the HIDB?
  Lord James Douglas-Hamilton: The HIDB operates on a much smaller level than the Scottish tourist board will after it is given powers under the Bill. It is highly desirable that these consultations should start and be carried out effectively. It is the responsibility of the Secretary of State for Scotland, who, if he is doing his job properly and effectively, will make certain that the British Tourist Authority does its job properly in representing Scottish interests—remembering that there is a British dimension to this—in those parts of the world where the Scottish tourist board would not have the funds to operate effectively.
  In his letter to me, the director of overseas tourism of the British Tourist Authority, Mr. Norman Chumley said:
  "We see a very important role in identifying very special targets in those markets which offer the best potential … We see good opportunities to co-ordinate the Scottish trade and the variety of Scottish tourism products … With the Scottish Tourist Board having the power to act overseas we can fulfil the role of a catalyst for the Scottish trade and bring to them promotional opportunities that may otherwise not be there. Such things are specific sales missions, Scottish stands at overseas trade fairs and exhibitions, and co-ordinated advertising campaigns in specific markets and specialist media".
  I cannot help believing that the Scottish tourist board will be effective, as the chairman of the Scottish tourist board suggested, and that the Bill will open up new horizons and possibilities. He also suggested—the hon. Member for Maryhill mentioned this—that over the next five years it could earn an additional £250 million and produce another 25,000 jobs. It is essential that it should be given every encouragement to do that, if it is at all possible.
  The Scottish tourist board talked about acting as a catalyst for the Scottish trade. It intends, later this year, under the powers in the Bill, to pull together promotion of tourism in Scandinavian countries, including Norway, Sweden and Denmark. Part of the project will involve going over on a sales mission with representatives of the Scottish tourist trade. Such a specific sales mission could be big or small. The tendency will be to do it on a fairly large scale but in some cases a sales mission could involve only one person going to see one operator, if that was all that was required. Obviously, the tourist board understands that, with limited resources, it will have to be careful to make the most cost-effective use of what is available.
  Recent sales missions have been to Canada and the United States, supported by the Scottish Airports Authority, and have put strong emphasis on promoting Prestwick airport and the countryside of Robert Burns. There have also been organised visits by overseas tour operators to Scotland, which the Scottish tourist board
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  helped to co-ordinate. Co-ordination is especially important for advertising campaigns in specific markets and forms of the media. The Scottish tourist board feels that it would have a great deal more clout under the terms of the Bill because it could advertise in key newspapers in Holland, Germany and Scandinavia. It is examining the Scandinavian market hard at present. The justification for such advertising is that if Edinburgh and Wester Ross, or some other part of Scotland, were to be advertised, it would be as part of a Scottish campaign. Therefore the advertisement would not appear next to a minor town of another foreign country, but in a Scottish context with other Scottish products. Such effective co-ordination is a more professional way of obtaining results.
  Mr. O'Neill: The hon. Gentleman has moved from Time magazine, referred to by my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen), to continental newspapers. Their advertising charges may be smaller than those of Time magazine, but it would not take long to consume a budget of £200,000. To talk realistically about the sort of programme the hon. Gentleman envisages would involve far more money than the Government are prepared to put up.
  Lord James Douglas-Hamilton: I did not mention Time magazine but referred to particular newspapers on the continent. Obviously the Scottish tourist board must make the best use of whatever resources are available. That is why it recognises that, depending on what it is given, it may have to engage in either big efforts where circumstances demand that, or small ones. It will have to judge that carefully according to the circumstances and there will have to be effective consultations.
  The local authorities have already gone to overseas trade fairs and exhibitions, which would be expanded. They have been to Montreux in Switzerland, to Paris and to Brussels. At all those fairs there was a Scottish stand with members of the tourist board meeting operators on their own ground and putting over the Scottish message. That appears to have met with particular success in Germany and France — although all countries have shown interest as well.
  It is hoped that Scotland will become the home of many major conferences and exhibitions in western Europe. The STB is aware that in the travel business market incentive travel is now buoyant and there will be a great opportunity to increase such travel. Those who engage in incentive travel tend to be fairly large spenders, so there are opportunities there for promotion. I hope that a great deal will be done to identify possibilities for conferences and exhibitions. The London convention bureau does that in the south of England and is successful in bringing business to London. The Scottish tourist board will have a great opportunity to do the same for Scotland.
  The hon. Member for Maryhill mentioned the Edinburgh Festival as being successful in bringing many people, including some of Scottish descent, to Scotland. In much the same way the clan gathering, which many people regarded with a pinch of salt at the time, had the benefit of attracting many people who helped shopkeepers and enjoyed the organised events. It is a mistake for the House to underestimate the strength of the affinity felt by people of Scottish descent for Scotland. Some time ago during a world war, an Englishman was visiting the Highlands of Scotland and an old gentleman named

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  Macpherson gave him a lift to the hotel in a cart. He asked the old man how his children were getting on and the old man said that he thought that they were doing right. The Englishman asked whether they were serving his country and the old man said, "I think so. One is a Cabinet Minister, another is a judge in India and the third is a captain in the Army." I suggest that there are more Macphersons living outside Scotland than inside. Hence, there is a great deal of scope for the Scottish tourist board to be enormously effective in attracting business to Scotland. This Bill will be good for the Scottish tourist board and good for employment in Scotland and, as such, it deserves to be supported.
  5.10 pm
  Mr. Gordon Wilson: I relish the story that has just been told by the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). It was an ancient monument of a story but one that I am glad he managed to trot out.
  This is a rare occasion upon which I can say to the Government, "I told you so," because many hon. Members have changed and some of those here today were not here three years ago when I was lucky in the ballot and introduced a Bill called the Development of Tourism (Scotland) Bill. In clause 1 it sought to provide:
  "Notwithstanding the provisions of subsection (3) above the Scottish Tourist Board shall have power to carry on activities outside the United Kingdom so as to encourage people to visit Scotland."
  That is almost word for word what is included in clause 1(1) of this Bill. I am delighted that the Government are proposing this Bill, although I am afraid that they have not taken advantage of the opportunity to give a straight power to the Scottish tourist board to spend the money allocated to it in the best way to encourage the Scottish tourist industry.
  The formula that the Government have adopted is a recipe for confusion and delay. In the future the Government may well regret having adopted the format of requiring the consent of the Secretary of State for Scotland and consultation with the British Tourist Authority.
  When I presented my Bill there years ago, I adduced the arguments that Lord Stodart's committee had advanced. I quoted a letter which I had received on 11 December 1980 to show the wishes of the Scottish tourist board. The letter said that the Scottish tourist board
  "believes that Scotland is a separate entity and has to be marketed as such."
  The letter then continued:
  "Neither the Scottish Tourist Board nor the Scottish local authorities are satisfied with an arrangement which permits individual regions or districts of Scotland to promote overseas, but excludes the national tourist agency from supporting their endeavours on Scottish basis."
  I was greatly disappointed that the Government set out to block the Bill. The former hon. Member for Aberdeen, South, Mr. Sproat, in a speech that lasted for over an hour, described the idea of giving power to the Scottish tourist board as being selfish and thoughtless. It is interesting now to note that he described his Government as being selfish and thoughtless. That may make it rather more difficult for him to find another constituency. If that is the case, perhaps some favour has been done to the House.
  Mr. Dewar: It is remarkable that Mr. Sproat was the junior Minister in charge of tourism later in his career.
  Mr. Wilson: As a result of his efforts in helping to block my Bill, the hon. Gentleman was then promoted to the Department of Trade and given responsibility for tourism.
  Another of the few speakers in the short debate was the hon. Member for Watford (Mr. Garel-Jones), who sought to destroy the Bill. He was subsequently promoted to Whip. Whether that was for blocking my Bill or having the insensitivity to block a Bill dealing with disablement, I am not sure, but they were both dastardly acts.
  The House was almost empty on that occasion. The hon. Member for Glasgow, Garscadden (Mr. Dewar) apologised to me later for his absence. He had not thought it likely that there would be a debate. The Leader of the Liberal party paid a short visit but he was so scunnered by the hour-long speech of the hon. Member for Aberdeen, South that he had to leave with the hon. Member for Garscadden because of feelings of faintness. The Under-Secretary spoke about the Bill. The hon. Member for Edinburgh, Pentlands (Mr. Rifkind) has gone to foreign parts as Minister of State, Foreign and Commonwealth Office and is hardly ever seen in a Scottish context If he is to be believed, speaking on behalf of the Scottish Office, he said:
  "If we accepted the Bill, we should be doing a complete somersault, overturning the principles of the 1969 Act." He made it clear that he rejected the proposition contained in Lord Stodart's report. He went on to say:
  "For reasons I have indicated, we do not consider it appropriate, or, indeed, necessary or desirable, in the interests of the tourist requirements of Scotland, that such a change should be made.… It requires no legislation."—[Official Report, 27 February 1981; Vol. 999, c. 1137–40.]
  Three years later the Minister has told us of the opportunities that could come from this Bill, but we have lost valuable time.
  Since I am at the moment promoting the Leasehold (Scotland) Bill which is receiving a degree of support in the country, and the Social Security (Cold Climate Allowance) Amendment Bill which is receiving even more support, perhaps the Government should consider accepting one or both of them before they have to do a further somersault, even with the type of twist and pirouette that occurs in clause 1(2) of this Bill.
  It is a great pity that the Government have not lived up to their manifesto. At the risk of imperilling my immortal soul, I have read the Conservative manifesto. One of the very few propositions with which it set out to tempt the electorate into voting for it relates to tourism, on page 22. It says:
  "To this end"—
  that is, the encouragement of full co-operation between the Scottish tourist board, the Highlands and Islands Development Board, the local authorities and the British Tourist Authority with the minimum of duplication, waste and so on—
  "we shall extend the powers of the Scottish Tourist Board to include promotional activity outwith the United Kingdom, on the lines of those enjoyed by the local authorities."
  I am well aware that the local authorities require the consent of the Secretary of State for Scotland. They do not require the consent of the British Tourist Authority. As has been pointed out in the debate, the Highlands and Islands Development Board does not require the consent of the Secretary of State for Scotland, nor does it have to consult the British Tourist Authority when it tries to promote the Highlands and Islands of Scotland. Logically, I should have thought that the Government should follow the

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  parallel which has been working successfully with the Highlands and Islands Development Board, and give the Scottish tourist board unfettered powers. We all accept that the Scottish tourist board would consult the British Tourist Authority. It would be remarkable if it did not. It would be equally remarkable if it did not consult the Scottish Office, upon which it would be dependent for funds to pursue its activities. The Government should consider relaxing this unnecessary restriction.
  The concurrent arrangement that is taking place with the reorganisation of the British Tourist Authority and the English tourist board is much more worrying. The decision has been taken that there will be a common chairman for both organisations. The statement in the House in November by the Minister of State, Department of Trade and Industry shows that it is expected that there will be changes in the functions of both bodies, with an intention that they will begin to run along the same lines. I suggest that there is a real danger that Scotland could be the loser if that happens. If we do not exercise some care and discretion we may encounter considerable difficulties.
  I have no doubt that the most efficient use of resources would be to disband the British Tourist Authority and allow the revenues to be spent by the individual boards. That would greatly favour the Scottish tourist board, but the English and Welsh boards could equally compete on a reasonable basis. There is no reason why there could not be co-operation and consultation between the bodies, if necessary, by following a format adduced and accepted over years between the electricity boards in Scotland, whereby the chairman of each serves on the board of each body.
  Mrs. Anna McCurley: Does not the hon. Gentleman agree that in the present circumstances the British Tourist Authority has done quite well by Scotland, particularly this year, which is heritage year? In 21 countries, the heritage trails from Scotland have been co-ordinated by the British Tourist Authority with its resources, which the Scottish tourist board could not possibly command.
  Mr. Wilson: There is no doubt that the Scottish tourist board would have had difficulty, with the funds available to it, in making such an overseas projection, and being able to do what the hon. Lady has described. Nobody would doubt that, and one of the points made by others is the inadequacy of the funds made available, even on the common agency basis, which was fabricated by the Earl of Mansfield when he was a Minister. My view is that if we do not take care of the structure that the Government are considering, there will be a disaster. I cannot see how a British Tourist Authority, sharing a chairman with the English tourist board, can manage to see things from the right point of view, bearing in mind the criticism, shown in the papers over many years, of the inadequacy of the British Tourist Authority in reflecting Scottish interests in the tourist industry.
  If one takes the view that marketing is an essential part of the tourist board in Scotland, the formula that the Government have evolved, inadequate and equal in inadequacy to the one adopted three years ago, will lead to delay in projecting Scotland, and it could be damaged. The definition of marketing, as defined by the Institute of Marketing, is:
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  "The management process responsible for identifying, anticipating and satisfying customer requirements profitably."
  If the Scottish tourist board has to clear all its foreign marketing with the British Tourist Authority, it ceases to be the management authority, and we shall end up with the same problem of authority for the overseas projection of Scotland resting in London.
  Scotland is already in direct competition with the other national tourist boards for certain overseas markets, and if the British Tourist Authority hampers the Scottish tourist board in its efforts, and puts pressure on the Secretary of State to refuse permission on foreign marketing to Scotland's tourist industry it will run into considerable problems. The Bill relies heavily on favourable reactions from the British Tourist Authority. This is no way for Scotland to improve its foreign tourism. It is a minefield of conflicting ideas that could result ultimately in resignations and perhaps the gagging of Ministers and civil servants.
  What does Scotland need? First, it needs a body that can market Scotland overseas. Secondly, it needs more flights into Scotland, with Prestwick being the lead airport for international traffic, perhaps with access from the east coast, from where there is considerable criticism of the distance one has to travel to Prestwick. Thirdly, Scotland needs better ferry links with Europe, and this could conflict with the existing arrangements, particularly with the ferry links on the south-east coast of England. Fourthly, hotels in Scotland need better deals with British Rail and the British air carriers.
  We are in a cut-throat industry, and our customers can just as easily go to America, Spain or England. Therefore, we must have the greatest freedom to pursue our markets, even if that is because of competition to the detriment of other areas. We must win the maximum share of the business that we can for our hotels and tourist areas.
  The British Tourist Authority does not require to retain the power to promote Scotland abroad. It cannot guarantee impartiality and has proved in the past that it is inefficient and ineffective in the promotion of anything other than London, Stratford-upon-Avon and, nearer to hand, the Edinburgh tattoo. The British Tourist Authority has been a handicap to Scotland. It seeks to bring tourists into London and has directed most of its efforts to the metropolitan areas and surrounding attractions such as Stratford-upon-Avon. The problem is that once the tourists reach London, they quickly realise the costs of travel by air or train northwards, and that can add a substantial amount to any family budget.
  As to the financing in the Bill, £200,000, even with the additions that it has been suggested may come from the Scottish Office, is a paltry budget. Reference has been made to how expensive advertisements in Time magazine are, but £200,000 would not go far towards a small television promotional campaign in the metropolitan area of New York, let alone the rest of the market in the United States. That sum compares miserably with the £2 million that, under the Government proposals, will still remain with the British Tourist Authority, which I believe is completely ignorant of the Scottish dimension.
  In his statement to the House in November, the Minister of State, Department of Trade and Industry, said that the amount of money and the powers that are to go to the Scottish tourist board would be equivalent to a limited promotion, and that is what is required.
  Mr. Dalyell: What evidence does the hon. Gentleman have for his statement that the British Tourist Authority, whatever one's criticism of it might be, is ignorant of the Scottish dimension? That is not true.
  Mr. Wilson: As the hon. Gentleman has proved by his attitude to the Scottish Assembly that he is completely ignorant of the Scottish dimension as well, far be it from me — [Interruption.] The hon. Gentleman did not appreciate the need for a Scottish Parliament, so I fail to trust his judgment. As has been proved in the past he is not all that keen on Scotland anyway, and more keen on the problems of Argentina.
  The chairman of the Scottish tourist board said on 22 April 1982 that Scotland's "tourist potential"—he too is a sinner come to repentance, like the hon. Member for Linlithgow (Mr. Dalyell)—
  "would be better served by promoting the country independently from the rest of Britain."
  5.28 pm
  Mr. Nicholas Fairbairn: Far be it from me to defend the reputation of the hon. Member for Linlithgow (Mr. Dalyell) but to suggest that he has no concept of the Scottish dimension shows a parsimonious stupidity on the part of the hon. Member for Dundee, East, (Mr. Wilson).
  I have always taken the view that the promotion of tourism in Britain was a dual function. The individual parts of the country—whether Devon or Cornwall. or Argyllshire or Perthshire or Dumfriesshire—viewed in their national context, have individual claims to be promoted alongside the promotion of the British national interests of "Come to Britain". The Scottish tourist board should have every opportunity and encouragement to promote Scotland, not as Scotland, but as all the different part of Scotland that have a particular fascination and appeal. To suggest, as the hon. Member for Dundee, East did, that there should be some disintegrated form, in which there would be a national league in which "Come to England", "Come to Scotland", "Come to Wales" and "Come to Ireland" were in competition is the worst possible approach, because one is not promoting advantage. "Come to Scotland" must be promoted on the basis of "Come and see Loch Ness, or Edinburgh or Dumfriesshire or Perthshire." Scotland cannot be promoted just on the basis of the general name. It is essential for the Scottish tourist board to have freedom to promote the individual attractions of Scotland.
  I worry about the new arrangements when it is suggested that the chairman of the English tourist board should be the same person as the chairman of the British Tourist Authority. I do not wish to walk on eggs. [Interruption.] I may say that it is a Scottish tradition, and if the hon. Member for East Lothian (Mr. Home Robertson) has read the memorials of Lord Cockburn he will know that many people did it. I beg your pardon, Mr. Deputy Speaker, I got it wrong. I should have said "walk as if on eggs".
  If the justification for the proposals for the GCHQ is a confusion of loyalty, all I can say is that if I were the chairman of the Scottish tourist board and also the chairman of the British Tourist Authority my natural impartiality would not necessarily favour England. For the reverse reason, therefore, we have cause to be suspicious of any arrangement involving a person whose natural
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  interests in the promotion of Great Briain conflict with his other duties. The Minister would be wise to try to persuade his colleagues to make a dual mandate, instead of bringing about confusion of office in this way.
  May I suggest how we in Scotland could do much more for tourism? As the Minister said, tourism is a huge industry, with ever-increasing prospects, if they are grasped. Certainly in Perthshire there is a huge potential. It is a huge potential, if it is not foolishly frustrated. may I give one or two examples of the way in which I believe it is foolishly frustrated? I am glad to see the Minister who is responsible for the Scottish development department in his seat.
  One of the characteristics of tourists, presumably—or frequently — is that they have not been to the place before. They therefore do not know where places are. Even if they know where the places are, they may not know what is there when they get there. For some years, and against much opposition, we have managed to bypass most of the towns that lie between the south and Inverness. [Interruption.] As my hon. Friend the Member for Stirling (Mr. Forsyth) says, in travelling from London to Inverness, Dunblane is virtually the only place that one has to pass through. I used to have to deal with that matter, and I hope that the Minister at the Scottish development department will not waste money on having a third consultant telling the world where the road should go, thus spending more money now, supposedly to save time so that 20 years later the road can have another imaginary track.
  I am concerned about the signposting of roads. Eventually, after vast pressure, the Scottish development department invented what I think was called the experiment of Strongbow signs which were printed in the colour of chocolate pudding with custard letters on them. Even a person with the most acute sight, travelling on a bicycle at the slowest possible speed, would have to stop and get off to read them. That does not seem to me an intelligent form of signposting.
  Apart from that type of delay, all attempts to signpost other bypassed places, such as Bridge of Earn. Auchterarder, or whatever, are always explained away on the basis of some extraordinary experiment—a need for universalisation, a terror of any form of difference anywhere — because the poor tourist who comes to Scotland—a Uruguayan Greek speaking French—might be confused if he saw a signpost near Wick which differed from one in Auchtermuchty.
  I do not understand why there is this delay. If we are to promote tourism, I can show hon. Gentlemen signs that could be put up tomorrow. We do not need the Scottish development department saying that everything has to be universal. It is not universal. Some signs advertise Granada. Some signs advertise lavatories near Kinross. Some signs say that one can have bed and breakfast, others say that one can camp and others say that one cannot camp. I ask the Minister to make no more excuses and to ensure that we have signs that promote tourism in Scotland.
  I also ask Ministers at the Scottish Office to use their influence with self-catering. Because a week in a hotel in Scotland may cost more than a flight to a funny little place in the sun on the Costa somewhere, the promotion of self-catering has become a method of attracting people to Scotland. People who go to Scotland have to travel great distances to enjoy it. When people go to the Costa del Sol,

  729
  all they have to do is to walk 100 yards, 50 yards or 5 yards to the beach. To enjoy the magnificence of Scotland one must travel. So, because the cost factor is high, the residential factor should be low. That is one reason for the growth of the self-catering industry. If the threatened or imagined alterations in the taxation of self-catering facilities are confirmed in the Budget, many establishments will inevitably be bankrupted and will have to close.
  The Budget provides an opportunity to alter the basis whereby the provision of a self-catering facility is not a service. I do not understand how that can be said. If a person were told upon arrival that he did not have a chalet and could not stay, I imagine that he would think that he had lost a service. Therefore, I urge Ministers sincerely to prevent self-catering holidays in Scotland from being taxed out of existence.
  If the Bill provides the opportunity to demonstrate the superior excellence and attraction of Scotland and those parts that can be marketed and sold, it will be a good deed. After travelling around the famous places of the British Isles such as Devon and Cornwall and the Lake District, and then the Highlands of Scotland, a comparison can be made. That comparison is that we have more to sell, promote and attract than any of the rival places in the United Kingdom. I beg the Government to ensure that the Bill enables us to do just that.
  5.41 pm
  Mr. Tam Dalyell: As an entertainer, I cannot compete with the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) and I shall not try. I want to ask the Minister several mundane, practical but relevant questions, many of which could easily be answered by civil servants without resorting to letter writing. However, if the Minister wishes to write letters I shall understand.
  First, who will be responsible for promoting the Commonwealth games in 1986 in Edinburgh? Is it to be the new Scottish board or is it to be the British Tourist Authority? I ask that in order to make the same point that I made in public to Kenneth Borthwick and his colleagues at the last meeting of the main organising committee, of which I have been an active member. What will be said about hotel prices? Something of a scandal is now developing around the world because of the exploitation by hotels in cities that are chosen for major sporting and cultural events arising out of the prices that they charge. Such exploitation was banned in Calgary, Canada. If what is likely to happen this summer in Los Angeles is anything to go by we shall come to a stage where sporting fanatics of modest means will find it extremely difficult to go to the Olympic games, which will be visited only by rich Americans and exceedingly rich people from other countries. That is clearly unsatisfactory.
  The last time the games took place in Edinburgh we had a proud record and I do not think that there was any exploitation. However, greed develops and there must be some code of conduct for hotel prices for Edinburgh and surrounding areas in 1986, as Kenneth Borthwick promised. I ask the Minister to comment on how the games committee will publicise the fact that there is such a code of conduct. I have some confidence in those who are imposing it and they say that they can manage it. I should like a ministerial assurance tonight that an active monitor
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  will be kept on what happens. It is important that Scotland should be able to parade itself as a country that will not exploit those who visit the 1986 games.
  Mr. Maxton: My hon. Friend will be well aware that at present the Commonwealth Games are at some risk. Scotland could lose a major tourist attraction as a result of the crass stupidity of the English Rugby Union's proposal to tour South Africa.
  Mr. Dalyell: I thought that it might stretch your patience too far, Mr. Deputy Speaker, to go along that road, but it is exceedingly important. I welcome the strong statements of the Minister with responsibility for sport. I assume that that shows the considered attitudes and actions of the Government, whatever the hon. Member for Luton, North (Mr. Carlisle) might say about the signatures of Conservative Members that he apparently has, who take a different view on tours of South Africa. It is an important point and if my hon. Friend the Member for Glasgow, Carthcart (Mr. Maxton) catches your eye, Mr. Deputy Speaker, he might develop it. We await an answer from the Scottish Office.
  I must be careful about declaring interests that I do not possess because I obtain no financial benefit from our heritage as such. However, if we do not keep our heritage in good repair it will be that much more difficult to promote convincingly the heritage of Scotland.
  I should declare that my wife is the Historic Buildings Council representative on the Edinburgh new town conservation committee. It is extremely well run by Sir Alan Hume, a former distinguished civil servant, and particularly by Desmond Hodges, whose work I admire greatly. I cannot speak with their authority, but the city of Edinburgh will need more and more money from somewhere to stop crumbling stone. I do not pretend that the problem is anything like as bad as it is in parts of Bath but it exists nevertheless. If the Government are to promote Edinburgh as one of the great European cities, what will be done to help the new town, which needs such help more than it has ever done before?
  It is unrealistic for hon. Members to call for sums that no Government can possibly afford to give, but some calculation should be made of the employment that is created by putting money into projects to preserve our heritage, such as Edinburgh new town. Thousands of skilled building workers are unemployed. It may be that hon. Members will say that repairs of council housing should come first and I do not dispute that. However, the fact remains that money put into heritage is labour-intensive if it is properly used. I am told by people in the Cockburn Society, the Georgian Society and the Lothian Preservation Trust that that is an extremely cost-effective way of using money to create worthwhile employment. I hope that the Manpower Services Commission will make available any money that is asked for by the heritage bodies with the proviso that they should be extremely clear about how they will use it, and that it will not be used for administration.
  Do the Government accept in principle the proposition that money spent on maintenance, often essential maintenance, of the heritage is employment-creating? If so, what is their estimate of the number of skilled building trade workers and craftsmen who would be employed if we spent more millions of pounds on heritage projects? I give the crumbling parts of Edinburgh new town as just one example.

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  It is not simply a matter of ancient buildings. I had the good fortune to go with Morton Boyd to Inch Kailloch, where the Nature Conservancy Council is involved in a small project. There, we saw young people who would otherwise have no chance of a job at least getting training in conservation. I thought that the NCC was doing a valuable task. However, it is desperately short of money — in particular, for the notification of SSSIs; the Minister will remember well the many hours during which I and other hon. Members detained him on the Wildlife and Countryside Bill, as it then was—but it is extremely capable of providing worthwhile jobs. Perhaps it would be better to put money into jobs where there is the expectation of continuing employment rather than into training schemes which finish at the end of 12 or 18 months. My second question, therefore, is about the philosophy of it all.
  Hon. Members may think, as I come to my third question, that I have a personal interest in the matter, but I do not. I refer to the selection that must be made between those historic houses which will, and those which will not, be helped. There comes a point when we should have an overall strategy, and I will be specific. It may have to be a choice between, on the one hand, Filey, and, on the other, Cork, because the sums of money about which we are talking are absolutely enormous.
  Bolton, near Grantham, got £8 million. Those of us who took part in the deliberations on the then National Heritage Bill never imagined that Lord Charteris and his colleagues would give £8 million to one property, but that happened. Again, I make no complaint, but vast sums were given to Canons Ashby, perhaps rightly because of the Saxon heritage. They were vastly larger sums than any of those who took part in debating the relevant Bills imagined would be allocated by the national heritage memorial fund to particular projects.
  If, in the promotion of Britain overseas, our medieval and Georgian heritage is to be promoted, should we not get round to having a strategy on what is and what is not to be kept? I would tell the hon. Member for Derbyshire, South (Mrs. Currie), were she in her place, that with other members of the heritage group I went to Calke, just south of Derby. In one sense it is a remarkable town house. In another, however, it is strange, with rooms full of preserved birds. How a family could have preserved all those birds is a matter for wonder. But they have been neglected for decades, and a decision should be taken on whether the house at Calke is worth preserving. If it is, then we must bear in mind the Government's financial guidelines. A Labour Government, were we in power, would also have to lay clown guidelines—this is not entirely a party political question — and therefore somebody somewhere must decide what should be discarded from the heritage and what must be kept. We seem to adopt a random approach, but with a number of other, extremely costly and possibly valuable, projects coming up for help from the national heritage memorial fund, the Government must look at the whole issue afresh before a Keddlestone type of crisis occurs.
  Mr. Fairbairn: In the consideration of the heritage, which is important to tourism, would it not be sensible if the Department of the Environment, instead of spending huge sums in Scotland on preserving as ruins houses which
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  could be homes, sold them to people who would be happy to restore them, so that those funds could be used for the purposes about which the hon. Gentleman is talking?
  Mr. Dalyell: I am not antagonistic to that. Consider, for example, the sale of Niddry, near Winchburgh. I would be in favour of it being sold to someone who would do it up properly. At the same time, let us not imagine that from that sale any money would be left for anything else. If that were to happen to Niddry — and I should like Lord Linlithgow to do it to Midhope, which is an interesting building—those who took on the job would not have a penny extra with which to do anything other than the necessary improvements. Although it may sound good to sell off certain properties, there would be no profit in doing so. Indeed, to be fair to potential restorers, they would have to be given the property at a token rate—the old blench penny, nothing more than a token sum—or they could not reasonably be expected to do up properties that have been neglected for generations.
  Mr. Michael Forsyth: Is the hon. Gentleman aware that that brings private capital into the restoration of the building, which can then be used to provide an attraction for tourists, particularly in a number of local areas where there are many tower houses and interesting buildings? Many such buildings are literally falling down, with nobody showing any great concern, although the evidence is that, when they are restored, they attract substantial numbers of tourists to areas which would otherwise be denied that benefit.
  Mr. Dalyell: I agree with the hon. Gentleman, and Towie Barclay in Aberdeenshire is an example of a property that has been done up well by Mark Ellington, a distinguished member of the Historic Buildings Council. If I were asked whether it should be a priority for the national Exchequer to give money for new hospital facilities and extra money for education or, for example, doing up Towie Barclay, I would have to reply that there were more urgent priorities than Towie Barclay from the point of view of Government funding.
  Mr. Norman Buchan: Is my hon. Friend not in a sense selling the pass? We are facing the present dilemma because of this Government's malicious and stupid cuts in public expenditure. They pose the question whether to save a valuable building or a hospital. We say that the former kind of public expenditure is valuable in both respects, for the health and heritage of the nation and because it creates jobs and therefore helps to revive the economy. I am sure that my hon. Friend will accept that we should not accept the argument that the Conservatives have been giving us for the last five years.
  Mr. Dalyell: With reciprocated friendliness, I assure my hon. Friend that I stick to the view that any Government, and not least the Labour Government of which he was a Member, must make choices. As a former member of the council of the National Trust, and as one —I declare it—whose wife is involved in the work of the Historic Buildings Council, I know that it is unreal to expect the state to save everything. Choices must be made, sometimes unpalatable ones. Someone somewhere must make decisions about what state money should be concentrated on saving what. If there was enough money to save everything that any of us might want to preserve, it would be a wonderful world, but that is not the world in which we live.

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  What is the attitude of the Government to a number of voluntary bodies, for example the Lothian preservation trust, the Cockburn Society, the Georgian Society and a number of others in Scotland which have grown up with hard-working, dedicated people acting usually in a voluntary capacity? Is it the general view that, if those bodies raise local funds for a project which is deemed worth while by the Scottish Office, there should be some type of matching help? The role of voluntary bodies is important.
  I am not persuaded that the finance available for heritage is being used to its optimum extent. I have thought that for a long time—in fact, for more than 20 years, when Harold Wilson, who was then the Chairman of the Public Accounts Committee put me on that Committee. It is all very well for the Public Accounts Committee to bring accounting officers before the Committee and say, "But you cannot have carry-overs." In many cases, the Historical Buildings Association does not have all the knowledge that must be available before it can make decisions. It may be more efficient for the Treasury to be more flexible in allowing carry-overs of unused money. It is understandable for the Treasury to say that if at the end of the year £300,000 or £400,000 — X pounds — is unspent, it must be used. Otherwise the Treasury will say, "Well, since you did not use last year's expenditure, why should we up your expenditure next year?"
  When promoting and maintaining heritage, can we not have more flexible rules on expenditure that may not—for reasons that are mostly good—be taken up in a particular financial year? I should like some comment from the Minister. He would possibly be unwise to give that information in his reply, because he would need to consult his Treasury colleagues. This is not a new problem to them. The time has come when the Government should give some thought to this matter.
  I should like the Government to give some thought to the delicate question of staffing of semi-governmental bodies concerned with heritage. I had something to do with Mr. Graham, when he was the secretary of the HBC, and had the highest regard for him. I have no doubt that Brian Lang, when secretary of the Scottish Historical Buildings Council, had a great interest in these matters. Were that not so, he would not have gone on to be the secretary of the national heritage memorial fund.
  Is it ideal to have civil servants in some cases seconded to such bodies for a comparatively short time? If I can persuade Ministers, I point out that I have talked about these matters to the noble Lord Eccles, for whom I have a high regard, and who, given that I had political differences with him, was an intelligent Minister, in the Macmillan Government. When he was Churchill's Minister of Works, he tried hard, and almost succeeded, in getting a scheme whereby there would be a career structure for civil servants working in areas to do with heritage and, broadly, tourism. Is there not some case for looking at a career structure inside the Civil Service, especially in relation to seconding people to quasi-governmental bodies? I merely set down the marker. There may be overriding objections. I and others would like to see the question of career structure answered. At the end of the day we may have to accept those objections, but the question is worth asking.
  734
  Scottish Opera has developed, thanks to Alexander Gibson and others, in a remarkable way. Often, its productions have been fairly outstanding. This year and next year, however, it is unable to do any touring, although it hopes to have plans for after 1985. If we are seriously to encourage the arts, should not two aspects be looked at? Does the Royal opera house receive more than Scottish Opera of the money available for opera? It is not simply that I have been brainwashed by John Cox—
  Mr. Deputy Speaker: Order. I do not believe that the Government's subvention to the Royal opera house comes within the scope of the Bill. The hon. Member is pushing against the frontiers of what is tolerable, and I hope that he will not overstep the mark.
  Mr. Dalyell: I know that your patience has been estimable, Mr. Deputy Speaker. I shall desist from what I was going to say about Scottish Opera. I simply ask: what can be done to help Scottish Opera to tour? It will have a greater reputation at home if it is a touring company. In this world, the touring companies — [Interruption.] I know that I am being pressed on the subject of opera, so I shall go on to discuss ballet.
  A pressing, extremely well-informed constituent who talks to me at great length on these matters is the noble Lord Rosebery. More people are now very interested in ballet. It used to be an elite interest. Thanks partly to the efforts of the Scottish Ballet and to the great work done in schools, it is no longer an elite interest. The Scottish Ballet is no longer the peripheral and perhaps ribald matter that it might have been. The Scottish Ballet is desperately hard-pressed. Soon a long letter on that subject will go to Department of Education and Science Ministers, as that Department is the sponsoring body. I hope that the muscle —if that is the correct word in relation to ballet—of Scottish Ministers will be deployed as forcefully as possible with their DES colleagues so that this company can progress.
  On tourism— [Laughter.] These matters are relevant to the promotion of Scotland.
  Mr. Buchan: Absolutely right.
  Mr. Dalyell: My hon. Friend the Member for Paisley, South, with whom I hate to disagree, is shoulder to shoulder with me on the matter of ballet.
  There is nothing more preposterous than the way in which a series of British local authorities have taken their members to Japan and elsewhere to obtain the Nissan and other products. I do not know what the Japanese must think when visited by delegations from south Wales, Humberside and other places in the same country. A similar point applies a little to Scottish local authorities as well. They have set up—I have an extremely favourable impression of their work in Linlithgow—local authority groups which encourage tourism. Will local authority interests be portrayed separately in the authority which has extended powers or will they be represented on a Scottish basis? It is not sensible to produce abroad fragmented literature or to put pressure on bodies to go to the Edinburgh and Lothian district or the Argyll and Bute district. That must be done on a co-ordinated basis. It is, therefore, proper to ask on Second Reading about the relationship between the district tourist authorities, which have been set up with some enthusiasm, and promotion overseas on a Scottish basis.

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  If we are to attract people to Scotland, we must attract them to its beauty, especially the beauty of the Highlands and that of Galloway, that underestimated and beautiful part of Scotland. I hope to ingratiate myself with the Government Whip, the hon. Member for Galloway and Upper Nithsdale (Mr. Lang), by extolling the virtues of Galloway. I want to try to woo him so that he will use his undoubted influence with the Treasury. He is, after all, a Lord Commissioner of the Treasury. What do Lords Commissioners do other than influence the Treasury?
  In beautiful, lovely Galloway, the Nature Conservancy Council is interested in a number of SSSIs, but the council is desperately short of money for notification. I do not pretend that the situation is anything like as bad as that which prevails at the Halvegate marshes in Norfolk or the Somerset levels. Nevertheless, it is a problem relating to tourism and the countryside. When is a little more money to be available to Martin Boyd and others to take on the staff that is needed to undertake the notification that the House, rightly or wrongly, laid down in the Wildlife and Countryside Act?
  The Minister will well remember all the undertakings that were given on notification by the hon. Member for Dumfries (Sir H. Monro), who represents an area no less beautiful than Galloway and who was an effective Minister. The hon. Gentleman was aware of all the important tasks that the NCC had to undertake. I understand that only about 11 per cent. of all the notifications that the council hoped to undertake throughout Britain have been made. As a result, some people are jumping in and taking agricultural land when they should not. They are trying to get in before the Act comes into force in their areas.
  I do not apologise, Mr. Deputy Speaker, for raising that issue in this debate. Much of the debate will be concerned with promotion overseas and we had better be clear, if we promote Scotland, that we have something to promote. Beautiful areas are being harmed — I shall not say "destroyed" because a case is damaged by exaggeration —by the tardiness of notification of SSSIs. I do not claim that that notification is a great attraction but it is an increasing attraction.
  The Minister will remember—and so will the hon. Member for Dumfries, the former Minister, who took a great interest in the subject—the enormous length of our debates in Committee on marine SSSIs. I understand that not very much has been done about them. The Minister will remember that he was briefed, as I was, by some of his extremely well-informed constituents in Oban. When he replies later this evening, he will have a gorgeous opportunity to give us good news about the marine SSSIs and marine archeologicial sites.
  I shall not weary the House by going on for too long, but three of my hon. Friends and I are sponsored by the National Union of Railwaymen. We interrupted the Minister's opening speech by asking about the Aberdeen-Keith-Banff-Inverness railway line. I hope that some good news can be given. As a non-Highland Member who has an interest in tourism, I have no doubt that French and German tourists, and especially tourists from the United States, who do not have hired cars, rely on rail travel instead. Often they buy rail tickets in their own countries, and that is something that we should encourage because the practice is greatly to the profit of British Rail. These tourists rely on scenic routes, and before any decision is
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  taken on the closure of the Aberdeen-Keith-Banff-Inverness line in the north of Scotland, the consequences for tourism should be taken into account. I shall not trespass into the constituency views of others or on the ways in which the public get to work in Aberdeen or Inverness. I do not wish to trespass into those areas, but I feel that the issue should be raised in general terms—this should be music to the Minister's ears—for it is part of a Scottish interest and not merely a constituency interest.
  Having mentioned railways, I happen to be interested in school journeys, which are an increasingly important source of tourism. I am critical of Government policy in a way that should gladden the heart of my hon. Friend the Member for Paisley, South. In receiving school parties, is it not important that full use should be made of community centres? It is a crying scandal that money has not been made available to local authorities to hire janitors to keep open school and community centres at such times. This is an extremely important facility for incoming school parties, and the cost will amount to peanuts when set against the millions of pounds of capital funds that were expended in the 1950s, 1960s and 1970s on school and community centres. It seems that for the sake of peanuts we cannot keep them open.
  I note your signals, Mr. Deputy Speaker, and I am always sensitive to time signals from you. I was going to address myself to the Findhorn centre and stick up for it, but I shall cut that out of my speech.
  It was the Scots who started the shipschool protect—I refer to British India's old, Dunera shipschool project, which was carried on by the Uganda. For reasons that I shall not go into, the Uganda was taken over for a supposedly national interest because of certain events in another ocean. What is to be the compensation at the end of the day when the Uganda comes off Government charter? What compensation can people in the west of Scotland and members of the SS Uganda Society expect to enable a resumption of the tourism in which the Uganda was involved? If we are concerning ourselves with overseas tourism, it is important to consider taking 800 kids to Stockholm, Leningrad, Copenhagen, Bergen, Oslo and elsewhere.
  In the presence of the right hon. Member for Western Isles (Mr. Stewart), who is a member of the Falkland Islands Committee, I wish to express great concern about the runway that is being constructed on the Falklands. A great deal has been said about tourism to the Falkland Islands, not least by the committee of which the right hon. Gentleman is a member, and I wish to ask a specific question about Mount Pleasant airport. Anything less than 12,000 ft, bearing in mind that all north-bound flights will be limited, will mean that the percentage of departures requiring every available inch of runway will be vastly higher than that pertaining anywhere else. The safety factor in such Falkland operations—
  Mr. Speaker: Order. The hon. Gentleman, who has been speaking for nearly 40 minutes, is straying from the point.
  Mr. Dalyell: Before anyone talks about tourism to the Falkland Islands, he had better be clear that the Tristars will not have an accident at an airport on which we have spent—
  Mr. Speaker: Order. That is exactly what I was hoping the hon. Gentleman would not say. Has he concluded his speech?
  Mr. Dalyell: I have interpreted your intervention, Mr. Speaker, as an order to resume my place, and it would be tactless not to do so.
  6.20 pm
  Sir Hector Monro: It is always a pleasure and privilege to follow in debate the hon. Member for Linlithgow (Mr. Dalyell) on matters concerned with the heritage and conservation, on which he is an acknowledged expert. What the hon. Gentleman said about tourism and country houses is all too true. In many remote areas, country houses are the linchpin of tourism, yet most of the owners of historic houses and castles are struggling to make ends meet. Opening a country house is not a profitable operation, yet such houses are a tourist attraction, and attract people who will use the other facilities of the area such as hotels and recreational facilities. Any help that the Government could provide for the maintenance of those houses would produce a good return.
  The hon. Gentleman was also right to question the relation to tourism of the national heritage memorial fund. He and I served on the Committee that considered that Bill. Developments have not been as I anticipated then. A great deal of money is being directed into relatively few buildings, and that fills me with apprehension. Action seems to be taken on an ad hoc basis as and when buildings become available or the owners, sadly, die and the properties are placed on the market.
  I am concerned that apparently there is no overall policy related to the tourist potential of those magnificent old buildings. The hon. Member rightly said, in connection with Belton, that £8 million is a great deal of money. Where does one stop? I raised many eyebrows over Knoydart. Although beautiful, the property was not unique and it would have been very difficult for tourists to reach. But it is right to mention the importance to tourism of those basic attractions, and the difficulties that the owners face in providing the key attraction of a historic house. Perhaps at the time of the Budget the Chancellor of the Exchequer will think about grants and maintenance facilities for those houses. That is the moment to consider the difficulties.
  I appreciate what the hon. Gentleman has said about the Nature Conservancy Council, of which I am a member. He mentioned the problem of the sites of special scientific interest. The problem is one not of money but of qualified staff to carry out the detailed and flexible negotiations required for renotification. There are not enough men and women qualified to carry out the work. I hope that everything will be done to expedite matters, and that the notification will be completed in the coming two or three years.
  I am delighted that the Government have introduced a Bill to allow the Scottish tourist board to promote tourism to and within Scotland—though not to the Falklands. The Bill stems from the Development of Tourism Act 1969. Even with hindsight, I think that the then Government were wrong not to make use of the opportunity to allow the Scottish tourist board to become involved in overseas promotion. I am glad that after so many years our manifesto has enabled the Bill to be introduced. I welcome it, as does the Scottish tourist board.
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  The Bill contains only one contentious issue, and that is the provision about consultations with the Secretary of State and the British Tourist Authority—to which I give great credit for its work since its introduction. We would all wish to congratulate the chairman of the authority and the chairman of the Scottish tourist board. They have cooperated well, to the benefit not only of Scotland but of the rest of the United Kingdom.
  However, a number of hon. Members have rightly asked what will happen in the long term. One cannot be certain that the happy relationship between the BTA and the Scottish tourist board will always continue. A great deal of co-operation is required. When the future of the English tourist board and the BTA is still in doubt, although they share one chairman and are under one roof, one must ask what will be the exact connection between the authority and the Scottish tourist board. There could be conflict in the future. Could the Minister perhaps give us a little encouragement by saying that there could be an increase in the number of Scots in the British Tourist Authority? The chairman of the Scottish tourist board would then have plenty of support when arguing a case in the authority.
  Despite the Bill, the overall responsibility for promotion overseas remains with the BTA. I hope that, within that context, there will be a switch of emphasis toward the Scottish tourist board and, with it, a redirection of resources. I am certain that no industry in Scotland—not even whisky or oil — has a greater potential for return on investment than tourism. Anything that the Government are prepared to invest in tourism—I hope that their investment will be matched by the private sector —would give a worthy return.
  The Civic Government (Scotland) Act 1982 was based, in the main, though not completely, on the wise counsel of Lord Stodart, who has done so much for Scotland through his inestimable judgment on a host of topics. It was a pity that we did not go the whole way then. We now have, broadly speaking, districts and regions. The tourist industry is combined into area tourist boards. I note with interest the subsequent development through the chairman of the Scottish tourist board of a confederation of tourism which would include area boards and the Highland board. However, we should not get too bogged down with a structure of bureaucracy that might divert money away from attracting tourists to talking about a subject on which much is already known.
  I mentioned finance. I remind the Minister that there is great potential for bringing foreign exchange into the country, and direct income for the facilities that we make available to tourists in Scotland. I do not think that we are fully developing the potential. There is tremendous publicity for the tower of London and the national parks —for the honeypots, to use the jargon word—but we must try to spread the tourists further afield to the hotels, restaurants, country houses and recreational facilities, and to the houses open through the National Trust for Scotland. We must not underestimate the work of that body. We are not doing enough to attract tourists away from well-known centres.
  I join hands with my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) in criticising the inflexibility and general attitude not only of the Government but of local authorities to planning,

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  signposting and advertising. Almost at a stroke of the pen, one could do an immense amount for the tourist industry by taking a new look at signposting in Scotland.
  We are far too restricted. There must be a balance. I should not have talked about heritage as I did earlier if I was not interested in the physical beauty of the countryside, but we must strike a balance between adequate signposting and keeping the countryside free from unnecessary advertising. We must advertise our scenic routes more effectively. I know that after much argument with a Minister in the Department of Transport at the time we eventually got a scenic route sign at Carlisle indicating the route to Edinburgh through the Borders. That was a great help to the Border towns. However, if one goes a few miles on to Gretna there is no sign to show that if one turns left one goes to Galloway, which is one of the most beautiful parts of Scotland, or to the Burns country, or that there is anything other than the town of Dumfries down the road. We must be prepared to put up more signs showing the tourist what is available. We are falling flat on our faces. It is extremely difficult to get hotel and bed-and-breakfast signs. If we want tourists, we must be prepared to put up better signs.
  I know that my hon. Friend the Minister has taken a flexible attitude. I am pleased that he came and looked at the A74 and saw for himself that the signposts were not all that they ought to be. I am glad that he has already made some decisions and I thank him for them. I hope that he will give me more concessions in the near future.
  The development department takes a strong view that there should be no advertising in the highway boundaries, even though they might stretch back 50 yds from the road. Why can we not advertise our hotels and tourist attractions within the highway boundaries? They belong to the country. We should advertise them in an attractive and proper way. I want not a proliferation of signs but just fair advertising so that we can bring in tourists to spend money in Scotland.
  Mr. Fairbairn: The excuse given by the Scottish development department is that signs represent a traffic hazard. As one of the most distinguished motorists in the House, does my hon. Friend think that they are a traffic hazard or does he think that an infinitely greater traffic hazard is somebody who is looking for signs that do not exist?
  Sir Hector Monro: I entirely agree. When such a motorist sees a sign he stands on his brakes and bang, bang, bang behind. The most famous words in Scottish history are "in the interests of road safety." Whenever I complain to my local authority's planning department or to the Minster in the development department, back comes the phrase, "Cancelled in the interests of road safety."
  Mr. Donald Stewart: The hon. Gentleman mentioned the assistance that he has received from the Minister. Does he recall that in the Minister's constituency was one of the most useful road signs in the whole of Scotland? It was at the Conan ferry and said, "This is not the Ballachulish ferry."
  Sir Hector Monro: The right hon. Gentleman knows that once one is on his island it is impossible to get off —sober, anyhow. I am appreciative of the fact that my hon. Friend the Minister has been helpful. What he has heard today might push him a little further. We have the
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  Scottish tourist board's idea of universal signs. 1 do not believe that that is what the tourist wants. The tourist is able to assess from the quality of the hotel sign what he will find at the end of the road. We should encourage hotels' initiative in putting up good and attractive signs.
  I should like to deal with caravans. I am glad that we have introduced a Bill which deals with rating, but we must consider more touring sites. Time and again such sites are refused because of access to the trunk roads on account of the celebrated phrase, "in the interests of road safety." I drive on Scottish roads a great deal and there is frequently nothing to be seen except potential access to a caravan site which does not exist. My hon. Friend the Minister must take a firm line with his Department and say that practical motorists like many right hon. and hon. Members think that it greatly exaggerates the interests of road safety. We could then get off with having more facilities, more tourists and more money being spent locally. That is important and, after all, the objective of the Bill.
  The Government should take heed and heart. They will have the whole House behind them if they show an accelerated interest in tourism. It is essential for Scotland's economic future. Time is not on our side and we should be doing something for this season. I hope that my hon. Friend the Minister will do everything that he can through the excellent Scottish tourist board and, as a result of the Bill, emphatically consider the negative approach of the development department which must be told and shown what could be done if it really tried.
  6.35 pm
  Mr. Norman Buchan: As requested, I shall be brief. I am glad of the unusual opportunity to speak on Scottish matters from the Back Benches. One of the problems is that of shifting duties between regional and district authorities. That is especially true for one of our most important tourist attractions. One of the main reasons for people coming to the United Kingdom is our theatre and music. My hon. Friend the Member for Linlithgow (Mr. Dalyell) expressed his anxieties about the Scottish Opera.
  If we follow some of the Stodart committee's recommendations and shift arts support from regions to districts, we shall be in deadly trouble. The Scottish Opera is supported centrally, but most of its local authority support has come from that most generous of all regions, Strathclyde. We find a very different picture when examining additional support from the districts. Monklands, for example, is deprived in many ways. It has high unemployment, its industries are run down and it comprises mainly working-class and mining communities. Nevertheless, it contributes to the Scottish Opera. No one supposes that a high percentage of the population in Monklands go to see the Scottish Opera. A neighbouring district, Strathkelvin, which covers the borough of Bearsden, which is an extremely wealthy area—
  Mr. Michael Hirst: I find it extraordinary to have to point out to an Opposition Member who represents a west of Scotland constituency that Bearsden is not part of the district of Strathkelvin. I can anticipate the hon. Gentleman's point, which is to refer to the support which that authority gives to the Scottish Opera. Before he does that, perhaps I can remind

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  him that my constituents are immensely fine patrons of the Scottish Opera, although they have to pay enormous amounts of tax for the Government's subsidy.
  Mr. Buchan: If I got the nomenclature wrong, I shall correct it, but I am comparing that area's contribution with that made by Milngavie. For a long time Bearsden's contribution was zero. So much for strong support for the Scottish Opera, at any rate among the civic leadership of the hon. Gentleman's area. If the hon. Gentleman has moral authority in the area, he might say something to that council because, although citizens in the area buy tickets to see the Scottish Opera, their civic leaders do not help in any way. Most district authorities are Labour-controlled and therefore by definition mainly working class, and less well off. If the regions' responsibilities are to be taken over by the districts, working-class people will have to pay an inordinate amount in support or there will be a lack of funding because of the failure of philistine areas which are run by the Tories.
  Mr. Maxton: My hon. Friend is being marginally unkind to Bearsden and Milngavie district council because last year it managed to contribute £150 towards Scottish Opera. I should not like the House to be left with the impression that it was totally ungenerous in this matter.
  Mr. Buchan: That is correct; £150 was contributed, after some arm and wrist twisting.
  Mr. Hirst: I draw the attention of the hon. Gentleman to the substantial support that is given to leisure, recreation and the arts. Has he not heard of the Kilmardinny arts centre festival and of the Lilley art gallery? I suggest that the hon. Gentleman might profitably spend an hour in my constituency when I can show him the practical support that is given to the arts locally.
  Mr. Buchan: I have done so, without the support of the hon. Gentleman.
  England and Wales are facing, and Scotland is now beginning to face, the shift to the district which will result in less support for the arts because of the loss of regional support. I have given one example of this. Britain, including, I regret to say, areas of Scotland, is becoming fairly squalid because of the cuts in local authority finances. No other reason can be given for the mess that can be seen now on many motorway verges than that people are not being employed to clean it up. It is not possible to employ people because of the Government cuts in rate support grant for local authorities. Untidiness is the first step to decline in any area. When fencing is pulled down and not replaced, an area begins to degenerate. Every visitor to Britain in the past four or five years is aware of the squalor. I meet many foreigners who comment upon the squalid nature of many of our cities, with plastic bags outside shops and so on, all of which is caused by the cuts. The cuts are made by people who take to their cars every weekend to get the hell out of the cities to their comfortable homes in the Cotswolds and elsewhere. Those who continue to live in the cities suffer from the squalor, as do the tourists, whose numbers will soon decline.
  I make the plea that, if sums are to be allocated to spread the good name of Scotland abroad, there should be some generosity towards the local authorities so that the
  742
  country can be made fit to welcome tourists, and steps can be taken to prevent squalor from developing. Comments are frequently made by visitors from abroad. I cite the case of an Italian Communist journalist living in Paris who expressed his horror at the untidiness and squalor of London.
  It should be remembered that not all the artistic merits of Scotland reside in ballet—pace my hon. Friend the Member for Linlithgow (Mr. Dalyell)—and opera, but a great deal exists in our native music and song. When I was chairman, and now president, of the Edinburgh folk music festival, I received money from Lothian region, which is a Labour region, to support the festival. Lothian region recognised the importance of Scottish music — fiddle music, pipe music and so on. However, I received not a brass farthing from Edinburgh where the festival was being held, although it brought tourists and visitors to the city. I should like some help to be given to the Scottish aspect of tourist attractions, perhaps through the Scottish Office, to encourage local authorities to give assistance to the Edinburgh and Glasgow folk festivals.
  I deal next with industrial archaeology, and my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) may wish to comment on the more colourful aspects of our industrial history. Expenditure should be allocated to industrial archaeology. Scotland, the heart of the industrial revolution, as a result of Government's activities, is becoming the heart of industrial archaeology, with factory after factory being closed. We no longer need to go to derelict 19th century factory sites to see industrial decline. One compensation might be an intelligent approach to the conservation of some of our history in steel, iron, coal and ships. Indeed, the ships may become partially a museum on the Clyde, if the Government's policy is carried out. I hope that some work is being done to leave us the memory of shipbuilding in the Clyde, if the Government cannot leave us the actuality.
  The hon. Member for Dumfries (Sir H. Monro) said that, if the road signs were good, that was a sign of a good hotel. I can see no correlation between the ability to paint a good road sign and the ability to cook a good meal. This is part of the philistinism of the party that is so keen to erect road signs everywhere. One of the ugliest aspects of modern civilisation is the plethora of uncontrolled hoardings and road signs. I do not see why this happens in public places. There is undoubtedly money to be made from it, but it adds little to the attractiveness of the countryside, and the practice should stop.
  There are good and bad hotels. I remember Fitzroy Maclean, when he was a Member of Parliament, saying to Willie Ross, the then Secretary of State for Scotland, "You must do this and you must do that, and you have done this and you have failed to do that." The then Speaker properly intervened, and said, "You must not charge Mr. Speaker with anything," to which Willie Ross replied. "The hon. Member is, after all, a Scottish hotel keeper, and he is quite likely to charge you for anything." The hotels have to learn that tourism from abroad is expanding, and that visitors must be catered for. We are pleased that some independent action is to be taken in publicising Scotland abroad. However, not only the rich come to this country. The great bed-and-breakfast tradition must be given assistance to develop and to prosper.
  6.42 pm
  Mr. Barry Henderson: I am sorry that the hon. Member for Paisley, South (Mr. Buchan) is so blinded by his political prejudices, like the hon. Member for Dundee, East (Mr. Wilson), that he cannot address himself rationally to the Bill now before the House.
  I welcome the Bill, which will lift the restriction on overseas promotion activity imposed on the board by the Labour Government's Development of Tourism Act 1969. I welcome particularly what the Minister said about the way in which this would give powers to the Scottish tourist board to supplement, but not replace, the British Tourist Authority's promotion activities on behalf of Scotland. It would have been a great loss if the Government had gone further in the kind of restrictions indicated by the hon. Member for Dundee, East. I believe that there are benefits for tourism both in joint activity, and in recognising the distinctive characteristics of each part of the United Kingdom. The Bill strikes the right kind of balance.
  I wish to sound one cautionary note to the Government about the different boards. There may well be arguments to justify one person holding the chairmanship of the English tourist board and the British Tourist Authority, and for some reallocation of the functions of the boards. However, I can think of no arguments that would justify the amalgamation of the ETB and the BTA. Unless some such arguments are put forward, which would surprise me, I can tell my hon. Friend that I would oppose such a proposal as, indeed, I would oppose the abolition of the BTA. Using the strength of the United Kingdom where that is appropriate is as important as emphasising the distinctive characteristics and merits of different parts of the country.
  My second major point is that I hope that, in permitting the Scottish tourist board, through the Bill, to undertake overseas promotional activities, the glamour and attraction of those activities will not distract it from its primary task of promoting tourism in Scotland within the United Kingdom. I hope that it will never be allowed to forget that 90 per cent. of visitors to Scotland and 70 per cent. of Scotland's revenues from tourism derive from visitors from within the United Kingdom. That is something that the hon. Member for Dundee, East might wish to bear in mind.
  Tourism is an important industry. I find curious the varieties of figures thrown about in the debate relating to the number of jobs and the amount of money involved. The figures have ranged from 50,000 jobs to 120,000 jobs. It is especially important to recognise that some of the jobs arise in areas with very limited alternative possibilities for employment. The figures for income from tourism in Scotland have varied from £400 million to £800 million.
  Whatever the figures, there is no denying that it is a crucial industry in the Scottish economy. In Britain as a whole, there must be as many people employed in tourism as there are in the National Health Service. I understand that tourism generates a similar amount of foreign currency to the whole of the Merchant Navy or the British banking system. Perhaps not least of the value that the tourist industry brings to people in Scotland is the justification for enhanced facilities in a particular locality that might otherwise have been hard to justify. Undoubtedly, it is a growth industry. However, we must
  744
  remember that more Britons are being drawn abroad now than in the past, especially on day trips or motoring holidays to the Continent.
  As part of the important work that the STB must do to sustain its home market, as well as take advantage o' the facilities in the Bill to expand overseas promotion, I hope that both it and the BTA will direct their attention to the need to counter, by whatever means available, people's tendency to go abroad when, previously, they spent their holidays in Britain. From my earlier remarks about the sheer scale of home visitors compared with foreign visitors, it is obvious that a small drop in the home trade would need an enormous increase in overseas trade to compensate.
  I hope that hon. Members will have noted the growth in recent years of the short-break holiday trade. I understand that that is growing by about 45 per cent. per annum. People are taking a second holiday — a short break. That has particular opportunities for not only the home trade, but the European trade. I wish to emphasise the one sensible point made by the hon. Member for Dundee, East, which was the need for more direct Scottish flights, especially to and from the continent and North America.
  We could pick on several areas as being suitable for further development for tourism. I shall pick two. The first is the part that farmers can play in enhancing tourism in rural areas. That was admirably emphasised by work done by one of my constituents, Mrs. Jane Buchanan, who, under a Nuffield farming scholarship, carried out research into that matter and reported to the trust. Since then, she has been working with the STB in developing that area of tourism, which could further help in the more sparsely populated areas.
  The House may not be aware of the relatively new build-up of the Scottish fisheries museum at Anstruther in my constituency. It has developed rapidly, with a large amount of support from the fishing community and its friends throughout Scotland. It has been markedly successful in being perceived as of educational value for children from a wide area of Scotland. I hope that it will continue to develop.
  It is ironic that the vast tourism industry is characterised by large numbers of small enterprises. While that ensures vitality and variety in tourism, it also poses the risk of a lack of co-ordination. For those reasons we must welcome the consequences of the Local Government and Planning (Scotland) Act 1982, under which the new functions of district councils on tourism, the establishment of area tourist boards and the more recent establishment of the Scottish Federation of Tourism all help to ensure that the interests of tourism will not lack sufficient co-ordination to back up local initiative. In that context, it is important to ensure that the rate support grant recognises the new responsibilities of district authorities, which will vary considerably with the extent to which they are active in tourism.
  I want to mention three areas of special concern to me. First, there is the valuation and rating of caravan sites. This matter was first raised more than two years ago. If the Opposition had made rather more succinct speeches in the Rating and Valuation (Amendment) (Scotland) Bill Committee stage, we would be about to approach that matter. It will help to rectify the unfair anomalies that have acted against the interests of tourism in Scotland.

