Sitting of 27 April 1987

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  DEATH OF A MEMBER
  Mr. Speaker: I regret to have to inform the House of the death of the right hon. John Ernest Silkin, esquire, Member for Lewisham, Deptford, and I desire, on behalf of the House, to express our sense of the loss that we have sustained and our sympathy with the relatives of the right hon. Member.
Oral Answers to Questions
  WALES

    Labour Statistics
    Mr. Roy Hughesasked the Secretary of State for Wales what are the latest unadjusted figures for unemployment in (a) Newport, (b) Gwent and (c) Wales; and if he will give the equivalent figures for 1979 on the most nearly comparable basis.
    The Secretary of State for Wales (Mr. Nicholas Edwards): On 12 March 1987 the total numbers of unemployed claimants in Newport, Gwent and Wales were 9,524, 26,782 and 166,000 respectively. Unadjusted figures for 1979 are not available on a basis that enables a valid comparison to be made.
    Mr. Hughes: Does the Secretary of State appreciate than many thousands have been out of work for two years or more—approximately 1,400 in Newport, East? Does
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    the right hon. Gentleman recognise that people are being bullied off the register, that schemes are introduced which mean no real jobs, and that there have been 19 changes in the method of compiling the statistics? Is it not time that a stop was put to that fiddling and that the Government introduced suitable economic policies that will produce real jobs for our people?
    Mr. Edwards: The rate of long-term unemployment has been falling more rapidly in Wales than in the rest of the United Kingdom. The hon. Gentleman talks about real jobs. I am sure that he will have welcomed the announcement by Plessey on 15 April that it will expand its operations in Newport to create 137 jobs, the announcement by LRC Products today that it will create 110 jobs in Llanelli, and other announcements this April. Diversified Products announced 125 jobs in Gorseinon, Pulse Computers 30 jobs in Newport, Sebastian International 127 jobs at Bridgend, Graphaprint 100 jobs in Deeside, Action Express Packaging 30 jobs in Kenfig Hill, Brother Industries 191 jobs in Wrexham, Microloom 111 jobs in Swansea, and Anglo Swedish Homes 59 jobs in Port Talbot. If that is fiddling the figures, I am delighted to announce them to the House as real jobs.
    Sir Anthony Meyer: One feels a certain sympathy for the Labour party in its plight, but is there not something embarrassing about its attempt to extract bad capital from the crop of consistently good news that now comes every day from Wales?
    Mr. Edwards: I entirely agree. We have seen the headline total down by 18,200 over the year and we have seen seasonally adjusted unemployment in Wales fall for 10 consecutive months and for 11 out of the past 12 months. That is good news. I am surprised that it causes misery on the Opposition Benches.
    Mr. Geraint Howells: Can the Secretary of State tell the House what are the latest developments in the worst unemployment black spot in Wales, the Teifi valley?
    Mr. Edwards: In the Teifi valley, as in every other travel-to-work area in Wales, unemployment has fallen over the past 12 months. I am confident that the

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    unemployment figures will continue to improve. I say that because of the confidence being expressed by business and industry generally in Wales.
    Mr. Harvey: Does my right hon. Friend agree that the provision of 200 jobs by Brother Industries in Wrexham represents just the latest in a staggering record of achievements in reducing unemployment over the past six months? Will my right hon. Friend encourage further industries to move to that corner of north-east Wales?
    Mr. Edwards: The truth is that that corner of north-east Wales is proving to be one of the most attractive industrial locations in the whole of Britain. It has attracted a considerable amount of overseas investment. The number of jobs there has grown substantially during our term in office. I am particularly struck by the number of projects that are being negotiated currently there and elsewhere in Wales.
    Mr. D. E. Thomas: Does the Secretary of State accept that, of course, we welcome all new job announcements in Wales, whether from multinational companies, from within Wales or from the public sector? Our concern is the context in which those announcements are made. Does the right hon. Gentleman not understand that he has to set the job gains against the 150,000 jobs that have been destroyed since he took office as Secretary of State for Wales? That is what his successor as the candidate in the county of Pembrokeshire will be answerable for to the electorate now that the right hon. Gentleman is to retire.
    Mr. Edwards: I am glad that the hon. Gentleman, unlike the spokesman for the Labour party, has welcomed the good news. Of course we have suffered from high levels of unemployment in Wales. Indeed, Wales has suffered from the decline of the old basic industries for generations. However, I believe that we have now come to the end of that process and have a strengthening and broadening Welsh economy. I should have thought that both sides of the House would welcome the series of consistently good figures that have been emerging for at least a year in Wales.
    Mr. Dickens: Is it not a fact that, historically, there has always been high unemployment in the valleys of Wales? Is it not also a fact that no Government have done more to produce jobs and small businesses in Wales than have this Conservative Government?
    Mr. Edwards: All I can say—it is an absolute fact—is that unemployment has fallen more rapidly and for a longer period in Wales than in any other region of the United Kingdom and that the relative position of Wales in the unemployment tables has improved markedly during the past 12 months. I am confident that that process will continue.

    "Housing for Senior Management"
    Mr. Gareth Wardellasked the Secretary of State for Wales how many representations he has received in response to his Department's circular 30/86 entitled "Housing for Senior Management."
    The Parliamentary Under-Secretary of State for Wales (Mr. Mark Robinson): Forty four local authorities responded to the circular, and 14 other organisations and individuals made representations.
    Mr. Wardell: In view of the fact that the circular is to be inflicted on the people of Wales, but not on the people of England, will the Under-Secretary of State accept that it will undermine the entire planning process? Does he further accept that an overwhelming body of people in Wales are against the circular, and will he arrange to withdraw it as soon as he can?
    Mr. Robinson: The answer to the last question is no. I stress that the circular is concerned only with sites for individually designed single, new houses or low-density groups of houses in attractive locations commanding the privacy and space that executives in business and industry expect, and can often find elsewhere. I find it hard to believe that that could in any way undermine planning policies in Wales.
    Sir Raymond Gower: Will my hon. Friend make it clear that that will not mean the abandonment of sound planning principles, but is merely an additional consideration that planning authorities should have in mind in their aim of creating new jobs in the Principality?
    Mr. Robinson: My hon. Friend is absolutely right.

    Delyn Enterprise Zone
    Mr. Raffanasked the Secretary of State for Wales if he will give the total number of new jobs created in the Delyn enterprise zone since it came into operation on 21 July 1983.
    Mr. Nicholas Edwards: Between 21 July 1983 and 30 March 1987 a total of 1,155 new jobs have been created in the Delyn enterprise zone.
    Mr. Raffan: I thank my right hon. Friend for that most encouraging figure. Does he agree that the continued dramatic success of the Delyn enterprise zone, which has been largely responsible for the 13 per cent. drop in Delyn's unemployment figures during the past year, would be threatened by the return to power of the Labour party, which has shown nothing but outright hostility to the concept of enterprise zones?
    Mr. Edwards: I agree entirely. It is notable that 85 per cent. of the 2,000 jobs in the zone are in manufacturing and that 55 per cent. are full-time jobs for males. It is equally encouraging to see the success of the neighbouring green field business park, which has attracted companies such as Breger and Gibson, Huurral and Christie Tyler.

    Welsh Development Agency
    Mr. Knoxasked the Secretary of State for Wales what has been the total square footage of factories built by the Welsh Development Agency since May 1979.
    Mr. Nicholas Edwards: The WDA has completed more than 9·7 million sq ft of factory floor space since May 1979.
    Mr. Knox: Can my right hon. Friend say what the average square footage of factory space produced by the agency has been since the present Government came into power, and how that compares with the figure under the previous Labour Government?
    Mr. Edwards: Between January 1976 and March 1979 the agency completed 1·5 million sq ft—an average of 0·5 million sq ft per year. Under this Government there has

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    been an average of 1·2 million sq ft per year, which is more than double the rate under the previous Labour Government. However, perhaps even more important has been the record level at which those factories have been occupied. The allocation rate is currently running at an all-time high.
    Mr. Foot: We greatly welcome the Secretary of State's conversion to support for the Welsh Development Agency. We only wish that he had given that enthusiastic support from the beginning. What will be the real expansion in the money that is to be allocated to the Welsh Development Agency? The right hon. Gentleman must know that there are areas, such as mine, where we still have about 20 per cent. unemployment and are fighting as hard as we can against it. We need a considerable increase in the factory programme to enable us to attract more new industries into our areas, and I hope that we will get it from the right hon. Gentleman's successor.
    Mr. Edwards: We have a far bigger factory programme than that of the previous Administration, so I do not need lectures on that from the right hon. Gentleman. The agency's total budget for 1987–88 is £86·5 million, and it is planning on the basis of £93 million gross being available for factory development over the next three financial years. It is remarkable that the agency allocated 2 million sq ft of factory space in the past financial year and 566,000 sq ft in the first three months of this year. Therefore, the pace of allocation is accelerating.
    Mr. Wigley: Will the Secretary of State look at the situation in Gwynedd in detail and observe that the WDA's three-year programme has virtually no investment programmes in factories, other than at Llandudno junction, although in places such as Holyhead and the Pwllheli area unemployment is between 20 and 25 per cent.? When will the WDA deliver the goods to those areas?
    Mr. Edwards: I shall certainly look at those factors with the WDA, but by far the biggest contribution that has been or could be made to the economy of that area is the present road construction programme—the dualling of the A55 across north Wales and the work on the Conway crossing. The hon. Gentleman knows perfectly well that the improvement of those road links to the rest of Britain will make the biggest possible contribution to creating jobs in his area.
    Mr. Barry Jones: The WDA has done well for Wales, and I remind the House that a Labour Government created it. The Secretary of State puts a complacent gloss on the record, bearing in mind that under his stewardship unemployment has doubled since 1979. Has he forgotten his 6,473 jobless constituents? Not for them the rich pickings of the City. The right hon. Gentleman should present his WDA plans to restore his constituents to work. Does he know that more than 4,000 of my constituents are jobless and that recent job losses announced at the Modo factory are a serious blow? Has the WDA any plans to intervene to help my shocked constituents? The work of the agency in Clwyd would be much easier if the Government would give the £750 million loan for the airbus. Why has there been no statement on that?
    Mr. Edwards: The hon. Gentleman draws attention to the loss of 50 or 60 jobs at Modo, but not to the 100 jobs created, for example, by Graphoprint on Deeside, which
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    was the subject of my recent announcement, or the 100 jobs created at DRG Plastics, which were announced in March. Within one mile of DRG's new factory there are now nine foreign-owned companies employing about 1,400 people. In my constituency I have created an enterprise zone which already, in the short period of its history, has created more than 500 jobs. I greatly welcome the announcement made only this weekend of a major new ferry service operating from Pembroke dock to Ireland.

    Privatisation
    Mrs. Clwydasked the Secretary of State for Wales if he will make a statement on the impact of Her Majesty's Government's privatisation policy on the economy of Wales.
    Mr. Nicholas Edwards: Privatisation, which is an essential part of the Government's policy of stimulating enterprise, has already proved of considerable benefit to the people of Wales.
    Mrs. Clwyd: Does the Secretary of State think it ethical or desirable that Cabinet Ministers who make important decisions on privatisation should be allowed to buy shares in privatisation issues, as he did in British Telecom? What is his view of those of his colleagues who made multiple share applications?
    Mr. Edwards: My hon. Friend the Member for Ynys Môn (Mr. Best) has sadly wrecked his career by his action, but he should be remembered as well for his outstanding contribution to Ynys Môn as a constituency Member of Parliament. Like all Cabinet Ministers, all my investments are made without reference to me and at the complete discretion of my investment advisers.
    Mr. Grist: If I may use a slightly different meaning of the word "privatisation", does my right hon. Friend appreciate that some Conservative Ministers are most disappointed that this has not gone further in Wales, in particular in freeing workers in local authorities and the National Health Service? Can we look for further action on this in the next Conservative Government?
    Mr. Edwards: The answer to the final part of my hon. Friend's question is that he can look to further action. Indeed, we are already taking vigorous action in the Health Service. I have had recent discussions with the chairmen of a number of health authorities in Wales about carrying this action forward. I am glad to say that the health authority covering my hon. Friend's constituency is taking real and positive steps.
    Mr. Barry Jones: If privatisation of the public services in Wales were ever to take place it would lead to the loss of at least 3,000 jobs in the very early years in which it was implemented. Is not the right hon. Gentleman's record since 1979 in Wales a ghastly one? Manufacturing investment is down, regional grants are down, transport jobs are down, mining jobs are down by 23,000 and metals and chemicals are down by 45 per cent. Does the right hon. Gentleman not realise that his complacent policies have lost us 36 per cent. of our manufacturing jobs? To lose further jobs through privatisation would make the problems far worse. For these betrayals, the right hon. Gentleman should not be given a peerage to go back to the City, he should be sacked.
    Mr. Edwards: I have seldom heard such nonsense. The truth of the matter is that every privatisation has greatly

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    improved the efficiency of the organisation. In Wales, for example, we have benefited from Amersham International, Associated British Ports and Allied Wire and Steel. I hope that in due course, the steel industry will return to the freedom of the private sector. The hon. Gentleman seemed to suggest that he would like to see the steel industry return to the over-manned, uncompetitive condition in which we inherited it from the Labour party. I am glad to say that today it is among the most competitive steel industries in Europe and that its future is assured by that fact.
    Mr. Raffan: Does my right hon. Friend agree that privatisation by local authorities and health authorities has led not only to lower rates, which must be good for business and for jobs, but to better services, because money saved can be reallocated to areas of greatest need?
    Mr. Edwards: That is true. If we get improved efficiency, we are able to provide better services for the same outlay. It seems quite incredible that spokesmen from the Labour party should argue against efficiency in the public services, yet that seems to be the case that they are to present to the people of Britain and of Wales.

    Patients (Waiting Lists)
    Mr. Gristasked the Secretary of State for Wales what research his Department has made into the cost and effectiveness of appointments and waiting times for patients attending clinics at National Health Service hospitals in Wales.
    Mr. Mark Robinson: Information is not regularly collected centrally about cancellations of either in-patient or out-patient appointments. In surveys conducted in 1985 it was estimated that about 2 per cent. of out-patient clinics were cancelled by hospitals and that about 15 per cent. of new out-patients and 19 per cent. of follow-up outpatients did not attend for their appointments. The Welsh Office's waiting list team will be examining the impact of cancelled appointments on waiting lists during the course of its work over the next year.
    Mr. Grist: Is my hon. Friend aware of the survey in south Glamorgan, which estimates that 1,000 patients a week do not turn up, that this is costing the University hospital of Wales £2 million a year, that having everyone ordered to turn up for 10 o'clock in the morning causes a loss of money and ill will among both medical staff and patients, and that something ought to be done about it?
    Mr. Robinson: I realise the problems that such cancellations cause and the difficulty for those waiting for appointments. Responsibility for running an efficient appointments system rests with the district health authorities. As long ago as 1985 the Welsh Office asked authorities to validate their waiting lists. This should reduce non-attendance by eliminating those who no longer require treatment. As part of its work of disseminating good practice, the Department's waiting list team will be investigating further the procedures for health authorities in this regard.
    Dr. Roger Thomas: Does the Minister agree that it is bad and inefficient when all the out-patients are sent for at one time, either at 10 o'clock in the morning or 2 o'clock in the afternoon? Will he ensure that his Department tells
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    district health authorities that appointments should be staggered? That is one of the reasons why there are so many defaulters.
    Mr. Robinson: Once again, it is the responsibility of each health authority to decide how it runs its appointments system. That is precisely why we embarked on the validation exercise and why we are giving the sort of advice to health authorities that we are at present.
    Mr. Harvey: Does my hon. Friend agree that the 9 per cent. increase for nurses will do a great deal to improve morale in the Health Service? Does he also agree that it is highly desirable that so much of the funding for that should come not from the area health authorities but from central Government?
    Mr. Robinson: I listened carefully to what my hon. Friend said. It is perhaps worth recording that under the previous Labour Government the value of nurses' salaries actually fell by 21 per cent., whereas with this pay award the overall increase in nurses' pay, after allowing for inflation, is 30 per cent.
    Mr. Roy Hughes: Would it not be wiser for the Government to tackle the basic problems relating to ill health in Wales—unemployment, substandard housing, inadequate nutrition and a poor environment? Surely such measures would be more beneficial than pressing our general practitioners to distribute glossy Government propaganda.
    Mr. Robinson: The one thing that the hon. Gentleman absolutely hates is the truth. The truth is that we have increased total cash resources available to health authorities in Wales in the current year by 7·9 per cent. That is why revenue provision for health authorities has increased by 33 per cent. in real terms since 1979; that is why we have invested £495 million in the capital estate of the Health Service in Wales; that is why the numbers of staff are up by 13·5 per cent. since 1979; and that is why tens of thousands more patients are being cared for in Wales today than was possible in 1979.
    Mr. Foot: The hon. Gentleman gave the House particulars about nurses' salaries under the previous Labour Government, but will he tell us the exact dates with which he makes the comparison, because, if he makes an investigation, he will find that, unfortunately, he has been supplied with misleading figures.
    Mr. Robinson: The figures given were for 1974 to 1979, and they were given in the House recently by my right hon. Friend the Secretary of State for Social Services.
    Mr. Geraint Howells: I should like to make a plea on behalf of my constituents and the people of mid-Wales. Will the Minister consider giving extra financial aid to the East Dyfed health authority to enable it to build the urgently needed second phase at Bronglais hospital, Aberystwyth?
    Mr. Robinson: I remind the hon. Gentleman that we have given increases to the East Dyfed health authority for its current expenditure—nearly 6 per cent. this year—and for its capital programme. Indeed, at this moment, at a cost of £24 million, we are building a brand new hospital in Llanelli. The local health authority has a continuing capital programme and has many developments and plans within that programme.

    Leasehold Property
    Mr. Ron Daviesasked the Secretary of State for Wales how many domestic leaseholders in Wales he expects to be affected by the provisions of the Landlord and Tenant (No. 2) Bill; and if he will make a statement.
    Mr. Mark Robinson: Specific statistical information in the form requested is not available. On 30 June 1986 I informed the hon. Gentleman that legislation would be introduced
    "which would extend to all domestic leaseholders a right to challenge the coverage and premiums for the insurance of their properties proposed by owners of freeholds."—[Official Report, 30 June 1986; Vol. 100, c. 684.]
    On Second Reading of the Bill I informed the House that Government amendments would be tabled to meet that commitment. I am pleased to inform the House that that has been done and that I expect to move them in Standing Committee tomorrow.
    Mr. Davies: Will the Minister acknowledge that on 30 June he implied a lot more when he answered questions in the House? Will he confirm that the legislation as it now exists with the amendments that he is now proposing will neither extend to leaseholders the right to choose their own insurance company nor give them the right to purchase their freeholds at a precise and predetermined level? Those are the things that the Minister promised the House. How can he justify that betrayal of his own constituents, many of whom are faced with the predations of companies such as Castle Beg and Banana Bliss, and of the promises that he gave in this Chamber?
    Mr. Robinson: The hon. Gentleman obviously has not read Hansard, and I would have had a lot more sympathy with him had he attended the Second Reading debate in question. I have already quoted what I said on 30 June, and I shall do so again. I said:
    "which would extend to all domestic leaseholders a right to challenge the coverage and premiums for the insurance of their properties proposed by owners of freeholds"—[Official Report, 30 June 1986; Vol. 100, c. 684.]
    That is precisely what the clauses that have been tabled do. The amendments that we have tabled give leaseholders three important new rights—the right to know specific details about the insurance of their homes, the right to challenge the terms of such insurance, and the right to ask the court to vary leases that contain defective provisions in relation to insurance.
    The hon. Gentleman's other point was not part of the assurances that I gave the House on 30 June.
    Mr. Roy Hughes: The Minister still misses the point. Labour Members support the legislation as far as it goes, but we also support my hon. Friend the Member for Caerphilly (Mr. Davies) in his understanding that this legislation would extend to all domestic leaseholders. If the Minister cannot now fulfil the promise that he made, he should not have made it in the first place.
    Mr. Robinson: The hon. Gentleman did not listen to what I said. It does extend to all domestic leaseholders. The matters that are now being raised are really ones for the Committee stage of the Bill. That Committee stage is being dealt with in a bipartisan manner and the discussion is constructive on both sides. I find it strange that the kind of rancour that is now coming from the Opposition Benches is in no way manifesting itself in the work of the Committee.

    Schools (Ministerial Visits)
    Mr. BarryJones asked the Secretary of State for Wales to how many (a) state schools and (b) private schools he has paid official visits this year.
    The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): I have visited four local education authority maintained schools and one Roman Catholic voluntary aided school so far this year. I have not visited any independent schools.
    Mr. Jones: Is it not the case that if the money spent by Welsh Office Ministers on sponsoring pupils in private schools was spent on the state sector it would mean at least £5 per child in secondary education? Is it not also true that, according to the latest polls, parents believe that, under this Government, standards have fallen largely because the state sector is still underfunded, even in an election year? Her Majesty's Inspectorate points to an alarming situation where parent-teacher associations are now bailing out our schools throughout the length and breadth of Wales. Is it not a fact that since 1979 Welsh Office Ministers from public schools have neglected our state schools and favoured their own?
    Mr. Roberts: The hon. Gentleman's first point is quite wrong. I have already told him in the House that, even if we were not to spend on the assisted places scheme, it would add only 30p to the £1,400 spent per child in the maintained sector. The amount spent is only 0·126 per cent. of total spending on the maintained sector. As for falling standards, I deny that absolutely. We have taken steps to improve education in Wales, and will continue to do so. As for spending, the hon. Gentleman must know that, while spending has remained roughly constant, pupil numbers are now 14·5 per cent. down on what they were in 1977–78, whereas the number of teachers has declined by only 7 per cent. We are spending more per pupil than was spent under the last Labour Government.
    Mr. Raffan: Does my hon. Friend agree that if we are to find more resources for state schools in the Principality the most effective way is to remove surplus places at a faster rate? I instance the example of Clwyd, where at present 22,300 surplus places in the primary and secondary sectors are costing £3·5 million a year just to keep empty. Why do Labour Members not get off their backsides and support the Government in trying to reach their target of removing two fifths of those surplus places so that we can spend the money on where it is most needed—in the hard-pressed urban primary and secondary schools?
    Mr. Roberts: The hon. Member for Alyn and Deeside (Mr. Jones) could begin by supporting his education spokesman, the hon. Member for Durham, North (Mr. Radice), who is encouraging teachers not to take industrial action. The hon. Member for Alyn and Deeside should give his hon. Friend the Member for Durham, North his support. However, with regard to surplus places, my hon. Friend the Member for Delyn (Mr. Raffan) is absolutely right. There are about 150,000 surplus places in Wales and I know of some schools—in Clwyd, for example—where there are more surplus places than pupils at individual schools. I am also glad to say that a number of local education authorities are at various stages in the consideration of plans for rationalising school provision, particularly in the face of the declining secondary pupil numbers.
    Mr. D. E. Thomas: On his school visits, has the Minister visited any of the smaller comprehensive schools in western and mid-Wales to see the problems that they face in trying to provide for a broad-based bilingual curriculum with very scare resources?
    Mr. Roberts: The hon. Gentleman put his finger on the matter when he described the schools as "smaller comprehensive schools". Obviously, the smaller the school, the more difficult it is to provide a broad-based curriculum, particularly at secondary level. That is why so many local education authorities are considering sixth-form and tertiary colleges and other such reorgansiations.

    General Certificate of Secondary Education
    Sir Anthony Meyerasked the Secretary of State for Wales what representations he has received on the adequacy of resources for the general certificate of secondary education examinations.
    Mr. Wyn Roberts: I have had representations from about 35 individuals and organisations.
    Sir Anthony Meyer: Are not the resources available for the examination, whose introduction was very warmly supported by the main teachers' unions, perfectly adequate provided that the teachers' unions, which have now received a very large pay award, are prepared to show the very minimum of co-operation to make the new scheme work, rather than seeking to wreck the whole education system in pursuit of wage claims?
    Mr. Roberts: My hon. Friend is absolutely right. The teachers' unions were foremost in calling for a single examination at 16. Massive preparations followed the decision taken by the Government in 1984. Alas, the training that we provided was disrupted and boycotted during the industrial action last year. I note that the NAS/UWT is still highly critical of the GCSE, for which it called. Additional resources have been made available. Current education spending has been increased by 11 per cent. for Wales this year under the rate support grant settlement. We have given special assistance over three years of £2·4 million, and of £1 million additionally for INSET training over a period of two years. I am glad to say that local education authorities in Wales have increased their capitation allowances to provide additional funds for the GCSE.
    Mr. Barry Jones: For the examination to go well the teachers' morale must be restored, because the Government have destroyed that morale. Is it not the case that the Government have destroyed the teachers' free negotiating machinery? Has not the Secretary of State for Education and Science chosen to take greater powers over teachers than any Minister in peacetime, with the Secretary of State for Wales embarrassingly on his coat-tails?
    Mr. Roberts: Is it not the fact that the Government had to take that action and Parliament had to pass the relevant Act because of the inability of the unions to come to an agreement? With regard to the hon. Gentleman's point about destroying morale, I am sure that many workers in the country would like to have a 16·4 per cent. increase imposed upon them, over 18 months.

    Water Rates
    Mr. Wigleyasked the Secretary of State for Wales what representations he has received on the level of water rates in the Welsh water authority area.
    Mr. Mark Robinson: My right hon. Friend has received eight written representations about the level of water charges in the Welsh water authority area.
    Mr. Wigley: Does the Minister accept that an increase in water rates that is double the rate of inflation is unacceptable to Welsh water ratepayers, and will he tell the House why Mr. Bernard Doyle, the chief executive of the Welsh water authority, resigned? Do the Government intend to go ahead with the privatisation of the water industry in Wales?
    Mr. Robinson: I am satisfied that the increase in charges was the minimum necessary to meet higher costs due to inflation and to enable the board to continue to invest in improving the quality of services, such as water supply and sewerage, and to improve the environment, including coastal waters. The increase for the Welsh water authority is within the band of increases for all water authorities in England and Wales.
    The hon. Gentleman's point about the chief executive of the Welsh water authority is not a matter for me, but I understand that he resigned because of a dispute about his contract and that it has nothing to do with other matters.

  DUCHY OF LANCASTER

    Labour Statistics
    Mr. Silvesterasked the Chancellor of the Duchy of Lancaster how many persons are employed by the Duchy in the north-west region.
    The Chancellor of the Duchy of Lancaster (Mr. Norman Tebbit): Nineteen, Sir.
    Mr. Silvester: Is my right hon. Friend also pleased that there has been a continuous fall in unemployment in the north-west during the past eight months in respect of both male and female unemployment, and that the percentage of unemployment is low compared with the previous period?
    Mr. Tebbit: Indeed, and that contrasts starkly with the predictions made not that long ago by Labour party spokesmen to the effect that unemployment would rise inexorably and would exceed 5 million by the time of the next general election. As usual, another of their alarm scares and smears has been shown to be as untrue as they always have been.
    Mr. Alton: Notwithstanding the welcome increase in employment prospects for people in the north-west, does the Chancellor of the Duchy of Lancaster accept that there is a major problem of unemployment in the region and that only when the Government recognise the need to put money into construction projects, such as the creation of improved housing and the building of something like the Mersey barrage, will many of the unemployed in that important sector find work?
    Mr. Tebbit: I accept what the hon. Gentleman says about the major problem of unemployment that still exists

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    in the region, but it would be foolish to return to the policies that brought about that structural imbalance in the region—high public spending, state intervention and things of that sort. Of course there is a need for infrastructure spending, and my right hon. Friend the Secretary of State for Transport will shortly have something to say on our roads programme. Of course it has been right to help Liverpool by giving it the amount of urban aid grant that we have. Of course it is right to improve the water supply in the north-west. But in the long term the salvation of the north-west will be the private sector of enterprise creating firms which produce goods that people wish to buy.

    Ministerial Meetings
    Mr. Winnickasked the Chancellor of the Duchy of Lancaster how many official meetings he has had in the last month.
    Mr. Tebbit: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Winnick: But what—[Interruption.]
    Mr. Speaker: Order. I do not think we have yet had that answer.
    Mr. Tebbit: The hon. Member for Coventry, South-East (Mr. Nellist) was not here to ask his Question No. 19; he must be out somewhere. The answer to the hon. Gentleman's question — this is one fewer than the previous answer—is 18.
    Mr. Winnick: What amount of time can the right hon. Gentleman devote to meetings when he seems to be so busy intimidating and bullying the broadcasting authorities? Is it not true that a recent independent report that examined the BBC coverage of the American raids on Libya shows that there was no justification for the criticism levelled by the right hon. Gentleman? Is it too much to expect him to apologise?
    Mr. Tebbit: The hon. Gentleman seems to be complaining that my productivity, like the productivity of most people in industry, is expanding greatly and that I work too hard. I have to tell him that I shall continue to behave in that way. As for his complaints about the BBC, my independent report on the BBC's coverage of the Libyan incident came to a very different conclusion. That conclusion was accepted by most independent observers. I thought that the hon. Gentleman was going to ask me about the fact that the BBC recently confessed that it was entirely wrong to omit from one of its news broadcasts an item of news favourable to the Government. The director general was kind enough to say that he was wrong. I accept that he was wrong and I hope that the BBC will improve its journalistic standards.
    Sir Alex Fletcher: May I ask my right hon. Friend how many meetings he has had in the last month with the chairman of the party and whether agreement has been reached between both offices about the advice that should be given to the Prime Minister about the date of the next election?
    Mr. Tebbit: The two of us have had a number of meetings, but fortunately I do not have to answer at the Dispatch Box for the advice that the chairman of the party will give to the Prime Minister. The Chancellor of the
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    Duchy of Lancaster is very well content that the Prime Minister will make her own decision in her own time. I know that right hon. and hon. Members opposite are eager to have a general election—[Interruption.]—although I suspect not quite as eager as some others.

    Telephone Charges
    Mr. Willie. W. Hamiltonasked the Chancellor of the Duchy of Lancaster what was the total expenditure on telephone calls by his office for the last financial year.
    Mr. Tebbit: I regret that it is not possible to arrive at a figure disaggregated from the bill for the Cabinet Office as a whole.
    Mr. Hamilton: Can the right hon. Gentleman say whether he telephoned any of the British Telecom shareholders instead of sending them letters that invaded their privacy for the sake of party political propaganda? I have had letters from my new constituency in Devon, from professional people, objecting very much to this unsolicited mail. Can the right hon. Gentleman say whether there was any public expense involved in that, or was he behaving purely as a party-political hack?
    Mr. Tebbit: I am sure that the hon. Gentleman has had complaints from professional people and, that being so, they are professional complainers. As Members of Parliament we have all known those in our time. Of course, facilities for the Government that are provided by the taxpayer are not used by the party. The two things are kept entirely and completely separate. The hon. Gentleman asked about invading privacy. There are many complaints about direct mail. For example, my friend the chairman of the National Union was a little disturbed the other day when he received a begging letter from Mr. John Pardoe asking for funds on behalf of the alliance.
    Mr. Watts: In his capacity as a telephone user, has my right hon. Friend noted a substantial improvement in the performance of British Telecom since privatisation? Does he expect similar improvements in the performance of the electricity industry after it has been privatised?
    Mr. Tebbit: A few years ago there were great queues to obtain telephones, but telephones are now freely and readily available and the service is very good. On the generality of the case, very few companies that have been privatised have not improved their performance. Perhaps the most marked improvement of all is in the National Freight Corporation, which was sold to its employees. I trust that the Opposition are not threatening to re-nationalise that, for a start.
    Mr. Wigleyasked the Chancellor of the Duchy of Lancaster how much his office spent on telephone calls in the last financial year.
    Mr. Tebbit: I refer the hon. Gentleman to the answer that I gave some moments ago.
    Mr. Wigley: I congratulate the right hon. Gentleman on getting his lines right this time. Is he aware that there is considerable misgiving about the way in which he has used his dual offices—one party political and the other in government — to browbeat and bully people into being afraid of what an alternative Government would do to Telecom shares and at the same time asking for finance for his party? Is that not something that his Government and people in his job should avoid doing in future?
    Mr. Tebbit: Come, come I think, Mr. Speaker, that the hon. Gentleman is being a little silly about these things. All that I have done in any of the many offices that I hold is to make sure that the public are well aware of Opposition policies. Provided we stand on our record as a Government and set out the Opposition's policies as against ours, we shall have no problems whatever about walking the next general election, whenever it comes.
    Mr. Holt: Would my right hon. Friend care to say whether any of the telephone conversations that he has had were with Langbaurgh town hall, where the police have been called in to investigate the activities of the Labour-controlled housing department? They were called in by the Labour leader of the council, who is one of seven deselected Labour councillors who will fight as individual Labour against official Labour in the local elections in just over a week's time.
    Mr. Tebbit: Fortunately, I am not responsible for the Labour party's internal affairs. If I were, I should have to agree with the hon. Member, not for South Hams, but for Fife, Central (Mr. Hamilton), who, in the Daily Telegraph not so long ago criticised the intolerant and bigoted attitude of the Labour party, but that was when he was writing articles about why the Labour party must change, with the hon. Members for Woolwich (Mr. Cartwright) and for Stockton, South (Mr. Wrigglesworth) — somewhat peculiar company for the hon. Gentleman to keep.

  HOUSE OF COMMONS

    Scottish Business
    Mr. Dalyellasked the Lord Privy Seal what consideration he has given to changes in the procedures and facilities of the House designed to improve the handling of Scottish business.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I have no such proposals for change in mind at present.
    Mr. Dalyell: Will the right hon. Gentleman improve on the position whereby a letter to me as a Scottish Member of Parliament from the Secretary of State for Scotland was highlighted at 11 am on Thursday 23 April by the Prime Minister's press secretary at a meeting with the Lobby press? Does that not prove yet again that in the matter of the raid on the BBC in Glasgow in relation to the Zircon affair Mr. Bernard Ingham was the organ grinder and the Secretary of State one of the monkeys?
    Mr. Speaker: Order. I find it difficult to relate this to the handling of Scottish business.
    Mr. Dalyell: It is entirely a matter of the procedures of the Scottish Office. It is a unique procedure in the history of the Scottish Office that a letter to a Scottish Member of Parliament should be highlighted—
    Mr. Speaker: Order. The hon. Gentleman has asked his question. I just find it difficult to understand.
    Mr. Biffen: I had naturally expected the supplementary question to relate to Scottish business as such, but I appreciate that the hon. Gentleman has raised a point concerning the administration of the Scottish Office and I will, of course, refer it to my right hon. Friend.

    Envelopes
    Mr. Greenwayasked the Lord Privy Seal how many (a) self-seal and (b) non self-seal envelopes were provided for use by hon. Members and others during the latest year for which figures are available; and if he will make a statement.
    Mr. Biffen: During the period March 1986 to February 1987, 850,000 white self-seal post-paid envelopes and 2,550,000 gummed envelopes of the equivalent type were provided for the use of right hon. and hon. Members.
    Mr. Greenway: Will my right hon. Friend be kind enough, in his capacity as Lord Privy Seal, to move entirely to self-seal envelopes for hon. Members, bearing in mind the obnoxious taste of gummed envelopes? Alternatively, will he arrange for a more pleasant flavour of gum for the benefit of hon. Members' secretaries?
    Mr. Biffen: This is essentially a matter for the Services Committee. I am sure that my hon. Friend's comments will be noted, and I have reason to believe that his view is more widely held.
    Sir Alex Fletcher: Self-sealing envelopes are a long-awaited innovation, but is my right hon. Friend aware that the quality is very poor and that they do not stick down? Will he have a word with the suppliers?
    Mr. Biffen: Yes, the point has been noted. I gave a reply to my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) on 8 April, at column 230 of Hansard, explaining the remedial action being taken.
    Mr. Cormack: How much do these navel-contemplating questions cost to answer? Could they not be left off the Order Paper?
    Mr. Biffen: My mind boggles at assessing the cost of answering such questions or, indeed, the supplementary question that I have just been asked. I believe that my time is costed at rather less than other activities in the House, but I note what my hon. Friend has said.

    Westminster Hall (Railings)
    Mr. Jannerasked the Lord Privy Seal what representations the Select Committee on House of Commons (Services) has received on the railings in Westminster Hall; and if he will make a statement.
    Mr. Biffen: The hon. and learned Member addressed a question to me on this matter on 25 June last year, and I refer him to the reply that I gave on that occasion. Neither I nor the Services Committee have received any other recent representations on this subject.
    Mr. Janner: Does the right hon. Gentleman agree that the once temporary railings in Westminster Hall should not be there, that they are ugly, inexpensive and unpleasant, and that they spoil one of the most beautiful buildings in this country? Even if other people seem not to have noticed this, will the Services Committee at least consider replacing the railings with others that are more sightly?
    Mr. Biffen: I could not accept any of those strictures. All these are matters of aesthetic taste, and I would back my taste against that of the hon. and learned Gentleman any day. As he asked that the matter be referred to the

    17
    Services Committee, I shall do so and point out that he is unique in making his complaint, and that money spent on this is money that cannot readily be spent elsewhere.

    Parliamentary Questions
    The following Question stood upon the Order Paper:
    Mr. Dickensto ask the Lord Privy Seal if he will give his latest estimate of the cost of (a) answering an oral question, (b) answering a written question, (c) printing all questions on the Order Paper and Notice Paper in the 1985–86 Session and (d) printing all answers in the Official Report in the 1985–86 Session.
    Mr. Biffen: The cost in officials' time of replying to questions vary considerably, but the current average cost is estimated at £75 for;—
    Mr. Speaker: Order. I did not see the hon. Gentleman rise, so we must go back to questions to the Secretary of State for Wales.

    WALES
    Dr. Roger Thomasasked the Secretary of State for Wales what percentage of citizens of the Principality needing cardiac surgery are able to have their operation within Wales; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Wales (Mr. Mark Robinson): Comprehensive information on numbers of patients receiving cardiac surgery outside Wales is not readily available. However, during 1985, the most recent period for which information is held centrally, of 798 patients from Wales reported as having been treated in hospitals in England and Wales and whose specialty on discharge was recorded as cardiac surgery, 704, or 88 per cent., were treated at hospitals in Wales.
    Dr. Thomas: Does the Minister recall, in 1982, a report on the needs of cardiac surgery in Wales from Professor Williams? Does he not realise that the shortfall in cardiac surgery in Wales is such that we need two centres for south Wales, one serving the south-west and the other Cardiff?
    Mr. Robinson: It is because of that shortfall that the Government have increased the number of open heart operations being carried out in the Principality. At the moment we have a target of about 600 a year, but we intend to increase that number to about 1,100. As a result, a paediatric cardiac unit is to be built at the University hospital of Wales, in Cardiff, as the first phase of a substantial development of the regional cardiac service.

    Dairy Industry
    Mr. Geraint Howellsasked the Secretary of State for Wales if he will make a statement on the present state of the dairy industry in Wales.
    The Secretary of State for Wales (Mr. Nicholas Edwards): The December agreement by the Council of Agriculture Ministers produced a further package of measures designed to curb the problem of over-supply in milk. While individual dairy farms continue to face financial difficulty as a result of the imposition of quotas, the dairy sector as a whole in Wales showed a marked improvement in incomes during 1985–86.
    Mr. Howells: I am sure that the Minister would be the first to admit that many dairy farmers in west Wales face financial problems, which many will find it difficult to overcome. To whom does the Secretary of State attribute blame? Is it the Government of the day, the EEC, his colleague the Minister of Agriculture, Fisheries and Food, or himself?
    Mr. Edwards: It is a pleasure to see the hon. Member in his place asking his question, unlike the hon. Member for Brecon and Radnor (Mr. Livsey), who publicised his question in the newspapers but did not come to the House to ask it. The hon. Gentleman knows perfectly well that, with substantial surpluses being produced in this country and outside, an adjustment of the milk sector is inevitable. I hope that he will not pretend to his electors that such an adjustment can take place without any pain and discomfort.

    Labour Statistics
    Sir Raymond Gowerasked the Secretary of State for Wales if he will state the number of notified vacancies for jobs in Wales and in the Vale of Glamorgan, respectively, at the latest convenient date.
    Mr. Nicholas Edwards: The number of vacancies notified to jobcentres and career offices in Wales on 6 March 1987 were 12,100 and 300 respectively. This information is not available on a constituency basis, but the corresponding figures for South Glamorgan are 1,580 and 83.
    Sir Raymond Gower: Do these figures show an increase over the past 12 months?
    Mr. Edwards: There has been a satisfactory level of unfilled vacancies, showing the number of jobs that are available. My hon. Friend should understand that only a proportion of job vacancies are notified to jobcentres and career offices, and there has been a dramatic increase in the amount of newspaper advertising for jobs, particularly in Cardiff and the surrounding areas. I am sure that he will have seen with pleasure the recent survey by the Cardiff chamber of commerce and industry, which says that south Wales is heading for an economic boom.
    Mr. Barry Jones: Will the right hon. Gentleman agree with me that, in Clwyd, British Aerospace is going great guns? Will he take this opportunity to demonstrate his full support for the £750 million launch-aid for the Airbus A330, A340, and will he say whether the Government will make a statement? Does he know that many Welsh jobs hang on that decision?
    Mr. Edwards: I am glad to agree with the hon. Gentleman that that company, like so many others in Wales, is going great guns. The hon. Gentleman knows perfectly well that the question whether a statement is made from the Dispatch Box is not my responsibility.
    Sir Anthony Meyer: I support the hon. Member for Alyn and Deeside (Mr. Jones) in emphasising the enormous importance of that project, not only to north Wales, but to the aviation industry generally. I hope that my right hon. Friend will exercise what influence he can to ensure that the necessary launch-aid is forthcoming.
    Mr. Edwards: I agree with my hon. Friend that this is an extremely important project, and that it is a company

    19
    whose future is of the greatest significance to his constituents and many others. He would not expect me to
    20
    make a statement on the subject this afternoon because, as he knows, I am not the Minister who is primarily responsible.

Northern Ireland
3.31 pm
The Secretary of State for Northern Ireland (Mr. Tom King): With permission, Mr. Speaker, I wish to make a statement on the current security situation in Northern Ireland.
The House will be aware of the recent serious increase in the number of casualties which have been caused by terrorist actions. In the last week in particular, two members of the Royal Ulster Constabulary, one Ulster Defence Regiment soldier and three civilians have been murdered. The civilian deaths were of the foreman of a building company, and most recently the murder of Lord Justice Gibson and Lady Gibson.
As to the details of this latest outrage, while I have not yet received the full report on it, I have had an initial discussion with the Deputy Chief Constable and the General Officer Commanding, and I shall be meeting the Chief Constable and the GOC again later today. However, I can give the House some further information.
The explosives were in a blue Cortina car, which had been reported stolen a month ago in South Armagh. At the time of its theft, the car had GB number plates. It is believed to have been left only a few minutes earlier at the side of the road between the border crossing point and the security force check point. The method of detonation appears to have been by radio signal. In addition to the two fatalities, nine other people were injured.
The question has rightly been raised as to how there could have been any outside knowledge of Sir Maurice and Lady Gibson's movements. The RUC advised me of evidence that bookings were made in their own names through a travel agency in Belfast on 29 December, and that on 12 February a change was made to the date of their return. The hooking form included the description and registration number of the car. Further detailed investigations are continuing and I will inform the House as appropriate of any further information.
I know that the whole House will share with me the feelings of horror at this outrage, at the loss of a distinguished and brave member of the Northern Ireland judiciary and of his wife, and to express our deepest sympathy to their families.
But while public attention has been focused on this particular outrage, it would be quite wrong not to express our deep concern equally about the other tragic victims of this most recent and savage burst of terrorist violence. The recent and cowardly attacks on off-duty members of the security forces, coupled with murders of ploicemen in Newcastle and Portrush, the murder of a civilian prison instructor at Magee college, and the use of his body to lure two further members of the RUC to their deaths are indicative of a renewed desperation and viciousness in the IRA campaign. The security forces will meet the challenge of these new tactics by the IRA with the resolution and courage that have served them so well in the past, and the Government will give them all possible support in their vital task.
But while the role of the RUC and the armed forces is crucial in the front line against terrorism, they also need the unqualified support of the whole community in their task.
The clear purpose of the IRA at this time is to undermine the morale of the security forces, to increase
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tension and hatred between the communities and thus to provoke over-reaction from some Unionists and to create distrust and ill will between the Governments of the United Kingdom and the Republic of Ireland. That is their purpose, but they will not succeed.
The security forces have given abundant proof of their courage and determination to stand against terrorism. They now look to the whole community to show the same steadfastness in the face of the current campaign and for everybody to show particulatr vigilance over theit personal security. Above all, it is the time when the whole community must give its unqualified support for the RUC and the armed forces, and give the fullest co-operation in this vital fight to defeat the terrorists.
Mr. Stuart Bell: On behalf of the Opposition, may I add our outright condemnation to that of the Secretary of State for Northern Ireland following the series of tragedies that have overtaken our fellow citizens in that part of the United Kingdom? May I also extend our condolences and deep regret to the son and daughter of Sir Maurice and Lady Gibson who, like so many others in Northern Ireland, have had their parents tragically taken from them?
The Secretary of State referred to others who had lost their lives in Northern Ireland, including two members of the RUC, one UDR soldier and three civilians over the past week. About 29 people have lost thier lives since the beginning of the year. We share with the Secretary of State the deep sense of loss and tragedy and extend to families who have lost their loved ones our deep compassion and condolences. Not for the first time, the point has to be made that the bombs and bullets of the IRA create widows and orphans, but add nothing significant to the political debate.
Sir Maurice Gibson, as Lord Justice of Appeal at the Supreme Court of Judicature in Northern Ireland, was an Irishman through and through. He dedicated his life to the community in which he was born, in which he lived and in which he has now died. His wife, Lady Gibson, was innocent of any involvement except the involvement of marriage and devotion to her husband, for which she has paid a grievous price. It should be remembered that, when Lord Louis Mountbatten died in similar circumstances, a young Irish boy aged eight or nine died at the same time. The lesson for the whole island of Ireland is that the IRA kills Irish men and Irish women, seeks to be its own judge, jury and executioner and seeks by violence what it cannot achieve by election.
The House has often been described as the mother of democracies. How long, therefore, will it take for those who perpetrate violence to understand that the House and this country will never bend the knee to terrorists and never accept submission to the bullet and that our people are as hardy now in their resistance to violence as they were during the last war? To paraphrase Sir Winston Churchill, what kind of people does the IRA think we are?
Will the Secretary of State confirm that half a tonne of explosives was found in County Cavan in the Republic of Ireland on 22 April and that on 23 April a further large haul of explosives was found in Donegal near Bunbeg? We accept that there has been enhanced cross-border co-operation between the Governments of the Republic and the United Kingdom since the signing of the Anglo-Irish Agreement, but will the Secretary of State agree that a greater public perception of that increased co-operation is

23
required? Will he see how the public may be made aware, without our giving away secrets to the IRA, of what is being done in the interests of the people of Northern Ireland? If the Anglo-Irish Agreement is perceived in private among civil servants and politicians to be a success, equally it must be perceived to be a success by the public. Otherwise, the IRA will indeed undermine confidence in the political process and in the agreement itself.
Will the Secretary of State review the concept of a no-man's-land between the Republic and Northern Ireland on the land border of two sovereign states and ensure that never again can cars packed with explosives be parked there to endanger the lives of those passing from the Republic to the north?
What steps are being taken to impress upon those who may be at risk in Northern Ireland that, in their daily programme of living, they should be less sanguine and less philosophical and more alert to the danger of death not only for themselves, but for their families?
Will the Secretary of State confirm that, if the price of freedom is eternal vigilance, there must be vigilance for members of the security forces, vigilance for members of the RUC and the UDR and vigilance for the population?
This time of crisis must be a time of opportunity to ensure that the Anglo-Irish Agreement is strong enough to survive IRA attacks and enchance still further cooperation between the Republic and the United Kingdom in the interests of our respective democracies.
Mr. King: It is certainly true that there have been three major finds of explosives in recent days, one by the RUC and two by the Garda. As the hon. Member for Middlesbrough (Mr. Bell) sought to show, those finds put into perspective the fact that the security forces have had a number of very significant successes in frustrating other serious attacks.
I understand entirely the hon. Gentleman's point about being more forthcoming about some of the steps and arrangements that we are seeking to make in regard to cross-border security. By their nature, a number of the arrangements and the proposals that we are working on at the present time must remain not just confidential, but secret. That is one of the difficulties in getting people to understand some of the basic work that is being done in this area.
I certainly accept the hon. Gentleman's comments about no no-man's-land. There is no no-man's-land — that ground is patrolled by the Army—but it is true that the security forces vehicle checkpoint is some distance back from the border because of the problems that have been experienced. We are aware of the tragedy of 1985 and the reason why the location of that checkpoint is a little back from the border.
With regard to personal security, the RUC seeks to give the clearest possible advice to everybody who is under any threat within Northern Ireland. Its advice is well known, as is its readiness always to seek to help with measures to assist. Obviously there is a clear responsibility on individuals to pay the closest possible attention to sensible measures of security for their own persons.
Lastly, I very much appreciate the forthright way in which the hon. Gentleman spoke about the unwillingness of this House to give any quarter whatever to the terrorist threat. I talked about the need for everybody to show
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steadfastness in the face of that terrorist threat. Above all, it is from this House of Commons, these Houses of Parliament that that lead should come. The people of Northern Ireland should know that they have our total support in the fight against terrorism and that, regardless of party, regardless of controversy of other kinds, we are united in that matter.
Mr. James Molyneaux: Might I explain that my colleagues and I who represent Northern Ireland feel that, in view of the gravity of the issues, it would be utterly futile to deal with those grave matters by means of superficial exchanges across the Floor of the House?
Mr. King: I obviously appreciate, and certainly do not dissent from, the right hon. Gentleman's expression of concern about the gravity of the position. I obviously share that concern. However, I believe that it must be a matter for regret if it is not in this House of Commons, in this House of the Parliament of the Union that we stand together, that we discuss these issues and that we act in concert to try to bring to book the real enemy that we face. This is not a matter of political division; it is the evil of terrorism against which we should act in concert.
Sir John Biggs-Davison: Is my right hon. Friend aware that many of us who have opposed and do oppose the Anglo-Irish Agreement wish fully to support his appeal for everyone in Northern Ireland to support the security forces in these grave times?
Does my right hon. Friend accept that, instead of recriminating over transgressions of the border by the security forces of the Republic and the United Kingdom, the two sovereign Governments should now agree to free movement across the border by those forces in pursuit of terrorism? After so many years, is it not time that the British armed forces started talking and working directly with the Irish Army and air corps.
Mr. King: My hon. Friend knows as well as anybody in the House the sensitivities surrounding the matter. It is very much my hope that we can, working with the Irish Government—I much appreciate the totally unqualified support that we received from the new Taoiseach, Mr. Haughey in his statement and the Foreign Minister, Mr. Lenihan, who have promised every available support—bring to justice the perpetrators of this crime and others. To those who believe that there is no possibility of co-operation and hope, I must say that that seems to me to be a policy of despair. I believe that there is recognition throughout the island of Ireland of the damage that terrorism is doing, in terms of physical outrage in the north and without doubt in terms of economic damage and suffering in the south. I believe that there is a determination to rid the island once and for all of the scourge of terrorism. I say to my hon. Friend, without going into detail, that I take very seriously the points that he makes. I hope that we can make some progress around the issues that he mentioned.
Mr. David Alton: Hon. Members in all parts of the House will want to be associated with the strongest possible condemnation of the hateful and cowardly outrage which took place this weekend. I associate my right hon. and hon. Friends with what has been said.
Does the Secretary of State accept that the continued violence demonstrates the fear among extreme elements

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about the agreement, which represents a way in which majority and minority traditions may gradually fulfil their aspirations and obtain justice? Is it not therefore vital for the whole House unequivocally to reiterate its determination to maintain the agreement? Will the Secretary of State consider building on the agreement by establishing a joint security commission? Does he agree that it would be very helpful if Cardinal O'Fiaich and politicians from the nationalist tradition offered unambiguous support for the RUC and encouraged Catholics to support and join the force?
Mr. King: I appreciate very much the hon. Gentleman's remarks. Whatever view others may hold about the Anglo-Irish Agreement, from a political point of view there is absolutely no question but that the IRA fears it very much indeed because it sees that the resource of the border—the very length of it and the existence of the two jurisdictions—itself provides that advantage which the terrorists can exploit in both directions. Both Governments are well aware of that. Against that background, the IRA feels that we might succeed effectively in denying them that resource. Of course it is not something that can be achieved overnight. Those who suggest that grossly underestimate the skill and cunning of some of the terrorist organisations, and to do that would be a grave mistake.
It certainly would be very helpful in this fight if the security forces were to feel that they had the unqualified support of all the people in Northern Ireland. I look to all, particularly those in the Nationalist community, to give unqualified support to those men in the security forces who stand out day and night, often to protect their own members, against violence and intimidation. In their current challenge, it is in the interests of the majority and minority communities alike to stand together beside the forces of law and order.
Sir Anthony Kershaw: Is it not immensely depressing to hear the right hon. Member for Lagan Valley (Mr. Molyneaux) say that he wishes to stand aside from these terrible events in his own Province? [HON. MEMBERS: "He did not say that."] Is that not an abdication of responsibility which is wholly to be condemned? Does my right hon. Friend agree that there is a feeling in this country that the co-operation between the RUC and other forces — the Garda and military forces in southern Ireland—is not as good as it should be and not as good as was promised, and that it could have prevented the tragedy?
Mr. King: I am not sure that I would go so far as to endorse my hon. Friend's latter point, but we certainly see the potential for developing further the co-operation between the RUC and the Garda. Some people talk as if it were just a matter of signing some document, and one would get instant improvement in co-operation. It has to be built upon. I draw on the professional advice of the Chief Constable of the RUC, who goes no further than to say that, in his judgment, it provides the best opportunity for the development of closer co-operation, and the best opportunity for dealing with terrorism more effectively. That is the honest and truthful appraisal of the situation. There is nothing on a plate, but that opportunity is provided. Anybody who really believes that we shall make
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a more effective response against the terrorists by not working in close co-operation and harmony with the Irish Government misunderstands the reality of the situation.
I should like to add this to my hon. Friend. There may have been a misunderstanding. I hope that I misunderstood slightly what the right hon. Member for Lagan Valley (Mr. Molyneaux) meant. I think that he was implying—some of my right hon. and hon. Friends may not have understood this — that it was not that he declined to use the Chamber to discuss the matter, but that this question exchange was not the occasion that he would choose.
Mr. Seamus Mallon: As the Member in whose constituency that terrible deed took place, on behalf of my party I should like to add our condolences to the family of Lord Justice and Lady Gibson, and, indeed, to the families of all the people in the north of Ireland who have suffered in the recent past.
Will the Secretary of State confirm that there are two things that the Provisional IRA fear most? The first is the close co-operation between the British Government and the Irish Government in the search to bring about peace and stability in Northern Ireland. The second is that the Nationalist community, the Catholic community in the north of Ireland, will be weaned away from support for the Provisional IRA and leave it isolated.
Will the right hon. Gentleman further confirm that one of the aims of the Provisional IRA at present is to provoke the type of punitive reaction that would prevent that from happening? Will the right hon. Gentleman confirm that his Government, through himself, will be careful not to play into the Provisional IRA's hands by doing that?
Mr. King: We are anxious to build the support of the minority community in Northern Ireland and closer identification with administration and security efforts in the Province. That is very important. After the recent tragedy, I am sure that many in the Nationalist community will have learnt yet further what a totally unacceptable nature and viciousness the terrorists have. It is worth remarking that whoever detonated that bomb had no scruples about the other accidents that they might have caused at that time, no matter how horrific the death of Lord Justice Gibson. Not only were there the rugby players who were travelling south and the girls who appeared on television, but there was a bus with 50 schoolchildren taking part in a sports exchange, which was travelling north. These people have no compunction or scruples whatsoever, no matter how much suffering they may cause. These people hold out no promise whatsoever for the future of people anywhere in the island of Ireland and deserve the total condemnation of us all.
Sir Philip Goodhart: I am sure that we are all depressed by the latest wave of killings, but as it is widely recognised that the RUC is better trained and better equipped than the police force in the Republic, can my right hon. Friend say what offers of training or equipment have been made to the police in the Republic since the signing of the Anglo-Irish Agreement, and how many of those offers have been accepted?
Mr. King: A number of suggestions have been made and offers of help given. Some have been accepted. Further training is being undertaken in different ways.

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However, the point behind my hon. Friend's question is correct. I assure him that we are anxious to assist in any possible way.
Mr. Roy Mason: There is no doubt that the political wing of the Provisional IRA has had to give way to a more militant campaign since it was shunned in the elections in the Irish Republic. Therefore, its increased kill and bomb campaign is intended to terrorise the whole Province and, coincidentally, to try to smash the Anglo-Irish Agreement. Is the Secretary of State aware that that will now necessitate a higher security profile in many previously quiet areas? Will he confirm that, if need be, more British troops will be drafted into the Province? I hope that he will consider parallel patrols by the Army and RUC and that, for a time, they will increase their presence on the streets. I hope that he will also consider increasing the facilities of the British Army and of the special forces in the Province so that they can retaliate and capture more easily than hitherto. The Secretary of State must now turn the tide and retaliate more effectively against the terrorists. If he adopts some, if not all, of those measures, I am sure that he will receive the support of most hon. Members in this House.
Mr. King: I am grateful to the right hon. Gentleman. As he was a predecessor in my office, I listened with particular respect to his points. I accept his analysis of the split in Sinn Fein following the last Ard Fheis, its decision to stand and to take seats in the Dail, with the consequent humiliation at the polls and the advent of a new Government in the Irish Republic. I am sure that some of those factors, and their consequences, are the explanation behind the recent burst of violence. Although any death is one too many, it is fair to say that the violence of the past few weeks has followed a period when, otherwise, casualties were significantly lower than in the corresponding period last year.
The right hon. Gentleman will understand if I do not go further, but I take careful note of all the points that he has made. A number of those options must be considered and some will undoubtedly be discussed later today when I meet the leaders of the security forces.
Mr. Patrick Cormack: Is it not a fact that, throughout the United Kingdom — in England, Scotland and Wales—many people have laid down their lives in defence of the Union and, in so doing, have supported the policies that have been endorsed by the overwhelming majority of hon. Members? In those circumstances, is it not a tragedy that, for the most part those who represent Northern Ireland constituencies remain silent in this House?
Mr. King: Obviously, I do regret that fact. I hope that it will be recognised that this is the Parliament of the Union where such debate and discussion should take place, through official and other channels. I endorse the point made by my hon. Friend about the commitment in the whole of the United Kingdom for the rights of people in Northern Ireland to live in freedom from fear. That commitment is absolute and has been endorsed by successive Governments. I say that when my own regiment is serving in Northern Ireland—and doing so gladly—and when some of my consitituents, many other hon.
28
Members' constitituents, and the sons of our constituents, from all parts of the United Kingdom, are serving in Northern Ireland. Obviously, people in the Province are in the front line, and the courage of the RUC and the UDR is outstanding, but the effort that is made by the whole of the United Kingdom should be recognised.
Mr. A. E. P. Duffy: Without wishing to appear to be making unhelpful premature judgments, as some Unionist Members were quick to do over the weekend, does the Secretary of State not think that there were at least two surprising and basic deficiencies in the security arrangements? First, will he inform the House why an empty car was allowed to remain by the roadside in such a sensitive area? Secondly, why were Lord Justice Gibson and his wife allowed to publicise their travel arrangements so long in advance—I repeat the word "publicise"?
Mr. King: I would rather not comment on the hon. Gentleman's latter point. People must take responsibility for their affairs and, as the hon. Gentleman knows, the clearest guidance is given. All hon. Members, particularly those representing the Province, know of the guidance from the RUC and of the sensible, intelligent precautions to take. I would rather not comment further on that.
The hon. Gentleman will know that the road on which the car was parked carries a tremendous volume of cross-border traffic and that there is a considerable amount of parking on parts of it. Unfortunately, this vehicle was not observed in sufficent time. This has not yet been corroborated, but I understand that the presence of the vehicle had just been reported to the RUC at the time of the incident.
Mr. Cyril D. Townsend: Is it not deplorable that some Opposition Members seized this incident to accuse the security forces in the South of leaking information to the IRA? Would my right hon. Friend care to comment on that and to confirm that the forces in the South have been increasing the sums spent on border operations? Will he further confirm that the time has come for joint patrols between the two armies, bearing in mind that both sovereign states are dedicated to the eradication of this particularly beastly form of international terrorism?
Mr. King: In tragic incidents of this type, the first stories that appear are often confused and it is unfortunate if any allegations are made before there is proper evidence. The evidence that has since appeared shows that there were several ways in which the matter could have become more public knowledge. Other aspects have not yet been corroborated, so I shall not disclose them to the House, but they might have tended practically to "publicise", to use the word of the hon. Member for Sheffield, Attercliffe (Mr. Duffy), the journey even more.
We are certainly looking for the fullest co-operation with the Government of the Republic. My hon. Friend rightly asked about resources, and the present conditions and difficult problems of the Irish economy are no secret to the House. Obviously, bearing in mind those difficulties, we shall hope for a maximum contribution from the Republic, and we appreciate the approach that the new Government are taking on this matter.
Mr. Rob Hayward: In welcoming the modest, lucid statement of the hon. Member for

29
Middlesbrough (Mr. Bell), will my right hon. Friend take this opportunity to condemn those who continue to invite Sinn Fein spokesmen to public meetings in this part of the country. including that which took place in Bristol and was chaired by Councillor Ron Thomas? At that meeting the leader of the Labour group, Councillor Roger Berry, sat uncritically while the Sinn Fein spokesman expressed support for the IRA's right to "fight for freedom".
Mr. King: I join my hon. Friend in condemning such action without qualification. The apologists for the IRA pretend that there is political justification for its acts, but the whole world knows from following the election in the Republic how minuscule its support is even in the Republic of Ireland. It is now clear from recent events that its only remaining argument is terror. That is why the IRA will be defeated.
Mr. Tony Baldry: Is not a reason why the IRA is committing such atrocities that it has seen its electoral support through Sinn Fein continue to plummet as a result of the success of the Anglo-Irish Agreement? Should we not continue to build on that success and to improve security to ensure there is no hiding place for any terrorist, either north or south of the border?
Mr. King: I believe that the IRA can see, not only in the continuing co-operation between the British and Irish Governments—continuing, moreover, during the period of a change of Government in the Republic—but in the growing international co-operation against terrorism, that they can find no support whatever from any decent or respectable corner of the civilised world. I believe profoundly that the IRA will be frustrated in its attempts to procure arms and to win support and that we shall see the net closing gradually. That is what the IRA can also see,
Several Hon. Members rose—
Mr. Speaker: Order. I must protect the subsequent business of the House and bear in mind the fact that we have a further statement. I shall call one further question. Mr. Marlow.[Interruption.]
Mr. Tony Marlow: I am sure that the whole House has the feeling that, if this level of violence were to take place in England, there would be a public outcry demanding much stronger measures than we have at the moment. Can I follow the point made by the right hon. Member for Barnsley, Central (Mr. Mason) that perhaps my right hon. Friend could give more scope to the security forces to put, let us say, the wind up the terrorists — many, if not most, of whom are known? It would seem that the risks to terrorists of terrorist action are currently insufficient.
Mr. King: My hon. Friend will have heard my answer to the right hon. Member for Barnsley, Central (Mr. Mason). It would be wrong not to recognise the facts of the position, which are that earlier this year there was some reduction in casualties, but certainly now there is a serious increase; overall, the levels of violence and suffering are unacceptable. I am seriously considering any proposals from the security forces about the ways in which their efforts, which we back wholeheartedly, can be even more effective.
Mr. Barry Porter: On a point of order, Mr. Speaker.
Mr. Speaker: No. I will take points of order after the application under Standing Order No. 20.
Mr. Porter: My point of order arises directly from the last questions.
Mr. Speaker: That may be, but I shall still take it at the end.

Inner Cities
4.6 pm
The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): With permission, Mr. Speaker, I should like to make a statement on the inner cities initiative and the city action teams.
In February last year I announced the setting up of the new inner cities initiative in England. Its aim was to improve the targeting, and increase the benefit to local people, of the money channelled through existing central Government programmes in eight small inner city areas. We give it a modest top-up budget to test out new approaches to local problems, in particular those designed to improve training and increase the opportunities for employment and self-employment for local people. Task forces were set up in shop-front offices in each of the eight areas to co-ordinate Government action and to make better use of the large amounts of public money already being spent there. They were also given the job of working with the private sector, local authorities, voluntary groups and the residents themselves in developing local solutions to local problems.
The inner cities initiative was set up as an experimental programme. In a short time it has already shown what can be achieved by a common partnership of effort between the public and private sector with the active involvement of local people. Five different Government Departments have been involved in this work and I am also grateful for the way in which the Manpower Services Commission has supported the initiative by giving the inner cities high priority in targeting its programmes. The initiative has demonstrated how the Government, by operating at a local level, can give a lead by pulling together the efforts of all those who are involved in our inner cities.
The initiative has now been running for over a year. There have been significant and positive results. Our eight task forces have put themselves firmly on the local map. The task force have shown that new ideas and a fresh approach are just as important as money in releasing the enormous fund of energy and ideas that local people have available to tackle their problems. We said from the outset that any lessons learned from our eight small areas would be applied more widely to other inner city districts.
The results so far are so encouraging that I have now decided to expand the coverage of the initiative to other towns and cities, while retaining its experimental and informal nature. Therefore, I have decided to set up a further eight task forces on the same basis as the original eight. They will be located in parts of Coventry, Doncaster, Hartlepool, Nottingham, Rochdale, Preston, Wolverhampton and the London borough of Tower Hamlets.
The extra funds available to all the task forces to top up other programmes and to support new ideas will be increased to £14 million for 1987–88. Experience shows that the availability of this top-up money will enable all the task forces to develop programmes of action to help achieve the goals of the initiative, particularly in employment and enterprise. The approach works best where there is a genuine partnership of effort. We shall be looking to work with local people, local authorities and local industry and commerce to achieve that partnership.
I also propose to carry forward the work of the five city action teams, which we set up two years ago. Those teams
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consist of the regional directors of the Department of the Environment, Department of Trade and Industry and the MSC in each of the cities. They dispose of large budgets, which they seek to co-ordinate more closely, and we did not originally expect them to need separate CAT budgets as a team. However, last May we gave £1 million to the Newcastle-Gateshead team as part of a package of measures to relieve the effects in the north-east of the shipbuilding redundancies. That city action team used this sum very effectively to plug gaps in its ability to support services for local business and training in new technology. Its achievements demonstrate that the city action teams have an important part to play in accelerating progress in areas crucial to the regeneration of our inner cities and in attracting private sector support for worthwhile projects. Accordingly I shall be making £1 million available to each of the five city action teams in 1987–88 to be spent on the basis of a clear strategy that each team will be asked to prepare for local action.
The additional resources required for the expanded inner cities initiative and for the city action teams—an extra £10 million in 1987–88—will be found from within my Department's existing provision and, because we are committed to full value for money for Government spending, we shall continue to monitor and evaluate the contribution which these measures are making to urban regeneration.
One of the aims of our inner cities initiative has been to pool the efforts and resources of all Government Departments with a responsibility for our cities. As part of that concerted approach, my hon. Friend the Minister for Housing, Urban Affairs and Construction and I will be making a joint action for cities presentation tomorrow morning in London's docklands. This will be the first of a series of presentations across the country aimed at the business community, the voluntary sector and other opinion formers in our inner cities, to increase their involvement with Government efforts to make our cities better, safer and more attractive places in which to live and to do business.
The drive to help our inner cities is a key priority for the Government. It reflects our determination that all our people, wherever they live—north, midlands or south—should have the opportunity to share in this country's growing economic success. It reflects our belief in the younger generation, including those young people growing up in our multiracial inner cities, and our determination to improve their prospects. We have always made substantial resources available. What we are now doing is targeting those resources better to ensure that it is the people who live in our inner cities who benefit from our efforts. This initiative is designed to help inner city residents by helping them acquire new skills so that they can compete on equal terms for the opportunities which are increasingly becoming available; by helping them overcome the problems they face in setting up in business on their own account; and by helping to make our inner cities the sort of place where people want to live and where businesses want to invest. Today's announcement is just the latest in a long line of measures to promote action for cities, and I commend it to the House.
Mr. John Evans: It is increasingly obvious from the bribes that are flowing from the Cabinet that a general election is imminent. It is obvious that it will be in June, whether it be on 11 June or 18 June. If the

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hypocritical waffle that we have had from the Paymaster General today is an election bribe, it is the most miserable little sprat that we have ever had. It will not catch any mackerel and it certainly will not persuade anyone to vote other than Labour in the areas that he mentioned.
The Government are proposing to establish a further eight city action teams and are giving them all of £10 million to tackle the appalling problems of massive unemployment, had housing and multiple deprivation. The Government regard £10 million as the solution to the problem. But what is the background to the problems of most of the inner cities in our country today? Since 1979 about £200,000 million has been cut from the rate support grant to local authorities. Indeed, the authorities mentioned in this statement have been collectively deprived of hundreds of millions of pounds of rate support grant. The Government propose only a further £10 million. Twenty-five per cent. of Britain's schools do not have inside toilets. There is a £700 million backlog of repairs to Britain's secondary schools. The council house repair backlog is rising at the rate of £900 million a year and 1,300,000 householders are now on council house waiting lists. There is a £1,700 million backlog of repairs to sewers and drains, most of them in the inner city areas of our nation. However, the Government have pledged to spend only £10 million solving the problems of inner cities.
Despite the smallness of the extra funds, I am certain that the local authorities of this country, especially the Labour-controlled authorities such as those the Paymaster General has listed, have shown themselves willing and anxious to co-operate in any meaningful scheme that will help to solve the problems of unemployment and deprivation in their areas. But can the Minister say whether he has consulted the local authorities he named in his statement and, if not, why not? Will he consult them in the future because in his statement he informed us that he will be looking to work with local people, local authorities and local industry and commerce to achieve a partnership of effort? Will he give an undertaking that the local authorities will take the lead role in any initiatives to solve the problems in their areas?
Under this Government, unemployment has tripled in these areas since 1979, most of it in what was once the manufacturing industry. With that increased unemployment has come increased poverty and hardship. The problems of those areas, like the problems of the rest of the country, will not be solved by gimmicks such as city action teams and job training schemes, but by the election of a Labour Government with powers and pledges to solve the problems of unemployment in this country. That is why we will win the election in June or whenever the Government call it.
Mr. Clarke: I suppose I am not surprised that the hon. Member for St. Helens, North (Mr. Evans) began by relating all this to elections. If he feels that further Government assistance to inner cities will do his party harm, I hope that his worst fears are justified. He began by saying that we are producing election bribes. I point out that this is merely a logical extension of the work that inner city task forces started 12 months ago and that city action teams started two years ago, together with the enterprise zones, the urban development corporations and the concerted policy the Government have been developing on inner city problems for many years. The hon. Gentleman accused me of hypocrisy, but in this case I think he is guilty
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of hypocritical cynicism about every good idea that comes from the Government about employment, training, inner cities or any other action.
The hon. Gentleman keeps mentioning local authorities. So far as I am aware, the sole policy of Her Majesty's Opposition on inner city problems is that more money should be given to Labour local authorities and that they should be allowed to put up the rates again. However, that has had the effect of driving away business and employment opportunities from a large number of the areas we are talking about.
Trying to put together inner city or city expenditure as a whole is difficult. However, in the past year the Government spent well over £700 million tackling inner city housing dereliction and decay. We are talking here about eight small areas, now to be 16 areas, where the Government will work directly on the ground with small groups of officials and will work with the local people on a shop-front basis, targeting money into those small areas. We spent about £80 million last year in the original eight task force areas and we are spending this year about £82 million in the eight new task force areas. On top of that is this £14 million in top-up funds to encourage new ideas and new approaches, and to help stimulate progress more quickly.
We wish to co-operate with local authorities and I trust that the eight local authorities in whose areas we intend to operate will work with us. We have had good co-operation so far. In the case of Labour-controlled Birmingham, for example, I disapprove of quite a lot of its politics and it disapproves of quite a lot of mine, but the fact is that we have worked together to produce a lot of extremely good projects which have benefited the people of Handsworth and Aston. When dealing with useless organisations that will not co-operate, such as the Labour councils in Southwark and Leicester, one has to go to voluntary bodies, the private sector or anybody else of good will to do some good for the residents.
I hope that the eight authorities we are now approaching will work with us. Our intention is to work with them. We have made informal soundings of some. We shall be consulting them and I look forward to working in partnership with the local authorities, the private sector, voluntary bodies and the people who live in the inner city districts of the eight cities I have mentioned.
Mr. Ian Mikardo: Will the Minister kindly tell me where in Docklands he is holding his lush high-profile public relations exercise tomorrow? Would it be in one of the penthouse flats being made available to my constituents at no more than £375,000 a time, or would it be in the workshop of one of the 50 or 60 small and medium-sized firms that are presently being driven out, with their employees being put out of work, by the activities of the London Docklands development corporation?
Mr. Clarke: The conference is being held in the Limehouse Studio. Limehouse Studio is one of the places I have visited most recently in the docklands urban development corporation area. It has only to be seen to bear witness to the outstanding success of the whole idea of urban development corporations. It shows what can he achieved by attracting private sector investment into a derelict area.
As a Minister, I first went to the docklands when I was a junior Minister at the Department of Transport. I visited

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those empty expanses of water and derelict warehouses that have been created by years of industrial relations problems and a failure to adjust to change. I attended meetings where Labour councillors from the local authorities bickered endlessly about no solutions in particular for turning Docklands around. I have seen since what the Docklands development corporation has achieved. If the hon. Gentleman prefers Docklands as it was before the Government acted, compared with Docklands as it is now after the work of the development corporation, I can say only that he is advocating a policy of total despair for inner city residents all over the country.
Mr. Michael Fallon: Does my right hon. and learned Friend agree that the biggest handicap for the inner cities is the bureaucratic, negative and cynical Socialism practised by Labour local authorities within the areas mentioned? Does he also agree that the city action teams of Tyneside and Cleveland are regarded as a breath of fresh air, and that the extra million quid will be very welcome? However, does he also agree that that partnership will not reach fruition until local authorities such as Newcastle and Middlesbrough reduce their rates and promote policies that encourage business and job creation?
Mr. Clarke: I agree with my hon. Friend that his description of the role of the local authorities in the cities is true in most, if not all, cases. However, to a varying degree, many Labour authorities are, unfortunately, hostile to new ideas and resistant to innovation. Even where we co-operate with them, as we strive to do, I find that the process of decision-making within the local government machine is distressingly slow. Nevertheless, I concede that I can cite examples of Labour-controlled local authorities with which it is possible to work. We shall be striving to work with local authorities of whatever political complexion in the eight places I have mentioned.
I agree that rates are particularly destructive to the development of new business. A restraint on rate levels in the cities will be an enormous advantage in attracting new investment. Rate capping was about the only good news that businesses had in some of those boroughs and it is the only thing that is making it possible to attract new business into them now.
Mr. Ron Leighton: Is the Paymaster General aware that no areas have suffered more grievously under this Government than the inner cities? In my constituency, unemployment has gone up by over 300 per cent. Inner cities have suffered in particular by losing large sums of rate support grant. My borough of Newham has been robbed of more than £100 million since the Government have been in office. Around the country, many hundreds of millions of pounds of rate support grant has been lost. Is he aware that the puny £8 million that he announced last year and the £10 million he has announced today are derisory by contrast? Is he also aware that his press conference tomorrow will be seen as an insulting election gimmick, and that what we really need is a partnership between Government and local authorities—not making war on the local authorities—to bring back enterprise and employment? In the inner cities we need a major housing programme, rather than a cut in expenditure on public sector housing by 60 per cent., which is what the Government have done.
Mr. Clarke: The hon. Gentleman confirms what I said to his hon. Friend the Member for St. Helens, North (Mr. Evans). As far as I can understand it, Labour party policy is that the amount of rate support grant should be increased to allow Labour local authorities to go back to spending money at whatever level they wish, and that they should be allowed to put the rates up again. That is just about the Labour party's policy, full stop. When it comes to the work of urban regeneration and the figures quoted by the hon. Gentleman, I remind him that the urban programme, for which my hon. Friend the Minister for Housing, Urban Affairs and Construction who is sitting alongside me is responsible, has trebled in real terms during the lifetime of the Government. A total of 75 per cent. of that money comes from central Government and it is making a big contribution to the regeneration of local areas. The Government must work directly. It is no good saying that our only contact with the cities must be through Labour local authorities, which must have money given to them and be left to get on with the job. I am afraid that far too many of them show that, left to themselves, they cannot get on with the job. Neverthelss, partnership with them is what we wish to achieve.
Mr. Barry Porter: I am delighted that my right hon. and learned Friend can find £10 million for the problems of the inner cities. However, would he not have thought that there are other parts of the United Kingdom that have greater priorities, where people are being murdered by the day? Would not the Northern Ireland Office be better off with the £10 million to spend on security in the Province, rather than to have to make expressions to the House of abhorrence, disgust and shock, which do nothing to save lives?
Mr. Clarke: Like my hon. Friend, I sat through the statement made by my right hon. Friend the Secretary of State for Nothern Ireland a moment ago. I know that my hon. Friend has a close involvement with the affairs of Ulster and the problems the Province faces. I accept that Ulster requires considerable help in restoring its economy and giving people worthwhile employment and training opportunities to raise their expectations and hopes. I hope that I can persuade my hon. Friend that our initiative for the inner cities in England is not in competition with any worthwhile claims for resources in Northern Ireland, Scotland or Wales.
Mr. Ian Wrigglesworth: Welcome though the idea and practice of partnership and the new resources are, does the Paymaster General not accept that there are still many other areas in the inner cities in Britain that require this sort of assistance and partnership? Does he agree that the major problems of our inner cities have been caused by the economic and industrial policies of the Government, particularly in the regions and the cutbacks in rate support grant that have hit many areas, not least my own, very hard in recent times? The cuts in rate support grant have made it impossible for the local authorities to cope with the problems of economic and industrial decline that the Government's economic policies have brought about.
Mr. Clarke: I accept that there are many areas other than the 16 in which this initiative will be operating and the five city action team areas that could benefit from a concerted, direct Government approach. We are working

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on an experimental, informal basis in those representative 16 areas now. However, it is plainly our intention to apply any lessons we learn there throughout other areas. The agencies with which we are working—Business in the Community, the National Association for the Care and Resettlement of Offenders, the Evangelical Alliance, many of the clearing banks, and the residents themselves—are, I trust, developing new approaches to a long-standing problem that needs to be tackled in many of our cities.
With respect, I do not think that the hon. Gentleman really believes that the problems of our inner cities are some sudden creation of the past few years of economic difficulty. Inner city problems have been growing in this country because of profound structural and social change for over 20 years. What we are now seeing is an attempt to tackle them by central Government giving a lead to every other agency of good will in a more direct way than we have seen before, and I trust that that lead will be returned. I do not accept the hon. Gentleman's simplistic analysis, which Labour Members share, which is that somehow the problem has something to do with rate support grant and that if the rate support grant was put back we would not have any inner city problems. Giving more rate support grant to some of the inner London boroughs would make their problems worse rather than better.
Mr. Ken Eastham: The Minister was remarking to the House about the great successes of the past 12 months. Can he tell us whether that includes the inner city areas of Manchester, because I can tell the House that unemployment there is now standing at 35 per cent.? That hardly illustrates the success story of a Government who have been in power now for eight years. The Minister refers to finding the £10 million from his own Department's estimates. Can he tell the House where the £10 million is coming from? Does it mean that other schemes will be abandoned to find that money, or was it already in the Department?
How can the Minister say to us that finding £1 million for the redundant shipbuilders will help when there are thousands and thousands of redundant engineers? What difference will £1 million make when what they really want is jobs?
Mr. Clarke: Many good things have happened, and are still happening, in Manchester in recent years, and the city is steadily recovering. One of the major physical contributions that the Government have made is the new G-MEX exhibition centre which has largely been funded by central Government money. The hon. Gentleman should look next door to Salford and see what is happening in Salford quay and elsewhere. In the Moss Side task force area, with which this initiative is concerned, we are pursuing a programme with Selcare Trust to provide new engineering workshops for 75 people. In addition, bursaries are being provided to the Prince's Youth Business Trust in Moss Side. These are only the first of many projects that are now coming along to help the inhabitants of Moss Side and Hulme. Instead of simply trying to denigrate and run down these programmes, I hope that the hon. Gentleman and those who represent these great cities in England will see that they are beginning to succeed and that they will lend their efforts to encourage local people to co-operate with them as well.
Mr. Peter Thurnham: I welcome my right hon. and learned Friend's announcement and share his disappointment that Opposition Members have not given it a better welcome, especially as so many of these problem areas come under Labour-controlled authorities. When can we see an extension of this excellent initiative to areas such as Bolton where there is high unemployment and where I am sure this initiative would be much welcomed? Secondly, will he consider widening the membership of his city action teams by including the regional director of the DHSS?
Mr. Clarke: I am grateful to my hon. Friend for his condolences about the reaction of the Labour party. It is wholly predictable on this subject. Every statement that I have ever made as a Minister in the Department of Employment has been greeted by the Opposition with nothing but sneering cynicism coupled with no positive proposals of their own. There is merely an attempt to run down what we are doing. I do not find that a very encouraging approach to the problems of the inner cities.
I appreciate the claims of Bolton, and the selection of further places in which to experiment in Lancashire was extremely difficult. We tried to get as representative a mix as we could and we have now chosen Preston and Rochdale, with which Bolton might be bracketed. Any lessons learnt there can, I trust, rapidly be extended to Bolton as well.
Although the city action teams principally comprise the three Departments that I have mentioned, I take my hon. Friend's point that it is important that those responsible for the policy of other Government Departments should get involved as well, and to a large extent they do.
Mr. Don Dixon: Does the right hon. and learned Gentleman appreciate that the devastation caused by the Government's policies is not confined to inner city areas? For example, South Tyneside — the local authority that I represent—has the highest unemployment rate outside Northern Ireland, and the total amount of money that the right hon. and learned Gentleman has announced today in his election gimmick is less than the amount of rate support grant that the Government have stolen from South Tyneside since 1979. Incidentally, South Tyneside is the smallest metropolitan district council in the country.
Mr. Clarke: I have been to the hon. Gentleman's constituency, and I would not for a moment underestimate the appalling economic problems that it faces. His claim that they are the result of the economic policies of the last few years is, frankly, ridiculous. There has been a longstanding industrial and employment problem in his area. I have not announced a new task force for Jarrow and Tyneside today because my right hon. Friend the Secretary of State for the Environment only recently announced a new urban development corporation for Tyneside, with more than £100 million of new resources going in over the next five years.
The hon. Gentleman's claim that good news of this kind is all election gimmickry ignores the fact that this policy has been steadily emerging over the last five years, despite the sustained suspicions and resistance of the Labour party and other Opposition Members.
Mr. Martin M. Brandon-Bravo: All reasonable people will welcome my right hon. And

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learned Friend's statement today and recognise the Opposition's comments as nothing more than sour grapes. I thank him very much indeed for including the city of Nottingham in the additional aid, because I know that, following his visit to our city, he was made well aware of the willingness of the public and private sectors to work together. I also add my thanks to my right hon. and learned Friend and other senior colleagues who have demonstrated that it is possible for a number of Departments of State to work together and join in common cause for the benefit of our inner cities.
Mr. Clarke: I am grateful to my hon. Friend and look forward to working with him in that part of the area that is in his constituency. He does not represent the entirety of Forest Fields, Radford and Lenton, but he represents enough of it. I shall certainly need his assistance. My right hon. Friends the Secretaries of State for the Environment and Employment and myself have been to Nottingham recently and have followed its affairs very closely. We tried to engage the interest of the local authority and local industry, and some of the things that have happened recently are an attempt to respond to that on the part of the people of Nottingham. I believe that, through the task force approach, we have already established that people will work with us and take advantage of the new ideas and resources that we can bring in order to turn round areas such as Radford, Lenton and Forest Fields, where the residents need further help to obtain skills and training so that they can get back into the economy.
Mr. Nigel Spearing,: Does the Paymaster General recall that a few minutes ago he either said or implied that the activities of urban development corporations assisted local people? Will he take it from me and my hon. Friend the Member for Bow and Poplar (Mr. Mikardo) that the activities of the London Docklands development corporation mostly disadvantage local people—[HON. MEMBERS: "No."] It is true! Firms and people are being driven out by escalating land values and the arrogance and acquisitive instinct of the LDDC. When the right hon. and learned Gentleman goes to Docklands tomorrow, will he announce those features of his policy that are to the advantage of local people, and only those?
Mr. Clarke: I flatly and totally disagree with the hon. Gentleman's description of urban development corporations—
Mr. Spearing: In London.
Mr. Clarke: As I told his hon. Friend the Member for Bow and Poplar (Mr. Mikardo), it seems to me that he and his hon. Friends are advocating the conservation of dereliction and decay, presumably because that is the political power base of themselves and their friends. That is not the way to cure the problems of inner city London.
Mr. Tony Baldry: Does not my right hon. and learned Friend agree that in much of the inner cities Labour-controlled local authorities have been part of the problem rather than part of the solution, and that one of
40
the great advantages of the sort of initiatives that my right hon. and learned Friend has been taking is that at last they are attracting entrepreneurs and those concerned about building up business to come back and play a full part? Unless entrepreneurs are again prepared to take a leading role in the inner cities, there is very little future for such areas.
Mr. Clarke: I wholly agree with my hon. Friend. Unfortunately, in some Labour local authority areas, although not all, the activities of the local authority do more to exacerbate the problems than to cure them. The local authority can itself be part of the problem in places such as Leicester and Southwark, as I have discovered through the task force policy during the last 12 months. I agree with my hon. Friend that we must get the private sector, voluntary bodies and local people, much more directly involved, and the task force approach has succeeded in doing that. Clearing banks are collaborating with us in some of these areas, and major firms are showing an interest and helping us by working through Business in the Community. Well-respected voluntary bodies such as NACRO and APEX are working with us, too. Where a local authority joins in, that is all to the good and speeds things up. Where a local authority refuses to and simply creates difficulties, we must find others of good will who want to do something to alleviate the problems of the inner cities.
Several Hon. Members rose—
Mr. Speaker: Order. I must apply the same principle as I did on the previous statement. I shall call one more Opposition Member and we shall then have to move on.
Mr. Frank Haynes: Is the Paymaster General aware that from now on it seems that the Government Front Bench will show a completely different attitude towards the inner cities because of the coming general election? Is he also aware that he, the Minister for Housing, Urban Affairs and Construction, and his sidekick, the hon. Member for Nottingham, South (Mr. Brandon-Bravo), who happens to be a member of the Nottingham city council, have been severely critical since they came to power in 1979 of what the city council was not doing? It now appears that the electorate will take notice of what has been said this afternoon and will bear it in mind in the local district elections. They will let the Government know exactly where they stand on this fiddle of money for inner cities.
Mr. Clarke: All the talk about elections has come from the Opposition, and I can only think that several hon. Members are gripped by a sense of panic about the consequences. From the hon. Gentleman's remarks I could not understand whether or not he supports the announcement of a new task force for the inner area of Nottingham. I await the reaction of his allies on Nottingham city council and Nottingham county council, but I am genuinely hopeful that they will respond and offer to approach the problems in a spirit of partnership and step up the efforts that we should make in order to improve conditions in that inner city area.

Security
4.39 pm
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): It might be helpful to the House if I state that, having noted the comments made by the right hon. Member for Lagan Valley (Mr. Molyneaux) and those made by my right hon. Friend the Secretary of State for Northern Ireland, I recognise that there is in the House a very general desire for a debate on security matters in Northern Ireland. I hope that that can he arranged shortly through the usual channels.
Mr. David Winnick: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I will take the application under Standing Order No. 20 first and then take any points of order.
4.40 pm
Mr. Tony Benn: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the decision of the Prime Minister to suppress information about the disloyal and illegal activities by the security services and hence to mislead Parliament and the public."
My request arises from the report in The Independent this
morning written by three distinguished journalists who have read the book written by Mr. Peter Wright in which he reveals:
"Thirty senior staff of MI5 were engaged in a politically-motivated … plot to hound Harold Wilson from office as Prime Minister in 1974".
I quote again:
"Assassination plots, burglaries and bugging of allies and enemies, are all described at first hand in the Wright manuscript."
I quote again:
"Plans to assassinate President Nasser at the time of Suez … are confirmed with first-hand detail in the book."
Because of the nature of these charges, the Government have used the courts to try to silence and harass the press and journalists who brought this matter to light. It is my opinion that it is much to the credit of The Independent that it published the article. Some of the actions were directed against Members of this House, including Harold Wilson and others, some of whom are still Members of the House. The article is the first direct evidence available which discloses what is in the book which the Prime Minister has sought to suppress.
My request for a debate relates not to the case, but to the evidence that has now reached us. For many years it has been suspected that this was going on, but the Ministers responsible were either not told or knew and chose not to disclose it. In either case, a serious offence was committed. However, we know that the Prime Minister knew the book's contents because she personally Sent the Cabinet Secretary to Australia to get it suppressed. The argument that this was a breach of confidentiality was put about the real charge of illegality, disloyalty and possibly treason against Her Majesty's Government.
I conclude by stating that this is a matter of fundamental importance to the House, whose protector you are, Mr. Speaker. When you claim the privileges of the House, you ask that the most favourable construction be placed upon our proceedings, and nothing could be more
42
clearly covered in that category than Ministers being accountable to the House of Commons. I believe that the Wright book, coming on top of other revelations, reveals a situation within MI5 and MI6 and its relations with the Central Intelligence Agency which amount to a threat to parliamentary democracy. f submit that the House must debate the matter. I hope that you will reflect, Mr. Speaker, that as the events that will unfold as a result of the book become clearer, it would be inconceivable to observers that Parliament should not have discussed the matter at the earliest possible occasion.
Mr. Speaker: The right hon. Member asks leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the decision of the Prime Minister to suppress information about disloyal activities by the security services and hence to mislead Parliament and the public."
As the House and the right hon. Gentleman know, my only duty in adjudicating upon a Standing Order No. 20 application is whether to give it precedence over the business set down for today or tomorrow. I regret that I do not consider the matter that he has raised is appropriate for discussion under Standing Order No. 20 and I cannot, therefore, submit his application to the House.
Mr. James Molyneaux rose—
Rev. Ian Paisley: On a point of order, Mr. Speaker.
Mr. Speaker: Order. Not at the moment.
Rev. Ian Paisley rose—
Mr. Speaker: Order. I am on my feet.
Rev. Ian Paisley: I am sorry, Sir.
Mr. Speaker: May I tell the right hon. Member for Lagan Valley (Mr. Molyneaux) that, after the Leader of the House had risen to make his comments about a debate, I was not certain whether the right hon. Member for Lagan Valley was rising to raise his Standing Order No. 20 application or to ask a question. If he was rising to ask a question, I should have called him.
Mr. Molyneaux: I would like to thank the Leader of the House on behalf of my right hon. and hon. Friends for the suggestion that he has made, which is agreeable to us. In the light of that, with your leave, Mr. Speaker, I shall not now proceed to make application for a debate under Standing Order No. 20.
Rev. Ian Paisley: On a point of order.
Mr. Winnick: On a point of order, Mr. Speaker.
Mr. Tam Dalyell: On a point of order.
Mr. Speaker: Order. I am not taking points of order now. However, in fairness to the House, I will take any questions to the Leader of the House on his statement about the change of business. If the point of order from the hon. Member for Antrim, North (Rev. Ian Paisley) is encompassed within that, he may ask his question of the Leader of the House.
Rev. Ian Paisley: I find myself in some difficulty. I wanted to ask you, Sir, what I do as a Member of this House when members of the security forces have planned

43
to discredit and assassinate me. What do I do under those circumstances? Do I appeal to you, Mr. Speaker, for protection? On the other matter—[Interruption.] If the hon. Member wants to stand up and say something, let him stand up and not remain seated.
Mr. Speaker: Order. The hon. Gentleman should put a question to the Leader of the House.
Rev. Ian Paisley: My other point is that today, in the House, we heard a statement which can only lead to grave fears on behalf of many people in Northern Ireland. This House was deliberately misled by the Secretary of State. I want to say that the sooner that we have a debate—
Mr. Speaker: Order. The hon. Gentleman has made his point. No hon. Member from either side of the House deliberately misleads this House. We are all right hon. and hon. Members.
Several Hon. Members rose—
Mr. Speaker: Standing Order No. 20 application—Rev. William McCrea.
Mr. Dalyell: I have a question.
Mr. Speaker: Is it a question for the Leader of the House on the Northern Ireland statement?
Mr. Dalyell: My question relates to parliamentary business in relation to one of our former colleagues, Lord Glenamara, whose position is—
Mr. Speaker: Order. The hon. Gentleman knows that he cannot ask a question except on the statement that was made. I will hear the Standing Order No. 20 application.
Mr. Dalyell: It was on that business statement.
Mr. Barry Porter: On a very mundane level, I hope that my right hon. Friend the Leader of the House will take account of the fact that there are some local elections in the fairly near future. I hope that, when determining the time and date of the debate, he will bear in mind that many English Unionists might care to take part in it. Thursday 7 May would not be an appropriate date.
Mr. Biffen: I am certain that that will be one of the factors to be considered by the usual channels.
Mr. Dalyell rose—
Mr. James Kilfedder: On the statement made by the Leader of the House, may I state that it would be my wish, and the wish of my constituents and of the people of Northern Ireland, that a debate should take place immediately. None the less, I am glad to note that the Government have acceded to the request of the Members from Northern Ireland and agreed to the debate.
Mr. Eric S. Heffer: On a point of order, Mr. Speaker.
Mr. Dalyell: On a point of order.
Mr. Speaker: I will take points of order in their normal place after the Standing Order No. 20 applications.
Mr. Heffer: But it is in relation to the statement.
Mr. Speaker: Then do not raise a point of order; ask a question.
Mr. Heffer: The question is—
Mr. Speaker: Order. Questions on this matter must be addressed to the Leader of the House.
Mr. Heffer: But you have got them mixed up, haven't you?
Mr. Speaker: Order. I did get them mixed up; that is why I went back and called questions to the Leader of the House.
Mr. Heffer: Well then, let us get back to this afterwards.
Mr. Speaker: I will hear it later.
Mr. Dalyell: On a point of order, Mr. Speaker.
Mr. Speaker: Does it relate to the Irish statement?
Mr. Dalyell: Yes, it does. As the Leader of the House made a judgment about the importance of debating the situation on Northern Ireland, is it not a matter for comparative judgment—and equally important—that we debate the issue raised by my right hon. Friend the Member for Chesterfield (Mr. Benn)?
Mr. Dennis Skinner: I find it remarkable that we are now asking questions of the Leader of the House, who has not replied to a single one of the questions that have been raised. It is a cock-eyed state of affairs. I want to ask him this: when he arranges the debate on Northern Ireland, will he make sure that it does not conflict with one of the many requests that will be made under Standing Order No. 20 for a debate on the scandal that emerged today in The Independent and other newspapers in relation to MI5 and all the rest of it? Like my right hon. Friend the Member for Chesterfield (Mr. Benn), I believe that it is necessary for Labour Members to expose what has taken place with these so-called spycatchers and all the rest—
Mr. Speaker: Order. That is wide of the question.
Mr. Ian Gow rose—
Mr. Speaker: Is this a question to the Leader of the House?
Mr. Gow: Yes. Can my right hon. Friend say whether the forthcoming debate on Northern Ireland will be a half-day debate or a whole-day debate?
Mr. Biffen: That matter will be considered by the usual channels.
Mr. John David Taylor: On a point of order, Mr. Speaker.
Mr. Speaker: Not a point of order—a question to the Leader of the House?
Mr. Taylor: Yes, a question to the Leader of the House. Will the right hon. Gentleman give us an assurance that the debate on the Anglo-Irish Agreement and the lack of security in Northern Ireland will be held before the general election?
Mr. Biffen: I shall ensure that the usual channels consider that observation among all others.
Rev. William McCrea: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the terrorist murders committed by the IRA in my Mid-Ulster constituency which have resulted in a civilian being buried and a UDR man brutally murdered since the House rose on Friday last."

45
On behalf of the family of a UDR man who live in my constituency, may I say that I am deeply hurt that the Secretary of State came to the House today and failed to say that the last person to be murdered in Ulster was a member of the Ulster Defence Regiment. He was forgotten about and not mentioned, and I believe that that was absolutely disgraceful. Indeed, the Secretary of State should apologise to the widow and the two children, who have suffered because of a dastardly and brutal murder by the sewer crawlers of the IRA.
Many hon. Members have said today that they sympathise. In all the years since the troubles started in the Province, how many Members of Parliament have been across to Ulster, taken a widow by the hand and sympathised with her and her children after another brutal murder by the IRA? There is a widow sitting in my constituency today, but not one Minister will be present to sympathise with her. I have a message from that widow to the Secretary of State. He can keep his officials from her door—she does not want to see them. She said, "He is no good to me; he is no good to my children; he is no good to the widows of the RUC men; he is no good to the widows of the UDR; he is no good to the orphans—until he stops talking and starts acting against the murderers and puts them where they belong—six feet under." Then my constituents will listen to the Secretary of State. We are looking not for words, but for action against the sewer crawlers of Republican terrorism.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the terrorist murders committed by the IRA in the Mid-Ulster constituency which have resulted in a civilian being buried and a UDR man brutally murdered since the House rose last Friday."
I have listened—[Interruption.] Order. I have listened with deep concern to what the hon. Gentleman said on behalf of his constituents, but I regret that I do not consider the matter which he has raised as appropriate for discussion under Standing Order No. 20 and I cannot, therefore, submit his application to the House.
Later—
Mr. Heffer: I wanted to ask you something, Mr. Speaker, arising from what my right hon. Friend the Member for Chesterfield (Mr. Benn) said. I do not challenge your ruling, but you were careful to say that you could not make a decision today for a debate tomorrow. Are you saying that if this matter—it is of the greatest importance to the future of the country that the security services should not be involved in trying to undermine an elected Government — is raised tomorrow or the day after, it will be given greater consideration than it has been given today? It is vital that the nation should debate this matter which is an undermining of our democratic way of life.
Mr. Winnick: On the same point of order, Mr. Speaker.
Mr. Speaker: Yes, all right.
Mr. Winnick: It has been reported in the press that the Attorney-General was considering taking the matter of what has appeared in The Independent to court. As you will be the first to recognise, Mr. Speaker, you are first and
46
foremost the custodian of parliamentary democracy and the rights of this House. If it is true, as Mr. Wright has alleged, that up to 30 MI5 officers were engaged in the worst form of treachery — the overthrow of a democratically elected Government—and were conspiring to undermine and destroy a Prime Minister, surely this must be a matter of deep concern.
If it was alleged that the general council of the TUC had been conspiring to carry out assassinations or to destroy a democratically elected Government by treachery and subversion, Conservative Members would not hestitate constantly to urge that the matter should be debated. These events did not take place 300 or 100 years ago but took place within the last 10 or 12 years. Mr. Wright has left MI5, but if it is true that these events took place and if it is true, as stated, that a number of those who conspired to commit treachery remain in MI5, is it not a matter of the utmost importance that, as my right hon. and hon. Friends have urged, this matter should be debated as quickly as possible and before the general election?
Mr. Dalyell rose—
Mr. Speaker: Is this on the same point?
Mr. Dalyell: On the same issue. It is a direct question to you, Mr. Speaker. You will understand that, arising out of what has been written in relation to the Wright situation, we are in a new position in relation to the sub judice rule. May I ask for some guidance about how you intend to interpret the sub judice rule now that it has really been breached by a coach and four?
May I also ask whether there should be a statement about the position of the Security Commission, because there is certainly reference to the fact that the Security Commission has been impotent? Because I think that it is the business of the Chair, perhaps later today you could give a considered statement about the sub judice rule that you normally and legitimately adopt.
Mr. Skinner rose—
Mr. Speaker: Is this on the same point?
Mr. Skinner: Yes. It is linked to what has been asked by my hon. Friend the Member for Linlithgow (Mr. Dalyell), that here we are with the possibility of action being taken by the Attorney-General against these newspapers. My right hon. Friend the Member for Chesterfield (Mr. Benn) has asked for a Standing Order 20 debate and that request has been refused. We are approaching a general election and it is clear that there is a cover-up of gigantic proportions. The last thing that the Chair should become involved and embroiled in is part of that gagging and cover up. I suggest, Mr. Speaker—
Mr. Speaker: Order. I hope that the hon. Member is not suggesting that.
Mr. Skinner: Let me finish, Mr. Speaker. I am suggesting that it will be seen outside by millions of people that this Government—
Mr. Speaker: Order! I am not having that from the hon. Gentleman. The hon. Gentleman should raise a point of order that I can answer as a matter of order.
Mr. Skinner: What I am saying is that in this climate and in this environment millions of people will ask why on earth the House of Commons cannot discuss a most important issue that has been revealed by sections of the

47
the press. They will ask why we, in this so-called mother of Parliaments, this free Parliament that people talk about, cannot find ways of discussing it. All I am saying is that, if the Government are going to get the Attorney-General to stop this issue being debated, the net result will he that neither you nor anybody else will be able to ensure that this matter is discussed. All I am saying to you is to get on your bike and get it discussed quickly.
Mr. Speaker: Order. And I say to the hon. Gentleman that as the custodian of the Chair I am not prepared to be involved in political controversy.[Interruption.] This is a matter for the Government. It is not a question for the Chair. I have given my ruling about whether this matter should take precedence over the business set down for today or tomorrow, and that is the end of it.
Mr. David Steel: On a point of order, Mr. Speaker.
Mr. Alan Williams: On a point of order, Mr. Speaker.
Mr. Dalyell: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I shall take Mr. Steel first.
Mr. Steel: Further to that point of order, Mr. Speaker. The Chair is placed in difficulty because the Government have indicated that they are considering taking action against The Independent. This morning, before that was known, I tabled an early day motion suggesting that the current appeal that the Government intend to pursue against the judgment in Australia is itself now a waste of money. It would he extremely helpful to the Chair and to
48
the House if these further legal proceedings were withdrawn and the House were then able to debate the matter.
Mr. Williams: On a point of order, Mr. Speaker. We all appreciate the difficulty that you face, Mr. Speaker, in avoiding being drawn into political controversy. The point that my hon. Friend the Member for Walsall, North (Mr. Winnick) makes is a valid one. It is that acts of sedition are not matters of political controversy. They strike at the very core of the democratic system and you, Mr. Speaker, are the custodian of this House, the prime institution of our democratic society. Therefore, when we have clear and new evidence from people who were involved at the time that acts of sedition took place, then we on the Opposition Front Bench and our hon. Friends on the Back Benches strongly feel that this is a matter of such importance—not necessarily in a party political sense — that it deserves priority. We understand your problems, Mr. Speaker, but it is likely that we will return to this issue tomorrow and the day after and even the day after that.
Mr. Speaker: May I say to the hon. Gentleman and to the whole House, but specifically to the Opposition Front Bench, that they have their remedy? They have an Opposition day virtually every week — [Interruption.] Order.—and it is perfectly open to the Opposition to choose this subject for debate. I find it reprehensible that an hon. Member should seek to involve the Chair in a matter that is plainly one of political controversy.
Mr. Dalyell: On a point of order, Mr. Speaker. Were you deflected from the answer that you were about to give me about the sub judice rule?
Mr. Speaker: As far as I am aware, no action has been set down in the English courts, and the matter is not sub judice.