  745
  Perhaps more urgent is the taxation of self-catering establishments. We are grateful for the extent to which the Government have responded to representations following the somewhat arbitrary action of the Inland Revenue in changing from case 1 to case 6 of schedule D the basis on which that activity has been assessed for taxation. However, I am not yet convinced that the Government's propositions for inclusion in the 1984 Finance Bill will wholly meet the needs. I hope that they will be willing to listen, if necessary up to the Committee stage of that Bill, to ways in which the position might be improved.
  One is immediately struck by the effect on the tourist industry of the unfair way of taxing those who run self-catering establishments. That fundamentally derives from the not fiscally neutral relationship between earned and unearned income; between whether it is a good thing to rent accommodation with a service or only to rent accommodation and provide one's own service. Those are distortions, and not the least result of the Inland Revenue's action is the creation of a distortion between self-catering cottages and caravans.
  The third area of concern is that, apparently, every now and again the Home Office picks up a great big file marked, "How can we get more television licence fees paid for by hoteliers?" Despite the representations on many occasions that that would be a foolish proceeding, it keeps producing the file. I hope that my hon. Friend the Minister will encourage the Home Office to put away the file for good. Home tourists, who comprise 90 per cent. of tourists in Scotland, are already paying for television licences at home. Why should they pay for them again when they use a hotel room?
  Mr. Maxton: The hon. Gentleman's argument is astonishing. How can he claim that, in a block of flats designed for elderly people, each of the residents should pay a full television licence fee, but that the Hilton hotel in London should pay only one fee to cover many sets? Where is the justice in that? If more revenue came from hotels, there would be a better broadcasting service.
  Mr. Henderson: The hon. Gentleman knows that sheltered accommodation for the elderly is in a category for which a different television licence fee is payable. When elderly persons are living in their own dwellings, a distinction is drawn between one kind of accommodation and another, and between one person and another. Not least important is the fact that elderly people living in their own homes make much more frequent use of a television set than anyone staying in a hotel bedroom.
  We wish to encourage those providing services in the tourist industry to make them better and more attractive, and that could be done by the provision of television sets in hotel rooms. They may be of marginal use, but are invaluable in attracting customers and making them feel that they are well catered for. It is counter-productive to suggest that hotels should hold independent licences for each room. I hope that the Home Office will stop talking about television licences, and leave the subject alone.
  I have some questions for the Minister, which I shall ask briefly. I understand that the Department of the Environment has been involved in consultations over several matters. What progress has been made on controlling camping and caravan sites, and the setting of model standards for them? Those standards have been
  746
  discussed in more depth south of the border. In addition, what progress has been made with respect to the code of conduct, and the issuing of exemption certificates for caravan rallies? In each case, will the Minister bear in mind the distinctive Scottish position? I should not like Scottish authorities to feel that they must tag along with the Department of the Environment.
  I understand that the responsible authorities have estimated that the international tourist market is likely to double by the end of the century. It is important that Scotland should take a full share of those developments. I welcome the Bill for that reason and as a further sign of the Government's commitment to the development of the tourist trade in Scotland.
  7.6 pm
  Mr. Malcolm Bruce: I welcome the principles behind the Bill, although I regret that the Government have taken so long to introduce it. The proof of the Bill, once it has been passed, will be in its practical application, and how well it works.
  A number of the Bill's provisions give cause for concern. How can an effective promotion of Scotland be mounted overseas on a budget of £200,000? It is difficult to imagine how that can be achieved, knowing what one does about the overseas market and the generally high cost of overseas promotions and advertising. In that context, £200,000 will not make a huge difference. The British Tourist Authority might use that sum, or indeed the Bill, as the basis for downgrading its commitments to Scotland. It may feel that it can afford to play down Scotland, in view of the fact that it can make its own way. We are in danger of finishing worse off than before.
  The Bill will be judged on how effectivly the Government can ensure that the British Tourist Authority —which is likely to become confused with the English tourist board — will continue to support the Scottish tourist board.
  There is little point in increasing the promotion of Scotland overseas if we do not ensure at the same time that it will find a ready market. As many hon. Members have noted, Scotland has many attributes to promote, but there is a great deal more than we should be doing to make the most of what we have.
  It is time, for instance, that the Government stopped believing that London is the gateway to Scotland, and that they encouraged people to make a Scottish airport their first port of call in the United Kingdom. To achieve that there must be more direct flights into Scotland from the continent, and from across the Atlantic. There should be direct ferry services from the continent and Scandinavia.
  Generally, we must ensure that people see Scotland first, and do not regard London as their entry to Scotland. That would end the futility of the argument that is repeated every six months about whether to build a third London airport. We need that like we need a hole in the head. The airports we already have should be used more effectively, and the traffic distributed more evenly.
  It is regrettable that the debate is taking place immediately after a Scottish Office statement about the retraction of its commitment to road equivalent tariff in the islands. That is a major factor in encouraging tourist traffic. Although the Government support ferry services to the islands, the fundamental reason why road equivalent tariff has been withdrawn is that they are not prepared to pay for it. Having assessed the cost, the Government have

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  decided not to go ahead with the scheme, and as a consequence of the Government's decision not to stand by their commitment, the remoter, more outlying areas of Scotland will be faced with higher tariffs. By allowing a cut-off on the long distance routes, road equivalent tariff would be a major contribution to ferry services to the inner Hebrides, and to other islands most in need of the benefit. The Government's explanation of why and how the tariff cannot be paid is unsatisfactory. The perception is growing —the hon. Member for Linlithgow (Mr. Dalyell) was ruled out of order when he referred to it — that an analogy can be drawn with the Falkland Islands. The remote islands of Scotland require support in order to be viable communities. The people living there will not take kindly to the idea that the Government cannot afford to provide the necessary support when they can afford to squander hundreds of millions of pounds on the proposed airport on the Falkland Islands. The Government will find increasing awareness of that in the Scottish islands.
  Mr. Henderson: Will the hon. Gentleman give way?
  Mr. Bruce: No. I shall give way in a moment.
  If the Government can spend that amount of money on a remote island group on the other side of the world with a population of 1,800, they should not withdraw their commitment to provide road equivalent tariff to the islands of Scotland at a cost of about £10 million.
  Mr. Bill Walker: Perhaps the hon. Gentleman should do his homework a little more carefully before he deals with the support given by Governments of all colours to the airfields on the Scottish islands. Furthermore, he should reflect on the fact that the airfields would not be on the islands if they had not received Government support. The hon. Gentleman should also study the number of flights to the islands.
  Mr. Bruce: The hon. Gentleman's point is not contrary to what I have said. We need more support. I acknowledged that the Government were supporting services to the islands, but I also said that they do not support them enough and were going back on their commitment. That will cause considerable resentment in the islands.
  Mr. Henderson: Will the hon. Gentleman give way?
  Mr. Bruce: I shall not give way. I should like to proceed with my argument.
  The promotion of Scottish tourism is dependent on having an effective tourist industry, properly supported at home. In a number of instances the Government could recognise the need to maintain viable communities in the rural areas. It has already been mentioned that in many rural areas tourism is a major source of income and employment. Its potential is much greater than has been realised. It is not a happy circumstance that the Government are not providing a rural development programme to maintain the fabric of rural communities, o to enable them to support not only the indigenous inhabitants but the visitors, and to maintain the amenities, shops and services that make those places worth visiting.
  I shall quote a specific example of how public money has been spent in my constituency, which has been greeted with scepticism in the village of Collieston. In the past two or three years Alexander's has withdrawn the bus service from that village, which now has no bus service at all, yet £20,000 is being spent on a tourist car park, 75 per cent.
  748
  of which has come from a public grant. The people were not consulted about the provision of the car park. Understandably, they find it strange that money should be spent in that way when money could not be made available to support the bus service, which is the lifeline for the villagers.
  The Government should address themselves to such issues as that if they want to ensure that the rural areas of Scotland can take proper advantage of the tourist industry, which the Scottish tourist board is being allowed to go overseas to promote.
  Mr. Henderson: The hon. Gentleman's party supported the Labour Government in the Lib-Lab pact. Since that time the Conservative Government have multiplied by three the support for services to the islands. It is astonishing for his party to say that the amount of money is still not enough. 'When one thinks of support given in respect of hill livestock and other matters of crucial importance to the hill areas, such criticism comes ill from the hon. Gentleman.
  Mr. Bruce: I have not denied that the Government have supported the islands. I have repeatedly said that the Government made a commitment that they would accept the recommendation to move towards road equivalent tariff, but today they withdrew it, which is reneging on the commitment. That is what has happened, and the Government know it. The Under-Secretary will find out how his constituents feel about that when he goes back to his constituency at the weekend, assuming that he does.
  What is needed, if we are to promote Scotland effectively overseas, is better facilities, better supported and promoted. We have seen the mix of private and public sector support for tourism, which can be successful. In the past, however, there have been significant hiccups. When I was a candidate for my constituency, some enterprises were founded which have proved successful, such as the Lecht Ski Company development and the transport museum in Alford. Both those projects were endangered by the decision of the Labour Government to withdraw development area status or to downgrade the status of the Aberdeen employment area. Those areas could have lost tourism assistance. However, thanks to a fairly united local campaign, we managed to persuade the then Government to change their rules. The point at issue is that for such projects to be successful there has to be underwriting and support to enable people to make the investment.
  There is now a possibility of additional ski developments. There could be a conflict with the conservationists. Having designated an area for ski-ing, it is important to recognise that it might develop and expand. If we say that the company cannot provide another slope, lift or tow, we should not have given it permission to start the development in the first place. The essence is that, if a ski development thrives, it will grow and will need to take up more of the hill. We should decide which hills are suitable and not change the rules halfway through. I am not suggesting that the Government have done so, but that matter has been raised. I hope that that policy will be adhered to.
  We should recognise the contribution in income terms that tourism can make to rural communities in the form of farmhouse holidays and bed-and-breakfast accommodation. It is an important source of income, but the Scottish

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  tourist board, both at home and overseas, could promote and regulate it better. The Irish tourist board has promoted Ireland's very successfully, and we should learn from that experience. The tourist board should be prepared to grade bed-and-breakfast places and promote them. They are a feature of Scottish holidays. One can stay with a Scottish family, work on a Scottish farm and get the flavour of the country while supporting the community in an important way by supplementing the rural income. Many small tenant farmers in the less favoured areas and hill areas are dependent on such extra income to enable them to survive, given the marginal nature of such farming.
  A point that is related to that matter, but different, is the need to find the right balance for the role of holiday homes in rural areas. We must equate two separate problems. Most of us who are concerned about maintaining the population in rural areas and viable rural communities are disturbed when houses that are occupied are sold as holiday homes, thus taking out of the community a permanent residence. Measures should be taken to prevent that from happening. Change of use planning consent should be required in those circumstances.
  I appreciate the difficulty of striking the balance. We also need to ensure that properties in rural areas which may not be used and which are empty, derelict or run down are upgraded and used as holiday homes. I do not suggest that that balance is easy to find, but we should aim for it. We should encourage people to renovate those homes as holiday homes if otherwise they would not be properly used. We should recognise that that is a real contribution to income. Having been lobbied on a number of occasions, I recognise that the implications of rates and tax on such businesses must be taken fully into account.
  The hon. Member for Linlithgow (Mr. Dalyell) referred to giving grants to heritage projects and developments. I recognise the value of that. Having had experience of the wrong end of it, I do not believe that the Government should give grants or assistance for the development or renovation of castles and country houses unless those people are prepared to give access to the public, having had the benefit of the grant. That has not always been applied as a condition, and it should be. Provided that that criterion is applied, that is perhaps a reasonable line to follow.
  I wonder whether the Minister has had any thoughts on representations that have been or will be made by the Scottish tourist trade, particularly the hotel, restaurant and pub trade, about the differential in rates between comparable premises in Scotland and England. The trade claims that in comparable premises in Scotland people pay two or three times per room or square foot more than in England. Obviously that puts Scottish premises at a disadvantage in the international market or compared to England.
  Those points must be taken on board. There is no point in spending a relatively small amount of money —£200,000—to promote Scotland overseas if we do not continue to develop, improve and extend the facilities that we are promoting. We shall probably have to monitor closely the £200,000 because it is nothing like enough to give Scotland the maximum benefit from tourism. That major industry can contribute a great benefit, and, sadly, it is underexploited at present.
  7.19 pm
  Mr. Conal Gregory: As both the Secretary of the all-party parliamentary tourism committee and the hon. Member for York, where tourism provides jobs for over 6,800 people and creates an estimated turnover of £42 million, I recognise the importance of tourism as a major economic activity. Therefore, although a Yorkshire Sassenach, I welcome the opportunity that the Bill gives the House to consider tourism, especially Scottish tourism.
  The promotion of Scotland should be seen in the context of marketing Britain abroad. My hon. Friend the Minister of State, Department of Trade and Industry, spoke on 22 November of the Government's recognistion of the importance and potential of tourism. He referred to the 1982 turnover of £8·5 billion, which almost matched that of the motor industry. In his review announced last November he wrote:
  "Within the institutional framework it is the job of the tourist boards to work together and to co-ordinate and foster an industy, which by its nature is fragmented and diverse."
  The Bill will not necessarily lead to greater harmony and co-ordination — some people fear the reverse. While acknowledging that the Bill extends powers to permit the Scottish tourist board to undertake its own promotion abroad, I shall distinguish two principal consequences.
  First, there will be a diminution in the overall marketing of Britain. We shall not have a broad overview. Who will be responsible for promoting Britain abroad? The Bill takes us, in part, back to the days before the Development of Tourism Act 1969. A fragmented structure just at a time when we see a distinct growth in the industry and in its job vacancies, is not to be welcomed. It may in time lead to a reduction in real terms in the grant to the British Tourist Authority. Britain does not want to divide its resources if that means separate facilities—as shown, for example, by the United States and Australian states. The BTA will continue to be the prime promoter, but the overall strategy will have been lost.
  Secondly, there will be a growing demand by other boards to undertake separate overseas marketing. Some boards, such as the Northern Ireland board, asked the BTA to do the promotional work for them even before the 1969 legislation. So far Wales has shown that it does not wish to follow the Scottish path, but I wonder for how long. Is my hon. Friend aware that regional tourist boards already undertake promotions abroad, either independently or in harness with the BTA? The Yorkshire and Humberside tourist board, in addition to its representation at the world travel market where its stand won first prize, will fly the flag of this key English region at the ITB in Berlin, just as it did a short time ago in Utrecht and Stuttgart. In 1983–84 the board will spend £59,400 on promoting tourism abroad and in 1984–85 the estimate is £62,500. That represents 11 per cent. of the total funds available to it, and yields a staggering £85 million to £90 million in overseas income. One might say that that is the bargain of the decade.
  However, there is so much potential that one worries that the Bill will increase the inequality. I hope that the Minister will discuss this with his hon. Friends who have responsibility for the rest of Britain and that there is consequential consideration for other regions. Otherwise, the financial provisions and the promotions undertaken will continue to widen the imbalance.
  Mr. Dalyell: The hon. Gentleman's comments are of interest and importance to the debate. As an English Member interested in tourism how does he regard the job of the chairman of the British Tourist Authority? Given that there are separate Scottish arrangements, does he accept that the man or woman in that position should have equal regard for Scotland and for the regions of England? Would it not be only human if the English Members were to ask the chairman of the English tourist board searching questions granted that the Scottish position was separate? In a nutshell, is it not unreal to have a chairman of the English tourist board, who is also the chairman of the British Tourist Authority, and expect him to show the same responsibilities to Scotland as to England? I suspect that the hon. Gentleman spoke the truth.
  Mr. Gregory: The hon. Gentleman raises a very valid point. However, with respect, it should be directed not to the Back Benches but to the Government Front Bench—not necessarily to the Minister who will reply, but certainly to his colleagues. I hope that the hon. Gentleman's points will he taken on board.
  7.26 pm
  Mr. John Home Robertson: I welcome the hon. Member for York (Mr. Gregory) to the debate, which many hon. Members expected would be a purely Scottish debate. However, it is right that an hon. Member who is interested in the tourist industry, as he is, should express his interest. He has just scuppered my first point, that the Bill could perhaps more appropriately have been dealt with in the Scottish Grand Committee, as it is noncontroversial. There would have been no need to debate it on the Floor of the House and take up valuable time. However, since he took the opportunity to intervene in the debate, it proves that it was right to refer it to the House.
  I, like other hon. Members, give the provisions of the Bill a broad welcome. It would be rather inconsistent to do otherwise because I was one of the sponsors of the Bill introduced three years ago by the hon. Member for Dundee, East (Mr. Wilson). I welcome the fact that the Government have been converted to the idea which some of us put forward three years ago. Having supported the idea then, it is right that I should continue to support it now.
  It is right that the Government should lift the idiotic restrictions on overseas promotion activity by the Scottish tourist board. I remain anxious, as do other hon. Members, about the residual influence of the British Tourist Authority, not least because the chairman of the English tourist board is the chairman of the BTA. The BTA would inevitably be biased in favour of England, which is by far the biggest part of the United Kingdom. Because the chairman of the English tourist board is also the chairman of the BTA, Scottish tourism intersts will be handicapped.
  However, I am curious about the creation in the Bill of a new power for the BTA to give directions, or a statutory right to be consulted, to the Secretary of State for Scotland. I am unhappy about that. Some hon. Members wonder what the purpose of the BTA is. There is a strong argument to the effect that that body is one of the quangos which could usefully be made redundant. The English, Scottish and Welsh tourist boards all can and do an excellent job to promote the tourist interests of their areas, including promotion overseas. I wonder what the BTA will do.
  Mr. John Corrie: I agree with the hon. Gentleman's argument. Does he not accept that there needs to be a co-ordinating body to bring the national tourist boards together so that they do not compete with or plan against each other? Does it not have a small role to play in that way?
  Mr. Home Robertson: This is the perennial problem for all things Scottish. As soon as a Scottish interest becomes subsumed in a United Kingdom body, it tends to get squashed because of the sheer size of our big neighbour England. As we have seen from past tourist promotional material published by the BTA, it was oriented very largely to London and the splendid tourist attractions in England. Therefore, Scottish attractions have tended in such promotional material to play second fiddle. I welcome the fact that the Government have given the Scottish tourist board greater independence.
  As we are extending the scope and powers of the Scottish tourist board, I should say a word or two about its composition. I am a little worried that local authorities have no direct representation on it in spite of the fact that the Local Government Planning (Scotland) Act 1982 devolved all tourism to district councils and positively encouraged the establishment of area tourist boards which, in most cases, are coterminous with district councils. It seems odd, given their interest in tourism, that district councils and island councils should not have a direct say on the Scottish tourist board.
  That point is being repeatedly made for and on behalf of the East Lothian tourist board which promotes tourism in my constituency. As other hon. Members have been plugging their areas, I shall plug the tourist attractions of my constituency. The land and seascapes and historical sites in and around East Lothian are second to none.
  Mr. Dalyell: Hear, hear.
  Mr. Home Robertson: I hear my hon. Friend the Member for Linlithgow (Mr. Dalyell) saying, "Hear, hear," and well he might. As he knows, we have the Lammermuir hills, the harbours of Dunbar and north Berwick, Tantallon castle, the Muirfield golf course, the Bass rock and much more, including the mining museum at Prestongrange and the memorable battlefield at Prestonpans. It is highly memorable because it is one of the few battles against the English that we won. Those are some of the attractions of East Lothian. The south-east of Scotland has many other splendid tourist attractions, such as those of the Borders region and Edinburgh; and, in my hon. Friend's presence, I must also mention Linlithgow.
  The East Lothian tourist board has repeatedly appealed to the Scottish Economic Planning Department and to the Minister to appoint a member to the board from somewhere in the south-east of Scotland—from Lothian, the Borders or the Edinburgh area. I have a copy of the latest letter that the East Lothian tourist board has received from an official of the SEPD dated 22 September 1983. It states:
  "As explained previously, the Secretary of State has regard in making appointments to the Scottish Tourist Board to the importance of maintaining a satisfactory geographical spread of interests, but a more important factor is that members should have the skill and ability to take an all-Scotland view of the tourism industry. Candidates resident in the areas you mention are of course considered for appointment in the same way as candidates from other areas."
  They may have been considered, but they have not been successful.

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  I shall refer to the list of members of the Scottish tourist board. We have the splendid Mr. Alan Devereux, the chairman, who resides, I understand, in Giffnock and who says in "Who's Who" that his hobby is running for aeroplanes. That would appear to be the case from the rather breathless style of chairmanship and promotion that he adopts. He comes from the west of Scotland. There is Mr. R. A. Fasken, who represents, I understand, the Highlands and Islands Development Board; a Mr. I. F. H. Grant, who has to do with the Royal Bank of Scotland; Sir P. Hutchison, who is, I think, resident in Dumbarton and who has to do with the Stakis organisation; a Mrs. Bell, who I think comes from Lanarkshire. I do not know what her interest in the tourist industry is but I am sure that she does a good job on the board. Mr. G. M. Simmers of Scottish Highland hotels and Sir Alan Smith of Gleneagles hotels complete the list. Commercial tourist interests are amply represented and there is considerable representation from the west of Scotland and the Highlands. No doubt that is right.
  There is probably a case for extending the membership of the board to take into account local authorities' interests not least because of the specific duties of district councils and islands councils in the promotion of tourism. There is also a strong case for someone from the south-east of Scotland to put the case directly at board level for that area.
  This is the first time that I have addressed the House as a Member sponsored by the Transport Salaried Staffs Association. I am not sure whether I should have declared that interest at the beginning of my remarks. I know that the TSSA would have wanted me to express anxiety on behalf of its members who are involved in the management of hotels which the Government have privatised or are about to privatise. I know that the union is worried about what is happening to some of those hotels, particularly those in Glasgow. It is worried that the Government have washed their hands of some of those important previously publicly owned hotels which could have benefited from continued public ownership and further public investment rather than being simply got rid of or given away cheaply, as has happened.
  The TSSA would also want me to say that it is pretty stupid to introduce tourist legislation such as this when Government administrative action is forcing British Rail to cut services and close stations such as Ardrossan harbour, thus making it more difficult for tourists to move around in Scotland.
  One could make more of or less the same point in respect of the collapse of the Scottish road system. I was interested in a letter which was circulated to all Scottish Members last week. It was a copy of a letter sent by the Automobile Association to the Secretary of State for Scotland. It pointed out that in an unspecified region of Scotland it has been published that the roads maintenance programme had been slowed down as a result of Government expenditure cuts to such an extent that the roads—wherever it may be, and perhaps we can find out — would only be due for regular comprehensive resurfacing once every 200 years. Given that the average tarmac road surface is reckoned to be good for about 20 years, that leaves us with a pretty bleak outlook for the future of the Scottish road network. I do not know how on earth we will attract tourists to travel around Scotland if
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  our rail services have been seriously neglected and if our road network is rapidly deteriorating into a network of dirt tracks.
  I repeat my support for the Bill's narrow provisions, even if I am alarmed about many of the connected things that the Government are doing, to which I have referred. I wish the Scottish tourist board well with its new powers. I hope that they will benefit East Lothian, as well as some of the traditional tourist areas such as the Highlands and islands.
  7.38 pm
  Mr. Bill Walker: Unlike the hon. Member for East Lothian (Mr. Home Robertson) I welcome the fact that the debate has taken place on the floor of the House, because I believe that the Bill has United Kingdom implications, and it would have been quite wrong to restrict the debate to the Scottish Grand Committee. That is something about which we cannot agree.
  Mr. Maxton: My hon. Friend the Member for East Lothian and I would not really want the debate to take place in the Scottish Grand Committee; we would prefer it to take place in the Scottish assembly in Edinburgh.
  Mr. Walker: The hon. Gentlemen who are paddling this canoe now were paddling it some years ago in the House, but were sunk. I have no doubt that they will continue to paddle it as they do, on narrow horizons and without seeing the implications.
  My constituency of north Tayside is one of the most beautiful tourist areas in Scotland, embracing the highlands of Perthshire and the highland areas of Angus. Some may dispute that claim, but they cannot dispute that tourism is the largest single provider of jobs in my constituency, and in some ways that makes it unique. That is why I have a constituency interest in the Bill.
  The hon. Member for Linlithgow (Mr. Dalyell) and I do not agree on many subjects. However, unlike the hon. Member for Dundee, East (Mr. Wilson) I have never doubted the hon. Gentleman's sincerity and integrity and the way that he works for the good of his constituency and the people of Scotland. The hon. Member for Dundee, East devalued the House by the way in which he attacked the hon. Member for Linlithgow.
  I am sorry that my hon. Friend the Member for York (Mr. Gregory) is missing, as he properly drew attention to the English dimension. However, Scotland is more than just a region. It has its own laws and, because of that, it should not be and must not be seen as a region of the United Kingdom. The regions of England do not have separate laws, so Scotland is unique in that respect.
  We must keep in perspective what can be achieved when the Bill becomes law. Promotions by the Scottish tourist board overseas will be subject to the same demands and limitations that face any organisation attempting to improve its share of an overseas market. There will be the sheer size of the potential market to be covered, the possibly massive cost if one is to market sensibly, and the demands of the professional skill in the selection of the particular segments of an overseas market for promotion.I imagine that the Scottish tourist board will have in mind the market of north America where it can attempt to promote Scottish tourism to encourage the people to spend their holidays in Scotland. Many will consider it a

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  lucrative area in which to promote Scotland. However, I caution the House not to expect too much. It is one thing to be allowed to promote Scotland overseas and another to supply the required funds to produce meaningful and measurable differences in the number of people coming to Scotland.
  I should like to believe that the Bill will mean many more overseas visitors coming to my constituency, where the tourist industry is the largest employer. I shall do what other hon. Members have done and promote some of the more interesting parts of my constituency. I cannot promote it all because it is 2,000 square miles, and all of it is beautiful. Places such as Pitlochry, Dunkeld, Aberfeldy, Glen More, Loch Tay, Loch Rannoch, Glen Shee, Glamis castle, Scone palace and Blair castle are household names, and every year thousands of visitors come to enjoy the delights of this part of highland Scotland.
  Without these visitors, many of my constituents would be without work. That is why I welcome the Bill, but it is a qualified welcome. I pay tribute to the work done by the British Tourist Authority in the past. It has come in for some savaging, but I have made a point of studying the work that it does, particularly in north America. It is from this market that most of us are expecting results. Having made such a study, it is my considered judgment that within the budget available to it, it has done a good job. I place on record my view that it has always given Scotland a more than fair share of its promotion. Some of the hon. Members who have criticised the BTA have never visited its offices in New York; otherwise they would know that about 40 per cent. of the display area has, for many years, been devoted to Scotland. That is not surprising when one considers that for many years the director responsible for the project in north America was a Scot. It is not unusual to find Scots in these key jobs.
  I see little sense in promoting Scotland overseas if the Inland Revenue cannot be persuaded to take a realistic view of the letting of self-catering facilities in Scotland. Much public money has gone into developing facilities in recent years. Furnished accommodations and caravans provide most of the available bed places. While we are on the subject of caravans, I thank my right hon. and hon. Friends on the Front Bench for taking up my private Member's Bill and putting its contents into a Bill that is now going through the House, and that I hope will become law. I wish to place on record my thanks and those of the caravan industry for that. However, if the Inland Revenue continues to pursue the line that it has taken in correspondence, it seems that it will seek to change the basis of assessment for all taxpayers with unagreed accounts in terms of furnished letting, particularly in the self-catering industry.
  Mr. Albert McQuarrie: I am interested in my hon. Friend's comments about holiday letting. I am sure that he will agree that, in the rural areas in particular, where farmers have developed crofters' houses and spent money furnishing them and keeping them in good order for rental, it is farcical for the Inland Revenue to say that any income from them is unearned income. Surely that goes beyond the bounds of anyone's comprehension, and it is intolerable nonsense to suggest that the work done by these people results in unearned income.
  Mr. Walker: My hon. Friend has, as ever, put his finger on the point. This is not unearned income. These properties have to be looked after and serviced and the income from them should be treated as earned income. I hope that my right hon. and hon. Friends in the Treasury will look favourably on the matter. Much public money has gone into the development of this aspect of tourism, and it would be a tragedy if it were to be destroyed simply because there are people in the Inland Revenue who do not understand the difference between providing a self-catering facility and providing nothing. In other words, such people are earning an income.
  I hope that the genuine concern expressed throughout Scotland and other parts of the United Kingdom as it affects caravans and furnished accommodation will be taken on board. I also hope that my hon. Friends on the Front Bench will draw to the attention of the Treasury the fact that the tourist season in some parts of Scotland can be short and the period being suggested by the Inland Revenue is not sensible in terms of the days and weeks available for such a facility. I remind my hon. Friend the Minister that in some areas t he important winter season is still being developed.
  There has been much about ski-ing in the news recently, particularly about the problems in my constituency where some skiers were stranded. If 2,500 people can be stranded overnight, that makes one realise what the tourist trade means to my constituency, because on an average weekend in the winter, upwards of 7,000 people travel the road between Blairgowrie and Glen Shee to ski at Glen Shee. It is vital to our interests that this continues, as the local hotels and self-catering facilities benefit. We have developed this in recent years, again with the assistance of public money, and I hope that this is kept in mind when the Minister speaks to Treasury Ministers.
  The other aspect is that if we are to develop the winter facilities we must make sure that the roads are adequate to meet the demands, that access to the sites is up to the job and, more important, that the capital equipment required to keep the roads open in difficult winters is available. We need to look at the whole. That is why I have asked my right hon. Friend the Secretary of State for Scotland to conduct an inquiry into the problems at Glen Shee during the recent bad weather, to help not only Glen Shee but the other parts of Scotland where we are trying to develop this type of facility.
  I shall not detain the House with details of the weakness and lack of understanding of the holiday furnished self-catering and caravan letting facility that have been manifested by the Inland Revenue in recent correspondence. Suffice to say that I see little sense in promoting tourism overseas if the sector of the tourist market in Scotland, which provides the bulk of the bed spaces available, is being forced out of business by other Government action.
  I remind hon. Members that overseas visitors represent 9 per cent. of all visitors to Scotland. They account for nearly 27 per cent. of all Scottish tourism, amounting to £200 million. Anyone who has been involved in marketing and promotion will realise how difficult it will be to increase those figures substantially. The cost involved in increasing the figures by just a fraction of 1 per cent. may well be in excess of the sums of public money that any Government may be prepared to find. We must view the matter realistically. It is nonsense to think that we can

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  increase the numbers simply by continuing to spend more and more money. The problem has to be viewed commercially.
  Earlier in our debate, the hon. Member for Paisley, South (Mr. Buchan) commented on the change of responsibiltiy for tourism from the regions to the districts. In my opinion, the hon. Member was out of order in suggesting that districts would neglect the arts. That was the inference I drew from his comments. The theatres in Perth and Pitlochry have always enjoyed substantial district support, and I need not remind the House that without its theatre, Pitlochry would be much less popular as an attraction for tourists. I therefore commend the good work that has been done over many years by the people who run the theatre and the support that has been given to the theatres in Perth and Pitlochry by the district council and by Tayside region, when it had the responsibility.
  I want to comment briefly on signposting, which was mentioned by some of my hon. Friends. I support what they said, because we need to give advance warning of tourist attractions and the tourist facilities that are available. We need sanity in signposting. That is not to say that I want north Tayside to look like some parts of the United States, full of neon signs. That is the other extreme. There must be somewhere between what we have at the moment and that ghastly extreme. We want the right balance. Can we not have a more balanced and sensible view of signposting? I am delighted that my district councils support my view and have supported my efforts to get sensible signposting for tourist facilities.
  The railway line between Perth and Inverness is an essential part of the infrastructure of my constituency. More important, it is essential for the tourist traffic. We must, therefore, continue to support that line, and that is probably true of other lines in Scotland.
  I was disappointed when another tourist facility was withdrawn from Perth — Motorail. I was probably its best customer. Now I have to go to either Stirling or Edinburgh. I find it difficult even to get bookings, whereas I never had any difficulties when the facility was available in Perth.
  I remind the House that £200,000 is not a huge sum for marketing and promoting tourism in Scotland. I therefore end my comments with the suggestion — it is not a frivolous suggestion—that perhaps there should be joint promotion by the three large foreign currency earners—whisky, oil and tourism. After all, one of the finest tourist attractions in Pitlochry is Bell's Blair Atholl distillery. There will be plenty of benefits for our whisky and oil industries in linking them with the tourist traffic, particularly in north America. I am confident that there is scope there, if the people concerned can only get together and do something worth while.
  7.54 pm
  Mr. John Maxton: Again, we have had from the hon. Member for Tayside, North (Mr. Walker) the argument that we hear over and again from the propagators of the free market economy, pleading for public investment in their own small areas, desperately trying to get something for their own people. The hon. Member for Tayside, North looks at me critically. He made a plea for Motorail, saying that he could always get a booking at Perth. He could get a booking because no one
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  else was booking there. That is why British Rail, as a result of the cash limits imposed by the Government, was forced to withdraw the facility at Perth. He made a similar plea about the railway at Perth and Inverness. I want that railway to be maintained because I believe in the maintenance of the railway infrastructure. Conservative Members keep pleading for the market economy, but they cannot do that and at the same time make special pleadings on behalf of their own constituents and constituencies.
  I said in an intervention in the speech of the hon. Member for Tayside, North that in my view this debate should never have taken place here. In fact, it should not have taken place at all, as my hon. Friend the Member for Clackmannan (Mr. O'Neill) pointed out to me. If we had had the Scotland Act in force, whose provisions were approved by the Scottish people in the referendum on 1 March — of which the fifth anniversary will be next week — the Scottish tourist board would have come under the Scottish Assembly. It would have been an independent tourist board, without any links with the British Tourist Authority except for informal links of cooperation. That would have been a much better arrangement.
  I give this Bill a cautious welcome, because it will allow the Scottish tourist board a certain limited independence. However, it says that the Secretary of State for Scotland is subservient to the Secretary of State for Trade and Industry. The British Tourist Authority does not come under the Secretary of State for Scotland, but under the Secretary of State for Trade and Industry. The British Tourist Authority is responsible to him. If the Secretary of State for Scotland has to consult the British Tourist Authority before these offices are established, that makes the Secretary of State for Scotland subservient to the Secretary of State for Trade and Industry. We should bear that very much in mind.
  We have heard many pleas about tourism and the attractions of the tourist areas in Scotland. However, it is too easy to see the attraction of Scotland always in terms of the Highlands and Islands, the lochs, the mountains, the Burns country, even Galloway and Dumfries, and ignore the fact that many people in the United States and Canada did not come from the Highlands and Islands, Dumfries, Galloway or Ayrshire, but from the central belt of Scotland. They came from Glasgow. They left because they were driven out of the western belt in the industrial depression of the 1920s and 1930s. They were forced to make their homes in the United States and Canada. When they or their children come back, they want to come back to their home roots, the places they came from.
  Mention has been made of the Burrell collection, which has cost large sums of money. I have been there. It is housed in a magnificent building, although I am not so sure about the collection itself. It is the collection of a wealthy magpie shipowner who sailed semi-rotten ships and employed people on low wages to make a fortune that allowed him to collect that treasure.
  Less than a quarter of a mile from that collection in my constituency is a memorial to a man who much more typifies the west of Scotland, which people from other countries come to see. That memorial has been defaced. It has not been properly maintained because Glasgow district council does not have the money to do so. It is not fenced off to prevent vandalism and it is not properly protected. That is a memorial to John McLean, one of the great Glasgow Socialists. Let us remember that the west

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  of Scotland has a strong Socialist tradition and we ought to be proud of that heritage, build on it and ensure that people return to see it.
  Another example—Labour Governments are just as guilty as Conservative Governments—is the town of New Lanark, both as a superb example of early industrialisation many of whose factories and houses still survive, and as a memorial to one of the pioneers of Socialism and the co-operative movement — Robert Owen. Yet little or no public money has been put into it to preserve it. If it were a great cathedral or municipal building, if Bonnie Prince Charlie or Burns had slept there, New Lanark would have received public money, but because it represents Socialism, it has not.
  The late Emrys Hughes's widow lived her last years after the death of her husband in the home of Keir Hardie —Loch Norris in New Cumnock. That house has now passed into private hands when it should have been taken over by the local authority, which should have had the money and ability to turn it into a museum for the National Union of Mineworkers, the Scottish mining industry or the Socialist movement in Scotland. Instead, we have the great Burrell collection, which is a memorial to a rapacious, miserly shipowner who built up a fortune with which he amassed this so-called great art collection. It is marvellous, but there are other aspects to our heritage, as we in the Labour movement in west Scotland know. People come from the United States and Canada to visit the memorials of some of the great Socialists who lived there. On a slightly more frivolous note, we could build up a tourist trade with east Europe if we were to promote more of our Socialist monuments.
  Tourism, as other hon. Members have said, is not just about the promotion abroad of our attractions, hotels, or road signs which some hon. Members want so desperately to have plastered on our roads up and down the Highlands. I happen to prefer our roads as they are. It is about the provision of ferries, about which we were talking this afternoon, and facilities to those ferries. The hon. Member for Cunninghame, North (Mr. Corrie) discussed with me the problems of the electrification of the line to Ardrossan. If that station is not there the ability of the poorer people —not the very poor but the poorer people—to travel easily on their holidays to the island of Arran will be much reduced. Ferries are important and so are their facilities.
  Roads are important. It is important to have good roads, so that people can drive safely and know that they will be able to reach their destination in a set time. That is another problem in the highlands. One can travel from London to Perth or even Inverness quickly, but to travel off the main road or further north than Inverness and on to the islands is a long journey that cannot be timed. I know how long it takes to drive from London or its outskirts to my home in Hamilton, but I do not know how long it would take from Hamilton to the far north of Scotland. I can say how long it would take to travel to Perth or even Inverness, but beyond that I should have difficulties because there may be all sorts of hold-ups. We need proper roads and rail services. Those links are important, not just for Ardrossan, but elsewhere. I am not making a special plea for any particular area.
  My hon. Friend the Member for Paisley, South (Mr. Buchan) mentioned that Glasgow and Edinburgh have major artistic companies, museums and art galleries. Those are tourist attractions yet the Government have cut the Arts Council's grant for bodies such as the Scottish
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  Opera. They have changed the law. My hon. Friend the Member for Monklands, West (Mr. Clarke) will disagree with me marginally on this but the Scottish Opera has problems obtaining money from the districts around Glasgow, particularly Bearsden, Milngavie, and Eastwood—I call them the peripheral schemes—the suburbs that sponge so much on the ratepayers of Glasgow. The Arts Council has cut back. It is more difficult to maintain the facilities for both the public at large and the tourists.
  The Sports Council has also had its money cut. People may ask what that has to do with tourist attractions. In many Highland and Islands areas the ability of the Sports Council partially to fund sporting facilities that are an attraction to tourists has been important in the past. The hon. Member for Cunninghame, North will know that as well as I do. In his constituency the Sports' Council is funding less and less and tourist attractions are reduced.
  Local authorities provide many facilities in Glasgow, Edinburgh and throughout Scotland—facilities that are often unseen and unsung. The local authorities inspect hotels and their sanitary standards. They ensure that standards of food hygiene are maintained in hotels, restaurants and cafes. They maintain roads, sewerage systems and water supplies. Tourism must be seen as part and parcel of the economy. It cannot be taken in isolation, as Conservative Members like to try to do. They must see it as part and parcel of public expenditure. Perhaps more than any other industry tourism shows that in a modern economy the private sector cannot be divorced from the public sector. Conservative Members must learn that a viable private sector in a modern economy is impossible without much public expenditure to sustain it.
  8.10 pm
  Mr. Michael Hirst: I always vowed that if I ever spoke following the hon. Member for Glasgow, Cathcart (Mr. Maxton), I would take the opportunity to even the score on the obnoxious comments that he customarily makes, as he did this evening, about my constituents. However, in the interests of brevity and in deference to other hon. Members who wish to speak, I shall resist that temptation.
  Scotland has a claim to be promoted separately on the international tourist scene. As those who come from Scotland know, we have magnificent scenery, places of tremendous historical interest and superb leisure and art facilities that merit special consideration. However, I agree with the Minister that Scotland's tourism must be promoted within the British framework, and I should be most disappointed if we had a wasteful duplication of overseas offices.
  I listened with interest to what the hon. Member for Dundee, East (Mr. Wilson) said about the British Tourist Authority. I always find it distressing that he—a Scot like myself—should find it necessary, just on principle, to oppose anything that is British. When we are considering the promotion of tourism internationally, we must get above the xenophobia of some people in Scotland and recognise the work that is being done by the BTA to promote tourism in Scotland.
  However, I accept that the present situation may militate against Scotland getting a fair share of the tourist cake. All too often when travelling through Glasgow airport I have seen contingents of foreign tourists being jetted into that airport, being bussed to see Loch Lomond,

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  being shot over to see Edinburgh castle and other things in Edinburgh, and then being sent south again. These tourists are missing a great deal. If only those who plan their schedules gave them more than a day in Scotland, they would pass their time with profit seeing many of the beauties of Scotland.
  I hesitate to be boring at this stage in the debate and say something about the Bill. There must be proper co-ordination of the work done by the BTA, the new role envisaged for the Scottish tourist board and the work envisaged for the area tourist boards, and in that respect I see the Secretary of State's role as pivotal. The position has been criticised by Opposition Members without justification, for without co-ordination and consultation, I can see the various agencies endeavouring to arrogate to themselves responsibilities for the promotion of tourism abroad and in this country in a way that could be wasteful. I hope that the Secretary of State, in assuming that pivotal role in promoting tourism in Scotland, will recognise the need to co-ordinate that work and give speedy decisions so that the Scottish tourist board and the BTA can move in parallel.
  Mr. Craigen: Does the hon. Gentleman agree that the Scottish tourist board should give some perspective and co-ordination in this area?
  Mr. Hirst: That is so, and I am certain that the Scottish tourist board will be feeding information to the Scottish Office, which will be in close liaison with it and with the BTA to make sure that the money used for the promotion of tourism is spent in the most cost-effective way, and on that, I am sure that the hon. Member for Glasgow, Maryhill (Mr. Craigen) and I have no difference of view.
  Fear has been expressed by some of my hon. Friends that Scotland might somehow lose because the chairman of the British Tourist Authority may also be the chairman of the English tourist board. That is not a justifiable fear, because the chairmen of such organisations do not make all the decisions. There are their officials, boards and members, and I have yet to come across a board with such a domineering chairman that his members were not prepared to stand up to him and put forward alternative points of view.
  Mr. Wilson: Will the hon. Gentleman accept that it is not just a question of the appointment of a joint chairman for the English tourist board and the British Tourist Authority, but an intention to rearrange the affairs and functions of both organisations? If that happens, the functions that affect the English tourist board may come to dominate the interests and inclinations of the British Tourist Authority; and with a joint chairman, one might find the lines of communication being harmful to Scotland.
  Mr. Hirst: That is a hypothetical situation. The BTA has on it a representative of the Scottish tourist board. If the hon. Gentleman is putting forward the proposition that the chairman of the Scottish tourist board is incapable of fighting his corner for Scotland in the BTA, I profoundly disagree. If the hon. Gentleman believes that the functions of the BTA will be so neutered that they will start to become coincident with those of the English tourist board, then I agree that he has a potential worry. I do not believe
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  that that will be the case. I have enough confidence in my colleagues at the Scottish Office to believe that if they were aware that the functions of the BTA were being changed in such a way that Scotland would lose, the matter would be reviewed again.
  Mr. Wilson: In that case, will the hon. Gentleman explain why not only the current chairman but his predecessor in the Scottish tourist board sought powers to advertise and promote Scotland overseas? Surely they were not satisfied with what could be done within the ambit of the British Tourist Authority.
  Mr. Hirst: If the hon. Gentleman is adducing that argument as a justification for telling the Minister, "I told you so three years ago" on the then measure, his argument holds water. However, the current chairman of the Scottish tourist board recognises that Scotland is not just a region of the United Kingdom but a separately identifiable area with its own characteristics that are worthy of separate promotion. If it has taken some time for the merit of the case to be recognised, I am sure that the Government will espouse it with greater conviction than they would have done had they responded to the hon. Gentleman's view three years ago.
  When I first saw the Bill, I was modestly disappointed at the amount of money being set aside for the promotion of tourism in Scotland, for £200,000 will not buy much these days. Therefore I welcomed what the Minister said about the desirability of the Scottish tourist board engaging in promotions with various private interests.
  Last weekend I was in the north of Scotland, where I was impressed by some of the promotions that the Scottish tourist board has been doing with private interests. I hope that the Government will signal clearly to the Scottish tourist board that certainly Conservative Members have no ideological hangups about the board entering into joint promotion efforts with the private sector. I am convinced that there are great opportunities for the private sector to participate more strongly.
  Nobody underestimates the enormous potential that exists in tourism, particularly for the creation of jobs in the more remote areas. I spent part of last weekend seeking some snow on which to put on a pair of skis and fly downhill, and to initiate my small children into the art. I saw at first hand the sort of tourist facilities that have been developed; as it was not possible to ski, one had to go further afield to other places of interest. Remarkable steps forward have been taken in that part of Scotland, and we can be pleased about those developments.
  The international tourist is a demanding animal. He is accustomed to receiving a high standard of service and being satisfied with nothing less. While we speak of the commitment of the Government to tourism and the worthwhile steps forward that are being taken in the Bill for the special promotion of Scotland overseas, great fruits will be obtained in Scotland only if the message is clearly understood that there must not be second-rate service, that there must not be a sloppy attitude to things and that some of the traditional hours during which the Scots have been open for business for the tourist fraternity will not do. While much progress has been made in recent years, Scotland has enormous opportunity if it realises that alongside the promotion of tourism must be satisfied customers. The various services must be available for the tourists when they come to Scotland.
  8.19 pm
  Mr. Tom Clarke: I am delighted to take part in the debate—all the more so because, while my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) was suggesting that at some future date tourists from eastern Europe might come to see great monuments to Scots Socialists, I imagined myself sitting here waiting to be called in a debate on Scottish business, though I am not sure that that would represent the kind of tourist attraction to which my hon. Friend was referring.
  I shall deal in my speech with three points in response to what has been an interesting and, at times, a fascinating debate I had the privilege of serving on the Stodart committee. I believe that the Under-Secretary of State will acknowledge that the committee's recommendations had some influence on the Bill. I draw the attention of hon. Members to the thought which the committee, under the noble Lord Stodart, gave to the problem of local authority contributions to the arts.
  The report states:
  "Bodies such as the Scottish National Orchestra, Scottish Ballet and Scottish Opera depend for their finances on grants from the Scottish Arts Council, box office returns and to some extent on contributions from local authorities. We understand that some authorities are unwilling to support national arts companies because they do not see this to be a local responsibility, especially where the companies concerned are unlikely to perform in their areas. To most of us it seems that bodies such as those mentioned above should as national assets continue to receive public support from Central Government or its agencies, and not be dependent on annual contributions from local authorities."
  I signed that report, and that recommendation was unanimous. The unseemly disputes from time to time between one authority and another about who gave most to those national bodies would be avoided if the recommendation were accepted.
  I declare an interest because of my past employment by the Scottish Film Council. I thought it was of great concern that, from one year to the next, the Scottish Film Council could not be certain about what local authorities were to give. Much time was spent speculating on what might happen. Even in terms of the use of manpower, it is inefficient and wrong for such bodies to base their budgets, policies, presentations and role in the arts in Scotland on the whims of individual local authorities and on political changes. I hope that the Under-Secretary of State will take that point on board.
  The recommendations of the Stodart report seem to have influenced the Government's timing in the Bill on tourism, especially on overseas promotion. Scotland ought to be free to become involved in overseas promotion in its own right. Although I welcome the Bill, I hope that, in time, the House will be free to deal with a defect of the same type of grey area that the Stodart committee was set up to remove.
  On tourism, the committee said:
  "We are aware of the argument for giving the British Tourist Authority responsibility for promoting Scotland overseas along with other parts of the United Kingdom. We are however convinced that the distinctive attractions of Scotland and its high dependence economically on tourism merit a separate promotional effort abroad. We are in no doubt at all that this can best be done by the Scottish Tourist Board. Indeed, such an extension of the Board's powers is clearly logical when the Highlands and Islands Development Board already has them and uses them with such success. We recommend very strongly, therefore, that the Scottish Tourist Board should be given overseas promotional powers in its own right, and be solely responsible for promoting Scotland abroad, after consulting
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  district councils. (In saying this, we reserve the position of the Highlands and Islands Development Board, as we make clear in paragraph 154)."
  Those recommendations were not made lightly. Four pages of the Stodart report dealt with tourism. The Committee received an enormous number of representations from local authorities, the Scottish Tourist Board, the Highlands and Islands Development Board and so on. The decision taken in the light of those representations was unanimous. In this debate, I have not heard any argument that leads me to think that the Committee's recommendation on Scotland's right to promote its tourism should be lightly disregarded.
  In our approach to tourism, we want to seize upon this opportunity to ensure that there is some integration, continuity and understanding among those dealing with tourism at a local level, in Scotland, the United Kingdom generally and abroad. I am delighted that a number of hon. Members have rightly referred to the merits of their constituencies. The Stodart recommendation took into account the contribution which not only individual districts but areas within those districts have made and are capable of making to attract tourists.
  I am not surprised that Monklands should have become a focal point in the debate as a consequence of the speech by my hon. Friend the Member for Paisley, South (Mr. Buchan). I am delighted that he rightly complimented Monklands district council on its contribution to Scottish Opera. That district council has always been aware of its responsibilities in those matters even though it is part of an industrial area. Those who are dealing with other parts of Scotland have a responsibility also to accept the role that industrial areas are capable of playing. I recall Sir Kenneth Alexander—I am sorry to drop names at such an early stage in my parliamentary career, but my hon. Friend the Member for Linlithgow (Mr. Dalyell) refers with tremendous knowledge to distinguished gentlemen —giving evidence on tourism to the Stodart committee. When I asked what Coatbridge, an industrial town, would do for tourism, he immediately said, "Industrial archaeology." At the time, I wondered whether he had suddenly become an expert on the Government's industrial policy. On reflection, I believe—
  Mr. Craigen: He was an economics professor.
  Mr. Clarke: I take the point, and pay tribute to Sir Kenneth for his qualifications. I attempted to take that point seriously.
  On Sunday afternoon, I found myself in the constituency of the hon. Member for Stirling (Mr. Forsyth). There are remarkable ways of ensuring that hon. Members pay attention, and that is one of them. I was a guest of the Balfron Labour party, another distinguished Socialist organisation and, no doubt, in many ways a tourist attraction. Its members represent the future. I made my way from Balfron to Killearn, into the constituency of the hon. Member for Strathkelvin and Bearsden (Mr. Hirst), to Milton of Campsie in my constituency and then to the heart of Lanarkshire.
  During that journey I thought of this important debate. I realised that there was a considerable link between areas of beauty and industrial areas. I remembered the Kirkintilloch canal, the Monklands canal and the steel industry in Coatbridge, the old "Iron Burgh". There are industrial archaeology attractions in Scotland and those

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  who represent constituencies that are industrial areas should appreciate that. That is important to the Government's approach.
  My hon. Friend the Member for Linlithgow did not have time to refer to the canal museum in Linlithgow. I am sure that he would have referred also to Bo'ness, in part of his former constituency, where there is a museum containing exhibits that go back to industry in the 17th century. There are industrial attractions in various parts of Scotland.
  If areas such as Monklands and Strathkelvin are being generous in their contributions to activities in which they cannot easily participate—that seems to be accepted—it is reasonable that we should ask for a fair share of the funds that might be available for tourism and assert that we can offer tourist attractions as well.
  This debate on the promotion of tourism will be of great interest to people in every part of Scotland. When the hon. Member for Fife, North-East (Mr. Henderson) spoke, I recalled Mrs. Purvis, a chairman of North-East Fife district council, who was a member of the Stodart committee, who felt strongly that tourism was a main attraction in areas of industry and industrial development. That is a fair view, which should be encouraged.
  There are governments of other nations who are not as progressive as we would like to think Labour and Conservative Governments are, but I remember that in San Feliu, a small fishing village in Spain, the tourist authorities presented—I think that they still do—an amateur film festival that was sponsored by the Government's tourist department. It was aimed at attracting people to tourism in Spain, and at the same time to contributing to the growth of amateur cinematography. We in Scotland should consider the attractions and endeavours of the Scottish people that we are capable of providing in the rural areas, the central belt and elsewhere.
  When the Bill is enacted—there appears to be no major opposition to it—and the promotion of Scottish tourism takes place, I hope that the Minister will encourage his right hon. and hon. Friends to remember that those who represent Scottish tourist interests are there to represent Scotland, which means the whole of Scotland, including the part which I have the privilege to represent and which I have attempted to describe, albeit briefly.
  8.34 pm
  Mr. Martin J. O'Neill: I was expecting a number of Conservative Members to spring to their feet when you called me, Mr. Deputy Speaker, but obviously their voice has been exhausted. We have had a wide-ranging debate, Mr. Deputy Speaker, that has been due in no small measure to your generosity of spirit in interpretating the terms of the Bill. First, I apologise for my absence for part of the debate. I have been engaged, contrary to the ambitions of the Scottish tourist industry and those of my hon. Friend the Member for Monklands, West (Mr. Clarke), in trying to prevent the Polmaise colliery from becoming an industrial museum. I had to be out of the Chamber for part of the debate.
  I imagine that this debate has been welcomed by all Scottish Members, not least those who are members of the Committee that is considering the Rating and Valuation (Amendment) (Scotland) Bill. Once again, my hon. Friend
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  the Member for Glasgow, Maryhill (Mr. Craigen), has had to carry the burden of the initial Opposition Front Bench contribution.
  It is interesting that there has been a mass renunciation of Trappist vows by Scottish Conservative Back Benchers. We have had guides to virtually every Conservative constituency in Scotland and a useful expression of opinions. One is reminded in some respects of the conversion of Back Benchers in a previous Parliament when we were discussing the problems of inward investment. Those who were members of the Select Committee on Scottish Affairs at that time were very much opposed to bodies such as the Locate in Scotland Bureau. When the Goverment eventually considered the Select Committee's report on inward investment, they produced a compromise solution which, in many respects, was nearer to that for which the Opposition had been calling. The sponsors of the Bill of my hon. Friend the Member for Dundee, West (Mr. Ross), who are mainly Opposition Members, will have a sense of satisfaction in noting the apparent conversion.
  The Bill proposes to give the Scottish tourist board the right to spend £200,000 abroad on a more restricted basis than local authorities or the Highlands and Islands Development Board. To all intents and purposes, that is what the Bill proposes to do. Anxiety has been expressed about £200,000, which has to be set against the £7 million that is spent by the HIDB on grants and promotion. I understand that its accounts do not reveal the amount of money which is spent on overseas promotion. It might be helpful if the Minister told us how much the board spends on overseas promotion. I do not ask for that information in a mischevous sense to try to wrongfoot the Government. It will be helpful for us to know what other organisations within Scotland have been spending in the past.
  There is money that can be spent by district councils. My hon. Friend the Member for Monklands, West described the proceedings of the Stodart committee and the conclusions to which it came. The clincher is that the Government accepted the Stodart report and agreed that it was not sufficient merely to transfer responsibility to district councils. It accepted that there had to be a Scottish dimension abroad as well.
  I know that the Scottish tourist board has been extremely successful in establishing area tourist boards. In the Stirling and Trossachs area there have been considerable advances. Clackmannan, which has not been the most energetic authority in promoting the obvious attractions of my constituency, has been given an opportunity to present itself in attractive literature.
  I am led to believe that this is happening throughout Scotland, although the difficulties that the financial constraints impose on local authorities will limit the amount of money that they will be able to spend. The hon. Member for Fife, North-East (Mr. Henderson) hoped that the rate support grant would be adjusted to accommodate such payments or subventions from the district councils. The Under-Secretary of State is responsible for rating and related matters. I hope that he will tell the House whether greater provision will be made in the rate support grant for local authorities which depend on tourism, or whether they will have to levy a rate for it as in the past.
  We have heard talk today of substantial prizes for the Scottish economy. The Scottish tourist board has estimated that if we can get our act together—for want of a better expression—there is the prospect of 25,000

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  jobs in the next five years if we can double the number of tourists to 5 million. My hon. Friend the Member for Linlithgow (Mr. Dalyell)) mentioned the importance of giving the new tourist value for money.
  The Commonwealth games are likely to be a winner. Certainly, the 1970 Commonwealth games in Edinburgh were among the most successful that have been held. When we have a winner on our hands, it is essential that we are able to attract people on a basis of value for money, especially as many of the people who come to the games will be relatively young and will probably have only limited resources. One hopes that they will take advantage of the Commonwealth games to stay on in Scotland. Edinburgh is a major tourist centre which attracts many thousands of people to the Edinburgh festival.
  Some of the points which my hon. Friend made about the code of conduct may well be applied already by Edinburgh district council's accommodation board. Perhaps the Under-Secretary, who represents an Edinburgh constituency, will clear up that point. It would be useful to know whether we are establishing across Scotland codes which would certainly be appreciated and which would provide tourists from the continent with confidence in the accommodation that they book. In talking about promotion abroad, we must not forget to make such provision.
  Hon. Members have mentioned tourist developments which take account of, and go hand in hand with, cultural heritage. We have had convincing pleas for account to be taken of the industrial and social heritage of Scotland. Perhaps we should get away from an excessively tartan, "Bonnie Prince Charlie slept here" image, which is probably already attracting as many people to Scotland as it can.
  We should consider the effort of Glasgow district council. That council's "Miles Better" and "Come home to Glasgow" campaigns have been an outstanding success. The city has been able to take advantage of its architectural heritage and its cultural ties throughout the world. It is clear, too, that it will exploit—if that is the right word — to the full the outstanding asset of the Burrell collection. That example should influence our future efforts. I hope that the seemingly elastic £200,000 can be extended to help with that aspect of overseas publicity.
  The importance of good international air links has been mentioned. I am not particularly enthusiastic about freeports. They may or may not be a success. However, I hope that the future of Prestwick has now been guaranteed for some time to come. If so, we look forward to increasing air links with north America. We hope that some of the £200,000 may be utilised in conjunction with airlines that at present do not use Prestwick. Among those I include the so-called Scottish airline British Caledonian, whose only connection with Scotland at present, apart from its tartan insignia, is in its flights to and from Edinburgh.
  Mr. Bill Walker rose—
  Lord James Douglas-Hamilton: Steady on. That is a terrible statement. Will the hon. Gentleman give way?
  Mr. O'Neill: I realise that some hon. Members claim a monopoly on aviation matters. That is invariably the cause of some mirth on the Labour Benches. However, I
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  am prepared to give way to one hon. Member whose judgment in some matters I value—the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton).
  Lord James Douglas-Hamilton: Caledonian Airmotive employs 460 persons at Prestwick. As the hon. Gentleman is encouraging the development of the freeport at Prestwick, he should recognise the work that British Caledonian is doing in providing employment for the people around Prestwick.
  Mr. O'Neill: I was referring to British Caledonian in the context of flights into and out of Scotland. The airline claims a Caledonian connection, but provides only limited air links. I was talking not about the spin-off in terms of employment, but about attracting United Kingdom airlines to use Prestwick. British Caledonian is the only United Kingdom airline which has a tartan tinge, but it has only a limited role in providing flights to and from Scotland. Cynics would say that the only reason why British Caledonian retains its air links between Glasgow, Edinburgh and Gatwick is that if it did not do so, it could not justify calling itself British Caledonian. It is assumed that British Caledonian regards the routes as loss makers.
  If Conservative Members are as energetic in encouraging air links by British airlines to Prestwick as they are in defending British Caledonian, I shall be happy for the future of Scottish tourism. I would be happy to think that the £200,000 might be expanded by the kind of partnerships that have been hinted at by Conservative Members. They have suggested the possibility of joint projects. However, we have to take account of another element that is implicit in the legislation — the relationship between the United Kingdom body — the British Tourist Authority — and the Scottish tourist board.
  There is also a relationship between the Scottish Development Agency, the Highlands and Islands Development Board and local authorities. There is considerable confusion as to who should be doing what. Conservative Members mentioned that, and I hope that the Bill can be amended in Committee to clarify it. When different bodies have various links and responsibilities, confusion can arise. Although I did not agree with all that the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) said, I agreed that there should be a role for someone to co-ordinate those activities. That might fall to the Secretary of State for Scotland. I would prefer it to rest with the Scottish tourist board. We must get the type of balance that has been achieved with the Locate in Scotland Bureau. That would go some way to providing a balance between the one door that is required abroad and taking account of the specifically Scottish implications.
  It is unfortunate that the hon. Member for York (Mr. Gregory) is not here as he mentioned some anxieties. He endeavoured to be helpful. It is a bold English Member who speaks in a Scottish debate. Perhaps he feels that people who stop in York are on their way to or are returning from Scotland and that he therefore has an interest in our debate. He mentioned the Minister of State, Department of Trade and Industry. I agree that he has been unhelpful in his attempt to talk down the importance of the Bill. We recognise that the Minister might be playing to a slightly different gallery than the Scottish Office in this matter.
  There are dangers implicit in the appointment of the same person to the chairmanship of the British Tourist

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  Authority and the English tourist board. We are always suspicious of the actions of the Secretary of State for Trade and Industry. That caution goes back a long time. We are dubious about any proposition that involves asking someone to investigate the possibility of a merger of two bodies as we are certain that he will not do that unless he is fairly sure about the outcome of those investigations. The Opposition think that either the relegation of the British Tourist Authority to the English tourist board or the elevation of the English tourist board to being almost in competition with the Scottish tourist board would be bad for Britain, bad for England and dangerous for Scotland.
  Although the hon. Member for York spoke at length about the significance of the English regions and the extent to which they are allowed independence under the English tourist board, it is almost unanimously agreed in the House that, in tourist matters, Scotland is not a region of the United Kingdom. Its identity is significant in marketing terms and it would be difficult to split the one from the other. We could well end up with publicity that runs, "Come to England" with the phrase, "and visit Scotland" as an afterthought. We would be cautious of supporting that and are not happy about such a suggestion.
  Perhaps the Scottish Office would have preferred that the Minister of State had not made his statement. It would have been better if the Bill had been on the statute book before starting to talk in these terms. I am confident that the present chairman of the Scottish tourist board is able to hold his own with the British Tourist Authority. For someone who started off as a root and branch opponent of devolution, it has not taken him long after becoming chairman of a Scottish quango to see the virtue of some freedom of action.
  By and large, the Opposition welcome the Bill. We give it a cautious welcome. We are unhappy about the £200,000. We have said several times that we doubt that it can be put to meaningful use in promotions if we are to feature in European newspapers or major publications in the United States which, by common consent, have been regarded as the two main targets for promotional initiatives.
  Had the provisions of the Scotland Act 1978 been fully honoured, this debate would have been unnecessary. That Act provided that we should have the type of relationship which has been spoken of today — a constructive relationship between a Scottish institution and a body with responsibilities for the United Kingdom. As a supporter of devolution I regard the fact that the Act was not fully honoured as regrettable as this would have been an opportunity to see the two co-existing and working together. Nevertheless, the Opposition basically sympathise with the Bill's objectives. We suspend judgment on whether the £200,000 is enough. We would have preferred discussion about a merger between the English tourist board and the British Tourist Authority not to have been presented now. However, with those reservations we welcome the Bill.
  8.56 pm
  The Under-Secretary of State for Scotland (Mr. Michael Ancram): We are obviously grateful to the Opposition for their welcome for the Bill, although that welcome has been somewhat muted and, in the case of the hon. Member for Clackmannan (Mr. O'Neill), was
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  positively lukewarm. However, bearing in mind the way in which normally, regardless of the merits of the case, the Opposition oppose whatever the Government propose for Scotland, I suppose that we must accept with some gratitude the hon. Gentleman's attitude.
  As the hon. Member for Clackmannan said, this has been a wide-ranging debate. Taking notes of most of it, I have found it difficult to fit the speeches into a pattern, not least because of the far-ranging speech of the hon. Member for Linlithgow (Mr. Dalyell), some of the points of which I hope to deal with later. I am always struck during such debates by how many beautiful tourist attractions about which we so infrequently hear there are throughout the constituencies of Scotland. However, on occasions such as this they appear like birds out of the morning mist and fly over the Chamber to be admired. When I hear the hon. Member for Glasgow, Cathcart (Mr. Maxton) speak of Socialist monuments in his constituency and his far-reaching dream that Americans and others will come across the Atlantic to see a statue, presumably of him, I think that perhaps he is taking tourism a little far.
  I was a little disappointed by the speech of the hon. Member for Clackmannan because I think he offered little that was constructive to the debate. To use a large part of his speech to make what appeared to be a highly motivated attack on private airlines, specifically British Caledonian airways, is not in the spirit of promoting Scottish industry, Scottish tourism or Scottish business, but I suppose that is all that the House can expect from the hon. Member.
  It would take me a long time to deal with some of the detailed points that have been raised in the debate, and I hope that hon. Members will forgive me if I do not touch on all of them. If hon. Members will advise me of specific points to which they would like answers, I shall reply in writing.
  The hon. Member for Glasgow, Maryhill (Mr. Craigen) began with an important question about the standard of accommodation, and the Government's view on the matter. The upgrading of facilities is a key aim of the Scottish tourist board's development strategy, and must remain so. The STB welcomes applications for refurbishment and improvement grants. The grading schemes are currently being discussed with key sectors of the accommodation service, and the self-catering and caravan sectors are particularly aware of the importance of grading schemes. The hon. Gentleman will therefore note that there is some momentum and initiative in that respect. The hon. Member must appreciate that the STB is Government-funded and, indeed, is the Government agent for the tourist industry in Scotland.
  The hon. Gentleman asked about training for the tourist industry, and what was being done on this score. The prime responsibility for training in this area lies with the hotel and catering training board, and not with the Scottish tourist board. The STB has a role in the training of tourist officers, and in the training of tourist guides. The STB has been supporting the Scottish tourist guide scheme, and is offering advice by Scotbec — the Scottish Business Education Council — in the design of self-education courses for tourist operators, and those planning to set up new tourist business. The STB has therefore been active in this direction, which I hope is recognised by the hon. Member.
  The hon. Member said — this was reflected in a number of other speeches—that there were reservations about the Bill, and that the arrangements arrived at would

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  mean that less money was spent and less effort was made by the BTA in Scottish matters than hitherto. There is no justification for taking that view. The £200,000 that is being allocated to the STB to fulfil the provisions of the Bill is additional money and does not come from moneys previously allocated to the BTA. The BTA will continue as before its programme of promotions abroad covering all Britain, and the proportion of its spending relating to Scotland will not be reduced as a result of legislation.
  My right hon. Friend the Minister of State, Department of Trade and Industry, emphasised, following his review of the functions of the BTA, carried out by his Department last year, that he expected the BTA to have full regard to the needs of Scotland and of Wales in drawing up its overseas programme. So far as it is within the hands of Government to ensure that Scotland's promotion by the BTA continues at its present level, I assure the hon. Member that that is the Government's position.
  Mr. Fairbairn: What is the proportion?
  Mr. Ancram: The proportion is approximately 20 per cent., which is more than the per capita figure, but in a way reflects the sheer geographical size of Scotland. In my view, that proportion is about right in the circumstances, although it varies from promotion to promotion.
  Mr. Dalyell: Would the Minister give a considered reply to the point that was eloquently made by his hon. Friend the Member for York (Mr. Gregory) on the subject?
  Mr. Ancram: If the hon. Gentleman will allow me to make my speech in my own way, I shall deal with the point raised by my hon. Friend, but in the chronological order in which it was made.
  A number of Opposition Members have voiced their concern about what can he done with £200,000. As my hon. Friend for Argyll and Bute (Mr. MacKay) said, the figure will not stand alone, because it is the experience of the tourist boards in such promotions that there is a private financial input that has to be taken alongside the figure spent by the tourist boards. The proportion is about two to one. In these circumstances, we are talking about a figure nearer to £300,000 than £200,000 in terms of promotion. But there are obvious areas in which the STB is looking to achieve that degree of promotion under this legislation.
  The hon. Member for Maryhill mentioned encouraging airlines to fly people into Scotland. I understand that the STB is already discussing with Icelandic and Scandinavian airlines the possibility of promotions linked to their direct services to Glasgow and Aberdeen. That is one example of where action is already being taken. Equally, other promotional areas, both with the trade and separately, are being considered by the STB. We believe that the amount of money available will be sufficient to get the supplemental promotions off the ground.
  The hon. Member for Clackmannan asked me to give the figures for overseas promotion by the Highlands and Islands Development Board. The estimated figure for this year is £140,000. Since 1980 it has run at about £150,000 a year. It was a little more last year and is expected to be a little less this year, but that is the general level of provision for overseas promotion by the HIDB.
  Mr. O'Neill: I am grateful to the Minister both for providing that information and for giving way. Does he envisage a combination of the HIDB and STB on any promotions and development?
  Mr. Ancram: That is a matter for them. If they thought that there would be benefit in a joint promotion—just as the STB co-ordinates with the trade in promotion — no doubt they would consider that.
  A certain amount has been said about the position of the HIDB. I remind hon. Members that it has been in a unique position since its inception in 1965. The HIDB has exercised its powers responsibly and has kept in close contact with the BTA, but had the legislation to set up the HIDB been before us now I wonder whether we would have thought it better to include the HIDB in the Bill to ensure that there never would be a duplication of effort or the crossed wires that can so often ruin the promotions that are so important to tourism in Scotland.
  The Bill gives additional powers to the STB that will oblige it to change the way in which it operates. The Government believe that to ensure that the STB exercises its new powers so that they dovetail — dovetail is the right word — it is desirable to require it to seek the approval of the Secretary of State.
  Some Opposition Members have suggested that the BTA would have a veto on what the STB wanted to do. There is nothing in the legislation that gives the BTA, any veto. There is a requirement for the STB to inform the Secretary of State of its proposals, and for the Secretary of State then to consult with the BTA.
  But consultation, as I know from the areas in which I have statutory consultation, does not necessarily mean direction by the person with whom one consults. It is highly sensible that, where public money is being spent by the STB on the promotion of Scottish tourism, the Secretary of State should be satisfied that that does not duplicate or cross some equal form of promotion by the BTA. It is a sensible regulation that will well serve both the STB and the BTA in future.
  Mr. Gordon Wilson: It is common knowledge, although never fully admitted, that much of Government business is carried out in the Cabinet sub-committee. Is the Minister saying that the Department of Trade and Industry would have no say in any dispute between the STB and the BTA? I understand that he is saying that full responsibility will be borne by the Secretary of State for Scotland, and no one else.
  Mr. Ancram: Yes, the responsibility will be borne by my right hon. Friend the Secretary of State. That is what the legislation sets out. It deals with the amount of promotion available to the STB from the Scottish block. Of course, my right hon. Friend will be in control of the consultation. The hon. Gentleman is seeing difficulties that do not exist.
  Mr. Maxton: I must point out that clause 1(2) of the Bill says:
  "The Scottish Tourist Board shall exercise the power referred to in subsection (1) …"—
  that is what we are debating—
  "to carry on activities outside the United Kingdom only with the consent … of the Secretary of State who shall, before giving … such consent, consult the British Tourist Authority."
  The Minister is saying that someone else is responsible.
  Mr. Ancram: That is precisely what I said. Clearly, the hon. Gentleman has not been listening. The fear that the British Tourist Authority would have some sort of veto does not fit in with the words in the Bill, under which the Secretary of State has to consult, which is the limit of his power.