Mauritian Citizens (Detention)
4.54 pm
Mr. Jeremy Corbyn: I beg to ask 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 continued and unauthorised holding of 10 Mauritian citizens at Heathrow airport."
This is a serious matter. On 12 April, a group of 10 Mauritian citizens arrived at Heathrow airport in transit with the intention of travelling on holiday to Europe. They had valid visas for all the countries that they proposed to visit. They were stopped at the airport by security staff. They were strip-searched and handed over to the immigration service. They were then delayed sufficiently so that their onward flight to Brussels had already left, and they were then placed in detention at Heathrow. At no stage were they applying for entry to the United Kingdom, yet their passports were stamped with the words, "Refused permission to enter the United Kingdom", and the immigration service decided to deport them back to Mauritius, even though they had been booked on an onward flight to Belgium.
On Good Friday, the Mauritians' solicitor applied for a judicial review and was granted an injunction preventing their removal to Mauritius, but 15 days later they are still held at Harmondsworth detention centre. They have been refused permission to continue their holiday in Belgium, unauthorised stamps have been placed in their passports saying that they cannot he admitted to Britain—they never applied to come here — and their high commissioner, who has met Home Office and Foreign Office officials on the matter, has not received a satisfactory explanation of this serious state of affairs.
It is important for the House to debate the matter because those people are being wrongly held at the airport. No charge has been preferred against them, yet they have not been allowed to go free. It calls into question the activities and behaviour of the Home Office and the immigration service, in respect not just of this matter but of other matters. It is incumbent upon a Home Office Minister to make a statement to the House about what is happening at Heathrow airport, and it is important for the House to discuss this serious matter.
Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the continued and unauthorised holding of 10 Mauritian citizens at Heathrow airport."
Again, I have listened with concern to what the hon. Gentleman said, but I regret that I do not consider the matter which he has raised to be appropriate for discussion under Standing Order No. 20 and I cannot, therefore, submit his application to the House.

Westland plc (Select Committee Evidence)
4.58 pm
Mr. Robin Cook: On a point of order, Mr. Speaker. I refer you to the report of the Select Committee on Trade and Industry in February this year concerning share dealings in Westland. As the minutes of the proceedings make clear, on 14 May the Committee received evidence from representatives of Westland and of Lazard Brothers, its merchant bankers. At page 179, the representatives were asked whether they had any knowledge of the six mystery buyers of shares in Westland. Mr. Michael Baughan, director of Lazards, is recorded as replying: "No knowledge whatsoever."
Last week, it emerged that the Banque Dreyfus, which is one of the six mystery buyers, is a corresponding bank of Lazard Brothers. That information was not disclosed to the Select Committee, although, since the chairman of Lazard Brothers is a former Member of the House and of the Government, the bank might have been expected to know of the importance of the Select Committee and of any dealings with it.
I ask you, Mr.Speaker, to invite Ministers to note this expression of concern and to suggest to them that a full statement would be welcome, to discover whether they knew this information, when they knew it and why the information was not disclosed to the Select Committee on any of the three separate occasions when Ministers gave evidence to it.
Mr. Speaker: This is not a question of order. As the hon. Gentleman correctly said, it is a matter for the Government and for the Select Committee, and I have no doubt that his comments will have been heard. Now I will take Mr. Heffer.

Westland plc (Select Committee Evidence)

  STATUTORY INSTRUMENTS,&c
  Ordered,
  That the draft British Nuclear Fuels plc (Financial Limit) Order 1987 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Neubert.]

Orders of the Day

  Consumer Protection Bill [Lords]
  Order for Second Reading read.
  Mr. Teddy Taylor: On a point of order, Mr. Speaker. My point is not as controversial as those points that were raised before, but I put it to you that essential documents relating to this debate are not available in the Vote Office. As you will know, Mr. Speaker, one of the essential parts of this Bill is to repeal the Trade Descriptions Act 1972, an Act which was approved unanimously by the House. Hon. Members who have asked for the Second Reading Hansard of 25 February 1972 have been advised that it is out of print. It would be ridiculous if hon. Members were asked to make a judgment on whether to repeal an Act if they were not able to read the arguments about why the Act was introduced by the House in 1972.
  Mr. Speaker: I understand the hon. Gentleman's point of order. I am sure that Ministers will continue to make available such documents as are absolutely essential for an understanding of Bills. That obligation could not be to provide every Act that may be about to be repealed, because some of them go back over the centuries. I am certain that if the hon. Gentleman went to the Library he would be able to see a copy of the 1972 Act.
  Before I call the Minister, may I tell the House that I have not selected the amendment in the name of the right hon. Member for Taunton (Sir E. du Cann) and his hon. Friends?
  5·9 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard): I beg to move, That the Bill be now read a Second time.
  The Bill originated in another place and was warmly welcomed there. It deals with two principal matters—consumer safety and misleading price indications. Parts I and II of the Bill are addressed to safety. The first provides new civil remedies for those injured by unsafe goods and the second concerns criminal sanctions against those who supply such goods. Part III extends the protection for consumers against misleading price indications.
  Before I explain the Bill's provisions in more detail, I should like to say a few words about the Government's general approach to consumer protection policy. For most purposes, the best protection that consumers can have is that provided by fair competition in a free market. In general, that protection can best be achieved by letting business get on with the task of competing for customers, but fair competition can only be achieved in a suitable framework.
  The Bill is addressed to two forms of unfair competition. Supplying unsafe goods is a form of unfair competition as it gives the supplier of unsafe goods an unfair advantage over a competitor who is prepared to incur the costs associated with ensuring that his goods are safe. It is also a particularly objectionable practice in its own right. Misleading consumers about the price that they are charged is also unfair competition. Fair competition will not be achieved if consumers are given false or misleading information on which to base the decisions that they make in the market place.
  52
  I should like to explain to the House the Bill's principal provisions. Part I provides consumers who arc injured by defective products with a new mechanism for seeking compensation. These provisions implement the European Community directive on liability for defective products.
  United Kingdom law as it stands provides injured consumers with two avenues for seeking redress — the law of contract and the law of negligence—but there are deficiencies in these two routes. Under the law of contract, only the purchaser may be compensated by his immediate supplier. Under the law of negligence, compensation can be gained directly from the manufacturer only if the injured person can show that the manufacturer has been negligent. Those anomalies in our existing product liability law were addressed in reports prepared by a Royal Commission chaired by Lord Pearson and by the Law Commission and the Scottish Law Commission. All three recommended that manufacturers should be strictly liable for death or injury arising from a defect in their products, subject to certain defences.
  The European Community considered the matter over a period of 10 years and in July 1985 adopted a directive requiring member states to make provisions which follow many of those recommended by the three commissions to which I referred. Accordingly, under part I of the Bill, any person who can show that he was injured as a result of a lack of safety in a product will be able to secure compensation from the manufacturer or, if appropriate, the importer into the Community. He will not have to show negligence and he need not be the purchaser. The benefit to consumers is clear. I might add that it will also assist retailers, who are liable under the law of contract, by tending to channel claims for compensation towards the manufacturer who introduced the defect.
  The general purpose of the directive is harmonisation. There are three matters on which member states may derogate from its core provisions, but we intend to take up none of those derogations. First, the directive excludes liability relating to primary agricultural produce. The Government do not intend to depart from this and, to my knowledge, no other member state has proposed legislation which differs from our intentions. Secondly, the directive provides an important defence for the manufacturer if he can show that at the time of supply the general state of scientific and technical knowledge was not such as to enable the defect to be discovered. This is called the development risks defence. Member states may derogate from this provision, but in my view to do so could stifle innovation, which would be in the interests of neither industry nor consumers. Other member states in the Community agree with our view.
  Mr. Cranley Onslow: If my hon. and learned Friend is referring to what is also known as the state of the art defence, can he say whether he intends to invite the Committee to restore the original wording as presented in another place, which is greatly preferred by the aerospace industry and by other high-tech industries?
  Mr. Howard: I shall be coming to that, but I have not yet reached a final view. I wish to listen to the opinions expressed in the House today, as well as outside, before coming to a final conclusion about whether the original language should be restored.
  Mr. Michael Grylls: Will my hon. and learned Friend also consider the possibility of limiting the liability under this provision? That would be a great help for many innovative and science-based industries.
  Mr. Howard: I shall be coming to that almost immediately, although I fear that the help provided by such limits would be largely illusory. First, however, I should like to complete my comments on the development risks defence as the principle of that defence may still be a matter of controversy between the two sides of the House.
  Mr. Gerald Howarth: There is no one on the other side.
  Mr. Howard: As usual, my hon. Friend is entirely accurate in his observation, but we shall await with interest the comments of the Opposition Front-Bench spokesman.
  Apart from the German law, which applies only to pharmaceuticals and which was in existence before the directive was adopted, no member state has introduced legislation without the development risks defence in it. Even in France and Belgium, where the existing law on liability does not incorporate this defence, the courts appear to provide a development risks defence in their interpretation of the law.
  I should make one further observation about development risks. The House will be aware that the Bill orginally contained a slightly different formulation of that defence—this was the point raised by my hon. Friend the Member for Woking (Mr. Onslow) — and that the wording was altered as a result of an amendment in another place. Some have welcomed that amendment, but others have opposed it. I wish to hear the views of both sides of the House before reaching a final decision.
  The third derogation enables us to limit a producer's total liability attaching to a particular defect—this was the point raised by my hon. Friend the Member for Surrey, North-West (Mr. Grylls) —to 70 million ecu, or some £40 million, but I fear that that might lead to injustices when there are many claims and to delays in awarding compensation when there is a possibility of further claims in respect of the same product while offering little real protection to most manufacturers. Having considered the matter carefully, therefore, we do not intend to set such a limit and, apart from the special German pharmaceutical law that I mentioned earlier, no other member state appears likely to impose a limit on liability.
  Part II is complementary to the Bill's product liability provisions and is intended to prevent unsafe goods reaching the market in the first place. There are already regulations which make it an offence to supply certain specific types of goods if they are unsafe, but inevitably this results in some dangerous products reaching consumers because there are no regulations prohibiting their supply.
  The Government announced their policy on this matter in the White Paper, "The Safety of Goods", in July 1984. We propose to tackle this problem by introducing a new general safety requirement which will make it an offence to supply any unsafe consumer goods. It will, however, be a defence to show that the goods conform to an approved safety standard or otherwise achieve the same level of safety, and we intend to approve a comprehensive regime of standards for this purpose. This will give an important boost to the role of standards, thus improving the quality
  54
  and competitiveness of British goods. Part II applies throughout the chain of supply, although there w ill be a defence for retailers who often do not have specialised knowledge about the manufacture of goods. We shall, however, broadly retain the existing regulations covering specific goods.
  The White Paper also made proposals for the improved enforcement of consumer safety legislation. Those proposals were taken up by my hon. Friend the Member for York (Mr. Gregory) and now constitute the Consumer Safety (Amendment) Act 1986. I am grateful to my hon. Friend for his efforts, and that Act is consolidated in parts II and IV of the Bill.
  Mr. Hugh Dykes: In consultations with industry and trade representatives about consumer safety, my hon. and learned Friend showed some sympathy with the views expressed by some retailers and, I believe. by the Retail Consortium, that a balance must be struck between retailers' and manufacturers' obligations and the need for consumers to use products correctly and not wilfully or negligently. Is he satisfied that the proposals to be introduced at a later stage will take care of that vital point?
  Mr. Howard: My hon. Friend is right to refer to those concerns. We have considered them carefully and are satisfied that the present language of the Bill more than adequately meets those concerns.
  Part III is addressed to misleading price indications. The present legislation, which is contained in section 11 of the Trade Descriptions Act 1968 and the Price Marking (Bargain Offers) Order 1979, has been widely criticised. Both provisions prohibit specific practices. This approach allows other misleading practices to slip through the net. The Trade Descriptions Act allows traders to "disclaim" certain of its requirements, and the bargain offers order is extremely complex, poorly understood and difficult to enforce. The Bill replaces those complex provisions with another general offence — giving a misleading price indication to consumers in respect of any goods, services, accommodation or facilities. The Bill also provides for a code of practice giving traders detailed guidance on this general offence. A copy of the draft code was placed in the Library on 20 November last year.
  The House will no doubt wish to know what the code's legal status is to be. When the Bill was introduced in another place, compliance with the code was to be a complete defence. However, during the passage of the Bill through another place, the Retail Consortium, the National Consumer Council, the National Federation of Consumer Groups, the Institute of Trading Standards Administration and the Local Authorities Co-ordinating Body on Trading Standards — all those most directly concerned and now called the "Concordat"—presented an alternative package of proposals.
  This package included a proposal that compliance with the code should not be a defence but that compliance or contravention should tend to establish innocence or guilt. We have consulted widely on the package, and we undertook to reflect the outcome of that consultation in the Bill. The consultation is now complete, and the opinions received indicate very considerable support for the Concordat's proposal on the status of the code. I can therefore tell the House that the Government intend to move amendments in Committee which will give the code the status that the Concordat seeks.
  Mr. Dykes: Will my hon. and learned Friend go into that in a little more detail? I am sure that what he has just said will be widely welcomed, and not just by those representing the Concordat. Before the Committee stage, and perhaps now, could my hon. and learned Friend say whether the revised code of practice will be, for example, shorter, clearer, and briefer?
  Mr. Howard: We shall be seeking to do what we can to improve the presentation of the code, and it may be that there will be some enhanced scope for that in the light of the decisions taken about the status of the code.
  Part IV provides for the enforcement of parts II and III. It consolidates, with minor amendments, the relevant provisions in the current legislation. Part V amends the Health and Safety at Work etc. Act 1974. That Act is intended to ensure that safety considerations are properly taken into account before goods for use at work are supplied. The amendments will improve the working of the Act. The general duty to supply safe goods for use at work is to be extended to fairground equipment.
  Mr. Teddy Taylor: How will it improve the practice to extend this to fairgrounds and to replacement parts of an article? Does my hon. and learned Friend realise that the Bill gives the Customs the power to stop essential replacement parts for a fairground operation that may be desperately needed to allow the machine that has been authorised and approved as safe to go ahead? Is there not at least a case for saying that replacement parts for a proven article should be exempted?
  Mr. Howard: If the parts are thought to be unsafe, I should have thought that it would be in everyone's interests that they should not be available for use with all the possible dangers to which their use might lead. It is only if the parts are thought to be unsafe that the powers to which my hon. Friend refers will arise. Therefore, I fear that I cannot go along with the concern that he has expressed on that point.
  Mr. Taylor: How can my hon. and learned Friend say that? What possible purpose can a replacement part he put to if it is part of a proven, approved article, other than to be put into that particular item and used again?
  Mr. Howard: I understand that that is the contemplated use of the proposed replacement part, but if it comes to the Customs officer's notice that the replacement part, for some reason, might be defective or unsafe, which is the situation with which we are concerned, it is only sensible that powers should be available to ensure that that potentially defective or unsafe part is not put into use.
  Finally, I come to a matter which I know is of very great concern to many hon. Members and in particular many of my hon. Friends—the Trade Descriptions Act 1972. The Act requires all imported goods, with a few exceptions, which are supplied in the United Kingdom bearing a United Kingdom name or mark to be marked with their country of origin. Early last year the European Commission renewed a challenge to the Act on the ground that, in its view, it is a measure amounting to a quantitative restriction on imports between member states, which is prohibited by article 30 of the treaty of Rome.
  The challenge to the 1972 Act was the initial formal step in the procedure for infraction proceedings under article 169 of the treaty. The next step would have been the issue of a reasoned opinion by the Commission which would,
  56
  to a large extent, have committed the matter to being brought fairly rapidly before the European Court of Justice. After careful consideration of the legal position, particularly an earlier judgment by the European Court of Justice against the United Kingdom's 1981 origin marking order, the Government have reluctantly concluded that the United Kingdom could not hope successfully to defend the Act before the European Court and that no useful purpose would have been served by seeking to do so. Indeed, an unsuccessful United Kingdom defence could well have been counter-productive since the terms of an adverse judgment might well have inhibited the scope for successor arrangements. Part V of the Bill accordingly makes provision for the repeal of the 1972 Act.
  Many hon. Members are, I know, concerned about the potential effect on both consumers and industry in this country of repealing the 1972 Act—as, indeed, I am. As the House knows, in the light of consultation with interested parties, we have been considering the scope—consistent with Community law — for a successor arrangement to be introduced by statutory instrument under the existing powers of the Trade Descriptions Act 1968. As soon as we are able to do so we shall announce a decision. I believe that the House will recognise that it is necessary to provide the power to repeal the 1972 Act when we have an acceptable successor regime. I can assure the House, as I have made clear in the past, that it is not our intention to bring into force the repeal of the 1972 Act until such time as the question of a successor arrangement is resolved.
  Whatever arrangements are made, most British manufacturers will doubtless wish to continue to draw attention to the fact that their goods are made in Britain. The repeal of the 1972 Act will not prevent that.
  Mr. J. F. Pawsey: Will my hon. and learned Friend give the House a little more information about the successor arrangements, because some of us are a little apprehensive about them? Does he mean that that will be a new form of words that will effectively be the 1972 Act put in a slightly different way?
  Mr. Howard: Unfortunately, I cannot go as far as acceding to that suggestion by my hon. Friend, because it is the substance of these matters that is looked at by the European Court, not simply the language. We shall be seeking to find not only a formula, but some substance that will protect the consumer against the danger of being misled by some misleading indication of the origin of the goods in question that we can hope successfully to defend before the European Court of Justice.
  I assure my hon. Friend that one of the reasons why I am not in a position to identify this successor regime to the House is that we are determined to leave no stone unturned in our efforts to ensure that we get the most effective successor regime possible. For example, we are looking at regimes that have been adopted in other Community countries. I am determined that we shall not have any lesser degree of protection in this country than is afforded, for example, to consumers in France in relation to any similar signs of origin of goods that may be in force under French law. I am afraid that I cannot go any further than that.
  Mr. Gerald Howarth: Do I understand that this provision in the Bill to repeal the 1972 Act can be invoked at a later stage? If that is the case, and if it is the intention

  57
  to repeal that not immediately but at some future date, how does that square with our position vis-a-vis the European Court? Presumably, if we are taken to court, we shall be saddled with the 1972 Act. Therefore, we will fall foul of the court in any case.
  Mr. Howard: The prospects are that whereas the European Commission would commence infraction proceedings if there were no legislation to repeal the 1972 Act, if this measure contains a provision for the repeal of the Act, although that repeal is not activated until we have a successor regime ready to put into place, those infraction proceedings will not be commenced
  Mr. Teddy Taylor: Before the Minister leaves that point, will he say whether it will be Government policy to proceed with prosecutions under the 1972 Act?
  Mr. Howard: That is a matter for trading standards officers, who are the responsible authorities for prosecutions under the provisions of the 1972 Act.
  I am sure that the House will agree that the Bill offers real gains for consumers and responsible businesses. Both will benefit from the more effective operation of the market mechanism. Supplying unsafe goods and giving misleading price indications are clearly harmful to consumers. They are also a way of gaining an unfair competitive advantage over honest business. The Bill will do much to prevent both mischiefs.
  5.30 pm
  Mr. Alan Williams: I welcome any addition to consumer protection law, whatever its source. Over the years there has been a fairly good consensus approach on legislation such as the Fair Trading Act 1973 and the Consumer Credit Act 1974, which was initiated by one party and taken up, modified and implemented by another.
  We are in agreement with much of what the Minister has said. The Bill is a step forward, but when we look at the detail we see that it is a smaller step than we had originally hoped for when we saw it in the Queen's Speech at the start of this Session. For example, the Bill purports to protect consumers but, according to the Consumers Association and the National Consumer Council, it would fail to provide compensation for consumers in the event of another thalidomide tragedy. Inevitably, it will be seen by the general public as a mouse of a Bill and as having failed to deal with one of the most important cases that has arisen with regard to consumer interest and the interests of industry for many years.
  The Bill is based on a European directive and is therefore the basis of legislation which is being enacted in various Common Market countries. However, it gives the British consumer — as I hope to demonstrate — less protection than the French or West German Governments have felt appropriate to give to their citizens. For that reason we shall be seeking to move various amendments in Committee, as no doubt the Minister would expect.
  I notice that there is a money resolution on the Order Paper. I was very disappointed, when looking at the explanatory memorandum, to see that there are not expected to he any implications for public expenditure or public service manpower. If that is so, I wonder what the Bill is all about and what value it will be to the consumer.
  However, if no further resources are forthcoming to meet the wider responsibilities, the quality of existing
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  consumer protection will fall as the resources are spread more thinly over a wider range. Consumer organisations, and trading standards officers in particular, have pointed out that the present consumer safety legislation has not met the objectives that we all want. Various Governments have introduced measures to improve consumer safety. We have nibbled at the issue and that is why I welcome the approach of a general requirement for safety. Under the present legislation as few as 30 categories of goods are covered, but the safety requirement is being extended to the whole sector of the supply of goods. The Minister is saying that he will carry out this enormous extension without any extra manpower or financial resources, so one is a little puzzled as to what that extension will be worth.
  The same applies to the misleading prices issue, with which I shall deal in more detail a little later. We all go into shops and look at newspapers and adverts which mention bargain and special offers. A whole industry is misleading the public in terms of the marketing of goods. I hope that that will at last be dealt with, but I recognise the problems that are involved.
  In addition to that wider responsibility for safety there will, we hope, be an effective framework for the control of misleading marketing practices. How will we implement the intentions, as opposed to legislating for them, if our trading standards officers are to have no extra resources of manpower or money? It seems that there is more of a declaration of pious hope about extending consumer protection than a likelihood of delivery. Perhaps the Minister will clarify the position in his winding-up speech.
  Mr. Howard: The right hon. Gentleman will have an opportunity to address the House before I reach my winding-up speech. Perhaps on that occasion, if not now, he would be good enough to tell the House the extent to which he thinks that additional resources are appropriate and the proposals of the Labour party on that issue. I am sure that that will interest my right hon. Friend the Chief Secretary to the Treasury when he is trying to identify how much the Labour party's programme would cost.
  Mr. Williams: The hon. and learned Gentleman makes a rather petty debating point which is of no great profundity. I am making an objective analysis of a rather poor and pathetic Bill: it is not my fault that it lays itself open to criticism.
  As to the provision of resources, I point out to the Minister that as consumer Minister in 1974 I set up, for the first time, a national network of consumer advice centres, provided resources for them and made sure that the local authorities were able to sustain them throughout the period of the Labour Government. Sadly, as soon as this Administration came to office they set about withdrawing funding, which led to the closure of nearly all the consumer protection centres.
  In Committee we shall explain what we need to explain. We are discussing the adequacies and inadequacies of the Bill. By making a minor debating point the Minister does not escape the fact, which I have already put forward, that the Bill imposes enormous additional responsibilities on the consumer protection machinery, which is already creaking because it has been starved of resources since the Government came to office. It is expected to carry out all these extra responsibilities with no extra manpower or resources. It is up to the Minister to defend the penny-pinching attitude of this Administration. Equally, it is for

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  me to demonstrate that that is the attitude of this Administration. In Committee we shall deal with this and many other points.
  The Bill waters down the proposals that the EC has put forward. Let us take the fairly basic sector of food and agricultural products. Nothing is more fundamental in terms of the interests of the consumer than foodstuffs. It matters to us as individuals and it matters even more to our children that the quality of our foodstuffs should be protected by consumer legislation. Yet it seems that the Government have made a significant change in the rules affecting foodstuffs. The rules in the EC directive exclude agricultural produce that has not undergone "initial processing", but those words do not appear in the Bill. The Government have adopted a different formula from that applied in the rest of the European Community. Under the Bill, there is an exclusion for agricultural produce that has not undergone industrial processing and even that phrase is qualified by a reference to the essential characteristics of the product being affected. I do not pretend to know what that means and nothing in the Bill tells us what it means. However, I know that it does not mean initial processing and that it is a major departure from the directive's intentions.
  As there is no definition of industrial processing in the Bill and as the Minister in another place failed to satisfy their Lordships, I hope that the Under-Secretary will clarify the matter, because it puzzles us all. What is foodstuff that has not undergone industrial processing which has affected the essential characteristics of the product?
  I assume that the Bill will exclude the chemical spraying of foodstuffs. Lettuce has a high absorption rate and sustains many of the chemicals sprayed on it. Will such spraying be covered by the Bill? Would it be covered by the directive? We do not know, and we should like to know.
  What about the injection of cattle with steroids and antibiotics? Is that "initial processing"? It certainly does not seem to be "industrial processing". Again, we do not know, and the public are entitled to know. Are additives an industrial process? Are preservatives, colourings and flavour enhancers covered by the Bill? Would they be covered by the directive? We need clarification of such matters.
  The National Consumer Council believes that the Government have deliberately created a loophole to appease the agriculture lobby and that the Ministry of Agriculture, Fisheries and Food has sabotaged consumer protection legislation. It says:
  "We are adamantly opposed to the Government's extension of this loophole. There is real and widespread public concern at the use of chemical treatments to make foodstuffs look nicer, last longer and taste better. While the Directive leaves liability for such treatments to the court, the Bill expressly states that there should be no compensation under the product liability laws."
  The intentions of the directive are much wider than those of the Bill.
  Product liability will be closely investigated in Committee, because there is great anxiety about the subject. The House welcomes the introduction of product liability. It has been a decade in coming, but I recognize
  60
  the problems that have had to be overcome. However, we have moved a long way from the Pearson report which stated unequivocally:
  "to exclude development risks from a regime of strict liability would be to leave a gap in the compensation cover, through which, for example, the victims of another thalidomide disaster might easily slip."
  The Pearson commission was asked to look at the issue, and it heard all the evidence before stating clearly that the defence that the Government intend to allow should not be permitted. It might be said that the commission's judgments were perverse; we can all remember committees coming up with unexpected or unbalanced judgments. However, not only the Pearson commission, but the Law Commissions for Scotland and for England and Wales, the Bar Council and the Law Society have all come down against the defence that the Government are building into the Bill.
  The National Consumer Council observes that no similar defence is available under French or West German laws. The Minister said that the courts had interpreted the law in France. The French legislature made a decision and the courts interpreted it. The day that a Minister of the Crown comes to the House and tells me that a French judge should determine how a British Government should legislate will be the day I question whether that man is fit to be a Minister. Therefore, I assume that that was not really the point that the Under-Secretary was making.
  Mr. Howard: It is not the point that I was making, and the right hon. Gentleman knows perfectly well that it is not. However, it affects the extent to which he is able to rely on the law of France as a precedent. That is all.
  Mr. Williams: The Governments of France and West Germany passed laws that they wanted to be implemented. The courts have given their interpretation, as our courts would be able to do. The Under-Secretary has said that he would be willing to start from the weakest possible position.
  There is great worry on the Conservative Back Benches about one proposal in the Bill, on which the Under-Secretary says, "Because a court on the continent has interpreted the matter in a certain way, we shall not get caught in that trap, but will capitulate at the outset." The hon. and learned Gentleman says that adjudications that he admits differ from the intentions of the French Government should have an influence on the way in which we legislate for the protection of our consumers. I do not accept that view.
  The NCC is a body of considerable authority, and it says that because a defence that is not available in France or West Germany will be permitted in this country, and because there are tighter rules about pharmaceuticals in the United States, we could become a testing ground for new drugs. I do not wish to contemplate such a risk.
  Of course, consumer groups will argue for the widest protection. That is their job, and our job is to ensure that their views and arguments are fully considered. I recently met representatives of the Association of British Insurers, because consumer groups argued that it might be costly to have full product liability, but that the costs were insurable, and that the insurance premium could be added to the price paid by consumers.
  I asked the Association of British Insurers for its views—I know that it has now submitted a brief to Members—following the lunch—rather the meeting—I had with

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  it on 10 March.[Interruption.] The association members enjoyed the lunch, but I enjoyed their company—I have a waistline problem. However, I must say that a very good mineral water was served. I asked the association to inquire of its member companies and the letter I received states:
  "The enclosed note explains the general view on product liability taken by insurance companies. This is that they are, by and large, confident that they will be able to provide cover for liabilities under the new legislation for current limits of indemnity at premium levels which will have only a marginal effect on the cost of production".
  In fairness, that is not what the association had been asked to address. The question was not what would happen under the present legislation, but what would happen if that legislation were amended in the form that was suggested. Thus, my objectivity is unchallengeable.
  Mr. Howard indicated assent.
  Mr. Williams: I am glad that the Minister appreciates that. The letter continued:
  "There could, however, be a reduction in the amount of insurance capacity"—
  the association did not say there would be non-availability —
  "if the state-of-the-art defence were not included. This would particularly affect industries, such as pharmaceuticals and aerospace, which present a heavy development risk exposure."
  Therefore, the insurance companies are not saying that that risk could not be covered, but they are saying that there may be some limit on the extent of cover.
  Mr. Howard: That is the same thing.
  Mr. Williams: It is not the same thing. For a company to say that it is willing to insure, even if that insurance is more limited than under the present proposals, is different from saying that the company cannot insure. I am sure that the Minister will admit that. What is available is insurance cover under either scheme, but the insurance companies admit that they would want some type of ceiling on the level of commitment.
  If that is the case—I believe that we wish to obtain the best piece of legislation that we can for the consumer—we shall need to explore a series of amendments in Committee. We should have a genuine exploration of those amendments in Committee and get answers from the Government. We shall also seek advice from the various organisations concerned regarding the options. We shall certainly move an amendment on strict liability with insurance. We shall judge that matter in the light of the arguments that are put forward and consider whether we should adopt the New Zealand system. In that country there is a type of state system operating as back-up for compensation. We should consider the merits of that system. I am not sure whether it would work here, but we should consider whether there is anything in it that we can use to the advantage of British consumers.
  In Committee we should also consider the precise wording of the defence. We shall need to consider such matters in detail. I am sure the Minister will agree with me that they are important issues and they are not easy to decide upon. I do not consider this a simple black and white issue. There are important arguements on both sides and we must have them rehearsed. However, I do not want to hear the nonsensical argument that it has become so expensive to obtain insurance in America that that means that Britain will follow the same route. I believe that that
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  argument was put forward earlier by certain sectors of the industry, but it has now been thoroughly discredited and we do not hear it so often.
  The American system is utterly different from ours. In the United States juries award damages that are often astronomical. In Britain awards are made by judges. I am sure that other hon. Members have dealt with constituents' cases and have shared their anguish when they obtain derisory damages for the death or maiming of a child. In this country damages are judged on the loss of earning power rather than on emotive issues. Therefore, damages in Britain tend to be far smaller than in the United States. In the United States there is a rather peculiar practice—no doubt the United States would be called the -market society" known as the contingent fee system. Under that system solicitors run around offering to take on cases at no cost to the person who is pursuing that case. Instead, the solicitors take a percentage of the spoils. There is a more litigious attitude in the United States than in Britain. Thus, the United States experience in terms of the cost of product liability has little relevance to Britain.
  On the question of safety, I intimated earlier that we welcomed the introduction of the general duty. I believe that safety is a more important consideration than value for money. Value for money and misleading prices are important, but safety is the paramount consideration. However, I wish to return to the point that we debated virtually a year ago, but which is encapsulated in the legislation before us and in the Consumer Safety (Amendment) Act 1986. The Government, through their amendments to that Act—incorporated in the legislation we are discussing today — made it more difficult for consumer protection departments and trading standards officers to give the safety protection that the public need.
  The Government insisted that trading standards officers should have only 48 hours in which to carry out their initial investigations of goods. If I remember correctly, the Minister was defeated on that issue in Committee by 11 votes to 2. He did not convince anyone—only his Private Parliamentary Secretary dared to vote with him. The PPS did not look happy at the time and I am sure he made a mistake at that time. The Minister's arguments were destroyed in Committee. The Committee asked that, instead of 48 hours, 72 hours should he given. It was pointed out that something might happen late on a Friday evening, and that the 48 hours would have expired by the Monday morning. The Committee asked the Minister to be more generous and make that limit 72 hours. In fact, the limit of 72 hours was in the Bill, but the Minister came along and amended it to 48 hours. The Minister's argument to amend the limit to 48 hours will appeal to the hon. Member for Southend, East (Mr. Taylor). The Minister's argument fits in with what I was saying about the Minister's attitude to what goes on on the continent. In Committee the Minister said:
  "we are are prepared to increase this period"—
  the period in which it is decided whether goods are safe or unsafe—
  "to 72 hours, primarily for the reason that that extension would be vulnerable to criticism as imposing an unnecessary restraint on trade and might imperil the legislation at the hands of enforcement authorities in the European Community before the European Court of Justice."
  Therefore, extending the inspection period from 48 hours to 72 hours would upset all those nice people in Brussels

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  However, the Minister could not tell us from where he had obtained that judgment, nor quote a document stating that that would happen.
  The Minister then decided that perhaps that argument was not the most persuasive. The other reason that he gave for not extending the limit to 72 hours was:
  "a longer period could lead to undesirable blockages and overcrowding in busy ports"—[Official Report, Standing Committee C, 30 April 1986; c. 12.]
  I recall saying to the Minister that he was suggesting that, in addition to butter mountains, we would have teddy bear mountains at the ports of the United Kingdom.
  The Minister's arguments were too preposterous to be contemplated, either from the point of view held by the hon. Member for Southend, East and his colleagues or from the aspects that I have discussed. The Minister is sustaining legislation that makes it more difficult for trading standards officers to carry out their proper duties to check the safety of goods.
  In Committee we shall also want to discuss second-hand goods. One cannot expect the same standard from secondhand goods as from new goods. That would be illogical, but some consumer organisations have suggested amendments which they think are suitable. Those with the lowest incomes use the second-hand market and they are least able to protect themselves. I think of cases brought to my surgery of people asking for assistance in obtaining kitchen equipment. The Department of Health and Social Security will provide enough money to buy a second-hand stove, but a restored electrical or gas appliance can be unsafe. I know of at least three instances of people who have bought such equipment and found it unsafe or inoperable. In the House of Lords the Minister said that specific regulations could be used to deal with second-hand goods.
  That is a slow and laborious way of providing consumer protection. The Department might have streamlined the system but at one time 102 steps had to be taken before an order became law. The system is not convincing. It is even less convincing when one bears in mind that many months ago the Minister promised that he would introduce legislation to cover second-hand gas ovens. I understand from consumer organisations that such legislation has not materialised. All that we have had is the promise.
  I can understand the Government's difficulties in relation to misleading prices and the John Methuen case way back in 1975. The Government's attempts were disastrous and had to be lost in the system because the orders were impossible to implement. I am glad that the Minister has at least been willing to take advice on the format. He has explained his intentions this afternoon and we shall examine them constructively in Committee.
  We shall also wish to examine protection for the pharmacist — I do not refer to the pharmaceutical industry. The pharmacists have requested a requirement that the name of the manufacturer should appear on a product so that the people against whom claims should be made are known clearly to the public. We shall examine that suggestion in Committee.
  My final argument concerns the amendment that is not to be discussed and the repeal of the Trade Descriptions Act 1972. I note the helpful and clear amendment tabled by Conservative Members. They are doing their best to
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  guide the Minister along the correct path. However, I have served on Committees with the right hon. Member for Taunton (Sir E. du Cann) and I know how difficult he is to help. The Minister's argument is that we cannot keep the protection under the Trade Descriptions Act requiring that the country of origin be shown because eventually we might lose in Europe. I cannot imagine a French Minister taking that attitude. I cannot imagine a French Minister saying, "We might lose in the end so we will not fight." A French Minister protecting French rights would say, "We will fight until we have gone through the whole system." All that we have heard from the Minister today is his assessment that an unsuccessful defence might prejudice the proposed replacement regime. I find that a little strange. The Minister is saying that we shall pass the legislation and repeal the Trade Descriptions Act 1972, that we shall not implement the legislation but start negotiations with Europe. I do not find that impressive and I do not think that anybody will be convinced that the Minister is serious.
  The Minister is saying that of course he will put something in place of the Act but that he does not know what it will be. It is not as though we are talking of something new. The matter did not come before him last week or the week before. I have letters from the Minister written last year in which he says that the Government intend to put something in place of the Act. Today he tells us that he intends to do something but that he does not know what or when or whether it will be effective.
  The Minister was unable to answer when asked what would happen in the meantime, what the trading standards officers would do and whether any cases would be considered. If we approve the Bill it will be the law in theory because the repeals will not have been implemented. The Minister says that everything will be up to the trading standards officers and that they must decide whether to take action in the intervening period. How unconvincing can a Minister be? This is an arch example of passing the buck.
  By the time that the Bill reaches Committee we expect to have clear explanations from the Minister of how he intends to replace the Act and with what. His attitude to the Commission has been submissive. He seems to be the Government's political football. He has been kicked around Japan and now he is being kicked around the Commission.
  We shall not oppose the legislation because we think that some extra protection is better than no protection. The Bill itself is almost an abuse under the Trade Descriptions Act in that it is far less than it was purported to be when it was first politically marketed by the Government last October.
  6.8 pm
  Mr. Charles Morrison: As I view the acres of empty Benches behind the Opposition spokesman, I find it not surprising that the Labour party does not intend to oppose the legislation.
  I shall he brief and refer to part I of the Bill which I am sure will reassure the Minister. As I staggered to my feet, my hon. and learned Friend the Minister might have felt burdened with the thought of opposition from this quarter, but I want to assure him that in principle I am in favour of consumer protection. Also, because we are members of the European Community, which I strongly support in principle — I emphasise the words "in

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  principle" — I am in favour of harmonisation. The greater the common ground in terms of economic and related law the better it is for the internal smooth running of the Community and for the Community's external attitudes to other countries. However, these general principles assume that European Community directives are always drawn up to the greatest common advantage. I am not convinced that it is to the greatest common advantage for part I of the Bill to be drawn as it is.
  It looks to me as if those in the Commission who were responsible for part I drew it up for the benefit of lawyers. It looks as if it has been drawn up by lawyers for the benefit of lawyers. Within the concept of consumer protection, I am in favour of manufacturers being responsible for the safety and reliability of their products. Nevertheless, there is a limit. The idea, mooted by my hon. and learned Friend the Minister, of liability up to a maximum of £70 million is not much consolation for a great many manufacturers.
  I am the parliamentary representative of the British Scrap Federation. [Laughter.] It is very important. After all, scrap metal provides most of the raw materials for the steel industry, among other industries. It is the considered view of the legal advisers of the federation that members of the federation will be affected by the passing into law of the Bill's provisions on product liability. How far members will be affected is difficult to say because so much of part I of the Bill is couched in such vague terms that the interpretation of those terms will depend upon the construction put upon them by the courts.
  Nevertheless, it seems clear that the Bill maps out two ways in which someone may be liable for damage caused by a defective product. The first relates to the originator of the product and the second to intermediaries. The second, presumably, is designed so that where products are sold to consumers by retailers who could not be said to have produced the product, the person damaged is still protected. That is not unreasonable. But it seems that members of the British Scrap Federation could be liable in many cases under clause 2(2)(a), which refers to the producers. As my hon. and learned Friend the Minister knows well, a producer is defined in clause 1 as the person who manufactured the product, or
  "in the case of a substance which has not been manufactured but has been won or abstracted, the person who won or abstracted it",
  or, where the product bears an essential characteristic
  "attributable to an industrial or other process having been carried out … the person who carried out that process".
  However remotely connected, that person could be the scrap metal merchant who sells the original metal, which goes through several manufacturing processes before ultimately it may be discovered that there is a defect. I see my hon. and learned Friend the Minister making a face at that proposition. I cannot believe that it is the intention of the Bill or of the European Community directive that such liability should exist, but, unless the matter is clarified in the legislation, the potential for lengthy and expensive litigation is enormous and the extra insurance costs for scrap metal dealers, among others put in a similar position, could be large.
  I know that, rightly, it is the Government's strong desire to strengthen the service industries, but such a provision would be carrying that intention a little too far.
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  Therefore, I trust that my hon. and learned Friend the Minister will be able to reassure me when he winds up the debate.
  6.14 pm
  Mrs. Rosie Barnes: I welcome the Second Reading of the Bill. The current law is inadequate in several areas, many of which are addressed in the Bill.
  With regard to product liability, at present the buyer alone is protected, not the consumer, if he does not happen to be the buyer or necessarily the victim of the product. Currently product liability relates directly only to the seller or the middle man and provides for compensation from the producer of the goods only if he can be proved to be negligent. At present, remedies are available only through common law redress and depend on finding fault in the product.
  On consumer safety, at present there are serious doubts, especially in the ability of enforcement authorities to stop the supply and sale of unsafe goods. The misleading price legislation has been described as obscure and full of loopholes, so there is much to be done. Consumers' rights need to be strengthened considerably. The Bill addresses many of the problems.
  There is general agreement that liability for defective products should he much stricter—that is, without proof of fault and not based on negligence. Of course, liability should include not only the manufacturer, but the importers and suppliers of own brand goods. However, there is room for further debate on some of the issues where individual states in the EEC are allowed to derogate. The most notable is the state of the art issue. Producers should not be liable for a defect if it could not originally have been foreseen because of the state of technology and scientific knowledge at the time of manufacture. The debate is focusing on the conflict of interest between victims and producers, or, to put it another way, between big business and the individual.
  There are limited circumstances in which innocent victims of unforeseen disasters will remain uncompensated, and they will occur from time to time. Victims, such as those of thalidomide, which has been mentioned, will face the same lengthy delay of years, sometimes running into decades, the same complexities and the same legal wrangles that the Bill purports to avoid.
  Companies argue that to exclude that clause would raise insurance costs and inhibit innovation. Thus, potential customers as well as businesses would lose out. So we are faced with the choice: do we stifle innovation or leave a huge gap in compensation cover? But there is no clear evidence that insurance costs will soar, as has been predicted. It is clear that in the United States, where juries are notorious for their compensatory awards, the problem is different. Parallels cannot be drawn with the situation here.
  Insurers in this country agree that insurance at a modest level would cover that liability. It would seem sensible to consider obliging potential defendants to take out product liability insurance. Surely the cost of insuring against a defective product, ultimately and inevitably paid for by the buyers of the product, is a better way to deal with product defects than individual victims having to remain uncompensated. With major catastrophes of an unforeseen nature, such as thalidomide, surely the state

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  should assume some responsibility for excess risk, as happens in New Zealand, so that injured parties receive speedy and humane redress.
  I return to the development risks defence. As has been said, France, Belgium and Luxembourg do not allow that defence, and Germany does not propose to permit its use in the pharmaceutical industry. Surely we should consider similar action, if not across the board, at least for the vital pharmaceutical area. In the event of the clause being retained, I am anxious about the possibility of the phrasing being diluted from "every conceivable effort" to "all reasonable efforts". The two are quite different and that could be a relatively meaningless phrase.
  Another related area is the loophole that is currently provided by the insolvency laws. There is evidence that separate companies have been set up to undertake the manufacture or construction of discrete products so that, in the event of a defect arising, liability can be avoided by winding up the company concerned. That loophole must be closed and that practice must be stopped.
  Another area needing further consideration is the exemption of primary agricultural products. Again, this leads to anomalies in the system and leaves potential victims entirely unprotected. I accept the difficulties involved in assessing the effect of hidden environmental factors that are beyond the scope of the producer. I accept also the difficulties in detecting the source of the problem. However, that would leave redress for the victims only under the existing laws of negligence. In this day and age, there are major concerns about pesticides, hormones, and the like in agricultural use. Responsibility must be taken for such usage.
  We should derogate from the directive on that count, with the same assumption of state responsibility for cases such as thalidomide, in the event of a major environmental problem.
  Mr. Teddy Taylor: Is the hon. Lady speaking for her party in her splendid and astonishingly forward-looking statement or for herself?
  Mrs. Barnes: I am speaking for myself. However, the hon. Gentleman may be surprised to know that I am also reflecting my party's views.
  Part II of the Bill clearly gives far greater protection to consumers—the onus to ensure safety will be put on suppliers—and consumers will not be reliant solely on enforcement officers stepping in. However, the exclusion from this section of second-hand goods causes some anxiety, and protection must be afforded in that area. Similar concern arises over the exclusion of goods for export. Surely there should be the same safety requirements for people in this country as appertain for those in other countries. Such a dual standard is quite unacceptable.
  Finally, I would welcome the commitment to accept the Concordat on the review of the complexities involved in the misleading pricing legislation which would cause great confusion in its current form.
  Mr. Tam Dalyell: On a point of order, Mr. Speaker. In complete good faith, and on the basis of the information then available, you gave a ruling just after Question Time, in answer to my question about the Attorney-General's role in the publication in a national
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  newspaper, that as that had not been referred to the English courts, there was, therefore, no question of sub judice. It may be that events unknown to you have taken place that would cause you to alter that answer.
  Mr. Speaker: That has nothing to do with this debate. However, since the matter has been raised, it is true that when I ruled earlier I was not aware that the Attorney-General had taken steps to initiate proceedings for criminal contempt against The Independent and, I understand, other newspapers. In those circumstances, I must regard the issues raised by the action as being sub judice.
  Mr. David Winnick: Further to that point of order, Mr. Speaker. As you said in reply to my point of order earlier that the matter was being considered by the Attorney-General, surely what you have just stated would not stop hon. Members raising the matter at the appropriate occasion, be it tomorrow or any other time, during Question Time because you have previously ruled that, since the matter is being pursued in Australia, the allegations made by Mr. Wright can be raised on the Floor of the House. Therefore, I hope that the fact that the Attorney-General is taking the matter to the courts, because of what has appeared in The Independent and in one or two other newspapers, will not stop that matter being raised as, indeed, it was raised prior to what appeared in The Independent today.
  Mr. Speaker: Previously, action was in the Australian courts. However, it is quite plain that, so far as The Independent and other newspapers are concerned, action is in the English courts. In that case, it would be sub judice.
  Mr. Dalyell: Further to that point of order, Mr. Speaker. Does that mean that the second Adjournment debate for which I applied to your office is, therefore, out of order?
  Mr. Speaker: That is hypothetical at the moment because we have not got near a second Adjournment debate.
  Mr. Williams: Further to that point of order, Mr. Speaker. Could I ask you not to give a ruling now, but to consider it by tomorrow? I realise that everyone has been taken a little by surprise by events. Would you mind clarifying the ruling that you have just given to my hon. Friends by tomorrow because clearly we need to know the extent to which the issue is sub judice? There must be aspects that we can still raise. I have forgotten the precise term that you used, Mr. Speaker, but, so far as we are concerned, it is the area of precise action that will be limited. There must be areas of discussion in relation to the Wright case that are not covered by the ruling that you have just given. It would be helpful if, by tomorrow, you could clarify that.
  Mr. Speaker: I shall certainly have to consider that. However, I advise the right hon. Gentleman that if, for instance, the Opposition were to change the subject of their Opposition day tomorrow to include such a debate, I should clearly have to look carefully at the issues that could be raised in it.
  6.25 pm
  Sir Philip Goodhart: I assure the hon. Member for Greenwich (Mrs. Barnes) that the warmth of my congratulations to her owes little to the fact that I have

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  a brother and a sister-in-law who hope to fight at her side as SDP candidates in the forthcoming general election. On many occasions, the hon. Lady has shown that she is a persuasive speaker. Clearly, she is a charming speaker who, this afternoon, has also shown that she is prepared, at times, to take an independent line from that of her party.
  Mr. Dykes: Does my hon. Friend agree that the hon. Lady will realise that if one reads a speech word for word one tends to lose the interest of the House, unless one allows an intervention by another hon. Member?
  Sir Philip Goodhart: As I was saying, clearly the hon. Lady is a persuasive speaker or she would not have persuaded so many people at the recent by-election to change their voting pattern.
  Mr. Teddy Taylor: Does my hon. Friend agree that the speech made by the hon. Member for Greenwich (Mrs. Barnes) was one of the best SDP speeches that we have heard for a long time and will he disregard the caddish comments of my hon. Friend the Member for Harrow, East (Mr. Dykes), who should be ashamed of himself?
  Sir Philip Goodhart: The hon. Lady's speech showed a considerable independence of thought. I agree that it is customary on such occasions to say that one looks forward to hearing the hon. Member addressing the House often in the future. However, on this occasion, one cannot make that customary reference to a maiden speech because it would he inviting Conservative—
  Sir Raymond Gower: It was not a maiden speech.
  Mr. Rob Hayward: The previous speech obviously made a great impact on my hon. Friend.
  Sir Philip Goodhart: I was under the impression that it was the hon. Lady's maiden speech. However, for the sake of charity and chivalry, I shall not withdraw any of the remarks that I have made.
  The hon. Lady quoted extensively from a brief that many hon. Members received from the Consumers Association. I agree with a great deal of the contents of that brief, not surprisingly, as I have been a member of the council of the Consumers Association for many years and am now a vice-president of it. I am delighted to extend a warm welcome to the Bill, but the association has two reservations about part I, both of which have already been touched on. I shall return to them, although I take a rather different attitude from that of the right hon. Member for Swansea, West (Mr. Williams).
  The association's first criticism relates to clause 2(4) and the proposed exemption of unprocessed agricultural products, including game. Naturally, food is important and Lord Denning has recently reminded us that the whole legal concept of making manufacturers liable for negligence in sending out defective products stems from the famous ginger beer bottle case of 1932. My hon. and learned Friend who introduced the Bill on Second Reading with his customary lucidity was not a ginger beer consumer in 1932 and, indeed, he was not alive then, but I was both alive and a ginger beer consumer at that time. Fortunately, the ginger beer I drank in those days was uncontaminated, but an unfortunate woman purchased a bottle of ginger beer in which she found a snail and, being a sensitive female, seeing the snail in the bottle made her ill and she sued. The House of Lords changed the law on
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  negligence, which allowed her claim to succeed, and the idea of tort and negligence stems from that case. Until then manufacturers were not liable for their negligence.
  Today no one would argue in favour of allowing manufacturers to let snails crawl into ginger beer bottles, but do we want to extend liability so that anyone who sells a fresh apple in which half a worm appears also becomes subject to the full weight of product liability? My friends in the association say that it will be a
  "curious anomaly that consumers—in the most literal sense—of some kinds of food, are offered less protection or redress than others."
  That may be so, but the whole world of consumer protection is bound to be full of anomalies and its seems perfectly acceptable that people who buy fresh apples must expect at times to find that they have also bought a worm, and that people who choose to eat pheasant should occasionally find a shotgun pellet in their food.
  I am also somewhat doubtful about the association's objections to what has become known as the development risk defence in clause 4(1).
  Mr. Teddy Taylor: Surely my hon. Friend accepts that if people die as a consequence of eating apples which have been produced by a particular agricultural technique, the same product liability should apply as applies to pharmaceutical products? It is not a question of finding worms or shotgun pellets. If people die or contract serious diseases because of techniques of agricultural production which do not involve doing anything to the produce after it has been grown, surely the same liability should apply as applies to every other industry in Britain.
  Sir Philip Goodhart: I would have thought that the use of poisonous insecticides, which is what my hon. Friend has in mind, was covered by legislation other than the Bill and that without the adoption of product liability as enshrined in part I of the Bill consumers would have ample recourse to damages in the courts. I do not believe that the use of poisonous insecticides will be affected in any way by the Bill. Obviously, that is a matter for the courts to decide.
  To return to clause 4(1), as has already been explained, broadly speaking, this defence says that a producer shall not be liable as a result of the legislation if he proves that the state of scientific and technical change at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered. Clearly, this has particular relevance to the pharmaceutical industry and the Consumers Association states that
  "it provides a gap in the law which might leave future victims of Thalidomide-type disaster without adequate compensation."
  There is already a great deal of legislation that relates to the safety of medicines and the testing of new pharmaceutical products before they become available to doctors and patients. Meanwhile we must balance the possible risks to the consumer of a medicine which does damage against the risk that an effective, life-saving or pain-reducing drug will not be produced because the company thinks that the financial risks are too great.
  It is perhaps worth noting that when the Bill received its Second Reading in another place Lord Denning spoke strongly against allowing the development risk provision and was in favour of amending clause 4. When the Committee stage had been reached he had changed his mind, largely because of a report in a newspaper about the development of an anti-AIDS drug by the Wellcome

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  Foundation. The main research laboratory of the Wellcome Foundation happens to be in my constituency. Indeed, by Committee stage Lord Denning was arguing that the Wellcome Foundation should be able to develop that drug, to experiment with it and to test it without being liable to any patient who happened to have unforeseen side effects.
  These days a lot of official spokesmen spend a great deal of time and money warning us about the danger of the acquired immune deficiency syndrome, in particular Dr. Koop, the American Surgeon-General, who keeps telling us that this disease could become the modern equivalent of the black death and could kill tens of millions of people before the end of this century. Even if we think that Dr. Koop is overreacting, do we really want to put more legal and financial inhibitions on people who are trying to develop a cure or a vaccine for this disease?
  I do not think that we can give any blanket exemption of liability to those who are involved in trying to find a cure for AIDS. After all, the number of people who die from AIDS is a tiny fraction of those who die from cancer or who suffer from arthritis. The AIDS argument, certainly for the pharmaceutical industry, has tipped the balance against those who wish to do away with the development risk defence.
  When I last visited the Wellcome research laboratory in my constituency I was told, both informally and formally, that abolition of the development risk defence would be a considerable cause for concern. There can be no doubt that this view is shared by the British pharmaceutical industry. That industry has earned a great deal of money for this country in the past 20 years and has done an enormous amount to combat pain and ill health. Therefore, I hope that the Government will continue to oppose this attempt to amend clause 4. I am in favour of going back to the original wording of clause 4 in Committee.
  I was slightly alarmed to hear how many issues the right hon. Member for Swansea, West intends to raise in Committee. We would have to be monks not to realise that a general election may be called in the next few weeks. This will put the whole future of the Bill at risk. I hope that, through consultation, we could reach some form of self-denying ordinance so that the Committee stage of the Bill is truncated and there is very little, if any, amendment to it. There would then be some chance of the Bill reaching the statute book, even if the general election is called in June.
  This is a good Bill, even without amendment, and I would like to see it on the statute book along with the other important consumer protection legislation that the Government have introduced.
  6.44 pm
  Mr. Richard Page: I welcome the Bill and I will be supporting it this evening. I hope that my hon. Friend the Member for Beckenham (Sir P. Goodhart) will not mind if I do not respond as fulsomely to his speech as he did to that of the hon. Member for Greenwich (Mrs. Barnes). I simply echo his hope that, in the event of a general election, some deal can be worked out so that parts, if not all, of this Bill can reach the statute book and be put into operation.
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  I was also very pleased that my hon. and learned Friend the Minister was not wedded to the amendment to clause 4(1) that was moved in another place. Because of those words of hope, I will focus my few words on trying to persuade him to change his mind, to remove the amendment and to reintroduce the state-of-the-art defence as it was understood when it was introduced back in December in another place. As the Bill is presently constructed, it refers — dare I say it, somewhat simplistically — to the state of scientific and technical knowledge at the time not being such as to enable the existence of the defect being discovered. No account is taken of the accessibility of the knowledge or the feasibility of its application. It is open to a number of interpretations and puts the development risk defence in jeopardy.
  I will speak in favour of the state-of-the-art defence, for two reasons—one for the consumer and one for the producer. The consumer will suffer because he will be faced with vastly increased costs. The insurance bills will be very much larger than originally anticipated. In another place Lord Williams had a fairly laid-back approach to costs when he said that consumers would be quite willing to pay extra for extra protection. I do not know what experience the noble Lord has with consumers, but my experience is that consumers are exceedingly reluctant to pay any extra money. If a consumer has two similar articles placed in front of him at different prices, he will choose the cheaper.
  In this measure we are also looking to remove the markings of origin, which will make it much harder to say that an article is made in Britain or that it is covered by the protection of insurance. The hon. Member for Greenwich spoke about modest costs. That is a red herring. I do not believe that the costs are going to be moderate; I believe that they will be extremely heavy. I do not wish to upset the insurance companies, but they are nothing more than high-grade bookmakers. When one takes one's few shillings and puts them on one's selection for the Derby, one hopes that it will win. One puts one's money on with an insurance company hoping that one will not lose—hoping that one will not get pestilence, flood or theft. If one does lose, one hopes that the insurance company will pay out.
  However, insurance companies are commercial organisations, not charities. They expect a reasonable profit margin. If there is an unestimable risk on a new product, they will cover themselves accordingly. Therefore, if this state-of-the-art defence is removed, insurance costs will be much higher.
  I will give one or two examples. Some hon. Members, obviously not I, will remember the days when electrical wiring was covered in rubber and a canvas sheath. Somebody had the bright idea of producing a plastic covering. Can hon. Members imagine the manufacturer telling the insurance company that he had this new idea for wiring and asking for cover? The insurance company would think how many tens and hundreds of thousands of houses and how many factories, hospitals and shops that wire would be installed in, and, if there was a defect, how much the incipient liability or cost would be. Insurance companies would charge an astronomical premium or say, "Just do a few houses in a trial area to see how it works. Let us see what it will be like after a few years."
  Can anyone see our foreign competition, particularly in the far east, saying that they could not touch a product for

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  a couple of years because we were doing trials? Our competitors would be taking our ideas as quickly as possible. In fact, the Japanese do not even impose strict liability for ordinary design defects, as this Bill does. The exclusion of the defence is likely to be critical for our European companies as regards Japan and our other industrial rivals.
  I know that everybody, rightly, mentions thalidomide. I do not wish to minimise the impact that that has had on the individuals involved. I am exceedingly sorry and they have my sympathy for the suffering the victims have undergone. However, we always accentuate the negative; we never look at the positive. Innovation has brought our citizens some advantages. In my constituency, there is a company called Astra Pharmaceuticals, which has produced a chemical called Beta Loc. It is given to victims of heart attacks. The company has discovered that the victims, having been given the drug, have a vastly increased chance of survival and their recuperation is very much quicker. It has also been found that the complications that follow heart disease are very much reduced. I have no doubt that there are hundreds of thousands, if not millions, of people walking the streets today thanks to the drug that has given them an extra lease of life.
  I am sure that if the drug had been suggested for its new operation with the state-of-the-art defence removed and mentioned to the insurance companies, they would have said, "Steady, let us take this a little bit slower. Let us load the insurance and increase the field trials." I can assure the House that the graph of differences between those taking the drug and those not taking it is dramatic and the deaths from a slow introduction would have run into thousands.
  We are a country of innovation. We are a country of ideas, and too often in the past we have been accused of not implementing our ideas. We have allowed other countries to exploit them. If we are not careful, and if we put too many burdens on our companies, we shall lose out in those areas of innovation. The consumer will lose out on cost and through the slowness of the introduction of innovations.
  I have mentioned the consumer and my second point is the effect on the producer. I hope to persuade my hon. and learned Friend the Minister of that effect. I have no doubt that the removal of this defence will make the producer reluctant to bring forward new ideas and it is new ideas on which the employment and growth of this country depends. I can see the producers saying that they should keep on with the old methods and be a bit slower introducing new ideas. Our competition around the rim of the Pacific basin will not be as delicate. They will take our ideas and exploit them.
  That brings me to a point that has concerned me regarding British companies for some time. This House tells those companies that they must have health and safety legislation, employment legislation and pollution controls and that they can then get on and produce their product. The House then says, "By the way, we are going to let you compete against products from other countries where producers do not have any of those obligations placed on them." I am not saying that we should remove those protections for the people of this country. However, we have to look a little more carefully at the methods whereby products come into this country and ensure that they are competing fairly with the British manufacturer and do not have an unfair below-the-counter advantage.
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  If the defence is removed and the costs of insurance increase, I can see other countries bringing their products into our land, and so many ways in which they could take a price advantage. It would not be beyond the wit of any company to set up a shell import company and move the product through the shell company into our land. If something goes wrong, the shell company has no assets in it. That could operate and would cause extreme difficulty. Some people might say that it could be followed back to the manufacturer, but I have to say that we cannot even stop counterfeit material coming into the country.
  I have bought plugs and sockets from a reputable distributor believing that they were British made. They had the British kitemarks, all the patent numbers and all the "correct" origins of manufacture. Only when the plug started smouldering, burning and charring around the plastic did I realise that I had bought a far east cheap substitute. I am worried—
  Mr. Teddy Taylor: Was the country of origin marked on it?
  Mr. Page:I know the path down which my hon. Friend is seeking to lead me, and I am willing to follow. The products said that they were made in England. That is the problem with the counterfeit products coming into this country. Without putting them to the test, they look as if they are made in Britain. I was fooled. The plugs and sockets looked to be genuine articles. I understand that even cricket bats are being manufactured in Asia and coming into this country with all the marks suggesting they were made in Britain. However, I feel that I have gone far enough down this road.
  Until the world—I mean the world—has a uniform system of dealing with product liability and insurance, I sincerely ask the Minister to consider in Committee withdrawing the amendment passed in another place and reverting to the state-of-the-art defence as was originally envisaged on Second Reading in the other place.
  6.57 pm
  Mr. Teddy Taylor: One of the arguments in favour of an early general election is that we would quickly be able to cut the throat of this measure which is masquerading under the title of the Consumer Protection Bill. I am sure that if an action was taken by a trading standards officer to determine whether that was a satisfactory title explaining what the Bill does, the Minister would certainly be found guilty of misleading the public, because there is no way in which this is a consumer protection Bill. It is a Bill that will create a great deal of confusion. It will cause damage to consumers and remove major consumer rights. The only encouraging aspect of the debate we have had so far was the remarkably encouraging speech of the hon. Member for Greenwich (Mrs. Barnes) showing that within the alliance there is now at least a spark of interest in consumer affairs, rather than the alliance being simply a sort of political wing of the National Farmers Union. That was certainly encouraging and I hope that it will continue.
  What are my objections to the Bill as it now stands? First, on the matter of development risks, I almost thought it was worthwhile, with the confusion created by the Bill, to see the rather ridiculous Confederation of British Industry — which occasionally sends us some sensible material—publish a paper, and pass it to Members of Parliament, which says

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  "The wording of the EC Directive is unworkable in the context of a British Statute."
  That is further than the CBI is usually prepared to go. Of course, the CBI is absolutely right. The problem is finding a proper definition of what is a "foreseeable" risk. Most people would accept that manufacturers, retailers and wholesalers have a responsibility for products that create risks for the public that can be reasonably foreseen at the time the goods are made. What is certainly not right is to have a situation in which people are held liable for risks that could not be foreseen in any possible way.
  That argument has been well canvassed, and the views of the House are well known to the Minister. I hope that he will give two detailed answers to the question that I am now about to ask. Why on earth is he excluding agriculture? He must be well aware that if there are any real, genuine grounds for fearing that the public's health and safety may be damaged, it is because of the manner in which agricultural goods are produced at present.
  The Minister is well aware of the use of new chemicals and the damage caused to our water supplies by the use of nitrate and other fertilisers. He must be well aware that excessive agricultural production has led to a situation in which people are at risk. If they are not at risk. there is no reason to exclude agriculture from the Bill.
  Why was agriculture excluded? Is there any logical reason why agricultural producers should not be in exactly the same position as the producers of any other commodity? The Minister should give a straight answer to those questions. Would he be willing to reconsider the matter in Committee?
  Secondly, what is the nature of the exclusion of agriculture? If, for example, a new agricultural process results in defective produce which at a later stage causes illness, rashes, death or some other kind of problem for the consumer, who is liable and in what way? Does the exclusion of agriculture in clause 2 mean that the producer of the original chemical or pesticide is removed from liability in relation to the effect on agricultural produce? What is the nature of the exclusion, why do we want the exclusion at all and how far does the exclusion extend?
  Does not the Minister consider that he has gone too far on consumer safety in clause 10(2)? I have been told by others who have had the privilege of filling my hon. Friend's position that there is a fanatical, go-ahead and keen group in his Department which always wants to ban everything. They told me about the problem of resisting this group. One example of its activities was the famous scented erasures abolition order.
  On the other hand, does not the Minister think there is a danger that this envangelical group has got together to draft the wording of clause 10(2), because it appears to make individuals liable for accidents even if, after the goods have been produced, the consumer misuses the goods, does not read the instructions or goes against the instructions? Surely a producer should not be liable for injuries sustained as a direct result of people using materials in an unsafe way.
  My third detailed point relates to clause 36 and fairgrounds. I hope that the Minister misunderstood the point that I made earlier, because he gave me a dusty answer. He must be aware that in fairgrounds a number of items are carefully tested and proven to ensure that the general public is in no danger. He will be aware that,
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  because of this new legislation and the increased activities of health and safety officers and local authorities, fairgrounds now come under careful and strict supervision. The public is thereby protected, and no reasonable person would object to that. However, if a part needing replacement breaks down, is it fair and reasonable that powers should be provided to Customs officers to seize or detain the imported replacement part of an existing proven article based on their judgment of its safety?
  Let us say that a gearbox fails and requires an imported replacement. Surely it is unreasonable for the Minister to say that it should be excluded, because it is a replacement part of something that has been accepted as fair and reasonable. If a replacement part of a fairground ride is not used for that purpose, is there anything else for which it can reasonably be used, and is it not fair and reasonable that it should be admitted if it is an integral part of an existing proven article?
  The Minister will be aware that fairgrounds have difficulty surviving these days, and it is quite unreasonable to create unnecessary problems for them. A delay of 48 hours, 72 hours or however many hours the Common Market may decide to allow us can be vital for an operation that depends for its survival on a few days of good weather.
  Mr. William Cash: Apart from the fact that it is important to retain the state-of-the-art defence, is my hon. Friend aware that in some circumstances replacements come from a person different from the producer of the original article? In those circumstances, I understand that the defence would not be available. I am sure that the Committee discussion will be extremely interesting, and there may be occasions when serious legal problems will arise from this legislation. However, I have confidence that somehow we shall overcome them.
  Mr. Taylor: As usual, my hon. Friend has studied this matter carefully and he is absolutely right, because we are extending to fairgrounds something that at present applies to other industries. We are concerned about maintaining the safety and protection of the public while not making life impossible for industry and commerce.
  My main objection is that under the Bill the Government are repealing the Trade Descriptions Act 1972, which was unanimously approved by the House of Commons. I am sure that hon. Members will regret the fact that the Second Reading debate in Hansard is unfortunately out of print, but I gather from my hon. Friends who have a copy that at that time the present Secretary of State for the Environment put forward a passionate plea in favour of origin marking as a means of giving greater protection to the consumer, of giving the information that they require and of assisting people in making the right consumer choices. He said that that Act would afford greater protection to the consumer and general public, and he gave the wholehearted support of the Government. The Opposition supported it, as did the minority parties. Everyone welcomed origin marking as something of importance to protect and inform the consumer.
  Now we are told that, reluctantly, the Minister will have to scrap origin marking. No longer will foreign manufacturers be obliged to mark the country of origin on their goods. The reason, we are told, is that the Common Market thinks that our legislation is unlawful. But if he

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  looks at the discussions in 1972, the Minister will see that the matter was then raised by Mr. George Darling and others, who asked whether that Act was in line with the treaty of Rome, whether the Minister had checked with the Commission and whether it was lawful. The answer was specifically given by the present Secretary of State for the Environment who was then a junior Minister in another Department. He said that there was no question whatever but that that Act was acceptable to the Europeans and the treaty of Rome.
  Mr. Richard Page: Does not my hon. Friend believe that retaining origin marking is a sentimenal rather than practical gesture? Is it not now exceedingly difficult to discover exactly where a product comes from, as many assembly plants draw components from all over the world? Therefore, it is increasingly difficult to say that an article is produced in one country.
  Mr. Taylor: My hon. Friend may hold that point of view, but when the matter was rationally discussed in the House of Commons, every hon. Member supported it because it was thought to be important. Now that things are becoming more complicated it is even more important for consumers to know where goods are made. In the old days one could rely on trade names. For example, if a product was marked Ford or Hotpoint, one had a rough idea of where it was made. As my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) has said, now we do not have the slightest idea where an article comes from.
  There may also be safety implications. I read a fascinating article the other day which gave details about Duracell batteries that are advertised as having a lifespan six times that of the average battery. However, that only applies to those Duracell batteries manufactured in Britain. Other Duracell batteries produced in Greece do not possess such qualities. According to the article and the Channel 4 television programme "4 what it's worth", those batteries are described as rather dangerous and do not possess the additional qualities of the British-made product, yet both are sold under the same trade name. If there was ever a need for the consumer to be protected, that need is greater now than ever before.
  What changes have occurred among legal opinions with regard to the treaty of Rome? Why, when we were told that the Commission was consulted when the Trade Descriptions Act 1972 was passed, are we told that legislation must now go? What reasons do the Commission give for telling the United Kingdom that our goods must not be marked with their country of origin?
  The first argument given by the Commission why British goods should not be so marked—as recorded in the excellent document produced by the Library—was that British regulations increased the production costs of imported goods, making them more difficult to sell in Britain. In other words, if goods were marked made in Germany, Italy, East Germany or Czechoslovakia, it would be more difficult for those goods to be sold in Great Britain and their costs would thereby increase.
  The second reason that the Common Market has given why our goods must not be marked is that origin marking would enable consumers to assert any prejudices that they might have against foreign products. I often wonder what those who organise boycotts would do if we abolished origin marking. The Liberal party and others become
  78
  involved in boycotts of South African goods. If Liberal Members were here tonight — instead of being completely absent from their Benches — they might realise that, from the passing of this Bill, it will not be possible for Liberals, Socialists, the Co-operative or anyone else to organise a boycott of South African goods because they will not know where goods come from.
  People such as myself, for reasons which my hon. Friend the Minister might regard as irrational, do not wish to buy goods produced in Communist states, where there is forced labour, and where Jewish people are persecuted. That may be foolish. Perhaps I am not acting as rationally as my hon. and learned Friend the Minister would wish me to act. However, that is my view. Why the blazes should we be told by the Common Market that we should not have information about where goods are produced if the British Parliament unanimously decided that that was a good idea?
  Some people say that we must be progressive and forward looking and that the Community's main argument was that we would be un-European if we gave British people the opportunity of knowing which goods were produced in different parts of the Community. My hon. Friend the Member for Harrow, East (Mr. Dykes) will appreciate that this is the vital issue. The Common Market wants to deprive people of the opportunity of making a choice between goods produced in different parts of the Community because it would be un-European to do that—and I know that my hon. Friend the Member for Harrow, East would be the last person who would want to be un-European. However, it is all very well for Germany to make such a claim. Germany originally raised the issue with the European Court. However, we must consider Britain's position in relation to Europe. We are not the same as Germany or France because we have a horrendous trade deficit with those countries.
  When the 1972 Act was passed, Britain had a surplus in manufacturing trade with the Common Market of £55 million. It was small, but people still said that we wanted origin marking. We have a deficit in trade with the Common Market for 1986 of £10,000 million. That is a horrendous figure, more than three times the size of our deficit with Japan, about which we have heard so much nonsense recently and about which a great deal of discussion is taking place. Although the Germans may riot particlarly want to know where goods are produced, I suggest that from Britain's point of view the future viability of our economy depends on individuals who are prepared — all things being equal — to choose British goods.
  Another reason why people want to retain origin marking is that some people — rightly or wrongly — regard the country of origin as a guide to quality, reliability and value for money. Some people, like myself, try to buy British when we can, not because the goods are always cheaper, but because, by and large, we believe that we will get a better deal and better quality and if something goes wrong it will be easier to do something about it. Why should we be deprived of that right by the Common Market, irrespective of the views of the British Parliament and people?
  There is no point in hiding the fact that some people want to buy goods on the basis of where they come from as an expression or sign of their political views and prejudices. What is wrong with that? If we know goods are produced in countries where there is slave labour, why

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  should we not have the right, as consumers, to discriminate against those products? If, as we find was the case in the Soviet Union until very recently, Jews are discriminated against shamefully, surely as individuals we have the right to know whether goods came from such countries. We should not be deprived of the opportunity and should at least have the right to know the origins of goods in those circumstances.
  I had the pleasure of hearing our splendid Prime Minister the other day at an exhibition where she made a superb speech about better buying British or better made in Britain—I cannot remember which. However, I know that the Government support, with lots of money, lots of organisations that are concerned with better buying British or better made in Britain. What on earth is the point of the Government spending taxpayers' money or the Prime Minister using her very valuable time addressing a conference telling people to buy British when the Minister has introduced a Bill to deprive people in this country of the chance of knowing where goods are made? This is a retrograde step which we do not want.
  The Minister has told us not to worry and that he will not abolish origin marking until he can put something in its place. The Minister will be aware that, on the basis of what the Common Market has said and of the decisions of the European Court and the Commission, nothing that is realistic, significant or of value can be put in its place which will not contradict the whole principle of what the EEC has said today. The Minister will be aware of the advice given by his Department. The Department has told people that it would be happy to consider any other approaches that recipients may propose provided that they seem likely to satisfy the Department's requirements of Community law.
  Mr. Cash: Will my hon. Friend accept the words "Not made outside the United Kingdom"?
  Mr. Taylor: If the 1972 Act is to go, it will be even more difficult to define what is made outside the United Kingdom. It would be very difficult for the courts to interpret that definition if the 1972 Act is not enforced.
  My hon. and learned Friend the Minister will be aware that his Department has written to interested organisations explaining that all the reasonable alternatives are regarded by the EEC as completely unacceptable because the EEC takes the view that a place of origin does not confer special characteristics. There is no way in which any meaningful alternative can be introduced.
  The problem is, what should the Government do? Should they simply do nothing? Should they tell the Common Market to go and jump and mind its own business or should they go ahead and simply repeal the origin marking laws and let the Europeans make the decision for us? I appreciate that there is a danger that the Government may interpret this simply as an old battle about us joining the Common Market. It is not that kind of a battle. This matter is terribly important and affects one of the fundamental freedoms and rights of the British people. It affects one of the fundamental rights of the British Parliament to make decisions of this kind which, in my view, in no way undermine the principles of membership of the Common Market.
  I hope at some stage that the Government will have a long hard look at the extent to which the powers of this
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  Parliament are being gradually taken away and diminished, not by elected politicians, but by the non-elected Common Market Commission. We shall have another opportunity to consider the matter in September when the European Court will give its decision about whether Britain is legally correct not to apply VAT to new house building, protective clothing, protective footwear or to items such as gas and electricity for industry and commerce. The Court will tell us what we are allowed to do. That Court and the Commission are non-elected, but they will take the decision.
  I hope that, on that occasion, the Government will at least put up the flag for independence. I hope that in Committee they will withdraw this offensive clause which gives the Government the power to remove origin marking. If they removed it, the Common Market would look rather silly if it took action to deny the British Parliament the right to allow our people to know where goods are made.
  I accept that this is a quiet day. The moment the Opposition announced that they would not vote on the Bill, people disappeared from the building quickly. With the other things that have happened today, very few people in Britain will be aware that origin marking has been abolished, but, as the Minister is aware, these matters have a habit of catching up with the Government. I hope that he will remove the clause quickly in Committee and will let matters take their correct course. I very much doubt whether the Common Market would be stupid enough to use its battery of weapons to force the British Government, against their wishes, to abolish the principle of origin marking, which is an important right for every British consumer.
  7.20 pm
  Mr. Hugh Dykes: My hon. Friend the Member for Southend, East (Mr. Taylor) has again indulged in his anti-European utterances. We are very used to them. We have the principle of tedious repetition in our debates. I always think that it would be as well to spread the principle over more than one debate, because my hon. Friend's speech was an exact repeat of what we have heard on many other occasions.
  In referring to the disappearance of origin markings—if the Trade Descriptions Act 1972 is to disappear—my hon. Friend misunderstood the complexities of the changed world in which we live. Origin marks and trade marks are much more complex than they used to be in 1972. I agree with my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) that, because of the multiplicity of manufacturing efforts and the interdependence of the modern manufacturing world, not only beyond the confines of the EEC but among the member states, it is easier to talk about the specific origin of a manufactured product than to judge it accurately. For example, there may be a crossing of frontiers in the assembly of a product between a non-EEC country and a member state. If a given percentage of the product is assembled or manufactured abroad, that sometimes removes the need to have an origin mark.
  Another example cited by my hon. Friend surprised me. In the old days, when the quality of goods coming from Japan was low, it was disadvantageous to the Japanese to put the words "Made in Japan" on their products, when they were compared with the high quality goods that bore the famous description which made us all so proud, "Made

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  in Britain". One would like to think that that was the case nowadays, but in respect of some products that is not so. If Japan was compelled to put the words, "Made in Japan" on its goods—emerging countries, such as Korea, are also beginning to make more high quality, reliable goods — would that he an advantage in promoting British sales? I very much doubt it. We can all imagine the sort of product that I mean.
  A combination of the present origin marking system in the United Kingdom and a Community system is likely to be the best result. That is why this provision is not one of the more difficult parts of the Bill. I doubt whether it will cause much anxiety in Committee, but I could be wrong.
  The present position is different from the position in 1972. This is very much a changed world in terms of sophisticated consumer durables and many other manufactures, and the point now is not so much that manufacturers can put origin markings on their products, but that the EEC is gradually progressing towards a common definition of an origin marking system. We do not yet know whether it will apply to products imported from outside the EEC or whether it will be compulsory. I believe that the modern attitude will be one of acceptance of the words "Made in the EEC" rather than an insistence that labels should bear the words "Made in France", "Made in Germany" or "Made in Britain". Many of us hope that, by 1992, we shall have a unified trading market in which it will be wrong and, as the European Court has already determined several times, a restraint on trade and misleading for consumers still to have compulsory origin marks. The remarks made in the debate in the House of Lords and today—with the exception of those of my hon. Friend the Member for Southend, East—have been about right.
  I welcome the developments in part I of the Bill. I shared the anxiety of other hon. Members when the Opposition spokesman, after 25 minutes, said, "I now come to part II." He then took almost 40 minutes to make a series of clause stand part speeches that would have been more relevant to the Committee stage. We should remember that there was a thorough debate on, although not many amendments to, the Bill in the other place.
  I welcome Second Reading of the Bill and the balance of part I. Some matters will have to be considered in Committee, but for the sake of brevity, and because I know that my hon. and learned Friend the Minister wishes to reply to the debate, I shall concentrate on part III and misleading prices. That is apposite, because part III has been mentioned least of all on the debate so far. I should declare an interest not only in the EEC—increasingly in dealing with national legislation, we are considering European matters — but in the retailing industry. The Minister's remarks will be welcomed, and perhaps were expected by some sections of the retailing industry in general. He said that he was willing to accept the so-called Concordat approach of all the groups that took part in the series of discussions since last October with officials and Ministers in the Department of Trade and Industry about introducing a proper misleading prices regime for the future.
  Although this part of the Bill has not been mentioned much so far, I believe that it will not be easy to introduce such a regime and that this is the most complex part of the Bill. The House must be aware constantly that it is extremely difficult to draft consumer safety legislation. Just as the draftsmen think that they are reaching a correct
  82
  legal formula, they begin to think that they are already creating new loopholes which clever, highly paid lawyers can exploit on behalf of their clients. It is almost inescapable in sophisticaed legislation generally; it is even worse in this case. But that does not mean that we should not try to do it, and the problem of misleading prices needs a fresh and determined approach, which the Government are showing.
  I speak informally on behalf of retailers on what I believe most of them think to be correct, and I know that they welcome the measure, as they have made clear all along. As represented officially through the Retail Consortium, the British Retailers Association and other groups, many retailers feared that the proposed code of practice would be far too long, complex and difficult—especially for small traders and retailers — to follow realistically. They feared that they would be caught out constantly, which would be very unfair to them, even if it did not harm consumers. It was obviously drafted by a raft of officials, who had put in everything, trying to cover all the ground. It is much more important to create, as the Government do from clause 20 onwards, a correct definition of misleading prices and a general offence, which they can use as a powerful weapon against offenders in the future. Coupling that with sensible regulations, as was requested in the Concordat approach, and a shorter draft code of practice and a final code of practice would improve matters.
  I had a letter at the end of March from a retailer representing the Retail Consortium. I think that the views expressed there would coincide with the views of many hon. Members about part III of the Bill. The letter says:
  "The Concordat has sought to identify the principal areas of abuse currently experienced, and to provide a simpler way of controlling them. We believe that this alternative approach accordingly stands more chance of being observed by a larger number of traders.
  We also believe that enforcement officers will be more easily able to proceed against rogue traders if statutory regulations exist in respect of those abuses most frequently found in practice."
  It is interesting to note that that fits in well with what the Retail Consortium said in its official letter sent to many people, including Members of Parliament, on 23 April. Speaking about the Second Reading, the letter expressed a degree of optimism that the Minister would accept the revised approach because over 200 interested parties had been consulted on the Concordat and the Government's proposals. The letter says:
  "We are optimistic that the Minister will announce that he has received a response in favour of the approach advocated by the Concordat, and that as a result he will table amendments to reflect the Concordat's proposals on the status of the code during the Committee Stage of the Bill."
  I should like to recall to the House the British Retailers Association's official proposal of 20 February. This was the original Concordat document formulated after all the discussions. On page 2 the retailers argue strongly:
  "The areas which the parties propose should be covered by regulations are:

  the 28 day rule

  recommended retail prices

  introductory offers

  worth and value claims

  substantiation".

  The 28-day rule is an extremely important and difficult area in which to try to ensure justice for the consumer in terms of misleading price announcements. The second point about recommended retail prices is also a complex

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  area. Introductory offers have given rise to many abuses over the years. Some of them are difficult to detect because they are very subtle. I refer to these matters now because it will help the Second Reading debate.
  Although the Minister has left the Chamber—no doubt temporarily—I am sure that a note will be made of my requests. Perhaps when the Minister is winding up he will spell out more what he means about accepting the Concordat proposals. It is necessary to affirm that the details of that approach are being accepted rather than just saying in broad outline that he goes along with them. I understand that it may not be possible for the Minister to do that at the end of this debate, but it may be necessary to have it spelt out before the Committee stage.
  Reference has been made to the possibility of a general election. Perhaps that is one of the reasons why there is an absence of Opposition Members. It may also have to do with the likelihood of no vote being taken at the end of this debate. Whatever the reason, their absence suggests a feeling in the House that there should be a formal, short Committee stage on the Bill. I share the anxiety of my hon. Friend the Member for Southend, East about that. In an intervention, perhaps a sedentary one, he gave the impression that that would not be a good idea, although clearly he did that for different reasons of content in the Bill than I do.
  There has been a material and lengthy debate in the other place on the three main parts of the Bill and to a much lesser extent on the other parts. The House needs to be committed not only intellectually and emotionally, but in terms of practical detail to modern consumer protection legislation. I hope that the Bill, together with some of the amendments that we may consider in Commitee, strikes the right balance. We need to look after consumers in an increasingly complex world where products continually become more complicated and sophisticated, and we need a reasonable basis of comprehensible justice, fairness and understanding for manufacturers, importers, distributors and retailers. If we can strike the right balance, which is difficult, and reflect the requirements of the European Community—which I share with enthusiasm—we will make progress. That cannot be done by way of a Committee stage that is just a formality, as a result perhaps of some deal between the usual channels that might involve wider political reasons.
  7.34 pm
  Mr. Gerald Howarth: I am delighted to follow my hon. Friend the Member for Harrow, East (Mr. Dykes), who was unquestionably made in the EC. That is firmly imprinted upon him. I am doing my best to become more communitaire, although between us I think that our brief knowledge of Russian could not yet be described as a communitaire activity. No doubt in his wish to enhance the Community he would like to see us walk in that direction. My hon. Friend spoke about the lack of troops on the Opposition Benches. I thought that the right hon. Member for Swansea, West (Mr. Williams) was seeking to talk the Bill out. Then I realised that he was inspiring the invisible ranks behind him that had fled to their constituencies in the hope of saving their deposits.
  I am grateful for the opportunity to welcome the Opposition's Deputy Chief Whip, the hon. Member for Cumbernauld and Kilsyth (Mr. Hogg). I hope that we
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  shall see him do his stuff and that we will he able usefully to instruct him during the remainder of the debate. I also welcome to the Government Front Bench my hon. Friend and neighbour the Member for Staffordshire, South-East (Mr. Lightbown). I hope that one day he will find himself in a ministerial position.
  The Bill is of great interest to a wide range of British manufacturing companies. They have been through a tough time in the past few years but are now showing enormously encouraging signs. Manufacturing industry is coming out of the recession looking fitter, more competitive and more determined than ever before. It is right that we should protect the consumer from poor and faulty workmanship. British industry is foremost in wishing to see that protection. However, it is not fair to place intolerable burdens on industry because they have the effect of driving up costs and making industry less competitive than its counterparts in other countries.
  It is especially important that hon. Members should not seek to use this House to make pious and sanctimonious arguments about improving consumer protection while at the same time imposing such burdens on industry and piling up hurdles between it and its markets. I noted what my hon. Friend the Member for Southend, East (Mr. Taylor) said about the Department of Trade and Industry and the possibility that there is a nadir-like clique in that Department. If that is the case, I hope that the people in that clique will come to understand that they will do no service to the consumer by making even higher hurdles for industry.
  I should like to speak about two aspects of the Bill. The first is product liability and the second is the country of origin mark. I declare my interest as a consultant to the Electric Cable Makers Confederation. I do so with considerable pride because that confederation contains some of the major and most successful companies in British manufacturing. If I name only BICC, GEC, Delta and Rists, one can immediately identify major British companies and success stories.
  It is by drawing on specific examples of where this Bill impacts on industry that we can do a service to Parliament and, hopefully, help the Minister to find his way through the complexities of the Bill. He has been good enough to meet members of the industry who have expressed their concern to him. It is a vital industry, employing 28,000 people and with a turnover of £1,100 million, of which 25 per cent. is in exports. Approximately 50 per cent. of the industry's output, in the form of smaller distribution cables, will be affected by the Bill, so the industry has a clear interest in this measure. The Government have gone some way towards meeting the cable industry's concern, but my hon. and learned Friend should be under no illusions—the industry is still concerned about a number of items. I shall list them briefly today as they point to genuine problems that will be encountered if the Bill becomes law in its present form.
  The first question is whether an electrical installation is a product. Clause 1(2)(c) defines a producer, but it is not clear who would be the producer of an electrical installation and whether the installation would fall within the definition:
  "'product' means any goods or electricity and … includes a product which is comprised in another product".
  One thinks, for example, of wiring in a house. People are taking on increasingly complex DIY jobs and often rewire their own homes. If a person sells a house after rewiring

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  it and the new occupant, wishing to hang a picture where previously there was no picture hook, bangs a six-inch nail into the wall and electrocutes himself by driving it straight through an electric cable, who will be liable? Will it be the manufacturer of the cable or the person, whether he be a DIY enthusiast or a professional electrician, who installed the cable? I hope that practical problems of that kind can be addressed in Committee, if not in this debate.
  Secondly, with regard to unreasonable misuse, the Bill relies upon clause 3(2) which provides:
  "In determining for the purposes of subsection (1) above what persons generally are entitled to expect in relaton to a product all the circumstances shall be taken into account, including …
  (b) what might reasonably be expected to be done with or in relation to the product".
  That is a very general statement. What might reasonably he expected by one person might not be the same for another. I understand that the Unfair Contract Terms Act provided for the publication of guidelines providing much more detailed information for industry. My hon. and learned Friend the Minister may wish to consider whether guidelines would be appropriate in this case, although it may be too complex even for that possibility. For example, if a person uses an electric mowing machine which runs over the cable and cuts it, is that unreasonable use of the cable?
  The Government argue that these are matters for the courts to decide. That would be fine if things were as simple as that, but they are not. Companies may not be able to obtain the necessary insurance cover to protect themselves against what could be very substantial financial penalties. The right hon. Member for Swansea, West, who has just returned to the Chamber, mentioned that aspect. He stated very fairly that the Association of British Insurers felt that the existing situation could be covered hut did not express an opinion about the possibility of covering the situation if the Bill became law. If I have got that slightly wrong, perhaps the right hon. Gentleman will correct me.
  Mr. Williams: I left the Chamber briefly to deal with some telephone calls. The association said, not that cover could not be offered but that the amount of cover would be limited. In other words, it could not guarantee the amount.
  Mr. Howarth: I am grateful to the right hon. Gentleman. That reservation is itself a serious limitation on what the insurance market can do. The CBI brief states:
  "The Association of Insurance and Risk Managers in Industry and Commerce (AIRMIC), which represents those responsible for buying insurance on behalf of their companies … point out that high risk and high-tech research and development based industries in this country are having real difficulties in getting appropriate cover for product liability 'at any price'. They continue: 'If, as we know is the case, the insurance industry is not able to provide the cover that we need at present, one must question their ability to provide cover under a strict liability regime, let alone one without a development risks defence'."
  I wish to put that point on record. It will be very difficult for companies to obtain cover. One area that my hon. and learned Friend the Minister may wish to consider concerns high-tech companies producing medical equipment.
  It is not just a problem of insurance. We are seeking to impose on industry a more time-consuming measure. If these matters go to the courts, people in industry will have to brief lawyers and spend time establishing case law. The preamble to the Bill states:
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  "There are not expected to be any implications for public expenditure or public service manpower."
  It says nothing about the expected impact on manpower in industry. There is a defence under clause 4(1)(f) for the supplier of a component if
  "the d effect—

  ((i)) constituted a defect in a product (`the subsequent product') in which the product in question had been comprised; and

  (ii) was wholly attributable to the design of the subsequent product or to compliance by the producer of the product in question with instructions given by the producer of the subsequent product."

  That is fair enough, but the cable manufacturer has absolutely no control over the ultimate use of the cable. He does not sell directly, for example, to a lawn mower manufacturer; he sells to cable wholesalers. I hope, therefore, that my hon. and learned Friend the Minister will take on board the difficulties faced by an industry of that kind which wants to be responsible and which already exercises enormous care to ensure that its products are safe but which has no control over the end user.
  My third point concerns the state of the art defence. I echo the comments of my hon. Friend the Member for Hertfordshire, South-West (Mr. Page). It is vital that there should be a much broader defence, as was originally provided in the Bill. My hon. and learned Friend the Minister was kind enough to say that he would listen carefully to the representations made. I hope that he will take careful note of this one. The Society of British Aerospace Companies and other major elements of industry are most concerned about this. I hope that the Government will consider this in Committee and perhaps restore the original wording.
  My fourth point affects not only the cable industry hut many others. Producers in this country are at a potential disadvantage compared with overseas producers selling cheap stuff through importing houses in the United Kingdom which are frequently £100 companies. Export-import businesses are almost the easiest thing to get into if one is at a loss for something to do. One does not need much capital and one can set oneself up as a £100 company. Under the Bill, it will be the importer that the consumer who has been injured, or perhaps has lost a member of his family, will sue. What use will the Bill he in such circumstances? If the importer is just a £100 company, it can simply go bust and not pay up. British companies will be applying all the rules under the Bill while the foreign competition will be able to get off scot-free.
  The argument about the origin of country marking was eloquently articulated by my hon. Friend the Member for Southend, East who, as always, spoke with vigour for Britain. While I welcome what my hon. and learned Friend the Minister has said, the Bill states that the 1972 Act will be repealed. I do not quite understand how that squares with what he told me in my intervention in his speech. I hope that he can clarify that. This measure is contrary to everything else that we are doing for consumer protection. The whole emphasis has been on giving the consumer much more information on which to make a balanced judgment. That is what we believe when we say that we are in favour of the market. Giving people choice means giving people information on which to make that choice. The abolition of this requirement will deny the consumer information that he has at the moment, and that will limit his scope for making a choice.

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  I am one of those who seek at every opportunity to buy British, and I am proud of that. Much to the chagrin of my wife, I turn products over to see whether they are made in Britain. If they are not, I will not buy them unless there is no British substitute. There is still high unemployment in the west midlands. We hear people in the south-east moaning about that, but they run around in foreign motor cars. If they want to improve the unemployment position in the west midlands, they should go out and buy British manufactured goods. That is the biggest contribution that we can all make to solving unemployment. However, the Bill threatens to deny us the opportunity to do what we can as individual consumers to support British industry and solve the unemployment problem.
  I hope that my hon. and learned Friend has noted all the observations made from the Government Back Benches. The removal of country of origin marking is not acceptable to the British people. They see it as a manifestation of what they all feared when we entered the EEC—that power would be ceded from Westminster to Brussels. I am sorry if that offends my hon. Friend the Member for Harrow, East, but that is how people outside perceive these things. I hope that my hon. and learned Friend will do everything in his power to resist this trend and to make sure that any successor arrangements are just as good as those that prevail now.
  7.53 pm
  Mr. William Cash: I declare an interest as an adviser to the British Foundry Association, which has made a number of points about the Bill. In particular, it wants to support the state-of-the-art defence. As I said in an intervention, problems also arise under clause 4 and its definitions, which were changed in the other place. The British Foundry Association members have a problem under the new version. Where they have been involved in the making of castings to a specific order of an original producer and these wear out and need to be replaced, orders for replacements can and do come from persons other than the original producer, who may no longer exist. In such circumstances, the association is concerned that there would be no defence for its members, as makers of the castings from the original foundry. I should be grateful if the Minister would consider these points in Committee.
  I notice that in part III, which is entitled "Misleading Price Indications", we may have an opportunity to come back to a point about which I have corresponded with the Minister. This arises out of my amendment to the Banking Bill. I was particularly concerned that there should be a proper disclosure of the manner in which interest is accumulated when customers of banks incur overdrafts.
  I do not want to go into this in detail, because it is already on the record. I had a most helpful letter from the Minister — one that is worthy of a press release, although I held it back. He has conceded the principle that he will be looking at all this and that something will come of our discussions and correspondence. The voluntary ombudsman service has already stated that there are a number of serious deficiencies in the current system. I see no good reason why the manner in which interest is arrived at could not properly be disclosed.
  I am particularly glad to notice that the definition of price of services includes the possibility of interest. In clause 22, under the definition of services, there is included
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  the provision of credit, banking or insurance services. I am hopeful that this may be a mechanism whereby banks would be required to produce accurate information for their customers as to the manner in which interest is accumulated. I hesitate to say this but those who are interested might save time by looking at my comments about this subject made in the Committee considering the Banking Bill, as those comments summarise my position.
  In its parliamentary brief, the CBI has said that it is vital, in the interests of society as a whole, that the development risk defence is retained and precisely worded.
  I am a member of the Select Committee on European Legislation and I have taken a close interest in European affairs. However, the idea that we should automatically take on the precise wording of a directive fills me with horror. We must not assume, because it is contrary to the nature of a directive in the first place, that it is up to us to implement the objectives of the directive in its exact wording. If we were to do so, we would rapidly get into serious difficulties.
  Our method of interpretation is somewhat different from that in the European Community, although when it comes to matters of interpretation before the European Court, we have to follow its method of interpretation. We should stick to the wording in the Bill as originally introduced. We should not take the European directive wording lock, stock and barrel. I have no doubt that my hon. and learned Friend the Minister will have plenty to say on this subject on another occasion.
  7.58 pm
  Mr. Howard: I thank all hon. Members who have spoken in this interesting debate. Some have suggested various ways in which we might change the Bill to reflect the interests of either industry or the consumer. I shall comment on as many of the points that have been raised as I can, but if I omit any I apologise in advance and no doubt there will be an opportunity to discuss them on other occasions.
  I remind hon. Members that our purpose in part I is to implement the product liability directive. That directive was agreed by all member states of the community and there are very few areas where we can make choices. Where we can make a choice, it is right that we should debate that choice. However, it is not our policy to go beyond the directive. Our intention is merely to implement it by the provisions in part I.
  The main purpose of the directive is to reduce distortions in competition and barriers to trade throughout the Community by providing a common level of protection for consumers throughout the member states. I agree that this harmonisation is not yet total, but it is an important step towards that goal and we should do all that we can to ensure that the law relating to defective products is completely harmonised throughout the Community.
  I now turn to the points which were raised by right hon. and hon. Members on part I of the Bill. First, I shall deal with the point which was made by the right hon. Member for Swansea, West (Mr. Williams) and the hon. Member for Greenwich (Mrs. Barnes) about the extent to which the development risks defence might give rise to a repetition of the thalidomide tragedy. It is very important to clarify our minds and think about the relevance of that argument to the development risks defence in the Bill.

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  I have no intention of minimising in any way the anguish and suffering of the children who were damaged by thalidomide, or that of their parents. I question the extent to which the discussion of the liability of the manufacturers of thalidomide is relevant to any discussion on the Bill. A legal decision was never reached on the liability of the manufacturers of thalidomide because the case was settled out of court, and in the absence of that decision it would be irresponsible of me, or anyone else, to make a judgment as to that company's liability.
  While I agree that the thalidomide tragedy was the impetus behind protective legislation of several types in many member states, and indeed was the major reason for the initial proposals which resulted in the directive that we are implementing through the Bill, we must be careful not to make unrealistic connections between that matter and the Bill. It is particularly relevant to note that there have been significant changes in the circumstances in which drugs may be tested on human beings or marketed generally in this country since the late 1950s, when thalidomide was first supplied. My hon. Friend the Member for Beckenham (Sir P. Goodhart) pointed out those differences.
  The Medicines Act 1968, which in large part was brought into being in the wake of the thalidomide case, ensures that no medicinal product can be manufactured, sold, supplied or imported into this country, except in accordance with the appropriate licences and clinical trial certificates as to the safety and quality of that product. I doubt whether the thalidomide case is relevant to the Bill, and I think that we should concentrate our attention on what the development risks defence means in reality to industry and consumers.
  Still on the development risks defence, I should say something about insurance cover. The right hon. Member for Swansea, West, and many other hon. Members who contributed to the debate, said something about the relevance of insurance cover. It is true that the view of the Association of British Insurers is that, as long as the development risks defence is maintained, the Bill as a whole should not lead, and is not expected to lead, to a great increase in the cost of insurance.
  The ABI went on to say—the right hon. Member for Swansea, West mentioned this, but I am not sure that he fully and properly conveyed the implications of its second point—that if the development risks defence is taken out of the Bill, the availability of insurance would be reduced. That does not necessarily mean that there will be a limit to the liability which might he covered by insurance in certain circumstances; it could go to the question whether cover could be obtained at all. That is a serious matter; that is what the availability of insurance means; that is what is called into question if the development risks defence is removed.
  To suggest, as the hon. Member for Greenwich did, that this was a question of a modest increase was wholly to misrepresent the nature of the risks in relation to the availability of insurance which manufacturers of products in this country would run if the development risks defence were removed from the Bill. That is a matter to which I attach a great deal of importance.
  I now turn to the exclusion from the Bill of agricultural products. This point was raised, with his usual forcefulness, by my hon. Friend the Member for Southend, East (Mr. Taylor), who asked a number of questions about it. I shall also attempt to deal with the
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  difference between initial processing and industrial processing, which was raised by the right hon. Member for Swansea, West.
  The directive excludes liability for primary agricultural products, and the Government are implementing the directive in this respect. It is true that member states are entitled to derogate from this provision but, so far as we are aware, no other member state intends to make use of that derogration to include liability for primary agricultural products, and for us to do so would not only fly in the face of our aim of eventual harmonisation but could place United Kingdom farmers at a disadvantage throughout the Community. I hope that that would not commend itself to my hon. Friend the Member for Southend, East. That is an important reason behind our decision not to take advantage of this derogation.
  Mr. Williams: Unfortunately, my notes are with Hansard. However, the point that I remember making is not whether there should be a derogation; it was that in the directive—
  Mr. Howard: I am coming to that.
  Mr. Williams: In that case, I shall leave it at that.
  Mr. Howard: I was dealing with the argument put by my hon. Friend the Member for Southend, East and the hon. Member for Greenwich, who said that she was not only speaking for herself but reflecting—an interesting word, I thought—the views of her party. Her party is adept at reflecting the views of the last person who has been speaking to the particular spokesman of the party involved. Perhaps I should not dwell too long on that point.
  There are other reasons for our decision not to take advantage of this derogation. Primary agricultural products are particularly prone to environmental defects which are beyond the control of the farmer. More often than not, a farmer's supplies are mixed at market with the supplies of other farmers before undergoing processing. It would be very difficult to identify any particular supplier. I do not claim that agricultural products uniquely have these features, but for them the combination of these features is more common and more important than it is for anything else.
  I shall deal with the difference in terminology which was raised by the right hon. Member for Swansea, West. We are quite clear that what is intended to be excluded are the sort of things that are done on farms, such as harvesting and threshing, and things which are necessary to produce the product in its marketable form, so the slaughter of animals is included.
  The exact words in the directive—"initial processing"—did not seem very apt. I agree with my hon. Friend the Member for Stafford (Mr. Cash) that we should not simply adopt the language of the Community directive. There is a rather confusing implication in using the words "initial processing". Processing which goes beyond initial processing is not excluded; that result would clearly be absurd. In addition, we believe that the word "initial" may suggest that some processes which we consider to be part and parcel of the production of primary agricultural products are covered by the directive.
  We think that the reference to products that have not undergone an industrial process expresses the underlying intentions of the directive, as expressed in its own

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  preamble, rather better than the language of the directive itself. That is why we have chosen to change the wording to that extent from that in the directive.
  Mr. Teddy Taylor: I hope that the Minister will say something about the extent to which agriculture is exempted. I mentioned a number of examples and I should like to know what the position is.
  Mr. Howard: There is no intention to exclude agricultural products from the kind of liability which they attract at the moment. My hon. Friend the Member for Southend, East mentioned a number of hypothetical circumstances and asked where the liability would lie in those circumstances. At the moment, liability is attracted under the law of contract. There would also be liability under the law of tort — if, for instance, it could be demonstrated that a farmer or manufacturer of a spray, or something of that kind, which was used in the course of the growth of the product concerned were negligent. Nothing in the directive or the Bill affects that liability. The only question is whether the additional liability provided by the Bill should be applied to agricultural products. For the reasons that I have given, we do not think that that would be an appropriate course to take.
  I was pleased to hear the warm welcome that the general safety requirement received from, I think, every hon. Member who spoke. Perhaps I should remind the House of the important differences between that part of the Bill and part I. Part I imposes a civil liability only and covers most products. Part II will make it a criminal offence to supply unsafe consumer goods and civil liability will attach only in respect of breaches of specific safety regulations, in a similar way to the provisions in the Consumer Safety Act 1978.
  A number of points were raised about part II. The right hon. Member for Swansea, West returned to the pleasant disputation that took place in the Standing Committee on the private Member's Bill promoted last year by my hon. Friend the Member for York (Mr. Gregory) about the time for which Customs officers would be able to detain goods—not, I emphasise, as was incorrectly stated by the right hon. Gentleman, in order to decide whether goods are safe or unsafe—that is not the purpose of detention of goods by customs officers—but so that the officers may form a provisional judgment on whether the attention of trading standards officers should be drawn to those goods. The trading standards officers decide whether goods are safe or unsafe and whether action is to be taken. Customs officers make a preliminary assessment and the Standing Committee was eventually persuaded to agree that 48 hours was a sufficient period within which that assessment should be completed.
  The right hon. Member for Swansea, West accepted that it would not be possible to attach to second-hand goods the same standards of safety that one attaches to new goods. That poses the problem of how to assess the appropriate standards of safety. That would be a difficult exercise, which would enormously complicate the enforcement of any provision. Another difficulty is that second-hand goods are often bought by the least advantaged members of the community who know that those items will have to be renovated before they can be used safely. I see no reason to deprive people of that
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  opportunity. To do so would be a splendid example of well-meaning legislation worsening the lot of those whom it is designed to help.
  That is not to say that no problem can arise over second-hand goods. We recognise the potential and that is why we propose to deal with second-hand goods that are particularly prone to pose risks to the safety of consumers by relying on regulations. I am confident that that balance is the best one to adopt and that it will survive whatever scrutiny the right hon. Member for Swansea. West and his colleagues submit it to in Committee.
  The third part of the Bill makes it an offence to give misleading price indications. There has been a wide welcome for my decision to accept the proposals advanced by the Concordat during the passage of the Bill through another place. I shall certainly take to heart some of the observations made about the possibility of simplifying and shortening the code.
  My hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) asked how we could repeal the 1972 Act in the Bill but not activate the repeal until a satisfactory replacement regime had been identified. The answer is that each provision in the Bill will need a commencement order before it is brought into effect. I have said that no commencement order for the repeal of the 1972 Act will take effect until a satisfactory regime has been devised and put in place.
  Mr. Williams: Will the commencement order be subject to the positive or the negative resolution procedure? Will the House have an opportunity to debate the matter again before the 1972 Act is repealed?
  Mr. Howard: We can consider that matter in Committee. I have no doubt that hon. Members on both sides of the House will have views to express.
  Mr. Gerald Howarth: I did not seek to imply that my hon. and learned Friend was being devious, and I see now that under clause 50(2) each provision can he brought into effect by order. I am grateful to my hon. and learned Friend for that clarification.
  Mr. Howard: I am grateful to my hon. Friend for those remarks.
  I am grateful to all hon. Members who have contributed to the debate. The discussion has been wide ranging, but no more so than I would have expected on a subject as diverse as the protection of consumers. The Bill is important, both to industry and to the users of its products and services. It is important that we take time to consider its implications for us all, but I hope that those who pay attention to these matters will have been struck, as I was, by the concern expressed by my hon. Friends about the problems that face British industry and the extent to which it can obtain insurance for its products, compete effectively in the market place, and provide employment for our people. That was in contrast to the rather unworldly attitudes adopted by the right hon. Member for Swansea, West, who spoke for the official Opposition, and the hon. Member for Greenwich (Mrs. Barnes), who spoke for the alliance. In that spirit, I commend the Bill to the House.
  Question put and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bill).