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  The hon. Member for Dundee, East (Mr. Wilson) indulged in a veritable orgy of self-justification. To suggest that the Bill is in some way the child of his Bill, and that today's debate would not have taken place had it not been for him shows that the hon. Gentleman has not studied the Bill very carefully.
  There are substantial differences between the Development of Tourism (Scotland) Bill introduced by the hon. Gentleman in 1981, and the Bill that we are debating today. I recollect that the hon. Gentleman envisaged—he was not able to write this into his Bill—that the Scottish tourist board would handle all overseas promotion of Scotland, and that the BTA take none of that work. I should have questioned the hon. Gentleman's political credentials if he had not suggested that arrangement, but that suggestion is not in the Bill.
  There is a great difference between the Bills in the amount of control exercised over the Scottish tourist board's activities. It is difficult for the hon. Gentleman to claim with any justification that the Government have come along three years later with a replica of his Bill. The new Bill is a very sensible measure, whereas the 1981 Bill went too far, and would probably have ended up with a series of conflicting promotions by the tourist boards in various parts of the United Kingdom. Taxpayers' money would have been frittered away unnecessarily on competing promotions.
  Mr. Wilson: I am grateful to the Minister for his description of my Bill, about which he is very sensitive. However, does he not agree that clause 1(1) is exactly the same as that of the Development of Tourism (Scotland) Bill, given a few changes in word order? Does not the Minister realise that, as I was right three years ago, it is likely that I am right now and that the previous Bill is the superior model that the Government should have followed?
  Mr. Ancram: It will be difficult to explain much of the Bill to the hon. Gentleman if he cannot see the difference between a separate and competing promotion by Scotland, which was the basis of his legislation, and a facility to enable the Scottish tourist board to promote Scotland while being able to plug in to the BTA's more widespread promotion of Britain, and Scotland within Britain.
  A number of my right hon. and hon. Friends dealt with signposts, especially my hon. and learned Friend the member for Perth and Kinross (Mr. Fairbairn). They were also mentioned by my hon. Friends the Members for Dunfries (Sir H. Monro) and for Tayside, North (Mr. Walker). The strungbow signs referred to by my hon. and learned Friend are white on a green background. The custard and chocolate signs of which he complained are service signs. I have been concerned about their colour for some time, and my Department is considering that matter.
  Mr. Fairbairn rose—
  Mr. Ancram: There are two criteria to keep in mind when discussing signposting. The first arises from my hon. and learned Friend's remarks about the need for signs telling tourists what services are available. It is essential in that respect to keep signposting consistent, and to the same standard throughout the United Kingdom. Otherwise, we shall create confusion in the minds of tourists.
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  The second point is that as far as possible we must avoid the proliferation of signs that we have seen in some parts of the United Kingdom, and, to a far greater extent, on the other side of the Atlantic. I agree that the balance is difficult. We are trying to achieve that balance. I hope that my hon. Friends will accept that I am looking carefully at that matter.
  Mr. Fairbairn: Just for the record, I referred not to strungbow signs but to Strongbow signs because they seemed to me to be the same colour as a well-known product from the south-east of England, cider. The Minister corrected me and told me that they had the absurd name "strungbow" signs. If anyone travelling in the north, south, east or west of Scotland were asked whether the signs were the same or different, he would not know, so why say that the signs must all be the same?
  Mr. Ancram: I listened carefully to what my hon. and learned Friend said in his speech. I may have misheard him, but I thought that I distinctly heard him say that it was important to have signs that could be easily understood by tourists. Having travelled abroad to countries where there is consistency in the standard of signing, I believe that that is much easier for tourists than a variety of different signs.
  Mr. Michael Forsyth: Is my hon. Friend aware that in my constituency we have Blair Drummond safari park, which is a major tourist attraction? It wants signs to direct the tourists who travel all over the constituency looking for the safari park. The park is prepared to pay for signs. It does not mind whether the signs are chocolate pudding coloured, green or blue: it simply wants signs. Central regional council says consistently that the Minister's Department would not agree to those signs being put up.
  Mr. Fairbairn: What about Scone palace?
  Mr. Forsyth: Does the Minister agree that, whether the debate is about colour or consistency, signs are desparately needed for tourists, who are running around in circles?
  Mr. Ancram: I agree with my hon. Friend that signs are useful. While there are restrictions on the signs that can be put up on the verges of trunk roads, which remain the property of the Secretary of State, there are possibilities of putting up signs outwith those areas. If my hon. Friend will write to me about the matter that he has mentioned, I shall consider it.
  Mr. Fairbairn: If my hon. Friend is attempting, in front of the House, to evoke a principle, what about Scone palace and Strath Allan aircraft museum, which have signs both on public and private property, and no objection is taken by my hon. Friend's Department? Either my hon. Friend must be consistent or he must be sensible.
  Mr. Ancram: The choice between those two is like the choice between Scylla and Charybdis. The examples that my hon. and learned Friend mentioned are examples of a particular type of house for which provision was made for signposting some time ago. He will find other examples of such signs on roads around Scotland.
  Some hon. Members mentioned taxation of self-catering holiday accommodation. That is a matter for the Chancellor of the Exchequer. I shall make sure that my right hon. Friend is made aware of the representations that have been made. My colleagues in the Scottish Office and I are fully aware of the strengh of feeling in the Scottish tourist industry about the proposed changes.

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  Many points were raised by the hon. Member for Linlithgow. I am sure that he does not expect me to deal with all of them. Unlike some Opposition Members, he fairly said that he would not expect me to respond to some of his points because he thought that those matters required further discussion and consultation. I thank him for exercising patience in waiting for a reply. The hon. Gentleman mentioned a number of matters on which I shall touch. He questioned Government support for historic buildings and made the valid point that those buildings play a role in the general provision of tourist attractions. The Government support in the form of grants for historic buildings is considerable—about £3 million a year. Appropriate conditions are attached to grants to ensure public access. The hon. Gentleman was concerned as to how the grants were distributed. I take that matter seriously and I shall centainly consider it further.
  The hon. Gentleman also asked which houses were being helped. I shall look into that matter. However, we are discussing primarily the Scottish tourist board's role, and it is only indirectly involved in assisting historic houses. The board is keen to make the most of the heritage, and there is good liaison between the board and bodies such as the Historic Buildings Council.
  The hon. Gentleman and my hon. Friend the Member for Dumfries raised the important point about the coordination of local authority tourist promotions. He may know that there is now a body called SCOT — the recently founded Scottish Federation of Tourism—which provides a forum for determining Scotland-wide promotion priorities. At the same time, because local authorities must also have the approval of the Secretary of State for promotional activity, there is co-ordination, which will slot in well with the co-ordination of the Scottish tourist board and the British Tourist Authority in the future.
  My hon. Friend the Member for Fife, North-East (Mr. Henderson) raised a number of important issues, which will take too long to deal with now, so I shall write to him about them. My hon. Friend the Member for York (Mr. Gregory) raised a question that is central to the debate and on which I shall conclude my summary of the points raised. He asked whether the Bill would encourage fragmentation of the effort that is being made within the United Kingdom. That matter should concern all hon. Members. My belief is that it will not, precisely because of the provisions that have been written into the legislation. The consent of the Secretary of State is required, but the Secretary of State would consult the BTA. Areas where there might be conflict and where wires might cross and lead to fragmentation can be avoided at
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  that stage. That is an important safeguard and one of the reasons why I do not accept the argument put forward by the hon. Member for Dundee, East.
  The Bill seeks to give Scotland, through the Scottish tourist board, the voice that it needs to deal with the particular and specific aspects of its own promotion, which it can do particularly well on a Scottish basis, but seeks to ensure that it does not lose the advantage of being served Scotland as a part of Britain. Having been involved for many years in the tourist trade I believe that the fact that Scotland is part of Britain is one of our strongest advantages in attracting tourism. I should hate to see any legislation that destroys the important relationship between the needs of Scotland as Scotland and the needs of Scotland as part of the United Kingdom.
  Mr. Dalyell: Following on from the speech of the hon. Member for York (Mr. Gregory), has this been agreed with the English tourist board? Does the chairman of the English tourist board precisely and emphatically understand the guidelines that have been laid down tonight and has he accepted them?
  Mr. Ancram: The BTA, is the principal body for the legislation. It is obviously aware of how the legislation will work and of the questions that may arise over possible differences in terms of promotion on a Scottish or a United Kingdom basis. As hon. Members have pointed out, the chairman of the BTA is also the chairman of the English tourist board. For that reason, if for no other, the chairman of the English tourist board will be aware of that position. To succeed in the world tourist market, Scotland must project itself as being Scottish and British. Tourism is vital to Scotland. We must seek every way to promote it. I believe that the Bill achieves that, and I ask my hon. Friends to support it.
  Question put.
  Bill accordingly read a Second time
  Bill committed to a Committee of the whole House.—[Mr. MacKay.]
  Further proceedings postponed pursuant to order this day.

  TOURISM (OVERSEAS PROMOTION) (SCOTLAND) BILL [LORDS] [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That for the purpose of any Act resulting from the Tourism (Overseas Promotion) (Scotland) Bill [Lords] it is expedient to authorise the payment of money provided by Parliament of any increase attributable to the provisions of that Act in the sums payable under the Development of Tourism Act 1969 out of money so provided. —[Mr. Sainsbury.]

Tourism (Overseas Promotion) (Scotland) Bill [Lords]
Postponed proceedings resumed.
Bill immediately considered in Committee, pursuant to order this day.
[Mr. PAUL DEAN in the Chair]

Tourism (Overseas Promotion) (Scotland) Bill [Lords]
  Clause 1

    POWER OF THE SCOTTISH TOURIST BOARD TO ENGAGE OUTSIDE THE UK IN THE PROMOTION OF TOURISM IN SCOTLAND
    9.27 pm
    Mr. Craigen: I beg to move amendment No. 1, in page 1, line 14, leave out 'with or without conditions'.
    This amendment should give the Minister the opportunity to explain more thoroughly how he sees the consultative process operating in practice when the Scottish tourist board comes up with its ideas for overseas promotion. I understand that, in all probability, the Scottish tourist board would from time to time present a programme or package of proposals to the Secretary of State for Scotland. Will the Minister tell us the reason for putting, "with or without conditions" in the Bill? The Minister will appreciate that the conduct of operations will often involve commercial considerations and that there will be a fairly limited time scale. It would be useful to know how long it will take the Secretary of State to reach decisions. Moreover, what kind of exhortations, limitations or conditions does the Secretary of State have in mind when he includes that point in the Bill?
    My hon. Friend the Member for Monklands, West (Mr. Clarke) spoke earlier about the £200,000 and how different parts of Scotland might benefit from overseas promotional work. He no doubt had in mind the rate support grant and its distribution. Does the Secretary of State have in mind how different parts of Scotland will benefit from added overseas promotion?
    The Bill's intention is to innovate and create new opportunities. I wonder whether the terminology in the Bill will be conducive to achieving the Government's intention.
    9.30 pm
    Mr. John MacKay: It is appropriate that I start by saying that I am pleased to see you in the Chair, Mr. Dean, as your interest in Scottish tourism was no doubt greatly encouraged by your fortnight's stay in the island of Coll in my constituency this year. [HON. MEMBERS: "Oh."] I apologise, but every other hon. Member has got in a plug for his constituency. I thought that I had better do the same, and what better advertisement than a satisfied customer sitting in the Chair for this Committee?
    I shall explain to the Committee the normal way in which tourist promotion programmes come about. I expect that the Scottish tourist board will look ahead at about this time for next year's promotion, and draw up a programme of consultations presumably not only with the Highlands and Islands Development Board, with which it is in close consultation on the important home market. It will then draw up a plan and a budget for the plan, which it will submit to my right hon. Friend the Secretary of State. At that stage my right hon. Friend will ask the British Tourist
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    Authority for its view. From our experience of the BTA's views being sought for programmes under the 1982 Act from tourist bodies such as local authorities, we can say that a speedy response will be given by the BTA. We have no doubt that a similar speedy response would be given to my right hon. Friend in the circumstances that we are envisaging.
    We are then at the stage at which I can answer the question why the words "with or without conditions" have been included. The reason is that, when my right hon. Friend has the BTA's comments and has seen some of the other promotional activities that other local authorities have put to him, or even some industrial promotional activity taking place abroad, he may decide that it would be a good thing if the STB's proposals were fitted into some other proposal coming to his desk. Rather than send the proposal back to the STB and ask it to put in another one, it is sensible to say that it can have the promotion with one condition; perhaps it could look at the possibility of changing the date to marry up with a programme being carried out by the BTA or somebody else, or, instead of a particular method of propaganda, it would consider an alternative method that would fit into the appropriate dates. Such a conditional agreement could save time and bureaucracy.
    The words are there so that my right hon. Friend will have the power to give conditional approval, if he wishes to put the promotion on to a programme that we are still examining and thus save the time of the STB and the Department, with proposals going backwards and forwards to be re-submitted as a whole package. I hope that, with that explanation, the hon. Member for Glasgow, Maryhill (Mr. Craigen) will withdraw his amendment.
    Mr. Craigen: Given what the Minister has said, it would be my intention to withdraw the amendment, but could he add one further comment? I take his point about an annual programme being the method of procedure, but I hope that he will not exclude an opportunity that may suddenly arise, in which the STB feels that it has something that it would like to support, and that there will be some flexibility within the procedures to take account of that. It would be a tragedy if Scotland were to lose out on something simply because of the slow mechanism of the system.
    Mr. John MacKay: I accept that point. I know that occasionally something comes up and the STB thinks that it would like to plug in to something else abroad; it wants to submit a plan to my right hon. Friend and to proceed quickly. I assure the hon. Member that the procedure that we see working when we consult the BTA about the proposals from local authorities suggests that in the circumstances that the hon. Gentleman envisages, we should get a speedy response from the BTA and give a speedy response to the STB, for the proper reasons that the hon. Gentleman has mentioned.
    Mr. Craigen: I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Mr. Dewar: I beg to move amendment No. 2, in page 1, line 15, leave out from 'State' to end of line 16.
    We have had what could euphemistically and optimistically be described as a wide-ranging Second Reading debate, in the course of which the substance of

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    this amendment has surfaced more than once. However, as so often happens in considering a specific amendment, it is difficult to concentrate on the issue that is causing anxiety. We are therefore justified in tabling this amendment.
    The effect of the amendment is to remove what I shall call the second leg of the conditions which hedge and inhibit the Scottish tourist board's freedom to use the new power given to it in clause 1. We challenge not the requirement to consult the Secretary of State for Scotland, but the condition that the Secretary of State shall, before giving or withholding his consent, consult the British Tourist Authority. We are entitled to ask why that second restriction is necessary.
    After all, Mr. Campbell—Mr. Dean. I am sorry. If I may say so, that is an interesting example of the conditioning of the human mind. The many hours under my hon. Friend the Member for Dumbarton (Mr. Campbell) on the Rating and Valuation (Amendment) (Scotland) Bill have implanted the very improper thought in my mind that every Chairman is called Campbell. I realise, of course, that that is not so.
    The Minister made a general case—I understand it, but I do not entirely accept it—that it is necessary to ensure that there is no sudden outbreak of unrivalled competition between the Scottish tourist board and the English tourist board in promoting their various interests firth the United Kingdom. Even if we accept that there is a danger — it is always a little quaint to hear Conservative Ministers talking about unbridled competition as a menace to be avoided — I should have thought that the need to consult the Secretary of State would itself have ensured that that unfortunate fear, if justified, did not arise.
    We have good grounds for that supposition. Only in 1982, some of us—I was one, although I do not believe that the hon. Member for Argyll and Bute (Mr. MacKay) was — under the present Government, were wrestling with the local government, planning and land legislation in its various stages. We had a long debate about the right of district councils which, under the Stodart report, were being made the primary authorities responsible for tourism. There was a long debate about what steps should be taken to ensure that there was not the fragmentation which I should have thought was an even greater danger when dealing with 53 Scottish district councils.
    At that stage, the Government were perfectly happy with the provision that before a district council made a sally abroad for promotion purposes, it had the permission of the Secretary of State. No one suggested that, in addition, there was a need to consult the British Tourist Authority or anyone else. It was accepted that the promotion could go ahead if the Secretary of State was consulted and gave his permission. In the case of district councils, that does not rule out the Secretary of State consulting the British Tourist Authority, although presumably he would not do that on every occasion. No doubt if he thought that the promotion might lead to confusion or overlap, or if he thought that it was a wasteful use of resources, the Secretary of State, under the Local Government, Planning and Land Act, could go to the British Tourist Authority and say, "What do you think about this?" No doubt its view would be persuasive in deciding whether his consent was given or withheld.
    The Committee considering that legislation, and the House on Report and at subsequent stages, and presumably
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    Governments, since they made no attempt to dissuade the House, felt that the Secretary of State's permission simpliciter — if I may put it that way, at least in statutory terms — was sufficient safeguard against the possibility of anarchy, which has been foreseen in the arguments that we have heard tonight.
    As the Minister is well aware, the other example that has been fairly quoted is even more strongly on the side of the amendment—the precedent of the Highlands and Islands Development Board. I recognise that the Minister has said that it will be spending only about £150,000 on overseas promotion in either the coming year or the following year, but presumably that budget could vary. I gather that it spends about £7 million a year on tourism but presumably it could increase its spending on overseas promotion at its discretion. Proportionately, it is a much higher budget than the Bill allows the Scottish tourist board. It has not, apparently, created any anxiety in the Government's mind. There has been no suggestion that it has led to the kind of difficulties that are anticipated. Had such difficulties occurred, we could have assumed that the Government would have taken advantage of one of the many legislative opportunities in the past few years to come forward with proposals to inhibit the freedom of manoeuvre for the Highlands and Islands Development Board in this area.
    The danger seems to have been exaggerated. I am being charitable in assuming that some safeguard is necessary, but I cannot for the life of me see why the safeguard that is written into the Local Government and Planning (Scotland) Act 1982 is not sufficient to meet the present circumstances as well. The amendment seeks to remove what we see as an unnecessary additional provision, leaving the safeguard on all fours with that which is considered satisfactory in terms of local authority operations in a similar area and of a similar kind. The amendment is the essence of reasonableness and has a great deal of force behind it. I hope that the Minister will be prepared to consider it seriously and with some favour.
    Will the Minister say a word or two about the relationship between the British Tourist Authority and the Secretary of State in the consultative process? The Secretary of State is not the lead Department—to use the jargon of Government. Presumably the Department of Trade and Industry puts fear into the heart of the British Tourist Authority. It is unfortunate that the Scottish Office should oppose consultation with the British Tourist Authority. If the British Tourist Authority were to say that it did not want a promotion to go ahead because it was inopportune for strategic reasons, however obscure and unworthy in the eyes of the Scottish tourist board, I presume that the Scottish Office could say that it had consulted the British Tourist Authority but would pay no attention to its view and would go ahead. The Scottish Office does that in many consultative procedures. I want it put on the record that consultation with the British Tourist Authority will have all the validity and productive results that consultation by the Scottish Office with other organisations so often has in other spheres.
    I am sure that the Minister accepts that there is considerable and fair anxiety in our minds about the possible fusion of the British Tourist Authority and the English tourist board at some future date. Several Conservative Members have expressed anxiety about this. I hope that the opposition of Conservatives will be maintained even if they discover that the Government

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    intend to let the merger take place. There is an obvious awkwardness in terms of impartiality and the range of responsibility that would remain with the British Tourist Authority. With that on the agenda it is important that we look sympathetically at the amendment. We are entitled to express our alarm in view of the way in which the Minister of State, Department of Trade and Industry, when making his recent statement in the House about the review of tourism, did everything in his power to minimise the importance of the concession in the Bill to the Scottish tourist board.
    In that context, the amendment would do something to reassure us about the intentions of the Government and help us feel that the Bill was not merely a piece of cosmetic window-dressing which would bring no practical fruits in the promotion of tourism. The provision is unnecessary from the precedents that I cited and there is no reason why the consultation process, if it is to take place, should not be done at the discretion of the Scottish Office, and it should not become a statutory duty in the prim and formal way that is being suggested.
    9.45 pm
    Mr. Maxton: I support the amendment because either this is a dangerous part of the Bill or it represents unnecessary verbiage.
    If, as the Under-Secretary said, there is no veto, what will happen when the Scottish tourist board says, "We want to establish an office or do a promotion in New York or Washington."? It will go to the Secretary of State, who may say, "I see no great objection to that and I shall put no conditions on it, but I must now consult the BTA." One of the right hon. Gentleman's officials telephones an official at the BTA and says, "The Scottish tourist board wants to establish a scheme in Washington," or whatever the proposal may be. If the BTA replies, "That is not on," and the Scottish Office official says, "I have consulted the BTA," and puts down the telephone, and the Scottish tourist board carries on with its scheme or proposal, the provision represents unnecessary verbiage. If that is what it means, it should not be in the Bill.
    On the other hand, if it means—as some of my hon. Friends feel it does—that the BTA will have a veto over any proposal by the Scottish tourist board, we are not prepared to see the BTA have that sort of power. If it does not mean that, it is unnecessary and the Minister should accept the amendment and delete the provision. If he does not agree to delete it, we shall regard it as a veto and be disturbed by it being in the Bill.
    We seem, again, to be giving the BTA extra power. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said, the Bill becomes meaningless window-dressing because the BTA remains the authority, although it is essentially not now the British Tourist Authority but the English tourist board, in that the chairman of both is one and the same person.
    We also know that the Minister responsible is not the Secretary of State for Scotland but the Secretary of State for Trade and Industry. He will have the veto, and that causes concern to those of us who wish to see not independence for Scotland but greater autonomy for the Scottish institutions to run their own affairs.
    Mr. Wilson: I, too, shall be brief, because the arguments for the amendment have been well adduced by the hon. Members for Glasgow, Garscadden (Mr. Dewar) and for Glasgow, Cathcart (Mr. Maxton).
    The Government gave the game away in the debate on the last amendment when the Under-Secretary said that the BTA would be the lead organisation. It follows, therefore, if the BTA is the lead organisation, that the responsible Minister for that quango—the Secretary of State for Trade and Industry — will be the lead Minister. If a dispute broke out between the Scottish tourist board and the British Tourist Authority, how would it be resolved?
    I suggest that it would be naive to expect that the BTA would make its reservations known to the Secretary of State for Scotland in terms of the consultation power. It would go to its lead Minister. The matter would then go to a Cabinet sub-committee, where it would be thrashed out. The Scottish Office, compared with the might, power and majesty of the Department of Trade and Industry, is a pigmy which would be overruled if there were any real dispute. It is well known that this little promise, which was slipped in to the Scottish Conservative manifesto, came as some surprise to the Department of Trade and Industry, which hitherto had not been very keen on a change in the classical structure.
    If—this has been proven in debate and admitted by the Government because it has been published — the chairman of the British Tourist Authority and the English tourist board is to be one and the same person, and the functions of those bodies in some cases are to be merged or resolved for better co-ordination, the substantial influence of the ETB will be added to the power of the BTA. If that is the case, we must be careful about the two lines that the hon. Member for Glasgow, Garscadden is seeking to excise. There is no reason for a Conservative Government, who allegedly believe in competition and are introducing competition into various monopolies, to be so scared of competition among the various tourist bodies which know best, or should know best, how to look after tourism in their areas. If the Government do not accept the amendment, they are making a declaration of no confidence and lack of trust in the Scottish tourist board and its chairman.
    I suggest that, if the Government trust the Scottish tourist board to perform its functions and control its budget, its choice of chairman and so forth, they ought to cut out those harmful and damaging words in the Bill and leave the promotion of tourism in Scotland to the Scottish tourist board, with the consent of the Secretary of State for Scotland.
    I naturally expect the Secretary of State for Scotland, being aware of pressures on the flank from the BTA, to take them on board. For once, the hon. Member for Glasgow, Cathcart has a good point when he says that either those words mean something or they do not. I suspect that they mean something. There will be ample proof if the Government do not accept the amendment. The House would be naive if it took a different view.
    I hope that the Opposition will press the amendment, because it is not only reasonable but one of principle.
    Mr. Henderson: The hon. Member for Glasgow, Cathcart (Mr. Maxton) was wholly wrong on so many points of fact that it is hard to give credibility to his conclusions. It is surprising that the hon. Member for Dundee, East (Mr. Wilson), who is a straightforward

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    nationalist, unlike the hon. Member for Cathcart, should have allowed himself to be dragged along on such a series of false premises. I hope that my hon. Friend the Under-Secretary of State will confirm my understanding of the Bill—that, in practice, the Scottish tourist board, in a major overseas effort, would consult the BTA to see, apart from anything else, how much money the BTA would provide. If the Scottish tourist board and the BTA do not agree, I understand that the arbiter will be the Secretary of State for Scotland. I should have thought that hon. Members would not find much wrong with that.
    Mr. Dalyell: We have got on to thin ice. The House of Commons is an extraordinary place. We go on for hours when nothing much happens, then suddenly hon. Members begin to lift stones. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) lifted a stone and out came all sorts of creepy crawly things, little awkward points—
    Mr. Wilson: Is this the Linlithgow question?
    Mr. Dalyell: I am afraid it is.
    It is a matter of deja vu: some of us have been here before. We were in this position in 1977, 1978 and 1979. I do not pretend that the future of the Scottish tourist board has anything like the momentous importance of the constitutional arrangements of the UK, but there are somewhat similar problems. How odd it is that the House of Commons goes on talking and talking before beginning suddenly to bring up these issues.
    I shall make a wager with my hon. Friends. I assert that the Government will resist the amendment because it is crucial to the Bill and not because it is unnecessary. I shall reveal why it is crucial. Without these few innocuous words in the Bill, the British Tourist Authority and the Department of Trade and Industry would never have accepted it in the first place.
    I listened carefully to the inelegant reply of the Under-Secretary of State, who has evaporated, and that is when I became suspicious. The hon. Gentleman let the cat out of the bag. He could not answer the crucial question and I thought that it would be indelicate of me, in view of political history, to make the speech of the previous hon. Member for York, Mr. Lyon. That speech having been made, someone at some time will have to answer it. The question that I asked directly of the Under-Secretary, who should have returned, was whether the British Tourist Authority had agreed to that which is set out in the Bill. I suspect that it may have done, but I believe that it did so only on the condition that the few words that the amendment would omit were included in the Bill.
    My purpose is to make a plea for some candour and a bit of honesty. If we wish to pass through the back door, we must first press the Minister on precisely what is meant. I do not want to keep the House of Commons any longer than is necessary, so I merely say that if there was an agreement with the BTA, it would have been more candid if the Minister has said so bluntly to my hon. Friend the Member for Garscadden.
    Mr. John MacKay: We have had a most interesting debate. I was wondering what would come out from the stones lifted by the hon. Member for Linlithgow (Mr. Dalyell). Now I know. I do not subscribe to the same Machiavellian theory of politics as the hon. Gentleman. The reason for the inclusion of the two lines in the Bill
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    which the amendment seeks to remove is a simple one that I explained in my opening speech. Some Labour Members disagree with the proposition, but we believe that it is best in the tourist interests of the entire United Kingdom, and of Scotland especially, that the BTA should act as the main tourist promoter of Britain, including Scotland, overseas. We believe it wise that it takes the leading role.
    I know that the hon. Member for Dundee, East (Mr. Wilson), for example, would happily break that arrangement apart and would have nothing to do with the BTA or, presumably, the English tourist board. I do not know what his long-held anti-English view would do to our English-based tourist trade, which is vital to the Scottish tourist industry and which would be destroyed if English tourists came across too many people who expressed the views that we hear from the Scottish National party.
    The British Tourist Authority has a budget of about £27 million, from both public funds and the private funds which it draws into its promotions. It would be foolhardy to set up an organisation parallel to the BTA, as the hon. Member for Dundee, East suggested. That shows the extent of the role of the British Tourist Authority abroad. Of that £27 million, the identifiable Scottish share is about £3·5 million. It seems perfectly sensible that if the Scottish tourist board is to make the best use of that sum, it should consult, and my right hon. Friend should consult—
    It being Ten o'clock, The CHAIRMAN left the Chair to report progress and ask leave to sit again.
    Committee report progress.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Tourism (Overseas Promotion) (Scotland) Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Lang.]
Again considered in Committee.
Question again proposed, That the amendment be made.
Mr. MacKay: I was putting into context the role of the British Tourist Authority and the size of its budget.
I have been asked what sort of consultation there will be between the Secretary of State and the British Tourist Authority. The hon. Member for Glasgow, Garscadden (Mr. Dewar) has put his finger on it. The Scottish Office will consult in its usual fashion. Sometimes we act on the advice that we are given, and sometimes we do not. I am not speaking with my tongue in my cheek. In the case of consultation by any Government Department—certainly the Scottish Office—the Department is not absolutely bound to accept the views that it receives. It will not be so bound in this case.
My right hon. Friend the Secretary of State will show the BTA the programme that the Scottish tourist board wishes to carry out— say—next year. It is easier to think in terms of a whole year's programme. He will ask the authority what its views are. It may reply that it is completely opposed to the programme. I have no doubt that my right hon. Friend would then have discussions with the Scottish tourist board.
We want to make use of the link with the BTA's offices and apparatus around the world. However, if my right hon. Friend decides that it is in the best interests of Scottish tourism that the project that he is considering should go ahead despite the fact that the BTA does not like it, he will

785
be able to give his approval to the STB for the programme to go ahead. The BTA will have no veto, and the Secretary of State for Trade and Industry will have no veto on any project put before the Secretary of State for Scotland.
Mr. Dewar rose—
Mr. Wilson: I marvel at the high quality of codswallop that the Minister is producing. Does he not agree that, if there were a dispute of that magnitude, the Secretary of State for Trade and Industry would seek the opportunity to follow discussions with his right hon. Friend through the medium of a Cabinet sub-committee? Is not that the way in which differences between competing Departments are sorted out? Does the Under-Secretary of State say that there would be no question of taking a difference to a Cabinet sub-committee for resolution?
Mr. MacKay: I cannot envisage any situation in which that would happen, unless the Government took leave of their senses and appointed someone like the hon. Member for Dundee, East as chairman. Such a chairman might be looking for confrontation. However, the Scottish tourist board has perfectly reasonable chairmen who would not seek confrontation. For a properly designed programme of the type about which we are talking, Opposition Members are devising purely hypothetical circumstances in an attempt to do I am not sure what but, in the case of the hon. Member for Dundee, East, to advance the cause of nationalism. I shall give way to the hon. Member for Garscadden, who, I am sure, is not attempting to do that.
Mr. Dewar: I might be doing the Minister an injustice as he might be coming to this point. However, will he explain why, if it is so essential to hang around the Secretary of State a statutory duty to consult the British Tourist Authority, it was not necessary to have a similar safeguard in the Local Government and Planning (Scotland) Act 1982 when we were doing the basic model as regards local authorities' rights to promote their areas overseas? If there is no clear reason why that difference is being made, we are left inescapably with the theory which was advanced by my hon. Friend the Member for Linlithgow (Mr. Dalyell) that the words have been added as some form of danegeld to the Department of Trade and Industry.
Mr. MacKay: I assume that the hon. Gentleman has accepted my point that there is no veto. I have certainly made that clear. We approach the matter from the Scottish tourist board's point of view. It will spend £200,000 of direct Government money and about £100,000 provided by the trade. We believe that the relationship between the Scottish tourist board, the Secretary of State and the British Tourist Authority is a little different from the relationship between local authorities, the Secretary of State and the British Tourist Authority. The hon. Gentleman might say that we can merely continue in the way that we are going, but the Secretary of State consults the British Tourist Authority about proposals from local authorities. It is fairer and better in the case of the Scottish tourist board that consultation should be on the face of the Bill. Perhaps it should have been on the face of the previous Bill. That might be a reasonable argument, but it is not important enough to make us amend that legislation to bring it into line with the Bill.
786
When considering the powers of the Scottish tourist board in overseas promotion, we must lay out clearly and honestly that my right hon. Friend will be expected to consult the British Tourist Authority to see what programme it has and how the Scottish tourist board's programme fits in with what the British Tourist Authority is doing. The British Tourist Authority might be able to adapt and respond to the programme put up by the Scottish tourist board so that the effort of the two bodies could be maximised.
It is clear that the final decision rests with my right hon. Friend the Secretary of State for Scotland. He will take the advice of the British Tourist Authority and then make a decision. There will be no veto by the British Tourist Authority. The Opposition's suggestions and suspicions are totally unwarranted.
Mr. Dewar: I have listened closely to what the Minister has said. I understood him to say that in the Local Government and Planning (Scotland) Act 1982 these words are not necessary because the Secretary of State, in any event, does the consultation as a matter of good manners and good management practice. The Minister has also put great stress on the independence of the Scottish Office in this machinery and the fact that it will be dictated to by no one. Why does he not give a little example of that smeddum and independence by accepting the amendment and leaving the matter on the good practice basis which has worked so satisfactorily with the other machinery?
Mr. MacKay: My point is that it has worked satisfactorily since the 1982 Act, but I think that, on reflection, it may have been wiser to be open and straightforward on the face of the Bill and say that there will be consultation with the British Tourist Authority before my right hon. Friend gives his final decision. That is perfectly fair and reasonable and, with my assurance that there is no way in which the British Tourist Authority will be able to impose a veto, I am sure that the House can happily pass the Bill as it stands.
Mr. Henderson: Does not my hon. Friend find it curious that the Labour party put through a Bill on tourism which prevented the Scottish tourist board from promoting Scotland overseas but now quibbles about a Bill that enables it to promote Scotland overseas because of an argument about who is consulted about what?
Mr. MacKay: My hon. Friend makes a fair point. However, to be equally fair to the Opposition, who were in Government in 1969, I think we have moved a little from that position, and the Opposition now accept that they would be better off if the 1969 legislation had included a section similar to clause 1 of the Bill. I say "equally", but I think that what we are doing tonight is improved by making it perfectly clear that what goes on in practice is an obligation on my right hon. Friend that he should consult the BTA before taking his final decision.
Mr. Maxton: I do not find the Minister's explanation satisfactory. What he describes is the wrong way round. The sort of consultation about which he is talking—genuine discussions among the professions, the experts—should take place not between the Secretary of State and the British Tourist Authority, but between the Scottish tourist board and the British Tourist Authority. If the Scottish tourist board has a scheme to put up, it has a member on the British Tourist Authority who can raise it

787
at the authority, the consultative process can be carried out, and agreement can be reached. The position referred to by the hon. Member for Fife, North-East (Mr. Henderson) is then reached at which the Secretary of State would become the arbiter. When consultation takes place between the British Tourist Authority and the Scottish tourist board and disagreement ensues, the Secretary of State becomes the arbiter.
Whatever the Minister may say, if the clause is left unamended, although the British Tourist Authority may not have an absolute veto, in my view no Secretary of State for Scotland will ignore its advice. If what the Minister says is correct, he would do better to accept the amendment to omit the words. As the Minister has said, consultation will take place anyway, so what is the purpose of having such unnecessary verbiage in the Bill? These words should be omitted.
Mr. Dalyell: My hon. Friend uses the words "unnecessary verbiage". Our experience of parliamentary draftsmen is that they very seldom include unnecessary verbiage. This is far from unnecessary verbiage. If it were all as innocent and straightforward as the Minister makes out, why is the House devoting, on a Tuesday in prime time, six and quarter hours or more to the topic? Why is the Bill being considered in prime time if it is as easy as the Minister makes out? The Minister said that the decision is with the Secretary of State for Scotland. Where is that stated in the Bill? At no point in the Bill can I find any such statement. On the contrary, if the Minister looks carefully, after the phrase to which my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) referred to in lines 15 and 16, he will see the words,
"(3) Nothing in the section shall—
(a) affect the power of the British Tourist Authority to carry on any activities outside the United Kingdom for the purpose of encouraging people to visit Scotland;"
The Bill does not say that the final decision is with the Secretary of State. On the contrary, it gives the British Tourist Authority carte blanche.
I wish to ask a simple and artless question. Can the Minister tell us, with crossed heart, that his statement that the final decision will lay with the Secretary of State for Scotland has been agreed with the Secretary of State for Trade and Industry and his senior officials? Can he stand up, cross his heart and say, "Yes, the Secretary of State for Trade and Industry and his senior officials have absolutely agreed that the final verdict is always for the Secretary of State for Scotland"? It is no good the Minister nodding silently. Silent nods are not recorded in Hansard. I am giving the Minister the opportunity to shut me up for a long time. I pause for a reply; will I get one?
10.15 pm
Mr. MacKay: I nodded to the hon. Gentleman simply because the occupant of the Chair would not like two hon. Members to be on their feet at the same time. The Bill is a Government Bill. It has been through the machinery of Government. It represents a clear view of Government policy, from all parts of Government. I have stated the simple fact of the matter. As it says on the face of the Bill,
"the Secretary of State, before giving or withholding such consent, will consult the British Tourist Authority."
I have made it perfectly clear that consultation means what it has always meant for the Scottish Office. I cannot speak for other Departments, but I know that the hon. Gentleman has been involved in some of them. The
788
Scottish Office does not necessarily accept the opinions that it receives. It simply asks for views, but it is not bound to accept them.
I have made the position clear. There is nothing sinister about it. It is not a veto given to the BTA or to my right hon. Friend the Secretary of State for Trade and Industry. It is quite simply a power given to my right hon. Friend the Secretary of State for Scotland to consult the BTA, to consider what it says and then, if he so chooses, to ignore what it says and give his permission to the STB to carry out the programme that it put before him.
That is as clear an explanation and an assurance as I can possibly give the Committee. I hope that the hon. Member for Garscadden will withdraw the amendment.
Question put, That the amendment be made:—
The Committee divided: Ayes 13, Noes 125.

Division No. 171]

[10.18 pm

AYES

Bennett, A. (Dent'n & Red'sh)

Millan, Rt Hon Bruce

Bruce, Malcolm

Skinner, Dennis

Buchan, Norman

Stewart, Rt Hon D. (W Isles)

Canavan, Dennis

Wrigglesworth, Ian

Cartwright, John

Dalyell, Tam

Tellers for the Ayes:

Godman, Dr Norman

Mr. Gordon Wilson and

Marshall, David (Shettleston)

Mr. James Wallace.

Maxton, John

NOES

Alexander, Richard

Hanley, Jeremy

Alison, Rt Hon Michael

Hargreaves, Kenneth

Amess, David

Harris, David

Ancram, Michael

Harvey, Robert

Ashby, David

Hawkins, Sir Paul (SW N'folk)

Atkins, Rt Hon Sir H.

Hayes, J.

Baker, Rt Hon K. (Mole Vall'y)

Heathcoat-Amory, David

Baker, Nicholas (N Dorset)

Henderson, Barry

Baldry, Anthony

Hicks, Robert

Batiste, Spencer

Hind, Kenneth

Bellingham, Henry

Hirst, Michael

Berry, Sir Anthony

Holt, Richard

Body, Richard

Howarth, Alan (Stratf'd-on-A)

Bottomley, Peter

Howarth, Gerald (Cannock)

Bowden, A. (Brighton K'to'n)

Hunt, David (Wirral)

Bowden, Gerald (Dulwich)

Jones, Gwilym (Cardiff N)

Braine, Sir Bernard

Jones, Robert (W Herts)

Bright, Graham

King, Roger (B'ham N'field)

Brooke, Hon Peter

Knight, Gregory (Derby N)

Bruinvels, Peter

Knowles, Michael

Buck, Sir Antony

Knox, David

Carttiss, Michael

Lang, Ian

Chalker, Mrs Lynda

Leigh, Edward (Gainsbor'gh)

Chapman, Sydney

Lightbown, David

Chope, Christopher

Lilley, Peter

Clarke, Rt Hon K. (Rushcliffe)

Lord, Michael

Conway, Derek

McCrindle, Robert

Cope, John

McCurley, Mrs Anna

Dicks, Terry

Macfarlane, Neil

Dorrell, Stephen

MacKay, John (Argyll & Bute)

Douglas-Hamilton, Lord J.

Maclean, David John.

Eyre, Sir Reginald

Major, John

Fairbairn, Nicholas

Mates, Michael

Forsyth, Michael (Stirling)

Mather, Carol

Forth, Eric

Merchant, Piers

Fox, Marcus

Monro, Sir Hector

Franks, Cecil

Moore, John

Fraser, Peter (Angus East)

Morris, M. (N'hampton, S)

Gale, Roger

Morrison, Hon P. (Chester)

Galley, Roy

Murphy, Christopher

Gardner, Sir Edward (Fylde)

Needham, Richard

Goodlad, Alastair

Nelson, Anthony

Gower, Sir Raymond

Neubert, Michael

Griffiths, Peter (Portsm'th N)

Newton, Tony

Gummer, John Selwyn

Nicholls, Patrick

Hamilton, Neil (Tatton)

Onslow, Cranley

789

Ottaway, Richard

Thompson, Donald (Calder V)

Page, John (Harrow W)

Thompson, Patrick (N'ich N)

Page, Richard (Herts SW)

Thorne, Neil (Ilford S)

Parris, Matthew

van Straubenzee, Sir W.

Pollock, Alexander

Wakeham, Rt Hon John

Powell, William (Corby)

Waldegrave, Hon William

Powley, John

Walker, Bill (T'side N)

Proctor, K. Harvey

Waller, Gary

Rathbone, Tim

Wardle, C. (Bexhill)

Renton, Tim

Warren, Kenneth

Roe, Mrs Marion

Wheeler, John

Sainsbury, Hon Timothy

Wiggin, Jerry

Shepherd, Richard (Aldridge)

Wilkinson, John

Squire, Robin

Young, Sir George (Acton)

Steen, Anthony

Stevens, Martin (Fulham)

Tellers for the Noes:

Stewart, Allan (Eastwood)

Mr. Tristan Garel-Jones and

Taylor, Rt Hon John David

Mr. Archie Hamilton.

Taylor, Teddy (S'end E)

Question accordingly negatived.
Clauses 1 and 2 ordered to stand part of the Bill.

BUSINESS OF THE HOUSE
  Clause 3

    Short title and commencement
    Mr. John MacKay: I beg to move amendment No. 3, in page 2, line 11, leave out subsection (2).
    While subsection (2) is simply what is added by the other place, the traditional procedure of the House when a Bill has started in the other place means that that subsection is carried here. We remove it by the amendment.
    Mr. Maxton: I accept that. However, that is a silly custom. Clause 2 states:
    "There shall be paid out of moneys provided by Parliament an increase attributable to this Act."
    Clause 3 states:
    "Nothing in this Act shall impose any charge on the people or on public funds".
    790
    That is insane. It proves that we should not have that other place up the road.
    Mr. Wilson: We should not have this place either.
    Mr. Maxton: The hon. Member for Dundee, East (Mr. Wilson) says that we should not have this place either. In terms of Scottish legislation, he is right. It should be taken in a Scottish assembly elected by the Scottish people.
    The Second Deputy Chairman of Ways and Means (Mr. Paul Dean): Order. I know that we are reaching the end of the proceedings, but the hon. Member is now straying.
    Mr. Maxton: The one thing that I find surprising about the financial aspect of the Bill — this is a financial clause — is that the hon. Member for Stirling (Mr. Forsyth), the guru of monetarist policies in Scotland, has not opened his mouth once to make a speech about a Bill which increases public finance and public intervention and imposes greater state control. I should have thought that he would have been demanding the privatisation of the Scottish tourist board and that it should be paid for by a levy on the tourist industry rather than be financed out of general taxation.
    Question put, That the amendment be made:—
    The House proceeded to a Division.
    Mr. Lang and Mr. Sainsbury were appointed Tellers for the Ayes; but no Member being willing to act as Teller for the Noes, The Second Deputy Chairman declared that the Ayes had it.
    Amendment agreed to.
    Clause 3, as amended, ordered to stand part of the Bill.
    Bill reported, with an amendment.
    Question, That the Bill be now read the Third time, put and agreed to.
    Bill accordingly read the Third time and passed, with an amendment.

Liquefied Petroleum Gas (East Leicester)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.)
10.36 pm
Mr. Peter Bruinvels: I am grateful for the opportunity to raise in the House the subject of the safety of the proposed installation, storage and retailing of liquefied petroleum gas at the Trocadero filling station, Uppingham road and Scraptoft lane, east Leicester, within my constituency.
The site encompasses a small part of a triangular-shaped area of land at the junction of the busy Uppingham road, the A47 and Scraptoft lane, presently occupied by a Shell UK petrol filling station. The station is situated two miles east of the city centre in a predominantly residential development of three-storey town housing in Scraptoft mews, with around 30 residents, bordering the site to the east. Detached and semi-detached housing extends along both sides of Uppingham road to the south-east, along Scraptoft lane to the north and north-east, and beyond Uppingham road to the north-west.
It is intended to locate the LPG installation close by the Scraptoft lane frontage of the Shell site within a landscaping area, bordered on the roadside by an existing curved brick screen wall, approximately 8 ft high above adjoining ground level and 11 ft high above forecourt level. The installation would consist of two 6,000 gallon storage tanks, mounted on supports within a 7·5 ft high chain link fenced compound.
My constituents have visited me and have written many letters expressing grave concern at the dangers of such a risk.
The site was formerly the Trocadero cinema, which after 20 years was converted to a bingo hall and dance hall. In 1970 there was a serious fire and the hall was virtually burnt out. In 1971, Shell finally took over. On 23 August 1982, consent was given to Shell to redevelop the existing petrol station, and this was completed in December 1983. On 31 December 1982, Shell UK applied to Leicester city council for approval to redevelop part of the petrol filling station by the erection of the building and plant for the storage and retail of liquefied petroleum gas, to which I shall refer as LPG.
Leicester's chief environmental health officer reported strong reservations about the proposal because of the risk associated with bulk storage and with bulk road tankers visiting the site, and I agreed with him. On 1 March 1983, Leicester city council turned down Shell UK's planning application because the proposed installation, located in a residential area, would be likely to constitute an unacceptable safety risk because of the possibility of an uncontrolled release of the LPG into the atmosphere and the consequent risk of explosion. Shell UK appealed to my right hon. Friend the Secretary of State for the Environment against the decision, and the inspector who was appointed was Mr. P. R. D. Youngs. A local inquiry into the appeal was held between 26 October and 28 October, at the town hall, Leicester.
I shall not comment too much on the conduct of 'the case, other than to say at this point that Shell UK brought in technical experts from as far away as Holland, together with its leading solicitor, while Leicester city council
792
brought in local officers, not necessarily able or expected to present the opposite side of this case. The inspector reported on 6 January 1984 that he was prepared to allow the development to go ahead.
This decision has been received with shock and fear within my constituency. The news leaked out just 24 hours after there had been a serious explosion at Desford on 26 January 1984, injuring seven people and causing over £50,000 worth of damage. The Desford press headlines were:
"A red cloud shot towards the sky.
Flames leapt 40 feet into the air.
Parts of gas cylinders were thrown many hundreds of yards".
It is not surprising that a full inquiry is being carried out. I know how concerned people in Leicester are, and they need reassurance now.
As recently as 13 February, there was the incident of a leaking cylinder at Stoney Stanton. My constituents are rightly worried. It is, therefore, a matter of serious regret that, although all the legal avenues have been explored, we have not met with success. This Adjournment debate against this major blunder is our last resort.
No one has been able to prove the need for such a project. There are already three outlets dispensing LPG in Leicester, and the A47, where 15,000 vehicles passed the site on 21 May 1981 in a 12-hour period, was the least used route of the three main roads in Leicester.
The inspector admitted that the short opening hours of the other LPG sites indicated that current demand for LPG was low. I realise that appeals are judged primarily on their planning merits, but I really wonder whether need outweighed planning objections in this case. The issue in question is the likely effects of the LPG installation on the safety and amenities of those persons who live in the vicinity of the site.
On 28 January 1984, I interviewed 35 residents in the Uppingham road. Twenty-three of them were against the proposed installation. Nine did not even know that it had been approved. Three supported it, provided it was safe. It should be said that none of those three lived near the site. The site is not suitable, and no political party would want the installation on a site which already has 54,000 gallons of petrol stored underground.
I have yet to find anyone in favour of this project, except Shell UK. The company seems to be totally indifferent to the wishes of my constituents, and it has not even contacted me or attempted to reassure me or my constituents about the safety aspects or sent me a copy of its report. If that is the company's attitude, no wonder the opposition is growing.
The four local Conservative councillors involved—Guy Collis and Michael Clayton, both from Humberstone ward, and John Allen and Lynda Eaton, both from Thurncourt ward — have raised with me the safety aspects, the matter of the built-up area and the inappropriate siting of this LPG installation. It is obvious to me that an uncontrolled release of LPG would lead to a gas cloud explosion that could have catastrophic consequences.
The area concerned is largely occupied by the middle-aged. The Uppingham road shopping precinct is used by a large number of people, as is Humberstone park, where many children play, to the south-west of Uppingham road. The A47 becomes very congested in the rush hour and on Friday nights. If there was an explosion, which could be

793
caused by one of the numerous road accidents at the busy junction of Uppingham road and Scraptoft lane, many people could be injured and perhaps some lives lost.
The inspector said that there would be an element of danger from the presence of the LPG installation—which he estimated at a one-in-50,000 chance. However, we have already had two explosions this year alone, at Desford and Stoney Stanton.
To avoid any further risks, and if the plan is to go ahead, I must demand that there is a restriction on the quantity to be allowed and stored, and also a minimum distance specified from the nearest residential property. The Health and Safety Executive guidelines would have to be strictly adhered to.
A pressure vessel failure must be avoided, as a major release of LPG forming into a vapour cloud could spread over houses and could then ignite. The inspector says that 10 to 20 per cent. of vapour clouds ignite. A cloud igniting may not have any people inside, but that is not the point.
I think it only right that a full programme of safety education for all employees of the petrol station should be immediately introduced. It is not sufficient to have only one person on duty at the Trocadero self-service garage, looking after the six petrol pumps and the LPG store. There should be at least one full-time employee exclusively looking after this installation who would be properly trained, and not just for the minimum four hours under the Shell course. I also request that LPG should be made available only between normal working hours, and sold only during daylight, and definitely not on a 24-hour basis, as the petrol is now.
The original application specified two 6,000-gallon tanks of LPG. There should never be more than that. Even the inspector specified that as the maximum. Lorries coming in to collect LPG, off-loading or loading, should be allowed to do so only during those normal working hours and one at a time.
I am surprised that such stores are not sited at all principal motorway service centres. I should have thought that that would be the correct site for them. The site should be regularly visited by the Health and Safety Executive to ensure that the LPG installation is being kept up to safety standards and that no temporary or untrained personnel ever operate the LPG mechanism.
I stated earlier that Leicester city council did not produce any technical evidence on the safety aspects at the inquiry. It has to be said that, even if it had, the odds were weighted against it. Councillor Lynda Eaton, a local solicitor, and myself believe that local authorities are at a disadvantage against large petrol companies, because they have all the funds and the authorities do not. Shell UK was clearly prepared to fight this all the way to the High Court. It was determined to win, and showed this by bringing over every resource possible, including experts from Holland.
Once Shell UK knows that it has won, a dangerous precedent will be established and the inspector's report will be used as a public relations job to any other questioning local authority, which will ask "If a large local authority such as Leicester lost, what chance have we?"
If I cannot stop this site, I must provide as much publicity as possible on the case to other local authorities to try to protect them, if only to balance out their previous distinct disadvantage. The Government should exercise
794
greater control over the appeal procedure under the Town and Country Planning Act 1971. The applicants can have things so weighted in their favour as they continue to bombard local planning authorities that the local authorities get tired of turning down the applications.
The small man—in this case Leicester city planning department—did not have the necessary free funds to challenge Shell UK on a specific point of law in the High Court.
The inspector should pay attention to the locality. The Trocadero is less than a mile from a conservation area. My constituents see the value of their houses dropping. Compensation should be made available and it should be Shell's responsibility. The inspector should look more at environmental circumstances as well as probabilities.
With the A47 being a major coastal route with a high proportion of lorries and heavy traffic, a higher incidence of accidents must be expected, and there is a possibility that a lorry might run out of control and crash into the LPG plant. Should a double risk situation be allowed, with an LPG plant store and a large petrol station? It can be deemed that the risk is greater with the sum of the two. Should not the garage be closed at 10 pm with LPG being closed daily considerably earlier?
I welcome the presence of my hon. Friend the Under-Secretary of State for the Environment. What advice was tendered by the Health and Safety Executive regarding Shell UK's application for the Trocadero? What are the Health and Safety Executive's rules regarding the storage of LPG?
Is my hon. Friend aware—I am sure he is—that LPG consists of propane and butane but that Her Majesty's factory inspectorate does not keep comprehensive statistics concerning leakage? Why not?
In a written answer to me dated 7 February, it was revealed that in 1978 there were 40 and in 1979 41 reported incidents involving LPG fires and explosions at factory and construction sites. I should be interested to have more up-to-date figures as they seem to be disturbing. One wonders whether anyone was injured.
I also understand from a written answer on 7 February that the Health and Safety Commission is likely to publish a new consultative document containing proposals to revise existing legislation and advice relating to flammable gases. Does the Minister know what plans it is considering? Will they be retrospective and, therefore, affect all existing LPG sites? Should LPG installation plants be above or below ground? Which is the safer? I would have hoped that having houses only 40 ft away from the proposed LPG site, as we have at Scraptoft mews, where there are over 35 residents, would have excluded such sites from serious consideration. A planning application for maisonettes beside the Trocadero is still outstanding from March 1983. I wonder why. Nobody would want to move in— not absolutely next door to this LPG store—should it still go ahead, and I do not blame them.
While thanking the Under-Secretary for listening to my remarks, I urge him in reply to give the residents of east Leicester some hope by bringing pressure on Shell UK to reconsider this extraordinary decision, one which nobody wants, which has caused so much concern, which has made so many of my constituents write to me in the last three weeks and about which they feel that there is a safety question. They fear that their homes may not be safe and that their environment may be damaged.
10.51 pm
The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): I congratulate my hon. Friend the Member for Leicester, East (Mr. Bruinvels) on the spirited way in which he introduced what I believe is his first Adjournment debate. I also congratulate him on the research which he has undertaken and echo his hope that the interested parties who read his remarks will play a part in trying to reassure his constituents about many of the issues which have clearly worried them.
I thank my hon. Friend for the manner in which he opened the debate. I quite understand that he and his constituents are worried about whether it is safe for liquid petroleum gas to be sold from petrol filling stations, and I hope that I can offer some reassurance in the time available to me.
I must, however, make it clear at the outset that the decision on the planning appeal has been taken and, as my hon. Friend understands, cannot be reopened. After the applicants had exercised their right to appeal against Leicester city council's refusal of planning permission for the installation, storage and retailing of liquefied petroleum at the Trocadero petrol filling station in Leicester, one of my Department's inspectors, Mr. Youngs, was appointed to determine the appeal.
I should perhaps say that 95 per cent. of all appeals are now determined by inspectors, and I take this opportunity to pay tribute to their work. I have every confidence in the ability and integrity of the inspectorate, and I believe that this confidence is widely shared.
Mr. Youngs is a very senior inspector who has worked in local government and who is a chartered surveyor as well as a planner. He held an inquiry which lasted three days, as my hon. Friend said, at which he heard evidence from the applicant, the city council and a number of local residents and councillors. When he had heard all the relevant evidence and seen the site, he gave his decision. That decision was that the applicant's appeal should be allowed and planning permission granted for the proposed development, subject to certain conditions.
The inspector's decision was open to challenge on legal grounds for a period of six weeks. I understand that this period has now expired and that no such challenge has been received. Apart from this limited right of challenge on legal grounds, a planning appeal decision, once given, is final. I have no power to reopen the decision, even if I thought—and I certainly do not—that there was some reason to do so. Planning permission has now been granted, and the only way in which the case could now be reopened would be for the city council to make a formal order revoking this permission.
I am bound to add, however, that, quite apart from any question of compensation, the applicants would have a right to make objections against any revocation order, and the city council would need to make a very compelling case to convince the Secretary of State that he should confirm it.
It was known that the inquiry would be concerned largely with safety. An assessor, Mr. T. A. Kantyka, was appointed to advise the inspector on technical and safety issues. Mr. Kantyka retired about three years ago but previously had worked in the petrochemical industry for 32 years. He has specialised in safety matters, and was chairman of the European Federation of Chemical Engineers' working party on loss prevention for 10 years,
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between 1970 and 1980. For good measure, he is also a former vice president of the Institution of Chemical Engineers. Mr. Kantyka had previously acted as assessor at the inquiry into the British Gas methane terminal at Canvey Island. His appointment to the Leicester inquiry demonstrates how seriously the safety aspects of the proposal were examined.
The inspector's decision letter of 15 pages concentrates almost entirely on the safety issue, and I hope that this will be a source of comfort to my hon. Friend. The applicant's evidence that the design and location of the installation would be in accordance with the relevant Health and Safety Executive guidance note, CS5, and two liquid petroleum gas industry technical association codes of practice was not challenged.
Similarly, the applicant assured the inspector that the design and operation of delivery vehicles would comply with the relevant code of practice and the regulations governing the conveyance of dangerous substances by road, and that the storage tanks would be designed, fabricated and tested to the relevant British standard. It will be for Leicester city council to undertake regular inspections of that site and that storage. I could go on to repeat what was said about the storage temperatures, the safety of pipelines, the safety of the dispenser and the safety systems incorporated into delivery vehicles, but time would forbid that. There was evidence that, even if an accidental discharge should occur, there would in most circumstances be no risk to persons or property outside the perimeter of the site. In short, the safety issue was comprehensively and thoroughly gone into at the inquiry, and little if any of the technical evidence given by the applicant on this subject was challenged.
The assessor's views and conclusions were quite clear. He was satisfied that the requirements of the various codes were met and, to some extent, exceeded. The inspector accepted his advice on this point and on the risk of a vapour cloud being formed by a major release of LPG. He put that risk at one in 50,000 years.
The city council appears to have taken a very different approach, as my hon. Friend touched on. It was looking for conclusive proof of the safety of the proposed installation. It said, as quoted in the decision letter:
"Unless an accident was impossible, it was reasonable to consider one could occur. Whether it was probable was another matter, and was not relevant for the purpose of this inquiry".
I understand and sympathise with this approach, but in a large part of our lives nil risks do not exist. We must constantly, in relation to development control, assess the degree of risk of a particular action and balance it against other reasons for or against the action in question. That is the approach the inspector adopted. It is the approach regularly adopted by the Health and Safety Executive as well, and I believe that it is the proper approach.
I realise that the fears of the local residents have been increased by two recent incidents at LPG depots. In one case, cylinders were being filled at a bulk storage site when there was a release of LPG and a fire; my hon. Friend touched on that point In the other case, a storage tank was being moved about on site by a forklift truck when the drain valve hit the ground. In this case, while LPG was released, there was no fire. These are not operations that would be carried out at a filling station, and the Health and Safety Executive takes the view that they have no direct relevance to this proposal.

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The two incidents are being investigated by Her Majesty's factory inspectorate. In the event of the investigations revealing a breach of legal requirements, prosecution will be considered. I take note of the points my hon. Friend has raised and the fears that they arouse, and I shall draw them to the attention of my colleagues in other Departments so that he can have a fuller reply.
It has been argued also that there is no proven need to justify this development. I share the inspector's view that this argument does not get us very far. It is not for the developer to prove why he ought to be granted planning permission: our approach is that planning permission ought to be granted unless there is a sound and clear-cut reason to refuse it. I understand there are already some 400 autogas refuelling stations in the United Kingdom and that a significant number—at the inquiry, the applicants said about 50 — are at petrol filling stations. In addition, there are a number of private refuelling points.
The use of automotive LPG is growing, particularly by fleet operators, and this would suggest that the number of fuelling stations is also likely to grow. However, it is not for the Government to judge. We cannot judge whether the applicants are making a wise commercial decision in providing LPG facilities at this garage. The question is whether there is any adequate reason to refuse permission for the applicants to do so. In this case, the inspector, after hearing the evidence and seeing the site, concluded that the level of risk was well within the limits of acceptability. It compared favourably with the figure of the one-in-10,000 chance applicable to normal daily human activity, which is often adopted as the base line in other cases where safety is at issue. As there was no other planning reason for the application to be refused, the inspector allowed the appeal and granted planning permission subject to a number of conditions, two of which had been suggested by the assessor.
I understand that, when the application was first made, Leicester city council consulted the Health and Safety Executive. The HSE said that it believed there would be insufficient health and safety grounds for turning down the proposal, provided that the recommendations in guidance note CS5 were met. I also understand that, since the granting of planning permission, HSE inspectors, including a specialist on LPG, have visited the site after discussions with an officer from the council and that they have repeated the HSE's previous view.
It may be helpful to widen the focus of this debate and to look more generally at what is done to ensure the safety of LPG installations. Apart from the location and separation from site boundaries, there are two other principles intended to ensure safe storage and use. The plant involved must be properly designed, constructed and maintained. Secondly, there must be appropriate safe systems of work. Provided that those requirements are met, a small installation such as a filling station poses no significant risk.
All industrial and commercial undertakings, including motor vehicle filling stations, at which liquid propane is kept are subject to the Health and Safety at Work etc. Act 1974. Sections 2 and 3 of that Act lay general duties on persons operating such undertakings to ensure, so far as is reasonably practicable, the safety not only of their own
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employees but also of members of the public and others who may be affected by their activities. The Leicester filling station would be subject to those provisions.
My hon. Friend expressed concern about the role of Shell UK and about the training and preparation of staff. I hope that his remarks will be noted and that some good will result from them, so that further reassurance can be given.
In addition, the conveyance of LPG by road is controlled by the dangerous substances regulations of 1981, and those regulations also cover the loading and unloading of vehicles. That, too, will reassure my hon. Friend's constituents.
In assessing whether or not those general duties have been complied with, enforcing authorities and others can draw on an extensive body of guidance, including standards and codes of practice issued both by the Government and by the industry itself. In particular, there is advice on the storage of bulk liquid propane gas contained in the Health and Safety Executive's guidance note CS5, "The Storage of LPG at Fixed Installations". The House is currently reviewing this guidance note. Among the matters being discussed with the industry is the provision of remotely operated emergency isolation devices. The applicants propose to fit such a device at the Leicester service station. The provision of such devices on installations is intended to enhance existing safety standards.
There are additional controls on the large scale-storage of LPG. The Notification of Installations Handling Hazardous Substances Regulations 1982, which came into force at the beginning of 1983, require anyone in control of a site handling certain quantities of defined hazardous substances to supply information about that activity to the Health and Safety Executive. The information is passed to local planning authorities to assist them in matters of development control for both the major hazard itself and developments nearby.
The HSE is currently reviewing the guidance note, and those matters are being discussed with the industry. The provision of the remotely operated emergency isolation is a very important feature of the safeguards, and I hope that it will further reassure my hon. Friend's constituents.
Further information is also passed to the local fire service. The quantity applicable to each of the hazardous substances is based on the recommendations of the advisory committee on major hazards, and the proposals for regulations were circulated to the CBI, the TUC and local authority associations as part of the consultation procedures. For activities involving LPG, the regulations apply where the quantity on site is not less than 25 tonnes, so that the Leicester filling station would not be a major industrial hazard on the basis of those regulations.
In premises subject to the Factories Acts—again, this would not include this filling station —the storage of LPG is subject to certain requirements of the Highly Flammable Liquids and Liquefied Petroleum Gases Regulations 1972. There are many other regulations, and new regulations are proposed which will relate to all flammable gases and oxygen.
I must emphasise that fixed bulk LPG storage tanks are not an unknown quantity from a safety point of view. In 1980, it was estimated that there were some 30,000 such storage tanks in the United Kingdom—a figure which, I must confess, came as some surprise to me. The safety record of fixed bulk storage tanks of liquid propane gas in

799
the United Kingdom is good and there is no record of failure of any such tank in this country. Failure could theoretically occur due to mechanical defects in the tank, but this is extremely unlikely.
To return to the Leicester case, all the safety issues were thoroughly gone into at the public inquiry. The inspector had the best possible technical assistance and advice in evaluating what was said.
I understand the concern of my hon. Friend's constituents, but I hope that what I have said this evening
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will go a long way towards reassuring them. Others outside the House have a part to play, and I am confident that my hon. Friend's remarks will be widely read. I hope that commercial interests will play their part in helping to reassure my hon. Friend and his constituents.
Question put and agreed to.
Adjourned accordingly at four 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 Hereford.
Viscount Head—Sat first in Parliament after the death of his father.

Sick Pay: Entitlement
Lord Winstanley: 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 it was their intention when introducing the new statutory sick pay scheme that people should now qualify for statutory sick pay who would not have qualified for sick pay under the old national insurance regulations.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): Yes, my Lords, there are two such groups. First, there are the married women and widows who have opted to pay the reduced rate national insurance contribution. The rate of this contribution has been increased to finance their entitlement to statutory sick pay. Secondly, there are some employees whose current earnings qualify them for statutory sick pay but whose contribution record is insufficient to qualify them for sickness benefit.
Lord Winstanley: My Lords, I thank the noble Lord for that Answer. May I ask him whether he is aware that noble Lords on this side of the House are always very glad indeed to learn of any generous gesture made by the Government at the moment, even when, as some of us suspected in this case, that gesture has been made by mistake? But it would appear that this has been done on purpose. So that we can know the extent of the Government's generosity, will the noble Lord be in a position to tell us at some time how much the Government have taken in by way of increased contributions from these people and how much they have paid out by way of statutory sick pay? That will enable us to know whether the Government have actually made a profit.
Lord Glenarthur: My Lords, I am glad that the noble Lord feels that it has been a generous gesture. It was certainly on purpose that it was done in this way. So far as figures are concerned, as the noble Lord will appreciate it is a little early yet, but at the end of the year there will be a return and that will tell us how much statutory sick pay had been paid out in the financial year. Perhaps when I have those details I can let the noble Lord know.
Baroness Jeger: My Lords, we on this side are very glad when anyone gets any money from the Government for anything. May I ask the noble Lord the Minister whether he can tell the House about the number of exclusions—the completions of the exclusion form, the SSP1E? This entitles an employer not to pay sick pay under this scheme. Also, what information can the noble Lord give the House about non-payment of SSI?
Lord Glenarthur: My Lords, I do not think that I can give the noble Baroness information on the SSP1E, but I shall certainly find out and let her know. Will the noble Baroness repeat the second part of her supplementary question?
Baroness Jeger: My Lords, it was to ask whether the noble Lord will be able to tell the House at some time about the number of exclusions and the effect on employees of these regulations, which relate mainly to low pay.
Lord Glenarthur: Yes, my Lords, in due course; but of course, the figures are not fully available yet. When they are, I shall let the noble Baroness know.
Baroness Macleod of Borve: My Lords, may ask my noble friend whether he is aware that until this scheme started widows were unable to claim sickness benefit at all because of the overlapping benefit rule, and that throughout the country they are most indebted to the Government for bringing in the scheme?
Lord Glenarthur: My Lords, national insurance widows have always been able to claim and qualify for sickness benefit under the normal rules; but, as my noble friend says, the amount of benefit payable is limited under the overlapping benefit provisions to the greater of the sickness benefit and the widow's benefit. It is not really a question of having gained entitlement, but it is certainly a question of having gained more money.

Unemployment: Statistics
2.39 p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what are the latest available figures for unemployment in the United Kingdom and what groups are most adversely affected.
The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie): My Lords, on 12th January, the number of unemployed claimants in the United Kingdom was 3,199,678, representing an unemployment rate of 13.4 per cent. An analysis by age shows that young people have the highest unemployment rate.
Lord Dean of Beswick: My Lords, I am grateful to the noble Earl the Minister for that reply, but is he aware of the report published at the weekend which

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showed that over the past four or five years the group of people who have suffered most from job losses are the women of this country? If the Government have any schemes for job improvement or to increase job provision, will he seek to influence them to consider jobs for women as a top priority?
The Earl of Gowrie: My Lords, as I said in my original Answer, the evidence that we have is that the worst affected groups are young people. Nevertheless, unemployment is an evil wherever it falls, and I am of course sensitive to its effects in respect of any group in our economy.
Lord Dean of Beswick: My Lords, I was of course referring to the figures. The Minister referred to young people as being the groups most adversely hit. I am referring to all females, including those in the younger age groups. The figures show quite clearly that women as a group have lost more jobs than any other section in the community.
Lord Stallard: My Lords, does the noble Earl recall the many speeches made by Government spokesmen in the other place linking the rate of inflation to the rate of unemployment and saying that if inflation came down unemployment would also come down? As inflation has come down but unemployment has gone up, is there another explanation?
The Earl of Gowrie: My Lords, this is precisely the point which the Government would never lose an opportunity to seek to make clear. The falls in the levels of inflation have coincided with a marked improvement in the rates of increase in unemployment levels. For instance, although it takes some time to feed through, over the past six months there has been an average monthly rise of 4,000, compared with an average monthly rise of 21,000 in the six months previously. Allowing for the two-year or one and a half year time lag that most economists now bargain for, that is a very startling effect indeed, and it is thoroughly to be wished that it continues.
Lord Boyd-Carpenter: My Lords, in the light of what my noble friend has said about juvenile unemployment—which I think many of us regard as socially the worst of all forms of unemployment—may I ask whether the Government have given consideration to the effect on it of the practice of the remaining wages councils of fixing rates of pay for juveniles very close to the adult rate?
The Earl of Gowrie: My Lords, in December the Department of Employment published a research paper which conclusively showed that there was a relation between levels of pay on offer and the incidence of unemployment among young people. I hope that noble Lords in all parts of the House will reflect their concern about unemployment among the young or any other groups in society by seeking to persuade those who influence pay bargaining.
Lord Molloy: My Lords, would not the noble Earl agree—
Noble Lords: Order, Order!
Lord Diamond: My Lords, I am grateful to the noble Lord. Is the noble Earl aware that untypically he has not answered the Question on the Order Paper? The Question asked for the figures for unemployment and the noble Earl gave us the figures for claimants. Is he able to tell us the total number of unemployed in the country?
The Earl of Gowrie: My Lords, I am not able to state that with precision because of course the only measure we have is those who claim. But it is certainly the case that without the very large sums of public money that the Government spend in order to help those who are suffering the evil of unemployment, the figure would be substantially higher.
Lord Molloy: My Lords, is the noble Earl aware that—as he has suggested—noble Lords on all sides of the House are deeply concerned about unemployment among the youth and that we are not particularly upset that there may be some who are employed and are under the protection of the wages councils? Would that they were all employed and under the protection of the wages councils! I think that every Member of the House would agree with that. Is the noble Earl also aware that some of the schemes on which the Government have embarked are not producing results? Will he please be prepared to consider the setting up of a national council, comprising representatives of the CBI, the TUC and other parts of industry, as well as some scientific experts and experts from our universities, who might be able to make a contribution as to what is required in order to get our youth gainfully employed?
The Earl of Gowrie: Alas, my Lords, words do not create jobs; would that it were so! The fact of the matter is that only a stable currency and the recovery of the whole of the West from a very deep recession will actually generate more jobs in the real world.
Lord Harmar-Nicholls: My Lords, before we develop a national inferiority complex on this subject, when considering unemployment, which is rife all over Europe, ought it not to be borne in mind that our schemes for alleviating it are becoming the envy of the other countries? Ought not the other side of the coin to be taken into account? That is, that per thousand of the population this country has more people in employment than has any other European country, except Denmark.
The Earl of Gowrie: My Lords, I certainly agree with my noble friend that it does not help employment in this country if we persistently talk ourselves down. Of the 20 OECD countries for which regular unemployment figures are available, in the past 12 months only five had lower percentage increases than the United Kingdom. During that period unemployment has risen by 25 per cent, in Norway; 16 per cent, in Ireland; 15 per cent, in Spain; 12 per cent, in the Netherlands; 10 per cent, in Italy; 9 per cent, in Denmark; 5 per cent, in Belgium; and 4 per cent. here.
Lord Dunleath: My Lords, in view of the fact that the rate of unemployment in Northern Ireland is

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considerably higher than in any other region of the United Kingdom, and in the light of the substantial amount of public funds invested in the ex-De Lorean factory near Belfast, which was purpose built for the manufacture and assembly of motor-cars, but which is now lying idle, will not the noble Earl agree that there is now what amounts to a moral obligation on Her Majesty's Government to do their best to direct the Nissan car plant to that factory?
The Earl of Gowrie: My Lords, as a fellow Irishman, I admire the noble Lord's ingenuity, but that is another Question.
Lord Blyton: My Lords, is the Minister aware that many of us regard the figures on unemployment in this country that have been given today by the Government as ridiculous because we consider that the Government are manipulating the figures of total unemployment, which we consider to be at least 5 million?
The Earl of Gowrie: My Lords, in a previous reply I pointed out to the House—and I hope that as a courtesy to me the noble Lord will check this—that without the very considerable sums of money from central funds which the Government are spending on this great problem and evil, the rates of unemployment would be considerably higher than they are.
Lord Winstanley: My Lords, does the noble Earl have available figures regarding the level of unemployment among the registered disabled? May I also ask him whether, as an example to other employers, Government departments are continuing to employ the appropriate percentage of registered disabled people?
The Earl of Gowrie: My Lords, if the noble Lord will put that down as a Question I shall do my best to answer it.
Lord Rochester: My Lords, can the Minister assure us that the number of places available under the community programme represents, in the Government's view, an adequate response to the increasing number of people aged between 18 and 24 who have now been unemployed for more than 12 months?
The Earl of Gowrie: My Lords, it is very much my view that the best way in which we can help the long-term unemployed is by setting the economy to rights and creating the conditions for higher rates of growth. But help is available through the community programme which is now providing up to 130,000 temporary jobs. Naturally, I would wish that help to be extended, but we have to take into account that the spending that would improve such a figure would also be to the detriment of recovery generally.
Lord Dean of Beswick: My Lords, is the noble Earl not aware that his answer to the very pointed question of the noble Lord, Lord Diamond, indicates clearly that the figure of claimants that he has given on behalf
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of the Government is a grossly understated figure in regard to the actual problem of unemployment and that most responsible sources consider it to be a million more? Is the Minister aware that, apart from youths whom he described as the main problem of unemployment, there are also people in the 30 to 40 age bracket who may never work again in view of the rate at which unemployment figures are proceeding at present? When will the Government really take on board the views of bodies such as the CBI, the TUC and even the Institute of Directors, which suggest a reflation of the economy to deal with this appalling problem?
The Earl of Gowrie: My Lords, I am not sure whether the CBI or the Institute of Directors have been seeking a generalised reflation of the economy which in a trading economy such as ours could have a pretty adverse effect on unemployment and other areas. Leaving that point aside, I thought that I had made clear to the noble Lord and to the House that I think the overall problem of unemployment would be rather greater were the Government not tackling the matter in the way that they are.
Lord Kilmarnock: My Lords, can the noble Earl give the figure of the total number of unemployed claimants who have been claiming supplementary benefit for more than a year and how many children they are responsible for supporting?
The Earl of Gowrie: My Lords, I think that I would need prior notice to answer that question.
Baroness Ewart-Biggs: My Lords, in view of the Minister's original Answer that it is youth which forms the highest part of unemployment, would he not agree that apprenticeship is a sure way to employment as shown by the youth schemes in Germany and Austria? Will he say whether he is satisfied that British firms offer as many apprenticeships as possible?
The Earl of Gowrie: My Lords, I agree that that is an entirely laudable objective. But for British firms to offer more apprenticeships they have to be secure in the knowledge of more orders. They have, in short, to be more competitive. Government policies are designed to create a climate in which they can become more competitive.
Lord Leatherland: My Lords, I wish to put a very brief question. What do the Government intend to do to reduce the number of unemployed?
The Earl of Gowrie: My Lords, as I think I said in my first supplementary, to create a stable financial environment and to operate both nationally and internationally in a disciplined manner so that the Western world can come out of a largely self-induced recession.

Car Parks of the House: Congestion
2.54 p.m.
Lord Segal: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask the Chairman of Committees what steps are being taken to ease congestion in the car parks of the House.
The Chairman of Committees (Lord Aberdare): My Lords, the steadily increasing daily attendance at your Lordships' House has added to the pressure on car parking space. This problem is constantly under review and the police and the staff of the House do their best to cope within the restricted space available.
Lord Segal: My Lords, while thanking the noble Lord the Chairman of Committees for that reply, I should like to join with him in thanking the attendants of the House and the police for the assistance that they render to Members, especially those who are disabled, seeking to park their cars. As parking spaces become more and more scarce, and as the abolition of this House becomes more and more remote, could not parking space be created underground as has been done in the other place so that the approaches to this House may be more greatly enhanced?
Lord Aberdare: My Lords, I am grateful to the noble Lord for the tribute that he paid to the staff and to the police. I am sure that it will be echoed thoughout the House. I doubt very much whether his idea of a further underground car park is really feasible, but we shall continue to do our best to provide as much space as we can.
Lord Stewart of Fulham: My Lords, while agreeing with what has been said about the staff and the police, can the noble Lord help me over something that has always puzzled me in regard to the car park? Why is the statue there one of King Richard I? I never heard that he was much of a parliamentarian.
Lord Aberdare: My Lords, it is perfectly true that Richard I spent only six months of his 10-year reign in this country but this statue was commissioned as a commemorative symbol of the Great Exhibition and exhibited by the sculptor Carlo Marochetti at the west entrance of the exhibition in 1951.
Noble Lords: Eighteen fifty-one.
Lord Aberdare: My Lords, 1851.I am reading but I am reading it wrong. In 1859, it was decided that the statue should be placed in Old Palace Yard and it has been there ever since.
Lord John-Mackie: My Lords, is the noble Lord aware that if noble Lords would learn to park head to tail with the passenger doors close together and only one gap between cars it would be possible to park six cars where only five are accommodated at present? Is he also aware that if chauffeur driven cars would leave the car park as soon as they have dropped their passengers this would relieve congestion considerably?
Lord Aberdare: My Lords, I am sure that those suggestions will have been heard and will be observed. I can only say that the staff perform an amazing job in getting a quart into a pint pot. There are 94 car parking spaces between the Peers car park and the Royal Court
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car park and very often 135 cars are parked in those spaces.
Lord Beswick: My Lords, the noble Lord rightly calls attention to the fact that demand on space has increased over the last decade or so. Am I also not right in saying that the space has been decreased since a pedestrian way was railed off? Is there not a demand for something more to be done?
Lord Aberdare: My Lords, I think that marginally that was so. On the other hand, we did gain a few other places nearer to St. Stephen's Hall when the House of Commons began using its underground car park.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Gray of Contin will, with the leave of the House, repeat a Statement to be made in another place on Scottish shipping subsidies.
The Committee stage of the Telecommunications Bill will be adjourned for dinner at approximately 7.30 p.m. for about three-quarters of an hour. During this adjournment the Committee stage of the Education (Amendment) (Scotland) Bill, the European Assembly Elections (Northern Ireland) Regulations 1984 and the District Electoral Areas Commissioner (Northern Ireland) Order 1983 will be taken.

Dangerous Vessels Bill [H.L.]
Lord Walston: My Lords, I beg to introduce a Bill to empower harbour masters to give directions to prohibit vessels from entering the areas of jurisdiction of their respective harbour authorities or to require the removal of vessels from those areas where those vessels present a grave and imminent danger to human life, property or navigation, to enable the Secretary of State to give further directions countermanding those first mentioned directions, to provide for compensation for damages suffered in certain circumstances as a consequence of those directions, and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Walston.)
On Question, Bill read a first time, and to be printed.

Telecommunications Bill
3 p.m.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, I beg to move that the House do now again resolve itself into Committee in this Bill.
Moved, That the House do now again resolve itself into Committee—(Lord Cockfield.)
Lord Bruce of Donington: During the proceedings of your Lordships' Committee yesterday the noble and learned Lord the Lord Advocate in the course of the

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debate on an amendment, indicated at col. 470 of the Official Report:
"We intend to make a statement to the House at a later stage of the Bill outlining the steps we propose to take to permit wider resale of circuits leased from BT".
That statement at the time aroused some anxiety in the Committee, and indeed some debate took place upon it. At a later stage the noble and learned Lord was moved to say that he hoped to have a statement made not at the Committee stage but at Report or Third Reading. That did not meet with the entire approval of the Committee and it did not quite quell its anxieties. So a little later in the proceedings the noble and learned Lord said that he hoped that the Government would be in a position to make the statement by the Report stage of the Bill.
Your Lordships will recall that there was still some widespread dissatisfaction with the situation, and that subsequently the Committee divided on the Motion, That the House do now resume. And the Government obtained only a very small majority. The situation is still very unsatisfactory. I have considered the matter with my noble friends on this side of the House and we now have formally to ask the Government whether the promised statement can be made at least 10 days before the Report stage of the Bill. Your Lordships will appreciate that this matter is of some consequence, not only in regard to amendments that have been discussed, but also in regard to those still to come, particularly those with financial implications. Therefore, it will be necessary, for the convenience of Her Majesty's Opposition—and indeed for other Members of the House—to have this statement in good time to enable the appropriate consultations to take place, so that the matter may be discussed in some detail, and in order that amendments may be put down in good time before the Report stage. Then the Government will have an opportunity of considering the reaction that results from their statement. We should be most grateful if the House can be given that assurance.
The Lord President of the Council (Viscount Whitelaw): My Lords, I give the noble Lord and the House the assurance that it will be put before your Lordships' in good time.
Lord Cledwyn of Penrhos: My Lords, the noble Viscount has been kind enough to make that statement, but I wonder whether he can clarify the position rather more than he has done? My noble friend Lord Bruce of Donington has made a very reasonable statement and a very reasonable request to the House. What the noble Viscount has done is to leave us in the same state of uncertainty as we were left in yesterday. "In good time" is not quite good enough. We need to know that this will be in our hands a reasonable period of time before the Report stage. As my noble friend has said, this is a matter of the utmost complexity and importance. Therefore, we shall be most grateful to the noble Viscount if he can give us a rather clearer indication of when we may expect the statement.
Lord Lloyd of Kilgerran: My Lords, this is a very complicated Bill and I and Members sitting on this
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side of the House would like to support what has been said already.
Viscount Whitelaw: My Lords, of course I will respond to the noble Lord, Lord Cledwyn, and the noble Lord, Lord Lloyd. When I said "in good time" I hoped that that could be interpreted as being in reasonable time and in proper time before the Report stage.
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 45 [Interruption or interference with public telecommunication system]:
Lord Stoddart of Swindon Lord Stoddart of Swindon had given notice of his intention to move Amendment No. 109:
Page 42, line 18, at end insert—
("(3) No person being an employee of a company or companies running telecommunications systems shall be guilty of an offence under this section if the conduct complained of takes place exclusively or primarily in contemplation or furtherance of a trade dispute with those running telecommunications systems.
(4) No person shall be guilty of soliciting or procuring or attempting to solicit, incite or procure or aiding or abetting the commission by an employee of companies running telecommunications systems of an offence under this section unless it can be established that one or more of the persons so solicited, incited or procured, or aided or abetted or in relation to them an attempt to solicit, incite or procure as aforesaid is alleged to have been made would not have been entitled to the immunity conferred by subsection (1) above in the event of his or their being charged with the relative substantive offence of the said provisions.
(5) Where in pursuance of any agreement the Act in question in relation to any of the offences referred to in subsection (4) above are to be done exclusively or primarily in contemplation or furtherance of a trade dispute with companies running telecommunications systems that offence or those offences are to be disregarded for the purpose of section 1 of the Criminal Law Act 1977.")
The noble Lord said: At a very late stage last night we were presented with two amendments by the Government which your Lordships were pleased to pass. Amendment No. 109 refers to the problems of strikes and other action. In all the circumstances, bearing in mind that at the end of his statement the noble and learned Lord the Lord Advocate invited comments that he said the Government would consider, and bearing in mind also that we—and indeed all other interested parties—will wish to consider in depth and at certain length what the noble and learned Lord said, with the consent of those noble Lords who have appended their names to this amendment, I do not propose to move the amendment.
[Amendment No. 109 not moved.]
Clause 45, as amended, agreed to.
Clause 46 [Interception and disclosure of messages etc.]:
Lord Mishcon Lord Mishcon moved Amendment No. 110:
Leave out Clause 46 and insert the following clause:
("Interception and disclosure of messages.
46.—(1) A person who—

(a) intentionally intercepts any message or other matter carried by means of a telecommunications system licensed under section 7 above:

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(b) instigates any person engaged in the business of a licensee to intercept such a message or other matter; or

(c) discloses the contents of any message or other matter intercepted under paragraph (a) or (b) above,

unless acting in obedience to a warrant issued pursuant to the following provisions of this section, shall be guilty of an offence and liable on conviction on indictment to a fine not exceeding £5,000 or to imprisonment for a term not exceeding three years or to both.
(2) Proceedings for an offence under subsection (1) above shall not be instituted in England or Wales except by or with the consent of the Attorney General, or in Northern Ireland except by or with the consent of the Attorney General for Northern Ireland.
(3) The Secretary of State may, on the application of a chief officer of police or the Commissioners of Customs and Excise issue a warrant for the interception and disclosure of telecommunications if he is satisfied that—

(a) it would assist in the detection of a serious offence;

(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried; and

(c) there is good reason to think that the interception would result in a conviction for that offence.

In this subsection "serious offence" means—

(i) an offence for which a person not previously convicted could reasonably be expected to be sentenced to imprisonment for a term of three years; or

(ii) an offence in which either a large number of people is involved or there is good reason to apprehend the use of violence or the financial rewards of success are very large.

(4) The Secretary of State may, in the application of a chief officer of police or the Director General of the Security Service issue a warrant for the interception and disclosure of telecommunications if he is satisfied that—

(a) it would assist in the detection of a major subversive, terrorist or espionage activity giving rise to external or internal danger to the defence of the realm; and

(b) normal methods of investigation have been tried and have failed or from the nature of things are unlikely to succeed if tried.

(5) An application for a warrant under this section shall be made in writing and shall specify—

(a) the person whose telecommunications it is sought to intercept and the telecommunications in question; and

(b) the facts and circumstances in support of the application.

Provided that the Secretary of State may allow any information required under paragraph (b) above to be provided orally and not in writing in respect of an application for a warrant under this subsection.
(6) Except in a case of emergency any warrant under this section shall be issued only under the hand of the Secretary of State; and, in any such case, shall be confirmed under his hand as soon as reasonably practicable after issue.
(7) Any warrant issued under this section should carry a time limit not exceeding two months from the date of issue and may be renewed for not more than one month at a time in the case of an application of the police, not more than two months at a time in the case of an application of the Customs and Excise, and not more than six months at a time in the case of an application of the Security Service.
(8) In this section "intercept" includes the doing of any act designed to enable an interception to take place and "intercepts", "intercepted" and "interception" shall be construed accordingly.")
The noble Lord said: I am moving this amendment concerning the new clause with the consent of those in whose names the amendment stands and in the absence of my noble and learned friend Lord Elwyn-Jones, who finds himself engaged upon other matters but who otherwise would have been here in the Committee and would no doubt have repeated the eloquent speech which he made on a very similar amendment at the Committee stage of this Bill in its former version in a former Session of your Lordships' House.
In opening the debate on this amendment, I should like to point out that it is one of the most important amendments to this Bill that your Lordships will have to consider. It touches—and when it does so there is a very ready reaction in your Lordships' House—upon the liberty of the subject, upon the value of privacy and upon international conventions to which we are a party and which pay tribute to that right of privacy. I cannot think of anything more annoying—if I can put it in that somewhat neutral language—than having one's telephone tapped and knowing that that telephone can be tapped without proper control.
This is not a new matter that has been exercising the public mind; it goes back a very long time. Debate after debate, article after article, and meeting after meeting of the Post Office Engineering Union have endeavoured to ensure that there is proper regulation concerning telephone tapping. This amendment has two aims. The first is to see that there is statutory provision for the control of the right of the state, through the Secretary of State, to indulge in telephone tapping. The amendment also seeks to put just measures into the Bill for the control—and indeed, the punishment—of those who indulge in unauthorised telephone tapping.
When one is talking in terms of the control of crime, the guardianship of security and the defence of customs and excise in the proper carrying out of their very difficult duties, when one is dealing with matters of espionage and terrorism (as unfortunately we do in this age) I hope that your Lordships will take it for granted that in moving this amendment—which is very clear in its terms—there is not the slightest desire to impinge upon any of those very vital matters. This is written into the amendment, and written in very clearly. I suppose that everyone would also agree with the words of the noble and learned Lord, Lord Diplock, who has such a great experience of these matters. The noble and learned Lord was charged with certain duties and in his report, which was published in 1981, he said:
"The exercise by the state of any power to read or listen to communications taking place between private citizens involves an invasion of their privacy which has always been looked on by the public with suspicion and distaste."
Therefore, we start our investigation of this new clause (if I may put it that way) upon the basis that there is no desire at all to impinge on the proper use by the state of very necessary powers in certain circumstances. We also start with the premise that it is a right which must be properly circumscribed, because otherwise it is an invasion of a very sacred right and one, of course, recognised by the Convention on Human Rights.
Your Lordships may be amazed to know that, in spite of all these matters to which I have referred, there is no clarity in our law as to what are the rights of the state and what are the rights of the citizen in these matters. There is certainly no statutory form. Again, I want to make it clear to your Lordships that, in trying to put this into statutory form, the amendment follows completely and closely the very words that are used in the White Paper which was issued by the Government only a couple of years ago, in which they explained their procedure before the warrant was issued by the Secretary of State. So, again, we proceed with this

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clause on the basis of moderation and of putting into statutory form only what the Government themselves have said is the proper procedure to be followed in regard to state-authorised interference in this way.
A very great judge had something to say about the state of our law. Sir Robert Megarry, Vice-Chancellor of the Chancery Division, in the case of Malone v The Metropolitan Police Commissioners at page 733 of the Weekly Law Reports of 18th May 1979 gave a judgment. With your Lordships' permission, because it is so germane to the very fundamental reasoning behind this amendment, I seek leave to read this excerpt from his judgment:
"I would only add that even if it was not clear before, this case seems to me to make it plain that telephone tapping is a subject which cries out for legislation. Privacy and confidentiality are, of course, subjects of considerable complexity. Yet however desirable it may be that they should at least to some extent be defined and regulated by statute rather than being left for slow and expensive evolution in individual cases brought at the expense of litigants and the Legal Aid Fund, the difficulty of the subject matter is liable to discourage legislative zeal. Telephone tapping lies in a much narrower compass. The difficulties in legislating on the subject ought not to prove insuperable and the requirements of the convention should provide a spur to action, even if belated.".
I pause for a moment only to say that the convention is, of course, the European Convention on Human Rights, to which we are a party and in regard to which only yesterday our Government was sued before the court after an adverse report from the European Commission on breaches of that convention so far as this Government are concerned and so far as our country is concerned on the very matter about which I am talking, which is telephone tapping. I continue:
"This, however, is not for me to decide. I can do no more than express a hope and offer a proleptic welcome to any statute on the subject. However much the protection of the public against crime demands that in proper cases the police should have the assistance of telephone tapping, I would have thought that in any civilised system of law the claims of liberty and justice would require that telephone users should have effective and independent safeguards against possible abuses."
I could continue with this passage, which merely repeats in very eloquent language the need for legislation and the need for statute to set out very clearly what the procedure should be and what the safeguards should be for the private citizen when telephone tapping is in fact exercised by the state. I repeat, in this connection this amendment follows word for word all the matters which the Government in their White Paper have said is the normal practice; and all the matters which the Government have said are done are in fact incorporated in this amendment without any addition. So much for the state exercising the right of telephone tapping.
With your Lordships' experience in industry and commerce (which is very great in various parts of the Committee), your Lordships will know full well of the growth of industrial espionage. Your Lordships will also know what happens from reading reports in journals and in the daily papers. Your Lordships will also know about what unfortunately happens in the criminal world in regard to blackmail as a result of the interception of telephone calls. In connection with unauthorised tapping, this amendment simply makes
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the penalties realistic and, if I may quote some very well-known words, it makes
"the punishment fit the crime".
Therefore, we have the opportunity of doing what a distinguished judge has called for; we have the opportunity of doing what those experienced in this matter have been crying for; and, by a vote on a completely non-political matter, we have the opportunity of doing what another place nearly did when almost this selfsame amendment came before it at the Committee stage of the previous Telecommunications Bill. On that occasion, the amendment was lost by the Chairman's vote. Your Lordships will know their procedure—and some of your Lordships will know it far better than I. The procedure is that, if there is no majority for an amendment, by tradition the Chairman has to vote against it. So the amendment was very, very nearly carried.
No doubt your Lordships will have read reports in The Times this morning that the Attorney-General, because of the importance of the matter, appeared yesterday on behalf of the Government in a case which dealt with telephone tapping. It was said that we had no proper safeguards and that we were in breach of the convention. If ever there was a moment—a very topical moment—in which to carry this amendment, to bring ourselves clearly within the terms of the White Paper and the convention and to impose on ourselves a duty to safeguard the private rights of the citizens of our land and to see to it that the statute speaks in a clear way and that the law is lucid, in a field in which it has not been clear up to the time that your Lordships have this great opportunity, that time has come. I beg to move.
Lord Lloyd of Kilgerran: Your Lordships will know that the party to which I have the honour to belong has a long tradition in strongly supporting matters relating to privacy and the human rights of the individual. Many of your Lordships will still remember the many interventions made by the late Leader of my party, whose sudden death we all so greatly mourn. Noble Lords will no doubt remember the many interventions he made in your Lordships' House on this very matter of human rights and questions of privacy. In view of the powerful speech of the noble Lord, Lord Mishcon, with all of which I certainly agree, echoing as he has done the powerful words of the noble and learned Lord, Lord Diplock, I shall be very brief. I merely want to say that if the noble Lord decides to move to a Division, then we on these Benches will certainly support him in that.
Your Lordships will forgive me if I emphasise one matter since I have raised so many matters during the Committee stage of this Bill relating to EC and foreign laws. The passing of this amendment will in my view be a very useful and helpful method of enabling the Government to put themselves within the European law in relation to human rights.
Lord Edmund-Davies: I had no reason to think that I would be present this afternoon, otherwise I should have come prepared to deal with this vitally important constitutional matter. I have to say that my time in the Chamber must be limited to the next half an hour. I

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hope your Lordships will acquit me of discourtesy, because it is absolutely impossible for me to remain here. But I cannot be here for any time at all without submitting to the Committee that it is wholly unthinkable that in these days subsection (3) of Clause 46 in the Bill can be tolerated for a moment. It says:
"Subsection (1) above does not apply to anything done in obedience to a warrant under the hand of the Secretary of State"—
no more. A warrant issued by the Secretary of State is a complete answer to the earlier provisions. That simply will not do. This is not a party matter; this is a matter of the greatest constitutional importance.
No Secretary of State in any Government must be able to say: "You cannot inquire into this matter at all; I have issued a warrant. You may consider, you may be convinced—indeed, it may be apparent to everybody—that there was no ground on which a warrant could be issued, but nothing can be done about it". Accordingly, all I can submit for the earnest consideration of the Committee is that nothing should be done which will lead to the acceptance of such a provision as is contained in subsection (3) of Clause 46.
For the first time I have seen the suggestion contained in the amendment proposed. It begins in subsection (3) by placing a fetter upon the action of the Secretary of State. It is not simply his ipse dixit, to say that a warrant will be issued. He is required to be satisfied of at least certain matters. Whether or not the formula, if he is satisfied, et cetera, is quite acceptable in the light of the trouble caused by such cases as Liversidge v Anderson is a matter which I think demands very careful consideration hereafter, but at least the amendment has the virtue of placing or seeking to place some degree of fetter upon the power of the Secretary of State—if he is satisfied that it would assist in the detection of a serious offence, and so on.
I apologise for the total inadequacy and the shabbiness of my intervention at this stage in the wholly unforeseen circumstances of my being present here this afternoon. But I implore the Committee to see that something is done on the lines of subsection (3) of the amendment to Clause 46, at least, and that the clause in its present form does not go through.
3.25 p.m.
The Lord Advocate (Lord Mackay of Clashfern): The noble Lord who moved this amendment referred us to the earlier occasion when a very similar amendment was debated and when his noble and learned friend Lord Elwyn-Jones moved the corresponding amendment. The argument is very much the same now as it was then, subject to the fact that, as the noble Lord, Lord Mishcon, said, only yesterday the European Court of Human Rights were hearing the oral submissions arising out of the case of Malone, which was dealt with on the judgment of the Vice-Chancellor, Sir Robert Megarry, to which the noble Lord referred. As is the custom in the European Court of Human Rights, the decision has been postponed for some time, so it will be some little time before the judgment of the court upon this matter in the case of Malone will be available. It would certainly seem to the Government that this would not be an appropriate time at which to attempt to deal with this matter in legislation, when there is a case pending
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which is absolutely germane to it. The arguments of the Attorney General have been referred to already on that matter.
I think it is important to remember that the essential point we are discussing today is not the need for interception for the purposes set out in the White Paper, the detection of serious crime and the safeguarding of the security of the state, but the way in which it is controlled to ensure that the power to intercept communications is exercised only in clearly justifiable cases and that the use made of it is limited to what is strictly necessary.
In my submission to your Lordships it is not completely right to say that telephones can be tapped without proper control. Both the clause in the Bill and, of course, the amendment moved by the noble Lord provide that telephones may not be lawfully tapped without a warrant of the Secretary of State, and that anyone tapping in the course of their duties without such warrant would be guilty of an offence. There is a point between us possibly about what the penalty should be, but there is no question that unwarranted telephone tapping is an offence under the provisions of the Bill already. The only question is whether the granting of a warrant by the Secretary of State should be subject to controls which are set out in the statute, or should be a matter of the personal administrative responsibility of the Secretary of State for which he is answerable to Parliament under provisions of an administrative character which Parliament have set up, to which I shall come in a little more detail in a moment.
The Government's case against the detailed regulation of interception by statute rests on the proposition that interception, to be effective, must be secret. This means that both the fact of interception and the information which led to it must be secret. But if the detailed criteria for interception were laid down in an Act of Parliament then the whole process would become subject to much more open scrutiny. The inclusion in this Bill of this amendment would give private individuals the right to sue the Secretary of State in a civil suit in the courts, and the courts would be obliged to adjudicate.
To enable the courts to determine these matters fairly all the relevant information would have to be exposed in evidence because the procedures which are set down in the amendment require that certain information should be before the Secretary of State before the warrant is granted, and if that is to be adequately tested it would require revealing precisely the information which must be kept secret for the interception to be effective. Secrecy and litigation are difficult to reconcile, because the basic principle of our litigation is that it is completely open whereas secrecy of course goes in the opposite direction.
The Government believe that the present system under which the power of the Secretary of State to authorise interception under warrant is specifically recognised by legislation, and the White Paper, The Interception of Communications in Great Britain, which sets out detailed administrative procedures and safeguards for interception on behalf of the police, Customs and Excise, and the security service, avoid the unacceptable consequences of legislation while

639
indicating clearly the strict controls on interception for these purposes.
In addition—and this is the further matter to which I made reference earlier—there is the further safeguard of the independent judicial monitor. Lord Diplock's report published in March 1981, Command 81/91, found that the procedures set out in the 1981 White Paper were being strictly observed. In addition, there is the undertaking that the Home Secretary will inform the other place of any changes in these arrangements. The noble and learned Lord, Lord Bridge of Harwich, has now taken over from the noble and learned Lord, Lord Diplock, the task of maintaining a continuing independent check on individual cases. In the Government's view this scrutiny by the independent judicial monitor ensures that the arrangements set out in the 1980 White Paper continue to be scrupulously observed, while at the same time it preserves the secrecy which is the central feature of these arrangements.
It is not easy to elaborate upon this matter. These are the essential features of the argument and, as the noble Lord, Lord Mishcon, said, they have been elaborated many times. A further safeguard of course is the position of British Telecommunications itself. They need the confidence of their customers and would not put it at risk by allowing any kind of snooping on those customers' communications, and apart altogether from that there is the criminal sanction to which I have already referred.
In that situation I would suggest to your Lordships that the position which the Government have consistently taken up is one to which your Lordships should give effect at this stage. As I said, the effect is that the Court of Human Rights is in the course of dealing with a particular case on this very matter at this moment. It would seem to be a singularly inappropriate moment at which to indulge in detailed legislation. I should remind your Lordships that in the passage quoted from the Vice-Chancellor, Sir Robert Megarry, he indicated that legislation of this kind would possibly be simpler than legislating the right of privacy completely, but it is apparent from the way in which he expressed himself that he did not anticipate that legislation in this area would be particularly simple. In that situation the view of the Government is that this amendment should not be given effect, and that the clause as it stands in the Bill should stand part.
Lord Molloy: Is the noble and learned Lord the Minister aware that the view could well be taken that British legislation should by and large support anything that comes from the Court of Human Rights in Europe but that we certainly ought not to hold up any legislation to wait to see which way that court jumps? If we start on that caper, we would hardly get any legislation through this House whatsoever. However, we have to take full cognisance of what the Court of Human Rights says.
The other thing which the Minister ought to take into account is the able speech to which we listened from my noble friend Lord Mishcon, and the tremendously powerful words from learned people in the world of the judiciary that he quoted. They made us all think. Then we had the notable contribution
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from the noble and learned Lord, Lord Edmund-Davies. Those of us who are not lawyers but who have listened to the words of these eminent people will realise that they are all opposed to the Government doing this. When one realises what we have heard said this afternoon in this Committee, and that the Opposition parties have declared themselves in support of the official Opposition against the Government, one is compelled to think that the safeguards which the noble and learned Lord read out are more excuses than safeguards, and that we should not be put off our duty.
Our duty lies in the firm belief that the ordinary people of this country are dead against any form of phone tapping except perhaps within the parameters outlined by my noble friend Lord Mishcon. It is on that basis that I support this amendment this afternoon. I believe that the mass of ordinary Britons in this island of ours support the judges who were quoted by my noble friend, and support the noble and learned Lord, Lord Edmund-Davies. I hope that the Government too will come round to agreeing to the amendment.
Lord Harris of Greenwich: On one matter I think that the noble and learned Lord the Lord Advocate would have persuaded us that he was right, and that was that telephone tapping is desirable on some occasions in the national interest. First, it is clearly desirable when there is a case of espionage, or suspected espionage. Secondly, it is desirable when there is a belief that it is the only way of bringing to justice some group of criminals involved in the international trade in narcotics. Thirdly, it is right when there is a belief by the Home Secretary that it is the only way to bring to justice people who are involved in grave criminal offences which, if carried through, will cause loss of life.
In those three cases I think there is no doubt that telephone tapping and mail interception are right. But I have rarely heard the noble and learned Lord the Lord Advocate less persuasive on an important issue which this Committee is discussing, particularly following the speech of the noble and learned Lord, Lord Edmund-Davies. When the noble and learned Lord the Lord Advocate turned to deal with the judgment of the Vice-Chancellor, Sir Robert Megarry, he in no way began to answer the point made by Sir Robert Megarry in that judgment.
What he said—and the noble Lord, Lord Mishcon, reminded us of it—was that telephone tapping cries out for legislation. The answer, in so far as there was an answer from the noble and learned Lord the Lord Advocate, was that Sir Robert Megarry had also said that legislation would not be easy to draft. No doubt it would not be, but that frankly is no answer at all. The Government have a clear obligation to bring forward legislation of their own. If they do not like the amendment, I hope that the noble and learned Lord will listen to the balance of the argument that has been deployed in this Chamber this afternoon and indicate that at a later stage he will bring forward legislation. What is involved here is this country, yet again, being dragged to the European court.
It is quite obvious what the judgment of that court would be. We already lost our argument in the European Commission when we were defeated very

641
nearly unanimously. What will happen is that later this year the European Court will bring forward a judgment which, once again, will cause great damage to the international reputation of this country and will give rise to some dark beliefs held by some people—I do not share those beliefs—that there is something very mysterious and wrong going on in this area of telephone interception. There is no point in saying that there is little risk involved in not having legislation.
I shall deal with one case that has not been touched on. It was a disciplinary case brought against a barrister some years ago. The noble and learned Lord may remember it. What was discovered on that occasion was that the telephone conversations of a member of the Bar had been intercepted and had been used as evidence against him in disciplinary proceedings. As a result of that a committee including the late Lord Birkett and Lord Gordon-Walker, were appointed to investigate this matter and produce a report. Following that report which the Government of the day accepted, there still remain grave doubts and uncertainty about the way in which the Home Secretary utilised his power. I do not believe there is a mystery. I believe that successive Home Secretaries have behaved wholly honourably in this matter, but there is so much public disquiet that it is the responsibility of the Government to bring forward a sensible amendment of their own, if they do not like this one, and put this whole issue on a statutory basis. That was what Sir Robert Megarry recommended and I hope the Committee will take that view this afternoon.
Lord Mishcon: The Committee is always entertained by the noble and learned Lord the Lord Advocate to powerful speeches and effective reasoning. I am afraid I must agree with the noble Lord, Lord Harris of Greenwich, that on this occasion he did not quite come up to that standard. It is not because of any lack of ability of the noble and learned Lord; it is merely that his mind was speaking but his heart was not in it. That was completely obvious.
I shall take up two points rapidly while paying my tribute to the contribution made by the noble and learned Lord, Lord Edmund-Davies. Is it not an extraordinary answer from the Government, that the reason that this is not timely is that we are waiting for the judgment of the European Court? I follow completely what the noble Lord, Lord Harris, said. Are we again to be forced into legislation, as it is quite obvious we are bound to be, because the court has found against us? Or are we to adopt an amendment of this kind which would mean without any doubt that we would not then be in breach of the convention? If the Government want to be put into that undignified position, may I be allowed to say in all humility that I do not think that the majority of the citizens of this country will welcome the indignity of legislating on that basis.
The second point that the noble and learned Lord rather haltingly made was that this might involve the judicial process. If there is one department in the whole of the Government that appears time and time again to fear the process of judicial review, for some uncanny reason it is the Home Office. It is as though one does not ever have in mind that if security matters
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are involved there is an adequate procedure for the proceedings to be held in camera. Our judges are astute to guard the security of this country with their usual consistent ability and therefore the noble and learned Lord need not tremble on grounds of publicity. I repeat that this amendment (and the noble and learned Lord was unable to say otherwise) follows completely the procedure that was laid down in the White Paper; no amendments, no new thoughts, purely and simply a safeguard for our people, and a safeguard, too, for our reputation in the world, especially in Europe, in relation to human rights.
This is an opportunity for all of us to act in accordance with our conscience and to do our duty upon this occasion without regard to what seats we occupy in your Lordships' Chamber.
Lord Mackay of Clashfern: The noble Lord was suggesting that a complete answer to the problem that I raised about secrecy was the fact that the courts can sit in camera. I can understand that that is an important manner in which the courts can deal with security questions to prevent publicity. But it is not publicity that is important in this case. It is that the person who may be the subject of the inquiry should not be informed about the nature of the information upon which the warrant was based or, perhaps even more important, the source of that information. The sort of matters being dealt with under this procedure are matters of the highest importance and on which people's lives may be at stake.
The second point I wish to make follows from what the noble Lord, Lord Harris of Greenwich, was saying. Because of the manner in which this amendment has been constructed, as I understand it what has been done is simply to put into statutory form what are the present arrangements under the White Paper. Therefore there is no suggestion whatever that the arrangements will be carried out differently from the present arrangements. All that is happening is that the present arrangements set out in the White Paper— which were monitored first by the noble and learned Lord, Lord Diplock, and now by the noble and learned Lord, Lord Bridge of Harwich—instead of being purely in an administrative White Paper are to be in the statute. They are exactly the same, as I understand what is attempted, as are presently in the administrative arrangements which have been fully described and monitored.
The third point is that the noble Lords, Lord Harris of Greenwich and Lord Mishcon, are forecasting what the court's judgment will be. That is an undertaking that I should not be prepared to take on board. One might have some views about the broad thrust of the judgment, possibly; but we are quite unable to say at this stage what the precise criticisms, if any, the court will have of our present arrangements. The noble Lord is saying with confidence that his amendment would precisely meet any judgment that the Court of Human Rights might deliver. I find it hard to know how he can say that with any confidence. These are all matters of importance certainly, but I would urge your Lordships that the Government view is a perfectly appropriate view to take at this stage and that the amendment should not be supported.
Lord Mishcon: I am sure that the Committee would want its opinion to be taken.
3.50 p.m.
On Question, Whether the said amendment (No. 110) shall be agreed to?
Their Lordships divided: Contents, 129;Not-Contents, 112.

DIVISION NO. 1

CONTENTS

Airedale, L.

Kilmarnock, L.

Amherst, E.

Kinloss, Ly.

Ampthill, L.

Leatherland, L.

Ardwick, L.

Llewelyn-Davies of Hastoe, B.

Attlee, E.

Lloyd of Hampstead, L.

Aylestone, L.

Lloyd of Kilgerran, L.

Banks, L.

Longford, E.

Barnett, L.

Loudoun, C.

Beswick, L.

McIntosh of Haringey, L.

Birk, B.

Mackie of Benshie, L.

Bishopston, L.

MacLeod of Fuinary, L.

Blyton, L.

McNair, L.

Boston of Faversham, L.

Mar, C.

Bottomley, L.

Milford, L.

Bowden, L.

Mishcon, L.

Brookes, L.

Molloy, L.

Brooks of Tremorfa, L.

Nicol, B.

Bruce of Donington, L.

O'Brien of Lothbury, L.

Buckmaster, V.

Oram, L.

Burton of Coventry, B.

Paget of Northampton, L.

Caccia, L.

Peart, L.

Caradon, L.

Phillips, B.

Carmichael of Kelvingrove, L.

Ponsonby of Shulbrede, L. [Teller.]

Chitnis, L.

Cledwyn of Penrhos, L.

Raglan, L.

Collison, L.

Rathcreedan, L.

Cooper of Stockton Heath, L.

Reilly, L.

Darling of Hillsborough, L.

Rhodes, L.

David, B.

Rochester, L.

Dean of Beswick, L.

Ross of Marnock, L.

Diamond, L.

St. Davids, V.

Donaldson of Kingsbridge, L.

Seear, B.

Donnett of Balgay, L.

Seebohm, L.

Edmund-Davies, L.

Sefton of Garston, L.

Ennals, L.

Segal, L.

Ewart-Biggs, B.

Shackleton, L.

Ezra, L.

Shaughnessy, L.

Gaitskell, B.

Shinwell, L.

Gallacher, L.

Simon, V.

Galpern, L.

Somers, L.

George-Brown, L.

Soper, L.

Gladwyn, L.

Spens, L.

Gormley, L.

Stallard, L.

Graham of Edmonton, L. [Teller.]

Stamp, L.

Stedman, B.

Hale, L.

Stewart of Alvechurch, B.

Hampton, L.

Stewart of Fulham, L.

Hanworth, V.

Stoddart of Swindon, L.

Harris of Greenwich, L.

Stone, L.

Hayter, L.

Strabolgi, L.

Henniker, L.

Taylor of Blackburn, L.

Hereford, Bp.

Taylor of Gryfe, L.

Hooson, L.

Taylor of Mansfield, L.

Houghton of Sowerby, L.

Tordoff, L.

Hughes, L.

Underhill, L.

Hunt, L.

Wallace of Coslany, L.

Hunter of Newington, L.

Wedderburn of Charlton, L.

Hylton-Foster, B.

Wells-Pestell, L.

Ilchester, E.

Whaddon, L.

Irving of Dartford, L.

White, B.

Jacques, L.

Wigoder, L.

Jenkins of Putney, L.

Wilberforce, L.

John-Mackie, L.

Wilson of Rievaulx, L.

Kagan, L.

Winstanley, L.

Kaldor, L.

Wootton of Abinger, B.

Kearton, L.

644

NOT-CONTENTS

Abercorn, D.

Long, V.

Ailesbury, M.

Lovat, L.

Airey of Abingdon, B.

Lucas of Chilworth, L.

Allerton, L.

Lyell, L.

Avon, E.

McAlpine of Moffat, L.

Bauer, L.

McAlpine of West Green, L.

Belhaven and Stenton, L.

Mackay of Clashfern, L.

Belstead, L.

Macleod of Borve, B.

Bessborough, E.

Macpherson of Drumochter, L.

Boyd-Carpenter, L.

Broxbourne, L.

Mancroft, L.

Bruce-Gardyne, L.

Mansfield, E.

Caithness, E.

Margadale, L.

Campbell of Croy, L.

Marley, L.

Carnegy of Lour, B.

Merrivale, L.

Chelmer, L.

Middleton, L.

Clancarty, E.

Milverton, L.

Clitheroe, L.

Molson, L.

Cockfield, L.

Monk Bretton, L.

Coleraine, L.

Montgomery of Alamein, V.

Cottesloe, L.

Morris, L.

Cullen of Ashbourne, L.

Mottistone, L.

Daventry, V.

Mowbray and Stourton, L

De Freyne, L.

Murton of Lindisfarne, L.

De La Warr, E.

Northchurch, B.

Denham, L. [Teller.]

Nugent of Guildford, L.

Drumalbyn, L.

Onslow, E.

Duncan-Sandys, L.

Peyton of Yeovil, L.

Dundee, E.

Portland, D.

Ebbisham, L.

Rankeillour, L.

Effingham, E.

Rochdale, V.

Ellenborough, L.

Romney, E.

Elliot of Harwood, B.

Saint Oswald, L.

Elphinstone, L.

Sandys, L.

Elton, L.

Selkirk, E.

Enniskillen, E.

Sempill, Ly.

Ferrier, L.

Sharples, B.

Fraser of Kilmorack, L.

Sherfield, L.

Gainford, L.

Skelmersdale, L.

Glanusk, L.

Stodart of Leaston, L.

Glenarthur, L.

Strathcarron, L.

Gray of Contin, L.

Sudeley, L.

Gridley, L.

Suffield, L.

Hailsham of Saint Marylebone, L.

Swinton, E. [Teller.]

Terrington, L.

Hampden, V.

Teynham, L.

Harmar-Nicholls, L.

Thorneycroft, L.

Harvey of Prestbury, L.

Torphichen, L.

Henley, L.

Tranmire, L.

Hives, L.

Trenchard, V.

Home of the Hirsel, L.

Trumpington, B.

Hornsby-Smith, B.

Ullswater, V.

Ingrow, L.

Vaux of Harrowden, L.

Kaberry of Adel, L.

Vickers, B.

Kinnaird, L.

Vivian, L.

Lane-Fox, B.

Whitelaw, V.

Lauderdale, E.

Young, B.

Resolved in the affirmative, and amendment agreed to accordingly.
House resumed.