  CONSUMER PROTECTION BILL [LORDS.] [MONEY]
  Queen's Recommendation having been signified—
  Resolved
  That, for the purposes of any Act resulting from the Consumer Protection Bill [Lords], it is expedient to authorise—

  (a) the payment out of money provided by Parliament of—

  (i) any expenses incurred or compensation payable by a Minister of the Crown or Government department in consequence of any provision of that Act; and

  (ii) any increase attributable to that Act in the sums payable out of such money under any other Act; and

  (b) the payment of sums into the Consolidated Fund—[Mr. Lennox-Boyd.]

  Parliamentary and Other Pensions Bill
  Order for Second Reading read.
  8.18 pm
  The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move. That the Bill be now read a Second time.
  Since 1965, there have been six Acts of Parliament dealing with the parliamentary pensions scheme. On almost every occasion, the Minister responsible has had to apologise for the complexity of the legislation. This Bill is no exception, but I hope that it will allow some of the complexities of the present arrangements to be avoided in the future.
  The Bill's main purpose is to enable the parliamentary pensions scheme to be contained in regulations rather than in primary legislation. That has two advantages: it makes the scheme simpler and more readily understandable. The current rules of the scheme will be able to be published in consolidated form, so that it will be easier to consult them, and any future changes to the rules will require not primary legislation but the simpler procedure appropriate to statutory instruments.
  Before I describe the contents of the Bill in more detail, I should make a couple of general points. The first is the importance I attach to listening to Members' comments about the scheme and to discussing with Members any changes the Government propose. My commitment to this will, I hope, be clear not just from the Bill's provisions on consultation, but from the steps I have taken already to explain to Members what the Bill itself would do. I am grateful for the views of those Members I have been able to consult during the preparation of this Bill. I believe they generally appreciated the reasons for simplifying the scheme in the way we propose. I should particularly pay tribute to the chairman of the trustees of the pension fund, the right hon. Member for Manchester, Wythenshawe (Mr. Morris), for his help and advice.
  The second general point is to emphasise, especially to the House, that this Bill does not amend the provisions of the scheme in any way. I am aware that some aspects of the scheme are seen by some hon. Members as unsatisfactory, but we have a tradition of referring proposals for improvements in our pension arrangements to an independent body. The House will recall that substantial changes were made to the scheme in 1984 following recommendations by the Top Salaries Review Body. In view of this I do not expect the TSRB to offer recommendations on the pension scheme again in the near future.
  Mr. John McWilliam: Surely the Leader of the House is not implying that the House, when it last took the decision as a result of the recommendations of the TSRB, actually enacted the recommendations of the TSRB. The right hon. Gentleman will recall that it did not.
  Mr. Biffen: The House has never been in a position of formally, totally and exactly reflecting any recommendations from the TSRB. I believe that the hon. Gentleman will none the less conclude, if he considers the legislation that was put through the House following that report on the pension scheme, that it reflected many of the recommendations, including the extremely valuable one on the rate of accrual. I accept that, of course, the House never has reflected and doubtless never will precisely and

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  exactly reflect the recommendations of the TSRB. I will, of course, take note of any points that are raised today about the substance of the scheme, but I believe that our debate should and must concentrate on the contents of the Bill itself.
  Clause 1 reproduces the main provisions of the existing legislation governing the existence of the parliamentary contributory pension fund. The fund will continue to operate with the current trustees, appointed by the House, as it does now. Detailed arrangements for the conduct of the trustees' business will, in future, be contained in regulations.
  Clause 2 is the heart of the Bill. It gives a power to the Leader of the House to make regulations providing for pensions for Members, Ministers and certain other office-holders. The principal matters that may be covered by the regulations are listed in schedule 1. This clause and schedule are based on various provisions of the Superannuation Act 1972 which governs most of the main public service pensions schemes. Schedule 2 provides for the current legislation to continue to have effect until it is replaced, as appropriate, by regulations made under the new power.
  Although the change from primary legislation to regulations means that the opportunities in the House for debate and amendment of the Government proposals will be less extensive, the clause provides significant safeguards for the rights of Members. No regulations can be made that adversely affect the accrued pension rights of former Members or office-holders no longer in service at the time of the making of the regulations, or their dependants, without their consent. The Leader of the House is obliged to consult the trustees and Members' representatives before making any regulations. The regulations themselves will be subject to affirmative resolution procedure in both Houses.
  Clause 3 provides for the continuation of the annual Exchequer contribution to the fund, which is based on the recommendation of the Government Actuary. He will continue to report on the fund every three years, but the Bill does slightly amend present practice. In future the Government Actuary will be recommending a rate of contribution by the Exchequer for the years following publication of his report, rather than the years following the valuation date, which may be some time before the report is published. This will avoid unexpected adjustments to the rate of contribution, which can upset the trustees' investment activities.
  Clause 4 gives authority for the payment of a pension to the widow of Lord Maybray-King, the distinguished former Speaker who died last year. When Mr. Speaker King retired in 1971 his pension arrangements were set out in a special Act of Parliament, as was the practice then. This provided for a pension to be paid to his then, wife, who was named in the Act, in the event of his death. She died, however, and he remarried, but the Act did not provide a pension for his surviving widow. There has been a certain amount of public comment on this provision, and I am pleased to have this opportunity to correct any misleading impression that may have been given. Mr. Speaker King's Retirement Act makes specific provision for his widow's pension to be subject to the limitations applying to the pension of Members' widows. Since the parliamentary pension scheme began in 1965, it has
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  provided that the survivor of a marriage after retirement should be entitled to a pension. But it would clearly have been invidious to have made explicit provision in the 1971 Act for the possibility of Mr. Speaker King being married to anyone other than his then wife at the time of his death. Clause 4 is, therefore, needed to ensure that Lady Maybray-King is in no worse a position than if her husband had remained just a Member of Parliament and had not become Speaker.
  The House will see from this brief description that the Bill is almost wholly concerned with the legislative framework of the scheme. As I suggested earlier, I envisage no substantial changes to the scheme itself in the absence of recommendations from the TSRB. Some changes will be necessary before next April, however, so that the scheme complies with the requirements of the Social Security Act 1986.
  The most significant change is that membership of the scheme will no longer be compulsory for Members. This means that we, like all other members of occupational pension schemes, will be able to take advantage of the new freedom to choose personal pensions. I shall not detain the House further on this point now. I have already circulated to Members an outline of the pension scheme illustrating their effects, and we shall, of course, have an opportunity to debate the regulations themselves. I am incidentally indebted to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) for pointing out an ambiguity in that outline in the reference to pensions based on final salary: in common with many other schemes, pensions are based on the salary earned in the last 12 months of service, rather than the rate in payment on the date of retirement.
  In conclusion, I say to the House that I believe that we should not take up an inordinate amount of parliamentary time with debates on our terms and conditions. It is, however, right that there should be a proper degree of public and parliamentary scrutiny. This short and relatively modest Bill improves the modalities by which we make and discuss these arrangements. I commend the Bill to the House.
  8.27 pm
  Mr. Peter Shore: I believe that the House will want to thank the Leader of the House for that extremely clear and unusually concise presentation of what is, in fact, a rather complex matter. I accept that, as the right hon. Gentleman's speech confirmed and as the explanatory and financial memorandum tells us, the main purpose of the Bill is to enable the parliamentary pension scheme to be set out in regulations rather than, as at the present time, in successive Acts of Parliament.
  The Bill makes no changes to the rules of the present scheme, but in future it will enable further developments in the parliamentary pension scheme to be made by regulations rather than by primary legislation. The case for making future changes by regulation rather than by primary legislation is that since pensions for Members of Parliament were first introduced in the Ministerial Salaries and Members' Pension Act 1965 no fewer than five Acts of Parliament have been found necessary during the following 20 years. I accept that the scheme is now very complex and that further amendments to the scheme as it now stands would make it even harder to follow than it is today.
  The Bill proposes three things. The first is that the parliamentary contribution fund should continue and that

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  the elected trustees should continue to decide how to invest the assets of that fund. Secondly, it provides that the present rules of the scheme should be continued. Existing provisions, therefore, both those enacted by previous primary and secondary legislation, which relate to the parliamentary contributory pension fund, are to be continued. They are set out in schedule 2 and the provisions are safeguarded as though they were contained in regulations under clause 2. These features will not be controversial. Indeed, the House will be pleased that the trustees' role is to be safeguarded.
  Thirdly, the Leader of the House is empowered to make regulations for future changes to the scheme. The provisions are listed in the 13 paragraphs of schedule 1. Clause 2(4)(a) enables the Leader of the House to make regulations covering any or all of those provisions. Clause 2(4)(b) gives the Leader of the House the power to make regulations from a date before they are made. If I understand that correctly, it is a retrospective power.
  Clause 2(4)(c) provides a general power to make different provisions in respect of different recipients. These powers will give greater flexibility to the scheme but they are wide ranging. The powers are to be exercised by statutory instrument and the Bill provides that regulations cannot be made unless the trustees, other representatives and those who are eligible for a pension are consulted by the Leader of the House. That is welcome. Regulations must be approved by a vote in both Houses. The approval is to be sought by affirmative resolution guaranteeing what would normally be a one and a half hour debate.
  No one will doubt that the regulation-making power gives very great power indeed to the Leader of the House and to the Government. If the past is any guide, in future many matters of controversy will arise from further proposed changes in the parliamentary pension scheme. The House might wish to make amendments to what the Leader of the House proposes. That will not be possible because a regulation can only be accepted, defeated or withdrawn.
  Moreover, the one and a half hour debate will be inadequate for any major proposal for change. The great advantage of proceeding by way of further primary legislation is that it gives ample scope for debate and for considered amendment. The disadvantage is the increasing complexity of primary legislation and the lack of flexibility.
  These points, in particular the objections to the regulation-making procedure, have been put strongly to the Leader of the House and I believe that he recognises the widespread concern.
  One proposal that has emerged in discussion is that which allows debate on an amendable motion before any regulations altering the scheme are laid before the House. The amendable motion is the procedure by which we decide such complex matters as Members' pay, the amount and content of the secretarial allowance, car allowance and other controversial matters. As a result of those debates on the motions, amended or not, and approved by the House, regulations are subsequently issued. Such a procedure has the great advantage of allowing for detailed amendment and for debate not being limited to one and half hours. Such a procedure would meet the anxieties expressed by many hon. Members. We shall listen with particular interest to what the Minister says later. I hope that it will be possible to explore the matter further in Committee.
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  The other main change in the Bill is the provision which governs the Exchequer contribution to the parliamentary contributory pension fund as provided for in clause 3. The Government Actuary will continue to value the fund every three years and to produce a report as soon as practicable after the valuation date. Each report will continue to recommend the Exchequer contribution rate and the changes will come into effect in the year following the year in which the report is made, and in the two subsequent years. This differs from present arrangements whereby the Exchequer contribution to the fund is set from the three years starting with the year of the valuation date. It is claimed that the change will lead to a smoother adjustment to whatever new rate is proposed. I am inclined to accept that.
  That apart, there is only one other change to the Bill to which the Leader of the House referred. Clause 4 amends Mr. Speaker King's Retirement Act 1971 and provides a pension for the widow of the late Lord Maybray-King. This has attracted some critical attention since it extends the right to a pension to the survivor of Lord Maybray-King's post-retirement marriage. However, the provision is in line with the current arrangements for Speakers' widows' pensions and for the pensions of the widows of other Members of Parliament, which also provide for the payment of pension to the survivor of a post-retirement marriage. I was surprised at that. As such a provision has been part of the parliamentary pension scheme since it was introduced in 1965 it would, indeed, be an anomaly if Lord Maybray-King's widow were to be treated differently from the widows of other Members.
  The Leader of the House has made it clear that he does not intend to introduce in the Bill any other changes in the provisions of the parliamentary pensions scheme. I accept that this is not the occasion to make major amendments to the scheme since we shall shortly receive the report of a further review of parliamentary pay and allowances from the TSRB, but there are a number of anomalies which we now have the opportunity to rehearse or to remove.
  I was a little worried about what the Leader of the House said about the next TSRB report. He gave the impression that it would not consider pensions. I would not like the Leader of the House or anybody else to think that we reached in the 1984 Act a perfection in pension provision, because clearly that is not so. We have been learning slowly over the years how to construct a reasonable pension arrangement for Members who have, after all, the most curious and most threatened career structure of any group in the country.
  On the subject of anomalies, the House will recall that in the 1984 Act it is agreed that if a Member retires at the end of a Parliament, and if at that time he is over 60 and has served for 20 years, he is entitled to a full, unabated pension. There will be a small number of hon. Members, aged 57, 58 or 59, who have completed 20 years of service and who do not wish to serve again for the life of a further Parliament. It is reasonable for such ex-Members to wait until they are 60 before drawing their full, unabated parliamentary pension. But as things stand such a Member has to defer drawing such a pension until he is 65, unless he is prepared to draw a substantially abated pension. Surely that anomaly should be put right.
  Further thought should be given to the 60/20 rule. If a Member has reached the age of 60 and has served for 20 years but stands and is defeated in the subsequent general

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  election, he is not qualified under the current rules to draw an unabated pension. He is in exactly the same position as a Member over 60 who has completed 20 years' service but who decides not to stand again at the general election. The logic or justice of treating one Member differently from another is not clear.
  There is a further anomaly. All hon. Members are entitled to severance pay, or resettlement grant, if they lose their seats at a general election, if they cannot stand as a result of boundary changes, if their constituencies cease to exist or if they retire at a general election. The resettlement grant is graded according to the age of the Member and the period of his service. That applies to all Members except those who have reached the normal age of retirement. For them, no resettlement grant or severance pay is available. Again, that does not seem to me to be fair.
  Some hon. Members first enter the House in their middle years. They may well have served for fewer than 20 years before their retirement. Therefore, they will not be eligible for a full parliamentary pension, but no resettlement grant is available to them. Again, that is anomalous when compared to a Member of Parliament who conforms to the 60/20 rule but who chooses to retire at the age of 60. He is entitled to a resettlement grant as well as to his full pension. I believe, therefore, that there is a strong case for making a retirement cash payment equal to the resettlement grant for Members who retire at over 65. It is possible that the Leader of the House or the Minister of State, Treasury will be able to give an assurance on those points. Perhaps hon. Members will wish to frame amendments for the Committee stage.
  I conclude with a further point that deserves attention—the contribution that members of the pension scheme and the Treasury make to the fund. The House will recall that in the 1984 Act Members' contributions were increased from 6 per cent. to 9 per cent. of salary. That was 1 per cent. higher than the 1983 review of parliamentary pay and allowances had recommended. Since then, we have had the report of the Government Actuary, which was laid before the House on 26 November 1986, and which valued the fund as it stood on 1 April 1984. It showed a remarkable increase in the value of the fund from £20·6 million in April 1981 to £41·7 million three years later. That has enabled the Government Actuary to recommend that the Treasury contribution be reduced from 16 per cent. in 1984 to 13 per cent. in 1987.
  I have no knowledge of the value of the fund to date, but if it has kept pace with market values generally it must be at least twice the £41·7 million value in April 1984. If that is so, there will already be a strong surplus of assets over all computable liabilities in the pension fund now. Under present arrangements, that will simply mean, when the Government Actuary next reports, a further—and large — reduction in the Treasury contribution. The Social Security Act 1986 allows Members to opt out of the parliamentary pension scheme in favour of a personal pension. That must make the parliamentary pension scheme less attractive. On the face of it, the 9 per cent. Members' contribution seems to have been set too high and a new basis for calculating the Treasury contribution or other changes and improvements in the benefits available under the pension fund are now required.
  I hope that we shall hear more about that from my right hon. Friend the Member for Manchester, Wythenshawe
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  (Mr. Morris), and, indeed, from other trustees of the fund. I hope that we shall have a sympathetic response from the Treasury Minister.
  This is in no sense a party issue. I am speaking for myself and reflecting my own views, not the views of my party, but I hope that in Committee it will be possible to make further progress in improving our parliamentary and other pension arrangements and removing the anomalies that still exist, which are small in cost but burdensome in their effect.
  8.44 pm
  Mr. Alfred Morris: I am grateful to the Leader of the House for his extremely kind reference to me in his opening speech. As he said, I have a very special interest in this Bill as chairman both of the managing trustees of the parliamentary contributory pension fund and the House of Commons Members' fund.
  I pay tribute to the quiet and unpublicised, but often difficult and always painstaking, work of my fellow trustees in the service of their fellow Members. At the same time, I place on record here the unfailing help that we receive from Jim Dobson, Tony Lewis, Frank Brewer and all who work with them in the Fees Office. Nothing is too much trouble for them if they can help any Member of this House, past or present, or their dependants. The House as a whole owes them its gratitude.
  The cumulative effect of six separate Acts of Parliament and 20 or so statutory instruments has made the parliamentary pension scheme, as it now exists, administratively very complex; and we have reached the stage where further amendments would make it extremely hard to follow. This Bill makes no changes to the rules of the scheme, or to the benefits available, but will enable the existing legislation to be consolidated in regulations or to continue to have effect as if contained in regulations, as appropriate, and will also enable future amendments to the scheme to be made by regulations. So the Bill, on which I congratulate the Leader of the House, is deserving of support on two counts. First, it will be more convenient and make the scheme more comprehensible to have it in a single document; and, perhaps more importantly, any future amendments will not be subject to the constraints of the parliamentary time available for primary legislation and can thus be implemented more quickly.
  Contributions under the original Act in 1965 were expressed as a fixed sum of £150 a year from each Member with, effectively, a matching Exchequer contribution. There was provision for an additional Exchequer contribution to meet the cost of pensions in respect of non-contributory, but reckonable, service before the scheme started. The 1965 Act further provided that benefits and/ or contributions could be varied in the light of any surplus or deficiency revealed by an actuarial review of the fund.
  By contrast, the Parliamentary and Other Pensions Act 1972 determined the Member's contribution at 5 per cent. of salary, leaving the Exchequer contribution to be determined by the Government Actuary at the appropriate level necessary to balance assets and liabilities. This means, of course—and it is essential for the fact to be understood by the House as a whole—that the fund can never go into surplus, no matter how well the investments perform. Equally, it means that the prospects of securing improvements in the scheme, based on successful investment management, are effectively vetoed since the

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  Exchequer contribution correspondingly diminishes as a result. I ask the House to take very careful note of that point.
  The amendments recommended by the Top Salaries Review Body in its 20th report were estimated to increase the cost of benefits under the scheme from about 18 per cent. to 22 per cent. of a Member's salary. It was therefore recommended that the Member's contribution should be, as before, approximately three eighths, or 8 per cent. Notwithstanding the review body's recommendation, the Government decided that the Member's contribution should be 9 per cent. The effect of that decision, endorsed by the House, has been to cause the Government Actuary to recommend a significant reduction in the Exchequer contribution from 3·3 times Members' contributions in 1985–86 to 2·3 in 1986–87 and only 2·0 thereafter. I must strongly emphasise to the House that this compares most unfavourably with other pension funds. The Government Actuary's Seventh Survey of Occupational Pension Schemes 1983, which was published in 1986, shows that across the board employers' contributions are 3·03 times employees' contributions. The multiple for the public sector alone is 2·6. Allowing for the fact that the parliamentary scheme's multiple also contains an element relating to pensions in respect of pre-1964 service, the Exchequer contribution to our scheme is inferior to that for the public sector taken as a whole.
  There have, of course, been many improvements in the scheme over the years, in which the trustees have taken a leading role, not least those in the accrual rate; in the qualifying age/service conditions for early retirement at a general election; and the provision for ill-health retirement pensions. There is, however, a strong case for further improvements, and it is ultimately for the House to decide if and when they should be effected. Take, for example, the relationship between salary and pension. In 1975, the TSRB recommended a parliamentary, salary of £8,000, compared with £4,500 per annum then payable. Although the recommendation was not implemented in full (the salary moving only to £5,750) the Government of the day nevertheless permitted a higher notional salary to be implemented for pension purposes. Thus, the widow of a Member who died in service was awarded a pension correspondingly higher than would otherwise have been the case. The House may think that this precedent should be followed in all circumstances where a Government cannot see their way fully to implement TSRB recommendations on pay at the outset, as happened in 1983.
  Ill-health retirement is another subject of concern. On retirement for reasons of ill health, service is enhanced to twice its actual length if that is less than 10 years or, if service is more than 10 years, to 20 years or by six and two thirds years, whichever is greater. In no case can the enhancement be greater than the period from the date of retirement to sixty-fifth birthday. The current practice of the Inland Revenue would permit a pension based on potential service to age 65. So if a Member retires on ill-health grounds at the age of 55, with 23 years' service, under the parliamentary pensions scheme his or her pension is based on 28 and two thirds years, whereas under Revenue rules it could be based on 32 years. In the 10 cases we have had to date, seven pensioners would have benefited under a change to the Revenue maximum.
  I turn now to the death in service gratuity. The gratuity payable on death in service is a sum equal to a Member's
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  salary. The Revenue limit is four times salary, including any retained benefits. If the gratuity in the parliamentary scheme were to be set at twice the Member's salary at the date of death, the question of retained benefit could be ignored. On current salary, the widow of a Member who died in service would, therefore, receive £37,000, compared with the Revenue limit of double that amount, less any retained benefits as defined by it.
  The pension paid to widows and widowers is currently one half of the Member's notional ill-health pension. The Revenue maximum is two thirds of the Member's notional ill-health pension, based on potential service to age 65. So if a Member dies in service at the age of 55, with 22 years' service, the widow or widower would receive over £2,500 a year less than the Revenue maximum allows. Moreover, under our scheme, the widow's or widower's pension ceases on remarriage or cohabitation, whereas, under Revenue practice, it may continue for life notwithstanding remarriage or cohabitation.
  Some of the public comment there has been on clause 4 of the Bill, which allows for the payment of a pension to Lord Maybray-King's widow, must have left many of those we represent with the impression that the widows of Members of Parliament are extremely well provided for. While Lady Maybray-King's pension would, in any case, not be payable from the parliamentary pensions scheme, but from the Consolidated Fund, it may thus be instructive to spell out in this debate just how much the generality of widows of Members of Parliament are entitled to receive.
  If a Member died, over the age of 65, with 30 years' service, his widow's pension would be £4,604. In the case of a Member who died, under the age of 65, with 14 years' service—and with an enhancement of over six and a half years—the long-term pension of his widow was less than £2,800 a year. That is the reality behind some of the public comment there has been about clause 4 of the Bill, and right hon. and hon. Members may feel that the time has now come to look at improvements in widows' benefits that would bring them more into line with those in some other schemes. In particular, a case could be made for a minimum pension based on not less than 10 years' actual and notional service. At the present time, this would provide a widow's pension of £1,800 a year which very few people here, or anywhere else, could describe as extravagant.
  I am, of course, very much aware how strongly many right hon. and hon. Members feel about the payment of a year's salary as resettlement grant to Members who retire under the age of 65, but not to their colleagues, often with much longer service, who have reached that age when t hey leave the House. Resettlement grant is payable from the Consolidated Fund and not from the parliamentary pensions scheme, but the Leader of the House has been made fully aware of the strength of feeling on this issue which, no doubt, others will want to speak about as the debate proceeds.
  If we accept the hints given both by the right hon. Gentleman and the Prime Minister last Thursday about the length of time left to us before this Parliament is dissolved, the Bill now before us may have two Second Readings, one before the election and one afterwards. If that proves to be the case, there will be ample time for suggestions made in this debate to be fully considered before we enact the Bill.
  As of now, as chairman of the managing trustees, I am glad to have had the opportunity provided by this debate

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  to indicate both the restraints on the parliamentary pensions scheme and, at the same time, some of the improvements I should like to see, especially for Members' dependants. I hope that they will be given due attention by both sides of the House and that today's hopeful precepts on improving the scheme, or at least some of them, will become tomorrow's practice. It is within the power of the House to make that happen.
  8.58 pm
  Sir Anthony Kershaw: I wish to add only a few words to those of the right hon. Members for Bethnal Green and Stepney (Mr. Shore) and for Manchester, Wythenshawe (Mr. Morris). As they have just said, the present scheme is said to be too complex. The Bill will enable us swiftly to alter arrangements and to take them through the House easily without the long debates and delays which have characterised our past legislation. That may well be, and to that extent one welcomes these new arrangements, but it implies that new arrangements are desirable and that changes will be made. In several respects, which have already been alluded to, these changes are certainly necessary.
  I should like to deal principally with two items. The first is the gratuity or resettlement grant — I am not sure which to call it — at the end of one's service in Parliament. I should declare an interest in this matter because I am over 65 and shall not receive one. The gratuity or resettlement grant has never been payable to one who will receive a pension. Originally, if an hon. Member retired or disappeared from the House, he did not receive a pension until he was 65, so there was a gap when he received no parliamentary pensionable income. Therefore, it was fair that there should be some payment to tide him over until he was 65 and could receive a pension. However, as a consequence of one or two hard cases which will be present in the minds of right hon. and hon. Members, first, we gave a gratuity to people younger than 65. Then one could receive one's pension at the age of 62, and now one can receive it at the age of 60. One can even receive a reduced pension and a gratuity at the age of 50. If one is over 65, however, one cannot receive a gratuity.
  The reason for the arrangement to tide over those who have not reached the age of 65 has now disappeared, so it is reasonable to discuss whether those over 65 should also receive a gratuity or resettlement grant or whether the others should not because they receive a pension. There is no logic or fairness in the present position and I am sure that my right hon. Friend the Leader of the House or anyone in his position will wish to consider that soon.
  My second point relates to our contributions, which are now 9 per cent. of salary. I understand that, historically, the reason why we pay 9 per cent. of salary is because we made no or too low contributions before 1964, so we have to make up time. As has been said, the Exchequer reviewed the position and decided that its contribution and ours were unnecessarily high to maintain the fund, so it reduced its contribution from 3·3 times hon. Members' contributions to 2·3 times—a prudent financial move. But why are we left paying 9 per cent.? Should not our contribution decrease proportionately? I do not understand the logic of the present position. Will my fight hon.
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  Friend the Leader of the House say why we still pay 9 per cent., yet the Treasury has reduced its contribution so remarkably?
  If we pass the Bill, as we undoubtedly shall, it will be possible for my right hon. Friend to make changes in our various arrangements quickly. Is that not important in view of the political situation? Admittedly, the Bill must pass through all its stages and that will take time, but if we are to have a general election, as we read in the newspapers, perhaps nothing can stop my right hon. Friend, as soon as the Bill receives Royal Assent, introducing regulations to make all sorts of beneficent changes which will gladden the hearts of more than 100 right hon. and hon. Members who will retire before the general election.
  If we continue in our Sessions and our Parliament and we go beyond 1 January next year, for many people the position will be transformed. We will then go to a salary of over £21,000, linked to the chief veterinary officer of the Ministry of Agriculture, Fisheries and Food—which, of course, will enable us to be very important people. But unless we reach 1 January 1988 we will not receive that. At the end of perhaps next week, when we get rid of the Bill, it will be possible for the Treasury to introduce various regulations to improve matters.
  The right hon. Member for Wythenshawe spoke about widows. Is it possible to imagine that the widow of a Member who served over 20 years in this House will get a pension of £2,000 a year less than one can get from the Department of Health and Social Security if one applied over the counter? It is an absolute disgrace that this should be tolerated and even to speak of it ought to give one a sense of shock.
  Such changes, which will not cost very much money—the usual plea of a Back Bencher to the Front Bench—nevertheless ought to be made in the short time that may be available to us before Parliament is dissolved.
  9.6 pm
  Mr. Richard Wainwright: It is agreed in all parts of the House that an adequate contributory pension scheme in up-to-date form is a most necessary buttress to the independence and reputation of the House and of each hon. Member. It is largely because the Bill offers a way for amendments to be made to the scheme to keep it up to date with less delay than in the past and with much less excuse about lack of parliamentary time that I, who have the honour to be one of the managing trustees, support the Bill.
  Pensions are a very dynamic topic. Already in this short debate a formidable list of invaluable changes has been carefully compiled by the Leader of the House, who has always seemed to me to be very understanding of such problems.
  In supporting this new method of keeping the scheme up to date and in line with general developments in pension schemes, I would like to support those hon. Members who have already pointed out the extraordinary situation of Exchequer contributions. The trustees, under the diligent leadership of the right hon. Member for Manchester, Wythenshawe (Mr. Morris), try their best to improve the state of the fund and if the long-term consequences were not likely to be so unfortunate, it would be comical if, with with the assistance of a buoyant

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  stock market, their labours were reasonably successful, and the sole result was that the Exchequer's contribution was automatically reduced.
  This also destroys the opportunity that trustees ought to have of being able to say to the Leader of the House, if there is an imminent surplus because of the success of the fund, that they have been reasonably good stewards, that they have been lucky in their results, that they have more backing to enable the fund to be improved, and that Members should have better benefits in return for their substantial 9 per cent. contributions. But not a bit of it. We are not in that position at all, because there cannot be a surplus. Any improvements in the scheme are bound to decrease, in however small a degree, the Exchequer contribution.
  The trustees are set an impossible task and are given no incentive, apart from a sense of duty to the Exchequer, to keep the fund buoyant. I am sure that the absurdity of the long-term position must be apparent to the Leader of the House and the Treasury Ministers and that we shall have some encouragement to hope that the position will be made a little more equitable on that score.
  I should like to add my voice to those who have already said that if we are to proceed by regulation, for which there is much to be said, all hon. Members must be given an opportunity for a debate on an amendable motion. I am sure that my fellow trustees, and particularly our chairman, will not object to my pointing out that, although trustees try, as a result of their experience month by month in managing the fund and the scheme, to point out anomalies and remind the House, particularly the Leader of the House, of injustices inherent in the present scheme, the job of the trustees legally is to administer the scheme as the House has already enacted it. Anything we do over and above that is simply a bonus from such experience as may have been accumulated. Therefore, the House should not rely—I am sure it would not—upon a small body of trustees to maintain and uphold the interests of different hon. Members, almost all of whom have somewhat different circumstances.
  I hope that as the Bill proceeds on its way—I wish it a speedy passage—the Leader of the House will come forward with firm and clear undertakings that the Government fully recognise an obligation to enable the House to have a full debate on an amendable motion before any regulations under the Bill are introduced.
  9.12 pm
  Mr. John McWilliam: I will not detain the House for long, but I join others in giving my thanks to those trustees who have worked so hard over the years to look after our interests. I do not think that their work is suitably appreciated or lauded in the House. I am grateful and I am sure that every hon. Member present is grateful also.
  I should like to thank all the officers of the Fees Office—it would be invidious to name any particular one—for the help they give Members in administering an extremely complicated scheme, vested as it is in so many different pieces of legislation. That is why I welcome the intention behind the Bill.
  There are some details with which I take issue and which I hope to have an opportunity to explore in Committee. I share the concern of my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore)
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  that pension debates might in future be limited to a one-and-a-half hour order some time after 1 o'clock in the morning because such debates are important.
  As my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) has set out so clearly, there are anomalies. Our widows are not as well treated as widows in other schemes. Our people who retire after 65 are not as well treated, and our people who die in service or who are severely injured in service are not as well treated. I wish them to be treated to the extent allowable within the general Inland Revenue and DHSS regulations. That is certainly possible given the strength of the scheme as it exists.
  There are some problems within the legislation. For instance, clause 2 states:
  "The Leader of the House of Commons may, with the consent of the Treasury, by regulations make provision with respect to the Fund".
  We had a civil war about that once upon a time. We vote funds to the Treasury; it does not vote funds to us. Our trustees look after the scheme, not the Treasury. The Treasury has no responsibility for it. Therefore, the clause should refer to the trustees and not the Treasury. I am certain that that is not an oversight and I am equally certain that the Leader of the House did not exercise his mind sufficiently on the constitutional implications of the clause. It is important not only constitutionally but practically. If the trustees have no incentive to manage the scheme well, why should they bother? It seems that there is a major fault in the scheme.
  Clause 3(2) talks about the contributions being made in accordance with the report of the Government Actuary. That seems as if we are legislating in the sense that each time one has a row with one's wife, the mother-in-law must be the judge and jury. That seems to be the effect of that provision, and it should be looked at.
  The point was well made that the freedom to choose outside pensions which now exists will cause some problems for the scheme in the future. It will certainly cause me some heart-searching. I do not mind coming in at 38 years of age and bringing 20 years' reckonable service with me. I do not mind at all if that extra money—from which I can never benefit because even on my own contributions, by the time I reach 60 I shall be over the Inland Revenue limit — results in better benefits for widows of those who die in service or those who are injured in service. But I mind a great deal when the Government Actuary says, "I shall nick that and give it back to the Treasury." That, in effect, is what is proposed. I could have given that money to charity rather than to the Treasury, but that is what has been enacted.
  As increasing numbers of people such as myself come into the House with a good pension scheme behind them which brings in substantial benefits, it seems to me that we should have some say in those benefits. I do not want to pay any less than anyone else, but it ought to go to a good cause, and these days it does not seem to me that the Treasury is the best cause in the world.
  That brings me to the 9 per cent. actuarial contribution. I well remember those debates, because I led from the Opposition Front Bench. I remind hon. Members that the additional 1 per cent. contribution was not recommended by the Top Salaries Review Body but was part of the rakeback which the chairman of the 1922 Committee proposed — I suspect not with the permission of his Committee — in order to save the Government's face

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  when they decided not to implement the Top Salary Review Body's report and to stage the salary increase over a number of years instead of granting it immediately as was suggested. They decided to rake back another 1 per cent. by inserting an additional pension contribution, and tonight it is proposed that the Treasury should rake it back. I do not mind having a clean argument about salaries and pensions, but that muddied the water, and I feel strongly about that I per cent. contribution, as clearly, from what I have said, I am paying far too much already.
  I welcome the opportunity to get the Bill into Committee. I think that we can do something with it. The way in which we treat our widows and the way in which we treat those who die in service—particularly given the number who have died in the last six months—as well as those who are injured in the service of the House because of the way in which we choose to operate does not make the House a particularly civilised place for which to work.
  I do not mind working such long hours, but if I keeled over tomorrow I would like to think that my family would at least be well taken care of. At present that is not the case. I therefore look forward to taking the Bill into Committee and I look forward to the opportunity sensibly to amend it once it is there.
  9.20 pm
  Mr. Brynmor John: I shall detain the House for only a short while. Although this appears to be a constitutional Bill at first sight, it is not merely such a Bill. I want to voice my suspicion about anything that is unamendable. I hope that the Leader of the House will consider how amendments can be made because a "take it or leave it" option puts the House in a most invidious position.
  The Bill allows us the opportunity to be rid of anomalies. No one here is after a gold-plated scheme. However, with the help of the funds in the scheme and the contribution of 9 per cent.—a very high figure indeed—that we make historically as contributors to the pension scheme, we deserve a reasonably good scheme. However, we certainly deserve a scheme which is rid of anomalies before the Bill is enacted.
  I want to concentrate on the 60/20 rule. It is the greatest nonsense that if someone chooses to retire at or after his 60th birthday—which may fortunately be the day after a general election — having qualified after serving 20 years, he can draw his unabated pension in full. However, if he is faced with the choice of retiring at 58 or 59 and decides that another Parliament is not for him, he will either suffer an abatement of pension or, if he wants to wait for it in full, he will have to wait a number of years which may be beyond his financial means. Nor do I see why a person defeated in that age band should suffer any difference of treatment. Frankly, I believe that neither person is likely to get employment again.
  I want the Leader of the House to look at this matter sympathetically. The Leader of the House was described as seeming to be sympathetic. I thought that he had a flinty tone about him tonight. I hope that that is simply role playing and the Leader of the House was merely playing "Biffen the hard man" rather than the real Leader of the House. If the pension is not drawn until 60, there is no additional charge to the fund and there is no difference
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  between someone retiring at 58 or 59 or after the age of 60. Such a small worthwhile benefit is relatively free of cost and would improve the scheme, ridding it of one anomaly—widows are another anomaly—and that would make the scheme beneficial to the contributors. After all, if we are expecting people to pay 9 per cent. of their salary towards a contributory pension scheme, at the very least they should look forward to retiring in comfort comparable to those in outside industry without having to suffer a cut in pension as a penalty.
  9.22 pm
  The Minister of State, Treasury (Mr. Peter Brooke): It is a pleasure to reply to this useful debate. After my right hon. Friend the Leader of the House moved the Second Reading, the right hon. Member for Bethnal Green and Stepney (Mr. Shore) asked a series of questions and made a series of observations about the Bill, to which I will do my best to reply.
  My great-uncle was the hon. Member in the Liberal interest for Tower Hamlets, Bow and Bromley. I believe that this is the first time that I have followed the right hon. Member for Bethnal Green and Stepney in a debate of this kind, although I have followed his colleague in Tower Hamlets, the hon. Member for Bow and Poplar (Mr. Mikardo). It is a delight to pay an incidental tribute to my great-uncle as well as to the right hon. Member for Bethnal Green and Stepney.
  The right hon. Member for Bethnal Green and Stepney spelt out concisely and neatly the antithesis before us, in terms of the complexity of the legislation and the disadvantages of the simplicity inherent in regulations. He was joined in those observations later by his hon. Friend the Member for Blaydon (Mr. McWilliam). I listened very carefully to the right hon. Gentleman's comments about the procedure upon which we would embark under the Bill and in particular to his questions about the way in which we might handle these matters, assuming that the Bill is enacted. I want to put a proposition before the House which I hope will act as a vehicle for our debates in Committee.
  The Bill also provides for consultation before regulations are introduced, but we shall consider carefully whether we can devise arrangements more like those for determining the pay of Members of Parliament, in which Members have an opportunity to debate an amendable motion before final proposals are introduced. That was the gist of the right hon. Gentleman's speech, and I am delighted to respond in this way. He and the right hon. Member for Manchester, Wythenshawe (Mr. Morris) mentioned Lady Maybray-King and drew attention to the fact that some of the criticisms that have been made outside the House about that provision were ill-founded. I am grateful to both right hon. Gentlemen for sustaining the proposition in the Bill.
  The right hon. Member for Bethnal Green and Stepney mentioned the Top Salaries Review Body and changes that might be made to the provisions of the scheme and the arrangements for Members, but, as my right hon. Friend the Leader of the House said, the Government do not believe that it is an appropriate time to amend the scheme. We have heard suggestions for improving it, all of which can be referred to the TSRB when it next considers Members' pensions. I should say that substantial improvements tend to carry substantial costs.

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  The right hon. Member for Bethnal Green and Stepney mentioned anomalies relating especially to Members retiring at or about the age of 60. He mentioned the pension for a Member who retires, with 20 years' service, between the ages of 57 and 59 and suggested that that should be paid as though he had reached the age of 60. In 1984, substantial improvements were made in the pensions for that group. Their pensions were abated by a smaller percentage than the full actuarial reduction. Hon. Members also addressed the issue of lowering the general retirement age to 60. It was considered by the TSRB, most recently in its report on pensions in 1983, but it did not recommend a general reduction.
  Mr. John: My right hon. Friend's point was not that the full pension should be paid at the age of 57, 58 or 59, but that if the Member retiring at that age chose not to draw his pension until he was 60 he was taking advantage of the 60–20 rule.
  Mr. Brooke: There is a hazard in our getting too deeply drawn into the details of the scheme, given the fact that it is not the purpose of the Bill to change the rules at this juncture.
  The right hon. Member for Bethnal Green and Stepney asked another question about which I can give some information to the House. He said that Members of Parliament aged between 60 and 65 with at least 20 years' service who retired received pensions while those who lost an election did not. That was changed in 1984, and I am delighted to say that, after the age of 60, it makes no difference whether a Member was defeated in an election or retired.
  The right hon. Member for Bethnal Green and Stepney, my hon. Friend the Member for Stroud (Sir A. Kershaw) and others mentioned the resettlement grants for those aged over 65. As they recognised, resettlement grants are not part of the pensions scheme and the arrangements for determining their size and the qualifications for receiving them are not affected by the Bill. They are fixed by resolution of the House following recommendations from the TSRB, and we have no plans to change the rules in the near future. I heard what was said in the debate, but those who are aged over 65 receive a lump sum and a pension from the pensions scheme. No doubt that influenced the decision that there would be no resettlement grants as well.
  Sir Paul Bryan (Boothferry): Does my hon. Friend know the amount of the pension that they get?
  Sir Anthony Kershaw: And the amount of the lump sum?
  Mr. Brooke: The amount will depend on the individual hon. Member's circumstances.
  Mr. McWilliam: It might help the hon. Members for Boothferry (Sir P. Bryan) and for Stroud (Sir A. Kershaw) if I tell them that an hon. Member may commute up to one third of his pension as a lump sum when he retires. However, the lump sum is not there as a matter of right and is not built into the scheme.
  Sir Anthony Kershaw: What is all this about a lump sum for people over the age of 65? I have not heard of this before. If my hon. Friend the Member for Boothferry (Sir P. Bryan) wants to know the kind of pension that one gets after 32 years of service, I can tell him. It is about £9,000 a year.
  Mr. Brooke: I am grateful to my hon. Friend. I should not have taken his speech out of order in replying to the debate. The right hon. Member for Bethnal Green and Stepney raised the matter of contributions and the amounts.
  I shall respond in general to the question about the report by the Government Actuary. The Government Actuary's latest report was published in November and shows that the Exchequer is still making additional contributions to eliminate the deficiency in the fund that was created mainly by earlier Acts which gave credit for service before 1964, for which no contributions were paid. Therefore, there is no question of the fund being in surplus. The right hon. Member for Wythenshawe spoke about that.
  I realise that it is important for the House to have clear information about the state of the fund and the Government Actuary's report. If there are ways in which we can improve the transmission of that information, I shall be delighted to enter into correspondence with hon. Members about how this might be achieved.
  The right hon. Member for Wythenshawe asked a number of questions about methods by which the scheme might be improved. As I said earlier, that is not the substance and subject of the Bill. However, one has to ask that question in the context of various questions to the TSRB. He said that we should be able to secure better benefits if the fund's investments are working as well as we have cause to believe them to be. Of course. that works both ways, and I take it that hon. Members would not wish to see benefits reduced when investments do less well. Under the present system, the Exchequer bears all that risk and that underlies the nature of the Exchequer's contribution.
  The right hon. Member for Wythenshawe conjectured about the date of the election. I cannot shed any light on that, nor can I speculate about the pace with which we can carry this legislation through. The legislation is useful and I hope that it will be carried through promptly. I also have a family association with my hon. Friend the Member for Stroud in that he and my father were LCC members for my constituency. I am conscious that my hon. Friend will not fight the next election. One's fear, when one hears hon. Friends and Opposition Members speak in the Chamber, is that one may be hearing them for the last time. I am delighted that I have had an opportunity to speak in this debate.
  The issues raised by my hon. Friend the Member for Stroud fall into the general area of those raised by other hon. Members, in that improvements to the arrangements for the scheme are not essentially dealt with in this Bill.
  The hon. Member for Colne Valley (Mr. Wainright), as a managing trustee, referred to contributions and the hon. Member for Blaydon and others thanked the trustees and the Fees Office, as do I. The hon. Member for Blaydon introduced the civil war into the debate. Part of my constituency played a role vis-a-vis the rest of the nation with which it is not always associated in the light of subsequent events. I was somewhat puzzled as to whether the Government Actuary or the Treasury was supposed to be the mother-in-law.
  Mr. McWilliam: They are interchangeable.
  Mr. Brooke: One cannot characterise the Treasury as some kind of impersonal force when Lords Commissioners

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  of the Treasury sit in the House and are personally responsible. The hon. Member for Blaydon also referred to the 9 per cent. contribution, as he did when my right hon. Friend the Lord Privy Seal spoke earlier.
  The hon. Member for Pontypridd (Mr. John) spoke of particular elements and conditions and although some of the matters raised have been outside the ambit of the Bill as presently constituted it is helpful to have those observations on record so that the debate becomes a quarry from which we can subsequently obtain data.
  Mr. Jack Dormand: Perhaps the Minister will explain in what way the Bill has been helpful. We had a very depressing speech from the Leader of the House and that of the Treasury Minister has been even more depressing. They have made it clear that they are not prepared to take on board suggestions and proposals put forward from both sides of the House. One appreciates the Minister's argument that certain issues are not matters for him or for the present Bill, but matters for the Top Salaries Review Body or matters for consideration at another time and perhaps with another Bill. Will he come clean and admit that nothing will be done in Committee to change the purpose of the Bill which, as the Leader of the House has said, is merely to bring about a change in the mechanics?
  Mr. Brooke: My right hon. Friend the Leader of the House has made it perfectly clear, as does the Bill, that we are changing the mechanics, but in view of the complexity into which we have got ourselves it would be a mistake to continue to engage in primary legislation to tidy up that complexity.
  The hon. Member for Blaydon queried Members' rights in relation to lump sums: I acknowledge that the lump sum figure is secured by commutation, but there is a right that such commutation can take place.
  I wish to deal with one matter that has not been raised in the House. There have been occasions in the past when there has been an interaction between tax legislation and Members' allowances and benefits, but it has not always been identified and when it has been noticed thereafter there has been distress that it was not recognised earlier. I wish, therefore, to draw attention to a proposal in the Budget to limit the maximum lump sum that can be paid out on retirement to those joining schemes after 17 March
  112
  this year. The proposal will affect Members of Parliament in exactly the same way as other employees. It is not relevant to the Bill before us and there will be ample opportunity to debate it when the House considers schedule 5 of the Finance Bill and when it subsequently considers regulations bringing the parliamentary scheme into line with the provisions of the Finance Bill. I repeat that it does not apply to anybody who is a Member now. It relates only to those who come in after 17 March. However, I thought it appropriate and sensible that this should be put on the record so that it will be known to everybody when we deal with the Committee stage of both of the Bills.
  It has become clear during the debate that the central purpose of the Bill is to improve the mechanics of the arrangements. I am delighted that we are able to provide a pension for Lady Maybray-King, and for the support that I received from the Opposition Benches for bringing this in. I commend the Bill to the House.
  Question put and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

  Parliamentary and Other Pensions Bill

    PARLIAMENTARY AND OTHER PENSIONS BILL [MONEY]
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act resulting from the Parliamentary and other Pensions Bill, it is expedient to authorise—

    (a) the payment out of money provided by Parliament of sums required by or under that Act to be paid out of money so provided into the Parliamentary Contributory Pension Fund;

    (b) the payment out of the Consolidation Fund of—

    (i) such amounts as are required under that Act to be paid out of the Consolidated Fund in respect of transfer values paid into the Consolidated Fund;

    (ii) interest required under that Act to be paid on those amounts; and

    (iii) any increase attributable to that Act in the sums required to be paid out of the Consolidated Fund under Mr. Speaker King's Retirement Act 1971 or section 27 of the Parliamentary and other Pensions Act 1972; and

    (c) the payment of sums into the Consolidated Fund.—[Mr. Ryder.]