Scottish Shipping Subsidy
3.59 p.m.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Scotland. The Statement is as follows:
"With permission, I should like to make a Statement on my proposals for financial assistance in 1984–85 for snipping services to the Scottish islands, and also to announce my conclusions on the future system of shipping subsidy.
"I propose to give deficit grants of £7·2 million to Caledonian MacBrayne and of £0·9 million to the Orkney Islands Shipping Company. These grants will limit the need in both cases for the companies to increase their fares to approximately 5 per cent. overall for the year. I propose also to increase support offered to P & O and to the various bulk shipping companies with whom I have undertakings to allow them to continue to rebate the fares and charges on their services. The rebates are estimated to cost £3·65 million in the case of P & O and £1·6 million in the case of the bulk shippers.
"In total, Government revenue support in 1984–85 will amount to some £13·35 million—an increase of 9·9 per cent. over the current financial year, and more than a threefold increase since 1978–79. I hope this will be recognised as an excellent deal for the users of these services, and for the island communities they support.
"I am also able to announce today that I have completed my review of the future system of shipping subsidies and have concluded that a change to an RET-based system of subsidy should not be pursued.
"I have taken this decision after detailed consideration of the difficult practical issues that would arise if RET were implemented. In particular, full implementation would not distribute the greatly increased subsidy that would be required to where support is most needed. Moreover, since the subsidy system would still have to be adapted to be acceptable to all communities affected by it, the system would not be objective or above dispute. The required adaptations would also increase the cost and there would be considerable confusion during the necessarily lengthy transitional period.
"I have also taken into account several other developments since 1979. First, it has become clear that a period of major new capital investment lies ahead, in new ships and in the associated terminals, for both Caledonian MacBrayne services and those serving Orkney and Shetland. There is therefore substantially more public expenditure to be committed on our shipping services than is indicated by the annual revenue grants alone, and it is vital for the maintenance and improvement of these services in the longer term that resources be made available for these capital works. Secondly, I attach much importance to the Monopolies and Mergers Commission's general recommendation that, in the interests of efficiency, Caledonian MacBrayne's fares should be related to costs incurred. This adds weight to the practical objections to RET. Besides offering no encouragement to efficient operation, it would, by stimulating demand, itself increase the need for new investment in shipping capacity. Since the subsidy requirement would be calculated automatically by reference to a formula unrelated to shipping costs, that requirement could change considerably from one year to the next. Sudden increases in subsidy could only be achieved at the expense of other services for which I am responsible.
"It is, however, important to have a fares system that is clearly understood. P & O and the bulk
646
shippers are private sector operators who fix their fares and charges on a commercial basis, the charges being rebated with the benefit of subsidy. These arrangements will continue. In the case of Caledonian MacBrayne, the Monopolies and Mergers Commission noted the company's policy that fares on one route should be comparable with those on another, and that a standard fare scale should be adopted consisting of three elements: pier dues, toll charges (reflecting the cost of loading) and distance charges. Such a system should produce a structure of fares tapering with distance. The commission noted that no recent progress had been made with this system and that as a result significant anomalies now exist in the fare structure. They recommended that Caledonian MacBrayne should make renewed progress towards such a system, starting with an up-to-date examination of the structure of costs. I have asked the company to proceed on this basis. The new fares system will take some years to implement fully, but a start will be made in fixing the charges for 1984–85, which the company will be announcing shortly. The result will be a standard fares system which should be more equitable than at present.
"Mr. Speaker, the question I have had to address is how, in the light of some significant developments since 1979, we can offer the best long-term guarantee of services to the Scottish islands. My subsidy proposals for 1984–85 together with my substantial capital support to ships and terminals confirm the Government's continuing commitment to the maintenance and improvement of these services."
My Lords, that concludes the Statement.
Lord Ross of Marnock: My Lords, I think the House should be grateful to the Minister of State for repeating that Statement. It is a very important one indeed, covering not only the current on-going situation in relation to finance but the whole future structure of the support that is to be given to the Scottish Islands, mainly the Western Isles, the Orkneys and Shetlands.
I should like first to deal with the current situation. I do not think anyone could be anything but relieved that the Government have given the measure of support that they have. It does of course mean a 5 per cent, increase, and as to whether that 5 per cent, will be equally divided between freight and passengers we do not know. I hope it may well be possible that in respect of passengers there will not be any increase at all, but we shall have to wait and see. I certainly have no complaint in respect of that.
When the Government go on to tell us that it is a three-fold increase from 1978–79, lots of things have happened since then and there may well be new elements within those subsidies, bearing in mind the much increased traffic in certain of those islands related to oil and the bulk that has now got to be taken up there which would not be considered to be really related to the normal, ordinary life of the people of the Highlands and Islands.
Now, shall I congratulate the Government, or shall I not, on finally having made up their minds about RET? For those of your Lordships who wonder what that means, it is "road equivalent tariff". It has been a

647
war-cry in the Highlands for long enough—and who shouted loudest for it? It was the Government, the Tories. They had it in one of their manifestos—I think it was 1973—but suddenly they have seen the light. There always was a certain amount of confusion about how you interpreted RET; but the Government have now taken belated advice somewhere or other. I fancy that what spelt the doom of RET for the Government, although it will disappoint many of their own supporters, is the fact that it was going to cost more; it was going to stimulate demand, and it might have led to a demand for new ships. If there is any place where you want to stimulate demand and stimulate interest in people to go there, surely it is the Scottish Islands. So if they had turned it down they would have given the worst of all reasons for it. I would ask the Government whether this is the end of it, or whether there is the possibility of some kind of structure, based upon that, which will eventually be put forward.
The other point I should like to raise is this. We are told there is going to be some new kind of structure towards which they will move as regards Caledonian MacBrayne and the Orkney Islands shipping side. What is this going to mean? Any change in that structure may well affect routes, some of which are already threatened. It will affect charges; and I think I am right in saying that at present Caledonian MacBrayne tends to take into account the sparsity and distance of an island and not relate it purely to the cost. In other words, the more popular routes will help to maintain the less popular routes. I hope that flexibility will remain.
The Government cannot blame Caledonian MacBrayne about this, because every year the Secretary of State has to approve the routes and charges, so if there have been any defects in past years they stem from the Secretary of State. I certainly shall hold fire in respect of the new changes until I see what is promised. When will we see the new fares and routes in this coming year? Am I right in thinking that one of the dangers, as we move towards that, is that the less popular and more distant routes will be threatened? But they are still the lifelines of the people; and that is a thing that we have to remember when dealing with future policies in relation to fares and charges.
Lord Taylor of Gryfe: My Lords, we on these Benches should like to thank the noble Lord for the Statement made this afternoon, and to congratulate the Minister on achieving a further subsidy for this important service in a period when there is so much talk of Government cut-backs in one way or another. At the same time, I should like to ask one or two questions. I notice that the subsidy to MacBrayne is £7.2 million, while that to P & O is £3.65 million. Both companies carry freight, though MacBrayne carry both passengers and freight. I am wondering how the costings were calculated which provided the £3.65 million subsidy to P & O as against the £7.2 million to MacBrayne, when one considers that MacBrayne has a much more substantial service to the islands and carries a greater number of passengers and freight. It would be interesting to know how those computations were made.
Secondly, I think the Minister will pay tribute to the operational efficiency of MacBrayne, not only because
648
it was able to keep the fares increase to 5 per cent, as a result of the increased subsidy but because it is a reflection of the fact that MacBrayne has been able to contain its costs, which is a very creditable performance in these days.
The Minister might agree that the increased costs which MacBrayne is carrying this year, which necessitate the increase in fares, are due not to operational problems but to the fact that new tonnage has to be depreciated heavily and involves high interest charges, while it is financed under the ship mortgage scheme. If we are looking forward to new investment, which we very much welcome, I should be interested to hear from the Minister what kind of impact there will be on future fares, if there is to be an increasing burden of depreciation and interest in the years ahead with the new and desirable tonnage.
I very much welcome the logic of the decision that the RET system should be departed from and that we should adopt the more logical system which is recommended by the Monopolies and Mergers Commission. The new structure is desirable, is better understood than the RET system and makes for a more equitable distribution.
Finally, may I just echo what the noble Lord, Lord Ross of Marnock, has said? What we are talking about is the lifeline of people in the outer islands, and any increase in fares is a tax on those people. Therefore, I hope that that will be kept in mind. It is their only connection with the mainland. It is their only opportunity for exporting their goods and moving around or back to the mainland. That involves a very substantial social obligation which should weigh heavily in any decision that we make about the future of MacBrayne.
Lord Gray of Contin: My Lords, I am most grateful to the noble Lord, Lord Ross of Marnock, and to the noble Lord, Lord Taylor of Gryfe, for their general welcome to the Statement which I have made this afternoon. The noble Lord, Lord Ross of Marnock, acknowledged that the Government have made a substantial investment, and will be making a substantial investment this year, so far as help to shipping services to the islands is concerned. As I said in my initial Statement, the sum is £13.35 million—an increase in real terms of 9.9 per cent.
The noble Lord, Lord Ross of Marnock, asked whether this is the end of the road equivalent tariff. Of course, it would be a brave person who committed his successors in respect of the future, but certainly, so far as we are concerned, we have taken the decision that the road equivalent tariff system should not be proceeded with, and that it should not be proceeded with for a number of reasons which I need not go into now. But the principal issue which determined the Government's final decision was that, although the road equivalent tariff might be a very easy way to conduct our affairs for the future and would undoubtedly bring benefit to some islands, there is no doubt that it would leave others severely disadvantaged. Therefore, the Secretary of State took the view that the selective approach which has been the method over the years was the more desirable to maintain.
The noble Lord, Lord Ross of Marnock, mentioned Caledonian MacBrayne and the Orkney Islands

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Shipping Company, and said that we would wish to acknowledge their activities, as did the noble Lord, Lord Taylor of Gryfe. I willingly acknowledge the service which they give. So far as the future fares structure is concerned, as the noble Lord rightly pointed out this is subject to the approval of the Secretary of State on a year to year basis. We feel confident, as was acknowledged by the noble Lord, Lord Taylor of Gryfe, that the new structure of fares will be more satisfactory than the road equivalent tariff. Indeed, when we talk about the road equivalent tariff we must recall that as far back as 1980, when the consultative paper was produced, there were a great many people who were unhappy about it, including the Shetland Islands Council, the Western Isles Council, Strathclyde Council, the Scottish Transport Group and a number of other influential bodies.
The noble Lord, Lord Taylor of Gryfe, asked me how the breakdown of the £7.2 million support for Caledonian MacBrayne and the £3.65 million support for P & O was arrived at. If he will bear with me, that is something which I shall write to him about and explain in detail, because I cannot give him that information at this time. Again, I am most grateful to the noble Lords for their welcome of this decision by trie Government.
Lord Mottistone: My Lords, is my noble friend able to give some indication of how these grants, which are clearly welcomed by noble Lords opposite, compare with the rather more limited financial support which the Government give to sea transport to the Isle of Wight? It is all very well noble Lords laughing. For these people, too, it is the lifeline. I suspect that the Scottish amounts that we have heard about are proportionately very much larger. I wonder whether my noble friend has any idea of how they compare.
Lord Gray of Contin: My Lords, I am, of course, very interested in what my noble friend Lord Mottistone has to say on that subject, but I cannot give him any comparison at the moment. I have no doubt those who read the reports of our deliberations will take note of what he said. If they do not, I shall remind them so that they can write to him. But I must say that I find my responsibilities for the Scottish Islands just as much as I can cope with at one time.
Lord Shinwell: My Lords, the Minister may have noted that my noble friend Lord Ross of Marnock expressed doubts as to whether the Government deserve congratulations. On the whole, I think that he ought to give the Government some credit, for this is by no means a new controversy. I doubt whether anybody else in your Lordships' House can recall, as I can, the controversy at the beginning of the century when MacBraynes exercised a monopoly over the Western Highlands traffic and the traffic south of the Highlands. It was one of my tasks, as organiser for one of the seamen's unions, to try to persuade the men on the MacBrayne vessels to become members of the organisation. We had a frightful row with MacBraynes about it, but now something has happened. I am not so sure that past Labour Governments made a very effective contribution, in spite of the remarkable efforts of my noble friend and some of his colleagues. Nevertheless, they made some contribution. There are
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always bound to be anomalies in connection with shipping, particularly in matters of this kind. On the whole, we might give the Government some credit and hope for the best.
Lord Gray of Contin: My Lords, I am most grateful to the noble Lord, Lord Shinwell, for his generous remarks.
Lord Campbell of Croy: My Lords, my memory certainly does not go nearly so far back as that of the noble Lord, Lord Shinwell, but I remember that the MacBrayne monopoly was broken during the early 1970s while I was Secretary of State. Is not the principle of RET being abandoned—many people thought at the time that this principle ought to be fully examined—because, when applied to some sea journeys and some distances, it means that less financial help would be given than would be made available under the existing system?
Lord Gray of Contin: My Lords, I am grateful to my noble friend. I remember well the contribution which my noble friend made to the general administration of these services when he was Secretary of State for Scotland. My noble friend is perfectly correct. It would not have mattered how we tried to adjust an RET system; the result would have been that any adjustment would have benefited some areas and disadvantaged others. As the pattern changed in years to come, we could foresee this happening over and over again. It was one of the major reasons for the Government's deciding not to proceed with it.
Lord Donnet of Balgay: My Lords, I would ask for a little patience, in the sense that the Minister is having an unusually pleasant experience today when perhaps he had expected an unpleasant one. I should like to take the opportunity to run the narrow line between the interrogative and the assertive. The Minister indicated that the Government have concluded their review of the road equivalent tariff and the implications it will have for the expectations of the islanders both in Orkney and Shetland and in the Inner and Outer Hebrides. The view was forced upon them that the road equivalent tariff led straight to Heaven and carried with it a very substantial reduction in fares on the ferries. There was a Conservative Party promise during the 1979 election that the road equivalent tariff would be put into operation. Quite rightly the Minister said that it has been subjected to so many interpretations that the Government finally decided to abandon it. This will raise many questions. Not only the local authorities but the Highlands and Islands Development Board take a very strong view about it. Is the Minister aware that Caledonian MacBrayne have been investigated by the Price Commission and by the Monopolies and Mergers Commission? Would the Government now allow Caledonian MacBrayne to get on with their work?
Lord Gray of Contin: My Lords, I am grateful to the noble Lord, Lord Donnet of Balgay, for his contribution. He is not, perhaps, fully informed on this matter. Even at the outset considerable reservations were expressed about the whole concept of RET. Two of the bodies which the noble Lord mentioned—

651
for example, the Western Isles Council—had great reservations about it, because under RET the southern routes to the Western Isles would have been very adversely affected. The Shetland Island Council shared similar doubts. The noble Lord asked me what this will mean for the people in these areas. It will mean a steady fare structure for them. It means that the capital expenditure from which they will benefit will go ahead. We must bear in mind that until 1979 Orkney and Shetland received no subsidy for their shipping services. They will have £3·5 million for P & O in the coming year and £1·3 million capital assistance towards the refit of the "St. Clair". The Western Isles will similarly benefit. There has been a major breakthrough with the new Hebrides vessel which has recently been announced and the consequential pier works, costing up to £5 million, at Uig, Tarbert and Lochmaddy. Therefore, the commitment which the Government have shown to the islands will be fully appreciated by these islands. It is our intention to make quite sure that they are looked after in a fair and reasonable way.
Lord Taylor of Gryfe: My Lords, will the example of Caledonian MacBrayne—of placing their orders in British yards—be drawn to the attention of other companies which may enjoy a subsidy of this kind?
Lord Gray of Contin: My Lords, this must be a matter for each and every company to decide for itself, but I have no doubt that the policy of Caledonian MacBrayne will be highlighted by what the noble Lord has just said.
Lord Carmichael of Kelvingrove: My Lords, I wonder whether I could press that point, knowing how important it is that the delivery of new ships should hit the correct part of the season. I had the unpleasant experience, in another capacity, of having to defend a ship going to another yard because delivery at the correct part of the season could not be guaranteed. Would the Minister make it clear to the Scottish Office that forward planning, and even forward ordering, should be resorted to, particularly since there is spare capacity in Scottish and British shipyards, bearing in mind always that for these purposes a ship must be delivered at the end of March or at the beginning of April?
Lord Gray of Contin: My Lords, my stand on those matters when I was Minister of State for Energy is probably well known. On many occasions I did my utmost to try to persuade people to place orders in British yards. I shall certainly continue to do so, provided always that the prices are competitive and that delivery is guaranteed.

Telecommunications Bill
4.29 p.m.
House again in Committee.
Clause 47 [General functions]:
Lord Mottistone Lord Mottistone moved Amendment No. 111:
Page 43, line 30, at end insert—
("( ) It shall be the duty of the Director to administer, regulate and allocate numbering plans and access codes for public telecommunication systems.")
The noble Lord said: The noble Earl, Lord Halsbury, kindly agreed that I should move this amendment. I am delighted to see the noble Earl in his place again. I should explain to your Lordships the technical terms of this amendment. Numbering plans are plans of numbers which include the telephone numbers of ordinary citizens, private branch exchanges and, in more recent times, the sophisticated computer applications which are required by other kinds of telephone user. Ordinary numbers and access codes are accessed into all public telecommunication systems, as defined in Clause 9 of the Bill.
It is necessary for the common facilities needed by all users to be administered by an impartial body. This argument is very similar to that which I advanced in respect of Amendment No. 56 on 16th February at col. 442 with regard to frequencies. In that case, I was delighted that my noble friend Lord Glenarthur said at col. 443:
"We also recognise that in allocating frequencies between different types of radio service and between different users there is a need to avoid appearing to favour one above another for no good reason".
My noble friend went on to say at col. 444:
"I should like to take this possibility away for thought and discussion with a view to tabling an amendment on Report".
One of the problems about numbering plans at the moment, particularly for people with the new type of equipment, is that users are quite often told by British Telecom, who currently have the total duty of allocation, that there are not enough numbers. In many cases, that is due to the fact that, for administrative reasons, numbers are put into blocks. There is no reason to suppose that there could be many more numbers available at any one time than appears to be the case.
The main point is the question of having a common resource which may at times, perhaps, be scarce, being allocated by an impartial body. Oftel is an ideal body for that purpose, and I hope that my noble friends on the Front Bench will be able to give a similar answer to that given by my noble friend Lord Glenarthur in answer to Amendment No. 56. I beg to move.
The Countess of Mar: I wish to speak against this amendment, for I suggest that it is totally impracticable. For every telephone area, there are at least four people dealing with number allocation. It is a very complex business. The noble Lord, Lord Mottistone, does not realise—perhaps understandably—that certain numbers are allocated in blocks because of the type of equipment used. There are special relay sets for big business users, and their numbers come in blocks—and they cannot be split up. Business users are allocated a certain group of numbers to allow them to grow. The other problem with number allocation is that one quite often has a number that cannot be used, perhaps because it is a recently-ceased business number. It would not be good business practice to issue that number again to someone who is in business and who may be in competition with the person who had that number before.
Lord Mottistone: Such as the Foreign Office?
The Countess of Mar: Giving this duty to the director of Oftel, who would have a staff of 50, would

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be totally impracticable. I see no reason why British Telecom should not continue with the issue of numbers, with the allocation of numbers, and with the access codes—allowing it to negotiate with other companies or with other cable providers, as it does now.
Lord Lyell: My noble friend referred to helpful comments which had been made by my noble friend Lord Glenarthur at an earlier stage in our proceedings on the Bill now before us. I only hope that my noble friend Lord Mottistone will be able to bear with me while I attempt to answer the amendment he has moved.
I will stress at the outset that the Government support the general aim of the amendment moved by my noble friend. Indeed, we intend to include a condition in the BT licence, and in other licences, giving the director ultimate control over numbering arrangements. We believe the amendment to be unnecessary because the Bill as it is drafted gives the Government all the powers needed to exercise ultimate control over numbering arrangements.
The method of control suggested in the amendment—which is direct administration by the director—would be costly in terms of public service manpower and involve an unnecessary degree of interference in what are essentially commercial arrangements. So while the broad aim of the amendment is acceptable, its detailed approach gives rise to a few problems. The Government hope that British Telecom, Mercury and the cellular operators will be able to agree on such arrangements as they may wish to make, and on long-term numbering agreements for the new digital exchanges of the future.
So far as regulations are concerned, we intend to adopt the same approach we have taken regarding the interconnection of the public networks. We believe that it is right to leave to the operators the mutual negotiations which will give acceptable numbering arrangements. It is the operators—and I am sure my noble friend agrees—who have the technical expertise and a commercial interest in the outcome; so we believe that it is the operators who are more likely to get it right than the Government. But if the operators fail to agree, the Government intend the director to have powers to intervene and to specify what the national numbering arrangements should be. We intend to achieve this result by including a new condition in British Telecom's licence, and we are now discussing its precise terms with British Telecom.
I hope that I have gone some way to show why it is that, since the powers to regulate numbers are already contained in the Bill—and since the British Telecom licence will contain a new condition on numbering—I have to advise my noble friend that we cannot accept his amendment today.
Lord McIntosh of Haringey: The Government will have to make up their minds whether they are making real concessions to the noble Lord, Lord Mottistone, or whether they are cosmetic concessions which the Minister is making. Part III of the Bill is perfectly clear in its intention. It says that there is the right of appeal to the director against any abuse of the powers and responsibilities of operators. That, surely—as I
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thought was implied by the Minister's statement—is a clear enough defence of the rights of subscribers. It is clear enough that they have a right of appeal to the Director General of Telecommunications.
The noble Lord, Lord Lyell, has made it clear that it would be inappropriate to accept this amendment and to transfer to the director responsibility for the actual operation of the numbering plans. The noble Countess, Lady Mar, made it clear how totally impracticable that would be with a staff of 50 in Oftel. If that is the case, it would surely be equally wrong to insist on writing into British Telecom's licence a further guarantee which simply duplicates that which appears already in Part III of the Bill. The proposed amendment is simply a recipe for duplicate bureaucracy. The Minister's statement gives me no confidence that the Government are setting themselves firmly enough against such duplicate bureaucracy.
Lord Somers: I cannot help feeling that the noble Lord, Lord Lyell, missed out the one essential point in the amendment—and I am not sure that it was even mentioned by the noble Lord, Lord Mottistone. It is, that there must be a single, central authority for the allocation of numbers. Otherwise, there is likely to be confusion and overlapping between various authorities and various operators. There must be a single, central authority for the entire country.
Lord Spens: Are not the Government providing British Telecom with a very easy method of discriminating against smaller users of specialist groups of numbers? It is so easy for British Telecom to say that no numbers are available. I understand that is something which they are already doing. So I hope that the noble Lord will think again on this one.
4.40 p.m.
Lord Lyell: First of all I am very flattered to be elevated in rank; I think that the noble Lord, Lord McIntosh, was referring to me as the Minister of State, or possibly he meant the Minister in the other place. Well, I am not there yet, but I live in hope! I would stress to the noble Lord, Lord McIntosh—and indeed to the noble Lords, Lord Somers and Lord Spens—the key point of my reply. We believe that this problem of numbers and numbering and access to networks is something for the commercial interests and the operators to mutually negotiate an acceptable solution. I stress that to the noble Lord, Lord Spens. If they fail to agree, the Government intend the director to have powers to intervene and he will be the ultimate authority; he will be able to specify what the national numbering arrangements should be.
If there are problems, I hope that these will be minimised as the networks grow. I am sure even the noble Lord, Lord Spens, would agree that with advancing technology there might well be problems with numbers not being available yet to satisfy the demands. But as far as this amendment is concerned, the Government believe that it is for the commercial operators to come to an agreement. We believe they will be able to do it, but the ultimate sanction will be with the director.
Lord Spens: I understand that there are 999 million numbers which could be made available. I cannot believe that there could be any shortage of groups of numbers.
Lord Kaldor: I do not know whether the question I want to ask is pertinent to the amendment. Is there any chance of our going over to the system which exists in other countries by which the code number of a single locality is the same wherever that particular locality is telephoned from? In England, apart from larger towns, the code number varies according to whether you are ringing from London or Cambridge or Oxford or various other places. It would be a great simplification if each town or locality had one code number for the whole country.
Lord Lyell: If I may briefly reply to the noble Lord, Lord Kaldor, it is something that has always fascinated me. If I may take one example, I think what the noble Lord is seeking does work, not just in England—I say this as a Scot, and it works in Scotland too, and Northern Ireland and Wales. I am not too sure about the Republic of Ireland, but I will leave that for the moment. The noble Lord mentioned Cambridge, which I think is his home town, if I can call it that. As I understand it, if the noble Lord is ringing a number fairly near to Cambridge the code number might be a little different. But if the noble Lord is ringing my home in Scotland from Cambridge I can assure him that the number is the same code from Cambridge as it would be from London. I think these codes tend to vary in the immediate vicinity.
I have been given some more detailed advice: I am told that the numbers are wired into the exchanges and they cannot be changed cheaply. So there might be a shortage. I am advised that area codes will be possible with digital technology, but not yet. But on Lord Kaldor's point, as far as I am aware, the code numbers are the same for a given locality, but possibly not within the immediate environs of that locality.
Lord Kaldor: I do not want to hold up the proceedings, but this is not my experience, except for the code numbers for major towns which are printed in the little book which gives the trunk dialling numbers. If what the noble Lord says is correct, why it it that a different small book is produced as regards telephone numbers from each locality? I have one in Cambridge and it is quite different from the one issued in London.
Lord Lyell: If I may reply briefly, if the noble Lord looks in his Cambridge book he will find a fascinating number, which has the name of one of my noble friends: he will find Trumpington. Whether it has an exchange, I do not know. Possibly if we looked in a book at my home or in London we would find a different number from Trumpington, but this is because Trumpington or its local exchange is immediately within the Cambridge area where the noble Lord lives. I would have thought that this anomaly would not apply outwith a radius of from 15 to 20 miles or something like that. If I am wrong, perhaps we may pursue this further by letter; but it is an interesting point and I promise to take it up.
The Earl of Halsbury: My noble friend Lady Mar threw the Government a lifeline which they grasped with great speed. She pointed out that this amendment could not be carried if the staff were limited to 50. But of course 50 is not a magic number, it is only a number referred to in the preamble to the Bill as it was originally conceived. It would be a non-sequitur to say that we cannot increase it. If we assign a fresh duty to Telecom the staff to discharge that duty must be increased, too.
Lord Torphichen: I think that the point the noble Lord, Lord Kaldor, has introduced is a very valid one. The Post Office, when it designed the subscriber trunk dialling system in the 1950s, allocated two types of number, a first-class service for those in the major city areas whose codes were the same whether they were dialled from outside that area, outside the country or whatever, and those outside the major city areas, who in general end up with a telephone number which is preceded by one of three possible codes; first, a very short code for local exchanges to dial; secondly, a slightly longer code for dialling that particular exchange from anywhere in this country, usually different from the last digit of the first prefix; and, thirdly, you may find that you have yet a third prefix which people dialling from outside the country must use.
If you are running a business in competition with somebody next door to you and you are outside the major city area and your competitor is inside the major city area, as far as the telephone numbering system goes you have a second-class service. You cannot put your full telephone number on your letter heading either for people within this country or for people dialling from abroad. This is one very good reason why British Telecom should be overseen in their allocation of numbers, the fact that they so totally ruined the system when they designed it in the 1950s for subscriber trunk dialling.
Lord Mottistone: I am sure we are most grateful to those noble Lords who have introduced technicalities into this. Perhaps I could return to my noble friend the Minister's remarks. I am grateful to him for coming some way towards me in saying that the director will be the ultimate source of administration of these numbering plans and access codes. That I think satisfies the immediate point. The important thing is that there should be an impartial ultimate source. The noble Lord, Lord McIntosh, says there are parts of the Bill which allow appeal, but I think it is also necessary that there should be in the administrative sense somebody who is keeping an eye on it all to make sure that impartiality rules the day now that British Telecom is to be made part of the competitive market, albeit with too large a share of it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Spens Lord Spens had given notice of his intention to move Amendment No. 112:
Page 43, line 30, at end insert—
("( ) It shall be the duty of the Director to administer, regulate and allocate the use of cable and broadcasting systems for the transmission of telecommunication messages.").
The noble Lord said: The next six amendments have been put down by our liberalisation group. I think we raised all the matters covered by them during our discussion on Clause 3. We received some sympathy from Ministers over some of them and not so much over others. But I do not think it is really worth while entering into detailed discussions on them again this time. Therefore, I shall not move this amendment or the following five amendments.
[Amendment No. 112 not moved.]
[Amendments Nos. 113, 114, 115, 115A and 115AA not moved.]
Clause 47 agreed to.
Clauses 48 and 49 agreed to.
4.52 p.m.
The Countess of Mar The Countess of Mar moved Amendment No. 115B:
Alter Clause 49, insert the following new clause:
("Illegal installations.
.—(1) It shall be the duty of the Director to investigate all written complaints from any public telecommunications operator of the attachment to a telecommunication system of equipment the public telecommunications operator believes is not approved for attachment under section 22 of this Act.
(2) The Director may investigate any complaints concerning the attachment of apparatus believed by the complainant not to be approved for connection to a telecommunication system under section 22 of this Act.
(3) Following investigations under subsections (1) or (2) of this section, the Director may institute criminal proceedings against the person or persons complained of.
(4) Any person who attaches to a telecommunication system any apparatus for which approval has not been granted under section 22 of this Act shall be guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to a fine.").

The noble Countess said: At present British Telecom is empowered under the telecommunications schemes, Section 12.1, to terminate service to any customer who fails to observe the provisions of the schemes under which service is provided. We have given the director a great many duties, including the issue of licences and the approval of apparatus for connection to telecommunication systems. However, the director has been left powerless to investigate any illegal attachment or, in a serious case, to take any proceedings. Since it is chiefly the operators who will be concerned about illegal attachments and who are likely to discover them in carrying out their operations, this seems to be the most sensible way to proceed.
There is nothing in the amendment that would prevent the director from investigating an illegal attachment on his own initiative or as the result of a complaint or tip-off from someone other than the operator. This is the purpose of subsection (2).
The Minister may say that there is adequate provision in the Bill to prevent the sale or advertisement of non-approved apparatus, but the British race is very ingenious. If there is no legal safeguard, there could be serious damage to, or a total breakdown of, a part or parts of the system. I beg to move.
Lord Lyell: We certainly fully understand the intention behind the amendment moved by the noble
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Countess, but hope that we can reassure her that the Bill already contains the safeguards that she is seeking. First of all, subsection (1) of the amendment seeks to impose a duty on the director to investigate written complaints from public telecommunication operators; but we believe that this is already covered by Clause 51, which places a duty on the director to counter any representation made to him relating to telecommunication services and apparatus. This is a wide-ranging duty, and includes complaints made by public telecommunication operators about the connection of apparatus. This new clause also seeks to make connection of unapproved apparatus a criminal offence and to give the director power to institute proceedings. But here again we believe that the Bill already contains provisions which meet what we believe are the aims of this amendment.
I should like to draw the Committee's attention to Clause 5 of the Bill, which makes it a criminal offence to connect or permit the connection of unauthorised apparatus to any licensed telecommunication system. Part 4 of the draft licence for British Telecom makes it clear that British Telecom is authorised to connect to its system only apparatus approved under Clause 22. Therefore, connection of unauthorised—that is, unapproved—apparatus will be a criminal offence under the Bill as drafted, and the director already has powers under Clause 5(7) to institute proceedings in respect of any offence under Clause 5.
It is also the Government's intention to include in the licences for the public telecommunications systems to be run by Mercury, Hull and the cellular radio companies similar provisions to those in British Telecom's draft licence authorising only the connection of apparatus approved under Clause 22.
I hope that this short explanation meets the noble Countess's concern. But there is one feature which we think is really undesirable. This new clause would make it an offence not only to connect unapproved apparatus to systems whose licences forbid it but to any telecommunication system. I do not think this would be appropriate, because in practice there will be many private telecommunication systems, including both systems exempt under Clause 6 and licensed systems, where there is no reason whatever for regulatory control over what apparatus may and may not be connected. This is why Clause 22 applies only to those systems whose licences specifically refer to it.
But this amendment would require approval of apparatus to apply to all systems, including the private systems I have mentioned, and would make a criminal offence any infringements of such rules. We do not believe it should be an offence to attaach an unapproved telephone to a private intercom system, and, indeed, I do not think that in fact this is what the noble Countess is seeking. What we want to do is to prevent unapproved apparatus from being attached to the major public systems, and I hope I have gone some way to explain how this will be achieved by the Bill as it stands.
The Countess of Mar: I thank the noble Lord the Minister for answering my worries so succinctly. It really was a probing amendment. I think he has covered everything, and I wish to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 116 not moved.]
Clause 50 agreed to.
Clause 51 [Investigation of complaints]:
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No.117:
Page 47, line 1, leave out subsection (4).
The noble Lord said: The intention behind this amendment is to frustrate the Government in their desire to get rid of the Post Office Users' National Council. I am in some difficulty owing to the benevolence of the noble Lord, Lord Cockfield, yesterday, who indicated that he was going some way towards establishing an authority to advise the director. He said that he would introduce an amendment at a later stage which would incorporate his proposals, which he was not able to detail. I can quite understand the reason for that; amendments take time to formulate. They have to go through parliamentary counsel, and all the rest of it.
I think that POUNC served a very useful purpose indeed. It most certainly monitored the system as such and handled expeditiously—and, for that matter, continues to do so—complaints against the public monoply that subscribers make from time to time. Most noble Lords on all sides of the Committee regard its departure with some anxiety.
When he spoke yesterday the noble Lord, Lord Cockfield, mentioned the position of POUNC. It seemed to us that he had in mind the establishment of an authority which at any rate embraced some of the functions now carried out by POUNC. I do not know whether the noble Lord would wish to enlighten us further. I certainly should not wish to respond to his very considerate offer of yesterday by presuming to try to slap him in the face today. That would be most discourteous, and politically it would not be very sound, either. I wonder whether the noble Lord is yet in a position to give us some further information without committing himself to the text of the amendment which he himself will later propose, so that we can see whether or not it will be necessary for us to press this amendment in its present form. I beg to move.
Lord Cockfield: I entirely appreciate the point that the noble Lord, Lord Bruce of Donington, is making. I shall endeavour to table the amendments at the earliest possible date. I should think that the right course would be for the noble Lord to study the amendments after I have tabled them and if there is then any point that he wishes to raise on them, we can come back to them at the Report stage. I hope that that meets the very legitimate point that he is raising.
Lord Bruce of Donington: I am happy to accept the assurance of the noble Lord, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 51 agreed to.
Clause 52 [Power to establish advisory bodies]:
5.1 p.m.
Baroness Macleod of Borve Baroness Macleod of Borve moved Amendment No. 117A:
Page 47, line 9, at end insert ("(a)")
The noble Baroness said: We now reach Clause 52, which deals with the power to establish advisory bodies. In moving Amendment No. 117AI wish at the same time also to speak to Amendments Nos. 118A, 118C, 119, 120A, 121A and 122.
Amendment No. 118A: Page 47, line 10, after ("for") insert ("matters affecting")
Amendment No. 118C: Page 47, line 11, at end insert ("and (b) an advisory body for matters affecting persons who are disabled or of pensionable age")
Amendment No. 119: Page 47, line 11, at end insert—
("(2A) The Director shall, as soon as practicable after the appointed day after consultation with the Secretary of State, establish an advisory body for the elderly and people with disabilities.")
Amendment No. 120A: Page 47, line 13, leave out ("for any part of the United Kingdom")
Amendment No. 121 A: Page 47, leave out line 16 and insert ("the part of the United Kingdom concerned or persons who are disabled or of pensionable age, as the case may require")
Amendment No. 122: Page 47, line 16, at end insert—
("( ) In establishing an advisory body under subsection (2A) above, the Director shall have regard to the desirability of having members who are familiar with the special requirements and circumstances of the elderly and people with disabilities.")
These amendments relate to a request to the Minister to set up an advisory body specifically to look after the welfare and problems of the elderly and people with disabilities. The first two amendments, Nos. 117 A and 118A, are paving amendments. Like the noble Lord, Lord Bruce of Donington, I am emboldened by the words of my noble friend Lord Cockfield yesterday to ask for this matter to be included in view of the fact that the Minister's own amendment relating to small businesses is to come up later.
During the Committee stage of the Bill much has been said about these special cases, and it is I believe very obvious to all of us in all parts of your Lordships' Chamber that the Government are not only fully aware of the problems of these people, but are also very willing to help. It follows that if the Government agree to this important advisory body, it should comprise members who are familier with the special requirements and circumstances of the elderly and the disabled and who can represent them. This is provided for in Amendment No. 122.
Amendments Nos. 120A and 121A are designed to tidy up subsection (3) in order to ensure that in setting up the advisory body the director recruits people who have knowledge of circumstances in all parts of the United Kingdom, or of problems which face the disabled and those of pensionable age. Although what we are asking for is contained in Conditions 31 and 32 of the licence, we are all very anxious that the provision should be included in the Bill. Therefore, I beg to move.
Lord Cockfield: I wonder whether it would be for the convenience of the Committee if I speak not only to Amendment No. 117A, but also to the batch of related amendments, which in fact are Amendments Nos. 118A, 118C, 120A, 121AandNo. 123AA.

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[Amendment No. 123AA: Clause 53, page 47, line 39, after ("functions") insert ("(including, in particular, those affecting persons who are disabled or of pensionable age)").
I am happy to say that I am able to accept all these amendments of my noble friend. I think that if we accept them, two other amendments, Nos. 119 and 122, fall by the wayside. This is purely a matter of drafting.
The Government are fully committed to protecting the interests of the disabled. These amendments will further strengthen the safeguards in the Bill. They will also ensure that in addition to the disabled, the interests of the elderly—or in legal phraseology, persons of pensionable age—are looked after. Concern about this matter was expressed in the Second Reading debate.
The obligation imposed by the amendments to set up an advisory body especially for the disabled and the elderly will ensure that the director is kept fully informed of the needs and requirements of two very important groups of people. The advisory body will be required to make an annual report to the director, and this in turn will be published in the director's annual report. The positive requirement on the director to include in his own report a review of developments and activities in telecommunications in so far as they affect the disabled and the elderly is also to be welcomed.
I should like to express my appreciation of the part played by my noble friends Lady Macleod of Borve and Lady Lane-Fox in taking the initiative to improve the Bill in this way. I am sure that the amendments will meet with the universal approval of your Lordships' Committee.
On Question, amendment agreed to.
Lord Somers Lord Somers moved Amendment No. 118:
Page 47, line 10, after ("bodies") insert ("representing users").
The noble Lord said: Speaking as a person of pensionable age, perhaps I may say that I was extremely comforted by the words of the noble Lord. In moving this amendment, which is a very simple one, I can say only that if the Government do not feel that they can accept it, I shall inevitably be driven to the conclusion that they feel that the users do not really matter very much. In regard to a body that is to be a commercial one and which will, I suppose, seek more users in order to make it flourish, such a feeling on the part of the Government would seem to represent a peculiar outlook, but I sincerely hope that the noble Lord may be able to disillusion me in that respect. I beg to move.
Lord Taylor of Gryfe: I should like to support the amendment. A subsequent amendment in my name not only encourages the participation of users as consumers of the service; it also encourages the users to become shareholders in the new company under preferential terms which would ensure a wide distribution of share ownership. However, the present amendment prefers simply that the advisory body should have consumer representation. That seems to me to be logical and I hope that unless the point is to be covered in some of the proposals that will be brought forward in connection with the consultative
662
council which is planned, the Government will feel able to accept the amendment.
Lord Spens: I think that at this stage I can refer to my Amendment No. 121, which also asks for the advisory bodies to represent users. If we agree to Amendment No. 118B, as I hope we shall, there will be an advisory body for small businesses, but that will not cover all the users who are small in comparison with British Telecom, but large in comparison with the normal small business. I should therefore like to see this amendment carried.
Lord Lyell: I do not think that there is any difference between what we have in our minds and what the noble Lords, Lord Somers and Lord Spens, have in their minds over what we believe to be the purpose of Amendments No. 118 and 121. Both seem to us to wish to ensure that the advisory bodies established under Clause 52(2) will be concerned with consumer matters. My noble friend Lord Cockfield made clear earlier to the Committee that he accepts that this clause needs amending to strengthen the role of the national advisory bodies. In our earlier debate, I think on Amendment No. 62, my noble friend proposed two changes: first, that the national advisory bodies should be appointed not by the director but by the Secretary of State in order to emphasise their independence; and, secondly, that the terms of reference of the national advisory bodies should be extended to underline the fact that these bodies would be primarily concerned with the interests of consumers. These two concessions, I believe, go a long way to meeting the understandable concern of the noble Lords and also of the noble Lord, Lord Taylor of Gryfe, underlined in this amendment as well as in Amendment No. 121.
Lord Mottistone: My noble friend has emphasied "users". It depends what you mean by users. POUNC talks about users, you and I. But there is also the question of business users. The noble Lord, Lord Spens, will, I think, agree with me that Amendment No. 121 which I, too, believe should be discussed now, really refers to business users. May I ask the Government, when they are rethinking this clause, to give thought to that fact, recognising that business users represent 85 per cent. of the telecommunications revenue and are therefore very important. Indeed, their strength in using the modern technology and the communications is vital to the wellbeing of the country. If our businesses are not successful, we have no money to live on. It is important that business users of all sorts should not be overlooked in any recasting of Clause 52. I go only that far. The Government can perhaps take what I say into account in any re-wording that they have in mind.
Lord Lyell: We are grateful to be reminded by my noble friend of the wide definition of the word "users". We shall study closely what he said and bear his comments in mind.
Lord Somers: I am grateful to the noble Lord and for the support of all my noble friends on whatever Benches they may sit. They are my noble friends. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Macleod of Borve Baroness Macleod of Borve moved Amendment No. 118 A:
[Printed above.]
On Question, amendment agreed to.
Lord Cockfield Lord Cockfield moved Amendment No. 118B:
Page 47, line 11, at end insert—
("(aa) anadvisorybody for matters affecting small businesses").
The noble Lord said: With this amendment, I should also like to associate Amendments Nos. 121B and 123AB.
Amendment No. 121B:
After ("concerned") insert (", small businesses").
Amendment No. 123AB:
After ("affecting") insert ("small businesses or").
Your Lordships will remember that on Thursday, 16th February, in reply to an amendment tabled by the noble Lord, Lord Spens, I promised to bring forward amendments to Clauses 52 and 53 to meet his concerns that small businesses should be properly recognised in the Bill. The amendments that I am now moving give effect to this undertaking.
As your Lordships will appreciate, they are very similar to the amendments tabled by my noble friends Lady Macleod and Lady Lane-Fox on the disabled and the elderly to which your Lordships have just agreed. Briefly, Amendment No. 118B requires the director to set up an advisory body specifically on small businesses and Amendment No. 121B ensures that in appointing members to this body the director has regard to the desirability of members who are familiar with the special requirements and circumstances of small businesses. In this way the director will be kept fully informed of the needs and requirements of small businesses with a view to exercising his functions as appropriate.
Under Clause 53(5) this advisory body will make an annual report to the director who will include it in his own annual report which will be published. In addition, Amendment No. 123AB ensures that the director himself must include in his own report a review of developments and activities in telecommunications insofar as they affect small businesses.
Your Lordships will recall that in our earlier discussions I reminded the House of the very considerable contributions that have been made by Members on both sides of the House and by Governments of both complexions in helping and assisting small businesses. I pay tribute to the extremely important part played in his day by my most distinguished predecessor in my present office, the noble Lord, Lord Lever of Manchester. I hope therefore that these amendments will commend themselves to your Lordships.
Lord Spens: I am most grateful to the Minister for tabling these amendments. They satisfy our worries very well. I support them wholly.
On Question, amendment agreed to.
Baroness Macleod of Borve Baroness Macleod of Borve moved Amendment No. 118C:
[Printed above.]
On Question, amendment agreed to.
Baroness Macleod of Borve Baroness Macleod of Borve moved Amendment No. 119:
[Printed above.]
The noble Baroness said: I thought that I had spoken to this amendment but if your Lordships want to hear me again, I should like formally to beg to move it. I have already spoken to the effect that there should be an advisory body for the elderly and people with disabilities. I think that my noble friend the Minister kindly agreed that this would be so. I formally beg to move.
Lord Cockfield: I hope that my noble friend will forgive me if I say that this has been covered in the other batch of amendments. It is simply the way in which the amendments have been drafted. Amendment No. 119 and Amendment No. 122 fell by the wayside to use the particular phrase that I had adopted. They are subsumed in the other group of amendments, Nos. 117A, 118A, 118C, 120A, 121A and 123AA. I wonder whether, with that explanation, my noble friend would see her way to withdrawing this amendment. Otherwise, it is simply duplication.
Baroness Macleod of Borve: Before withdrawing the amendment, may I thank my noble friend the Minister for so graciously helping us in this regard. It will be widely appreciated throughout the country by those people affected now and in the future. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Somers Lord Somers had given notice of his intention to move Amendment No. 120:
Page 47, line 12, leave out subsection (3) and insert—
("(3) Without prejudice to his power under subsection (1) above, and in addition to his duty under subsection (2) above the Director shall establish as soon as practicable after the appointed day an advisory body representing users for the United Kingdom as a whole The Chairman of the advisory bodies for England, Scotland, Wales and Northern Ireland shall have automatic membership of the advisory body for the United Kingdom.").
The Deputy Chairman of Committees (Lord Nugent of Guildford): I should explain to the noble Lord, Lord Somers, that if this amendment was agreed to it would conflict with some of the amendments already agreed to.
Lord Somers: In that case I shall not move the amendment.
[Amendment No. 120 not moved.]
Baroness Macleod of Borve Baroness Macleod of Borve moved Amendment No. 120A:
[Printed above.]
On Question, amendment agreed to.
[Amendment No. 121 not moved.]
Baroness Macleod of Borve Baroness Macleod of Borve moved Amendment No. 121A:
[Printed above.]
Lord Cockfield Lord Cockfield moved, asanamendmentto Amendment No. 121 A, Amendment No. 121B:
[Printed above.]
On Question, amendment to the amendment agreed to.
On Question, amendment, as amended, agreed to.
The Deputy Chairman of Committees: The next amendment is Amendment No. 122, which has already been spoken to.
Baroness Macleod of Borve Baroness Macleod of Borve moved Amendment No. 122:
[Printed earlier: col. 660.]
Lord Spens: I think that Amendment No. 122 has to be withdrawn.
The Deputy Chairman of Committees: Does the noble Baroness wish to withdraw Amendment No. 122?
Baroness Macleod of Borve: Yes: with the leave of the Committee, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.22 p.m.
Lord Somers Lord Somers moved Amendment No. 123:
Page 47, line 18, after ("Director") insert ("and to give public comment").
The noble Lord said: This is merely an amendment to make quite certain that the public know what the director is doing. It is very often the case that the public are not informed of what goes on behind the scenes and, in my view, when something is going to affect everybody—which, after all, is what this Bill is going to do—it is an important point. I beg to move.
Lord Lyell: As your Lordships will be aware, we have already spent some time on Clause 52 and therefore I hope that I can be reasonably brief in trying to explain what is in our mind so far as the amendment is concerned. We are not entirely sure what it is trying to achieve, but what we think it does is to place a duty on the advisory bodies, whenever they offer advice to the director, to "give public comment". We are not quite sure of the precise meaning of those words, but they seem to require the advisory bodies to publish comments on their advice to the director. We do not think that this is entirely what noble Lords would wish to do, because this would surely destroy the nature of the relationship between the director and the advisory bodies. Also, what if the bodies wanted to give advice of a confidential nature to the director? If it were to be published it would harm the relationship between the bodies and the director.
We believe that the Bill is right as it stands. Each of the advisory bodies will have an opportunity to make their views and findings more widely known in the annual report which they are required to make. These reports will be included in the director's annual report which will be published and will also—and I stress this to the noble Lord, Lord Somers—be laid before Parliament.
666
However, there may be instances where an advisory body wishes to bring something to public attention sooner than by its annual report. In such circumstances there is already a duty on the body to advise the director on this. Depending on what the matter is, the director will take the appropriate action. For example, if it concerns a matter on which he—that is, the director—thinks there should be a licence condition, he may seek to impose one. Alternatively, he may consider that it is not a matter for a licence, but should be drawn to the attention of consumers. In this second case he can use his powers under Clause 48 to publish information and advice. In this way it can become known not only to consumers in, for example, Scotland, but throughout the United Kingdom. I hope that with that brief explanation I have been able to satisfy the fears which were expressed by the noble Lord, Lord Somers.
Lord Somers: I am most grateful to the noble Lord for that very long and clear reply, and I beg leave to withdraw the amendment.
Lord Bruce of Donington: Before the Committee gives the noble Lord leave to withdraw his amendment, I should like to say that I am still not satisfied with the Minister's reply. One of the virtues of POUNC is that from time to time it is able to pass public comment upon various aspects of the service that is provided.
I do not really follow the reference to confidentiality to which the noble Lord, Lord Lyell, has referred. I was rather hoping that, living as we do—or as we are supposed to do—in an era of open Government, if a body of this kind feels that it has public comment to make, there is no reason why it should not be allowed to make it. Indeed, I see no reason why a duty should not be laid upon it to do so, otherwise one gets a very cosy little relationship—if one can describe it thus—between the Secretary of State; the new director of Telecom; possibly the managing director of the new successor company to British Telecom; the residual manager of British Telecom that will remain there until it is finally extinguished; and also the various advisory bodies. I am all for an air of easy informality to govern the relationship of these various interests together, and would not wish to encourage anything that would inhibit that. But every now and again I think that it is wise that an advisory body should be able to pass public comment without fear or favour.
Comments very often are embarrassing to Ministers and they may indeed irritate Ministers. Ministers in recent times have shown an increasing irritation at any kind of criticism against their divine judgment—"my mother, the Almighty and me", to repeat the phrase of the Prime Minister. I should have thought that, on the whole, it is in the public interest that advisory bodies ought to be able to do this, and I cannot understand, following the benevolent interest which the noble Lord, Lord Cockfield, has shown in these proceedings, why the noble Lord cannot accommodate himself as regards what I feel quite sure is the feeling of the Committee as a whole.
Lord Somers: The last thing that I would want to do is to irritate a Minister and so I still beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 123A:
Page 47, line 26, at end insert—
("and such report shall include a statement on matters relating to disabled people.").
The noble Lord said: I hope that the noble Lord will immediately accept this amendment and thus avoid the necessity for me to talk on it at all and, therefore, to detain the Committee. It seems to me to be so much in line with the satisfactory co-operation that he has been able to show to noble Lords on his side of the Committee. The amendment that I am venturing to lay before your Lordships is so much in tune with the various other amendments which have been so rapturously received by the noble Lord, Lord Cockfield, that perhaps he might feel constrained to render it unnecessary for me to speak any further and will accept the amendment without any further ado.
Lord Lyell: Of course, we appreciate the purpose of this amendment. I stress to the noble Lord, Lord Bruce, that this is no party matter. Indeed, I had the privilege of making two fairly lengthy statements from this Dispatch Box on Amendments Nos. 37 and 82 which gave rise, I regret to say, to a great deal of hilarity, as regards the inductive coupler. So I have expressed my views on that matter at considerable length. The noble Lord, Lord Bruce, may not have been in his place at the time, but certainly too many people were! Anyway, he does not need one today because we are speaking very close to one another.
However, I appreciate the noble Lord's concern, but I should stress to him and to the Committee that we think that the amendment has been overtaken by the amendments which have been proposed by my noble friend Lady Macleod and my noble friend Lady Lane-Fox, to which we have just agreed. These ensure that there is a separate advisory body for the disabled and the elderly which will make its own annual report. The noble Lord, Lord Bruce, will see that under Clause 52(5). Therefore, there is no need for the national advisory bodies to include any mention of the disabled.
5.30 p.m.
On Question, Whether the said amendment (No. 123A) shall be agreed to?
Their Lordships divided: Contents, 94; Not-Contents, 118.

DIVISION NO. 2

CONTENTS

Airedale, L.

Boston of Faversham, L.

Ardwick, L.

Bottomley, L.

Attlee, E.

Bowden, L.

Aylestone, L.

Bruce of Donington, L.

Barnett, L.

Caradon, L.

Bernstein, L.

Carmichael of Kelvingrove, L.

Beswick, L.

Chitnis, L.

Birk, B.

Cledwyn of Penrhos, L.

Bishopston, L.

Collison, L.

Blyton, L.

Darling of Hillsborough, L.

668

David, B.

Mackie of Benshie, L.

Dean of Beswick, L.

McNair, L.

Delacourt-Smith of Alteryn, B.

Melchett, L.

Molloy, L.

Diamond, L.

Nicol, B.

Donnet of Balgay, L.

Northfield, L.

Ennals, L.

Ogmore, L.

Ezra, L.

Oram, L.

Gaitskell, B.

Peart, L.

Gallacher, L.

Pitt of Hampstead, L.

Galpern, L.

Ponsonby of Shulbrede, L. [Teller.]

Gladwyn, L.

Graham of Edmonton, L. [Teller.]

Prys-Davies, L.

Raglan, L.

Grimond, L.

Rathcreedan, L.

Hale, L.

Rhodes, L.

Hampton, L.

Rochester, L.

Hanworth, V.

Ross of Marnock, L.

Harris of Greenwich, L.

Seear, B.

Hatch of Lusby, L.

Shackleton, L.

Houghton of Sowerby, L.

Shinwell, L.

Hughes, L.

Stallard, L.

Irving of Dartford, L.

Stedman, B.

Jacques, L.

Stewart of Fulham, L.

Jeger, B.

Stoddart of Swindon, L.

Jenkins of Putney, L.

Stone, L.

John-Mackie, L.

Strabolgi, L.

Kagan, L.

Taylor of Blackburn, L.

Kaldor, L.

Taylor of Gryfe, L.

Kearton, L.

Taylor of Mansfield, L.

Kilmarnock, L.

Tordoff, L.

Kirkhill, L.

Underhill, L.

Leatherland, L.

Wallace of Coslany, L.

Listowel, E.

Wedderburn of Charlton, L.

Llewelyn-Davies of Hastoe, B.

White, B.

Lloyd of Hampstead, L.

Willis, L.

Lloyd of Kilgerran, L.

Wilson of Rievaulx, L.

Longford, E.

Wootton of Abinger, B.

McIntosh of Haringey, L.

NOT-CONTENTS

Abercorn, D.

Gainford, L.

Airey of Abingdon, B.

Glanusk, L.

Allerton, L.

Glenarthur, L.

Auckland, L.

Halisham of Saint Marylebone, L.

Avon, E.

Bauer, L.

Halsbury, E.

Bellwin, L.

Harmar-Nicholls, L.

Belstead, L.

Hayter, L.

Bessborough, E.

Henley, L.

Brookes, L.

Home of the Hirsel, L.

Broxbourne, L.

Hornsby-Smith, B.

Bruce-Gardyne, L.

Hunter of Newington, L.

Buckmaster, V.

Hylton-Foster, B.

Caithness, E.

Ingrow, L.

Caldecote, V.

Kinloss, Ly.

Campbell of Alloway, L.

Lane-Fox, B.

Campbell of Croy, L.

Lauderdale, E.

Carnegy of Lour, B.

Long, V.

Chelmer, L.

Loudoun, C.

Cockfield, L.

Lucas of Chilworth, L.

Coleraine, L.

Lyell, L.

Colville of Culross, V.

McAlpine of West Green, L.

Crawshaw, L.

Mackay of Clashfern, L.

Cullen of Ashbourne, L.

MacLehose of Beoch, L.

Daventry, V.

Macleod of Borve, B.

De La Warr, E.

Mancroft, L.

Denham, L. [Teller.]

Mansfield, E.

Dilhorne, V.

Mar, C.

Drumalbyn, L.

Margadale, L.

Dudley, E.

Marley, L.

Dundee, E.

Maude of Stratford-upon-Avon, L.

Ebbisham, L.

Ellenborough, L.

Merrivale, L.

Elliot of Harwood, B.

Middleton, L.

Elphinstone, L.

Milne, L.

Elton, L.

Milverton, L.

Enniskillen, E.

Monk Bretton, L.

Faithfull, B.

Montgomery of Alamein, V.

Ferrier, L.

Morris, L.

Fraser of Kilmorack, L.

Mottistone, L.

669

Mowbray and Stourton, L.

Skelmersdale, L.

Murton of Lindisfarne, L.

Somers, L.

Northchurch, B.

Spens, L.

Nugent of Guildford, L.

Stodart of Leaston, L.

O'Neill of the Maine, L.

Strathcarron, L.

Onslow, E.

Sudeley, L.

Pender, L.

Suffield, L.

Peyton of Yeovil, L.

Swansea, L.

Portland, D.

Swinton, E. [Teller.]

Rankeillour, L.

Terrington, L.

Ridley, V.

Teviot, L.

Rochdale, V.

Thorneycroft, L.

Romney, E.

Tranmire, L.

St. Davids, V.

Trenchard, V.

Sandford, L.

Trumpington, B.

Sandys, L.

Ullswater, V.

Seebohm, L.

Vaux of Harrowden, L

Selkirk, E.

Weinstock, L.

Sempill, Ly.

Whitelaw, V.