  Coal Industry
  9.42 pm
  The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): I beg to move,
  That the draft Coal Industry (Restructuring Grants) Order 1987, which was laid before this House on 6th April, be approved.
  Mr. Allen McKay: On a point of order, Mr. Speaker. I understand that the order has not been dealt with in the normal manner because it has not been considered by the Joint Committee on Statutory Instruments. Is it right and proper that we should consider the order before it has gone through the normal procedure?
  Mr. Speaker: It is in order to debate it.
  Mr. Hunt: I understand that the order is due for consideration by the Joint Committee on Statutory Instruments tomorrow. The order was laid on 6 April and could not be considered by the Committee at its sitting on 7 April, and there has been no sitting since. The order has an operative date of 1 May. I am happy to give the assurance that should the Committee bring any aspect of this order to the attention of the House when it considers it tomorrow, the usual channels will consider the matter further.
  Section 3 of the Coal Industry Act 1987, which received Royal Assent on 5 March, empowers the Secretary of State to make grants to the British Coal Corporation towards eligible expenditure relating to costs falling in certain financial years of the corporation. In any years in which grant is to be paid, the Act requires an order, approved by the House, specifying the kinds of expenditure for which grant is to be paid and the limits on that grant. Such orders specify only kinds of expenditure which fall within one or more of the descriptions in schedule 2 to the Act. The Act has thus introduced a flexible regime, enabling support to be given towards the corporation's restructuring costs, with the rate and coverage of support being specified under annual orders in the light of circumstances at the time.
  The Government announced to Parliament on 11 March objectives for British Coal which had been agreed with the chairman, Sir Robert Haslam. These have already been published in the Official Report. The Government believe that these objectives represent demanding but attainable aims, and that working within this agreed framework will provide long-term security and prosperity to British Coal and the greatest benefit to the nation.
  The first draft order under section 3 is consistent with the objectives. It provides for 75 per cent. grant support towards a broad range of costs associated with restructuring to be incurred by British Coal in 1987–88, including costs of redundancy and early retirement, changes of work and place of employment, retraining for those who are to leave or have left the corporation through redundancy or incapacity and costs associated with the promotion of new employment opportunities. It also provides for generous grant towards the maintenance of existing arrangements for the provision of concessionary coal to former employees, who have reached retirement age, or their widows.
  The order begins the process of transferring to British Coal full responsibility for terms and conditions which, for
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  most industries and employers, are matters for the employer and borne by him, consistent with the transition to commercial viability in the industry, whilst enabling the Government to continue to meet the larger part of those costs during the process of that transition.
  I should emphasise that the order does not seek to transfer to British Coal the burden of continuing costs associated with past restructuring. Continuing benefits to those who took redundancy before 28 March 1987 under the redundant mineworkers' payment scheme will, as in the past, be funded directly by the Government. Similarly, British Coal will continue to be eligible, under section 4 of the Coal Industry Act 1967, section 7 of the Coal Industry Act 1977 and section 4 of the Coal Industry Act 1987, for grants towards the costs of premature and enhanced pensions, transfer payments and other benefits in relation to men already qualifying.
  Nor does the order seek to transfer to British Coal more of the costs which are associated with restructuring in the current financial year than it could reasonably hope to meet. The Government remain fully committed to providing the finance necessary to support British Coal's transition to viability. The 75 per cent. grant support proposed for 1987–88 is generous. The increased costs to British Coal arising from the establishment of its own redundancy arrangements is balanced by the extended availability of grant in other areas which were not previously eligible for non-deficit grant or where the level of that grant was previously limited to 50 per cent.
  Over the past two years British Coal has made massive progress towards the fundamental restructuring of the industry, concentrating its activities on more highly capitalised and efficient coal faces, enabling the same amount of coal to be produced with fewer faces, fewer men and lower costs. The success of this policy has been dramatically demonstrated by the outstanding growth in productivity, with the weekly productivity record being broken no fewer than 15 times during the course of the 1986–87 financial year. Prospects for the industry and all those who work in it are being transformed. The draft order before us will play a part in that continuing transformation and will, I hope, be welcomed by all hon. Members who have the interests of the coal industry at heart.
  9.47 pm
  Mr. Alexander Eadie: In introducing the order, the Minister tried to explain why it has been introduced. I know by speaking to them that some of his hon. Friends were a little puzzled that we should be debating the order, because it is not long since the House debated the Coal Industry Act 1987.
  The Minister has explained that we are debating an order which relates to the restructuring of grants. He has explained again that he is satisfied about the financial structure and the targets that have been laid down for British Coal. He is well satisfied, even in terms of the Coal Industry Act 1987, that they are generous. We expressed doubts about that at the time, and I still have doubts.
  The schedule to the order has six important headings on various types of expenditure. Head 1 is "Redundancy and early retirement". Head 2 is
  "Changes of work and place of employment".
  Head 4 is "Concessionary Coal", to which the Minister referred. I am suprised that in his opening remarks he did not deal with heads 5 and 6, which relate to retraining and

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  new employment. Those are in the schedule. I am not trying to chastise the Minister; the Opposition regard the order as important.
  The four sections on redundancy and early retirement are important to the men who will be affected. I do not think that the Minister will dispute that fact. He made it easier for me to make some of my comments, because he referred to the state of the industry. The hon. Gentleman must tell us what contraction of manpower is expected in the near future. It is generally recognised that there has been a massive contraction since 1984 and I have been informed that the average age of men in the industry is about 34. Mining must have virtually the youngest labour force in the country.
  There have been substantial productivity increases, and they must be welcomed, but the Minister must concede that the 15 new productivity records set in the past year surely mean that we are producing by far the cheapest coal in Europe. As some miners have been performing so well, will the labour force be free from further contraction or does the Minister expect further calls on expenditure on redundancy and early retirement?
  The Minister took care to say that we were not talking about the future, but miners and the people of this country want to know about the future. I have often said on behalf of the Opposition that the industry belongs to the people; it is a source of national wealth.
  We have tried to get the Government to ensure the welfare and health of the miners and their industry. I have tried, particularly during energy Question Time, to press the Government about imported coal. They are giving the nod to about 9 million tonnes of imported coal and they cannot claim that that is in the spirit of the free market or competition, because most of that coal is being dumped here at below production cost.
  At my annual meeting with my local farmers—the three-hour meeting turned out to be something of a seminar — they complained about cheap food being dumped in this country at below production cost. They said that that was unfair and that it was harming their industry. They were saying the same things about their industry that we say about the coal industry. As some of those farmers are liable to be Conservative supporters, I asked them whether they wanted to address their complaints to the Government. But that is by the way.
  We must ensure that manpower in the coal industry does not contract further as a result of the distorted overseas market. I was told today that due to the pound going up in value from about $1·52 to its present level, another cost of £3 per tonne will be put on the coal industry. We could considerably extend this debate if we considered what happened in 1981 and the effect that the pound had in destroying a large slice of British industry. The Minister rightly paid tribute to the productivity record of the miners but a statement on the effects of the pound and overseas markets would be welcomed by both sides of the House.
  With regard to redundancy and early retirement, I wish to discuss licensed mines. That question was discussed in my constituency at the weekend. I should explain that, as a result of a takeover bid, about 110 miners in licensed mines face redundancy. It has been suggested to the miners that they will not be covered by the National Coal Board's or British Coal's redundancy terms because the mines are
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  not wholly owned subsidiaries. However, these mines are licensed by the NCB or British Coal. Indeed, there are written terms — a contract — under the coal industry conciliation scheme regarding such mines.
  I find this matter a bit perturbing, to say the least. Is it not a fact that a royalty is paid to the NCB or British Coal for the production of coal from private mines? Indeed, we heard lobbies from the Conservative Benches on behalf of private mine owners. I wonder what some of those hon. Members have to say about the problem in my constituency. We are discussing the prospects for miners who have perhaps a few years or many years service. I must tell my hon. Friends that, although I am dealing with this matter on a constituency basis, I believe that it is something that may confront them.
  In the various coal debates, we have heard a great deal about the virtues of private ownership and privatisation. The example that I have given is small scale, but it means a hell of a lot for the 110 miners and those other people who may be involved in similar closures in other parts of the country. Is it a good advert for privatisation? Is it a good advert for private mine owners when the miners employed in such mines find themselves in this position? It is appropriate to this order that the Minister should investigate this matter. Indeed, the Minister has a duty and responsibility to do so.
  We hear a lot about human rights nowadays, and I am talking about fine decent people. Such people have rights and the Minister has a responsibility not only to investigate this matter, but to try to resolve the problem. I do not expect to be given all the answers tonight, but I am raising the matter now because I do not believe it is something of local significance, but I believe that it could easily affect all the coal-producing areas of the United Kingdom.
  I intend to restrict my remarks, although it is tempting to make a longer contribution. The order is important, not trivial. Heads 5 and 6 of the schedule deal with retraining and new employment. The order deals with the allocation of financial resources, so it is appropriate that, however short the debate, the Minister provides the House with an update on what is happening and what is likely to happen.
  Like other hon. Members, I receive press releases from British Coal Enterprise Ltd. I bear in mind what the chairman of British Coal said to our Select Committee.
  The Opposition do not intend to oppose the order, because of its nature and purpose and because of the way in which it allocates finance. We attach importance to the order because it affects the financial prospects of many people who were employed in the industry and many people who will not be employed in the industry in the years to come.
  10.1 pm
  Mr. Michael Fallon: The hon. Member for Midlothian (Mr. Eadie) spoke about the treatment of private sector miners. I wonder about the difference between the public and private sectors in relation to the expenditure listed in the schedule to the order. It seems that miners in the public sector are treated more generously than those who work in the opencast or small private mines. However, I come to a different conclusion. The hon. Member for Midlothian spoke of the rights of those who work in the private and small mines sector. They have rights, but surely the most important right is the right to work in an industry that flourishes and expands.

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  If we were able to remove the restriction on that sector— in particular the restriction on the number of men employed in each mine—perhaps some of the private companies that unfortunately have to make men redundant would expand and make more provision for the better treatment of employees.
  I have received correspondence from private small mine owners in the north-east saying that they would be willing and able to expand employment if that restriction were lifted.
  Mr. Eadie: The hon. Gentleman misses my point. I was talking about the victims of a takeover bid. The private mines are licensed by British Coal. Under the conciliation agreements, the private mines have responsibilities. Private mine owners enter a contract. They should honour it and look after their men.
  Mr. Fallon: I accept that. I was trying to say that it would be easier for the private mining sector to honour contracts and to expand if it were not limited to employing 30 men and not governed by bureaucratic and restrictive licensing systems which inhibit development.
  I have only one question to ask my hon. Friend the Minister about the order. I perfectly understand why the costs involved in past restructuring of the industry should not now be laid at the door of British Coal. Presumably, for the present restructuring costs, the expenditure listed in the schedule is the expenditure that we would normally expect a commercially viable and profitable industry to sustain from its own resources, out of its own profits, rather than rely on taxpayer grant to subsume. If that is so, what is the aim of the percentage figure in paragraph 4(b)? Is it the aim gradually to reduce that percentage figure to zero as the Coal Board heads for break-even and eventual profitability.
  10.6 pm
  Mr. Richard Livsey: I should like to make several points about the order. Perhaps it is strange for me to speak in a coal industry debate, but there is coal-mining in the southern part of my constituency. I am proud to say that my grandfather went down a pit at the age of 14, so I am not entirely ignorant of the industry.
  The order is a commentary on the present state of the coal industry. There has been a massive decline in the number of people employed in it. In south Wales alone, the number of people employed underground has declined from 31,000 in 1970 to 12,000 in 1986. There has been a massive decline of 6,500 in the past 18 months alone.
  I remember visiting the town of Maesteg—where my relatives lived—frequently in the 1950s and 1960s. Ten thousand miners worked in that community. The order is a sad commentary on the decline of the industry. The coalfied communities have been badly hit. The order gives some means of redress after the enormous job losses in those communities.
  Reference has been made to the expenditure headings. We in the alliance are interested in the changes in the type of work that we hope will take place in the coalfield communities. The provision on concessionary coal is helpful, because many families in the coalfields have suffered greatly as a result of mineworkers sustaining injuries. No doubt widows and others who live in those communities will benefit from that part of the order. Head 5, on retraining, is a move in the right direction. The
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  problem is that there have been cuts in retraining, certainly in the part of the south Wales coalfield with which I am familiar. Retraining is extremely important when people are leaving the industry and looking for new employment.
  New employment will be and is at present being stimulated by British Coal Enterprise Ltd., an initiative that we support, but we must ask whether the £27 million identified in the order is adequate to solve some of the problems in the coalfield communities now. There is massive unemployment in some of those communities—25 per cent. in some areas. There is 20 per cent. unemployment in Ystradgynlais, the coalmining part of my constituency. There is a feeling that there has not been enough redress in terms of job creation in those communities.
  Mr. David Hunt: It may assist the hon. Gentleman if I point out that the £27,700,000 limit is merely to cover the expenditure specified under head 4—concessionary coal —and does not relate to heads 5 and 6.
  Mr. Livsey: I stand corrected. However, if I may now make a point that I would have made later, I should like to ask the Minister how the allocation of funds is broken down between the six heads of expenditure contained in the order. Will he give us some information on that? I stand corrected on item 4 and the figure of £27 million, but what expenditure will take place under the other headings?
  Mr. Dennis Skinner: Less.
  Mr. Livsey: Expenditure for redundancy, retraining and new employment is important. However, for the coalfield communities, linked to that is the general investment policy of British Coal. There is too much of a dichotomy of interests in the energy policy of this country. Decisions have been made about the size of the British coal industry and the manipulation of different sources of energy, such as oil and nuclear power, and the mix between our different sources of energy.
  There is no doubt that the British coal industry has to some extent been run down. However, I welcome especially the proposed investment in the Margam mine in south Wales, which is a small start to try to invest more in deep mining. Certainly, we welcome the attitude of the National Union of Mineworkers in south Wales in accepting those proposals for six-day working. I know that that is controversial, but it will certainly result in greater productivity. I hope that that will be the forerunner of more investment in deep mining in the south Wales coalfields.
  Will the Minister also advise us how the order will affect the open-cast sector, which appears to he expanding? The Energy Select Committee reported that it wished to see expansion of open-cast mining from 15 million tonnes to 18 million tonnes per annum. However, that is not necessarily in the best interests of those areas where deep mines have been closed. Indeed, one could say that that is a policy for unemployment, because open-cast mining employs fewer people and is causing a great deal of damage to the environment and to the communities—
  Mr. Patrick Mc Loughlin rose—
  Mr. Livsey: I shall give way in a moment.
  It is also inhibiting investment in those communities in other enterprises and industries that would otherwise enter those areas. Open-cast mining creates a bad environment

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  for the encouragement of the new industries which, perhaps, British Coal Enterprise Ltd. is trying to encourage.
  Mr. McLoughlin: Does the hon. Gentleman accept that open-cast coal is important for some mines because of its high chlorine content? If coal from open-cast mines was not mixed with the deep-mined coal, many underground mine workers would be put out of a job because they would not be able to sell that coal to the Central Electricity Generating Board.
  Mr. Livsey: We must achieve a balance between open-cast and deep mining. The amount of open-cast mining that is proposed at present is too great, to the detriment of deep mining and of the jobs in those coalfields. There is clearly a need for open-cast mining but not at the level of 18 million tonnes that is proposed by the Energy Select Committee.
  Mr. John Watson: I appreciate the hon. Gentleman's desire to strike a balance in a debate such as this, but is he not coming near to saying that because open-cast mining employs fewer people, so is endemically more efficient, it should be discouraged on economic grounds?
  Mr. Livsey: I have not said that we should abolish open-cast mining overnight or anything of the sort; the open-cast sector is too large and has a detrimental effect on coalfield communities by inhibiting new industries, particularly high-tech industries which require a clean atmosphere, because of the amount of dust that it raises.
  On the whole, the order provides funds for the industry, so it is welcome, but I doubt whether sufficient resources are being allocated to solve the problems of the coalfield communities. We welcome certain aspects of the order, but the resources may be inadequate to service it.
  10.15 pm
  Mr. Spencer Batiste: The order comes before the House at an opportune moment, because if the newspapers are to be believed, this may well be our last debate on the coal industry in this Parliament.
  The debate provides us with a good opportunity to look back and compare the policies of the Government and the Opposition towards this vital industry. The Opposition made a concerted attempt to do the most grievous damage to it through their silence during the strike and their carping criticism of every piece of legislation that we have introduced to help the industry. It is a stain on their record and it will long be remembered by those who depend on the industry.
  I invite the House to compare that with our policies, which have achieved record investment, leading to record productivity time and again. Month after month we read of new records of productivity being achieved. That has been linked with massive redundancy benefits for those who have lost their jobs as a consequence of restructuring which have helped them rebuild their lives and bring new life into the coalfields, and with the creation of British Coal Enterprise Ltd. — one of the most successful job creation endeavours.
  Every time we raise the subject of BCEL in the House there is carping criticism from the Opposition. Either it is doing too little or it is not serious. Yet only last week BCEL announced that it had met its job creation target for 1986–87 of 10,000 new jobs. If that company continues to
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  develop 10,000 jobs from nothing in three years, it is clear how quickly it will bring new life into our coalfields. What great progress it has already made to that objective.
  One aspect of BCEL accounts for its success more than any other. Obviously, the Government's commitment to provide it with the money that it needs is most important. It knows that it can underpin any good project which is brought forward in the sure knowledge that Government money will be provided to help with its development. The figures show clearly that the most extraordinary additionality is achieved. For every £1 that BCE invests in a project, nearly £7 of other money is also invested. That is a particularly successful and important criterion in job creation.
  But the one aspect that accounts for the success of BCEL above all is the hands-on help it gives to people setting up their business for the first time. Ministers need help to set up new business endeavours, because they have not done it before. Wherever there are hands-on help agencies, the job creation success rate has been better, as has the business survival rate. BCEL is developing an enviable record for helping and nurturing new businesses into creation, prosperity and long-term survival.
  I ask my hon. Friend to consider whether this hands-on help might not be extended. Many Conservative Members have assisted in the past few months in the creation of urban development corporations in areas of dereliction where industry has declined and where a major effort is needed to pull together all the strands of policy from central Government to local government and tying them in with the private sector. Many of the coalfield communities, particularly in Yorkshire, are well adapted to a similar technique being applied.
  When we are returned in the new Parliament with a renewed, perhaps an increased, mandate, I ask that we turn our attention to developing the work of BCEL by adopting and perhaps adapting the techniques of the urban developments corporations. Those who live and work in the coalfield communities have no doubt about one thing above all — that this Government are their future. This Government have given them the money, organisation and determination to give British Coal a successful future. When they contrast this with the mindless militancy of the Opposition, they all know where their future lies.
  10.20 pm
  Mr. Michael McGuire: Listening to the previous speech, I could not help thinking that the election had started. I do not think the hon. Member for Elmet (Mr. Batiste) will mind me saying that I thought he jumped the gun with great style. He has probably rehearsed that spontaneous speech a dozen times.
  We tend to for get that this is a debating Chamber and that we should try to pick up points made by our colleagues. As this is likely to be the last occasion on which I will address the House, being a miner, it provides me with a good finale. I would like to pick up a point made by the hon. Member for Brecon and Radnor (Mr. Livsey) that this order is a commentary— I think a very sad one—on the decline of an industry which, in spite of what the hon. Member for Elmet said, has not been the success story that he portrayed. I will give one or two reasons why before I touch on one or two heads of expenditure.
  I am the second oldest mining Member of Parliament. As you would know, Mr. Deputy Speaker, when I came into this House there were about 29 mining Members of

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  Parliament. Without preaching or seeking to persuade people that we are as good as we think we are, I think that those 29 Members were an adornment and played a very useful part. I am not now speaking of myself, but of those who were more illustrious than me. We provided top-quality men who brought practical experience here.
  When the next Parliament convenes, without a shadow of doubt under a Labour Government, there will be only about 12 mining Members. My hon. Friends the Members for Bolsover (Mr. Skinner) and for Midlothian (Mr. Eadie) will be among the most senior of those 12. The decline has happened, as it has happened under this Government. because the best interests of the country have not always been merged with the best interests of the mining industry.
  One needs a computer to follow one's own interests in the House nowadays, but a statistic provided in an answer to a question last week showed that the total number of people employed in the mining industry now is down to about 110,000. The hon. Member for Brecon and Radnor gave the graphic illustration of a town in south Wales where there were once about 10,000 miners and where there are now only about 12.
  When I became a Labour candidate in 1961, Lancashire had two members on the national executive of the NUM. There was one member on the executive for every 20,000 members and part thereof. Lancashire is now merged with the western region and is probably down to about 7,000 members.
  I apologise to the Minister for missing his speech. I thought it was to be made at the time scheduled and I should have anticipated that it would be earlier. He did not speak very long so I missed the few comments he made. I know that the Minister would have given a eulogy about the order and the various heads of expenditure. I am bound to tell him that since the Government have been in charge and since the debacle of the miners' strike—I do not want to go into that because I had a particular point of view on it—we have lost about 40,000 miners.
  If I hear Ministers telling me how they are helping the mining industry, I want them to tell me that they are helping by saying that they will provide the new coal-fired power stations that I believe are desperately needed. We know that the Government are hanging fire on that. I want them to give the mining industry the same sort of attention they give to the nuclear power lobby.
  I made a statement in the House the other week which was misunderstood because, not being a classical scholar, I had to give a more homely metaphor. Those who have a working class background will know that there is a working class game known as brag in which each player has three cards. It is a simple idea; a sort of poor man's poker. The lowest hand on which one could hope to win the kitty and persuade one's opponents that one has a good hand is two twos, known as a pair of deuces.
  Mr. Skinner: One can have seven high if one is smart enough.
  Mr. McGuire: My hon. Friend must play a different school to us. However, there is a saying, "He is bragging on a pair of deuces." Why did I use that expression for the nuclear power lobby? If one reads the history of the promotion of nuclear power, even when the late Fred Lee was the Minister of Power in the 1964 Government, one got the impression that nuclear power was going to be so
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  abundant and cheap that it would not pay one to meter it. It was suggested that it was the greatest invention known to man. Our own people believed in that. The history of nuclear power has read like a fairy tale. The Government are persuading us again that it is the greatest thing that ever happened, ignoring the signs of great dark clouds on the horizon. Yet the coal industry is having to battle with one hand tied behind its back. That is why, when people promote nuclear power as distinct from coal-generated electricity, I say that they were bragging on a pair of deuces.
  I shall now deal with exports. In my constituency I have the company that is the leading exporter of mining manufacturing machinery in the country. I am pleased to say that I was there on the day that my hon. Friend the Member for Midlothian was presented with a miner's lamp, suitably inscribed, when he opened the test bed that subjects machines that are sold all over the world—to China and elsewhere — to simulated weights, heights, powers and stresses that I do not think they will meet even in the mines. It is one of the jewels in our industrial crown. I wonder what the export record is for nuclear power. I think that we gave one power station away once and I cannot see us doing much different in the future.
  That is the sort of thing to which I want the Government to pay attention. In spite of the enthusiasm of the hon. Member for Elmet—I do not know whether he will go into his mining areas—I think that he will be subject to some critical examination. He will need to sing a slightly different tune because the miners will say, "Here we have a Government giving us all these wonderful things but we are declining at a rate of knots."
  Mr. Batiste: The hon. Gentleman will be interested to hear that the majority of decent miners understand clearly that their future lies in an industry supported by the Government through investment, a Government who are determined to stand up to the militancy, which is the industry's biggest threat.
  Mr. McGuire: That is all very well. I believe that the Minister referred to the increase in productivity and the records being set daily by the miners. I tried to couple that with an action that the Government have deliberately taken. I am not sure of the precise technical term, but it was designed to encourage companies to switch to coal burning. I am not sure how long that lasted, but it was cut off. If I were to question the enthusiasm of the Minister and one of his most devoted supporters over what they were doing for the coal mining industry, I would ask, "Why has that not been continued?"
  Almost every week the Minister bombards us with the success of the mining industry, and I am pleased to hear it. He tells us how company X or Y has increased its profits, that it is marvellous and that it has gone over from oil burning to coal burning. A positive way of encouraging that is to keep the scheme going, but I believe that it is about to finish. Therefore, when people tell me what wonderful things they have done I like to marry that to practical realities.
  I also welcome the proposals in the order. No one with any sense would oppose them. One of the headings is "Concessionary Coal". In the past, along with my hon. Friend the Member for Bolsover, I have mounted odd rearguard actions — futile though they were — to draw attention to some of the cruel anomalies on concessionary

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  coal, and how they limited the giving of concessionary coal to widows of mineworkers, some of whom had worked in the mines all their lives. It often depended on the coroner's signature or the pneumoconiosis medical panel. Many widows were confused by the fact that the coroner's certificate said "industrial disease", as that was the pathologist's recommendation, whereas the pneumoconiosis medical panel — on whose advice the Coal Board would give concessionary coal—said "natural causes". It is almost impossible to convince a widow of that when her husband has worked many years in the mining industry—sometimes a lifetime—and has been in receipt of an industrial disease payment. I dealt with many such cases when I was pit secretary. There were buckets of sympathy but no practical help. It is impossible to say, "I am sorry. That is how the rules are defined and you cannot get concessionary coal." Some of these people now live alongside others who qualify even though they served a much shorter period in the pits, but good luck to them!
  Many of these things were symbolic of the fact that the work of these miners was appreciated. Naturally I welcome anything that will continue such concessions. The problem of such people will gradually reduce because anno domini will ensure that they die off. I shall not flog this to death, but I wish there was something in the order to give them solace and comfort, particularly as this is my last chance to say a few words on this subject.
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  I end as I began. This is a commentary on the decline of a once great industry. I doubt whether it will again be great in terms of its size in its heyday. When I first entered the House, we talked about whether coal production should be 190 million tonnes or 220 million tonnes. For many of us the Ark of the Covenant was the forecast of Dr. Idris Jones, who, in the early 1960s, said that the coal mining industry should be gearing itself to 250 million tonnes.
  A late colleague, Dick Kelly, the Member for Don Valley, used to hammer the Minister regularly about this plan, but it has continued to decline. Certain events have hastened the industry's decline, but I would rather hear Ministers say, "This is the way in which we shall get it back on its feet. We shall give it a proper place in our energy policy because compared with nuclear it is easily and outstandingly the best. We will not leave for future generations any of the problems that we are storing up through nuclear generation." If there is one more whiff of a Chernobyl all the forecasts for nuclear power in this country and elsewhere will go out the window. That has been the response in other countries, but we have not seen the light.
  If the Government were really keen on promoting the coal industry and intent on doing what the bright young Member for Elmet will say when he goes around his constituency bragging on a pair of deuces—if I may use that term again — the Minister would tell us what positive steps the Government intend to take to restore the fortunes of the coal industry. If the Minister acted in that way, he would be heard with much greater conviction.
  10.35 pm
  Mr. Allen McKay: I shall be very brief, as other hon. Members have been before me.
  I want to pick up on one or two of the points made by the hon. Member for Darlington (Mr. Fallon) about privatisation of the collieries and mines. I do not know whether the hon. Member for Darlington has ever worked in a mine, never mind a private mine. In fact, I doubt that very much indeed. He does not know what he is talking about. He is basing his comments upon textbooks. If he considered the matter practically, or if he had ever seen a private mine working, he would not be so keen on them. I have worked in such a mine. Actually I worked for one. The benevolence of the National Coal Board in those days meant that the board lent out its craftsmen to private mines because those mines could not afford to keep them. We helped out. We put those mines in order when the inspector of mines came down. Those mines could not keep within the regulations unless they had assistance from the National Coal Board. The National Coal Board had to hold money back to ensure that the reinstatements were completed after those mines had abandoned their dependence on oil.
  Perhaps the hon. Member for Darlington should consider the history of the industry and discover that the mines were nationalised purely and simply because the private mines could neither produce sufficient material nor provide the working conditions that were becoming necessary. As a result of the war, the Government realised that the products of the private mines would be inadequate, and that is why they were nationalised.
  If people believe that open-casting is primarily a sweetener for deep-mined coal, they must also believe that pigs may fly. That story was put about simply to get open-casting expanded. Open-casting was carried out simply because it was more economical, less manpower intensive, and a great deal of coal could to extracted. That method created environmental problems that we are still living with in my area after 30 years. If people want open-casting they can have it. Please do not send it our way, because we do not want any more.
  We want new industries in the area to make up for the old industry that has disappeared. I am not so naive as to believe that the collieries that have closed will reopen. However, I hope for a future in which the existing collieries will expand. We shall find that that will be necessary, because the Government are making the same mistake as the Labour Government in the 1960s over the closure of the collieries. We had to return to the position later and realise that a mistake had been made.
  If we consider the amount of oil and gas taken and used from the North Sea at the moment in terms of coal equivalent, it is possible to measure the amount of coal we shall need in future, unless the Government are prepared to enter into the full-scale use of nuclear power stations or, if they run down the British coal mining industry, to import more coal. There is no other way for the Government to act.
  British Coal Enterprise Ltd. is doing an excellent job, but we should put the jobs that it has created into perspective. The Minister said that 10,000 jobs have been created, but where are they? I know of six in my constituency — one is in a pub and another is in
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  prefabrication. The irony is that the biggest part of that prefabrication work is ordered from British Coal. We have got six jobs in return for 6,400 jobs lost, so we must put the figures into perspective. The company is doing excellent work, and I would encourage it all the way because it must continue, but let us not run away with the idea that it will replace every job that was lost; it will not.
  People are right to point out the massive redundancy payments that have been received by many grateful mine workers, but let us not forget what they were. The were given not out of the generosity and goodness of heart of the Government or British Coal; they were used to buy out jobs, because that was the easiest way to run down the industry. It has been done by Governments of both parties. I do not say that this Government must take all the blame, because the Labour Government also had a redundancy scheme. The Minister knows that my job was resettlement. But the massive redundancy payments are no longer available. We have this Bill because we must pay for those redundancies. As the Minister said, it is a continuing payment and the industry will be viable only if we keep on paying it. We would not even think of voting against such a measure. We must not be mealy-mouthed about it. We must recognise it for what it is worth.
  The industry is now called the British Coal Corporation. Not so long ago, it was the National Coal Board, and when we questioned the use of "British Coal", we were told that it was just a name to be used for selling coal. It was thought that it would sell more coal using that name. Now it is called the British Coal Corporation, and it seems that we are getting rid of all the dead wood—as the Minister would probably call it, but which I believe is a necessary part of the industry — and reaching a position where private capital can be introduced. The corporation may also be sold off, but that remains to be seen.
  Let us consider the people who will he caught up in redundancy but will not benefit from the massive redundancy payments that have been made. The retraining scheme is totally inadequate and should be re-examined. It cannot be done in eight weeks. In 1947, the new National Coal Board sent me away for six months' training as an electrical engineer. The board recognised that it took about six months to get the basics right before going on to technical college and university. What has changed? Why is a period of eight weeks now considered to be adequate for retraining? The industry must know from its history that it is simply running a whitewash brush over the problem. Now that the redundancy payments have disappeared, and the jobs are no longer being bought out, we must consider retraining.
  The British Steel Corporation's retraining programme runs for a minimum of two years. We should consider that example seriously, because the people who will be leaving the industry, because of the change in structure, will be young men. If we hope to carry out retraining of the young men who are being made redundant or who are leaving the industry, we must look seriously at how we retrain them for future occupations.
  British Steel looked seriously at the way in which it should carry out retraining. I talked to British Steel about that. It looked at the labour market and at the possibilities of jobs that might be available. Consequently, it was retraining not for a dead end, but for the future. I ask the Minister to look at retraining for the future. The minimum

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  time necessary is two years, and people must be retrained for specific jobs that may become available not necessarily in the area in which they were born, but in other areas.
  We must be far more constructive about training than we have been in the past now that the big redundancy payments have gone. We must look after the people who have given many years and whose fathers have given a lifetime to the industry. We owe them that. A Labour Government will expand rather than contract the industry. The Minister talked about a new base. We will build on that and expand the industry, because that is what is necessary.
  10.45 pm
  Mr. Dennis Skinner: My hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) spoke about the six jobs allocated to his constituents as a result of the setting up of British Coal Enterprise Ltd. My hon. Friend is not sure how many more people have got jobs. I am not aware of any more in great numbers, but I think that about half a dozen or eight or perhaps 10 were created on the Government quango that set up this organisation. Two of those people did their level best to run down the efforts of the people who were on strike and they got their just reward for participating in that action. Some of them already had jobs.
  If my hon. Friend is drawing up a register of those who have got jobs under British Coal Enterprise Ltd., he should have a look at the brochure. Perhaps he will find a few more jobs, but I doubt whether he will get to the figures of 10,000 or 14,000 that have been mentioned. No doubt the Minister, in a flight of fancy, would say 20,000.
  Hon. Members have spoken about record productivity in the British coalfield. There is no doubt that there has been record productivity every time we have got away from pit closures. One does not need to be a Pythagoras to work that out. If at any given moment the 20 or 30 pits at the bottom of the productivity table are chopped off, the net result is that those further up the table show a greater increase in productivity. That has happened under all Governments.
  My hon. Friend the Member for Barnsley, West and Penistone knows only too well that the pits at the bottom of the table at any given time could, given a bit of a chance and a breather, get to a white face or overcome whatever the trouble is, perhaps various difficulties in the strata, and find themselves three years later at the top of the league when previously they had been at the bottom. Other pits, sadly, have been shut and all the men and women involved are out of work. When they go to the unemployment exchange to get some money from the taxpayer—part of the £20-odd billion that unemployment is currently costing—they find an order from the Government saying that we have to spend more money on some sort of redundancy payments and concessionary coal payments.
  Then we will be told that we have to find some more money for British Coal Enterprise Ltd., in order to provide more jobs for more bureaucrats and half a dozen people in the average coalfield constituency. Anybody looking at that from abroad or from afar would say that it was economic madness. They would ask why on earth the Government are doing it. Of course, they are doing it
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  because this order is a follow-on from the Bill that we debated some time ago. My hon. Friend the Member for Midlothian (Mr. Eadie) spoke strongly about that.
  That Bill was about laying the way open for privatisation in the event of a Tory victory at the general election. That is the essence of the order, because the last thing that the Tory Government want is to saddle certain areas of the coal industry with a large bill. We know from past experience that, when the Government have launched privatisations, they have ensured that the chosen sectors of the economy have been well breached by the time of the handover or sell-out, and the order continues that practice. That is what the game is all about.
  It is sad that in their retreat in the search for jobs, some in the industry have even talked of working six days a week for single-time payments. It would be ridiculous if there were to be any further erosion of terms and conditions of that sort. I listened to the spokesman for the Liberal party, the hon. Member for Brecon and Radnor (Mr. Livsey) praising those who have declared that they will work a six-day week. He and his colleagues are telling miners that if they want a job they must work six days a week, but he and his friends turn up for work only half the time. The recent victor at Greenwich, the hon. Member for Greenwich (Mrs. Barnes), voted only a few times in this place before we learned that she was looking for another job. Having found one job, she has obtained another, at a salary of £9,000 a year. However, the Liberal spokesman has the cheek to tell miners that they must grovel for six days a week if they are to have a job. These are the messages that come from the mouths of Liberals, and they should understand that my colleagues in Wales are not sold on the idea of a six-day week. I advise the hon. Member for Brecon and Radnor and his colleagues not to get any fancy notions.
  Mr. Livsey: The leadership of the south Wales NUM is in favour of the six-day week.
  Mr. Skinner: The hon. Gentleman should read the small print.
  Mr. Livsey: The proposition is a six-day working week, and not necessarily miners working a six-day week.
  Mr. Skinner: The matter will be decided soon at the NUM conference. I suggest that the hon. Gentleman confers with the leader of the Social Democratic party, the right hon. Member for Plymouth, Devonport (Dr. Owen), and checks on his record of attendance in this place. He should ask his right hon. Friend what he thinks about six-day working. The right hon. Gentleman appears six days a week only on our television screens. He is prepared to appear on that medium every day of the week, five times a day on any tinpot subject under the sun. I am amazed that no interviewer has said to him, "By the way, leader of the Social Democratic party, what did you do about this issue when you were Foreign Secretary? Were you too busy signing glossy autographed photographs of yourself, which you were trying to sell but did not manage to as you trotted around the globe, doing very little apart from that?" We do not want any lectures from those who have just dropped in for a moment or two on the Liberal-SDP Benches, and who in this instance might not be around to continue the discussion after the general election.
  This is a serious matter. We know that 9 million tonnes of coal are being imported and that it would be wrong to

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  take a partisan point of view. Why import 9 million tonnes of coal at this time, when we have so many difficulties with the balance of payments and everything else? Surely the Government should have the decency, quite apart from anything else, to follow up their candy-floss words about being against apartheid, and at least stop the coal that comes from South Africa via various routes through Amsterdam and so on. Why do the Government not have the guts to stop that imported coal?
  They should go further than that. They say that they stand up for Britain. We always get a lot of patriotism from Ministers and the Prime Minister, but they never seem to put it into practice. What is the economic sense in allowing all that coal to come in? It is subsidised up to the hilt, as everybody knows. Some countries are awash with coal. They say, "I tell you what—send it to Britain. It is an easy touch. It is into monetarism. It is mad on it in certain areas, although not in the City of London, which is into subsidy in a big way. Tax relief is the order of the day in the City. But if it is manufacturing industry, send it across to Britain. It will take it on. The philosophy still holds good in certain areas."
  The Government fall for that ploy, with the net result that they finish up with having to pay even more people at the unemployment exchange, and bring in some more Bills and orders to make all the redundancy payments. What nonsense. This order is about reducing jobs. It is hound to be. How can it be anything else? It recommends that one should pay more people what used to be called large redundancy payments. The only large ones that I have ever seen are those that I have read about in the newspapers for top business men — £1 million was shared between seven of them recently.
  These orders reduce the capacity of those working in the pits. This is partly a paving order for privatisation, and the interesting comment from the hon. Member for Darlington (Mr. Fallon) was all part of the plan. One of the legs of this plan is to make sure that there is plenty of opencast production because all those interested in moving into the mining industry will be looking at that first. If they can increase the 80 million tonnes, that would be important.
  However, the hon. Member for Darlington said something else. He asked why the Minister did not move on to increasing the numbers allowed to work in the private mines. All of us who have worked in the industry know that such mines are more dangerous than the mines in which we worked. One of the reasons for the limit of 30 workers is the health and safety hazard.
  Another important point is that the Government are focusing their attention on places such as Selby in north Yorkshire, and the Margam complex is all part of that. Once they get greater efficiency from those pits, they will shut the smaller, less efficient and less economic pits next door. If anybody gets the fancy idea that Margam, the privatisation of Selby, the Warwickshire coalfield and the Leicestershire and South Notts coalfield will do anything for the industry, they had better think again. It will all be about maximising production in the easiest seams.
  We all know from our experience that one of the benefits of nationalisation was that if there were seven seams, however, difficult some of them were, at least an attempt would be made to work them. Once privatisation gets hold, they will say, "Let's get the best three seams, the easiest, and then we will move along with our opencast friends."
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  The order also deals with housing. They have the cheek, under paragraph (vi) of the schedule, to talk about:
  "Payment to local authorities and housing associations for the provision of housing for employees on account of their place of employment being changed."
  It sounds grand; we cannot object to it on the face of it. As everybody knows who has taken part in the argument, we have been having battles and discussions with British Coal, about selling off its houses. British Coal has been encouraged by the Government with their market orientation, to sell off all its houses to some entrepreneur who will then sell them off to somebody else. A lot of the tenants in my constituency do not know who the landlord is. Some of them have disappeared into the night. The Government come before Parliament and say, "We have a little item here which will help British Coal to provide housing through local authorities and housing associations," when the job could have been done by keeping, hold of those properties, as was the case until fairly recently.
  I refer to concessionary coal. My hon. Friend the Member for Makerfield (Mr. McGuire) said that he was making his last speech. I am not so sure. One can never be sure in this place. He said that he was concerned about concessionary coal payments to widows. He has raised this point every time that he has had half a chance. Successive Government Ministers have not taken up the cause, so we are asking again. I extend the point marginally because it includes others—the pre 1968 widows and some miners who are still living. Only a few hundred are left in parts of the north Derbyshire coalfield, part of Lancashire and a few scattered about in some of the other coalfields.
  My hon. Friend the Member for Makerfield is making one last effort, and I am supporting him. Surely to God the Minister could, instead of saying no, have a look At this matter. When I came into this House one of the first things that the Government of 1970–74 did, to great applause from the Tory benches, was to provide pensions for the first time to the over-80s, who never had pensions. There was great applause and the Government received wonderful publicity for it. It only affected a few. That was our argument. We said, "We know why they are doing it. They should give better pensions to everybody." They were giving these pensions for the first time to the over-80s because a lot of them had passed on. The same applies to this. A few hundred people in those coalfields have had a raw deal. Some of them worked 40 or 50 years in the pit and those widows have seen their husbands pass away, many of them of pneumoconiosis. We are asking the Minister, once again, to give a concession to my hon. Friend the Member for Makerfield in his last effort.
  My hon. Friend said that he did not think that there would be any more great days. I would not accept that lightly. If he will cast his mind back, he will remember that there have been occasions when the industry has stabilised; it has not gone on a great leap forward, but there have been at least three occasions in my experience when the coal industry, because of market forces, the oil business and various other factors, has managed to hold on to its manpower and pits, which astounded us for a number of years.
  My hon. Friend's prediction about nuclear power is probably on the ball. When it happens, there will be great days for the mining industry, because such will be the clamour, if the disaster is a bit nearer than the last one at Chernobyl, that people in all parts of the country will rightly say, "There are 300 years of coal beneath our feet.

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  Let us put an end to nuclear power." The Government say that the nuclear industry is so productive, yet it has not been able to sell one power station. People will understand that more clearly. It is a terrible thing to have to say that it will be that kind of experience that will change matters. The oil and gas will run out, so the great days may still come. I am not throwing the towel in. One fine day, in my last days in this place and when my hon. Friend the Member for Makerfield is in the other place, I will say to my hon. Friend, "The great days are here again."
  11.4 pm
  Mr. Frank Haynes: I thoroughly enjoyed the contribution of my hon. Friend the Member for Bolsover (Mr. Skinner). He always makes good speeches, particularly when he is talking about the mining industry.
  The difference between the Opposition and the Government Benches is that Opposition Members speak with the voice of experience, although the Liberal spokesman's only connection with mining is the fact that his grandfather was a miner. Labour Members have had mining experience, working underground at the coal face. I wonder how many Conservative Members have ever had a No. 10 shovel in their hands. I have. It is as big as a table top and you are given a whacking great heap of coal to shift.
  I have listened to the contribution of Conservative Members. We hear from farmers, solicitors and City slickers in the financial world. Many hon. Members have been talking about British Telecom shares; that is what I mean by City slickers. There is more information to come out about other privatisations of public bodies.
  Many Tories make their contributions and buzz off. Perhaps they are tired and have to go bed. They certainly have not stayed tonight to hear the education that has been provided by the Opposition. One Tory Member talked about surface mining. He obviously does not know anything about mining because there is a difference between surface mining and deep mining. The nation has depended on the mining industry for donkeys' years, but the Government are destroying that industry in pursuit of profit.
  The hon. Member for Sherwood (Mr. Stewart) should listen carefully. He has probably heard this before, but he will hear it again, especially on the doorsteps in his constituency when he talks to miners, particularly the older men who have retired and who suffered so that we could have decent conditions, decent pay and decent jobs in mining. They suffered and I and some of my colleagues experienced that under private ownership.
  When the industry was nationalised, safety became the No. 1 priority. It was No. 3 under the private coal owners. The hon. Member for Sherwood shakes his head. He does not understand what I am saying. When I was a youngster in the pit, safety was No. 3 and earnings were No. 2. The No. 1 for the coal owners was production.
  I welcome what the Minister said about record-breaking production. Miners have always been able to achieve such results. They were asked to produce during the war and they did so. They produced the energy that the nation required to win the war. They will do the same again whenever they are called on. However, if the Government destroy the mining industry we shall be unable to supply the required energy.
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  Chernobyl has been mentioned—the hon. Member for Sherwood has a frown on his face, but I have not heard one word from him about miners' objections to nuclear power. I am convinced that one of the reasons why the Government are running down the British coal industry is to bring in more and more nuclear power stations. The Prime Minister promised that in the pre-election period of 1979. When she got in here she talked about the number of new nuclear power stations there would be and set out the programme for such stations. It is clear what the Government are about; it is further to run down the mining industry.
  There will be further pit closures in my constituency. When I was a youngster there were up to 14 pits in the area, but slowly but surely those pits have been destroyed. As a result of the Government's policies, slowly but surely the industry is being destroyed. One day we shall end up with no coal industry and we shall be sorry for it. When we get back into power we must do something about that problem. I believe that there should be a stop to any further nuclear power stations and those existing nuclear stations should be run down. We must again become sensible about the production of energy in Britain. The miners have always been asked to produce the energy requirements for the nation and they have lived up to their responsibilities.
  Mr. McLoughlin: Will the hon. Gentleman give way?
  Mr. Haynes: No, it is 11.11 pm. The hon. Gentleman has just walked back into the Chamber—I do not know where he has been—and now he wants to make an intervention. If the hon. Gentleman had remained in the Chamber he could have made a speech.
  We are discussing the coal mining industry and additional finance to that industry. I welcome that finance, it is a step in the right direction. However, it is nowhere near enough because of the problems that the industry faces. The point that I am seeking to make is that this Government have put all the weight of the costs of compensations and repairs — necessary because of mining subsidence — on the pits that caused that subsidence. Previous Governments had a commitment regarding those costs. However, the Government have washed their hands of the matter to save money. The end result of that saving is that the Government, through the National Coal Board or British Coal, as they now like to call it, are now telling those people who are making claims for compensation or repairs to damaged properties, "Sorry the damage is done" Those people are getting nowhere with their claims.
  No compensation is being offered and no repairs are being carried out. That is the way that the wicked Tory Government work. It is high time that the Minister took responsibility and told the NCB or British Coal that it has a responsibility to the people, not just in my constituency, but in the constituency of the hon. Member for Sherwood. However, in any debates that we have had regarding compensation and repair to properties as a result of mining subsidence we have not heard a word from the hon. Gentleman. It is high time that the hon. Gentleman and other Conservatives whose constituencies face mining subsidence problems followed our lead.
  I had hoped that the Minister would do something about the problem, but he has done little. Representations have been made and I even went so. far as to introduce a

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  ten-minute Bill on the problem. We have not met with much success yet. I am hoping to get a Second Reading for the Bill on 8 May so that it can go into Committee, come back for a Third Reading and we can get something done for the people in the mining areas.
  I appreciate the time and I shall be brief. I wish to discuss concessionary fuel. My hon. Friends the Members for Bolsover and for Makerfield (Mr. McGuire) have mentioned this problem. The Minister has been told time and time again about it. There are elderly people in my constituency, especially widows, who are receiving concessionary fuel. They receive smokeless fuel in lieu of cash. Because of the wicked winter the fuel went nowhere near keeping them warm. The fuel was gone in next to no time. The cash was gone, because as the price went up people could buy less fuel for the cash that they received. Because of cuts in the rate support grant the local authorities have not been able to pay for the fuel. The hon. Member for Sherwood should not shake his head because I am explaining the facts. In my constituency the local authority cannot afford to change its suppliers because the rate support grant has been cut. The Government have cut the grant each year since 1979.
  Mr. Andy Stewart: Will the hon. Gentleman give way?
  Mr. Haynes: I will not give way.
  I welcome the Southampton coal-fired power station. However, as my hon. Friend the Member for Bolsover said, the Government propose to ship coal from South Africa to fire that station. The Government have not denied it. I ask the Minister to state tonight that the Southampton power station will be fired by British coal. For years coal from the north-east has been transported to the south. That should be continued. The coal should be transported by barge—or by some other means—to the south. The Minister must deny that the Government intend to import South African coal and say that they will use coal from the north-east for the Southampton power station.
  11.17pm
  Mr. Eadie: I do not want to detain the Minister, because he has many comments to make. The debate has been interesting and perhaps there can be some unanimity. Perhaps the debate has proved that King Coal is not dead and that the coal reserves are an insurance for our people.
  My purpose is to take up the point made by my hon. Friend the Member for Makerfield (Mr. McGuire), who has perhaps made his last contribution in the House. The House is richer for his contributions. He made a passionate plea to the Minister. He has made that plea repeatedly during his distinguished career. He talked about the people who are left out. I do not know whether the Minister is feeling generous, or whether he has the power to be generous, but when he considers my hon. Friend's contribution and the hard work that he has done in the House, he might find it possible to say that he will consider what my hon. Friend said about concessionary coal for those left out because the schemes are not retrospective. My hon. Friend's argument was amplified by my hon. Friend the Member for Bolsover (Mr. Skinner).
  The Minister has many aspects to respond to, such as nuclear power and the future of the mining industry. I
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  hope that he will comment on the contribution by my hon. Friend the Member for Makerfield. It may be his last contribution. However, his membership of the House has been very distinguished.
  11.20 pm
  Mr. David Hunt: This has been a fascinating debate. I hope that the House will understand that in the 10 minutes that remain I shall not have time to cover all the points raised. I shall write to those hon. Members to whose questions I do not have time to reply.
  All those who have spoken in the debate have been united by their concern for the coal industry, but I highlight the remarkable contrast between the contributions from the Government Benches and those from the Opposition Benches. On the Government side there were forward-looking, positive speeches from my hon. Friends who are close to the men whom they represent. My hon. Friend the Member for Sherwood (Mr. Stewart), who has more producing pits in his constituency than any other hon. Member, represents the brave men of Nottinghamshire. My hon. Friend the Member for Derbyshire, West (Mr. McLoughlin), who was until recently a coal face worker at Littleton colliery, knows what it is like underground. He probably has the most recent experience underground of any Member in the House of Commons. We are proud to have him on the Conservative Benches.
  My hon. Friends the Member for Darlington (Mr. Fallon), for Loughborough (Mr. Dorrell), for Enfield, Southgate (Mr. Portillo) and for Wellingborough (Mr. Fry) and my hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the Parliamentary Under-Secretary of State for Trade and Industry, all listened, I thought, with rapt attention to a remarkably good speech by my hon. Friend the Member for Elmet (Mr. Batiste). Indeed, my hon. and learned Friend the Member for Folkestone and Hythe turned to me and said "Do you really need to wind up the debate after a speech as good as that?" I hope that he will forgive me for quoting him. The best thing about the speech by my hon. Friend the Member for Elmet was that he looked forward well into the future. The worst thing about speeches from Opposition Members was that they were once again voices anchored in the past. I suppose that the strangled cries of dying Socialism are not a nice noise for the House to hear, but it is still going on, and it drags on and on.
  One of these days I hope very much that Opposition Members will lift up their eyes and see the new spirit in the coalfield, the fine fellowship that I find underground at the coal face at present and that I found at Agecroft colliery in Manchester only a few weeks ago, where the men told me that the last thing they wanted was a Labour Government. They believed that life would be as black as the coal that they worked if Labour were ever returned to office because they felt that power would return to the discredited president of the NUM. I just hope that one day they will lift up their eyes and see that new spirit in the coalfield.
  I shall respond to the points raised by the hon. Member for Midlothiam (Mr. Eadie). He asked why we have the order when we have only just passed a Coal Industry Act. That is, of course, because the order follows directly from section 3 of the Coal Industry Act 1987 and seeks to introduce those very provisions that I spoke about in Committee when we discussed that measure.