Sharples, B.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.40 p.m.
On Question, Whether Clause 52, as amended, shall stand part of the Bill?
Lord Lloyd of Kilgerran: May I briefly intervene on Clause 52 because, if I remember rightly, when Amendment No. 62, dealing with the formation of a council, was raised, I believe that it was withdrawn on the understanding that there would be some modifications to Clause 52 by way of an amendment at the Report stage. I merely want to clarify whether the noble Lord the Minister has that in mind.
To explain a little further, this clause deals with advisory bodies; and the noble Lord, Lord Bruce, and I concurred in the withdrawal of the amendment which was to set up a telecommunications council. I think the noble Lord the Minister very kindly suggested there should be some amendments to Clause 52. I merely rise to clarify the matter, to ask whether or not it is true, and, if so, whether we could have these amendments fairly soon, at least some considerable time before Report stage, because this raises important matters.
Lord Cockfield: I confirm the understanding of the noble Lord of the position that we shall be building on Clause 52. I will use my best endeavours to ensure the amendments are tabled as promptly as possible.
Lord Lloyd of Kilgerran: I am very grateful to the noble Lord the Minister.
Clause 52, as amended, agreed to.
Clause 53 [Annual and other reports]:
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 123AA:
[Printed earlier: col. 661.]
Lord Lyell Lord Lyell moved, as an amendment to Amendment No. 123AA, Amendment No. 123AB:
[Printed earlier; col. 663.]
On Question, amendment to the amendment agreed to.
On Question, amendment, as amended, agreed to.
Clause 53, as amended, agreed to.
Clause 54 [Cable programme service]:
Lord Lyell Lord Lyell moved Amendments Nos. 123B, 123C and 123D:
Page 48, line 18, after ("both") insert ("either—(a)")
Page 48, line 19, leave out ("either—(a)")
Pages 48, line 22, at beginning insert ("for reception, by whatever means,")
The noble Lord said: With the permission of the Committee, for convenience I should like to speak to and move together Amendments Nos. 123B, 123C and 123D, all of which are contained in Clause 54. They have a simple purpose: to bring Clause 54 into line with the equivalent provision in the Cable and Broadcasting Bill. The equivalent provision is Clause 2 of that Bill, and during its Committee stage that Clause 2 was slightly amended. The amendments I am moving today repeat those changes to Clause 54.
Perhaps I may go though why we put the equivalent provisions in the two Bills. Part IV of the Bill before the Committee today updates and replaces the existing provisions in the Post Office Act 1969 on the licensing of cable programme services. These new licensing arrangements contained in Part IV are an interim measure because in due course these functions will be taken over by the new Cable Authority set up under the Cable and Broadcasting Bill. However, it is necessary to amend the Post Office Act in the Bill before us today rather than await the Cable Bill, so that all BT's exemptions from licensing end on the same day in accordance with the policy of the Government to place BT on an equal footing with its competitors. If I may move the three amendments together, Nos. 123B, 123C and 123D, I hope that will meet the approval of the Committee.
On Question, amendments agreed to.
Clause 54, as amended, agreed to.
Clauses 55 to 57 agreed to.
Clause 58 [Vesting of property, etc. of British Telecommunications in a company nominated by the Secretary of State]:
Lord Mottistone Lord Mottistone moved Amendment No. 124:
Page 51, line 22, at end insert ("or companies")
The noble Lord said: With the leave of the Committee, with this amendment I should like to take Nos. 125, 127, 128, 130 and 150.
Amendment No. 125: Page 51, line 24, after ("company") insert ("or companies")
Amendment No. 127: Page 51, line 32, leave out second ("the") and insert ("any")
Amendment No. 128: Page 52, line 12, after ("company") insert ("or companies")
Amendment No. 130: After Clause 58, insert the following new clause:
(" Powers to dispose of British Telecommunications by separate companies
—(1) The Secretary of State may by order dispose of British Telecommunications by authorising the sale of separate subsidiary companies each so organised as to have not more than 25 per cent, of its particular market.
(2) An order under section 67 of this Act shall not be made unless an order under this section has first been made.")
Amendment No. 150: Clause 92, Page 81, line 22, after ("(3)") insert (", 58A")
The first four are paving amendments to No. 130 which is the substantive amendment. Amendment No. 150 is consequential. I could have put down many more amendments on the lines of the first four to bring the various parts of Part V of the Bill into line with the sense of Amendment No. 130, but I did not do so because I merely wanted to show the way as to the sense of the amendments.
The point of Amendment No. 130 is to give the Government the opportunity, if they wish, to split up BT so that it becomes properly competitive. Many people are concerned that the provisions of this Bill, with the oversight of the Directer General of Telecommunications in effect trying to manage an artificially competitive situation, will not be good enough. They are concerned that the Government may well find during the course of the next two or three years that they will need to expedite matters to ensure proper competition, both for the benefit of BT's customers, who at present are not getting the full value for money they should, and also, and more importantly, to allow the development of its very small competitors. There is a view that it is too difficult to do this and that it would take a long time. But there is another view which puts a rather different slant on it. The main thing is that we are not seeking to do this immediately: we are merely seeking to give the Secretary of State the necessary power.
The only other point I think I should make (because people have often questioned it) is how it might initially be split up. For instance, there might be a company for systems, which would be sold off separately, and another company for the supply of apparatus; and yet another for, perhaps, the production of apparatus. There might be another company for international systems and another for value-added services; and as a further step, which might take rather longer, there is no really good reason in the long run why the various telephone areas we have now should not themselves all be split off, one by one, as is Hull at this very moment. There would be proper competition.
I was talking to a friend of mine at lunchtime—a businessman—who has a house in Scotland and who would appreciate, by dialling appropriately, being able to route his call to Scotland either up the west coast or up the east coast, as he can if he uses the railways—and why not? If he were getting a better service up the west coast, why should he not be able to dial that way? Or if he felt he was getting a better service up the east coast, the same thing. It is strange because we have never had it this way in this country, but it is becoming practicable, and more so as electronic developments go ahead.
I think it would be wise of the Government to have an amendment like Amendment No. 130. I fully admit the wording is probably absolutely hopeless, but it is the sense that matters. The sense of Amendment No. 130 should be in the Bill to give the necessary flexible power to the Secretary of State when, as I believe, the facts of life show that this is truly necessary. I beg to move.
Lord Bruce of Donington: I am not sure whether, from some perverse political motive, I ought not to
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support the noble Lord opposite in these amendments, because, of course, nothing would be more calculated to make British Telecommunications a completely unmarketable commodity in the City of London than carrying these amendments. Even as BT is now, and after suitable restructuring of its balance sheet by the Government in terms which I shall hope to be talking about later at another stage in this Committee, it is very doubtful whether British Telecommunications is capable of being marketed unless there is a very considerable restructuring.
If on the appointed day, "On such day as the Secretary of State may by order appoint for the purpose of this Part" of the Act "all the property, rights" and so on, should be distributed over a number of companies, this would accomplish my purpose, which is virtually to eliminate for all practical purposes the effectiveness of Part V of the Bill. Clearly it would never be privatised under those circumstances because nobody would buy it.
In a perverse way I am almost tempted to support the noble Lord. But I am dealing with the noble Lord, Lord Cockfield, who, as is well known, always deals with these matters seriously on their merits. I would not pre-empt the eloquence with which the noble Lord will undoubtedly deliver his reply to his noble friend, but I think that he is bound to refuse the amendment. Nobody in the Cabinet would dare to dishonour the pledge already given by the Prime Minister that there is going to be only one competitor, and that is Mercury. I do not think that the noble Lord will feel constrained at this stage to go against that dictum.
It is an interesting thought as to whether the liberalisers—I do not know whether I embrace some of the noble Lords on the Liberal and SDP Benches, possibly not, but they will dissociate themselves if they wish—would really like the whole of British Telecom's system to be fragmented in the way that the noble Lord implies. May I put it to the noble Lord, although perhaps on a modest scale, as one businessman to another that if you are going to have a public utility functioning in a world which actually comprises other public or private monopolies of a similar size and character, it has to have a certain amount of power. It has to have a certain amount of size. To fragment that size would be essentially to weaken it, aside from the impracticability of it.
Lord Mottistone: Would the noble Lord allow me to intervene?
Lord Bruce of Donington: I shall give way to the noble Lord in a moment when I have finished my sentence. If the noble Lord thinks otherwise, then I do not think he is conversant with the basic canons of monopoly business, and the effect that large undertakings have both upon the price structure and on the internal battle that goes on internationally between monopolies.
Lord Mottistone: It is not a question of power, it is a question of having too much power. I refer the noble Lord to the Competition Act 1980, and all that stems from that.
Lord Lloyd of Kilgerran: I am certainly not going to follow the noble Lord, Lord Bruce, in being perverse

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We have a certain amount of sympathy for Amendment No. 130. As your Lordships know, we on our Benches think that this is a bad Bill and that it is not necessary, but if you are going to have privatisation then it seems to me that the way in which the noble Lord, Lord Mottistone, has presented Amendment No. 130 together with its associated amendments would be a better way of having privatisation. As a matter for clarification, I assume that the noble Lord, Lord Mottistone, has included 25 per cent, in his proposed amendment—that the subsidiary companies shall each be "so organised as to have not more than 25 per cent, of its particular market"—because he had in mind the competition laws of this country.
Lord Donaldson of Kingsbridge: I should like to agree with my noble friend in principle, particularly because of the opportunity of regionalisation and regional command, which is the kind of thing that this might develop into quite well, and I should like to see the Bill at least make that possible.
Lord Spens: May I draw the attention of the Committee to the reply given by the noble and learned Lord, Lord Mackay of Clashfern, to Lord Mottistone when he was debating Amendment No. 79 at col. 529 of yesterday's Hansard. The noble and learned Lord said:
"The Government therefore believe that apparatus manufacture by any public telecommunications operator should be in a different company from that which runs the network with a different management and different accounts".
This amendment has only been put down in order to enable that not only to happen but in the future to enable British Telecom to sell off its subsidiaries if it wants to do so.
Lord McIntosh of Haringey: I want just a point of clarification before the Minister replies. I wonder whether he has formed an impression of what the amendment means by "25 per cent, of its particular market"? The noble Lord, Lord Mottistone, referred to one possible formulation of one of these companies to whom British Telecom should be devolved as being Hull. There is no competition in Hull. Hull is a monopoly telephone company within its particular geographical area. Are the Government satisfied that the breaking up of a national monopoly into a series of regional monopolies is going to achieve the liberalisation which the noble Lord, Lord Mottistone, desires?
Lord Mottistone: May I clarify that issue? I apologise to the Committee for not making it clear in the first instance. The 25 per cent, of a particular market is a direct reference back to the guidelines of the Competition Act 1980, which said that this is the size above which a monopoly starts to become seriously anti-competitive. A "particular market" is designed to cover different markets because British Telecom is not the only company that would be affected by this. There are certain specialised markets in which there would be other companies which currently have more than 25 per cent. In the case of Hull, I threw in the idea of competition between the areas because my great aim, regardless of the
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technicalities, is to make people compete. It is only by being competitive that they are efficient and give good service to their customers.
Lord McIntosh's question is answered by saying that in the case of Hull it is providing the same sort of service as, for instance, Reading. What you may find is that if you dial through to Hull you might have a better directory inquiry service than, say, Reading. In this case, if you were competitive, you would always be dialling to Hull and the money would go there. We all know that the directory inquiry service is the most miserable part of all the services provided by British Telecom, and I just choose that as an example. If your Lordships open your minds and are imaginative instead of working within the close confines of a philosophy started in the last century, then you might begin to understand my amendment.
Lord Brookes: To we natural "free enterprisers" Lord Mottistone's suggestions are naturally persuasive; but if they were adopted we should be in danger of addressing ourselves to the plausible attractions of competition in terms of the service to our domestic market, and of disregarding the tremendous significance of the telecommunication supply industries in this country, which I submit will need the concentrated purchasing power of British Telecom if they themselves are to address world markets on this frontier of technology which is concentrated in the new telecommunications situation, and positively and advantageously expressed by System X, so excellently developed by the Post Office, British Telecom, and British suppliers.
It is of vital importance to our new industries and new technologies engaged in this industry that if they are to survive we have to recognise that the British market will not be sufficient. Something like not less than 5 per cent, of the United States market must be conquered if we are to have the volume in order to design, research, and produce efficiently and effectively. We have to lift our eyes beyond the restrictions, confines and limitations of—dare I describe it?—our parochial market and look behind Telecom itself to the supply industries where at this point in time we are equal to the best in the world. Our disadvantage is that we do not have the market. Therefore, please let us not at this stage fragment our purchasing power and fragment the possible co-ordination of onward design into the future.
6 p.m.
Lord Cockfield: My noble friend Lord Mottistone has explained clearly that the purpose of these amendments is to divide British Telecom into its component parts, each organised with a separate subsidiary, and then to privatise each part separately.
The most interesting thing to have emerged from the debate is that it is perfectly clear that reputable alternative routes are available; some are supported by some noble Lords, others by other noble Lords. If faced with alternatives of this kind one has to make a choice. The Government have decided, for good and sufficient reasons, to go down one route. We adhere to that decision. I will explain why in some detail.
The Government's policy on this matter was set out fully by my right honourable friend the then Secretary

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of State for Trade and Industry in the statement he made on Second Reading in another place on 18th July. We wish to move ahead as quickly as possible to the flotation and to the disposal of a controlling interest in British Telecom plc. The amendments proposed would all result in a significant delay before privatisation could take place. One reason for this is that it could take years to put British Telecom's accounts into a form which would make piecemeal disposal possible. This is not a technical quibble. In selling something, one has to be able to show precisely what is being sold and proper accounts are needed to be able to do that.
There is also an important point of real substance. British Telecom has been developed in terms of management structure in the engineering of its network as a highly integrated company. The physical separation of its manpower and of its other assets could not be achieved quickly. Indeed, no credible case for a division of its network operations has been advanced, thus to separate local services from trunk services, as has sometimes been proposed, would be immensely complex and costly.
I am fully aware of the fact that real fears exist that BT might abuse its dominant market position and that these fears underlie some of the proposals for splitting British Telecom into its component parts. We have taken steps to ensure that the licensing arrangements, as exemplified by the draft British Telecom licence and the monitoring and enforcement procedures set out in the Bill, will provide an adequate guarantee of fair competition. What we intend is that British Telecom will have to conduct its network operations, its apparatus supply activities and apparatus manufacturing business on an arm's-length basis. It will be required under the terms of the licence to establish a separate subsidiary company for its apparatus manufacturing business and to adopt open tendering procedures in relation to it. This is the point to which the noble Lord, Lord Spens, referred.
The licence will also require separate accounting and reporting arrangements for its systems business and its apparatus supply business. There is also an explicit prohibition on any cross-subsidies from British Telecom's business to its apparatus supply or manufacturing business. There are other more general conditions which deal with other kinds of potential anti-competitive practices. Should it happen—and we do not expect this—that the initial conditions are shown to have a weakness which needs to be remedied, the director will be able to take action to modify them, if necessary, with the support of the Monopolies and Mergers Commission.
For all these reasons, the Government consider that there is an overwhelming case in favour of a unitary sale; a case which rests not only on the delay inherent in any alternative, but on the need to put British Telecom in the position where it can compete effectively internationally against giants such as AT & T. This is a very valid point that my noble friend Lord Brookes raised. There is also a need to provide a sound financial basis for the modernisation of the whole network and a need to maintain management morale within British Telecom, if it is to get off to a sound start as a public limited company. In the light of the full
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explanation that I have given, perhaps I might invite my noble friend to withdraw his amendment.
Lord Weinstock: I find myself in agreement with a great deal of what the noble Lord, Lord Cockfield, had to say in reply to the amendment. Those noble Lords who have referred to the system in Hull would find themselves restricted to local calls from Hull if it were not for the BT network. The noble Lord referred to a statement made by his right honourable friend in another place and himself pointed out the difficulties in trying to sell the separate parts of British Telecom because of administrative problems, accounting problems and so on. Does the noble Lord think that those difficulties will not arise in fulfilling the requirements of Conditions 18 and 20 of the licence which refer to cross-subsidy and the keeping of separate accounts for the separate activities of BT?
Lord Cockfield: The noble Lord is entirely correct. Complying with these requirements poses a problem, but the essential difference is that in wishing to privatise British Telecom these problems would need to be solved before one could privatise. That is why there is the delay. If British Telecom is sold as a single unit, as we propose, these problems can then be solved properly in due time, and we would hope as quickly as possible.
Lord Lloyd of Kilgerran: In view of the fact that on many occasions during the Committee stage, I have been rather chasing the noble Lord the Minister (if that is the correct expression) about the difficulties there may be in relation to the export trade, in all fairness I should now like to say that much of what the noble Lord has just said in dealing with the main parts of the amendments may be a great help not only to British industry but to the Government. His statement followed the speech of the noble Lord, Lord Brookes, who emphasised how essential it was to compete outside the United Kingdom. He said that a target of 5 per cent, in the American market would be something that should be sought. I intervened merely to say that the noble Lord, Lord Cockfield, has gone some some way to deal in general terms, though perhaps not as specifically as I should like, with the criticisms I made of the Bill in relation to the export trade.
Lord Mottistone: I thank my noble friend for his very full remarks. There is one point that he did not seem to cover. The point of the amendment was not to have the Bill implement this splitting up, merely to put the powers at the disposal of the Government in the event that perhaps in two or three years time they might find the course that they had followed was not the correct one and they might like to do this and it would be useful for them to have this advantage in the background. Would my noble friend like to comment on that?
Lord Cockfield: I started by saying that this was one of those areas where one had to make a choice and adhere to it. One could not possibly privatise British Telecom and then a few years afterwards say that it could have been a great deal better had it been privatised in a series of separate companies rather than

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as a unit. This is a major kind of decision that one has to take ab initio, and, as I have said, for good and sufficient reasons the Government have decided to go down the path of unitary disposal of the company.
Lord Mottistone: I thank my noble friend. I will not delay the Committee. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 125 not moved.]
6.11 p.m.
The Earl of Halsbury The Earl of Halsbury moved Amendment No. 126:
Page 51, line 24, at end insert—
("( ) References in this Act to the "successor company" shall include wholly owned subsidiary companies designated by the Secretary of State. Such subsidiary companies shall be registered under the Companies Act 1948 to 1983 and shall not have directors in common with other subisidary companies.").
The noble Earl said: This amendment endeavours to avoid cross-subsidisation and anti-competitive practices and to ensure that separate subsidiaries publish separate audited accounts and have no common directors. The general thought of it, first, is that whatever constraint this Bill when enacted will impose on the successor company shall be a constraint on the subsidiaries as well; so that they cannot play hide-and-seek or hide behind a smokescreen or anything like that. Neither can they get into cahoots, as it were, by having a lot of cross-linking directorships who can get up to things that the parent company might not know about. I think this is fairly straightforward stuff and I do not need to make a long speech about it.
I should be very interested if the noble Lord, Lord Weinstock, wanted to comment on it from the standpoint of practicality. I know that it is common practice for parent companies to have (as it were) a travelling director, someone very often on the financial side, who goes round from board meeting to board meeting of the subsidiaries keeping them in line with main board practice. That would be prohibited under this provision. I beg to move.
Lord Lloyd of Kilgerran: I am glad to see the noble Earl, Lord Halsbury, in his place and that he has recovered from his illness of yesterday because I have been asked by the noble Lord, Lord Spens, to intervene since this is a simple amendment dealing with anti-competitive practices. The noble Earl has explained the purpose of what I understand to be a probing amendment so as to get the attitude of the Government in this matter. I would support the general theme of this amendment.
Lord Weinstock: I do not think that the noble Lord, Lord Cockfield, will need a great deal of further explanation as to the relevance of the amendment and we shall hear from him shortly whether the Government are sympathetic to it or not. I wanted to raise a subsidiary point, really, to get information. Under the provisions of this clause, Clause 58, and of Clause 66, the Government will undertake and underwrite very considerable financial obligations; and they will do so on an open-ended basis. There is no indication of the amount of the continuing liability involved. What is more, that liability can be increased
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by decisions made by the successor company after the transfer to BT plc has taken place, for example, to wage increases and to other variations in terms and conditions of employment. Surely, this represents an element of subsidy although it may well enable the Government to raise more money from the sale of BT shares.
Being less reluctant than the noble Lord, Lord Somers, to irritate Ministers, may I ask noble Lords on the Government Front Bench if they do not think that it distorts the market to do this in telecommunications equipment and services to the detriment of competition?
Lord Cockfield: May I take the specific amendment raised by the noble Earl? To a very large degree, I dealt with this point when I was talking about the previous amendment moved by my noble friend Lord Mottistone. We appreciate that problems can arise in relation to the wide spread of activities undertaken by British Telecom and the importance that its apparatus-supply activities, its apparatus manufacturing business and its network operations should all be conducted on an arm's-length basis. The route that we have chosen to deal with this particular problem is to insert terms in the licence under which a separate subsidiary company would be established for the apparatus manufacturing business and open tendering procedures in relation to it would be adopted. The licence also requires separate accounting and reporting arrangements. I think that in practice, therefore, we have very fully covered the point which the noble Earl raised.
The only question is whether or not the conditions to which I have referred should be written into the Bill itself. Our view is that to attempt to do that would give a very misleading impression. It would suggest, for example, that, despite the decision which has been made and announced very clearly that we propose floating British Telecom as a unitary company, there was a prospect that we might be contemplating dividing it before the flotation took place. We have no such intention at all in our minds. We feel that the right course to adopt is the one that we have followed; namely, to put these conditions in the licence. I hope that that will satisfy the noble Earl on the point raised in his amendment. The points raised by the noble Lord, Lord Weinstock, did not, in fact, relate to the amendment. They related perhaps to a discussion that we will have at a later stage on whether this or other clauses should stand part of the Bill.
Lord Bruce of Donington: I am still a little mystified by the observations of the noble Lord on the amendment because Clause 58(1) provides for the transfer of all the property rights and liabilities, other than the excepted liabilities, to which British Telecom was entitled (or was so immediately before that date) which by virtue of those provisions become the property of the successor company. The subsidiaries which are described in the amendment as "wholly owned" are part of the property and assets of British Telecom and with the other assets automatically pass to the successor company, anyway. In that sense, I should have thought, looking at it in completely legal terms, the amendment is wholly unnecessary because

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the subsidiary companies belong already to British Telecom and go over to the successor company in any event.
Lord Cockfield: The position, in fact, is that British Telecom at present has no subsidiary company and, from that point of view, therefore, one could say that the amendment does not arise. But I well understand what the noble Earl had in mind. I assumed that this amendment flowed on from the previous amendments which we had been looking at where the proposal was that British Telecom should be divided into a number of subsidiary companies. But there is a considerable overlap between this amendment and the previous one, which is why it was necessary for me to delay your Lordships by repeating many of the observations that I had made on the previous amendment. I hope very much that that explanation satisfies the noble Earl.
The Earl of Halsbury: It will have to; because I am not the first person to move an amendment and to be told that it will be in the licence and I must be content with that. A lot of us have tried, as it were, to tighten up the structure a bit by putting into the Bill what I agree could be in the licence, and on the whole we have not seen much progress made in this direction. We have not really seen the licence in its final form and all this phasing of the passage of the Act and the publication of the licence in its final form is something which leaves everybody a little restive. But, restive or not, I beg your Lordships' leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 127 and 128 not moved.]
Clause 58 agreed to.
6.21 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 129:
After Clause 58, insert the following new clause:
("Duties of successor company.
.The successor company shall satisfy the Secretary of State that it will—

(a) establish adequate consultative procedures including provisions for industrial democracy;

(b) negotiate terms and conditions of employment including pay, promotion, job security and pensions;

(c) promote and encourage satisfactory levels of recruitment, training, safety, health and welfare, for its employees.").

The noble Lord said: I beg leave to move this amendment which stands in my name and the names of my noble friends. Your Lordships will note that the amendment seeks to ensure that,
(".The successor company shall satisfy the Secretary of State that it will—

(a) establish adequate consultative procedures including provisions for industrial democracy;

(b) negotiate terms and conditions of employment including pay, promotion, job security and pensions;

(c) promote and encourage satisfactory levels of recruitment, training, safety, health and welfare, for its employees.").

Your Lordships will be aware that the Post Office—and indeed British Telecom as it now is—have had good arrangements for consultation and negotiation about salaries and conditions of service. Indeed, they have had decent arrangements for discussing matters such as pension arrangements with
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their staff", and the staff have been involved in all aspects relating to safety, health and welfare.
Our desire—and I am sure the desire of all your Lordships—is that such arrangements should continue. In an industry of this sort—and here I refer in particular to the first paragraph—that is, to
"establish adequate consultative procedures including provisions for industrial democracy"—
it really is essential that people working there feel that they are part of that industry. They should feel that they have something to contribute to it, and that there are ways and means by which they can make that contribution in a real and positive way; that they can offer advice to the management and have at least some say in the new technologies which are so important to this industry; that they can have something to contribute about the future investment levels on which their jobs and livelihoods—and indeed the well-being of the telecommunications system—depend.
It is also essential that people who at present feel threatened—and I ask your Lordships to make no mistake about it: they feel threatened with massive job losses, because a number of 45,000 has been mentioned—should have confidence in the new organisation and confidence that they will be taken into consultation, not only about small matters but about all the large matters which will affect them, their jobs, their families and their livelihoods.
I should have thought that every person in this Chamber would want to establish such relationships right from the start. If British industry, whether it be British Telecom or any other industry, is to succeed, it is essential that we should have a contribution—and a large contribution—from the people working in those industries at every level. Therefore I hope that the Government will very seriously consider this amendment. If they cannot accept it at this stage, I at least ask them for assurances that the people working in British Telecom will not be in any way disadvantaged and that the arrangements which they have had hitherto for consultation and for settlement of disputes, for consultations on wages and pensions, and so on, will continue as hitherto or perhaps be improved. I beg to move, and I look forward to hearing the noble Lord's reply.
Lord Rochester: I should like to say a few words in support particularly of paragraph (a) of the suggested new clause concerning the establishment of adequate consultative procedures in the successor company. The Committee may recall that, first, your Lordships and, later, the Government accepted an amendment to the 1982 Employment Bill which I moved and which in its final form as Section 1 of the Act has meant that every United Kingdom company employing more than 250 people will from the beginning of this year have to include in its annual report a statement describing the action taken during the previous year to introduce, maintain or develop arrangements aimed at furthering employee involvement in a number of ways. These include consulting employees or their representatives on a regular basis so that the views of employees can be taken into account in making decisions which are likely to affect their interests.

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I have an uncomfortable feeling that when the Minister comes to reply to this amendment he will say that the successor company, like any other company, will be obliged to fulfil the requirement I have referred to but that in the Government's view no company should be compelled actually to establish consultative procedures where these do not already exist.
My amendment to the 1982 Employment Bill was deliberately framed in such a way that it had a good chance of gaining majority support among your Lordships. In moving it, I acknowledged that I was once altogether a voluntarist on the question of employee participation, but I added that the trouble about voluntarism is that there have to be volunteers. I said that exhortation concerning the need for speedier progress in the matter had in the past proved largely fruitless and that the Liberal Party had for the last 50 years wished to go much further in this direction. For my part, I had reached the conclusion that the time had come to make it a statutory requirement that in every company employing more than a certain number of people there should be consultative bodies of some kind.
I continue to hold that view and therefore I support in principle the amendment which has just been moved by the noble Lord, Lord Stoddart of Swindon. I do so not simply to conform to a particular long-held tenet of Liberal Party policy but because first-hand experience has led me to feel that the establishment of adequate consultative procedures on a countrywide basis would result in a significant improvement in the motivation of British working people generally in our industrial performance and in our international competitiveness. In my view, the Committee will be well advised to see that progress towards that end is made now by accepting this amendment to the Bill.
Lord Morris: I believe that I am not alone in thinking that it is really an abuse of the statute law to use a statute as a means of declaring that a company should fundamentally be good managers. This is precisely what this amendment appears to do, and as such it is totally unnecessary.
Lord Cockfield: As the noble Lord, Lord Stoddart of Swindon, will be aware, a new clause in the same terms was twice moved in another place and was twice defeated on a Division. The noble Lord will not be surprised, therefore, if I say that I could not accept the clause. The reason, quite simply, is that a statutory provision of this kind would be out of keeping with the relationship between the Government and British Telecom as a private sector company. This is not to say that we are out of sympathy with the spirit of the provision. What we believe is wrong is its incorporation in statute.
So far as employee consultation and industrial democracy are concerned, the Government are firmly committed to the principle that employees should be involved with their place of work. But we do not consider that the Government should impose particular arrangements for employee consultation on any undertaking through legislation. Suitable arrangements are best left to employers and employees to pursue voluntarily, taking into account their particular circumstances. So it will be for the successor company
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and its employees to take this up, without Government coercion or interference.
I well remember the debates in your Lordships' House on the provision in the 1982 Employment Act, to which the noble Lord, Lord Rochester, referred. But it was of the essence of that proposal that what was required was that the company should state in its annual report what it had in fact done. There was no coercion placed on the company to take any particular action. I entirely accept that it was a valuable pointer in the right direction, and that is why I say that, in spirit, we are entirely in support of employee consultation and industrial democracy.
Our policy towards terms and conditions of employment in the private sector is aimed at establishing the framework necessary to protect the rights of employers and employees. Where legislated, this framework applies to companies generally, though it allows for employers and employees to develop arrangements suited to their particular circumstances. Employees' welfare, health and safety and training and recruitment fall very much into the same category. A legislative framework lays down requirements where necessary and, subject to this, reponsibility for all these subjects is then placed on those running the companies concerned.
This is explicitly recognised in the Companies Act 1980, to which my noble friend Lord Glenarthur referred, and that includes the phrase,
"the interests of the company's employees in general as well as the interests of its members",
among the matters to which the directors of a company are to have regard in performing their functions. So there is a general framework for private sector companies to operate in. If there are any gaps in this framework, these should be tackled by general legislation, not by enactments aimed at particular private sector companies. While, therefore, we entirely appreciate the spirit behind the amendment, we do not think that this is a matter which should be covered by legislative provision in this Bill, and it is on this ground that I would oppose the amendment.
Lord McIntosh of Haringey: I wonder whether I am alone in remarking upon the amazing contrast between the Government's reaction to previous amendments concerning the successor company and their view on this amendment. On countless occasions during this Committee stage the Government have acceded to requests to tighten the control on the successor company through additional conditions in the British Telecom licence. Admittedly, on a number of occasions this has been in response to suggestions from other parts of the Committee that there should be controls in a statutory form. But, even so, with what the draft licence already contains and with the many additions which the Government have continually been undertaking to add to the draft licence, to call this private sector company tout court, as if that were enough to dismiss the purpose behind this amendment, is quite staggering.
This is not a private sector company in that sense. This is a private monopoly established by extremely detailed legislation and established under the conditions of a licence which, in turn, depend on extremely detailed legislation. It is, as the Government

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have confirmed in their reactions to recently proposed amendments, to be a public monopoly and not a liberalised telecommunications industry. It is therefore, in very many important ways, different from the private sector company which is the subject of the 1982 Employment Act. Indeed, if that were not enough, the continuing responsibilities of the Government to employees of the present British Telecom corporation would surely be enough to tip the balance.
It has been said, perhaps sometimes with more piety than conviction, that the future of the telecommunications industry in this country depends on the people who work in it. These people who work in the telecommunications industry have not only had a history of co-operation, of consultation, of involvement in the management of British Telecom. They have had that tradition enshrined as recently as 1981 in the British Telecommunications Act, in which provisions are made under statute by this Government for the kind of consultation which this amendment now requires. The complete volte-face which the Government are now doing, away from the conditions of the British Telecommunications Act, on the totally spurious ground that this is a private sector company, is not acceptable and I cannot believe that my noble friends would wish to be reassured by the response that the Government have given.
Lord Auckland: Before my noble friend replies, I wonder whether the Government could have another look at paragraph (c), particularly on the question of safety. May I ask my noble friend whether the Health and Safety at Work Act will apply to this new organisation and whether the Royal Society for the Prevention of Accidents has been consulted? Bearing in mind the large number of accidents which are taking place in industry at the present time, I think that, while paragraphs (a) and (b) of this amendment appear somewhat superfluous, paragraph (c) needs looking into, and I ask my noble friend whether that can be done.
Lord Bruce of Donington: I ask the noble Lord the Minister to be a little more considerate about this amendment. The welfare of the employees of British Telecom is of enormous importance, and the character of the administration to which they will be subjected by the successor company—a management with which I hope they will be able to co-operate as fully as they can—is a matter of enormous importance.
Your Lordships will recall that last night, when we were discussing the code part of the Bill, which appeared to impinge upon the interests of landlords, the Benches behind the noble Lord opposite filled up very considerably. There was a very considerable debate lest landlords, who were not in occupation of a particular part of land which was going to be overlaid by apparatus, should lose their right to compensation. That is all very well, but—
Lord Morris: Would the noble Lord—
Lord Bruce of Donington: I shall allow the noble Lord to intervene presently, because his attitude of
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arrogant indifference to the matter completely encapsulates the attitude of his party. Even the noble Lord, Lord Cockfield, has rather more sensibility than that. I issue a warning to the Government: if they proceed in their arrogant fashion and assume, even subconsciously, that the ordinary worker in this country is no longer of any account whatsoever, that his rights need not be safeguarded and that all he has to do is to endure the lash of fear which the Government's unemployment policy has subjected him to, they are making a very grave mistake. I sincerely hope that the Government will not keep it up.
One of the principal reasons for the success of German industry, which noble Lords opposite have very often justifiably praised and commented upon, is the policy of mitbestimmung—the policy of consultation—which, oddly enough, was firmly established by Her Majesty's Government in Germany after the war when laying down the procedure for industrial relations. For noble Lords opposite to continue to decry the importance of full consultative procedures and the bringing into line of firms which do not adopt them is a great mistake. They would lose nothing at all but would reassure the employees of British Telecom, comprising some of the most skilled and dedicated people in the telecommunications industry throughout the world, if they abandoned their stubbornness and gave way, even though they might not feel it in their hearts, in order at least to give those employees the impression that the party opposite might, after all, have a human face.
Lord Morris: Quite clearly the noble Lord opposite has totally misunderstood the point. It is nonsense to suggest that noble Lords on this side of the Committee have no sympathy with the underlying point. All we are suggesting is that it is totally unnecessary to have it in a statute. The noble Lord referred to the support and the interest of noble Lords on this side of the Committee when certain matters were discussed yesterday. May I ask whether there were so many noble Lords supporting his side of the Committee as there are sitting behind the noble Lord at this moment?
The Countess of Mar: I have a very great deal of sympathy, understandably, for this amendment. Right the way through the Committee stage I have made my position very clear. One point about which I am very concerned is that the negotiating procedures appear to have broken down a little between British Telecom and their employees. I am anxious that this should not be carried into the new private business. In April 1983, British Telecom unilaterally abrogated, after due notice, the agreement under which either they or the unions could institute mandatory arbitration, which has been the main mechanism by which the unions have sought to resolve disputes over many years. Recently they have also sought to deny the mechanism by which disputes could be escalated to high levels within the organisation for resolution. No disputes procedure is now incorporated, and the unions, which have traditionally sought to resolve their disputes by peaceful means, are finding that their only defence now is industrial action. I am very concerned that it

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should not be carried through; that there should be some resolution of the situation before privatisation.
Lord Donaldson of Kingsbridge: I should like to support the noble Countess, Lady Mar. It seems to me that the approach of the noble Lord, Lord Bruce of Donington, to the noble Lord, Lord Cockfield, is hardly likely to be very effective, though that of the noble Countess, Lady Mar, might be more effective. We have heard from the noble Lord that the Government agree with the points in the amendment. The question is whether or not they should be put into the Bill. I believe that the unhappiness and uneasiness of the staff would be eased if this were to be achieved without breaking a fundamental principle. No fundamental principle is, I believe, involved. This provides an opportunity for the noble Lord to do what he has done once or twice before in the Bill, though in a rather different way; namely, to do something with the deliberate intention of reassuring the majority of the people who are concerned about their future in this monopoly. Though a 3 per cent, differentiation may end one day by becoming competitive, it is certainly not competitive now. I appeal to the noble Lord on quite different grounds from my colleagues on the Labour Front Bench. It is worth asking him to think again about whether or not a little more could be done to meet the point.
Lord Peyton of Yeovil: I should like to make two short points. The first relates to the language used by the noble Lord, Lord Bruce of Donington. I have only just arrived in this place. One of the most acceptable and notable changes that one observes here is that noble Lords do not make a habit of imputing either silly or malicious motives to others. When the noble Lord stands up and says that we on this side of the Committee conduct ourselves as though the ordinary worker is of no account, he descends, I believe, to something very near idiocy. I want to be very careful, because I realise that the noble Lord, Lord Bruce of Donington, has a right which is not, apparently, shared by others: to use violent language. I do not want to trespass on his preserve.
Secondly, I see absolutely no objection to the contents and meaning of the proposed new clause. I just question the need to put it into an Act of Parliament, or the effectiveness of doing so. We are all greatly given to pieties. We are on the side of the old, the young and the disabled, as of habit. I very much doubt whether those categories whom we most seek to help benefit very greatly from our custom of inscribing these pieties in Acts of Parliament. I have seen Ministers of both Governments in another place rushing to the statute book and emptying their slop pails thereupon, with a whole range of nonsensical results. If my noble friend, following his usual acumen and judgment, supports on this occasion the cause of economy in statutes and does not follow the habit of increasing their verbiage, then I, for one, will applaud him.
Lord Cockfield: First may I thank the noble Lord, Lord Donaldson of Kingsbridge, and my noble friend Lord Peyton of Yeovil for their personal support. The noble Lord, Lord Bruce of Donington, dons the cloak of indignation like a well-worn garment. It does, of
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course, keep him warm, if it serves no other purpose. Turning to the amendment, all of us agree with the sentiments expressed in it; there is no question about that. We all recognise the immensely important part which the management and the workers in British Telecom play in the success of that business. We hope that the business will go from success to success and that it will continue to provide good employment, good working conditions and job satisfaction—and be an organisation in which people are happy and proud to work. The experience of companies which have been privatised is very good in those respects. We see no reason to suppose that the same will not be true in the case of British Telecom.
Where we part company is on the question of whether one writes all this, not into law but into this particular statute. I have said already that if there were a feeling that the law generally needed strengthening, that is a matter which can very properly be discussed in the context of other legislation. Indeed, the noble Lord, Lord Rochester, has very much to his credit the success of incorporating the particular provision to which he referred in the Employment Act 1982. That is the correct way of proceeding. What I believe to be wrong is writing conditions of this kind into a specific statute relating to a particular company. It is on those grounds that I oppose the proposed new clause, not because we in any way dissent from the quite admirable expression of goodwill which it contains.
Lord Rochester: Before the noble Lord sits down, is he saying, then, that if some means could be found of introducing a statute which obliged companies generally to adopt consultative procedures, that would have his sympathy? If that is so, it is very reassuring and comforting to a number of us on this side of the Committee.
Lord Cockfield: No. As the noble Lord will really realise, I was saying that if such a statute were introduced, it would be a subject for legitimate debate in your Lordships' House.
Lord Stoddart of Swindon: This has been a most interesting debate—spirited at times. I am not satisfied with the answer given by the noble Lord, Lord Cockfield. It is a simple amendment. We are merely asking that the successor company shall satisfy the Secretary of State that it will do these things. It is not a question of writing something further into the statute book. It is merely asking the Secretary of State to reassure himself that these things will be done.
The noble Lord said that he was with us in spirit. We propose to put some body on that spirit, and I therefore beg to move the amendment.
6.53 p.m.
On Question, Whether the said amendment (No. 129) shall be agreed to?
Their Lordships divided: Contents, 90; Not-Contents, 110.

DIVISION NO. 3

CONTENTS

Airedale, L.

Attlee, E.

Ardwick, L.

Aylestone, L.

687

Barnett, L.

Kilmarnock, L.

Bernstein, L.

Kirkhill, L.

Beswick, L.

Lawrence, L.

Birk, B.

Leatherland, L.

Bishopston, L.

Listowel, E.

Boston of Faversham, L.

Llewelyn-Davies of Hastoe, B

Bottomley, L.

Lloyd of Kilgerran, L.

Bowden, L.

Lockwood, B.

Briginshaw, L.

Longford, E.

Bruce of Donington, L.

McIntosh of Haringey, L.

Carmichael of Kelvingrove, L.

Mackie of Benshie, L.

Chitnis, L.

MacLeod of Fuinary, L.

Cledwyn of Penrhos, L.

Mar, C.

Collison, L.

Melchett, L.

Darling of Hillsborough, L.

Milner of Leeds, L.

David, B, [Teller.]

Molloy, L.

Dean of Beswick, L.

Nicol, B.

Delacourt-Smith of Alteryn, B.

Northfield, L.

Oram, L.

Diamond, L.

Peart, L.

Donaldson of Kingsbridge, L.

Pitt of Hampstead, L.

Ennals, L.

Ponsonby of Shulbrede, L. [Teller.]

Ewart-Biggs, B.

Fitt, L.

Prys-Davies, L.

Gaitskell, B.

Raglan, L.

Gallacher, L.

Rea, L.

Galpern, L.

Rochester, L.

Gladwyn, L.

Ross of Marnock, L.

Glenamara, L.

Shackleton, L.

Graham of Edmonton, L.

Stallard, L.

Gregson, L.

Stedman, B.

Grimond, L.

Stewart of Alvechurch, B.

Hale, L.

Stewart of Fulham, L.

Hampton, L.

Stoddart of Swindon, L.

Hanworth, V.

Strabolgi, L.

Harris of Greenwich, L.

Taylor of Blackburn, L.

Houghton of Sowerby, L.

Taylor of Mansfield, L.

Hughes, L.

Tordoff, L.

Irving of Dartford, L.

Underhill, L.

Jacques, L.

Wedderburn of Charlton, L.

Jeger, B.

Whaddon, L.

Jenkins of Putney, L.

White, B.

John-Mackie, L.

Wilson of Rievaulx, L.

Kaldor, L.

Winterbottom, L.

NOT-CONTENTS

Airey of Abingdon, B.

Fraser of Kilmorack, L.

Allerton, L.

Glanusk, L.

Avon, E.

Glenarthur, L.

Bellwin, L.

Gowrie, E.

Belstead, L.

Gray of Contin, L.

Boyd-Carpenter, L.

Grimston of Westbury, L.

Brookes, L.

Hailsham of Saint Marylebone, L.

Brougham and Vaux, L.

Broxbourne, L.

Halsbury, E.

Bruce-Gardyne, L.

Harmar-Nicholls, L.

Caithness, E.

Hayter, L.

Campbell of Croy, L.

Henley, L.

Carnegy of Lour, B.

Hives, L.

Cathcart, E.

Home of the Hirsel, L.

Chelmer, L.

Hornsby-Smith, B.

Cockfield, L.

Hunter of Newington, L.

Coleraine, L.

Hylton-Foster, B.

Colville of Culross, V.

Ingrow, L.

Colwyn, L.

Kilmany, L.

Cork and Orrery, E.

Kimberley, E.

Cornwallis, L.

Kinloss, Ly.

Craigavon, V.

Lane-Fox, B.

Crawshaw, L.

Lindsey and Abingdon, E.

De La Warr, E.

Long, V.

Denham, L, [Teller.]

Loudoun, C.

Dilhorne, V.

Lucas of Chilworth, L.

Drumalbyn, L.

Lyell, L.

Ellenborough, L.

McAlpine of West Green, L.

Elliot of Harwood, B.

Mackay of Clashfern, L.

Elphinstone, L.

Macleod of Borve, B.

Elton, L.

Mancroft, L.

Enniskillen, E.

Mansfield, E.

Faithfull, B.

Margadale, L.

Ferrier, L.

Marley, L.

688

Marshall of Leeds, L.

Sandford, L.

Maude of Stratford-upon-Avon, L.

Sandys, L.

Shannon, E.

Merrivale, L.

Skelmersdale, L.

Milne, L.

Somers, L.

Milverton, L.

Spens, L.

Monk Bretton, L.

Stodart of Leaston, L.

Montgomery of Alamein, V.

Strathcona and Mount Royal, L.

Morris, L.

Sudeley, L.

Mottistone, L.

Suffield, L.

Mowbray and Stourton, L.

Swansea, L.

Swinton, E, [Teller.]

Murton of Lindisfarne, L.

Teviot, L.

Nugent of Guildford, L.

Thorneycroft, L.

O'Neill of the Maine, L.

Tranmire, L.

Onslow, E.

Trenchard, V.

Pender, L.

Trumpington, B.

Peyton of Yeovil, L.

Tryon, L.

Plummer of St. Marylebone, L.

Ullswater, V.

Vaux of Harrowden, L.

Rankeillour, L.

Vickers, B.

Rochdale, V.

Whitelaw, V.

St. Davids, V.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.1 p.m.
[Amendment No. 130 not moved.]
Clause 59 [Initial Government holding in the successor company]:
Lord Rochester Lord Rochester moved Amendment No. 130A:
Page 52, line 29, at end insert—
("or unless he is satisfied that the successor company has established, or is about to establish, one or more employees' share schemes which will enable all full-time employees in the United Kingdom of the successor company and of every subsidiary thereof to acquire securities of the successor company on advantageous terms both upon the occasion of the issue of any prospectus relating to the successor company and otherwise.").
The noble Lord said: The purpose of this amendment is to ensure that when the successor company is floated, and thereafter, adequate arrangements will be made for employee participation by means of share ownership. It may be for the convenience of the Committee, because Amendments Nos. 143B and 143C are simply consequential on this one, that I should speak to them now.
Amendment No. 143B: Page 60, line 14, at end insert—
(" "employees' share scheme" bears the same meaning as in the Companies Act 1980.").
Amendment No. 143C: Page 60, line 20, leave out ("has the same meaning") and insert ("and "prospectus" bear the same respective meanings").
It seems to us important that in this instance, as in previous cases of so-called privatisation, the Government should encourage participation by employees in the ownership of share capital. If the diffusion of ownership is to mean anything, then individual share ownership is needed to counterbalance the weight of institutional holdings, and, above all, the workforce needs to feel a sense of involvement in the affairs of their employing company.
In this amendment we are asking for no more than has already happened in the case of British Petroleum, British Aerospace, Cable and Wireless, Amersham International. The amendment is deliberately flexible as to the precise form of the scheme or schemes that might be used, provided that they are one of the

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broadly based schemes, in other words, one of the schemes capable, if approved by the Inland Revenue, of conferring tax advantages on participants, and, by virtue of such approval, are bound to be extended to all full-time United Kingdom employees, subject only to any requirement as to length of service imposed by the scheme concerned.
The Committee may already know of some of the successes of these broadly based schemes. The first category are those which were introduced under the provisions of the 1978 Finance Act, itself a product of the Lib-Lab pact. The title given to such schemes in the legislation was "profit sharing". We prefer the term "employee share ownership" schemes. These schemes, which the present Government have made more attractive, I acknowledge, by raising the annual individual limits for participation, have had a remarkable effect on the pattern of individual share ownership in this country. Over 380 have been approved by the Inland Revenue, and the number of participants in them, how well over 300,000, is estimated to have raised the number of people of employment age directly owning shares in British companies by over one-third.
The second type of scheme which is available is the savings related share option scheme, introduced under the provisions of the Finance Act 1980. While this has by definition not yet made any impact on the pattern of actual ownership of shares, the earliest options granted not yet having run their five-year course, it is nevertheless encouraging that 280 such schemes have already been approved.
As I have said, the amendment does not seek to lay down the precise way in which either or indeed both of these schemes can be operated in relation to British Telecom on the occasion of the flotation or subsequently. Nor does it specify in the case of an employee share ownership scheme whether the funds are to be provided by the successor company or by the Government or even both. Indeed, it is surely best that actual detail should be tailored to the particular circumstances. I commend this amendment to the Committee, and in view of the flexible way in which it is drafted we hope that the Government will be able to accept it, or at the very least give us sufficient assurances to ensure that we do not feel obliged to press it further at this stage.
Lord Grimond: If I may very briefly intervene, I would wish to support the amendment moved by my noble friend. I ought I suppose to confess to an interest in that I am chairman of an organisation called Job Ownership Limited which exists to promote co-operatives, management buy-outs and the like. I think everyone would agree that the wider ownership of shares is highly desirable in this country, and also greater participation by the workers in the management of the companies in which they work.
I believe there are two or three special arguments in relation to this particular company. First of all, many of us believe that privatisation by turning public monopolies into private monopolies is not the only way forward and that the expansion of worker controlled companies offers a third and very useful path for industry. Secondly, there are many signs that the gap between rich and poor in this country is increasing, and as the technological revolution
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proceeds there are going to be enormous profits of capital and a lot of capital invested in such areas as telecommunications, while the demand for labour will fall. The best way, it would seem to me, of reinstating the balance and enabling people at large to take part in the advance of technology is to give them a share in ownership.
In addition to those cases mentioned by my noble friend, of course there was the great success of the National Freight Consortium bought over by its management. I imagine that one of the difficulties here is the sheer size of British Telecom. In the case of the National Freight Consortium the banks, I think, put up £10 for every £1 put up by the participants who bought it. In this case the banks would have to put up very much more to approach anything like a manageable buy-out. Indeed, when we come to the provisions of the Finance Acts which have already been mentioned, to give a significant shareholding to the people working in British Telecom would require a very large amount of money.
Whether the City would accept that is questionable; it would go far beyond what are at present guiding lines of the City as to what they think is supportable in the way of taking advantage of the Finance Acts. Whether they would support it or not I do not know. But I would urge the Government at least to make their view clear that what has been done in the case of British Aerospace and other cases of privatisation should be repeated here.
Finally, I should like to put two or three possibilities to the Government. First, they should extend what has been done in recent Finance Acts to encourage not only share ownership but also the control of companies by workers. They might at least indicate that they think it would be a good thing if the eventual directors of British Telecom got together with the unions and the City to see how much loan capital could be raised, so that it becomes feasible for more shares to be taken up by the people working in the business. I hope, too, that the City institutions will not attempt to lessen the effect of the Finance Acts by resisting the operation of the share schemes.
There is also the point that interest reliefs are available only for the first 12 months. To gain the full effect of the present Acts, in many cases a great many of the shares must be held by trusts. I would have thought that the 12-month period should be greatly lengthened so that people who come into British Telecom later can take advantage of the interest relief on the money they have to borrow to buy shares. I would also have hoped that the interest reliefs could then themselves be extended. There is of course the possibility which was mentioned earlier that British Telecom might be split up. We have dealt with that matter for the time being. If it were to be split up in the future, it would make it much more feasible to introduce a genuine co-operative principle into some of the component parts and to follow the example of the National Freight Corporation and possibly make it a genuinely worker-controlled company.
I hope that the Government will look favourably upon this, and even if they do not accept the wording of the amendment will indicate that they think the example of British Aerospace should indeed be followed in this case.
Lord Weinstock: The noble Lord, Lord Grimond, has shot my fox and mown down a great many other animals at the same time. There is widespread support for the idea of wider share ownership. The trouble is that this amendment applies to a particular company. I hope that the noble Lords on the Government Front Bench will think it worth while referring their right honourable friend the Chancellor of the Exchequer to this widespread feeling in support of wider share ownership in the hope that he may in his next Budget do such things as may make this possible for a great many other companies besides British Telecom.
Lord Donaldson of Kingsbridge: I intervene only to say from these Benches that we support our noble friends immediately in front of us.
7.12 p.m.
Lord Cockfield: The noble Lord, Lord Rochester, has played a prominent and valuable part in the encouragement of wider share ownership. In their turn, the Government have taken important steps to encourage share ownership by employees, particularly in the tax field. The noble Lord, Lord Grimond, made a number of very helpful suggestions. I shall most certainly refer what he has said to my right honourable friend the Chancellor of the Exchequer. I have also noted what the noble Lord, Lord Weinstock, said, and I shall draw the attention of my right honourable friend to his remarks as well.
I come now specifically to the amendment. We intend to fulfil the spirit of the amendment at the time of the flotation. The Government are considering a free and matching share offer for employees along the lines of those in past privatisations. The pattern we are following is, therefore, broadly the same as on previous privatisations. The free and matched shares would be vested in a profit-sharing scheme which would benefit from tax concessions under the Finance Act 1978. So employees would have an opportunity to acquire shares on advantageous terms during the initial flotation; and, if I may say so, the amendment is therefore unnecessary in this respect.
The Government's involvement in employee shareholdings must necessarily be limited to the initial flotation. The profit-sharing scheme established at the time of the flotation would continue in being, but the actual conditions for further share purchases by employees—for example, whether a matching contribution is required from employees and whether there is sufficient profit in any particular year or at any particular level to do this—will clearly be a matter for the successor company to decide. These are matters which need to be left to the successor company to determine in consultation with its employees. It will also be for the successor company to decide whether to set up a savings-related share option scheme or any other type of scheme aimed at encouraging employee shareholdings.
We agree, therefore, with the spirit underlying the amendment, and indeed in practice we shall go a long way to meet it. However, the amendment does not allow the element of flexibility and discretion which ought to be accorded to the new company. I have always been a strong supporter of shareholder participation. There is nothing between us on principle. It is
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simply that I do not think that legislating in this Bill is the right way to deal with this particular issue.
With this explanation, and with the indication that in practice on the flotation we will make provision of the kind which has been customary in the past, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Rochester: I am most grateful to those noble Lords who have spoken. My noble friend Lord Grimond has very considerable knowledge of and sympathy with the whole concept of employee share ownership, as he made abundantly plain. As was perhaps apparent from his remarks, I know that knowledge extends particularly to what is aimed at in the case of co-operatives. I also thank the noble Lord, Lord Weinstock, for the degree of support that he felt able to give to this amendment. I am grateful in particular to the noble Lord, Lord Cockfield, for what he has said, and for his agreement, as I understood it, not simply with the spirit of this amendment but that it should be possible on the flotation of the company, at least, for effect to be given to something on the general lines of this amendment.
My noble friends and I will naturally wish to study a little more closely what it is that the noble Lord, Lord Cockfield, has just said to us, but we are satisfied that he has said sufficient to enable me to withdraw the amendment at this stage. Again, I express my gratitude to him.
Lord McIntosh of Haringey: Before leave is given for the amendment to be withdrawn, may I remedy an error of silence on our part? From these Benches we should have said that we support the amendment and think that the noble Lord, Lord Rochester, has achieved something quite considerable in the response of the noble Lord, Lord Cockfield. We join in thanking him for it. We believe that this debate has been worth while.
Amendment, by leave, withdrawn.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 131:
Page 52, line 43, at end insert ("which shall be given only after approval by resolution of each House of Parliament").
The noble Lord said: Your Lordships will be aware that Clause 59 of the Bill gives the successor company the right to:
"issue such securities of the company as the Secretary of State may from time to time direct—

(a) to the Secretary of State; or

(b) to any person entitled to require the issue of the securities following their initial allotment to the Secretary of State".

On the face of it that appears to be quite an innocuous power, until one goes a little lower down Clause 59, to subsection (5), which states:
"The Secretary of State may not exercise any power conferred on him by this section, or dispose of any securities issued or of any rights to securities initially allotted to him in pursuance of this section, without the consent of the Treasury".
Your Lordships' Committee will be aware that the amendment that I present for consideration proposes the addition of the words:
"which shall be given only after approval by resolution of each House of Parliament".
The Committee may wonder why in these circumstances I attach such importance to both Houses of Parliament having to approve the disposal, because "dispose" does not necessarily mean to dispose of for value. If it were a question of disposing for value, totally different considerations would arise. Unless when he replies the noble Lord cares to correct me, I would say that in this particular case "to dispose of means to dispose of by gift.
Noble Lords, will be aware that among the present liabilities of British Telecom—I am not going to speak in precise figures—there is £2,700 million-odd worth of loans made to British Telecom by the Secretary of State. They are a liability, and over the period of time of repayment they would in principle and interest bring about £6,000 million into the Treasury. The Bill provides that in regard to the arrangement whereby British Telecom is responsible by way of instalments over 20 years (as is stated in the notes to its accounts) there will be an issue of debentures. In general that means—and I am indebted to the notes on this point supplied by the noble Lord—that the Government would be entitled to the same amount of capital in debenture capital terms, and the interest burden of British Telecom payable to the Government or to the debenture holder would be equalised over the period of time during which the debentures were termed.
In short, the financial provisions of the Bill provide for the conversion of the loans by the Secretary of State, which are repayable to him over a period of years, to be changed into debentures. So far so good, because that would mean that the Secretary of State would be owed his money in debenture form as distinct from loan form. But it is an asset in the hands of the state, in the hands of the Treasury.
The Committee will have noted that when, under an earlier clause of the Bill, the assets and liabilities of British Telecom are transferred to the successor company, one of the important liabilities of British Telecom, shown in its balance-sheet at £1,250,000, is transferred to another company altogether. The liability is transferred so that the new subscribers for the share capital of the successor company will not be encumbered by a liability of £1,250,000 which is already in British Telecom's balance-sheet.
On initially looking through that provision I wondered to myself how can a liability be transferred to another company unless assets are transferred with it, since otherwise the company would be immediately insolvent, having all the liabilities but no assets. The way in which I apprehend the Government are to proceed in this particular matter is that they will make a gift back to British Telecom of the debentures that have been issued to the approximate amount needed to enable the liability that has been transferred to be extinguished. In that way the Treasury, which is the taxpayer, is that amount worse off. Moreover, if the amount of the debentures disposed of is to be sufficient to cover any indexation rights attaching to pensions, the amount of debentures that will be given back as a direct gift by the Government, or disposed of by them, will be very much larger.
This is not the time to go through the detailed implications of this matter, though I have already worked them out; they are hardly appropriate to this amendment. All I am saying is that if debentures are
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disposed of in this way for the purpose of the extinguishment of a liability which will not be borne by those who invest in the new successor company to British Telecom, then at the very least Parliament should know the value of what has been transferred or disposed of. For that reason, I venture to move this amendment.
It may be that I have misinterpreted the very full notes with which the noble Lord so kindly provided me last week; but I think that the general picture I have given is, broadly speaking, correct, though we may have to argue more upon it at a later stage when the full financial implications of the privatisation of British Telecom come to be considered. However, for my immediate purpose I ask the Committee to accept the amendment proposing that disposals of securities in this sense should first of all receive the approval of both Houses of Parliament. I beg to move.
Lord Lloyd of Kilgerran: Before the noble Lord the Minister replies, I should like to ask what are the notes which the noble Lord, Lord Bruce of Donington, is relying upon. It would seem to me that there is far closer collaboration between the Government Front Bench and the Opposition Front Bench than there is with these Benches, because we have had no notes at all in regard to this matter. I am sure that it is just one of those accidents of fortune or misfortune which befall some of us sometimes.
Lord Bruce of Donington: In fairness to the noble Lord. Lord Cockfield, I would point out that the notes were provided to me after I had made an urgent request through the usual channels, in order to facilitate my study of the particular financial clauses of the Bill. I am, of course, very happy to supply the noble Lord with a copy and I have already mentioned this to him.
Lord Lloyd of Kilgerran: I hope that the noble Lord, Lord Bruce of Donington, is not suggesting that we are not interested in the financial parts of the Bill. We are as interested—although we are perhaps not quite so eloquent about it—as he is. We would have liked to have the notes in order to consider this matter intelligently.
7.30 p.m.
Lord Cockfield: I should like first to deal with the point raised by the noble Lord, Lord Lloyd of Kilgerran. The intention was that these notes should be generally available. That is the normal, common practice when notes of this sort are prepared. If something has gone wrong with the distribution arrangements I can only apologise to the noble Lord, Lord Lloyd. I shall have urgent measures taken to ensure that the matter is put right.
Lord Lloyd of Kilgerran: I am very grateful to the noble Lord.
Lord Cockfield: The comments made by the noble Lord, Lord Bruce of Donington, in proposing the amendment, went much wider than the amendment itself. They extended over the whole field of the structure that was to be adopted for privatisation. I can perhaps deal with that at a rather later stage. So far as

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the amendment itself is concerned, the noble Lord expressed some surprise at the inclusion of the phrase, "without the consent of the Treasury" in Clause 59(5). I thought that he would have realised by now that the Treasury keeps a very firm grip on what everyone does where money is involved.
Lord Bruce of Donington: I should like to put on record that I did not intend to query the consent of the Treasury in any way. It was the words, "dispose of that were the centre of my attention.
Lord Cockfield: The point here is that the word "dispose" includes gift as well as sale. The reason for the gift is precisely the point raised by the noble Lord, Lord Rochester—that some free shares will be made available to employees. We want to ensure that the legislation is drafted in a form that enables that to be done. So far as the great mass of shares is concerned, the obvious intention is to get full value for them. One reason for including the consent of the Treasury is to make certain that this is done.
On the broad question of the approval of Parliament, I would make the point that the question of whether or not BT is to be privatised is the whole substance of the present Bill. Once a Bill is enacted it has received the approval of Parliament. A second approval is a quite unnecessary complication. There is no reason for it whatever. If the Bill is passed by both Houses, that is a clear authority for the initial flotation. If we wished to sell more shares subsequently, we would give Parliament adequate forewarning of our intentions, as we have done in the past. It is unnecessary and it is not possible on such an occasion to seek specific approval for the actual details of the flotation.
I am not in any way detracting from Parliament's authority in resisting these amendments. The Government are not seeking any extra discretion here beyond what has been conferred by past privatisation legislation. The flotation itself will be a most public act, so that the Government's performance will be before Parliament. Accordingly, if I may say so, the amendment is unnecessary. I hope that the noble Lord will not pursue it.
Lord Bruce of Donington: I am obliged to the noble Lord. Perhaps he will clarify the point that I raised. It is important at this stage that it is not lost. Am I to take it from his reply that the debentures, which are issued to him in lieu of the loan liability by British Telecom to the Secretary of State, will not be alienated from the Secretary of State's ownership in order to satisfy other excepted liabilities of British Telecom? This is most important. It is very important indeed. If the noble Lord is able to answer the point, I shall be greatly obliged.
Lord Cockfield: The issue of the debentures is necessary to avoid a tax consequence that would arise if the National Loans Fund advances were simply repaid in the ordinary way. The intention is not in any way to relieve the successor company of the debt burden it inherits from British Telecom. We are really talking about Clause 60 in this respect. The clause is necessary to close off a potential tax gain on the early
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repayment of National Loans Fund loans. This gain would not be available to the successor company on loans taken out from the private sector. It would be wrong to allow such a tax advantage to the successor company when it is privatised.
The clause therefore provides for the National Loans Fund loans to be translated into debentures which will not have the same terms of early repayment. The clause will also allow, with the agreement of BT, the other terms and timing of repayment of the debt to be made more suitable to the successor company's start in the private sector. Clause 59 itself provides for the issue to the Secretary of State for securities in the form of equity. That equity in due course will constitute the shares that will be sold as part of flotation.
Lord Bruce of Donington: I am sorry to press the noble Lord further. I am grateful to him for his reply. I am fully seized of the fact that the loans will be converted into debentures and that there are tax advantages to that. I accept that. I understand that the debentures will be so conditioned that the payment of interest to the debenture holders will be more amenable and more evenly spread for the purposes of the successor company. All this I understand. What concerns me is the ownership.
At present British Telecom is indebted to the tune of £2,703 million worth of loans. These are assets. Instead of those loans being expressed in whatever form loans normally are—loan notes or otherwise—they will now be translated into debentures. So the Secretary of State now has debentures in his hands as distinct from having loan notes or whatever was the case previously. Can the noble Lord give an assurance that these debentures which he holds in his hands will remain assets in his hands and, through him, in the nation's hands? They are the nation's assets held through the Secretary of State. Or will these debentures be used in another way altogether to liquidate other liabilities, the excepted liabilities, that British Telecom will not continue to bear because of the provisions of Clause 58?
Lord Cockfield: The debentures, as I have explained, will be issued in place of NLF loans. They will remain in being as a liability of the successor company. They will be subject to whatever may be the appropriate repayment terms. Privatisation will be carried out by the issue by the new company to the Secretary of State of securities. Those securities will form the foundation of the flotation. The excepted liabilities as they are called are quite a separate issue.
Lord Bruce of Donington: I should like to go on record as saying that the noble Lord has not given a categorical answer to the categorical question that I put to him on at least two occasions. However, I shall return to the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Denham: It seems to be for the convenience of your Lordships that we should now resume for the dinner adjournment. In moving that the House do now resume, let me tell your Lordships that we will not revert to this particular Bill until 8.40 p.m.
I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Surrey County Council Bill [H.L.]
Read a second time.
Swavesey Bye-ways Bill [H.L.]
Read a second time, and committed to an Unopposed Bill Committee.
Warwick District Council Bill [H.L.]
Read a second time, and committed to a Select Committee on opposed provisions.

Education (Amendment) (Scotland) Bill [H.L.]
The Earl of Caithness: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(The Earl of Caithness.)
On Question, Motion agreed to.