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  The hon. Gentleman questioned whether I had mentioned retraining and employment opportunities. If he checks Hansard, he will find that I said that the order provided for support towards a broad range of costs associated with restructuring, including costs of redundancy and early retirement, changes of work and place of employment, retraining for persons who are to leave or who have left the corporation through redundancy or incapacity, and costs associated with the promotion of new employment opportunities. Those are crucial points.
  I respond to the hon. Gentleman's invitation to give a progress report on British Coal Enterprise Ltd, because the Government are encouraged by what has happened so far. For the first time we have a company dedicated to the provision of assistance for job creation in coal mining areas. That company's aim is to assist in the creation of jobs on a sufficent scale to offset the jobs lost during the restructuring of the industry. Since that company was formed in October 1984, it has committed £27 million in support of 1,184 projects, with a combined capital cost of £186 million, and assisted in the creation of 16,102 job opportunities by the end of March. Therefore, additional investment of over £160 million has been triggered off by direct action by British Coal Enterprise Ltd.
  I challenge Opposition Members to stop discrediting or seeking to discredit the work of British Coal Enterprise Ltd. I recognise that the hon. Member for Barnsley, West and Penistone (Mr. McKay) did not do so — he mentioned that it had done excellent work — but other hon. Members, including the hon. Member for Bolsover (Mr. Skinner), continually try to discredit the work of British Coal Enterprise Ltd. However, the facts fly in the face of what the hon. Gentleman sought to persuade the House.
  It has never been the case, under the redundant mineworkers' pension scheme, which was introduced by a Labour Government, that people working in the licensed mines would benefit. Similarly, it has not been the case that those working in the private open-cast sector would benefit. Now with the redundant mineworkers' pension scheme at an end, the new arrangements, announced by the chairman of British Coal, apply to the employees of British Coal, not to those employees who are involved in the private sector. The question of royalties had no bearing on this question. It is for the employers in the private sector to provide for their own employees.
  In 1979, when this Government came to office and inherited the coal industry from the stewardship of the hon. Member for Midlothian, the United Kingdom was a net importer of 2 million tonnes per year. Within four years, we were able to change that and this country became a net exporter of 2 million tonnes. Sadly, the strike destroyed that position. However, with the fine efforts of the men in the coalfields, I understand that we shall reach a position where coal is even more competitive than it is now. We cannot ignore our competitive position in world markets.
  My hon. Friend the Member for Darlington challenged me to tell him exactly what would happen in future orders as regards percentage and responsibility for terms and conditions. I am happy to confirm that, as British Coal returns to full viability, the proportion of the costs borne by it will be increased. However, I would not wish to
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  anticipate the percentage support to be specified in future orders, nor when it would prove appropriate for British Coal to bear all such future costs.
  To the hon. Member for Brecon and Radnor (Mr. Livsey) I would just say, "Yes, there has been a decline in numbers in south Wales, especially during the past 18 months." However, that has not been accompanied by a decline in output. Therefore, I do not call that a decline in the industry. Productivity has risen as never before in south Wales, and miners have been able to maintain the same level of output although with much reduced numbers. That is a marvellous example for the future of the coal industry.
  I have also been asked about open-cast coal. Of course, open-cast mining has a vital role to play. My hon. Friend the Member for Derbyshire, West stressed—he knows from his own work at Littleton colliery, as I found out by going underground at Lea Hall colliery — that deep-mined coal from such mines is unsaleable unless it is sweetened and blended with open-cast coal. Therefore, open-cast coal has an important part to play when it is combined with deep-mined production, and it is not to be seen as directly in competition with jobs in the deep mine sector. [Interruption.] I am not sure whether the hon. Member for Ashfield (Mr. Haynes) is disagreeing with me. Some deep mines require open-cast coal to sweeten their output so that an acceptable product is produced for the customers.
  Mr. Haynes: I never mentioned it.
  Mr. Hunt: I am sorry. I thought that the hon. Gentleman was heckling me. Obviously he was not.
  The hon. Member for Brecon and Radnor raised the issue of damage to the environment. Planning procedures ensure that an application to work open-cast coal does not go ahead without all the arguments for and against the development being aired, thus allowing for a balanced judgment. The Open-cast Executive spends a great deal of time and effort to reduce the impact of its sites and to restore them once coaling has ceased. I do not have time to mention the other points about open-cast mining now.
  I am sad that the hon. Member for Makerfield (Mr. McGuire) has made his last speech. We all remember the courage he showed during a difficult period which most hon. Members have tried to avoid mentioning. I, too, shall try not to make the mistake of doing so in detail. He is a brave man, and I am sorry that we have heard his last speech. He will know, as the hon. Member for Bolsover knows, that for many years the entitlement to concessionary coal was governed by a complex series of local and district agreements, some of which dated from many years past. Many anomalies often caused disputes and—
  It being half-past Eleven o'clock, MR. SPEAKER put the Question, pursuant to Standing Order No. 15.
  Question put and agreed to.
  Resolved,
  That the draft Coal Industry (Restructuring Grants) Order 1987, which was laid before this House on 6th April, be approved.

  Coal Industry

    WILDLIFE AND COUNTRYSIDE
    Ordered,
    That the provisions of paragraph (2) of Standing Order No. 84 (Constitution of standing committees), paragraph (1) of Standing Order No.86 (Nomination of standing

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    committees) and Standing Order No. 101 (Standing Committees on Statutory Instruments, &c.) shall apply to the Code of Guidance for Sites of Special Scientific Interest as if the said Code were a draft statutory instrument; and that the said Code be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Portillo.]

  Package Holidays (Insurance)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Portillo.]
  11.30 pm
  Mr. Peter Fry: I raise the question of monitoring tour operators' codes of conduct because of the circumstances surrounding a holiday in a Greek apartment booked through Intasun in June 1986 by my constituents Mr. and Mrs. Shaw, and their daughter Emily, now aged two.
  On studying the Intasun brochure my constituents accepted the recommended holiday insurance. Perhaps it should be noted that Intasun, like many other operators, makes it difficult to decline its preferred insurance as it is necessary specifically to refuse it. Nevertheless, the Shaws were satisfied with the description of the insurance. and I am not surprised, as it states:
  "Enjoy complete peace of mind with Intasun holiday insurance with Eagle Star Group … It's one of the finest available — excellent cover for you and your family. It provides total security."
  The booking form asks for any special requests and the Shaws requested a cot for their young daughter. The request was subsequently shown typed on the official Intasun invoices. Finally, Mr. and Mrs. Shaw took confidence from Intasun's fair trading policy, commitment No. 5 of which states:
  "We do not exclude or limit our liability to you for any loss or damage sustained by you as a result of the negligence of our employees or agents."
  No wonder that Mr. and Mrs. Shaw felt well prepared for the holiday.
  They duly arrived at their destination and found the cot in place. They were informed that it had been arranged and paid for by the Intasun representative and that they owed her the money. Unfortunately, the cot was unsuitable for all but the youngest babies and young Emily fell out of it and cut her head badly on a metal strip on the marble floor. That caused a considerable gash requiring six stitches. The damage was bad enough but could have been much worse, and the little girl was caused considerable pain and suffering and the danger of a permanent scar. The Shaws were unable to obtain a more satisfactory cot and eventually received their money back from the representative.
  On returning to the United Kingdom the Shaws first discovered that there was no personal accident insurance that covered that particular injury, so Mrs. Shaw wrote to Intasun, pointing out the danger of using such cots and asking that something be done about it to avoid even worse accidents or even a fatality, which is possible as a result of such an accident. At the same time. quite reasonably, she asked whether there was any possibility of compensation for out-of-pocket expenses, particularly for taxi fares to and from the hospital. She received a fairly full reply of 28 July 1986, in which Intasun expressed regret, but not much more. There was no mention of compensation and no liability or responsibility accepted for supplying the cot.
  Mrs. Shaw wrote again saying that she thought such an important safety issue should be well publicised and mentioned that she had discovered that she could not address her complaint about Intasun to any form of official arbitration. That was a shock to her as she was under the impression that complaints against tour

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  operators could go to arbitration. However, she discovered that complaints such as hers, relating to personal injury, were specifically excluded. Intasun replied that it had asked hotel managements to make cots as safe as possible but
  "could only hope they would comply."
  In the same letter to Mrs. Shaw it said that the subject had already been publicised on the media in this country and that parents should be aware of the dangers. However, it went on to say:
  "Intasun holidays are doing everything within our power to try and ensure that cots provided are safe for children and small babies."
  The Shaws received no satisfaction from the company so, at the end of August, they came to see me. Early in September I wrote to Intasun saying that I thought it had some obligation towards the family. The head of its legal services, a Mr. John de Vial, replied asking for more information and promised "urgent attention". I replied on 29 September and on 7 October Mr. de Vial, promised detailed comments "as soon as possible." On 2 January I asked for a reply. On 4 February I asked for a reply. It was a few days after that that I met an Intasun director at an Association of British Travel Agents seminar and mentioned the delay. I had still received no reply. On 27 February I met another Intasun executive and told him that my patience was now exhausted.
  Miraculously, a letter appeared on the House letter board dated 27 February enclosing a copy of a letter dated 30 December. The excuse was that two separate letters had been sent to me, which apparently had not reached me. I cannot know whether that was true. Letters can be backdated. All I know is that the odds of two letters being sent to a Member of Parliament at the House and not reaching him are astronomical. Post Office officials confirm that. However, the reply offered no redress to my constituents and no acceptance of liability. Indeed, it specifically put the onus on Mr. and Mrs. Shaw. In a further letter, Mr. de Vial specifically said that the transaction was a matter between the family and the property management. That entirely ignored the part played by the Intasun representative. Indeed, the only supposedly helpful remark that Mr. de Vial made was to suggest that the Shaws should take action in the Greek courts, perhaps with the aid of the Shaws' European Member of Parliament. That is the position we have reached now.
  I view Intasun in a poor light and I would certainly not book any holiday with the company. I give fair warning to those who do that there does not appear to be an effective response to complaints, nor can I promise an early reply to any letters that might be addressed to it.
  Certain principles seem to have been raised by this case of a personal injury incurred while on holiday. First, the average holidaymaker taking out the normal comprehensive insurance is under the impression that he and his family are covered by such insurance. That is clearly not the case. The personal accident cover is clearly inadequate. Secondly, there is the fact that in the event of any accident there is no arbitration procedure for action against the holiday company as there is with other types of claim. Thirdly, the problem in such cases is that the only recourse would be action against the hotelier through the local courts. For all practical purposes that would seem to be
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  out of the question except in the case of fairly serious injuries involving heavy damage. Fourthly, a great concern is the way in which tour operators seem to be able to skate round responsibility for any accidents that occur in accommodation that they have booked. Therefore, it is right to ask what can be done in the future. I believe that ABTA tries to be a reputable, public-spirited organisation, but, as an article in the Sunday press only yesterday reminded us, it is finding it impossible to persuade tour operators to agree on a common insurance policy.
  However, millions of our fellow countrymen will go abroad on holiday this year. They will think they have adequate insurance, that the tour operators have some liability and that in the event of any dispute there will be arbitration. They will be wrong on all three counts.
  What solutions are available? First, all operators should issue leaflets such as that issued by Horizon Holidays. This specifically mentions the danger of cots that may be unsuitable for young children. But even that excellent leaflet does not point to the very wide gap in insurance cover that is usually available.
  Secondly, ABTA should re-examine the codes of conduct and wonder whether, if so large an operator as Intasun can act in the way that I have outlined, the codes are not strong enough. Equally, if ABTA considers that they are, should not Intasun be disciplined or shown up for the way in which it behaved?
  Thirdly, if it is accepted that it will take some time to deal with this vexed question of personal injury and to devise a code of conduct that will deal with it, ABTA could recommend ex-gratia payments until a new code can be agreed that will make it impossible for a British tour operator to wriggle out of a liability that it might have to cover in this country.
  That is the real point. Had there been a similar calamity in this country the Shaws could have taken effective action. That would have enabled them to claim compensation for their daughter.
  I remind the House that the cot was mentioned in the original invoice, that it was specifically obtained by the Intasun representative and that the company representative paid for it and was reimbursed by the Shaws. Perhaps most importantly, surely the company's representative on the site was in a far better position to know whether the cot that was ordered was suitable for the young girl and in a far better position than the parents to make such a decision. I suggest that in this respect Intasun's response is misleading if not downright untruthful. In these circumstances, no British tour operator should be able to wriggle out of any responsibility.
  I am aware that the whole question of personal accident insurance is very tricky, and the likelihood is that it is difficult to arrange cover for a child as young as this. But many people who will be injured will be in employment and would expect compensation on a weekly basis should they have an accident abroad. It is worth noting that statistically one is more likely to have an accident on holiday than at work.
  I therefore look to ABTA to find ways in which such cover can be extended in a better manner than hitherto. A few years ago such cover was available as part of the normal holiday insurance. It has been cut out in recent years, presumably in order to save money.
  ABTA has a great responsibility to put the tour operators' house in order. I accept that it does not have the kind of powers that my hon. Friend has, but, after all,

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  it is supposed to be responsible for these codes of conduct and for ensuring that they are adhered to. I stress that in the meantime ex-gratia payments on a modest scale would do much to give confidence where, as I have shown, confidence is lacking at present. I therefore look forward to my hon. and learned Friend's reply. The holidays of many of our countrymen may well be ruined by accidents this year. Surely the time has come for us to try to ensure that any accidents that happen to people in future have a happier ending than the case to which I have referred tonight.
  11.45 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard): I congratulate my hon. Friend the Member for Wellingborough (Mr. Fry) on securing the opportunity of bringing this subject to the attention of the House. It is always distressing to learn of accidents befalling British families while on holiday abroad and particularly so when children are hurt. I sincerely hope that the daughter of my hon. Friend's constituents makes a full recovery and is none the worse for her experience.
  My hon. Friend has made some interesting suggestions about protection for consumers who suffer personal injury on holiday. I am sure that he will understand that it would not be appropriate for me to comment on the details of any specific dispute between consumer and tour operator, which could be a matter ultimately for the courts. Existing laws and codes of practice already provide extensive protection for holidaymakers. However, the extent to which the law would apply in individual cases would depend upon the facts of each case and the terms of any contract or contracts which may exist. It may therefore be helpful if I explain the position in general terms.
  In the first instance, holidaymakers have a significant measure of protection under the law. Although in the United Kingdom no laws specifically and exclusively govern rights and duties between those who provide package holidays and those who purchase them, the basic legal position is primarily governed by the ordinary, general law of contract and, in some circumstances, by the law of tort. The law is based upon common law and equitable principles developed over a long period by judicial decisions and modified from time to time by statutory provisions.
  Package tours comprise a number of different elements, including travel, food and accommodation at a resort. The holidaymaker may enter into a contract with a tour operator to provide any or all of these services. The relationship between the parties is governed by the terms of their contract. The basis for the contract is generally set out in the booking conditions laid down in the tour operator's brochure. Contractual rights and obligations and any exclusions specifically provided for will vary from operator to operator. To the extent that the contract does not specifically provide for certain rights or obligations, terms or conditions may be derived from the Supply of Goods and Services Act 1982. This Act requires that a provider of services fulfils his obligations with reasonable care and skill.
  The contract with the tour operator is not necessarily the only contract entered into as an integral part of a package holiday. It is not uncommon for the holiday-maker to enter into a particular arrangement on arrival at an hotel for specific facilities or services. In those
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  circumstances the contract will be governed by local law, and the tour operator is unlikely to be a party to any such contract.
  Exclusions from liability in specific contractual terms, or from terms implied under the Supply of Goods and Services Act, will be subject to the provisions of the Unfair Contract Terms Act 1977. Under the 1977 Act, terms which purport to exclude liability for death or personal injury resulting from a tour operator's negligence are void. Other clauses purporting to exclude liability for negligence in other circumstances are enforceable only if reasonable in all the circumstances. Liability may also arise in the law of tort if injury or loss is caused by negligent acts or omissions or results from negligent mis-statements by the tour operator or those for whom he is responsible
  The remedy for breach of any of these provisions is by civil proceedings for damages. I know that the general public often feel inhibited from taking these grievances to court because of what the believe to be the lengthy delays and costs involved. May I remind the House that claims for £5,000 or less are heard in the county courts and that under the small claims scheme disputes involving £500 or less — a figure which is currently under review — are automatically referred for arbitration once a defence is filed. The scheme is intended to be as quick, easy and inexpensive as possible. To this end, procedures have been simplified to enable consumers to make these claims without employing a solicitor to represent them.
  My hon. Friend mentioned the ABTA codes of practice. Those codes, one for the travel agents and the other for the tour operators, were drawn up in consultation with the Office of Fair Trading and prescribe rules to be observed by all member companies in arms such as description of holidays, booking conditions, alterations, cancellations and price variations. Failure to observe the code may result in the member company being fined or expelled from the association. The House will no doubt be aware that ABTA members provide the vast majority of package holidays from the United Kingdom. Under the ABTA rules, tour operator members are required to summarise accurately in their brochures any insurance facilities they offer alongside the holiday package. ABTA travel agents are required to draw the attention of their clients to insurance facilities and cover suitable to the clients' requirements.
  In the event of a dispute, the ABTA code for tour operators provides for arbitration, but, as my hon. Friend said, the arbitration scheme does not extend to claims mainly or solely in respect of physical injury or illness or their consequences. The scheme is operated simply and cheaply on a documents-only basis, without the need for either side to employ a solicitor, and it is not surprising that claims related to personal injury are excluded, given the exceptional, and frequently complex, nature of such claims.
  In disputes with insurers, there are two schemes whereby private policyholders can seek arbitration without having to resort to potentially costly legal action. The Insurance Ombudsman Bureau will investigate complaints about member companies where policyholders have failed to get satisfaction from the chief executive of the company concerned. The service is free to policyholders, and if a policyholder accepts the Ombudsman's decision, it is binding on both member company and policyholder. If the policyholder rejects the decision, he may pursue the complaint in the courts.

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  Some insurance companies subscribe to the personal insurance arbitration service which operates under the auspices of the Institute of Arbitrators, as in the case of the ABTA scheme. An independent arbitrator is appointed to consider a dispute, and both parties must agree to go to arbitration. The arbitrator's decision is binding on both parties and has the force of a legal award. If the policyholder is dissatisfied with the outcome, he does not have the right to litigation.
  My hon. Friend contended that the average holiday-maker, in taking out the normal comprehensive insurance, is under the impression that he and his family are covered by such insurance. This is clearly not necessarily the case, depending upon the terms of the policy.
  I have already outlined the obligations which ABTA imposes on its members, and the House will recall that member travel agents are required to draw their clients' attention to insurance facilities suitable to the clients' requirements and that tour operators must accurately summarise in their brochures any facilities that they offer. But most people would accept that it is in the consumer's best interest to have adequate insurance cover for his needs; and considerable effort has been made by Government, consumer organisations and the travel industry alike to get this message across to the holidaymaker. It is a basic principle that the consumer should satisfy himself that he has adequate insurance cover before he goes on holiday. He must therefore decide whether any policy which is on offer is adequate for any needs he may have or whether any additional cover may be required.
  Holiday insurance arrangements have developed alongside the massive growth of the package foreign holiday industry. Much holiday insurance is similarly packaged for a mass market. Such insurance policies are intended to meet normal needs for a relatively short fixed period. The cover provided is standard, to keep administrative costs low, and the product competitive. Premiums, too, are low. A typical policy for a 10 to 14-night holiday might give cancellation cover, medical expenses abroad, hospital benefit, certain personal accident benefits and cover for personal baggage and money up to specific limits. It is also open to the holidaymaker to take out additional cover in a particular
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  area, for example to cover the cost of legal expenses when making a court claim against someone who is legally liable for causing personal injury.
  My hon. Friend suggested that ABTA should do more to see that holidaymakers are properly covered or at least fully understand the implications of what cover is available. The Director General of Fair Trading is currently conducting an exercise to monitor the effectiveness of the ABTA codes of practice.
  The Director General of Fair Trading still has to discuss the survey with ABTA before publication of a report. He will explore whether it would he feasible or desirable to incorporate into the codes any obligation on the part of tour operators about safety standards in the accommodation and facilities that they provide.
  Holidays abroad inevitably involve some element of risk, or at least the unpredictable. Therefore, it is only prudent that holidaymakers should satisfy themselves that they have adequate insurance cover. If they are in any doubt about the adequacy of a policy they should seek advice on taking additional cover to meet their particular requirements.
  If things unfortunately do go wrong, I have drawn the House's attention to the considerable degree of protection for holidaymakers which already exists in law in the ABTA codes and in other arbitration schemes. The Government believe that the means whereby an aggrieved consumer may seek redress—either through the civil courts or by arbitration—are substantial. If consumers are unsure of their rights or of how to proceed in litigation, they should take advantage of the advice provided by citizen's advice bureaux or by their solicitor.
  I have not heard in the debate any arguments that give me reason to think that the present level of protection for holidaymakers is inadequate or that the means of redress are unsound. There is always scope for improvement and the Government take a close interest in the monitoring carried out by the Director General of Fair Trading. I shall ask him to consider in the context of his current review the matter of exclusion from arbitration in the tour operators' code of practice of claims resulting from injury or illness. The answer to many of the problems that arise is not more controls but better use by the consumer of the remedies that already exist.
  Question put and agreed to.
  Adjourned accordingly at five minutes to Twelve o'clock.

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  Departmental Advertising
  National Insurance
  National Insurance
  Mrs. E. Hamilton
  Mrs. E. Hamilton
  Severe Weather Payments
  Severe Weather Payments
  Bronchitis and Emphysema
  Bronchitis and Emphysema
  Familial Hyperlipidaemia
  Familial Hyperlipidaemia
  Pensioners
  Pensioners
  Expenditure
  Expenditure
  Children (Placements)
  Children (Placements)
  Research
  Research
  Acute Beds
  Acute Beds
  Health Authorities (Improvement Programmes)
  Health Authorities (Improvement Programmes)
  Hospitals (Statistics)
  Hospitals (Statistics)
  Correspondence
  Correspondence
  AIDS
  AIDS
  Attendance Allowance
  Attendance Allowance
  Adult Dental Health
  Adult Dental Health
  Disabled Persons (Services, Consultation and Representation) Act 1986
  Disabled Persons (Services, Consultation and Representation) Act 1986
  Guardians ad litem
  Guardians ad litem
  Drinking and Driving
  Drinking and Driving
  Population Statistics
  Population Statistics
  Housing Benefit
  Housing Benefit
  Benefits
  Benefits
NORTHERN IRELAND
  Teachers (Pay and Conditions)
  Teachers (Pay and Conditions)
SCOTLAND
  Safety Rails and Gates
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  National Heritage
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  Education (Capital Allocations)
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  Refuse (Fuel Conversion)
  Refuse (Fuel Conversion)
  Zircon Satellite (Police Operation)
  Zircon Satellite (Police Operation)
  Agriculture and Fisheries (Review)
  Agriculture and Fisheries (Review)
  M8 (Improvement Programme)
  M8 (Improvement Programme)
  Prisons (Disturbances)
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  Arts (Financial support)
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  Nuclear Disasters
  Nuclear Disasters
WALES
  Welsh Water Authority
  Welsh Water Authority
  Health Education
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  Marginal Land (Anglesey)
  Marginal Land (Anglesey)
  Patients (Waiting Lists)
  Patients (Waiting Lists)
  Lakes and Rivers (Acidification)
  Lakes and Rivers (Acidification)
  Farmers Union of Wales
  Farmers Union of Wales
  Japanese Investment
  Japanese Investment
  Road Works
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  House Improvement Grants
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  Council House Building
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  Cardiothoracic Surgery
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  Labour Statistics
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  Public Rights of Way
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  The Arts (Support)
  The Arts (Support)
NATIONAL FINANCE
  Privatisation
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  Earnings and Exports (Statistics)
  Earnings and Exports (Statistics)
  Manufacturing Industry
  Manufacturing Industry
  Land (Capital Gains Tax)
  Land (Capital Gains Tax)
  Taxable Benefits
  Taxable Benefits
  Building Societies
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THE ARTS
  Libraries
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  Local Authority Support
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HOUSE OF COMMONS
  Parliamentary Questions
  Parliamentary Questions

Preamble
Reassembling after the Easter Recess, the House met at half-past two of the clock:
The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Newcastle.

Exchange Rate Mechanism
Lord Ezra: 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 whether in view of the recent statement by M. Delors, President of the European Commission, that the European monetary system should be reinforced, they will reconsider their policy towards the exchange rate mechanism.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, we keep the question under continual review.
Lord Ezra: My Lords, I thank the noble Lord for that expected Answer. But is he aware that the reason for M. Delors making the statement was that he considered this to be an essential ingredient in creating an effective internal market? In view of the Government's commitment to the creation of an effective internal market, do they now consider that they should give more thought to supporting the EMS?
Lord Brabazon of Tara: My Lords, the Government have always said that there are arguments both in favour of and against joining the exchange rate mechanism. We shall join only when we are satisfied that the balance clearly favours doing so.
Baroness Seear: My Lords, will the noble Lord tell us what criteria are being applied? We have had this answer to the question at least 10 times and we have never been told how the Government are making their judgment. Will he please enlighten the House?
Lord Brabazon of Tara: My Lords, I am afraid the noble Baroness will be disappointed if she expects something new from me this afternoon. It is not possible to specify precisely what the factors are. There are a number of them, and they and their interaction need to be taken into account. It would be wrong to commit the Government. Circumstances change and I do not think that it would help conditions in the exchange market for me to be too specific.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the pound is doing pretty well under the present system?
Lord Brabazon of Tara: My Lords, I suspect that that depends on which way one wishes to see the pound going.
Lord Bruce of Donington: My Lords, is the noble Lord aware that some at any rate of the statements made by M. Delors ought to be the subject of consideration with the normal degree of prudence? Will he give the House an assurance that, although the matter will be kept under review, we shall not join this institution until it is in the best interests of the United Kingdom to do so?
Lord Brabazon of Tara: My Lords, I answered that question when I said that we should join only when we were satisfied that the balance clearly favoured our doing so. As regards the points made by M. Delors, we shall of course participate fully in those discussions.
Lord Diamond: My Lords, inasmuch as all that the Minister is saying is that the Government are behind joining in principle but are not clear as to the timing, would it not be sensible for them to make up their minds and end this nonsense which compels the Minister continually to give rather silly replies to the House?
Lord Brabazon of Tara: My Lords, I am sorry if the noble Lord thinks that my replies are silly. If he expects me to make some great policy statement this afternoon, I am afraid he is in for a disappointment.
Lord Ezra: My Lords, does the noble Lord recall that the Chancellor of the Exchequer was recently reported as having said that he thought that sterling ought to have a specific relationship to the deutsch mark? If that is so, is not the best way to do that to join the system which precisely provides for that eventuality?
Lord Brabazon of Tara: My Lords, my right honourable friend the Chancellor said nothing new. The policy is unchanged. The question of the United Kingdom's participation in the exchange rate mechanism is kept under review and, as I said, there are arguments both in favour and against joining it.

INF and Short-Range Nuclear Weapons
2.42 p.m.
Lord Jenkins of Putney: 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 how, as American Defence Secretary Caspar Weinberger and others have confirmed that the 1983 Nuclear Planning Group Conference at Montebello did approve specific proposals to enhance INF and short-range nuclear weapons, British Ministers justify their statements that this is not so.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, as my right honourable friend the Prime Minister has already made clear in another place, NATO agreed at the Montebello meeting of the Nuclear Planning Group in 1983 to both a major reduction in the number of its theatre nuclear weapons in Europe and the need for possible improvements to ensure the effectiveness of the

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remaining stockpile. This was clearly set out in the communiqué issued at the time. Since then the Supreme Allied Commander has put forward his proposals for these improvements. These are being pursued with the individual nations concerned but no decisions affecting the modernisation of the theatre nuclear weapons in service with British forces have yet been made.
Lord Jenkins of Putney: My Lords, has the noble Lord forgotten that on 26th March 1985, and several times subsequently, he said—and I quote him—
"no specific proposals of any sort had been made to alliance ministers at Montebello"?
Is he also aware that the Prime Minister's Statement in another place recently is the first time that the Government have admitted to what took place at Montebello? The Prime Minister made that Statement because Mr. Caspar Weinberger had blown the gaff to Congress. Is it not the case therefore, in spite of what the Minister said, that the Government have been consistently misleading Members of both Houses for nearly two years?
Lord Trefgarne: My Lords, neither I nor any of my ministerial colleagues has for a moment been misleading anybody. The noble Lord referred to certain correspondence which took place in March 1985 when I in my then capacity wrote to the honourable Gentlemen Mr. Wareing, the Member of Parliament for Liverpool. The position I described to him then was accurate and remains accurate to the extent of course that events have moved on.
Lord Irving of Dartford: My Lords, is the Minister aware that we welcome the Montebello decision and the subsequent withdrawal of warheads from Europe? Can he say whether, at the recent meeting, new systems were on the agenda and whether the participants discussed or referred to a new decision? Will he take this opportunity to express the Government's commitment to a further reduction in short-range nuclear weapons?
Lord Trefgarne: My Lords, we were very much in favour of the proposals agreed at Montebello which were described in the communiqué issued at that time. As I said in my original Answer, certain proposals have since been brought forward by the Supreme Allied Commander, addressed, of course, to individual nations. In so far as those proposals affect the United Kingdom, we are considering them very carefully and will reach our decisions in due course.
Lord Kennet: My Lords, is it not the case that all these matters may happily be put behind us as soon as we and the Western European nations have made up our minds what to do about the Soviet-American proposal for the elimination of intermediate and shorter range nuclear weapons? Does that not depend solely on the ability of our governments to come to grips with the fact that all these things hang together, and also the fact that we must consider conventional disarmament and chemical disarmament at the same time? It is not a very complicated proposition.
Lord Trefgarne: My Lords, that sounds a rather comprehensive supplementary question, if I may say so. Naturally, we shall be supporting any measure of disarmament that is both balanced and verifiable.
Lord Jenkins of Putney: My Lords, perhaps I may return to the reality that Mr. Caspar Weinberger said quite recently to Congress that, following agreement at Montebello, neutron weapons had been deployed; that is to say, he mentioned enhanced weapons and gave the actual numbers of those weapons. That was the substitution of a non-neutron weapon by a neutron weapon. In these circumstances, I repeat once more, is it not the case that the Minister has inadvertently or otherwise been misleading Members of both Houses?
Lord Trefgarne: No, my Lords, it is not the case that I or any of my colleagues have inadvertently or otherwise misled noble Lords or Members of the other place. The agreement reached at Montebello was an agreement in principle. The detailed proposals were brought forward subsequently by the Supreme Allied Commander and it is those that we are now considering.
Lord Peyton of Yeovil: My Lords, will my noble friend bear in mind that it is because the noble Lord asking the Question goes astray so often that he is tempted to use the explanation that he has been misled?
Lord Trefgarne: My Lords, that is a point of view my noble friend is entitled to hold and an opinon I am sometimes tempted to follow.
Lord Jenkins of Putney: My Lords, is the Minister aware that if either he or his noble friend are prepared to point out specific occasions on which I have gone astray, I shall be glad to correct them?
Lord Trefgarne: My Lords, I fear that Question Time would not be long enough.

Parliamentary Commissioner: Staff Resources
2.47 p.m.
The Marquess of Ailesbury: 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 whether the staff of the parliamentary ombudsman is currently up to its allotted strength.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the office of the Parliamentary Commissioner for Administration is combined with the office of the Health Service Commissioners for England, Wales and Scotland. I understand that at 1st April 1987, the combined number of staff in post was 84 against an agreed complement of 85, the shortfall being on the Health Service Commissioners' side.
The Marquess of Ailesbury: My Lords, I thank the Minister for that reply. Is he aware that when I wished to place a fairly simple matter before the parliamentary ombudsman, the advice that I received was that it would be a total waste of time as it would take from three to five months to obtain an opinion. Now that the Minister is aware of that, does it not seem to him that a quite admirable concept is being rendered far from admirable in practice through being starved of the necessary resources?
Lord Belstead: My Lords, with respect to the noble Marquess, I believe that the resources are sufficient. The reason investigations take some time is that they are detailed. The stages through which they need to pass were set out in the parliamentary commissioner's 1985 annual report.
Lord Elwyn-Jones: My Lords, is it not important that reasonable speed should be maintained in order to enable the citizen to have access to Parliament and to the ombudsman? That was an important innovation, introduced, if I am not mistaken, by a former Labour Government. Is it not important that such access should be rendered effective in view of the fact that this service is of great help to Members of Parliament and the public?
Lord Belstead: My Lords, I agree with the noble and learned Lord. The parliamentary commissioner has reduced by about one month the time that investigations have taken during 1986. The parliamentary commissioner has said publicly that it is his intention to try to knock another two months off the average investigation time.

Racial Harassment
2.50 p.m.
Lord Ritchie of Dundee: 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 action they are taking to protect the Asian communities in East London from verbal and physical victimisation.
The Minister of State, Home Office (The Earl of Caithness): My Lords, the Government are deeply concerned about the incidence of racial harassment in East London and elsewhere. We are therefore giving every encouragement to efforts to combat this behaviour. The Commissioner of the Metropolitan Police has made action against racial attacks a priority in his force goal for the current year. Earlier this year his officers launched intensive publicity campaigns in Ealing and Newham. We are also exploring ways of improving inter-agency co-operation in preventing and responding to racial attacks.
Lord Ritchie of Dundee: My Lords, I thank the Minister for his reply, which is encouraging up to a point. However, is he aware of a recently published report which covers the borough of Newham for the year up to March 1987 in which it is shown that 1,550 cases of racial harassment took place of which only
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one in 20 was reported? Is that because the victims fear that the police will not take adequate action? If not, what is the reason?
The Earl of Caithness: My Lords, we are aware of the report but we have not had an opportunity to study the full report which as I understand it is not available. From what we have been able to read so far, the noble Lord is right in saying that some members of ethnic minority communities are for a variety of reasons reluctant to report racial incidents to the police. The police are particularly aware of that, are sensitive to the difficulties and are making considerable efforts to build up the confidence of the ethnic minority communities.
Lord Mishcon: My Lords, is it not a fact that at every opportunity in this House and in another place Members have expressed their opprobrium of acts of victimisation of immigrants to this country, including specifically the Asian community? In view of the exchanges that have taken place today, will the Minister consider ensuring that the police consult community leaders, especially in East London, so that reports are made of acts of victimisation? Will he also ensure that they visit various places in those areas in order to make it quite clear that such complaints will be taken very seriously?
The Earl of Caithness: My Lords, I echo the noble Lord's words that all of us in this House deplore racial harassment. I remember discussing the point with him on the Public Order Bill when we made great strides in trying to help ethnic communities. I shall discuss what the noble Lord says with my right honourable friend, but I know that the police do a great deal with regard to ethnic minority communities and are setting up community liaison officers. In fact the number has doubled since 1982.
Lord Avebury: My Lords, will the Minister say when the racial attacks working party—which as I understand it is a sub-committee of the Ministerial Group on Crime Prevention—is likely to report and whether its findings will be made public? With regard to the Newham crime survey, which my noble friend mentioned, is he aware that one in four of the borough's black residents have been victims of racial harassment during the period in question and that when they reported those incidents to the police, 80 per cent. expressed dissatisfaction with the way in which the cases were handled? Does he agree that that is not only a function of the perception by the black communities of the way in which the police deal with these matters but also a question of misinterpretation of the way in which the police respond? Will he say whether the Metropolitan Commissioner has taken up the point made in the police's own response to the Home Affairs Committee report of July 1986 that:
"Police Forces should ensure that they have an adequate network of interpreters to call upon when needed".
In particular the response states that they can make arrangements through community groups for a list of volunteers.
Noble Lords: Speech!
Lord Avebury: My Lords, I am quoting from the Home Office reply to the Home Affairs Committee. I was asking the Minister whether the Metropolitan Commissioner has acted upon this particular and most commendable suggestion of his department?
The Earl of Caithness: My Lords, I know that the noble Lord, who is keen to conform to the procedure of this House, would not wish me to reply to all his many questions in detail. From what I have seen I would dispute the figures in the Newham report, but until we have the full report it is difficult to comment further.
Lord Hunt: My Lords, does the Minister agree that the people of South-East Asia—I am thinking especially of the Bengalis, of whom I have great knowledge—are notably peace-loving, law-abiding and, in so far as they are able to be so, hardworking citizens? Is it not ironic that they should be treated in this manner by the host community? Will he bear in mind that, in so far as they react, they react simply in despair against the treatment that they have been receiving?
The Earl of Caithness: My Lords, we welcome the ethnic minorities who wish to play a constructive part within the community. However, I do not necessarily agree that all the racial attacks come from the host country, because there is evidence of inter-ethnic minority racial attacks as well.
Lord Hutchinson of Lullington: My Lords, will the Minister tell the House whether there has been any progress in getting local authorities to remove racist graffiti? This matter was raised in the debates on the Public Order Bill and he then undertook to see what could be done.
The Earl of Caithness: My Lords, with respect, we discussed that matter fully during the Public Order Bill and it is a little wide of the Question on the Order Paper.
Lord Mellish: My Lords, is the Minister aware that many of the Asians who are living in this country and who are welcome—and we all know that the police do a good job in this area—are victims of expulsion by Dr. Banda, who is the Prime Minister, or whatever he calls himself, of Malawi? He threw the Asians out of his country simply because they were Asians and for no other reason. We took them in. If that is not black fascism, I do not know what is.
The Earl of Caithness: My Lords, I note what the noble Lord has to say.

Business
2.56 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Lyell will, with the leave of the House, repeat a Statement that is being made in another place on the current security situation in Northern Ireland.

Abolition of Domestic Rates Etc. (Scotland) Bill
The Minister of State, Scottish Office (Lord Glenarthur): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order—

Clauses 1 and 2,

Schedule 1,

Clauses 3 to 21,

Schedule 2,

Clause 22,

Schedule 3,

Clause 23,

Schedule 4,

Clauses 24 and 25,

Schedule 5,

Clauses 26 to 33,

Schedule 6,

Clause 34.—(Lord Glenarthur.)

On Question, Motion agreed to.

Sound Archives
The Lord President of the Council (Viscount Whitelaw): My Lords, I beg to move the Motion standing in my name on the Order Paper.
The background to this Motion was clearly set out by the Chairman of Committees on 8th April last when he moved that the report of the Select Committee on Broadcasting be agreed to. The House agreed to that report and the effect of my Motion today will be to give effect to the recommendation in it.
Moved, That, in accordance with the recommendation of the Select Committee on Broadcasting (1st Report 1986–87, Sound Archives) agreed to by the House on Wednesday, 8th April last, the Resolution of the House of 28th July 1977 relating to sound broadcasting be amended by the deletion in paragraph 4 of the words, "together with a selection for permanent preservation".—(Viscount Whitelaw.)
On Question, Motion agreed to.

Banking Bill
2.59 p.m.
Read a third time.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, before calling Amendment No. 1, I must point out that the Marshalled List should have been entitled, "Amendments to be moved on Third Reading". I now call Amendment No. 1.
Clause 2 [The Board of Banking Supervision]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 1:
Page 2, line 30, leave out ("it is decided") and insert ("they decided").
The noble Lord said: My Lords, I beg leave to move Amendment No. 1 standing in the name of my noble

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friend Lord Bruce of Donington and myself. I make no apology on Third Reading for returning to the vexed question of the decision-making procedures of the Board of Banking Supervision, the nature of which is set out in Clause 2 of the Bill. We have had an extensive discussion on this clause, both at Committee stage and on Report in your Lordships' House, and we have tried to introduce certain amendments to this clause but your Lordships have decided not to accept them. We therefore turn finally to the burden of subsection (5) of Clause 2, which relates to the power of independent members to place before the Chancellor the reasons for their advice to the ex-officio members of the board when that advice has been disregarded.
Your Lordships will remember that at Report stage I moved an amendment arguing that it was the independent members of the board who should decide when their advice has been disregarded. It seemed to us to be an odd construction that the independent members should be allowed to place before the Chancellor the reasons for their advice, without at the initial stage having been able to take the collective decision—and we emphasised that it was a collective decision—that that advice be disregarded. Your Lordships decided that that was not an appropriate amendment for this Bill and I therefore come back to the simple and slightly technical problem, which I raised both at Committee and on Report, of how such decisions will be taken.
Subsection (5) uses the expression in line 30 on page 2 of the Bill, "it is decided". In other words, there is a process which is undetermined and the passive is used to express the emergence of a decision. I am bound to say to the Government that we are still unhappy about the nature of this wording and the implications that it has, because in reality the board is going to take decisions collectively; and if the board takes decisions collectively it will presumably be on some form of voting which will allow the independent members, who have a majority, to carry their opinion in the board. Therefore if it is the board taking a decision, the majority of the board will presumably carry weight and indeed will carry the day. So we could never arrive at a decision when the independent members, who constitute a majority of the board, find that their advice is disregarded, because by simple resolution of the board they impose on the ex-officio members a duty to observe the advice of the board as a whole.
If that is not to be the method of taking such a decision, what other methods are available? It seems to me that there are two methods available. The first is for the ex-officio members, who are,
"the Governor of the Bank … the Deputy Governor of the Bank … and the executive director of the Bank for the time being responsible for the supervision of institutions authorised under this Act",
to say to the independent members, "Your advice is very interesting and very valuable. Nevertheless we decide that we are not going to accept it." It is in those circumstances that the independent members are entitled to place before the Chancellor the reasons for their advice.
There is another possibility, where the board as a whole takes a decision based on the advice of the independent members and the board as a whole is
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advised by an outside party, or indeed the ex-officio members of the board may be directed by an outside party not to attend to the advice proferred by the independent members. In other words, the outside party, which in this case almost certainly would be the Treasury, would say to the governor, "That is all very well. Nevertheless, we think that the Bank ought to do this and this". In those circumstances the advice of the independent members, although it was carried in a board decision, would be disregarded and the provisions of subsection (5) would be triggered.
We take the view that subsection (5) raises a number of difficulties, which were aired both in Committee and on Report, but particularly the difficulty that it is not seen under the operation of subsection (5) who exactly is empowered to take the decision to disregard the advice of the independent members. Furthermore, we do not believe it is right, if the Bank is to be charged with the supervision of the banking system, for the Bank to have to accept Treasury dictates. We therefore take the view that the only circumstances in which a decision could be taken to disregard the advice of the independent members—who I repeat have a majority on the board—are where the three ex-officio members collectively decide that they do not wish to take that advice. That is perfectly fair and proper and there is no reason why they should not do so.
But if that is to be done, then in our view it is right that that should be spelt out on the face of the Bill rather than being left in this rather nebulous expression, "it is decided". If you leave the Bill as it is with that expression, it is wholly unclear to Parliament, to the public or to authorised institutions what is the basis of decision which would trigger off the very important sanction in the Bill that the independent members are entitled to go to the Chancellor and say, "We gave our advice and it was disregarded".
I am aware that subsection (5) of Clause 2 has been the object of considerable discussion here and indeed was the result of a compromise reached in another place. Nevertheless, we still feel that the content of Clause 2(5) is not adequate for proper guidance to be given to authorised institutions and to the public about where the burden of decision rests. If it is the Bank which decides to ignore the advice of the independent members, that is one thing. If it is some nebulous arrangement which emerges, that is another.
We would far rather have it absolutely clear cut and say that if the Bank is entitled to ignore the advice of the independent members, the Bank must say so as ex-officio members. That will trigger off the right of independent members to go to the Chancellor and place their views before him. It seems to us only a matter of logic that that should be right and proper. I beg to move.
Lord Bruce-Gardyne: My Lords, I must admit that I share a lot of the doubts which the noble Lord, Lord Williams, has about this whole clause. Indeed, I argued at Committee stage that the latter part of the clause about the right of independent advisers to take their case to the Chancellor was in itself fundamentally fairly offensive to the authority of the Bank and that there might be something to be said for removing that whole concept altogether. I know that that is not the line which the noble Lord and the party opposite take.

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I must confess that the noble Lord left me fairly confused about the precise purpose of this amendment, because he seemed to be envisaging circumstances in which the Treasury—that malign influence—would step in and tell the Bank that it was to ignore the advice that it would receive from the independent advisers. At that point the independent advisers apparently would go to the Chancellor and inform him that their advice had been overridden. I should have thought that this was a matter of which the Chancellor would conceivably already be aware, since he had instructed the Bank to override their advice in the first place. Therefore, I find it a little hard to follow the motivation for the amendment. If the noble Lord's concern is simply that the clause as drafted leaves a measure of doubt as to how the decision to override the independent members has been arrived at, that seems to be another matter.
The noble Lord assumes that there will be voting in such circumstances. I should have thought that there will often not be any voting. In any sensible committee, voting takes place only on matters which have no significance, such as how much will be spent on postage. Serious decisions are taken by an anxious process, as the noble Lord well knows. They take place by the process of arm-twisting, eyebrow lifting and other such arcane pursuits which eventually enable the committee to arrive at something like unanimity. Therefore, I am mystified as to what particular advantage would be gained by making the proposed change. In so far as the purpose is to make quite sure that the Chancellor is aware, when he has told the Bank to ignore the opinion of the independent members, that he must be confronted by the independent members with their dissent from the ruling which he has required the Bank to give, it seems to me to be an effort of some superarrogation.
Lord O'Brien of Lothbury: My Lords, as I understand the point put forward by the noble Lord, Lord Williams of Elvel, he is looking at the situation where the board—independent and ex-officio members alike—have reached a conclusion but, despite having reached such a conclusion, there is a danger that the Treasury will overrule. He therefore wishes to avoid such a circumstance arising, leaving the Bank, having the full support of the board, to carry forward its responsibilities. However, where the independent members disagree with the official members, they have the right to report their disagreement to the Chancellor. It is a situation which has to be resolved, presumably with the help of the Chancellor backed by the Treasury. The point made by the noble Lord, Lord Williams, seems entirely valid.
Lord Beaverbrook: My Lords, I am grateful to the noble Lord, Lord Williams, for his explanation of the purpose of the amendment. I appreciate the point which the noble Lord makes. However, the existing wording of the Bill in this subsection of Clause 2 has been carefully chosen to properly reflect the position of the board and its members.
Under the Bill, as under the 1979 Act, it is the Bank of England which is formally given the statutory supervisory powers and obligations, and the
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judgments involved in carrying out those functions are therefore formally made by the Bank. The constitutional position is such that the Bank of England is not synonymous with the ex-officio members of the board. Therefore, while in practice the decisions will of course fall mainly to the ex-officio members—the governor, the deputy governor and the director of banking supervision—the formal position remains that the statutory powers are exercised by the Bank of England. This is properly reflected in the existing wording.
A further factor to be taken into account is that the decision-making process will not always involve the ex-officio members of the board. It is quite possible that other Bank officials—perhaps those expert in particular areas—will be called upon to take part in decision-making. This would be normal practice in any large organisation. Exactly which officers of the Bank were involved would depend on the details of each particular case. I cannot give the noble Lord a hard and fast rule on that matter. But I think the general position is clear where decision-taking in an institution such as the Bank is involved. The reference to a decision must, under the legislation, be the decision of the Bank of England. The board is an advisory body; it is not an executive body.
We are dealing with the situation in which the advice of the independent members is not to be followed. The decision of whether or not to follow that advice is for the Bank itself. That decision must then be notified to the Chancellor. I hope that I have been able to explain the position clearly to your Lordships and that the noble Lord, Lord Williams, will feel able to withdraw his amendment.
3.15 p.m.
Lord Williams of Elvel: My Lords, I am most grateful to the noble Lords, Lord Bruce-Gardyne and Lord O'Brien, and indeed to the Minister for speaking to the amendment. Perhaps I may take up the point made by the noble Lord, Lord Bruce-Gardyne. Clearly, if the Chancellor instructs the Bank to do something which is against the advice of the Board of Banking Supervision, it might be considered rather otiose for the independent members to go to him and present their advice which had been disregarded. Nevertheless, as the noble Lord and I well know, there are various ways and means of placing that advice before the Chancellor and of letting it be known that that advice was disregarded. Therefore, there is a lever which should not be underestimated.
The noble Lord, Lord O'Brien, made rather better than I did the point that the Bank should have the ultimate responsibility. That was taken up by the noble Lord, Lord Beaverbrook. If we are absolutely clear that the Bank has the responsibility for taking the decision and that the Bank, leaving aside the position of the ex-officio members, takes the decision and overrules in one way or another the advice given by the board which then triggers off the power of the independent members, I agree that the situation has been clarified and I shall be perfectly happy with that. On the other hand, if the Bank and the ex-officio members are in some way identified one with another, then I still believe that we have a problem.