European Assembly Elections (Northern Ireland) Regulations 1984
7.44 p.m.
The Minister of State, Northern Ireland Office (The Earl of Mansfield): My Lords, I beg to move that the draft European Assembly Elections (Nothern Ireland) Regulations 1984, which were laid before this House on 23rd January, be approved.
These regulations provide for the conduct of elections in Northern Ireland to the European Assembly. They reflect various changes in electoral law since 1979, but in most respects do not differ in substance from the 1979 regulations which they replace. They apply, with approprite modifications, provisions of the Representation of the People Act 1983 (which, as noble Lords will recall, was a consolidation measure) and the Representation of the People (Northern Ireland) Regulations 1983. The House recently approved similar regulations providing for the conduct of European Assembly elections in England, Wales and Scotland.
I will not detain your Lordships with a lengthy description of the draft regulations. A number of the changes since 1979 are common to the Northern Ireland and the Great Britain regulations, and noble Lords have already considered them when they approved the Great Britain regulations last month.
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Very briefly, the principal changes are: the exclusion of Saturdays from the computation of time for the purposes of the election timetable, with a consequent extension of the timetable; the entitlement of voluntary mental patients to be registered for European Assembly elections as well as for parliamentary elections; the disqualification of convicted prisoners serving sentences of more than 12 months from standing for the election; and increases in the limits on certain expenses such as candidates' permitted election expenses.
There are, however, some differences between the Northern Ireland and the Great Britain regulations, and it may be helpful to the House if I spend a few moments referring to the more important of these. First, whereas the simple majority system of voting will be used in Great Britain for the election in June this year, in Northern Ireland the method of election will be the single transferable vote, as in 1979. The European Assembly Elections Act 1978 provided for the use of STV (as it is called) in Northern Ireland, with the whole Province forming a single constituency returning three representatives. The Government believe it right that, given the nature of Northern Ireland society and its political system, the 1979 arrangements should be retained for this year's election. The draft regulations therefore differ from the Great Britain regulations in the provisions dealing with the procedures for voting and for the count.
Secondly, the grounds for entitlement to an absent vote are narrower in Northern Ireland than in Great Britain because of the widespread concern in Northern Ireland about electoral abuse, including postal voting abuse. We have taken the opportunity in these regulations to reduce opportunities for malpractice by not allowing an elector to obtain an absent vote on the grounds of no longer residing at his or her qualifying address. The regulations will also require more precise certification of postal voting applications made on grounds of blindness or other physical incapacity. As regards personation, which we believe occurs in Northern Ireland to a significant degree, we cannot take any steps requiring primary legislation before the June election, but we will be seeking to ensure that existing procedures are applied with maximum effectiveness.
These regulations are necessary for the conduct in Northern Ireland of the elections which will be held throughout the United Kingdom on 14th June this year. They have been examined by the Joint Committee on Statutory Instruments. My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 23rd January be approved.—(The Earl of Mansfield.)
Lord Underhill: My Lords, I thank the noble Earl for explaining the regulations. As the noble Earl has said, in the main they cover similar ground to the regulations which we discussed just a fortnight ago dealing with the rest of the United Kingdom. There may be a temptation by some noble Lords to argue about why there should be a different voting system. I have never accepted that the single transferable vote is proportional representation. But the fact is that it was introduced in Northern Ireland in 1972 and, as the

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noble Earl has said, it operated for the Assembly elections in 1979. Moreover, when first introduced in Northern Ireland in 1972 it was generally accepted by all the political parties that it would not be any excuse for discussing the question of PR elsewhere in the United Kingdom. Therefore, I do not think one need repeat tonight what happened in another place and have a long discussion on the merits of single transferable voting.
When the regulations for England, Scotland and Wales were before the House, I raised the question of the exclusion of Saturdays and suggested that it might have been advisable at that stage to have altered the election timetable, because it means that we now have an election timetable covering a period of six weeks instead of five weeks. Nothing can be done about it at this stage, because we cannot amend regulations. But I should like the Minister and the Home Office to consider this matter before the situation arises again, because six weeks is far too long for a local election campaign or for an Assembly election campaign; and perhaps we can deal with the matter at a later date.
Certainly we ought to have a situation where postal voting or absent voting conditions are the same throughout the whole of the United Kingdom. But, as has been repeatedly stressed—not just from these Benches but from all parts of the House—whatever noble Lords may argue, Northern Ireland is different from the rest of the United Kingdom. We all know what has happened as regards abuses in respect of absent voting. Therefore, regrettably, we accept the need in the regulations for changes in comparison with the rest of the United Kingdom. But we hope it may be possible in the not too distant future to revert to a situation where, if people do move from their registered address or from their qualifying address, they will be able to have the advantage of absent voting.
The only other point I want to make is that I accept that the increase in the permitted maximum of election expenses is in line with inflation. But the new limit must obviously give an advantage to the better-off political parties because Northern Ireland is the only place in the United Kingdom where more than one Member has to be elected in a common European constituency. Hence, with about 1 million electors, we have maximum permitted election expenses of about £45,000. I know that nothing can be done about amending this, but I draw attention to this fact, because it means that any party or body which or who wishes to contest Northern Ireland elections to the European Assembly has the permitted maximum against him of around £45.000. With those points, we accept the regulations.
Lord Hampton: My Lords, I too should like to thank the noble Earl for introducing these regulations. I see nothing to object to in either the increase in expense allowances for candidates or in the fact that Saturdays are no longer to be included in the computation of time in election timetables. I should, however, be grateful for answers to the following questions about the use of proportional representation in these elections, despite what the noble Lord, Lord Underhill, has just said. First, why is it accepted in
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Northern Ireland but not in Britain that the use of the single transferable vote is fairer to minorities? Secondly, why are the Government so certain that for these elections in Britain we should use a different non-proportional system from that used by all our European partners? If the Minister does not wish to take up the time of the House now, perhaps it would be possible for him to clarify the position for me by letter.
Lord Fitt: My Lords, it is on an occasion such as this that I regret not being a Member of another place, because as I read the Hansard reports of the debates that took place on these orders in another place, I wished that either I had been there or that some of those Unionists who spoke had been here. What I have read and what I know of Northern Ireland is completely contrary to the case which was put forward by the Unionist Members in another place.
In the last Parliament I vividly remember putting forward the case for proportional representation in Northern Ireland. Many Members on both sides of the House then were not in any way enamoured with the idea of the introduction of proportional representation in Northern Ireland. I took the view that Northern Ireland was different. There can be no gainsaying that fact. That is shown in its history—the history of its political parties, the history of its political and religious divisions; and, in particular, the history of the creation of the Northern Ireland state. The Northern Ireland state was created on a religious head count. It was deliberately created to give a Unionist Protestant majority control of Northern Ireland. It had a 65 per cent. Protestant Loyalist majority and a 35 per cent. Catholic Republican minority.
In that situation, the first-past-the-post system did not have any effect. It did not have the right effect, because we could be assured that, given the history of the boundary that was created at every election which took place, we would finish up with a Unionist Government. The minority would always be in the position of a minority both in the country and in the representative seats in Parliament and on the local authorities.
I saw it at first hand because I was a Member of the Stormont Parliament and I was also a Member of the British Parliament. In another place I could look across at the Dispatch Box and say, "When the next election comes, the positions could be reversed. The person who is standing as Prime Minister at the Dispatch Box could be speaking as the Leader of the Opposition after the next election." That was democracy as I thought, and I am a great upholder of the British democratic system. However, in Northern Ireland it did not happen like that. Because of the system of elections which we had, one could be assured at election after election from 1920 until 1972 that those who were in opposition would remain in opposition and those who were in government would remain in government. That was one of the reasons why the system of first-past-the-post did not have any significance whatever in Northern Ireland.
I remember very well an election in 1953 in Northern Ireland. Fifty-two Members were returned to the House of Commons on the first-past-the-post system in elections in Northern Ireland. Before a single

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vote was cast there were so many unopposed returns that the Unionist Government were elected without a single vote being cast. This meant that the whole system of elections in Northern Ireland was a farce. That is why I supported and fought for a different system; and, in particular, I had the support of members of the Labour Government in that Parliament. That is the system of proportional representation in Northern Ireland. I remember that I had an awful job trying to convince some of my closest colleagues in the Labour Party to support me in asking for the abolition of the first-past-the-post system and the institution of PR in Northern Ireland.
I know that I will not be making too many friends when I say with all honesty and without in any way trying to gain political points, that I am not a supporter of the proportional representation system in Great Britain—in England, Scotland or Wales. I believe that the conditions that prevail in Great Britain—in England, Scotland and Wales—are totally and absolutely different from those which we have in Northern Ireland. In Northern Ireland we had an artificial state, an artificial majority and an artificial minority. All those factors combined made it imperative that the system should be changed.
Indeed, it was the Unionist Government which departed from the proportional representation system because they wanted the first-past-the-post system which would guarantee their domination of the political arena in Northern Ireland. Therefore, I support the system of proportional representation as contained in these regulations. As I say, one of my regrets is that there are no Unionist Members here this evening, because they so abused the first-past-the-post system (and indeed would attempt to abuse this particular system) that their case would need to be answered.
However, I am taking part in this debate because of another issue altogether. The whole democratic system under which we are governed in these islands depends on the ballot box. I know that the IRA and its political spokesmen—Sinn Fein—believe that it also depends upon the Armalites. I completely reject and oppose that philosophy. In the last Westminster elections which we have just had in Northern Ireland we have seen a gross abuse of the ballot box system of election as we know it. In its first major campaign in elections in Northern Ireland, Sinn Fein so abused the ballot box system—particularly in the three constituencies of West Belfast, Mid-Ulster, and Fermanagh and South Tyrone—that the vote which was recorded as having been attributed to Sinn Fein candidates was totally untrue.
I have spoken to many observers from the Northern Ireland Office and to others who were present at the polling stations that day, and their estimate is that in West Belfast alone 20 per cent, of the votes cast for the Sinn Fein candidate—that would mean 4,000 votes— were taken illegally. They were impersonations. I know that the whole history of Irish elections has been recorded in very funny stories and people laugh at the amount of impersonation that allegedly took place. There was a saying that at election time candidates called on their supporters to vote early and vote often! All very funny, and to some extent it was funny in those days, but it is no longer funny.
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It used to be the case that impersonation in Northern Ireland could be regarded as maximising a vote a candidate would have got, anyway. For example, if persons supported a man because he was the Catholic candidate, then they were going to vote for that Catholic candidate; and likewise with the Orange candidates. If for some reason or other they could not get to the polling stations, one of their relations would come down to the election headquarters of a particular candidate and say, "My mother"—or father, or brother, or sister—"cannot vote this afternoon so would someone else vote?" Technically it was an offence. It was breaking the law, but it was understandable that people would say, "Well, a member of my family, if they were here, would vote for you". Means were taken by various candidates to have that vote cast in their favour. It was breaking the law, but it was understandable.
But what is happening now is totally different. As I saw myself in the last West Belfast election, Sinn Fein are marshalling young men and women to go in increasing numbers to various polling stations, to be transported from one polling station to another by car and to keep casting votes for people who would not under any circumstances be voting for their candidate. They are in fact stealing votes. When the legitimate voter does go to the polling station, he finds his vote has been taken and he is given something which is called a pink ballot paper, a tendered ballot paper, which really does not mean anything.
So the whole democratic process is being abused by vote stealing. There is no way that this can be prevented unless the Government take very stringent action. I heard the noble Lord the Minister say that the Government cannot take steps now to prevent these abuses. I say to him, why not? The Government could take steps. They have been aware of these abuses since the election of last June. If the Government were so minded they could take effective action to prevent this gross abuse of the democratic process.
I remember very well in 1972 when the British Government very quickly took emergency action to legitimise the actions of the British Army in relation to some of its activities in Northern Ireland, when it was found in the particular circumstances then prevailing that the British Army might have been found to be acting illegally. The next thing was that we had a Business Statement from the Leader of the House who told us that the next day's Business would be changed and we would have a Bill brought in and its First Reading, Second Reading, Third Reading, Committee stage, Report stage—the whole lot—would go through in a few hours in the House of Commons to legitimise the action of the British Army in these particular circumstances. I have absolutely no doubt that if the Government were so minded they could quite easily arrange for Parliament to deal with this business. They have a massive majority in the House of Commons; they could brook no opposition. I suggest this to the Minister.
In the last election in Northern Ireland I saw a young man arrested for impersonating, for illegally voting. He was taken to the police station, charged with illegally voting and released from the police station. He immediately went back to Sinn Fein headquarters and started again to vote. He voted illegally again and

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was arrested by the police, taken to the police station, charged again and released. He did it a third time, and on the third occasion as he was coming out of the polling station a policeman said to him, "Don't you think you are overdoing it?" He said, "I don't care. Noraid is paying my fine". Noraid is an American organisation which gives great financial support to Sinn Fein. Between 70 and 80 people were charged with impersonating in what was then my old constituency of West Belfast. There has been massive impersonation going on in West Belfast, in Mid-Ulster and in Fermanagh South Tyrone. A derisory fine of £10, £15 or £25 is not going to stop impersonation.
I am saying to the noble Lord the Minister that he should take this matter seriously in all elections in Northern Ireland. What he should do, and what the Government should do, is to lay down a mandatory prison sentence for anyone found impersonating. A mandatory prison sentence should be written into the electoral law or into the electoral regulations; anyone found vote stealing or impersonating should receive a mandatory prison sentence. Nobody votes wrongly by mistake. They are well aware of their own Christian name and surname, and if they are holding on to another name they are well aware they are breaking the law. If the Government are not prepared to lay down a mandatory prison sentence, then they could make it a very heavy fine—not £10 or £15 or £20, but a very heavy fine, something like £500 or £1,000, and in the event of that not being paid a prison sentence should follow.
I say this as one who has fought many elections in Northern Ireland. I realise the seriousness of the abuse that is now taking place at the ballot box because if one political party finds that it can get away with impersonation, with vote stealing, then another political party will feel it has to do the same thing. Then the whole democratic system of the ballot box is being abused.
My Lords, these are the few observations I wanted to make to the noble Earl the Minister, and they are made in all seriousness. The noble Lord has said that we cannot change the system in the House. I believe the Government could change the system if they had the will to do so, and I appeal to them to do so before the European election.
8.10 p.m.
The Earl of Mansfield: My Lords, I am most grateful to those noble Lords who have taken part in the debate on this order. There are perhaps one or two matters which call for a reply. The noble Lord, Lord Underhill, complained mildly about the timetable. I am afraid there is nothing that can be done about that. So far as absent voting and the rules appertaining to expenses are concerned, it would be nice if all rules which relate to the conducting of elections in every part of the United Kingdom could be exactly the same, but unfortunately in some cases—though not in the case of expenses where the same rules apply—they cannot be and that perhaps is the best explanation I can give the noble Lord.
The noble Lord, Lord Hampton, read out two questions and I wondered when the proportional representation point was going to be made and who
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was going to make it. In fact, if he will forgive my saying so, the noble Lord, Lord Fitt, has shot my fox, in fact shot a brace of them, because he answered both questions of the noble Lord, Lord Hampton, quite as well as I could ever do.
The system of proportional representation, the single transferable vote, which has now been in operation in Northern Ireland for quite a long time, seems to be a form of election which suits that troubled spot—may I put it in that way. The noble Lord, Lord Fitt, illustrated all too graphically the kind of unsatisfactory result one gets in a community which is as divided as Northern Ireland, and in the proportions in which it is so divided. Therefore, I reject unequivocally any criticism which the noble Lord, Lord Hampton, may make of having proportional repressentation in these particular circumstances in Northern Ireland.
Then says the noble Lord, turning the argument on its head, "Why not have the same thing in Great Britain?" But, of course, as the noble Lord, Lord Fitt, said, totally different considerations apply. We have a quite different outlook on our political affairs. There are important differences between Great Britain and Northern Ireland, and indeed between Great Britain and the rest of Europe.
It is worth saying that at the time when we had our first direct elections to the European Parliament all of us thought that a common, uniform European system would be in operation by the second elections which are due to take place later this year. Unfortunately that has not proved possible, and it is to be hoped that the Council of Ministers will resolve the matter speedily, and certainly in time for the next, third direct elections to the European Parliament when they take place.
I come now to the noble Lord, Lord Fitt, who obviously feels sore—and who shall blame him?—because of apparent electoral malpractices which took place at the last general election, as a result of which he now addresses your Lordships rather than those along at the blunt end of the Palace of Westminster in the other place. I am not really sure why he should complain at the change, but I see his point. The noble Lord says that if the Government only had the will all could be put right in time for the elections to the European Assembly in June.
I want to say to him that it is one thing to have the will but quite another to devise a scheme which is going to put an end to these forms of malpractice; which will do so effectively and yet in a way which will not detract from the civil rights of those who wish to take part in elections. I have to say from my own acquaintanceship with Northern Ireland that if one did anything which affected the rights of the citizens, on whatever side of the sectarian divide they may be, one would bring down on one's head coals of fire. What I can say to the noble Lord is that the Government are giving urgent and careful consideration to what further steps, including primary legislation, can be taken to deal with this question of personation, but it will not be possible to have primary legislation before June.
Goodness me, the noble Lord was in the other place long enough to know how long it takes to get a Bill from the stage at which a Government decide to do something rather complicated to the time when it

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reaches the statute book. Therefore, what we have done so far as absent voting is concerned—
Lord Fitt: My Lords, would the noble Earl give way for a moment? I have mentioned an occasion in the House of Commons when the House of Commons met to legitimise in one day the actions of the British Army which were causing concern at the time. That legislation went through in one day. One of the most draconian Acts of Parliament ever passed in the House of Commons, the Prevention of Terrorism Act, went through all its stages in one day. Emergency provisions went through all their stages in one day; and there were many more.
The Government would not be interfering with the civil rights of the citizen. I am all for them. There was no one more involved in the civil rights demonstrations than I was in 1968. It is not a civil right to steal votes or to personate, or to abuse the electoral system. The Government would not be affecting the civil rights of those who were abiding by the law, but they would be taking action against those who were breaking the law.
The Earl of Mansfield: My Lords, I rather resent being interrupted by the noble Lord at inordinate length to tell me, in precisely the same terms, what he has already told the House. It is one thing to pass legislation, particularly on a retroactive basis, to legitimate what has happened before; it is quite another to devise methods which will be effective, and at the same time scientifically and legally possible, to stop this form of malpractice. It is difficult to do this, whatever the motivation of those concerned. The Government are looking at the matter urgently, and I hope that these efforts will bear fruit. But, as I have said, not before June.
The last point I want to take up with the noble Lord, Lord Fitt—and it is almost a debating point—is that he asks, why cannot we have a mandatory prison sentence for those who are convicted of this particular offence? Any student of English law—and I say "student" with a small "s"—will know the abhorrence with which all practitioners in the law regard mandatory sentences. They are from time to time suggested for offences which revolt the general public—one can think of some sexual offences, and so on. But the law has been—and I think it is a good law—that it should be in the discretion of judges to award a just penalty in the circumstances, and that their discretion should not be fettered by rules of conduct which may well prevent them from doing what is right and just in the circumstances. I hope that I have replied sufficiently to this debate, and I commend these regulations to the House.
On Question, Motion agreed to.

District Electoral Areas Commissioner (Northern Ireland) Order 1983
8.16 p.m.
The Earl of Mansfield: My Lords, I beg to move that the draft District Electoral Areas Commissioner (Northern Ireland) Order 1983, which was laid before the House on 15th December, be approved.
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This order, if approved, will provide for the Secretary of State to appoint a district electoral areas commissioner whose function will be to submit to the Secretary of State a report setting out his recommendations for the grouping together in Northern Ireland of district wards into electoral areas; this is necessary for the conduct of local government elections because they are held according to the principle of proportional representation using the single transferable vote system. A brief explanation of the background to this draft order might be useful to the House.
The local government boundaries commissioner, who was appointed under Section 50 of the Local Government Act (Northern Ireland) 1972, is currently carrying out a review of the number, boundaries and names of local government districts in Northern Ireland and the number, boundaries and names of the wards into which each district is divided. However, the grouping of wards into district electoral areas does not fall within his remit. The provisions of the Electoral Law (Northern Ireland) Order 1972, under which the existing district electoral areas were determined, have now been repealed as spent, and the district electoral areas have remained the same since 1973 because there have as yet been no changes to district council and ward boundaries.
The purpose of the draft order which we are now considering is to provide the means by which the wards recommended by the local government boundaries commissioner, when he completes his current review, will be subsequently grouped into district electoral areas, and to establish procedures so that interested parties may make representations on the proposed groupings. Therefore, it may be helpful if I devote a few moments to describing the contents of the draft order.
Article 2 provides for the Secretary of State to appoint a district electoral areas commissioner as soon as practicable after an order has been made giving effect, with or without modifications, to the recommendations of the local government boundaries commissioner. Under the Local Government Act (Northern Ireland) 1972, it is theoretically possible for a local government boundaries commissioner to be appointed at any time to make recommendations in respect of particular districts (and their wards)—that is, otherwise than in the course of the statutory 10-yearly review of local government boundaries. Article 3 of the draft order therefore also provides for a district electoral areas commissioner to be appointed following such a part-review. The first schedule deals with the terms and conditions of the commissioner and provides for the appointment of staff, assistant commissioners and assessors to assist him.
The commissioner will be required to act in accordance with the procedure set out in Schedule 2; this procedure will enable interested parties to make representations on the proposed groupings of wards. It provides for the publication of the commissioner's provisional recommendations, the making of representations in writing during the month following publication, and the holding of public hearings to consider objections to the proposed groupings. After considering the representations made in writing and at any hearings, the commissioner will be required to

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submit final recommendations to the Secretary of State.
Schedule 3 sets out the rules which the commissioner will be required to follow in making his recommendations. One of these rules requires that each electoral area shall consist of not less than five and not more than seven wards. Notwithstanding the greater latitude in the 1972 provisions, we concluded after very careful consideration that the groups should be limited to five, six or seven wards because such groups produce the most proportional results, but will still allow the commissioner a sufficient degree of flexibility.
Noble Lords may know that the House was to have been invited to approve this draft order at an earlier date, but the debates in this House and in another place were postponed so as to allow time for consideration of representations which had been received. These representations suggested that the district electoral areas commissioner should be empowered to recommend groups of less than five wards in some circumstances. Under the 1972 legislation, although groups of five to seven wards were intended to be the norm, groups of four or eight wards were permissible and are by no means exceptional. However, it is widely recognised by experts in this field that, in practice, constituencies of five to seven seats achieve results which are considerably more proportional than are achieved by smaller groupings. Since there are at present in Northern Ireland a number of district electoral areas comprising four wards, the benefits of proportional representation have not been maximised in past local elections in Northern Ireland.
This draft order is not concerned with the principle of using proportional representation for Northern Ireland local elections; that principle was established in 1972, when Parliament decided that the single transferable vote system should be used for local and Assembly elections in Northern Ireland because it ensures the representation of substantial minorities. The Northern Ireland (Local Elections) Order 1977 provides that this is the system according to which local government elections in Northern Ireland are conducted. The Government believe that in Northern Ireland's special circumstances, it is the right system for those elections.
But as I have said, we are not discussing here the merits of proportional representation. The draft order now before the House provides for the implementation of a system of election which is already established. It is only right that that system should be put into practice in such a way as to maximise its effects, and in our view this is best achieved by restricting the commissioner's discretion so that he is required to recommend groups which will return five, six or seven representatives.
I hope that your Lordships will forgive me for dwelling on that point. I wanted to explain the reasons for the delay in bringing this draft order forward and to make clear that we have considered very carefully the points which were put to us; but we have not been persuaded that our original draft order should be changed.
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I will say a word about the remainder of the draft order. Once the district electoral areas commissioner has submitted a report to the Secretary of State, the Secretary of State will be required under Article 5 of the draft order to lay that report before Parliament. It will then be necessary to lay a further draft Order in Council before Parliament in order to give effect, with or without modifications, to the final recommendations contained in the commissioner's report.
The next district council elections in Northern Ireland will take place in May 1985 and this draft order is essential for the conduct of those elections. I beg to move.
Moved, That the draft order laid before the House on 15th December be approved.—(The Earl of Mansfield.)
Lord Underhill: My Lords, I again thank the noble Earl for his helpful explanation of the order. It is clear from what the noble Earl has said that this is an essential provision, a new provision and one which attempts to correct the position of the electoral divisions which have existed now for 10 years. As long as the single transferable vote is considered necessary, particularly in dealing with the local elections in Northern Ireland, we must have proper machinery to determine district electoral areas. I am pleased that the noble Earl has stressed that we are not debating the principle of the single transferable vote. I use that term and not "proportional representation", because I have never regarded STV as being PR. It may provide for a minority representation, but it is not proportional representation.
I hope we shall not again have the discussion which took place in the other place on the ground that: "If it is good enough for Northern Ireland, why don't we have this for local elections throughout the rest of Great Britain?". I think my noble friend Lord Fitt dealt with that, and we all know what happened. The report arising from the 1969 disturbances, which showed that there was discrimination of the minority community, led to the 1972 legislation.
The noble Earl has stressed that the next district elections with which these regulations are concerned is May 1985. In the light of provision for inquiries it is essential that we move fairly quickly. As the noble Earl said, the local government commissioner is now on the process of reviewing the boundaries of districts and the division of the districts into wards. These may not be settled for some months to come because there may be local inquiries. It is necessary to have the review of the district electoral areas after the wards and the local government boundaries have been determined. One cannot have that until the order for the local government boundaries and wards has been approved. The only question I want to ask is, why could the order not merely have extended the powers of the local government boundaries commissioner? Why should there be a separate appointment? The local government boundary commissioner is conversant with all the facts, has been handling the matter for some time, he knows the problems and the area. Why, following the acceptance of the order detailing the new boundaries of the local authorities and detailing the new wards, could not the same man deal with the grouping of wards in district electoral areas?

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The regulations provides for the appointment of staff, assistant commissioners and assessors. Surely the same staff, working with the local government boundary commissioner, can do this job. The staff is conversant with the whole position. While it may be desirable to have separate assistant commissioners and assessors, because of the time factor and these people have been engaged on it, it would seem to me that, as far as we can possibly achieve that, the same commissioner could deal with both tasks because one set of information arises out of the other. Having made that one criticism, it is an essential order which we support.
Lord Hampton: My Lords, I too should like to thank the noble Earl for introducing this order. It seems sensible and it is good to know that there is a widely respected candidate for the position of commissioner. I have one question to ask. I note that the boundaries for local and parliamentary elections will not necessarily coincide. Is the Minister entirely satisfied that confusion will not arise, and will any special steps be taken to prevent this? I have listened with interest to all the arguments about proportional representation. I must admit that I am not fully convinced, but I do not propose to take the matter further.
Lord Fitt: My Lords, this order is a necessary corollary to the order we have just discussed, in so far as it will group together a number of local government areas to make effective the principle of STV in elections in Northern Ireland. Without an increase in the number of wards, the idea behind STV, which is to give representation to minorities, would not take effect. I also noticed that when this legislation was going through another place many honourable Members from Northern Ireland objected to it on the grounds that it was a departure from conditions whihc prevail in Great Britain. I do not accept those arguments as valid. I repeat that Northern Ireland is a peculiar place—I underline that—with peculiar people; I am proud to be one of them. But the paranoia and the neurosis which was shown by certain spokesman in another place is sufficient justification for the Minister to promulgate this legislation.
Unlike the Front Bench speaker here this evening, I am not entirely opposed to the creation of a new job in Northern Ireland because far too many people there are unemployed. I warn the Minister that the appointment will be a sensitive one. The names of the applicants and their religions, especially of the successful applicants, will be a debating point among those politicians in Northern Ireland who have up to the present sought to make their own appointments in their own interests and in the interests of their own political parties.
Again, I see that many representations have been made to the Minister not to create new place names for the newly-created local government areas. I should think that that would be a very retrograde step. There are many names in Northern Ireland of local government areas which were abolished in the 1970s; and I recall with a great deal of sentiment the constituency and the ward which I represented in downtown Belfast alongside the dock area, which were known as Dock Ward and the Dock constituency. When STV
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was introduced the whole thing was changed and they called it "Area G", which meant absolutely nothing to the people who lived there. Some of those local government areas have names which carry a great deal of sentiment and emotion with them.
It may be that Unionist objections to the commissioner being allowed to give names after suitable representations had been made were because of their opposition to the recent changing of the name Londonderry City Council to Derry City Council after a democratic vote had taken place within that council. That may be the reason for their objection. I would certainly be at one with the Minister, for I know that I still speak for a lot of the people of Northern Ireland who are not terribly concerned with the names that they have at the moment, Area G and Area A, which are soulless names which mean nothing. I believe that there are many names in Northern Ireland which would be suitable for the newly-constructed local government boundaries.
The Earl of Mansfield: My Lords, I am obliged to noble Lords who have welcomed the draft order. Perhaps I might briefly respond. The noble Lord, Lord Underhill, took the very pertinent point that the timetable is tight, and in effect he asked. "Why not ask the local government boundaries commissioner to carry out the grouping of wards and, in effect, extend his jurisdiction?" The noble Lord will recollect that I said in my opening remarks that it was not part of his remit. The statutory remit of the local government boundaries commissioner under Section 50 of the Local Government Act (Northern Ireland) 1972 is very specific. It makes no provision for the grouping of wards. Therefore, new provision is necessary, and this is why the legislation takes the form that it does. The noble Lord, Lord Hampton, asked me about boundaries. Obviously, it would be administratively more convenient if district electoral areas were not split between constituencies where that was possible.
The scope for grouping wards so that boundaries of electoral areas are coterminous with those of parliamentary constituencies will be largely dictated by the report of the local government boundaries commissioner, which is yet to be finalised. I think it is inevitable that some areas will be split, particularly when one considers that there are more district council areas than parliamentary constituencies. I understand that the local government boundaries commissioner may recommend some wards, parts of which lie in differing parliamentary constituencies. The matter is contained—and he has very wide discretion, as noble Lords will see—in the third schedule.
The noble Lord, Lord Fitt, had, I think, two points. The district electoral areas commissioner is not going to come about as a result of advertising for applicants. The person who will fulfil this function will be appointed by the Secretary of State, who will consider who is the person that he considers best fitted for the job.
The final point taken by the noble Lord, Lord Fitt, was the matter of the naming of electoral areas. That will be for the commissioner, who will be open to representations on appropriate names. Once his final recommendations have been implemented, there will not be scope for names to be changed. There is a

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sensitivity about naming places in Northern Ireland at the moment. Of course, as the noble Lord, Lord Fitt, knows, but the House may not, areas have previously been identified by a letter. But the Government had to balance a number of conflicting considerations, and we came down in favour of names rather than letters. I am glad to see that the noble Lord, Lord Fitt, nods his head and agrees. My Lords, I commend this draft order to the House.
On Question, Motion agreed to.
Viscount Long: My Lords, I beg to move that the House do now adjourn during pleasure until 8.40 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.36 until 8.40 p.m.]

Telecommunications Bill
House again in Committee on Clause 59.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 132:
Page 53, line 3, leave out ("the Consolidated Fund") and insert ("a specifically designated fund for the promotion of and assistance to the recovery of British manufacturing industry")
The noble Lord said: I beg to move Amendment No. 132. The Government expect to gain some £4,000 million, as I understand it, from the sale of British Telecom shares. That is an enormous amount of money by any standards. But the receipts from capital assets have been built up over many years by the public through their investment in telecommunications and also by those who have worked in the industry, by their effort, their expertise and diligence over some 70 years. It is the public and those working in the industry who have built up those assets over a long period of time.
I want to make it quite clear that we on these Benches are diametrically opposed to the sale of British Telecom shares; but since the Government seem quite determined to override common sense with dogma and intend to proceed to privatise BT come what may, we must turn our attention to the use that is to be made of the proceeds of the sale—as I have said, some £4,000 million.
The Government, as we see it, plainly intend to use the profits of the sale to reduce taxes at the most appropriate time to assist their electoral chances. Noble Lords may laugh, but Conservative Governments have been known to do that in the past and I am quite certain that they intend to do so in the future. It is our view that that is precisely what they intend to do with this £4,000 million; but by doing so they will be applying capital receipts to revenue consumption—a course which they frown upon when it is embarked upon by others; for example, local authorities. I well remember being told by my officials when I was leader of a county borough council, when perhaps I wanted to do the same sort of thing, that the Government did not permit it. I came to understand that it was a wrong process anyway and did not seek to do it. But the Government now seek themselves to do
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what they tell other people it is wrong to do: that is, to apply capital receipts to revenue consumption.
What is worse is that these capital monies which will be applied to consumption will, due to the weak state of the manufacturing sector in Britain, be used to buy manufacturing imports. Thus the sale of BT shares will benefit not British manufacturers but foreign suppliers. There is a crying need for investment in manufacturing industry, particularly in the new technologies. If that is not done and if that investment does not take place—the noble Lord, Lord Weinstock, referred to this the other night when he rightly complained that those people who are engaged in manufacturing get "the neck of the chicken"—the service industries, in the long term, will not supply the real consumption needs of this country. Yet we are using this money for immediate consumption, in spite of the fact that if we do not invest in manufacturing industry Britain will be absolutely pauperised when North Sea oil runs out, as it assuredly will in the next decade. Indeed, the peak of the oil supply will come in 1985–86, according to the Government's own statistics, and from then on it is downhill all the way. What we are saying is that there is a great need for more money to be applied to our manufacturing industry in order that we can take up the slack when North Sea oil begins to run out. This amendment seeks to ensure that capital receipts from the sale of BT shares are used for the capital reconstruction of this country.
Over the past four or five years the Government have embarked upon a veritable rake's progress with Britain's state assets, and that rake's progress is being continued by this Bill, which is opposed by a large section of this Chamber. Certainly it has not found favour on the Labour Benches; it has not found favour on the Liberal Benches or, indeed, so far as I can see, on the Cross-Benches. Basically, I think people understand that the Government are embarked upon this rake's progress with these assets from British Telecom and with other assets which will be sold and the proceeds used for consumption.
The Government will argue of course that to do what we are suggesting in this amendment amounts to the hypothecation of revenues, and we all know that the Exchequer hates that. But, frankly, I believe that in this instance it is necessary to ensure that when the BT shares are sold, the people of this country shall know—whether they agree or disagree individually with the sale—that the capital receipts which they have built up are going to be used for the rebuilding of industry. I hope therefore that our amendment will be supported.
Lord Cockfield: Perhaps I might start by assuring the noble Lord that I am in complete disagreement with his views on matters of economic policy. I shall be only too glad to debate these methods with him on a more appropriate occasion. I would only ask him to compare the state of the economy today with the appalling state it was in when it was brought to its knees under a Labour Government in 1976, when they had to go crawling to the IMF to bail them out of bankruptcy. So let us leave those matters on one side. If the noble Lord wishes to float them, I am always prepared to argue them with him.

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What I will do is simply to say that this amendment runs contrary to our general policy towards industry. The general approach is to allow the operation of the economy to reflect, so far as possible, the play of market forces. Our policy of privatising British Telecom is implementing this approach in the telecommunications sector. It would be inconsistent with this approach to use the proceeds of sale to set up a fund to hand out money to manufacturing industry as an addition to the existing instruments of regional and industrial policy. Who would decide which industries and firms were to receive the cash injections? What criteria would they apply? The proposal is a recipe for duplication with existing schemes and an increase in interventionism, when the Government are seeking to move in the opposite direction.
The amendment is, moreover, inconsistent with good financial management of the public purse. It would clearly be wrong and wasteful to earmark proceeds from the BT sale to industry, without considering the assistance that is already given to industry and the assistance that may be required. In addition, there are other calls on public funds and the priority attached to these calls can be properly determined only by considering them together against the funds available in the course of the public expenditure exercise. This is the correct approach to public expenditure and it is the approach that the Bill provides for as it is currently drafted. For these reasons, I ask your Lordships to oppose the amendment.
Lord Bruce of Donington: I am very grateful that the noble Lord should have replied in the terms that he has, because it will give us an opportunity, as time and events unfold, to reproduce his words precisely to him. We all know perfectly well—and it has attracted public comment far outside the cloisters of Government—that it is not good housekeeping to sell the family silver in order to pay the wages of the butler. This is one of those elementary Victorian values to which the Prime Minister so often and so eloquently refers. It is not good policy to sell off assets in order to pay for revenue expenditure; and, sooner or later, this will catch up with the noble Lord, who still seems to be cocooned in those extraordinary economic policies which he enunciated from the moment of his arrival in this House and which have since been repudiated by most members of his own party. He seems to be isolated by an incredible sense of innocence.
What we are trying to do by this amendment is to protect the noble Lord from his own naïvete in the matter. It seems to us to be good housekeeping—I am talking of ordinary housekeeping as the British housewife understands it—if you fall short in one year and your income does not meet your current expenditure, that you do not immediately sell off the house in order to meet your current expenditure. You try to trim your expenditure to your income. The noble Lord has read the Government's expenditure White Paper and the recent effusions from the Treasury that may or may not bear his name, and he knows quite well that the only reason why Government expenditure has been held down to what his right honourable friend calls "acceptable limits" is
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that capital receipts have been deducted from capital expenditure prior to their presentation to the public.
The noble Lord does not seem able, and I am trying desperately to help him, to depart from the elementary accountancy of the cashbook; that is to say, what we are concerned with is sums received in and sums paid out. This is the basis of the Treasury's accounts. They take account of no assets at all. They do not even take account of liabilities, except in the theoretical sense when they try to assess the public sector borrowing requirement, on which they are normally thousands of millions of pounds out.
So it does not strike the noble Lord as at all incongruous that you should realise vast assets which you cannot replace, and then spend the money out on ordinary current expenditure. That does not seem to bother the noble Lord in the slightest. First-year accountancy students would tell him that that is not normal accountancy practice or normal economic practice, either. There may be economists on the noble Lord's side who could fortify his conviction in his own rectitude; but, if so. I do not see them and they certainly have not been very vocal recently.
All we are trying to do is safeguard the realisation of funds. I should have thought that this would commend itself to the noble Lord, on the assumption that the amounts received from the sale of British Telecom will result in a profit to the Government anyway. What I may seek to show at later stages is that, although the Government may be receiving upwards of £4,000 million from the sale of a half-share in British Telecom, the burden on the taxpayer in cash terms will ultimately be more, and the taxpayer will lose money on the transaction. I shall take the noble Lord through all the detailed calculations in due course.
In the meantime, I do not see why those of your Lordships who are concerned with financial prudence —and who in your Lordships' House is not concerned with financial prudence?—should object to the notional segregation of this sum, in order to repair investment in British industry? It is well known—the noble Lord's party has emphasised it more than often and so has the noble Lord—that one of the defects in industry in the United Kingdom is that it has had no capital policy. It has had plenty of incomes policy, but it has never had a capital policy.
The noble Lord knows perfectly well that the right honourable gentleman to whom he was at one time financial adviser complained more than once about the deficiencies of British industry in making investment. All that this amendment seeks to do is to give the Government the ability to exercise a little common sense as and when they wake up to the necessity to do so, which is the paramount necessity for investing in British industry. If private finance will not do it then, quite clearly, the state must in order that a correct capital policy can be maintained in this country.
Before concluding on this somewhat sombre note, I must apologise to the noble Lord, Lord Peyton of Yeovil, with whom I seem to have crossed swords inadvertently earlier in the evening. I regret it if the forcefulness of my language offended him. All I can assure him about is that I have followed his career in another place. I am used to his incisiveness, and I feel that I am a dove in comparison with his reputation.
Lord Lloyd of Kilgerran: Before the noble Lord sits down, as he has had the advantage of seeing the Government's financial notes on this matter, may I, as another innocent—if I may associate myself with the noble Lord. Lord Cockfield—ask him about subsection (6) of Clause 59, which refers to "Any dividend or other sums"? Is there any information in the financial notes about the amount involved? It would be very interesting to know what we are talking about in terms of finance.
Lord Bruce of Donington: If I may reply, by leave of the Committee, the memorandum which I have received and which is extremely informative—I do not wish to cast any aspersion on it—does not quantify the sums involved. Those are a matter of divination and examination of the accounts.
9 p.m.
Lord Cockfield: The noble Lord, Lord Bruce of Donington, put down a Question for Written Answer, and my reply to that Question gave him a very great deal of information which is printed in Hansard. The noble Lord, Lord Lloyd of Kilgerran, may like to refer to it. The figures will be misinterpreted by the noble Lord, Lord Bruce of Donington, but I await his so doing. The noble Lord indicated earlier that he proposes misinterpreting them.
There are only three points to which I wish to refer. First, the noble Lord's argument about the family silver is based upon a total fallacy. What is happening is that the ownership of British Telecom is being transferred to the British people. There is no reduction in wealth. It is much better for the British people themselves to own an industry of this kind than for it to be owned by one of these amorphous state corporations.
My second point is that the noble Lord will find an analysis of Government capital expenditure in the public expenditure White Paper which has just been published. There he will see that Government capital expenditure amounts to about £20 billion a year, a figure very greatly in excess of anything likely to be realised from the sale of British Telecom. This is only a question of fact.
Thirdly, investment in British industry depends upon the profitability of British industry. If the profitability is there, there is no shortage of money—and no difficulty in laying your hands on it, either. The policies of the Government are directed towards improving the profitability of industry. It is down that route rather than down the route of Government hand-outs that increased investment, on a sound basis, will be achieved.
Lord Weinstock: Am I to understand from what the noble Lord said with regard to the first of the three points he mentioned—namely, that the transfer which is to take place will be to the British people from the amorphous state ownership in which it is presently held—that no attempt will be made to market shares in British Telecom pic on Wall Street or anywhere else outside the United Kingdom?
Lord Cockfield: I am not excluding the possibility that foreign investors may purchase some part of the
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shares in exactly the same way as they hold shares in other companies—and, no doubt, in the company of which the noble Lord is so distinguished an ornament (I use that term in its correct and proper sense). Noble Lords opposite frequently criticise the United Kingdom because we are investing a very large amount of money overseas. I do not see any grounds on which they would criticise other people if they invest money in the United Kingdom.
Lord Stoddart of Swindon: I am sorry that the noble Lord, Lord Cockfield, should have given such a cool reception to my amendment. I had expected him to welcome it with open arms. I am also sorry that he should have turned the issue into a party political dogfight, which I had certainly not intended it to be. For example, the noble Lord asked me to compare the economic state of the country in 1976 with that at the present time. I am happy to do so. In 1976, unemployment was one-third what it is today; total industrial production was higher than it is today, although that was eight years ago; and investment in industry was one-third higher than it is today. So the state of the economy in 1976, despite certain financial difficulties which we had, was on a rising trend. There was higher production every year, more investment in industry every year—one year taken with another—and there were 2½ million more people at work, producing something for the country. That is the comparison, and it favours a Labour Government.
The noble Lord appears to be very critical of the Labour Government, but when he criticises the Labour Government of 1976 for having to go to the IMF for a loan he forgets that at that time no North Sea oil was flowing. This Government are deriving in total some £13 billion a year from their oil revenues. But under the noble Lord's Government those oil revenues are being squandered upon unemployment pay for people who are doing nothing, whereas they would love to be producing goods for themselves, for their families and for other people's families.
The noble Lord is also concerned about who will decide where the money in this special fund is to be spent. The answer is comparatively simple. The last Labour Government set up the National Enterprise Board, which invested in Britain. One of its investments in Britain was its investment in British Leyland. I well remember that in another place 150 of the noble Lord's colleagues voted against investment in British Leyland and said openly that they would prefer it to go into liquidation. British Leyland is now thriving. It is thriving so well that the noble Lord's Government are thinking of selling off part of it to private enterprise. So the hypothecation of certain revenues for investment in industry has paid off very well for the nation. And it appears that that investment by a Labour Government will assist this Government in selling off assets in order that they can cut taxes before the next general election, to help them win it. That is the real situation.
The noble Lord, Lord Weinstock, dealt with the point made by the noble Lord, Lord Cockfield, that these shares are going to be sold to the British people. Grave doubts have been expressed in the City as to whether British financial institutions will be able to take up an issue of £4,000 million. According to

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financial experts, it is almost certain that a great deal of the money will come from abroad. So it is not going to be sold to the British people; a good part of it will be sold to foreign investors, wherever they may be. That is not selling to the British people.
Indeed, I believe that a good deal of the British people's assets will be sold at knock-down prices. They will be knock-down prices, because the assets of British Telecom are, in my view, very much undervalued in their books. Those assets at knockdown prices will go to the benefit not of the British people but of people living abroad. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 59 shall stand part of the Bill?
Lord Weinstock: If we can return from the realms of economic debate to the Bill, Clause 59 refers to shares—and the noble Lord, Lord Cockfield, mentioned equity, it may be that it will not be only equity in the event—to be allotted to the Government as a consequence of the vesting of the undertaking of BT in the successor company, British Telecommunications pic. Some noble Lords may have seen a copy of the Memorandum of Association for British Telecommunications pic. That document certainly does not lack for flexibility, giving powers to operate any sort of business—from a betting shop to a boarding-house.
What we have not seen are the articles of association of the company. In particular, we do not know what rights it is proposed to attach to the shares held by the Government. Ministers have referred to the need to free BT from the fetters of Government control. Noble Lords on all sides of the Committee, on the other hand, are greatly exercised about the operation of a national monopoly free from Government control. That is why many noble Lords have sought to amend the Bill. That is why so much interest is taken in the licence.
If the same rights are to be attached to all the shares of the company, the Government, as holders of 49 per cent, of the shares, must be in a position to exercise effective control. Therefore, it will surely be of interest to your Lordships to know whether it is intended that the shares to be held by the Government will have attached to them the same rights as the other shares to be sold—and if not, in what respect are those rights to differ, and for what reasons?
Lord Cockfield: The noble Lord is raising a number of points which really relate to the flotation. I doubt whether it is possible to answer them specifically at this stage. Clearly, before the flotation takes place, the new company will have to be incorporated, and it will need its articles of association—and a prospectus will have to be issued.
So far as the shares are concerned, it is not proposed that the rights attaching to the equity shares should differ according to those shares which are sold by the Secretary of State as part of the flotation and those shares which are retained by the Secretary of State.
Lord Bruce of Donington: Can the noble Lord take us further than that? Can he say when the articles of
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association will be available to Members of Parliament and to Members of your Lordships' House, so that we may consider them? They must have received consideration in his department over the past few months. After all, we are not dealing in peanuts here; we are dealing in some thousands of millions of pounds. I suggest that we have a right as a House—in the same way that another place has—to know exactly what rights the Government have in mind.
I am bound to say, in anticipation of the noble Lord's reply, that I have the impression—particularly after yesterday—that the Government are still in the process of making up their minds on a whole number of factors; and that they are so confused at the present time as to what exactly they are going to do that securing an intelligible statement of detailed policy is almost out of the question. I do not find this satisfactory, and I am sure that your Lordships do not.
Lord Mottistone: The noble Earl, Lord Halsbury, obtained copies of the articles of association through the Library of this House a good week or fortnight ago. I do not know why noble Lords opposite have not secured access to that document; they can go to the Library like the rest of us.
9.13 p.m.
Lord Weinstock: With respect to the noble Lord, I myself have not been to the Library but a colleague has done so; he has obtained the memorandum of association but not the articles of association.
I am grateful for the reply given by the noble Lord, Lord Cockfield. I understood him to say that the equity held by the Secretary of State will have the same rights attaching to it as the shares to be sold. In that event, I do not wish to press the noble Lord because there may indeed be matters upon which the Government have not made up their minds. But I do not see how British Telecommunications pic can be described as free from Government control if 49 per cent, of the shares are in the hands of the Secretary of State.
Lord Cockfield: Perhaps I may expand upon the reply that I gave earlier, because I now discover that a draft of the articles of association was in fact laid in another place. It is, therefore, available. That is the first point. Secondly, as I said, the equity shares will all carry the same weight, but in addition the Secretary of State will hold a special share to protect certain provisions designed to ensure the independence of the company. The equity shares all carry the same weight. The noble Lord, Lord Weinstock, was referring to the 49 per cent, retained by the Secretary of State as compared with the 51 per cent. sold. All of those shares carry an equal weight, but in addition the Secretary of State will hold a special share to protect certain provisions designed to ensure the independence of the company. This has been done in the case of other privatisations.
Lord Bruce of Donington: Is the noble Lord aware that what he has just said only reinforces the point made by the noble Lord, Lord Weinstock? It is not necessary where the shares in a public company are spread widely, and the noble Lord seems to wish them

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to be as widely diffused as possible, even though in practice they will be spread over at the most 20 institutions or insurance companies, which will take up most of the issue. Is he aware that a concentrated holding of 49 per cent, as against a fragmented holding of 51 per cent. in fact ensures control for the 49 per cent. for all practical purposes? The point made by the noble Lord, Lord Weinstock, is perfectly valid: the Government will, in effect, even apart from the 1 per cent., still remain in effective control of the company.
Lord Cockfield: I should only like to say, if I may, in relation to that last point, that we have made it clear that we adopt a policy of not intervening in the management of the company by virtue of the 49 per cent. shareholding. That statement has been made quite clearly and publicly.
Lord Weinstock: I do not want to press the noble Lord unduly; and I am sorry to have to persist with this. Is it to be expected that restrictions on the rights attaching to the 49 per cent. will be written into the articles or some other authoritative documents which will make clear the rights of the 51 per cent. of the shares which are to be sold to third parties?
Lord Cockfield: No, I did not say that at all. In fact, on the contrary, I said that all equity shares would have exactly the same rights but there would be an additional special share held by the Government.
Lord Weinstock: In that case, would it be the intention, for example in the resolution proposing the appointment or dismissal of directors, to use their 49 per cent. in the vote?
Lord Cockfield: The noble Lord is now trying to forecast what will happen in the future. He must realise that the Government have made it quite clear that they do not propose using their shareholding as a means of controlling the management or operations of the company.
Lord Bruce of Donington: What about future Governments?
Clause 59 agreed to.
Clause 60 [Conversion of certain loans transferred to the successor company]:
Lord Bruce of Donington Lord Bruce of Donington had given notice of his intention to move Amendment No. 133:
Page 53, leave out lines 32 and 33.
The noble Lord said: Since these amendments were tabled I have received, only last week, a memorandum, very courteously made available by the noble Lord, which describes in a little greater detail the workings of Part V of the Bill. It is going to take some time, in view of the ambiguities that are still inherent not only in the Bill but in the more detailed explanation with which I have been provided, to assess and to be able to quantify the financial implications of the Bill. It had been my intention—and I sought the advice of the Clerks on this—to move the deletion of Part V altogether, because it would have had no effect
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on the other Parts, anyway, but I was advised that this was not feasible and that one therefore had to move this individually, section by section.
In order to shorten the proceedings, I do not propose to take advantage of that facility, and I do not intend to move Amendments Nos. 133 to 139. But on behalf of Her Majesty's Opposition, I give notice that a comprehensive series of amendments will probably be presented to the House for its consideration at the Report stage.
[Amendment No. 133 not moved.]
[Amendments Nos. 134 to 139 not moved.]
Clause 60 agreed to.
Clauses 61 and 62 agreed to.
Clause 63 [Target investment limit for Government shareholding]:
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 140:
Page 55, line 30, leave out ("by order") and insert ("after approval by resolution of each House of Parliament").
The noble Lord said: Amendments Nos. 140 and 141 to Clause 63 are designed to put the ratchet effects of the provisions of this clause under some kind of parliamentary control.
Amendment No. 141: Page 55, line 33, leave out paragraph (a).
Clause 63 has been very cleverly drafted. In fact, for once one must pay tribute to its clarity in the midst of a sea of other financial provisions which are rather more obscure. It is clearly designed to ensure that the interest in British Telecom of Her Majesty's Government, of whatever political complexion, progressively diminishes. By this means, on a change of Government, it is hoped to avoid any possibility of restoring British Telecom to its former status of a public utility responsible and responsive to Parliament and the people at large.
The endeavour to put into a Bill this ratchet mechanism which in statute ensures that the interests of the state progressively diminish is rather childish. It shows an inferiority complex which I suspect must be born of a growing consciousness of failure in the Government's carrying out of their policies over the past five years. If the noble Lord really thinks that a measure of this kind will prevent a future Labour Government from re-establishing the public utility of British Telecom to the position that it formerly occupied, I venture to suggest that he is in for a grave shock. In the meantime, we think that the progress of the ratchet ought to be subject to some kind of parliamentary supervision.
It is for that reason that these amendments are introduced. After what I have said they should be self-explanatory. I have no doubt that the noble Lord will reject them. I expect him to. Indeed, I should be surprised, and possibly disappointed, if he did otherwise. I beg to move.
Lord Cockfield: I shall not disappoint the noble Lord, Lord Bruce. The order-making powers for setting a new target investment limit under Clause 63 (4) are exercisable by statutory instrument and subject to the negative resolution procedure by virtue of Clause 92. That applies the negative resolution

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procedure to all order-making powers in the Bill. As the Committee will appreciate, the underlying aim is to avoid taking up parliamentary time unless it is absolutely necessary. The negative resolution procedure achieves that aim while still allowing Parliament the opportunity to make its views known on contentious issues, if it so wishes.
The amendment proposes an affirmative resolution procedure. We do not accept that setting a new target investment limit warrants such exceptional treatment. A new limit would normally follow a Government sale of shares which would already have been in the public eye. Therefore the new limit would be consequential upon a much more public event. An automatic debate is not called for in those circumstances. The negative resolution procedure would still provide an opportunity for Parliament to raise any issue arising from the sale of shares and to negate the order if it chose to do so. Accordingly, we believe that the arrangements made in the Bill fully meet the needs of parliamentary supervision and control. I feel that on those grounds I should oppose the amendment.
Lord Bruce of Donington: I am very glad to have the noble Lord's views, which will of course be on the record, and which I shall be able to cite to him in the fullness of time. I am greatly obliged to him. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 141 not moved.]
Clause 63 agreed to.
9.27 p.m.
Lord Donaldson of Kingsbridge Lord Donaldson of Kingsbridge moved Amendment No. 142:
After Clause 63. insert the following new clause:
("Share-holding by individual subscribers.
.The Secretary of State shall by statutory instrument make provision for the widest possible distribution of shares among individual subscribers for the services of the Company and shall provide appropriate incentives for the continued retention by those subscribers of those shares.")
The noble Lord said: This is a probing amendment, which was rather a pet (if I may say so) of my noble friend Lord Taylor of Gryfe, who has been summoned to the far North, and so I am left to put it forward as best I can. I think that the objective is quite obvious from the words on the Marshalled List. The objective is that telephone subscribers, of which there will be a very large number, should be given the opportunity to buy a limited number of shares, perhaps £50 or £100 worth. The amendment refers to:
"appropriate incentives for the continued retention"
of shares, and those would take the form of a discount from the bill which subscribers will receive each quarter, and which we all receive now. There would be no technical difficulty at all in doing that because bills have to be sent every quarter and with modern computerisation it would be easy enough to find out which subscribers were also shareholders.
The amendment would have the effect of bringing about a very wide, small—and I may say generally humble—shareholding, which we think is very healthy for any near monopoly to have. It would also provide a certain consumers' element of independence and
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authority to complain and possibly the chance to work together regionally.
Something of the kind was done by European Ferries not so very long ago, and it worked extremely well. It is just an idea which I believe, if carried out, would make the whole situation rather more satisfactory and rather more consumer-orientated. We believe that the ordinary man-in-the-street is the person who is likely to suffer from this privatisation. That has been the main motive for our objection to the Bill as a whole, and we believe that what is proposed in the amendment would give back to the man-in-the-street a little something, so that he could get together with other subscribers, complain hard and loud in an organised way as a shareholder, and have a little more control over the way in which the business was run. I beg to move.
Lord Mackay of Clashfern: We are in sympathy with the aims of this amendment. It has been said in another place that the Government's aim is to encourage a very wide take-up of shares by the public, and my noble friend Lord Cockfield indicated this a little while ago. In this way, the public will have a much more direct say in the running of British Telecom than they have had to date. Your Lordships will have seen the Government amendments that facilitate the despatch of share application forms so that the public at large may have the opportunity of subscribing. I refer to Amendment No. 143A which we shall be moving soon. We are also considering a number of ways for making British Telecom shares more attractive to individual subscribers and small investors although no decisions on the various options have yet been made.
The amendment calls for the widest possible distribution of shares. We are hoping to do that. We doubt whether anything is necessary in the shape of a particular provision such as this amendment proposes. What is required is the mechanism by which it should be carried out. That, as I say, we are going to attend to. The amendment also calls for share retention or its encouragement. The best incentive for the retention of British Telecom shares is British Telecom's own performance. Nevertheless, as your Lordships will know, we introduced a loyalty bonus as an incentive to retain shares in the Britoil flotation to encourage the longer term small investor. A similar bonus is under consideration to see whether or not it would be appropriate in this case. We will not be making any decision on this until the overall share offering has been firmed up. It would be unduly limiting to be bound to offer an extra incentive for retention at this stage.
Accordingly, I hope that the noble Lord, Lord Donaldson, will feel that the spirit of the amendment is very much in accordance with the Government's thinking; but the precise form of the amendment, we believe, is not desirable. The aims would be better achieved in the way that I have sought to explain.
Lord McIntosh of Haringey: I fear that the Minister has made the absolute minimum of concessions to the noble Lord, Lord Donaldson, who has moved what to us appears an admirable amendment. The noble and learned Lord is, in effect, asking for a blank cheque. He

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is asking the Committee to accept his assurance that at some stage the flotation documents, the prospectus, will carry some reference to shares for subscribers. The amendment—in my view, rightly—is much more precise. It asks that this should be an intention by statutory instrument. It asks that there should be the authority of Parliament, which I would have thought desirable and necessary, for the appropriate incentives for the continued retention of shares. I would simply ask the Minister whether incentives for the retention of shares might not be subject to challenge if they were inserted in the prospectus without parliamentary authority.
Lord Donaldson of Kingsbridge: I am not only pleased but also a little surprised at the modest welcome which the noble and learned Lord gave to the amendment. I am happy that the Government are thinking along these lines. We have been reduced to that as the most that we can get out of the majority of our amendments. After all, it is a good deal. Even if the Government will not accept amendments, the fact that they agree with them is rather a help. All that I should like to point out is that one of the significant aspects of the amendment, which is a probing one, is that the incentive for the telephone user to take up shares should be specifically offered in the sense of a discount of his bill. This is a matter to which the noble and learned Lord did not refer. I shall not be pressing the amendment. However, before withdrawing it, I should like to ask whether there is any way that this could be included in the general benevolence which the noble and learned Lord has shown towards this idea.
Lord Mackay of Clashfern: Certainly that possibility will be kept in mind. It is right to retain flexibility in the way in which this matter will be taken forward, because it is right to make these decisions as a whole towards the time of actual flotation. But I can certainly assure the noble Lord that his suggestions will be kept in mind.
Lord Bruce of Donington: Will the noble and learned Lord be slightly more forthcoming on this matter? If the shares in the new successor company are to be floated to raise a sum, reputedly for 51 per cent., amounting to some £4,000 million, is the noble and learned Lord not aware that, for the issue to be a success, the main bulk has got to come from the institutions themselves, otherwise the issue would be a flop and we should be faced with a similar situation of governmental losses to those that have taken place in certain other issues which I shall not mention here?
In those circumstances, is not the noble and learned Lord aware that the real chance for the ordinary members of the public, or such small numbers of the public who are still in possession of capital funds, to invest—and they comprise a remarkably small proportion of our population—is likely to come from original applicants for the shares in terms of the institutions unloading their shares on the public through the normal brokerage facilities? That is what will happen. In that connection, the acquisition of shares to the tune of, for example, £500 will cost the
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prospective shareholder some £40 or £50 in terms of commission, stamp duty and so on. In those circumstances, will he disabuse the general public of the idea that there is to be a very widespread individual shareholding in British Telecom when it is privatised?
Lord Mackay of Clashfern: I think that I have said as much as I reasonably can about this matter, and I do not want to add anything, seductive as the noble Lord's invitation may be.
Lord Donaldson of Kingsbridge: Before I withdraw the amendment. I should like to point out that the noble Lord, Lord Bruce, said—and this is clearly true—that with a very large issue of this kind the bulk will be taken up by the institutions. What I am asking—and what I think the noble and learned Lord suggested was not an unwelcome idea—is that provision should be made at issue for the very large number of telephone subscribers (I do not know whether there are 12 million or 15 million of them) to have a special right to acquire a limited number of shares, perhaps £ 15 worth or £ 100 worth, because they are subscribers. That is the point I made, and I think that it is a point which the noble and learned Lord took on board.
If the Government did in the end do something like that—and I hope very much that they will do so—it would mean that, in spite of the bulk going to the major institutions, there would be quite a large allocation of shares (if there are 12 million subscribers, perhaps half might take up the offer) to small people throughout the country, which would be very valuable. I am grateful for the friendly reception given to this suggestion of my noble friend and colleague Lord Taylor, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 143 not moved.]
Clauses 64 and 65 agreed to.
Clause 66 [Liability of Secretary of State in respect of liabilities vesting in successor company]:
9.40 p.m.
On Question, Whether Clause 66 shall stand part of the Bill?
Lord Weinstock: I wonder whether the noble Lord, Lord Cockfield, is yet in a position to reply to the point I raised earlier, when we were discussing Amendment No. 126, concerning the elements of subsidy inherent in the Bill?
Lord Mackay of Clashfern: As I understood the point which the noble Lord, Lord Weinstock, made earlier, it was that the Secretary of State is taking responsibility for the liabilities of British Telecom as at the date of transfer if the successor company, on being wound up, does not meet those liabilities. The reason for that is that up until the time of transfer British Telecom, being a nationalised operation, would be understood to be supported by the Government and, therefore, those who were creditors of it would have become creditors on that basis.

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Among these obligations perhaps the one of most interest is that relating to the pension provision for the employees of British Telecom as at that date. I think that that is perhaps particularly the point to which the noble Lord, Lord Weinstock, referred. Under Clause 66 the Government stand behind British Telecom pic in backing the fulfilment of those pension liabilities which are vested in British Telecom plc at the transfer date, so that the employees as at that date have the backing of the Government for their pension arrangements, which seems a very reasonable provision.
One of the liabilities so vested would be a requirement under the pension fund trust deed to ensure that there are sufficient funds available to meet the pension entitlements of current employees who are already members of the pension scheme at the time of the transfer when they come to retire in the future. Accordingly, the Government stand behind the pension entitlement of current employees in respect of all their service to retirement; that is to say, service both before and after the transfer date.
The Government also stand behind the British Telecom public limited company's liability to ensure that there are sufficient funds available to meet the entitlement of British Telecom pensioners at the time of the transfer; that is to say, those who are already pensioners. However, there will not be any Government backing for pension obligations for new recruits who join British Telecom plc and the pension scheme after the transfer date.
726
This is not a subsidy because, first, the Government guarantee would come into effect only if British Telecom plc were to go into liquidation, and would be directed to recompensing the creditors, not saving the company. The guarantee—and this is the second reason why it is not a subsidy—does not apply to fresh obligations which British Telecom plc would take on after the transfer date. Therefore, while making clear the nature of the obligations which are covered by this clause, I do not accept that these amount in any sense to a subsidy to British Telecom plc.
Lord Weinstock: I am grateful to the noble and learned Lord for that full explanation. Is the noble and learned Lord satisfied that the situation in British Telecom plc, in which some employees have index-linked pensions and other employees do not, will prove satisfactory?
Lord Mackay of Clashfern: That is a slightly different matter from the one with which I have been endeavouring to deal. Clause 66 is not designed to make good every possible improvement that could be made in the situation. It is concerned only with making certain that so far as current employees' pension entitlements are concerned, they have the same backing for the performance of these as they would have if the company were in state ownership.
Clause 66 agreed to.
Clause 67 [Dissolution of British Telecommunications]:
9.45 p.m.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 143ZA:
Page 58, line 34, leave out subsection (3) and insert—
("(3) During the transitional period section 1(4) of the 1981 Act (composition of British Telecommunications) shall have effect as if for the word "six" there were substituted the word "one" and paragraph 9 of Schedule 1 to that Act (quorum of British Telecommunications) shall have effect as if after the word "three" there were inserted the words "or the number of its members, whichever is the less".").
The noble and learned Lord said: This amendment is a consequential amendment. As Clause 67(3) is currently drafted the minimum number of corporation board members in addition to the chairman has changed from the six members originally in Section 1(4) of the 1981 Act to one member; that is to say, this is for the shell company, after the transfer takes place. That is because the intention of Clause 67(3) is to allow a small board to operate during the long period in which the shell corporation will be dealing with the various matters with which it requires to deal in the transitional period. There is no need for a larger board to supervise this relatively straightforward task. It is sufficient to have just the chairman and one other board member.
A further change to the 1981 Act is also required. Paragraph 9 of Schedule 1 to that Act provides that the quorum for the board shall be three board members. Since we are reducing the board to a chairman and one other, it is apparent that that particular provision requires to be changed, and that is what the second part of the amendment does. I beg to move.
On Question, amendment agreed to.
On Question, Whether Clause 67, as amended, shall stand part of the Bill?
Lord Bruce of Donington: The noble Lord has been kind enough to reply to the noble Lord. Lord Weinstock, in respect to his inquiries with regard to Clause 66, which, of course, deals with certain liabilities vesting in the successor company. Clause 67 gives the Government the power in effect to dissolve BT after its obligations under Schedule 5 are deemed to be completed.
I should like to redirect the attention of the noble Lord to the obligations of BT under Schedule 5. The noble Lord referred to the fact that the pensions in BT as it is now, the liability for which is stated in its balance-sheet to be £1,250 million and is probably more by now, are going to be transferred to a separate company. The noble Lord conveyed the fact that the Government stood behind that liability, that they accepted responsibility for it. On the assumption that the Government accept responsibility for it, where is the money coming from to discharge that liability? Is it coming from the Exchequer; is it coming from the Consolidated Fund; or where is it coming from? Perhaps the noble Lord can reply.
Lord Mackay of Clashfern: If the noble Lord, Lord Bruce of Donington, is referring to the obligation under Clause 66, the standing behind British Telecom pic—and I think that is what the noble Lord is referring to—then the situation is that we expect British Telecom plc to be able to meet those liabilities. Clause 66 makes it perfectly plain that it is only if British Telecom plc came to be wound up that the Government would have any responsibility to pay anything under Clause 66. Accordingly, our fervent belief is that no actual payment will be required under Clause 66.
Lord Bruce of Donington: I am sorry to press the noble Lord, but he will recall that under Clause 58 the assets and liabilities of BT are transferred to a successor company except for the excepted liabilities. The excepted liabilities comprise a liability stated in the balance sheet of BT as at 31st March 1983 of £1,250 million. At that date that was a liability of British Telecom stated in its balance sheet, and there is every reason to suppose that that figure is still there. That liability is not being transferred. In fact, it is expressly excepted in the terms of Clause 58; but that liability has got to be satisfied by someone at some time. If the noble Lord says that the successor company to BT has got to satisfy it, that will have a very depressing effect on the prospects of the issue being successful, because this is part of the restructuring of the balance sheet, without which the noble Lord will not get his money anyway. I am asking, who is going to discharge the excepted liability which the successor company will not take over? It still remains a liability. Who is going to pay it and where are the resources coming from?
Lord Mackay of Clashfern: I can only answer one question at a time, and the excepted liabilities are not liabilities in respect of the pensions which are payable, or which are a responsibility, a liability, of British Telecom at the transfer date. The excepted liabilities are not those that are covered under Clause 66 at all. The excepted liabilities are liabilities which subsist by virtue of a deed of covenant of 22nd November 1978 made between the Post Office and the then trustees of the Post Office staff superannuation scheme to make good a deficiency in the pension arrangements up to that point. Much earlier.
Lord Bruce of Donington: Who is going to pay?
Lord Mackay of Clashfern: I am trying to distinguish between the two questions. It is important that we distinguish between the questions asked here. The noble Lord in the first attack on this point was talking about liabilities that I referred to in answer to the noble Lord, Lord Weinstock, which are not the same as the excepted liabilities. The provision so far as the excepted liabilities are concerned is that they remain liabilities of British Telecom, the shell company, and the arrangements under which these are discharged are set out in Schedule 5. The manner in which they are to be discharged is provided for under the provisions of various paragraphs in that schedule, and particularly at paragraph 39.
Lord Bruce of Donington: I still ask the noble and learned Lord where the money is coming from? He has said, and I now quote him, that that liability, although an excepted liability, will remain the liability of British Telecom. I am quoting him exactly. But British Telecom has transferred all its assets to a successor company. How is it going to satisfy the liability? The answer surely is that the Government have to lie behind British Telecom, because otherwise they would have a liability and no asset. Is the noble and learned Lord seized of the point, or do I have to spell it out more simply?
Lord Mackay of Clashfern: I have no difficulty in understanding the point once the noble Lord has come to focus on this question. The answer is contained in the provisions of paragraph 39 of the Fifth Schedule.
Clause 67, as amended, agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 143A:
Before Clause 68, insert the following new clause:
("Application of law in relation lo offer of shares or debentures of the successor company.
.—(1) This section applies where the Secretary of State or a nominee of his offers for sale to the public shares or debentures of the successor company at a time when that company is wholly owned by the Crown: and in this section "full prospectus" means a prospectus which complies, or is deemed to comply, with the requirements of Schedule 4 to the Companies Act 1948 (matters to be specified in prospectus and reports to be set out therein).
(2) If the shares or debentures are offered by a full prospectus as respects which the conditions mentioned in subsection (3) below are fulfilled (in this section referred to as "the offer prospectus"), any form of application for the shares or debentures may (instead of being issued with a full prospectus) be issued with a notice given by the Secretary of State which includes—

(a) a brief description of the shares or debentures offered, the terms of the offer, the successor company"s business and its financial position;

(b) an indication of the places in the United Kingdom where copies of the offer prospectus are to be available for inspection by members of the public; and

(c) a statement of the effect of subsections (4) and (5) below,

(3)The said conditions are—

(a) that a copy of the prospectus has been delivered to the registrar of companies in pursuance of section 41 of the said Act of 1948; and

(b)that arrangements have been made with a view to securing—

(i) that on or before the date of receipt of the form of application by a member of the public a copy of the prospectus is published in not less than four national newspapers: and

(ii) that on that date copies of the prospectus are generally available in the United Kingdom for inspection by members of the public.

(4) Where a form of application is issued without a full prospectus but with a notice given by the Secretary of State under subsection (2) above, then, for the purposes of any enactment or any rule of law—

(a) the notice shall be taken to have incorporated the offer prospectus; and

(b) any application for the shares or debentures which is made in pursuance of the notice shall be taken to have been made in pursuance of that prospectus.

(5)Where a form of application is issued without a full prospectus, neither the form of application nor any document which is issued with it shall be regarded—

(a) as a prospectus for the purposes of sections 37 to 46 of the said Act of 1948 (prospectus requirements); or

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(b) as a circular for the purposes of section 14 of the Prevention of Fraud (Investments) Act 1958 or section 13 of the Prevention of Fraud (Investments) Act (Northern Ireland) 1940 (circulars relating to investments).

but only, where the form of application is issued without a notice given by the Secretary of State under subsection (2) above, for the purpose of determining the liability of persons other than the Secretary of State.").
The noble and learned Lord said: This is the amendment to which I referred when I was answering the noble Lord, Lord Donaldson of Kingsbridge, on an amendment that he moved earlier. The purpose of this amendment is to make possible, in the special circumstances of this flotation, application forms to be distributed other than with full prospectuses. Your Lordships will know that the present law on the distribution of application forms for shares is contained in Section 38 of the Companies Act 1948, which states that it shall not be lawful to issue shares unless the form of application is issued with a prospectus complying with the requirements of the Act.
The desirability of this stipulation is not in question, but we are concerned here with an offer unprecedented both in its size and the number of potential subscribers. It is not physically possible within the timeframe within which a prospectus must be completed and issued to produce, say, five million copies. The Government accordingly propose through the amendment to meet an exceptional need with an exceptional measure. Their aim is not to provide itself with a short cut but to remove, for this single purpose, a barrier to wide ownership of shares that would otherwise be impassable.
I believe that the amendment is perfectly consistent with the relevant European Community regulation, the council directive on listing particulars. This requires only that listing particulars should be made widely available, for example by publication in newspapers or by free availability at a variety of addresses.
It may be of some use if I take a little time to spell out what this new clause does. Where certain conditions about publication and availability are met, the. Secretary of State is permitted to issue application forms for British Telecom PLC shares without a full prospectus, although with a notice containing a brief description of the shares and the company. The Secretary of State will be required to make arrangements to publish the prospectus in four national newspapers and to make it generally available, for example, at major banks and possibly Post Offices. Given the wide availability of the prospectus, the Government have come to the view that it is reasonable for any application made in these circumstances to be treated as having been made on the basis of the full prospectus. This is in subsection (4).
Your Lordships may wish to know that the purpose of subsection (5) is to disapply certain provisions of the Companies Acts to make the circulation of a brief notice, to which I referred earlier, a possibility. Your Lordships may also like to know how the clause deals with the question of liability. The effect of subsections (4) and (5) is that the notice issued under the new clause will be treated as including the full prospectus. As long as the notice is correctly issued, the Secretary of State will not be liable for any loss suffered by an

731
investor because the notice did not contain all the information in the full prospectus. As I have said before, this is thought to be justified because the full prospectus will be so widely available.
In the unlikely event that the notice was not properly issued, the Secretary of State would take sole responsibility for it. So if anything went wrong about the notice that would be solely the responsibility of the Secretary of State. The subsections make it clear that no one else, including the directors of British Telecom, can be liable in respect of that. The investor will have the full remedies available in the event of the full prospectus containing any information which would be actionable. This is purely a means of achieving, in the very special circumstances of this case, the possibility of the widest subscription that one could imagine for this issue. I commend this amendment to your Lordships and I beg to move.
Lord Weinstock: The purpose of this amendment is to enable the Government to offer shares in BT PLC to the public on a simple application form which does not comply with the requirements of the Companies Acts and the Prevention of Fraud (Investments) Act. It is probably intended that forms of application will be enclosed with telephone bills. I submit to your Lordships that it is quite wrong that the elaborate code of investor protection contained in those Acts should be cast aside simply because the Government are the sellers. There can be no justification for having one set of rules for the Secretary of State when he wants to offer shares to the public, and another set of rules for everyone else. In any case, there is an inevitable conflict of interest if the Secretary of State is doing his duty. On the one hand, he must get as much as possible for the public property he is selling in the form of BT shares. On the other hand, he must, through the licence and the regulatory procedure protect the public and others against monopoly practice by British Telecom PLC. It follows that the conditions to be imposed on the operations of BT PLC must have an important bearing on the value of the shares and must be disclosed in detail to prospective purchasers. For the reasons I have given, and in the light of other experience. I ask your Lordships to reject this amendment so that potential investors would have the full and normal protection of the law in this matter.
Lord Lloyd of Kilgerran: Before the noble and learned Lord answers that question, I have a question which is to some extent supplementary to what the noble Lord, Lord Weinstock, had in mind. The noble and learned Lord, in his cogent and clear presentation of the substance of this amendment, said that it was an exceptional method for exceptional needs. He then went on to say that he was satisfied that it conformed with the relevant EEC regulations in respect of certain aspects with which this amendment is concerned. Will he tell the Committee, either now or at a later stage, what are the EEC regulations that he has in mind? I realise that this is a technical question but in some way it supplements what the noble Lord, Lord Weinstock, has raised as a possible problem to deal with.
10 p.m.
Lord Bruce of Donington: We on these Benches would wish to agree with the noble Lord, Lord Weinstock, in the observations that he has made. The Prevention of Fraud (Investments) Act went through a very lengthy procedure in the other place and in this House and so have the Companies Acts. Schedule 4 has received attention not only from the other place and this House but also from the Stock Exchange. There can be no justification for withdrawing the protection of the law from a person purely because he may onlv have £5 or £50 to invest, as distinct from £1,000, £50,000 or £100,000. In fact, to quite a large number or our citizens, £10 is worth more than possibly is £100 or £1,000 to those who are vastly better circumstanced.
It is no answer for the noble Lord to say that the full prospectus, in compliance with Schedule 4 of the Companies Act 1948, will be published in four national newspapers. Why do they not end up with the Chinese method and have a wall newspaper and put it on there so that it can be seen by all? The law does not provide for that. The requirements of the law are very specific. They require that every application form that is sent out should be accompanied by a prospectus. The reason for that is this. The prospective investor can consider the matter in solitude if necessary; he can look through the printed words and he can ponder over them; he need not necessarily take the printed form in the Sunday Express or the Daily Telegraph or other newspapers. He may not require to read them. He is entitled to look through the same documents as a person who is investing £100.000 wishes to look through.
I do not approve of this short circuiting of the requirements of the Act purely because the Government are under such desperate pressure for Mr. Nigel Lawson to raise the money—which is the main purpose of this Bill, anyway. I am not impressed by what the Government nave said. The law should be applicable to all, including the Government; and the Prime Minister has said so on more than one occasion. Why should the Government seek to be exempt purely because of the magnitude of the proposed issue? They should be even more careful. The more people that are invited to invest, probably the people with smaller incomes—and there are a lot of people with small incomes—ought to be afforded even greater protection than those that employ professional advice to examine prospectuses, and the like, on their behalf.
I sincerely hope that the Government will take back this amendment and think again. I am quite sure that it is one that the City of London in its right mind would not dream of countenancing. The Stock Exchange have prepared their own regulations which I have with me. I was going to go through them with the noble Lord and find out to which ones he objected; but I will not subject him to that this evening. This is an amendment which the Government should take back. It is not required this time.
Lord Kilmarnock: Before the noble and learned Lord the Lord Advocate rises, can he tell me about his use of the word "disapplying"? I believe he referred to

733
"disapplying" with the provisions of the Companies Act. Is this now current usage in lieu of the words "overriding" or "overruling"?
Lord Mackay of Clashfern: May I say first of all that the EEC provision I had in mind particularly was the listing directive—the Council directive on listing particulars, which requires that listing particulars should be widely available, for example, by publication in newspapers or by free availability at a variety of addresses.
Lord Lloyd of Kilgerran: Can the noble Lord give the reference number?
Lord Mackay of Clashfern: I do not have it in my head but I am sure I shall be able to give the noble Lord a note of it. It is one of the three Council directives regulating what I might broadly call Stock Exchange matters and the one that seems most relevant is that on listing particulars.
The noble Lord, Lord Bruce of Donington, speaks about the protection of the law, but of course what we are seeking to do here is, by Act of Parliament, to make a law which will include these particular provisions. It is a very common situation that a provision of an Act of Parliament of general application is not applied to a particular circumstance where, for one reason or another, it is not appropriate thai it should apply. That is what I meant by "disapply" in this situation.
The noble Lord, Lord Weinstock, mentioned the Prevention of Fraud (Investments) Act 1958. The only provision of that Act which is affected by this amendment is the prohibition in Section 14 of that Act and its Northern Ireland equivalent on the distribution of circulars inviting people to purchase securities. That is disapplied for the reasons that I have explained, namely that noble Lords opposite, agreeing with the noble Lord, Lord Donaldson of Kingsbridge, were in favour of wide ownership of these shares. If you are going to get that you must have some method for a wide distribution of a document under which one may apply for these shares. Does the noble Lord wish to make some comment?
Lord Bruce of Donington: Yes; I said "not on the basis of conning them". They have to see the whole of the facts and not merely a summary of them. They should know the facts as well as anybody else.
Lord Mackay of Clashfern: There is absolutely no question of people being in any way conned. They will be given a notice which will direct their attention to the full terms of the prospectus and they will have the full protection that any investor has, whether he is investing £5 or £500,000 under the general law. In addition, they will have the protection of the Secretary of State standing behind the notice, so if there is anything at all they can find fault with in the notice along the lines that the noble Lord, Lord Bruce of Donington, is suggesting, the Secretary of State will be responsible for that. So we have made every possible protection available for the subscribers at the same
734
time as taking the practical step necessary in order to secure that their subscriptions may be invited.
Accordingly, far from withdrawing the protection of the law from these investors, we are giving them all the protection of the law and making available to them a possibility which, but for this amendment, would not exist to achieve the very aims which noble Lords opposite, as well as my noble friends and those in other parts of the Chamber, seem to think are desirable aims. In my submission, this is a perfectly reasonable amendment to achieve that purpose and nobody has yet suggested how it could be achieved other than by means of this amendment. I hope that it will commend itself to your Lordships.
Lord Weinstock: If the noble Lord is faithful to the belief of his party in wider share ownership, and if he thinks that this is the way in which shares should be sold, should his Government not advocate this method of selling shares more generally? Why should it be restricted to this single Bill?
Lord Mackay of Clashfern: Of course, this Bill is concerned with British Telecommunications. It would not be possible in this Bill to make a provision of general application. But I think that the Council directive on listing particulars might well encourage a more general provision. I would not want to involve myself in a matter that is irrelevant to this Bill tonight. In this Bill we are concerned only with the desirability of doing it in this particular situation. A more general one will await another time. The noble Lord may feel that this is such a desirable way of proceeding that he will wish to bring in a measure of his own.
Lord Weinstock: With due respect, I do not. I think that investors need a certain amount of protection, and the offerings by the Government of shareholdings in other companies do not fill one brimful with confidence. I would not suggest for a second that there would be anything defective in the prospectus. But if the law prescribes that a certain degree of protection is necessary for investors, I cannot see why an exception should be made in this case. Surely, the same protection should be afforded to investors who want to put money into BT plc, as would apply to any other company.
Lord Mackay of Clashfern: As I said, in my submission the protection is at least as good here as it is in the general case, but it is applied in a slightly different way which is appropriate to this case.
The Countess of Mar: Can the noble and learned Lord the Lord Advocate explain to us why everything is being rushed through with so much haste? Why is there not time to prepare a proper prospectus and put it out? Are the Government so much in need of the money?
Lord Mackay of Clashfern: I do not know where the suggestion came from that a proper prospectus will not be prepared. I certainly did not say that, and I do not think anybody else did either. There is no question whatever of there not being a proper prospectus prepared; but the prospectus has to state the position

735
as near as possible to the date of flotation, because circumstances can change rather quickly. Therefore, it is a very important aspect of the preparation of a prospectus that it is done very close to the time that is important for the flotation, and it has to go out in a very large number of copies if this operation which I have described, and which I understood your Lordships to feel was desirable, is to be achieved.
That is the reason for this. There is no question of an inadequate prospectus or anything of that kind being prepared. The prospectus will be absolutely in accordance with the provisions which apply to every other prospectus. The point is that, instead of the people having to get a copy of the prospectus, they will get a notice which refers them to that prospectus although it is not copied in full.
Lord Weinstock: The very large number of prospectuses that will be required in this matter is a consequence of the very large sum of money that is involved. Is that any reason to abrogate the law?
Lord Bruce of Donington: While the noble and learned Lord is considering that, perhaps he can answer this question also. It is said that one of the reasons why there will be a shortened form of prospectus is that in issues of this kind, matters change almost up to the date of the issue of the prospectus itself. Many of us who are engaged professionally in this kind of business know well that steps have to be taken to ensure that the prospectus is accurate up to the last moment when all people are still committed to it.
What the noble Lord has just said, in effect, is that this cannot apply in this case where there is a shortened prospectus, so what is likely to happen is that even the shortened prospectus may not comply with the actual prospectus at the time when it is issued. Does the noble and learned Lord consider that to be satisfactory?
Lord Mackay of Clashfern: I never said that at all. The noble Lord is completely misrepresenting what I said. What I said in answer to the noble Countess, Lady Mar, was that, for the reasons which the noble Lord, Lord Bruce, has just explained, one has to bring out the full prospectus (which is what we are talking about) at a time that is close to the date of the flotation. We seem to be agreed about that, so we are making some progress.
The reason why it is not practicable to send the full copy round to the large number of people whom we would wish to subscribe to this offer is that it is not practicable to send out that number of prospectuses of that length in the time that would be available. The only way in which it can be done is by shortening the notice, but referring to a prospectus which is absolutely full and which entirely accords with all the provisions that refer to any other company. It will be entirely full and complete and there is no question of a shortened or a defective prospectus or anything of that sort. So far as the noble Lord, Lord Weinstock, is concerned, we are adding to the particular circumstances of this case an adaptation of the law which gives entirely adequate protection to those who will subscribe by this method. I hope that now the amendment will commend itself to your Lordships.
Lord Weinstock: Surely the noble and learned Lord the Lord Advocate would agree that what he is suggesting is an abrogation of the requirements of the law for protecting investors in the interests of administrative convenience. I should have thought that that was the last thing the Committee ought to agree to.
10.16 p.m.
On Question, Whether the said amendment (Amendment No. 143A) shall be agreed to?
Their Lordships divided: Contents, 47; Not-Contents, 28.

DIVISION NO. 4

Avon, E.

Lyell, L.

Bellwin, L.

Mackay of Clashfern, L.

Belstead, L.

Macleod of Borve, B.

Brookeborough, V.

Mansfield, E.

Brougham and Vaux, L.

Marley, L.

Cockfield, L.

Marshall of Leeds, L.

Colwyn, L.

Maude of Stratford-upon-Avon, L.

Cork and Orrery, E.

Craigmyle, L.

Morris, L.

Crawshaw, L.

Mottistone, L.

Denham, L. [Teller.]

Murton of Lindisfarne, L.

Elliot of Harwood, B.

O'Neill, L.

Elton, L.

Plummer of St. Marylebone, L.

Enniskillen, E.

Rochdale, V.

Glenarthur, L.

Sandford, L.

Gray of Contin, L.

Skelmersdale, L.

Grimston of Westbury, L.

Stodart of Leaston, L.

Hives, L.

Suffield, L.

Hornsby-Smith, B.

Swinton, E. [Teller.]

Ingrow, L.

Trumpington, B.

Killearn, L.

Vaux of Harrowden, L.

Kilmany, L.

Vickers, B.

Long, V.

Whitelaw, V.

Lucas of Chilworth, L.

Young, B.

NOT-CONTENTS

Airedale, L.

Lloyd of Kilgerran, L. [Teller.]

Attlee, E.

Lockwood, B.

Bishopston, L.

McIntosh of Haringey, L.

Bruce of Donington, L.

Mar, C.

Carmichael of Kelvingrove, L.

Nicol, B.

David, B.

Pitt of Hamstead, L.

Dean of Beswick, L.

Ponsonby of Shulbrede, L. [Teller.]

Elphinstone, L.

Ennals, L.

Raglan, L.

Fitt, L.

Rea, L.

Greenway, L.

Stedman, B.

Grey, E.

Stoddart of Swindon, L.

Houghton of Sowerby, L.

Tordoff, L.

Kilmarnock, L.

Weinstock, L.

Lawrence, L.

Resolved in the affirmative, and amendment agreed to accordingly.
Clause 68 agreed to.
Clause 69 [Tax provisions]:
10.24 p.m.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 143AB:
Page 60, line 3, leave out ("21 of the Finance Act 1972") and insert ("29 of the Value Added Tax Act 1983")
The noble and learned Lord said: This is a technical amendment consequential upon the enactment of the Value Added Tax Act 1983. That Act superseded provisions of the Finance Act 1972 on VAT group

737
registration, to which Clause 69(5) makes reference. This amendment seeks only to update the clause to take account of the new Act. I beg to move.
On Question, amendment agreed to.
Clause 69, as amended, agreed to.
Clause 70 [Interpretation of Part V]:
[Amendment No. 14SB not moved.]
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 143BA:
Page 60, line 15, leave out ("of the successor") and insert ("in relation to a").
The noble and learned Lord said: This is a technical amendment. Securities are currently defined in Clause 70(1) in relation only to the successor company. This definition needs to be widened to define what is meant by securities in any subsidiaries of the successor company which are referred to in Clauses 61(1) and 63(6). The amendment achieves this aim by applying the definition of securities in Clause 70(1) to any company referred to in Part V of the Bill rather than just the successor company. I beg to move.
On Question, amendment agreed to.
[Amendment No. 143C not moved.]
Clause 70, as amended, agreed to.
Lord Glanusk Lord Glanusk moved Amendment No. 144:
Before Clause 71, insert the following new clause:
("Conditions of licences under the 1949 Act.
.In section 1 of the 1949 Act (licensing of wireless telegraphy) after subsection (4) there shall be inserted the following subsection—
"(4A) Notwithstanding provisions of subsections (3) and (4) above a wireless telegraphy licence granted to a person authorised by a licence under section 7 of the Telecommunications Act 1984 to run a telecommunication system (within the meaning of Part II of the said Act of 1984) and required in connection with the running of that system may include provisions for its continuation in force for such period as may be specified in or determined by or under the licence, unless revoked in accordance with any term in that behalf contained in the licence.".")
The noble Lord said: I beg to move Amendment No. 144 in the names of my noble friend Lord Trenchard, the noble Lord, Lord Spens, and myself. This amendment is being tabled at the request of Mercury Communications Limited and it will in fact be required by other public telecommunications operators when the first duopoly expires; it will also be required by cable system operators when they require to use radio links, be they VHF, UHF, microwave, laser or any other method. On these occasions when they require to use these links they will need another licence under the Wireless Telegraphy Act 1949.
The difficulty arises in that this latter licence under the 1949 Act can be revoked at any time by the Secretary of State without any rules or guidance as to when or why. If this were to happen it would mean the complete closedown of the telecommunications system, although the operator in fact holds a valid telecommunications licence. So Amendment No. 144 is designed to make it possible for these two essential licences to run concurrently, and they can only be revoked as a pair and not individually in accordance with the rules laid down under the Telecommunications Bill.
We have had sympathetic noises from the Front Bench. I am sure they will not like our drafting of this amendment, but we would very much like to hear how sympathetic they are going to be to us.
Lord Glenarthur: Having listened to my noble friend's explanation of the intention of his amendment, I can certainly say that the Government sympathise with the intentions behind it and agree that there is a need for some security of tenure when wireless telegraphy licences are issued to holders of public telecommunication licences, such as Mercury, the cellular radio consortia, and of course British Telecom. The Government would like to table an amendment on Report which I fear will be rather longer than the amendment of my noble friend but which I think will more certainly achieve his desired aims. I hope that with that undertaking, he will see fit to withdraw his amendment.
Lord Glanusk: I am most grateful to my noble friend on the Front Bench. I shall wait to see the final version of the amendment and meanwhile withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 145 not moved.]
Clause 71 agreed to.
Schedule 3 agreed to.
Clauses 72 and 73 agreed to.
Clause 74 [Regulations with respect to resistance to interference]:
Lord Lyell Lord Lyell moved Amendments Nos. 145A, 145B and 145C:
Page 65, leave out lines 10 to 15.
Page 65, line 18, leave out ("or requirements with respect to the marking of any apparatus")
Page 65, line 31, leave out ("or with any requirements as to marking").
The noble Lord said: With the permission of the Committee, I should like to speak to Amendments Nos. 145A, 145Band 145C together.
All these amendments make minor alterations to Clause 74, and this itself adds a new Section 12A to the Wireless Telegraphy Act 1949.
I should also like to include in my remarks Amendments Nos. 154 and 155.
Amendment No. 154: In the Title, line 15, leave out ("and")
Amendment No. 155: In the Title, line 16, at end insert (", and otherwise to make provision with respect to wireless telegraphy apparatus and certain related apparatus;")
These amendments lengthen the Long Title of the Bill to reflect the inclusion of the new clauses about wireless telegraphy and associated apparatus.
Under the terms of the new clause, we find such things as marking orders, which require apparatus to be marked as complying with the requirements of statutory regulations made under the Wireless Telegraphy Acts. Subsection (4) of new Section 12A in the 1949 Act which is inserted by virtue of Clause 74 is redundant and can be omitted, as indeed can references to marking requirements which appear later in that clause. This is what Amendments Nos. 145A, 145B and 145C would achieve.
Amendments Nos. 154 and 155 to the Long Title of the Bill are necessary because at present the Long Title refers only to amending the Wireless Telegraphy Acts of 1949 to 1967 and to making:
"further provision for facilitating enforcement of those Acts".
The new clauses which will be inserted by Amendments Nos. 145D, 145E and 145F do neither of these things. They make fresh provision in relation to wireless telegraphy and to related apparatus. It is necessary to amend the Long Title of the Bill to ensure that it will embrace these provisions. That is what Amendments Nos. 154 and 155 do. I beg to move Amendments Nos.145A, 145B and 145C en bloc.
On Question, amendments agreed to.
Clause 74, as amended, agreed to.
Clauses 75 to 79 agreed to.
10.34 p.m.
Lord Lyell Lord Lyell moved Amendment No. 145D:
After Clause 79. insert the following new clause:
("Approval of wireless telegraphy apparatus, etc.
.—(1) Where any of the following instruments, namely—

(a) any licence granted under section 1 of the 1949 Act (licensing of wireless telegraphy).

(b) any regulations made under that section,

(c) any regulations made undersection 10of thatAct (regulations as to radiation of electro-magnetic energy etc.),

(d) any order made under section 7 of the 1967 Act (restriction on dealings in and custody of certain apparatus), or

(e) any authority given for the purposes of that section.

contains any provision which is framed by reference to relevant apparatus for the time being approved under this section for the purposes of that instrument, such apparatus may be approved for those purposes by the Secretary of State.
In this subsection "relevant apparatus" means wireless telegraphy apparatus or apparatus designed or adapted for use in connection with wireless telegraphy apparatus.
(2) A person applying for an approval under this section may be required by the Secretary of State to comply with such requirements as the Secretary of State may think appropriate: and those requirements may include a requirement to satisfy some other person with respect to any matter.
(3) An approval under this section may apply either to particular apparatus or to any apparatus of a description specified in the approval, and may so apply either for the purposes of a particular instrument falling within any of paragraphs (a) to (e) of subsection (1) above or for the purposes of instruments falling within any of those paragraphs of a description so specified.
(4) An approval under this section may specify conditions which must be complied with if the approval is to apply, for any purposes specified in the approval, to any apparatus which is so specified or is of a description so specified, and any such condition may impose on the person to whom the approval is given a requirement from time to time to satisfy any person with respect to any matter.
(5) The Secretary of State may at any time vary or withdraw any approval given by him under this section.
(6) A person appointed by the Secretary of State may exercise any function conferred on the Secretary of State by the preceding provisions of this section to such extent and subject to such conditions as may be specified in the appointment.
(7) The Secretary of State may by order provide for the charging of fees in respect of the exercise of any function in pursuance of this section by or on behalf of the Secretary of State: and an appointment under subsection (6) above may authorise the person appointed to retain any fees received by him in pursuance of any such order.
(8) Nothing in subsection (7) above shall preclude a person (not being the Secretary of State or a person acting on his behalf) by
740
whom any matter falls to be determined for the purposes of any requirement imposed in pursuance of subsection (2) or (4) above from charging any fee in respect of the carrying out of any test or other assessment made by him.
(9) Any sums received by the Secretary of State under this section shall be paid into the Consolidated Fund.")
The noble Lord said: I should like to begin with an apology. The amendment that we find on the Marshalled List today is starred as it was put down so late. I hope that your Lordships will see, by comparing the original amendment, Amendment No. 145D, with the revised edition today, that it is just mildly revised. The substitution was needed because subsections (3) and (6) of the new clause as originally put down were not quite right and we found it necessary to redraft them slightly to achieve the desired effect. With the permission of the Committee, it would save time if together with this amendment I spoke to Amendments Nos. 145E, 145Fand 145G.
Amendment No. 145E: After Clause 79, insert the following new clause:
("Information etc. to be marked on or to accompany apparatus.
(1) Where it appears to the Secretary of State expedient that any description of relevant apparatus should be marked with or accompanied by any information or instruction relating to the apparatus or its installation or use, the Secretary of State may by order—

(a) impose requirements for securing that relevant apparatus of that description is so marked or accompanied, and

(b) regulate or prohibit the supply of any such apparatus with respect to which the requirements are not complied with;

and the requirements may extend to the form and manner in which the information or instruction is given.
(2) An order under this section may, in the case of apparatus supplied in circumstances where the information or instruction required by the order would not be conveyed until after delivery, require the whole or part thereof to be also displayed near the apparatus.
(3) Where an order under this section is in force with respect to relevant apparatus of any description, any person who, in the course of any trade or business, supplies or offers to supply relevant apparatus of that description in contravention of the order shall, subject to section (Offences due to default of third person) below, be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(4) For the purposes of this section a person exposing relevant apparatus for supply or having such apparatus in his possession shall be deemed to offer to supply it.
(5) In this section and section (Information etc. to be given in advertisements) below—

(a) "relevant apparatus" means wireless telegraphy apparatus or apparatus designed or adapted for use in connection with wireless telegraphy apparatus; and

(b) "supply" shall be construed in accordance with section 9 of the Consumer Safety Act 1978.")

Amendment So. 145F: After Clause 79, insert the following new clause:
(" Information etc. to he given in advertisements.
.—(1) Where it appears to the Secretary of State expedient that any description of advertisements of relevant apparatus should contain or refer to any information relating to the apparatus or its installation or use, the Secretary of State may by order impose requirements as to the inclusion of the information, or an indication of the means by which it may be obtained, in advertisements of that description.
(2) An order under this section may specify the form and manner in which any information or indication required by the order is to be included in advertisements of any description.
(3) Where an advertisement of any relevant apparatus which is to be supplied in the course of any trade or business fails to comply with any requirement imposed under this section, any person who publishes the advertisement shall, subject to section (Offences due to default of third person) below, be guilty of an

741
offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(4) Section (Information etc. to he marked on or to accompany apparatus) (5) above applies for the purposes of this section; and in this section "advertisement" includes a catalogue, a circular and a price list.")
Amendment No. 145G: After Clause 79, insert the following new clause:
("Offences due to default of third person.
.—(1) Where the commission by any person of an offence under section (Information etc. to he marked on or to accompany apparatus) or (Information etc. to he given in advertisements) above is due to the act or default of some other person, that other person shall be guilty of the offence; and a person may be charged with and convicted of the offence by virtue of this subsection whether or not proceedings are taken against the first-mentioned person.
(2) In any proceedings for an offence under either of those sections it shall, subject to subsection (3) below, be a defence for the person charged to prove that he took all reasonable steps and exercised all due diligence to avoid committing the offence.
(3) Where the defence provided by subsection (2) above involves an allegation that the commission of the offence was due to the act or default of another person, the person charged shall not, without leave of the court, be entitled to rely on that defence unless, within a period ending seven clear days before the hearing, he has served on the prosecutor a notice in writing giving such information identifying or assisting in the identification of that other person as was then in his possession.
(4) In any proceedings for an offence under section (Information etc. to he given in advertisements) above it shall be a defence for the person charged to prove that he is a person whose business it is to publish or arrange for the publication of advertisements and that he received the advertisement for publication in the ordinary course of business and did not know and had no reason to suspect that its publication would amount to an offence under that section.")
The type approval of wireless telegraphy apparatus is at present carried out by the Secretary of State for Trade and Industry on a non-statutory basis. Samples of equipment are tested by the department's laboratory at Kenley against the relevant performance specification produced by the department in consultation with manufacturers. Such type approval by radio regulatory authorities is a well-established practice not only in this country, but also in Europe, and generally it works satisfactorily. However, the lack of any mention in the Wireless Telegraphy Acts of the approval system has become increasingly unsatisfactory because of the uncertainty that it creates about the powers of the Secretary of State to approve apparatus or to require the use of approved apparatus. The Government have therefore decided to make statutory provision on this subject. This will have the advantage of bringing the arrangements for approving wireless telegraphy apparatus more into line with those for telecommunications apparatus.
Amendment No. 145D is designed to achieve those aims. It also makes provision for approval to be given on the basis of independent tests (that is in subsection (2)), or indeed to delegate the whole approvals procedure (that is in subsection (6), at the bottom of page 17 of the Marshalled List) should it prove desirable to do so in the future. An example would be in order to bring together in a single place the approvals procedures for telecommunications apparatus and wireless telegraphy apparatus.
One important benefit of type approval is to remove from the user the burden of having to satisfy himself that the equipment that he buys and uses complies
742
with the specifications laid down for that particular use and that in using it he is therefore not committing an offence. In order to realise that benefit we think that it is desirable that the equipment should be marked or labelled.
The purpose of Amendment No. 145E is precisely to enable the Secretary of State to require equipment to be marked and in some cases to be accompanied by instructions concerning its installation or use; for example, whether it is necessary to obtain a wireless telegraphy licence or, in the case of approved cordless telephones, stating that the equipment is exempt from that requirement. This provision will be particularly helpful when the Government exempt from licensing, as they hope to do before long, a wide range of low-power radio devices. Apparatus will then be required to be marked to show whether or not it qualifies for use without a licence.
Amendment No. 145F is concerned with advertising. Advertising can also mislead by failing to show clearly and in an unambiguous way whether or not the apparatus advertised is approved for use in the United Kingdom and under what conditions. Amendment No. 145F is designed to enable the Secretary of State to remedy the situation by requiring in an order the inclusion of specific information in advertisements covered by that order. Contravention of any marking or advertising order will be an offence, liable on summary conviction to a fine not exceeding level 5, which is currently £1,000.
Finally, the new clause in Amendment No. 145G, which is concerned with offences due to the default of a third person, makes provisions similar to those in Clauses 5 and 29 relating to offences committed by a person which are due to the acts or defaults of a third person. These are designed to ensure that it is open to a person who contravenes a marking or advertising order to show that he had in fact acted in good faith and, where appropriate, had taken such steps as he could to avoid committing an offence.
I think that I have covered, I hope to the satisfaction of your Lordships' Committee, the reasons why we seek to move these amendments, and accordingly I beg to move.
On Question, amendment agreed to.
Lord Lyell Lord Lyell moved Amendments Nos. 145E, 145F and 145G:
[Printed above.]
The noble Lord said: Perhaps it will be for the convenience of the Committee if I move Amendments Nos. 145E, 145F and 145G en bloc. I beg to move.
Lord Morris: I wish to refer to Amendment No. 145E. In moving amendments my noble friend referred to the load power of certain wireless telegraphy apparatus. I should like to ask a simple question. Is the measure of power the intrinsic power of the transmission or the range in which the power of the transmission can be received?
Lord Mottistone: Perhaps I might intervene. If you talk about power, that is the power in watts at transmission from the aerial. The range depends entirely on the conditions under which it operates and

743
the circumstances in which it operates. That varies immensely. When the Bill refers to power, it means the power transmitted by the aerial.
Lord Morris: My noble friend has pointed out precisely why I asked the question in the first place.
Lord Lyell: The explanation of my noble friend Lord Mottistone is far more technical than I would be able to give. I am advised that power refers to the power of the transmission, not necessarily to the range or the radius, as explained by my noble friend. In a house or elsewhere, perhaps in the open, the range of the hand-held telephone might be greater. It is the power of the transmission.
On Question, amendments agreed to.
Clauses 80 to 82 agreed to.
Clause 83 [Power of Secretary of State to promote interests of disabled persons]:
[Amendment No. 146 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 147:
Page 74, line 14, at end insert—
("( ) The results of all research pertaining to subsection (2) above shall be laid before Parliament by the Secretary of State annually in a report from the Director.
( ) In making any report under this section available to the Secretary of State the Director shall have regard to the need for excluding, so far that it is practicable, the matters specified in section 48(2)(a) and (b) above.")
The noble Lord said: It is sad that the noble Baroness, Lady Macleod, the noble Baroness, Lady Lane-Fox, and the noble Lord, Lord Spens, are not here to move Amendment No. 146—
Lord Mottistone: If I might intervene, the reason that the amendment is not moved is that it is already covered by other amendments which the Government accepted at an earlier stage. It was one of a block overtaken by the Government's acceptance of about seven or eight amendments.
Lord McIntosh of Haringey: I am grateful to the noble Lord for that reminder. I do not think that my pen was moving fast enough at that stage. I can curtail my remarks on Amendment No. 147 and simply ask whether the second subsection that is proposed in the amendment would also be acceptable to the Government. It simply seeks to provide that no such report should infringe the interests either of individuals or of corporate bodies as provided in Clause 48 of the Bill.
Lord Glenarthur: No. I am afraid that the amendment is not acceptable in the way that the noble Lord describes. The aim of the amendment is to ensure that Parliament is informed about research and development of telecommunications apparatus especially constructed for the disabled. I agree that this is a legitimate aim, but I think that it is already achieved by amendments to Clauses 52 and 53 which the noble Lord was told about just now. In particular. Amendment No. 123AA obliges the director to include in his report a general view of development in telecommunications in respect of the director's
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functions particularly affecting those who are disabled and of pensionable age. One of the director's functions under Clause 47 is to keep under review activities in telecommunications and this includes research and development. Therefore, the director's report must include a mention of research and development and will include that financed by the Secretary of State under Clause 83.
In addition, your Lordships have already agreed to the establishment of a separate advice body for the disabled and no doubt it will wish to look into this area and will include it in its annual report. The report will be included in the director's annual report to the Secretary of State which will be laid before Parliament and published as the Secretary of State thinks appropriate. I hope that with that explanation the noble Lord will not press the amendment.
Lord McIntosh of Haringey: I am grateful to the Minister for that explanation. Subject to any further thoughts that I may have when I read his answer and the answer on the previous amendments, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 83 agreed to.
Clause 84 [Power of local authorities to contribute towards provision of facilities]:
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 148:
Page 74, line 29, at end insert ("and such payments shall qualify for a specific Government grant amounting to 50 per cent, of the total payment").
The noble Lord said: I beg to move Amendment No. 148 standing in my name and the names of my noble friends. This amendment refers to Clause 84 which gives a local authority the power to make a contribution to a public telecommunications operator towards the cost of a public telephone call box, if they feel that it is desirable. We are a little worried about this clause because it seems to us that it could very well be that, under certain circumstances, the blame for the removal of a public telephone kiosk could be transferred from the telecommunications operator to the local authority, if the local authority decline to make a grant. We think that that would be unjust, but we will not particularly quarrel with it.
Nevertheless, a public telephone call box is a social service, particularly in rural areas. We believe that, since it is a social service and that a public telecommunications system is something of a national asset, the Government should play some part in assisting the retention of public telephone boxes, particularly in rural areas. Therefore, we believe that if a local authority should feel that it is desirable that a public telephone call box should be retained in their area they should be able to claim a 50 per cent, grant from the Government. It would not be very costly and I feel quite sure that the Government will have every sympathy with this amendment, which I hope that they will accept.
Lord Glenarthur: I have certainly listened to what the noble Lord has said in support of his amendment, but I think that his proposals may be based on a

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misunderstanding of the extent of local authorities' contributions towards supporting public call boxes and, indeed, what these contributions are for. Let me first say that there is nothing new about the power in Clause 84 which enables local authorities to contribute towards either existing or additional call boxes in their area. This is something which I brought out when dealing with an earlier amendment yesterday. A similar power was included in the British Telecommunications Act 1981, which in turn followed a similar provision in the Post Office Act 1969.
Contributions by local authorities under this power are entirely voluntary. There is absolutely no compulsion on the local authorities to do so, but if they wish to make a contribution the Government do not see why they should be prevented. However, in the past very few councils have in fact used this power. Contributions in the last couple of years have been very small; for example, in 1981–82 only seven call boxes—out of a nationwide network of nearly 77,000—were subsidised by local authorities to bring up their takings to the guideline level of £185. In 1982–83, nine call boxes had been so subsidised by local authorities to a total of less than £500.
The Government do not expect these sums to increase significantly in the future. We are not looking to local authorities to take over responsibility of ensuring public call boxes in their area. The primary responsibility for ensuring a national network of public call boxes lies with the Secretary of State and the director in accordance with their paramount duty in Clause 3(1)(a) to ensure that there are provided throughout the United Kingdom, in so far as it is practicable to do so, public call box services to satisfy all reasonable demands for them. In fulfilment of this duty the responsibility for providing these call boxes will lie primarily with BT through obligations in its licence.
We have already discussed the security of the public call box network at some considerable length under Amendment No. 48, so your Lordships will know that BT will not be able to withdraw loss-making kiosks except in accordance with procedures agreed with the director. These procedures, which in fact are very similar to the present arrangements, will specify a minimum figure for the annual takings of a call box below which it may be withdrawn.
I hope that in our earlier discussion—I think it was yesterday—I satisfied the noble Lord and the Committee that call boxes will continue to be provided throughout the United Kingdom, including in rural areas. I also explained the proposal for access charges to ensure that BT is not put at an unfair competitive disadvantage on account of its obligation to provide call boxes.
The effect of the duty on the Secretary of State and the obligations on BT is that we are not looking to local authorities to provide the large sums of money which the noble Lord suggested in moving his amendment. Indeed, I doubt whether there will be much need for local authorities to contribute, but I do not see why they should not do so if they wish to, and Clause 84 enables them to do so. With that
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explanation, I hope that the noble Lord will withdraw his amendment.
Lord Stoddart of Swindon: Yes, in the light of that very full explanation, and bearing in mind that so small a number of local authorities have contributed in this way—and that being the case, the administrative cost of paying the 50 per cent. would probably exceed the 50 per cent. itself—I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
10.52 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 149:
Page 74, line 29, at end insert ("and such payments shall not cause any penalty under the General Rate Act 1967 and target expenditure limits")
The noble Lord said: I think I can move this amendment even faster, because all I really require is an assurance that, if a local authority contributes, that sum would not tip it over the limit which would cause it to suffer a penalty from the Government. I beg to move.
Lord Glenarthur: I think I can be equally brief. I am afraid that I cannot accept this amendment. In amplification of what the noble Lord said, I presume that by this amendment he intends to ensure that any expenditure by a local authority under Clause 84 does not count towards its expenditure target and, therefore, could not cause grant penalties. Amendment No. 149 refers to the General Rate Act 1967, but I think that this must be a mistake, as expenditure targets are set under the Local Government Finance Act 1982.
However, quite apart from this apparent error, I cannot accept the principle of this amendment. As I have explained, only a very tiny amount of expenditure is expected under Clause 84, and I do not think that the case for disregarding it when assessing local authorities' performance against expenditure targets has yet been made out. However, if local authorities wish to make representations to my right honourable friend the Secretary of State for the Environment that this or any item of expenditure should not score against their targets, then there is already statutory provision for this, and I know that my right honourable friend will consider most carefully the points they make. Again, I hope that the noble Lord will withdraw his amendment.
Lord Stoddart of Swindon: Yes, in the light of what the noble Lord has said, and bearing in mind that I want to think about this amendment again, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 84 shall stand part of the Bill?
Lord Morris: In view of what was said on the previous amendment, I would ask my noble friend whether, at a later stage, the Government would seriously consider removing this clause from the Bill.

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In view of the fact that the opportunity is placed in previous similar enactments, it seems rather unnecessary. The powers that have been taken up by local authorities have been minimal in the extreme. Although there is local government involvement in the provision of a telecommunications service, it brings it back somewhat into the political arena. I would suggest that the necessity for this particular clause should be considered with very great care.
Lord Glenarthur: I am sure that if it was possible to cut out a clause from this Bill under any circumstances the Government would be only too pleased to do so. But the fact remains that the description of the reason for retaining Clause 84 which I gave to the noble Lord opposite just now applies, and the Government think it is only right that, if a local authority should want to contribute towards the maintenance of a telephone box in any particular area, it should be able to do so. Therefore, I am afraid that I cannot agree with what my noble friend says.
Clause 84 agreed to.
Clause 85 [Use of certain conduits for telecommunication purposes]:
Lord Glenarthur Lord Glenarthur moved Amendment No.149A:
Page 75, line 22, at end insert—
("(2A) Where the doing by an authority with control of a public sewer of anything authorised by this section would, apart from this subsection, constitute a contravention of any obligation imposed (whether by virtue of any conveyance or agreement or otherwise) on the authority, the doing of that thing shall not constitute such a contravention to the extent that it consists in, or in authorising, the carrying out of works or inspections, or keeping of apparatus, wholly inside a public sewer.
(2B) Subject to subsections (2) and (2A) above, subsection (1) above is without prejudice to the rights of any person with an interest in land on, under or over which a relevant conduit is situated.")
The noble Lord said: These amendments are in response to concerns expressed by the water authorities that, as drafted, subsection (7) of Clause 85 might inhibit them in making use of the powers of the clause in relation to public sewers. This is not our intention.
As drafted, subsection (7) does not cater adequately for the variety of arrangements under which the various kinds of ducts referred to in Clause 85 may be installed. It was included in the context of electricity ducts and provides that the extension of the relevant authorities' statutory powers is without prejudice to the rights of any person with an interest in land on, under or above which the relevant conduit is situated. This is necessary because electricity ducts are installed under the terms of wayleave agreements and ownership is not vested in the electricity boards.
As far as public sewers are concerned, the position is rather different. The water authorities operate under statutes which provide for the vesting in them of public sewers. It was originally thought that they owned an unrestricted fee simple in all public sewers and that third party rights could not be affected by the carrying out of works wholly inside them. It all sounds rather bizarre, but I will see this through. It now appears, however, that there is some doubt whether this is always the case. I will pass to Clause 85(7), which was
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primarily intended to protect third party rights in relation to electricity conduits, and which may inadvertently inhibit the exercise of these new powers by water authorities. Since the intention is that water authorities should not need to obtain the consent of third parties for works done wholly inside a public sewer, it is very desirable to make this clear. The amendments therefore repeal subsection (7) of Clause 85 and replace it with a provision which, in relation to public sewers, provides that the authorisation of any works in such sewers will not constitute a contravention of any obligation imposed on a water authority by virtue of any conveyance or agreement.
We are concerned here with works carried out within these sewers. We think it is right to meet the concern of the water authorities in this regard. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No.149B:
Page 75, line 34, leve out ("giving a supply of water") and insert ("conveying water from one place to another").
The noble Lord said: I have already had an opportunity to explain the general purpose of Clause 85, which is to enable us to maximise the potential of our physical infrastructure. Amendment No. 149B is a minor improvement in the drafting of the clause which should help to promote that objective. A number of water authorities are seriously considering the installation of cables in conduits. While there are no definite plans as yet, the Government believe it would be wrong to inhibit development in this area because of a technical defect in the legislation. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No.149C:
Page 77, line 17, leave out subsection (7).
On Question, amendment agreed to.
Clause 85, as amended, agreed to.
Clauses 86 to 91 agreed to.
[Amendment No. 150 not moved]
Clause 92 agreed to.
Clause 93 agreed to.
Clause 94 [General interpretation]:
Lord Glenarthur Lord Glenarthur moved Amendment No.150A:
Page 82, line 30, at end insert—
(" "telecommunications operator" has the meaning given by section 16(1) above;")
The noble Lord said: This amendment has already been spoken to on an earlier amendment. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No.150B:
[Printed earlier: col. 491.]
The noble Lord said: This also was spoken to with Amendment No. 70A. I beg to move.
On Question, amendment agreed to.
Clause 94, as amended, agreed to.
Clause 95 agreed to.
Clause 96 [Amendments, transitional provisions and repeals]:
11 p.m.
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 150C, 150Dand 150E:
Page 84. line 12. after ("order") insert ("(a)")
Page 84, line 15, at end insert (" or
(b) repeal any enactment in a local telegraph Act which appears to him to be spent or no longer of practical utility")
Page 84, line 17, leave out from ("1978") to end of line 20 and insert ("and in subsection (3) above "local telegraph Act" means a local Act which incorporated a telegraph company or the Bill for which was promoted by such a company")
The noble Lord said: These amendments are designed to extend slightly a power already in Clause 96 which enables the Secretary of State to repeal, or amend, by order provisions in local Acts which are made unnecessary by, or are inconsistent with, the Bill. The extension is designed to bring within the scope of the order-making power, provisions in local telegraph companies Acts which are either spent or are no longer of practical utility.
The first amendment is a paving one. The second gives the necessary enabling power which can only be exercised by order subject to the negative resolution procedure. The third amendment provides a definition of "local telegraph Act" for the purpose of the subsection, and also corrects a missed consequential resulting from the bringing together in Clause 92 of all the references to the negative resolution procedure. I beg to move.
On Question, amendments agreed to.
Clause 96, as amended, agreed to.
Schedule 4 [Minor and consequential amendments]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 150F:
Page 155, line 33, after ("Schedule 9") insert ("before the appointed day")
The noble Lord said: This amendment corrects an omission of words in the current drafting, and is as simple as that. I beg to move.
Lord Bruce of Donington: Under what circumstances was it discovered that "before the appointed day" ought to be inserted here? It seems that this should have been thought of beforehand. The date is obviously important.
Lord Glenarthur: Sub-paragraph (2) of paragraph 57 of Schedule 4 is a transitional provision. It is intended to provide that when a road is diverted or closed under the Drainage (Northern Ireland) Order 1973 before the appointed day, the savings for the rights of British Telecom under the existing legislation will remain in effect after the appointed day.
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Unfortunately the words "before the appointed day" are missing from the sub-paragraph as drafted. This amendment inserts them.
On Question, amendment agreed to.
Schedule 4, as amended, agreed to.
Schedule 5 [General transitional provisions and savings]:
Lord Glenarthur Lord Glenarthur moved Amendment No.150G:
Page 179, line 18, leave out sub-paragraph (6).
The noble Lord said: This amendment is designed simply to remove a transitional provision which we have concluded is unnecessary and which, if left in place, could lead to misunderstandings about the Government's intentions. Paragraph 1(6) of Schedule 5 provides that neither the requirement to consult with the director imposed by Section 7(l)(a) of the Bill when the Secretary of State grants a licence, nor the requirements as to public notification when it is proposed to include Clause 8 type conditions in licences and when the application of the telecommunications code is being considered, need apply for a transitional period of up to two years from the appointed day. This provision was originally included in the Bill to cover the transition in relation to the very many licences already granted by BT and which may have to be re-issued when the Bill becomes law. In this connection our particular concern was to ensure that a requirement to consult the director in every case did not become a major administrative problem.
However, we are aware that paragraph 1(6) is open to a wider interpretation since it would mean that the public notification and consultation procedures need not be followed in relation to any licence granted by the Secretary of State during a period of up to two years from the appointed day. It was never the Government's intention that licences which involve Clause 8 type conditions and licences which apply the powers of the telecommunications code should be issued without that due process. We have concluded, therefore, that the simplest course is to delete paragraph 1(6) altogether so that there can be no misunderstanding about our intention.
On Question, amendment agreed to.
11.6 p.m.
Lord Bruce of Donington Lord Bruce of Donington moved Amendment No. 151:
Page 185, line 47, after ("pensions") insert ("(which should not discriminate as between pre- and post-privatisation members of the staff of British Telecommunications and the successor company)").
The noble Lord said: Paragraph 37 is one of those inevitable paragraphs in the transitional aspects of Bills of this kind where things are declared, "for the avoidance of doubt". Your Lordships will see at line 38 on page 185 that the paragraph commences:
"It is hereby declared for the avoidance of doubt".
The amendment seeks to make it clear that on vesting:
"the rights and liabilities of British Telecommunications under any agreement or arrangement for the payment of pensions which should not discriminate as between pre- and post-privatisation

751
members of the staff of British Telecommunications and the successor company".
If one reads Hansard one will find that the undertakings have already been given by the noble and learned Lord Advocate in the course of the debate earlier today. There does not appear to be any reason, therefore, why this should not be inserted in this declaratory paragraph. I beg to move.
Lord Glenarthur: This amendment seeks to bind the successor company's pensions policy towards recruits taken on after privatisation. BT's pension policy is not controlled in this way at present and to attempt to bind the successor company's future pensions policy could be wholly inappropriate to its private sector status. The amendment is in any case defective in many respects since paragraph 37 of Schedule 5 deals with pension obligations which exist at the time of transfer and cannot include future pension rights of new recruits after transfer.
In so far as the amendment might relate to current employees, may I restate the position which has been made amply clear in another place. The pension rights of current employees are not altered by the Bill or privatisation in any way. They are safeguarded under the BT Pension Fund Trust Deed, the rules of which require that any changes to the current entitlement of current employees on their retirement would have to be unanimously agreed by the trustees of the pension fund. Four out of the nine trustees represent BT's workforce and all the trustees are required by law to act in the best interests of the trust's beneficiaries. So it is most unlikely that there would be a change to the rules which would reduce the pension entitlement of current employees. Certainly such a change could not be forced on the employees by the successor company against their will.
I think, then, that the amendment does not enhance the rights of current employees after privatisation in the way that the noble Lord seeks that it should. It is objectionable in attempting to bind the succesor company's policy towards pensions for staff taken on after the privatisation, and is defective. I hope that the noble Lord will not press it to a Division.
Lord Bruce of Donington: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 152 not moved.]
[Amendment No. 153 not moved.]
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 153XA and 153YA:
Page 187, line 32, at end insert ("shall, as respects its duties under this paragraph, keep proper accounts and proper records in relation thereto and")
Page 187, line 35, leave out ("its duties under this paragraph") and insert ("those duties")
The noble Lord said: This amendment makes explicit the requirement on the shell corporation to keep proper accounts in respect of the discharging of the excepted liabilities under paragraph 39 of Schedule 5. The expected liabilities are payments due to the BT and Post Office pension funds in respect of the
752
pre-1969 pension fund deficiency. These liabilities are to be retained by the corporation after the rest of the business has been transferred to the successor company and discharged in the manner set out in paragraph 39.
It has already been provided in subsection (6) of the paragraph that the corporation will prepare and submit a report to the Secretary of State at the end its financial year and that this report will be laid before Parliament. This amendment merely makes explicit, where it was hitherto assumed, that the coporation will also keep proper accounts and records. In speaking to and moving Amendment No. 153XA, I speak to and move also Amendment No. 153YA. I hope that the Committee will accept these amendments.
Lord Bruce of Donington: The noble Lord has repeated the words used by an earlier spokesman on the Government side that the excepted liabilities which amount to £l,250-million as shown on the balance sheet of British Telecom as at 31st March 1983 will be excepted liabilities and will not therefore become the liability of the successor company. They still, however, remain a liability. The noble Lord has said that this liability will be discharged in the manner as determined by Schedule 5. It is very difficult on reading Schedule 5 as a whole to find exactly how this liability is going to be discharged. Will the noble Lord short circuit the matter and say who is going to pay the money?
On Question, amendments agreed to.
Schedule 5, as amended, agreed to.
Schedule 6 agreed to.
Schedule 7 [Repeals]:
Lord Mottistone Lord Mottistone moved Amendment No. 153ZA:
Page 196, leave out lines 53 to 55.
The noble Lord said: The two lines which I seek to remove repeal certain provisions of the Water Act 1945. The provisions confer powers on the statutory water undertakers relating to the establishment of telegraphic and telephonic and other electrical communication between their offices and any part of their works and between different parts of their works. The powers are of considerable operational significance, particularly with the increased use of telemetry in the provision of water services. The effect of repealing these powers will be to deprive water undertakers of powers which many of them have enjoyed and exercised for years, going back in some cases long before they were codified in the Third Schedule to the Water Act 1945.
In place of these powers, they will have to apply for licences. There are difficulties about the licences—and I will not spell them out because of the late hour—about which the water industry has been in touch with the Department of Trade and Industry and understand that there will be certain arrangements for them to facilitate the obtaining of licences. The amendment therefore is proposed either in the hope that my noble friend will agree to it and not to repeal those sections of the Water Act or to tell us in a little detail whether I am right in thinking that there are

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special arrangements being made for the water industry. I beg to move.
Lord Glenarthur: Without going into the detail of the amendment which my noble friend proposes, I can confirm that officials from the Department of Trade and Industry have been in touch with the Department of the Environment about the arrangements for putting into effect the assurances given to the chief executives of the regional water authorities in the circular letter. The Department of Trade and Industry have just written to the water authorities to begin the process of negotiating the licences that will need to be in place when the Bill becomes law. I hope that that reassures my noble friend and that he will be able to withdraw his amendment.
Lord Mottistone: Does my noble friend mean that there are going to be special arrangements that so far as possible meet the needs of the water industry?
Lord Glenarthur: I am not sure whether my noble friend is aware of the contents of the letter, but under Section 5 of Schedule 3 to the Water Act 1945 the water authorities were given power to install telegraphic systems for their own internal use. Schedule 7 to the Bill proposes the repeal of this power, and the amendment he has proposed seeks to delete that repeal. A circular letter from the Department of the Environment on 13th January 1983 informed chief executives of the regional water authorities of the Government's decision to seek to repeal this power, and the reasons for that decision. The main reason was that, given the rationalisation being effected by the Telecommunications Bill, it made little real sense having one-off provisions standing outside it. The circular letter, however, explained that it was the Government's intention that the water authorities should be enabled to continue to install and run telecommunications systems which they have had power to install under the Water Act 1945. This will be done by authorising the water authorities to operate the telecommunications code. I should like to confirm that this is the Government's intention.
Lord Mottistone: I am deeply grateful to my noble friend for confirming that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lyell Lord Lyell moved Amendments Nos. 153A and 153B:
[Primed earlier: col. 609.]
The noble Lord said: These amendments are consequential to an amendment which I moved yesterday. I beg to move.
On Question, amendments agreed to.
Lord Lyell Lord Lyell moved Amendment No. 153C:
[Printed earlier: col. 609.]
On Question, amendment agreed to.
Schedule 7, as amended, agreed to.
Clause 97 agreed to.
In the Title:
Lord Lyell Lord Lyell moved Amendments Nos. 154 and 155:
[Printed earlier: col. 738.]
The noble Lord said: I beg to move these two amendments together. I spoke to them when dealing with Amendment No. 145D and the large group of amendments. I beg to move.
On Question, amendments agreed to.
Title, as amended, agreed to.
House resumed: Bill reported with amendments.

Occupiers' Liability Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at eighteen minutes past eleven o'clock.

  CRIME IN PRISONS: REFERRAL TO POLICE
  CRIME IN PRISONS: REFERRAL TO POLICE
  PRISONS: MACHINERY NOISE LEVELS
  PRISONS: MACHINERY NOISE LEVELS
  JOB REFUSALS AND SOCIAL BENEFIT
  JOB REFUSALS AND SOCIAL BENEFIT
  THE HOMELESS: SUPPLEMENTARY BENEFITS
  THE HOMELESS: SUPPLEMENTARY BENEFITS
  MENTAL HANDICAP: REPORT
  MENTAL HANDICAP: REPORT
  INDEX-LINKED PENSIONS
  INDEX-LINKED PENSIONS
  EASTERN BLOC SHIPS IN BRITISH WATERS
  EASTERN BLOC SHIPS IN BRITISH WATERS
  TRANSPORT ACT 1980: TRIAL AREAS
  TRANSPORT ACT 1980: TRIAL AREAS
  LOCAL GOVERNMENT REORGANISATION
  LOCAL GOVERNMENT REORGANISATION