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I hope that I heard the noble Lord say that it is for the Bank to make the decision and then to look at the advice which is received from the board, and that if the advice is disregarded, the independent members have a right to go to the Chancellor. If that is the case under the Bill as drafted, then I agree that my amendment is unnecessary. Before I sit down, perhaps the noble Lord will confirm that my understanding is correct.
Lord Beaverbrook: Yes, my Lords. I can confirm that that is the case. Depending on precisely what the issue is, the decision-making procedures within the Bank will of course vary. An organisation such as the Bank of England will develop decision-making procedures such as standard committee arrangements that it follows in these issues. Clearly, senior officers will have key roles as members of the Board of Banking Supervision. However, it is not the case that those ex-officio members will take every decision alone. The amendment would imply that that was the case, and we could not accept it for that reason.
Lord Williams of Elvel: My Lords, I am most grateful to the noble Lord for confirming my understanding. I am glad to have that matter on the record. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 23 [Objection by direction of the Treasury]:
Lord Bruce-Gardyne Lord Bruce-Gardyne moved Amendment No. 2:
Page 18, line 13, at end insert—
("(4) A direction given in a case within subsection (1)(b) above shall be subject to affirmative resolution procedure.")
The noble Lord said: My Lords, this is a probing amendment. My excuse for tabling it is that I believe that circumstances have moved on since the discussion concerning Clause 23 in your Lordships' House on 6th April. My starting point is the statement of my noble friend the Secretary of State for Employment at col. 821 of the Official Report when he resisted an amendment moved by my noble friend Lord Elton which was designed to give a substantially greater measure of control over overseas takeover bids for British banks than that within the Bill.
In resisting that amendment, my noble friend said at col. 821:
"If we start to introduce measures which are as obviously protectionist as this one, I suspect that we shall not be protecting ourselves but will begin to set in train a series of measures from which we shall suffer".
I very much support that sentiment. Indeed, if I had not been abroad on the day in question I would have been eager to support my noble friend in your Lordships' House.
However, since then a number of statements have been issued by members of Her Majesty's Government suggesting that the provisions of the Financial Services Act (and by extrapolation Clause 23 of this Bill) could be invoked and may be invoked in the very near future in order to deal with what was deemed to be the inadequate glasnost, if one can use the currently fashionable phrase, of Japanese markets, both financial and commercial.
I have much more warmth for the statement of my noble friend the Secretary of State for Employment
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during the Report stage, to which I have already referred, than I have for one or two of the comments which have emanated from official circles since that time. Such comments concern the possible corrective action which may be taken in the event of the Japanese failing to show a greater openness.
Apart from the reasons which led my noble friend at Report stage to resist the amendment of my noble friend Lord Elton—and I will be very interested to hear my noble friend's reply from the Front Bench this afternoon concerning this point—I should have thought it was quite improper to contemplate using the provisions for reciprocity under the Financial Services Act, and still more so to use the provisions contained in Clause 23 concerning the issue of reciprocity, to withdraw or deny a licence to a Japanese finance house which is operating, or seeks to operate, in the City of London because Cable and Wireless has failed to come to the terms which it seeks for participation in the Japanese telecommunications market. It does not seem to me that this provision of the Bill could conceivably be an appropriate response to such an eventuality. That is one anxiety I have about some of the things which have been said since this matter was debated on Report.
My second anxiety is that we seem to be in danger of getting tunnel vision in so far as concerns Japan. Are we sure that we should take kindly to the acquisition by Sony of a dominant share in British Telecom's or our own telecommunications network? Do we have any reason at all to imagine that British Telecom or Mercury could make acquisitions, for example, in the German telecommunications market? Why are we singling out Japan in this context? I should have thought that the resistance of the Germans to penetration of their financial markets is far more flagrantly in conflict with the terms of the Treaty of Rome and their obligations within the European Community than is the attitude of the Japanese towards the entry of firms such as Cable and Wireless into their telecommunications market in conflict with their wider obligations under, for example, the GATT. I have no qualms at all about the basic concept contained in Clause 23; namely, that Her Majesty's Government should have a reserve power to refuse access to UK financial markets to operators which come from countries which refuse our operators access to their financial markets.
A few years ago the Allianze bid for Eagle Star was a very good case in point. It was then quite clear that if a British insurance company had made a bid for Allianze it would have been ruled out of court immediately by the Germans, regardless of their obligations under the Community treaties. The Monopolies Commission made it quite clear when the matter of the Allianze bid for Eagle Star came before it that this was not a matter for the commission. Therefore, it is entirely appropriate that the Government should be taking action under this clause to achieve reciprocity. However, I think we need an assurance from my noble friend before the Bill departs from us that first of all we are not going to distort the purposes of this clause in order to try to achieve access to the Japanese market, not in the banking sector for which this is designed but, for example, in the

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telecommunications market, or indeed for that matter in the whisky market or other such markets.
My second anxiety is that we should seek to invoke the powers under this clause to deny licences to Japanese finance houses which wish to practise in the City of London or to withdraw those that are already there because of the dilatoriness of Japanese access propositions for our own finance houses to their stock market. That is a perfectly legitimate use of the clause which I do not dispute. However, we should be cautious about how we use such powers and beware of the fact that if the City of London were to refuse access to or to withdraw access from major Japanese finance houses the implications for the City of London's position as one of the three principal international financial market places may be rather serious. It is sometimes argued that the Japanese cannot have a great deal to lose. However, I hope that we will not lose sight of the fact that, as my noble friend the Secretary of State for Employment pointed out in response to my noble friend Lord Elton, we too are very much at risk and arguably more at risk than the Japanese.
It is a mistake to believe that we can confer a one-way benefit to Japanese finance houses seeking to operate in London who could conceivably transfer their activities without too much difficulty to Munich, Turin or even, as the Irish Government suggest, to Dublin. That may be an inherently improbable prospect but it highlights the fact that these services are mobile, and we should be a little careful before we take action which may be shortsighted in order to induce a behaviour on the part of the Japanese which some of our other trading partners do not observe, whatever their international obligations may be. That is the purpose which lies behind this clause. I hope my noble friend can shed some reassurance around the scene. I beg to move.
3.30 p.m.
Lord Elton: My Lords, I rise only because my noble friend may have left it in your Lordships' minds that I tabled amendments earlier in our proceedings in order to keep specifically the Japanese, or any other financial institutions, out of the City of London. That was very far from the case, as I hope my noble friend will realise when he re-reads Hansard, as I counsel him to do. I was guarding against the possibility of an invasion of the high streets to an extent that they are dominated by foreign banks.
Looking at the clause to which my noble friend has directed our attention, I see that in page 18, line 6, in the description of the power that is invoked, it states:
"disqualification or restriction of persons connected with overseas countries which do not afford reciprocal facilities for financial business".
Therefore it does not seem to me that this clause is available for the dire purpose for which—I agree with my noble friend—it should not be used. Neither does it provide a statutory instrument which can be subject to the affirmative procedure. However, that is a quibble. My noble friend has put his argument on record and that is why he moved his amendment.
Lord Bruce of Donington: My Lords, we on this side of the House hope that the Minister will resist the
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amendment tabled by the noble Lord, Lord Bruce-Gardyne. While we entirely agree that when making a direction under this clause the Government should exercise very great prudence to safeguard themselves against any or all of the dangers that are apprehended by the noble Lord, Lord Bruce-Gardyne, in so far as the dangers are relevant to the clause, we do not think that the direction should be subject to an affirmative resolution and all the delay that that implies. I am given to understand it is a minimum of some 31 days.
Your Lordships are well aware that the moment the Treasury issues a direction the Chancellor of the Exchequer becomes answerable to another place and is subject to questions and to all kinds of representations there. Surely that is an adequate safeguard. We do not want directions under this clause to be made subject to an affirmative resolution.
Lord Beaverbrook: My Lords, I appreciate the concern expressed by my noble friend Lord Bruce-Gardyne and I believe that I can give him some reassurance on what I think is the essential point of principle.
As the Government have made clear on a number of occasions, both here and in another place, the purpose of the reciprocity provisions in the Financial Services Act and in this Bill is not to erect barriers to trade or to close down or clear the City of overseas institutions. The purpose is not to put a fence around British financial markets. The purpose of the provisions is to encourage other countries to adopt a more open approach to their own markets—the sort of open approach for which London is rightly renowned. I am sure that my noble friend supports that objective.
The United Kingdom has benefited greatly from that open approach which has helped to contribute to London's eminent position among world financial centres. Your Lordships need have no fears that the Government are unaware of that. However, it has been accepted by your Lordships and in another place that the Government should have available reserve powers aimed at encouraging others to open their own markets on a reciprocal basis. It is not acceptable to the Government that other countries should have the advantage of open access here but not offer reciprocal opportunities to British firms. The Government hope that it will not prove necessary to use these powers.
As your Lordships know, the Government are pursuing the question of access to other markets on a number of fronts. I have nothing further to add on that at this stage, but we will continue to pursue our case vigorously. We are fully aware of the sensitivity of this issue and any action will be taken only after the fullest possible consideration.
My noble friend Lord Bruce-Gardyne asked two specific questions. As regards Cable and Wireless, we do not believe that it would help our case at all to link access to financial markets to other forms of trade. The Government decided from the beginning that as a matter of principle reciprocity powers in respect of financial services should not be available for use in other areas of trade. Besides, trading goods is governed by obligations in the General Agreement on Tariffs and Trade. Therefore I can confirm that the powers both in the Financial Services Act and in this Bill apply explicitly to lack of reciprocity in other financial areas

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and are therefore not directly relevant to the Cable and Wireless case.
On my noble friend's second specific point, I agree with him that any action that requires careful thought and assessment—and the Financial Services Act itself—requires that the Government be satisfied that such action is in the national interest. Clearly the Government will have to weigh the various factors in the balance and the answer will depend on the circumstances at the time.
As regards my noble friend's amendment, I do not think it usual or necessary for powers of this kind to be subject to the affirmative resolution procedure. For example, it is not the case under the Financial Services Act. However, I hope that what I have said about the Government's approach to this issue reassures my noble friend and that he will not feel it necessary to press his amendment.
Lord Bruce-Gardyne: My Lords, I am grateful to my noble friend for that reply. In conclusion, I assure my noble friend Lord Elton that I was not suggesting that his amendment was designed to exclude the Japanese from our market; it was more the response from my noble friend the Secretary of State for Employment which I though was worth reiterating.
I am grateful to my noble friend for the reassurances he has given. They are helpful in the light of some of the comments made, perhaps in the heat of the moment, during the past few weeks. On the basis of those assurances I am happy to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Lord Chancellor: My Lords, I understand that it is convenient for the Statement to be read now.

Northern Ireland: Terrorist Activity
3.37 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell): My Lords, with the permission of your Lordships I shall repeat a Statement made in another place by my right honourable friend the Secretary of State for Northern Ireland. The Statement is as follows:
"With permission, Mr. Speaker, I wish to make a Statement on the current security situation.
"The House will be aware of the recent serious increase in the number of casualties caused by terrorist actions. In the last week in particular two members of the Royal Ulster Constabulary, one Ulster Defence Regiment soldier and three civilians have been murdered. The civilian deaths were of the foreman of a building company, and most recently the murder of Lord Justice Gibson and Lady Gibson. In respect of the details of this latest outrage, while I have not yet received the full report on it, I have had an initial discussion with the Deputy Chief Constable and the General Officer Commanding and will be meeting the Chief Constable and the GOC again later today. However, I am giving the House some further information. The explosives were in a blue Cortina car, which had
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been reported stolen a month ago in South Armagh. At the time of its theft the car had GB number plates. It is believed to have been left only a few minutes earlier at the side of the road between the border crossing point and the security force checkpoint. The method of detonation appears to have been by radio signal. In addition to the two fatalities, there were nine other people injured.
"The question has been rightly raised as to how there could have been any outside knowledge of Sir Maurice and Lady Gibson's movements. The RUC advised me of evidence that the bookings were made in their own names through a travel agency in Belfast on 29th December, and that on 12th February a change was made to the date of their return. The hooking form included the description and registration number of the car. Further detailed investigations are continuing and I will inform the House as appropriate of any further information. I know the whole House will share with me the feelings of horror at this outrage, at the loss of a distinguished and brave member of the Northern Ireland judiciary and of his wife, and will wish me to express our deepest sympathy to their families.
"But, Mr. Speaker, while public attention has been focussed on this particular outrage, it would be quite wrong not to express our deep concern equally about the other tragic victims of this most recent and savage burst of terrorist violence. The recent and cowardly attacks on off-duty members of the security forces, coupled with murders of policemen in Newcastle and Portrush, and the murder of the civilian prison instructor of Magee College and the use of his body to lure two further members of the RUC to their deaths, are indicative of a renewed desperation and viciousness in the IRA campaign. The security forces will meet the challenge of these new tactics by the IRA with the resolution and courage that have stood them so well in the past, and the Government will give them all possible support in their vital task.
"But while the role of the RUC and armed forces is crucial in the front line against terrorism, they need also the unqualified support of the community as a whole in their task. The clear purpose of the IRA at this time is to undermine the morale of the security forces, to increase tension and hatred between the communities and thus to provoke overreaction from some Unionists and to create distrust and between the governments of the United Kingdom and the Republic of Ireland. That is its purpose but it will not succeed.
"The security forces have given abundant proof of their courage and determination to stand against terrorism. What they now look to is the whole community to show the same steadfastness in the face of the current campaign and for everybody to show particular vigilance over their personal security. Above all, it is the time when the whole community must give its unqualified support for the RUC and the armed forces, and give the fullest co-operation in this vital fight to defeat the terrorists".
My Lords, that concludes the Statement.
Lord Prys-Davies: My Lords, we thank the noble Lord, Lord Lyell, for repeating a Statement made in

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another place by the Secretary of State for Northern Ireland. From these Benches, we wish to be fully associated with the horror and condemnation expressed in the Statement at the deliberate murder last Saturday morning of Lord Justice Gibson, Northern Ireland's second most senior judge, and Lady Gibson. I am sure that the whole House will want to express its revulsion at this murder. Although it is not mentioned in the Statement, we have noticed with satisfaction the condemnation universally voiced in the Republic of Ireland and articulated in particular by the Prime Minister of the Republic.
I think it is well known that Lord Justice Gibson sought fairly to apply and defend the rule of law in a divided and torn community. His task was not an easy one to discharge. His life was therefore vulnerable at all times. We have also been reminded by the Secretary of State for Northern Ireland in his Statement that the officers of the Royal Ulster Constabulary who enforce the rule of law on the streets of the Province are likewise vulnerable and that many have paid the ultimate price.
In the outrage last Saturday morning on the main highway between Dublin and Belfast we see but the latest manifestation of the sustained, vicious campaign of terrorism, sometimes fought with sophisticated weaponry, which has been waged in Northern Ireland for almost 20 years and which has tragically escalated during the past few months. Despite all the efforts of the police and security forces and despite the political initiatives taken by the Government, which we on these Benches fully support, the campaign of violence and murder continues.
That may suggest that the people who can most effectively answer the challenge of terrorism are the members of the two communities in Northern Ireland, accepting that they cannot provide support, cover and haven for the men of violence, and accepting, in the words of the Secretary of State's Statement, that the whole community must be defended by the whole community. We therefore endorse from these Benches the appeal made by the Secretary of State to all the people of Northern Ireland for their unqualified support and steadfastness in the face of the current campaign. We implore that there should be no reprisals following the murder of Lord Justice Gibson and Lady Gibson, as they would only further the objectives to which the terrorists are committed.
In a democracy, one cannot guarantee security all the time. Nevertheless, we have a feeling—it is no more than that—that the police and the security forces may be able to learn some lessons from this tragedy. How is it that the security intelligence appears to have failed to detect the plot to assassinate the Lord Justice? How is it that the vehicle in which the bomb had been planted was allowed to park on the road, if only, as is acknowledged in the Statement, for a few minutes, so near to a manned police checkpoint? Why was it allowed to remain in that position?
The fact that this deliberate, planned murder took place within a mile of a permanent, manned police checkpoint in broad daylight when it was known, or ought to have been known, to the security forces that Lord Justice Gibson would be driving along the road
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to which the checkpoint had a frontage, may indicate that the security forces on duty there and generally may, at least on that day, have been too casual in their approach to their duties. We should be pleased to be assured by further inquiries that we are totally wrong about that.
Finally, on these Benches we express our deepest sympathy to the family of Sir Maurice Gibson, to the families of the Royal Ulster Constabulary officers and to the families of the civilians who have been killed, and also to those who have been maimed by the men of violence.
3.45 p.m.
Lord Donaldson of Kingsbridge: My Lords, I wish to follow the noble Lord, Lord Prys-Davies, in expressing outrage and condemnation of this most offensive crime. Lord Justice Gibson was known, respected and honoured throughout Northern Ireland and in the South. All noble Lords who have worked in Northern Ireland will agree with me when I say that he was one of the judges who risked their lives by their very profession. He was in the front line and he has given his life for his country as nobly as anyone can.
The difference between fighting the IRA and fighting a war is that one's wife does not usually get killed with one, unless it is done by the IRA. This is the third or fourth time that it has killed families. Some were distinguished and some were undistinguished, but both kinds of killings are equally horrible. We must never let our hatred of this enemy ease up. Even though we are told to love our enemies, this is one which goes too far for me.
No comment can usefully be made about these events at this stage. A number of things obviously need explanation. I see no point in going into them until they are fully explained. My recollection is that the no man's land either side of the border was established because otherwise it was too easy for RUC cars to be identified and attacked. I think I am right in saying that that has gone on for a good many years, so we cannot blame any particular government or Secretary of State for allowing what seems in retrospect to be an odd system. I shall not comment on it.
I shall comment on the point which was so well made by the Secretary of State—that not only a distinguished man and his wife have been killed but a number of, as it were, junior officers, non-commissioned men and front line troops have been killed and continue to be killed the whole time. The Secretary of State was right to suggest that the IRA's hope in doing this is to make the Unionists attack the South on the grounds of inadequate security, to make the South unhappy about our Government, and generally to engender ill-feeling and distrust. I agree with the Secretary of State that the only way we from this angle can help the war that is going on against these very unprincipled and desperate characters is by trying to prevent our friends quarrelling among themselves.
Lord Lyell: My Lords, first I think that all of us would share the words of outrage that have been expressed by the noble Lords, Lord Prys-Davies and Lord Donaldson, about this foul outrage on the

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persons of Lord and Lady Gibson. But, above all, I think that everybody in Northern Ireland will be grateful for the unstinting support of the two noble Lords for the security forces and for the families of the security forces who, as your Lordships are aware, bear such a burden themselves.
With regard to the points made by the noble Lord, Lord Prys-Davies, I am able to tell him that further inquiries are being carried out about the travel arrangements made by Lord Justice Gibson. I would not want to go further on that today. However, anything that we can learn we shall certainly take into account.
I stress to the noble Lord that there is no element of casualness in the performance of their duties by any members of the Royal Ulster Constabulary. Your Lordships would not expect me to make any disclosure of police movements, particularly in this area near the border, at Killeen, up to the border and around it. Your Lordships will be aware that three Royal Ulster Constabulary constables and one woman constable were killed about 23 months ago in a mortar attack about half a mile from the scene of the murder of Lord Justice Gibson. I am able to say that the security forces patrol throughout the whole area, but again I make no disclosure as to what happened on this occasion. Once again I thank the noble Lord, Lord Donaldson, for his robust support for the words of my right honourable friend.
The Earl of Onslow: My Lords, will my noble friend make it absolutely clear to the Unionist community that it is no use their cutting wire, tearing up Acts of Parliament, generally marching around the place, banging Lambeg drums, playing fifes, and all those kinds of things, tying up Royal Ulster Constabulary time, when that time is much more valuably spent in trying to root out and destroy this particularly ugly form of murder? Furthermore, is it not ironic that they have the same idea of destroying the Anglo-Irish Agreement as the IRA? Can this also be pointed out, because we must root out terrorism and then peace might possibly return to Ireland, doubtful though that may be?
Lord Lyell: My Lords, the House will note the comments on and robust support of my noble friend for the Anglo-Irish Agreement. I think that we are in total agreement with the points that have been raised by him about the futility of sundry protests and gestures which are made and which are recognised by everybody in Northern Ireland as distracting the security forces, not least the Royal Ulster Constabulary, from their main task of allowing every citizen in Northern Ireland to carry on his or her daily life free of terrorism.
Lord Blease: My Lords, I join in thanking the Minister for repeating the Statement made by the Secretary of State for Northern Ireland in another place and also for his comments to his noble friend. I also join in the support given in the statement of my noble friend Lord Prys-Davies from the Front Bench and the remarks by the noble Lord, Lord Donaldson, who has considerable experience in Northern Ireland. I join with them in support of the security forces and their efforts to eradicate terrorism from the shores of Ireland.
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May I ask the Minister whether he is aware of the feelings of revulsion throughout Ireland, both North and South, that have swept across the community in the face of this latest IRA onslaught? May I further ask him whether he is aware of the strong announcement made by the Taoiseach, Mr. Charles Haughey, who in offering his sympathy to the relatives and friends of all those who were killed in this recent outburst of terrorism last week in Ireland declared:
"I wish to solemnly assure them"—
they are the relatives and friends of those killed and injured—
"that no effort will be spared in security co-operation to bring the perpetrators to justice"?
I welcome that statement by the Taoiseach and the Republic. I would also welcome just as strong a statement from the Benches of the Opposition. I am not sure that the Statement made in the other place and repeated in this House was indeed that firm and as strong.
I further wish to ask the Minister whether, having left the shores of Ireland this morning, he and his ministerial colleagues in Northern Ireland are aware of the deep sense of anxiety—indeed the acute concern—expressed throughout by the people of Northern Ireland that apparently there is not the determination, the expertise necessary in security matters or indeed the will in some cases to get to grips with terrorism and to bring it under some form of control if not to wipe it out.
I wholeheartedly agree with the noble Earl, Lord Onslow, that politicians in Northern Ireland ought to take themselves in hand. Those may not be his exact words but I agree with the sentiment. They ought to be here at Westminster dealing with democratic principles rather than tearing out barbed wire and taking up the time of the police and other security personnel who should be getting to grips with real terrorism. I should like a full assurance from the Minister today that a proposal for co-operation in both North and South with all levels of the security forces will be put forward in a concrete form rather than just a series of other talks again taking place.
Lord Lyell: My Lords, of course I give the assurance that co-operation between the Republic of Ireland and Her Majesty's Government on security matters is of the utmost importance. It is constantly being discussed. It is discussed at every meeting on the Anglo-Irish Agreement. I reassure the noble Lord that this will continue to be the situation.
I too have just returned from Northern Ireland, having made a rapid return trip since I left these shores this morning. I am aware of the feeling in the Province through person-to-person contact as well as from the press. There is deep anxiety, and for very good reason. I want to assure the noble Lord, Lord Blease, and all your Lordships that there are certainly techniques, and above all there is the will of Her Majesty's Government and of all the security forces, to defeat this campaign of terrorism. But the noble Lord will know that the Provisional IRA are dedicated, professional. ruthless and above all vicious in the forms of terrorism. Their campaign is following upon a pathetic showing in the recent elections in the Republic. The reasons that they undertake this campaign of terrorism

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are best known to themselves. However, I assure the noble Lord and every one of your Lordships that the will of the Government and of the security forces is there to defeat this terrorism.
Lord Chalfont: My Lords, I join in all the expressions of sympathy for the victims and the families of the victims of this form of terrorism, but does the Minister agree that expressions of outrage and revulsion are unlikely to make any impression on these people? Does he agree that the object of terrorism is to terrorise? It is to cause revulsion and fear. I ask the Minister two specific questions arising out of these latest incidents. First, are the Government content that the known and obvious targets of terrorism are given proper advice about sensible precautions to be taken in the conduct of their daily lives?
Secondly, in a context where we are now dealing with a branch of international terrorism and all that that means, is the noble Lord satisfied that in the counter-terrorist operations that are taking place in Northern Ireland—we all share a great admiration for the RUC—the armed forces are being given enough of a role to play in dealing with this problem?
4 p.m.
Lord Lyell: My Lords, of course I accept the first proposition put by the noble Lord about the objective of terrorism being to terrorise the population. But I would stress to the noble Lord, and I am sure he would accept, that although the people in Northern Ireland are anxious—and I wish to pay my tribute to the population—they are not however terrorised. They have stood up remarkably well to this. There is a feeling that they will not be beaten by this terrorism, as indeed they have not been over the past 17 or 18 years.
The noble Lord asked me two specific questions. The first was about the protection which is given to sundry persons whom he described as potential targets. The Government are content that sufficient advice is given to people who might be at risk. If any lessons may be learnt from the events which I have described this afternoon we shall take note and act very quickly, as I am sure the Royal Ulster Constabulary and the security forces will.
On the second question put to me by the noble Lord about international terrorism and the methods needed to combat it, I stress that the front line against terrorism is the Royal Ulster Constabulary. The army and the security forces act in support of the Royal Ulster Constabulary. I believe that is the position of all governments. It is a position which should be maintained and it will be maintained so far as we are concerned.
Lord Kilbracken: My Lords, I crossed the border at half-past eight this morning and I should like to begin by confirming what has been said by both my noble friends—that there is the most profound sense of shock and outrage in the Republic at what has happened. As I approached the border this morning in visibility of about 30 yards, I expected that, coming so soon after these murders, I should have some difficulty in crossing. I have to report that the only sign of security
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forces north of the border was a single soldier, a private who stopped me, looked briefly at my driving licence and let me through in 30 seconds. So it is the case that the border is not properly watched by the security forces in the North.
I should like to ask the Minister two questions. First, does he think it worth commenting on the outrageous suggestion of the Unionist leader, Mr. Molyneaux, that the knowledge of the judge's movements came to the IRA through a mole in the Garda Siochana? Secondly, does he have any knowledge why a man who was a known likely target for the IRA, when travelling from Britain to Northern Ireland should have chosen to travel by ferry from Liverpool to Dublin, not Dun Laoghaire, as the Secretary for Northern Ireland originally said, and then by road from Dublin to Belfast? He was thus not only exposing himself to IRA terrorists but also putting additional demands on the extremely pressed police forces in the North. Why did he have to go through another country? Why did he allow the number of his car, his position and his title to be known to a travel agent in Belfast over three months before the event?
Lord Lyell: My Lords, on the noble Lord's first point about his personal experience of crossing the border this morning, I do not want to comment any further on matters of security on the border. I think it is entirely a matter for the security forces as to how they go about their duty, how they spread their forces and what resources they use. But I beg the noble Lord not to take as evidence just what he saw. Members of another place have also taken that attitude and have found that they were entirely wrong. Certainly I believe we ought to allow the security forces who guard the border to carry out their duties as they see fit.
On the two questions which the noble Lord asked me about the statement made by a Member of another place immediately after the murder of Lord Justice Gibson, so far as we are aware there is no basis for this scurrilous statement. Indeed, it was of no help. I stress to the noble Lord and to your Lordships that further inquiries are being undertaken about the arrangements made by Lord Justice Gibson and Lady Gibson, and I think that this answer will also cover the noble Lord's second question. If we or the security forces in the Republic find any lessons from this, we shall certainly put them into practice.
Lord Moran: My Lords, having reached a point where it was suggested on the BBC at lunch-time today that a distinguished judge was irresponsible in booking a passage across the Irish Sea in his own name, is it not time that we took an entirely new look at security in Northern Ireland? Perhaps the security forces should stand less on the defensive and should take the initiative in trying to destroy and root out terrorism in the Province. To that end, can the Minister assure the House that anything the security forces need to secure that objective will be given to them, including if necessary some amendment to the legal framework?
Lord Lyell: My Lords, on the noble Lord's last point about what I think he called some amendment to the legal framework I would not give a guarantee this afternoon although we may be able to discuss this matter at a later stage. Regarding resources for the

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security forces, if my right honourable and honourable friends who examine security on a day-to-day basis decide that resources are needed for the security forces, those resources will be found.
I am afraid I have no knowledge of the comments which may have been made on the BBC about the travel arrangements of Lord Justice Gibson, or indeed of other prominent persons. As I have stressed before, if there are any lessons to be learnt we shall act on them.

Banking Bill
4.9 p.m.
Proceedings after Third Reading resumed.
Clause 41 [Investigations on behalf of the Bank]:
Lord Beaverbrook Lord Beaverbrook moved Amendment No. 3:
Page 34, line 17, after ("every") insert ("person who is or was a").
The noble Lord said: My Lords, this amendment corrects an omission in the Bill as drafted. Clause 41 deals with investigations into the affairs of authorised institutions by inspectors appointed for the task by the Bank of England where it believes an investigation is necessary in the interests of depositors. Subsection (5) imposes a duty on the directors, managers and controllers of an institution under investigation and on others closely connected with its business to cooperate with the inspectors.
However, unlike the same provision in the 1979 Act, the subsection does not apply this duty to people who were directors or managers or otherwise included in the subsection, but are no longer in such a position at the time the investigation takes place. Thus there will be no change to the position under the 1979 Act. It might well be the case that, for example, a former director would have been in office at the relevant time and therefore be able to assist the investigation. It is therefore important that he should be covered by the obligation to co-operate in an investigation. This amendment achieves that result. I beg to move.
4.15 p.m.
Lord Bruce of Donington: My Lords, this amendment, if I may say so, appears at a very late stage in the proceedings on the Bill. We quite understand, and the persons concerned were placed under notice by subsection (5), that:
"It shall be the duty of every director, controller, manager, employee, agent, banker, auditor or solicitor of a body which is under investigation",
to co-operate in certain specific ways; that is:
"to produce to the persons [appointed as investigators] …within such time and at such place as they may require, all documents relating to the body concerned which are in his custody or power … to attend before the persons so appointed at such time and place as they may require; and … otherwise to give those persons all assistance in connection with the investigation which he is reasonably able to give".
The clause itself, as originally stated, quite clearly gave notice to all those who occupied positions at the time. Now there appear to be some later thoughts about it. I invite the noble Lord to take account of the possible consequences.
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It means that, regardless of time—it could be a year before the passing of this Bill into law, two years ago, three years ago, four years ago or 10 years ago—all those who have occupied a position specified in the subsection are now put under notice. Why had this escaped the attention of the Government until now? Why was it not in the original clause as drafted? We have had a Committee stage on the Bill. Clause 41 provides that:
"If it appears to the Bank desirable to do so … [it] may appoint one or more competent persons to investigate".
The circumstances under which these various people have a duty are specified in subsection (5). Your Lordships will be aware that later in the clause, particularly subsection (9), if there is any default in co-operation in this respect, the person who is alleged to have committed some default under subsection (9) or who has not been co-operative or whatever it may be,
"shall be guilty of an offence and liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding the fifth level on the standard scale or to both".
As indeed one would expect, subsection (11) makes it clear that a barrister, advocate or solicitor is not required to produce a document containing a privileged communication made between himself and the authorised institution.
Let us consider this clause, as amended to include the words,
"person who is or was a".
and the position that may arise in practice. The amended clause would now read:
"It shall be the duty of every person who is or was"—
the time is infinite and could reach many years back in time—
"a director, controller, manager, employee, agent, banker, auditor or solicitor".
I am a little concerned, not purely because of my professional interest, about the position of the person who has been an auditor. Of all the people who are specified in this subsection it is the auditor who is most likely to have at his disposal some documentary evidence. The documentary evidence may comprise a whole series of audit reports and audit notes, which are often in very great detail going way back and which in some cases may already be in the archives of the firm of auditors concerned.
Is it really the intention that a power in such broad terms and reaching back over an infinite period of time should be given to require an outside body, not a servant of the Crown, not the Fraud Squad or any body of that kind, to report—incidentally without payment? I corresponded with the noble Lord on this matter of the position of the auditors under the clause. He wrote to me and said that the Bank appoints the investigator and pays his costs, but, in common with all other persons who may be questioned, there is no provision for payment by the Bank of the costs of attendance of reporting accountants or auditors. Whether or not they could reclaim their expenses from the institution under investigation would depend on the terms of their appointment. So far as auditors are concerned, shall we really have a circumstance in which a person or a firm which had been the auditor of a company or of an authorised institution some four

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or five years previously has to spend hours and hours, perhaps days, in searching through relevant documents without any kind of provision for remuneration for their time, purely on the basis of these requirements of, not, I repeat, the Fraud Squad or any body of that kind, but an investigating accountant acting on behalf of the Bank? I venture to say that that is wholly unreasonable.
Aside from that position, on which I should like the noble Lord to comment, there is still the point of principle that this measure is retrospective in its effect. It takes no account of any confidentiality agreement or contract between former controllers, managers or employees and the authorised institution for which they worked. On the point of principle and aside from the purely accounting aspects of the matter to which I have referred—I must declare that I have no personal interest in that whatsoever—we think it is a bad provision, providing as it does, in effect, for offences retrospectively, and providing for them without any regard to whatever previously subsisting arrangements there may have been.
Following the investigation of the Johnson Matthey case, on which the Bank reported and which must have been in the mind of the Government at the time, this legislation first went to another place, went through Committee there, then came to this place and through Committee and Report stages here. Are we to believe that the remedial steps that have been taken by the Bank since Johnson Matthey are so ineffective that it still apprehends there may be troubles, way back many years, which require unearthing before this legislation is brought forward? That is not exactly a motion of confidence in the amendments to the Bank's supervisory powers instituted, we are given to understand and which I believe to be the case, since the Johnson Matthey debâcle. If the Government and the Bank are quite sure that their revisions of the whole machinery are so effective, why do they now feel it necessary to adopt such a retrospective measure? We on this side of the House will be very interested in the Government's reply.
Lord Beaverbrook: My Lords, I think I should affirm to your Lordships that this Bill is all about the protection of depositors, not about the protection of fees for auditors or reporting accountants. Clause 41 imposes a duty on the directors, controllers, managers and employees of an authorised institution and on any agent, banker, auditor or solicitor, reporting accountant or significant shareholder of an institution to attend before the inspectors and to produce documents and otherwise assist the investigation. The clause as drafted does not, however, impose the same duty on persons who were formerly directors, managers and so on, but are no longer such at the time of the investigation. It could easily be the case that those involved with a troubled institution no longer hold office but nevertheless have much to contribute to an investigation.
The noble Lord, Lord Bruce, asked me whether we are concerned that matters from the past will come to light. That is perfectly possible. I have no crystal ball to see what might arise in the way of problems. I hope that there will be none. Indeed, the 1979 Act
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contained the same powers. Unfortunately, by simple oversight, these powers were left out of Clause 41 of the Bill.
I hope that I am able to reassure the noble Lord that all the amendment tabled today seeks to do is to put in exactly the same powers that were contained in the 1979 Act.
On Question, amendment agreed to.
Clause 43 [Powers of entry in cases of suspected contraventions]:
Lord Beaverbrook Lord Beaverbrook moved Amendment No. 4:
Page 37, line 5, after ("to") insert ("laying an").
The noble Lord said: My Lords, with the leave of the House I shall speak to Amendments Nos. 4 and 5 together. These two amendments are technical drafting amendments which improve the clarity of the subsection in its application to Northern Ireland. I am advised that the correct usage is to refer to "laying an information" and "making a complaint". These amendments reflect this usage. I beg to move.
On Question, amendment agreed to.
Lord Beaverbrook Lord Beaverbrook moved Amendment No. 5:
Page 37, line 6, after ("to") insert (making").
On Question, amendment agreed to.
Clause 79 [Duty to provide information and documents]:
Lord Beaverbrook Lord Beaverbrook moved Amendment No. 6:
Page 62, line 28, after ("296") insert ("(2)").
The noble Lord said: My Lords, this amendment is not substantive but merely a technical drafting improvement. I beg to move.
On Question, amendment agreed to.
Clause 90 [Disclosure of transactions by authorised institutions with chief executives and managers]:
Lord Beaverbrook Lord Beaverbrook moved Amendment No. 7:
Page 68, line 37, after ("transaction") insert (", arrangement").
The noble Lord said: My Lords, this amendment corrects an error. The word "arrangement" was accidentally omitted from the Bill in subsection (2) of Clause 90. This needs to be corrected since the clause involves consequential amendment of the Companies Act and the wording should therefore follow that in the Act and in subsection (1) of this clause. I beg to move.
On Question, amendment agreed to.
Lord Beaverbrook Lord Beaverbrook moved Amendment No. 8:
After Clause 90, insert the following new clause:
("Powers for securing reciprocal facilities for banking and other financial business.
For the avoidance of doubt it is hereby declared that a notice under section 183 of the Financial Services Act 1986 (disqualification or restriction of persons connected with overseas countries which do not afford reciprocal facilities for financial business) may be served on any person connected with the country

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in question who is carrying on or appears to the Secretary of State or the Treasury to intend to carry on in, or in relation to, the United Kingdom business of any of the descriptions specified in subsection (1) of that section whether or not it is of the same description as that affected by the less favourable terms which are the occasion for the service of the notice.").
The noble Lord said: My Lords, with the permission of the House, I shall speak to Amendments Nos. 8, 9 and 11. These amendments relate to a point raised by my noble friend Lord Elton during debate at the Report stage of the Bill. I am grateful to the noble Lord for raising the point at that time. The question that arose was whether the drafting of Section 183 of the Financial Services Act was sufficiently clear. That section deals with the issue of reciprocity. It provides the Government with reserve powers, the purpose being to secure reciprocal access for British firms in overseas markets. It allows for the refusal, restriction or removal of authorisation to carry on banking, investment or insurance business in the United Kingdom if the country of origin of the institution involved does not allow reciprocal access in these areas to British institutions.
The intention is that these powers should operate in such a way that action could be taken against, for example, a banking institution on grounds of lack of access in the investment or insurance fields and vice versa. This cross-functional approach gives the necessary degree of flexibility for the powers to achieve their objective. However, it is now considered that the present wording of the provision is insufficiently clear on this point and the new clause will put the matter beyond doubt.
The related amendment to Clause 109 ensures that as the provision is a clarification of existing legislation it will come into effect immediately following the passage of this Bill. I beg to move.
Lord Elton: My Lords, I rise only to say that while I do not have a copy of the Financial Services Act by me, I trust implicitly in the drafting of my noble friend's advisers. I should like to thank my noble friend for reading my speech. It is always nice when one discovers after one has made an intervention that it can actually have an effect upon those who appear to be impregnable at the time of listening.
Lord Williams of Elvel: My Lords, we welcome this redefinition, if I may so express it, of the powers under Section 183 of the Financial Services Act. I am still unclear as to what reciprocity really means. The noble Lord referred to the "cross-functional approach". I am unclear in practice, as I have always been unclear, exactly what this means. If I may say so, the Government—and I would say this to the noble Lord the Secretary of State if he were here—defended their position extremely well on the control of major financial institutions.
Since our discussion at Second Reading, I do not think the Government have given any comfort to those of us who wish to see the major institutions, particularly the clearing banks, protected from raiders—not necessarily the Japanese or indeed the Americans—beyond this country who, by acquiring major clearing banks, could gain a large slice of the high street banking business. Having re-read this morning our discussions in Committee and on Report,
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I do not believe that the Government have moved at all. Indeed, the last statement made by the noble Lord the Secretary of State on Report was absolutely consistent with what his right honourable friend Mr. Norman Tebbit said in 1984 in his definition of the criteria for reference under competition policy. I do not think that we have managed to make any impact on the Government's position in spite of all the huff and puff in certain quarters of the House.
I therefore have to accept that this is not a stage at which we would wish to continue the debate, however important we feel it to be. Time will tell whether the competition review in which the Government are at present engaged will provide us with some sort of criterion under which the banking business of the country is protected. We have to see that. Time will tell also whether the reciprocity arrangements, which are extended or redefined by the new clause, are adequate to deal with what some of us believe is a potentially serious threat. However, it is too late in the passage of the Bill—besides, we have discussed it so many times—for us to reopen the issue. Nevertheless, I wish to express some disappointment from these Benches that the Government have failed to move a little in our direction to control the ownership of major financial institutions in the country and to make sure that that control is retained in United Kingdom hands.
4.30 p.m.
Lord Elton: My Lords, before the noble Lord sits down, I should say that in my view the undertaking given by the Secretary of State on Report, unlike the statement on policy given by his right honourable friend earlier, to which the noble Lord referred, left the expectation that the Monopolies and Mergers Commission would be used to defend the national interest in the event of a foreign takeover bid for high street clearing banks; and that move, although not a dramatic one, was a move in the right direction.
Lord Williams of Elvel: My Lords, with the leave of the House, I do not believe that anything the Secretary of State said was different from what Mr. Tebbit said in 1984. Indeed, the Secretary of State went out of his way to say that it was exactly what Mr. Tebbit had said in 1984. We still have to see what the competition review produces. At present it is all up for grabs.
On Question, amendment agreed to.
Clause 109 [Short title and commencement]:
Lord Beaverbrook Lord Beaverbrook moved Amendment No. 9:
Page 79, line 22, at beginning insert ("Section (Powers for securing reciprocal facilities for banking and other financial business) above shall come into force on the passing of this Act and the other provisions of").
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Schedule 6 [Minor and consequential amendments]:
Lord Beaverbrook Lord Beaverbrook moved Amendment No. 10:
Page 92, line 2, at end insert—
("The Finance Act 1986
In Schedule 7 to the Finance Act 1986—

(a) in paragraphs 8(1) and 11(1)(c) for the words "a recognised bank or licensed institution (within the meaning of the

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Banking Act 1979)" there shall be substituted the words "an institution authorised under the Banking Act 1987";

(b) in paragraph 8(2) for the words "recognised bank or licensed institution" there shall be substituted the words "authorised institution".")

The noble Lord said: My Lords, the amendment remedies an omission in Schedule 6, which deals with consequential amendments of other legislation. It substitutes references to institutions authorised under the Bill for references to recognised banks or licensed institutions under the Banking Act 1979. The latter terminology is of course no longer relevant. I beg to move.
Lord Diamond: My Lords, as is well known to your Lordships' House, we on these Benches at all times are anxious to facilitate government business. It is for that reason that, although we have followed with the greatest care every amendment that has been moved and spoken to for and against this afternoon, we have not thought it appropriate to intervene.
On Question, amendment agreed to.
In the Title:
Lord Beaverbrook Lord Beaverbrook moved Amendment No. 11:
Line 6, after ("funds;") insert ("clarify the powers conferred by section 183 of the Financial Services Act 1986;").
The noble Lord said: My Lords, I have already spoken to the amendment. I beg to move.
On Question, amendment agreed to.
Lord Beaverbrook: My Lords, I beg to move that this Bill do now pass.
On Second Reading of the Bill my noble friend Lord Young of Graffham said he believed that, in considering the Bill, we would see your Lordships' House working at its best as a revising chamber looking at a serious measure on which Members have considerable expertise. My noble friend is unable to be present today, but if he were here I am sure he would agree that his prediction has been borne out by reality.
The Bill was given a general welcome by your Lordships at that earlier stage, and the need for revised legislation to bring up to date the supervisory framework for banks was fully accepted, as was the context of the Bill being the third major strand of legislation dealing with the regulation of financial institutions. But Second Reading also saw the opening moves in what were to be some closely argued debates on important aspects of the Bill in Committee and on Report. I should like to congratulate all your Lordships on the thorough, well informed and good humoured way in which those debates were conducted. Changes to the Bill have resulted from those debates—perhaps not as many changes as noble Lords opposite would have wished but improvements nevertheless.
Regardless of the outcome, the debates have illuminated the issues in the legislation. Statements for the record have been made, and the purpose of specific provisions, the intention behind them and the way they are to be implemented in practice have been clarified to the considerable benefit of those outside
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your Lordships' House who will be affected by legislation. I refer in this context to the important debates on the Board of Banking Supervision, on changes in shareholder control, on the monitoring of large exposures and on the role of auditors and accountants in the supervisory process. These were important debates. There are other examples that one could give to illustrate the value of your Lordships' proceedings on the Bill, including the elucidation of many complex technical matters.
It is always invidious on these occasions to mention the contributions to debates of individual noble Lords, but my researches show that this is rarely seen as an insurmountable obstacle. I hope that your Lordships will forgive my doing so briefly now. I should like to mention in particular the contributions made by my noble friends Lord Elton, Lord Boardman and Lord Bruce-Gardyne. From the Cross-Benches the noble Lord, Lord O'Brien, has brought a wealth of experience on the subject to our debates, as of course has the noble and learned Lord, Lord Denning.
Committee stage was also noteworthy, featuring what was regrettably the last occasion on which the right reverend Prelate the Bishop of Birmingham addressed your Lordships. He and other noble Lords made valuable contributions. From the Alliance Benches we have enjoyed a measure of support as well as opposition from the noble Viscount, Lord Chandos, and the noble Lord, Lord Taylor of Gryfe, on some important aspects of the Bill. That support was welcome, and I am grateful to the noble Lords.
I must finally pay tribute to the helpful and constructive approach that the noble Lord, Lord Bruce of Donington, and the noble Lord, Lord Williams of Elvel, have together brought to the Bill. Their approach has been straightforward. They gave the Bill their general support but wanted changes, and argued for them in speeches that were both forceful on points of principle and subtle in their appreciation of the detail of the provisions. A number of amendments were designed to improve technical aspects of the Bill. I am happy that we were able to accept some of them. Indeed, I can best describe the expertise in banking and accountancy displayed by the Opposition Front Benches as being enviable. I am grateful to both noble Lords.
The purpose of the Bill is to update and improve the framework of banking supervision and to provide a system for the protection of depositors into the 1990s. This is a worthy aim, and the Bill is better equipped to meet it as a result of your Lordships' scrutiny. I commend the Bill to the House.
Moved, That the Bill do now pass.—(Lord Beaverbrook.)
Lord Bruce of Donington: My Lords, we on this side of the House do not wish to detain your Lordships very long at the concluding stages of the Bill. We should like to say that, to the limited extent that governmental imagination has permitted, certain amendments of a comparatively minor and interpretive kind have been inserted in the Bill.
We do not dissent from the noble Lord's observation that the passage of the Bill through the House once again illustrates the value of this Chamber

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as a revising Chamber and as an opportunity for the Government to have second thoughts. We know that in certain important instances the Government have had second thoughts. In passing, and while we are all in a very amenable frame of mind, perhaps we on this side ought to offer our congratulations to the noble Lord, Lord Diamond, on having delivered an apologia for his party's non-participation in the proceedings on this Bill.
I do not wish to keep the House long, but there are just three matters on which I should like to touch before we part company with the Bill. We on this side remain profoundly sceptical about its effect in regard to the necessity for various banks and authorised institutions to be subject to some rather greater monitoring on their loan exposures overseas. Nothing that has been reported in the news since the memorable intervention by the right reverend Prelate the Bishop of Birmingham has done anything to diminish our anxiety about the very considerable debt crisis which remains, which overshadows the whole of the international banking system and upon which considerable comment was made in the Financial Times today, dealing with the position of the World Bank in these matters.
These are aspects which in our view demand so far as the United Kingdom is concerned (and we are not an inconsiderable force in financial affairs) power for the Bank, in consultation with the Treasury, to give broad directions covering loan exposures overseas. Although I devoutly hope that no untoward events will happen in the next six months, I venture to think that your Lordships may eventually conclude that it was a pity the Government were not given specific powers within the Bill to intervene over the question of loan exposures and to give policy directions in accordance with the amendments laid before your Lordships by my noble friend Lord Williams of Elvel and myself.
The second point—I am very sorry to have to go back to it and I will not detain your Lordships for very long upon it—concerns the position of auditors. Under this Bill, as indeed under the Financial Services Bill, there has been a tendency to put auditors in the position of being some kind of longstop, whereby if everybody else fails—the supervisors, the directors, the clerks, the controllers and yea even the lawyers—the auditors are to shoulder the entire responsibility.
I refer to this specifically in connection with the amendment I was able to put down and to which your Lordships listened very patiently concerning the applicability to auditors within the ambit of Clause 47 of the Bill in regard to qualified privilege. That is a term which was not invented by me—who would expect a mere accountant to invent a legal term of that kind?—but already in the Government's White Paper on the subject it was recommended that auditors should be given qualified privilege.
We had much argument in the House on the basis that the auditor would only be exposed to the law in regard to defamation and that the insertion of qualified privilege would be of no advantage to him. Unhappily, this is not the case. If an auditor operating under Clause 47 of the Bill finds himself to be part of a tripartite conference—that is to say, his client, the authorised institution, the supervisor and himself as
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auditor—in which position he starts making observations in breach of his normal duty of confidentiality to his client, then it is not the law of defamation to which he exposes himself. That was a point to which the observations of the noble and learned Lord, Lord Denning, were directed. It is in fact the law relating to negligence which would be involved there.
If in the course of a tripartite conference among the authorised institution, the supervisor and the auditor, the auditor omitted to say something which his client wished he had said or said something which his client did not wish him to say, he exposes himself to an accusation of professional negligence. Whether that action, if it were eventually to be brought, would succeed is entirely beside the point, because from the moment the allegation is made by the client either of some omission on his part at this tripartite conference or in respect of something which the client perhaps did not like, then he comes under an immediate obligation to inform the insurance company covering him for professional indemnity under the contract of insurance uberrime fidei. That would have very adverse consequences indeed upon any firm of auditors in such a position. So I must again—and this will he the last time—express my very great regret that the Government did not follow their proposals in their own White Paper on banking supervision to give auditors qualified privilege in relation to the matters falling under the review of their activities as auditors and not necessarily as reporting accountants, which are totally different, under Clause 47.
Finally, I come to the point of enforcement. Your Lordships will recall that in the earlier stages of the Bill I indicated that many Members in another place expressed considerable anxiety about the enforcement of the provisions of this Bill. These anxieties were not relieved in the course of the exchange which I was privileged to have with the noble and learned Lord who sits on the Woolsack when he was speaking in the House in answer to a Question of mine on the Director of Public Prosecutions' action, or rather inaction, in relation to Minet Holdings plc and PCW Underwriting Agencies Limited.
The noble and learned Lord said among other things that the resources of the DPP very often did not permit the mounting of a prosecution because those who were likely to be the subject of a prosecution were able to deploy vast numbers of counsel in order to argue the case on their behalf. To quote the noble and learned Lord, at col. 439 of Hansard on 2nd March he said:
"We do not yet have anything like those numbers at our disposal".
The noble and learned Lord, moreover, was kind enough—and this must be unique in view of our respective political affiliations—to thank me very much indeed for supporting his demand for new staff in order that the DPP could in numbers and in qualifications be brought far more up to the level necessary to tackle the formidable tasks facing the department.
With the greatest possible respect to the noble and learned Lord, I have to say that I deeply appreciate the warmth with which he received my proposal that the staff of the DPP should be increased; but I also have to point out that in his capacity as a member of the

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Cabinet in a purely political post, he has very adequate influence to ensure that the office of the DPP and indeed other offices have funds allocated to them. I therefore reiterate my support for the noble and learned Lord and the renewed vigour with which he will undoubtedly use his influence within the Cabinet to obtain adequate Treasury resources for considerable reinforcement of the DPP's office in order that Acts of this kind can be properly enforced.
I indicated previously—and I say it again—that some of these cases are manifestly against the law. Some are manifestly fraudulent; most are very adequately reported and were there inaccuracies the newspapers concerned would be exposed to considerable actions for libel. But there seems to be very great difficulty in mounting prosecutions against the mighty, the people with very adequate financial resources and those who are part of the establishment however reluctantly they may be accepted. We require not only that law and order should be enforced so far as concerns some of the hapless poorer people of the country but also that the law should be invoked against those who have shown, and continue to show themselves, contemptuous of the law itself.
Lord Denning: My Lords, in thanking the Government for bringing forward this Bill, I should like to say just one word about a point on which my noble friend Lord Bruce of Donington quoted me. It is in the nature of the duty of auditors that sometimes they have to break the confidence they owe to their client in order to further the ends of justice. In my observations at various stages of the Bill, I have said—and I think it is quite right—that in law they are adequately protected by what lawyers call "qualified privilege"; they are only liable for actions for defamation if they abuse that privilege by virtue of malice without reasonable cause.
However, in view of what my noble friend has said, it may be that they also need protection against unfounded claims for negligence. That is a point to be borne well in mind. If they are to do their duty properly they ought not to fear being struck in the back by actions for negligence. That is all I have to say.
Lord Elton: My Lords, this stage of the proceedings of any instrument seems to me to partake partly of the nature of a funeral and partly of the nature of a baptism. The Government tell us how we have fared during the life of the Bill which is coming to an end; the rest of us predict how the Act will perform after its birth and try to extort undertakings from godparents. I think that the noble Lord opposite has done exactly that.
First, I join him in thanking my noble friend and through him the Minister for the patience that has been shown and for the points that have been met. Secondly, I should like to recall one matter that I raised at Second Reading, in Committee and on Report, which remains of great interest to the banking sector. It is the question of the difficulties that inevitably arise when one kind of institution is subjected simultaneously to two sets of regulations originating from two different regulatory authorities.
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Your Lordships will recall that in an effort to resolve these difficulties the Bank of England recently issued the draft of a possible agreement between itself and securities interests. My noble friend may also have noted, because I pointed it out to him, that a major shortcoming of that draft agreement was that it did not apply to branches of foreign banks operating in this country. The effect of this omission certainly appears to be potentially discriminatory against British banks, which could be both unfair and harmful. I hope that my noble friend can now tell the House that a way has been, or will be, found to remove that anomaly.
I hope that my noble friend will also be able to tell your Lordships that real progress is being made in bridging the gap between the two systems of regulation deriving on the one hand from the Banking Bill and on the other from the Financial Services Act. He will agree that it would be a serious mistake to allow the well-founded system of consolidated supervision and the indivisibility of capital within a banking group to be prejudiced by systems of regulation that are designed primarily for securities businesses not subject to the Bank of England's system of detailed supervision. These matters can only be resolved in talks between the authorities. I hope that my noble friend realises that those talks will continue to be a matter of interest to Members of your Lordships' House as the instruments to exercise the controls approach perfection. It may be necessary to draw his attention and that of his right honourable friend in another place to the matter at a later stage.
I conclude with what I hope is sufficient brevity in thanking again my noble friend for the concessions that he has made and wishing the Act, as it will be, every success.
Lord Taylor of Gryfe: My Lords, the noble Lord, Lord Bruce of Donington, suggested that an apology was due from these Benches for a lack of critical assessment of this Bill. I am tempted not to rehearse the position of the Alliance but to say just a few words about the Bill at this concluding stage.
Perhaps I may say en passant, without introducing a party note, that since there is a conspiracy in British politics to ensure that the Alliance is not well represented in this House—yes, my Lords!—we have limited resources at our disposal to deal with the intricate and complicated legislation that appears here from time to time. I recall, of course, that the legislation followed the Johnson Matthey scandal in which it was demonstrated that the supervisory authority and resources of the Bank of England were inadequate to control the situation which arose in that case. I am thankful that the Bill that is now about to pass contains provisions which make it possible for much tighter supervision of the banking system. I am sure that it will give a great deal of confidence to all those engaged in banking affairs.
During the debate a major issue was raised, notably by the noble Lord, Lord Bruce of Donington, on the very important matter of the balance between the Treasury and the central bank. That is an important issue which I am glad was aired and adequately debated during our discussions on the Bill.
Finally, on the question of reciprocity, we, in the Alliance, are content to support the Government's

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amendment introduced this afternoon which provides some protection for the British banking system against possible foreign interference. We feel that the reliance on the Monopolies and Mergers Commission to exercise its authority and judgment in these matters is not misplaced, as was evident in the case of the Royal Bank of Scotland takeover.
For all those reasons, although we have not perhaps spoken as often as other parties in the House, we feel that the Bill ought to be supported in general and we are delighted that it shall now pass. I should like to congratulate the Ministers concerned for listening patiently and with understanding to the issues that have been raised and for the responsible way in which they responded. Perhaps I may also congratulate the noble Lords, Lord Williams of Elvel and Lord Bruce of Donington, for their critical examination of this important issue. I am delighted to feel that the Bill will now become an Act.
5 p.m.
Lord Boardman: My Lords, I have a substantial interest in banking. Therefore this Bill has been of particular interest to me and I welcome it very much. I am grateful, like my noble friend and other noble Lords, for the consideration given by my noble friend and by my noble friend the Secretary of State to the amendments tabled.
Some of those amendments may appear rather trivial but their practical impact can be quite substantial. I shall quote just one; it is the clause that was inserted in the Bill in this House that related to electronic funds transfer. That may appear to be of minor significance when looked at cold in the Bill but it has a large practical application to the development of banking, consumer purchases and the like. I am grateful to my noble friend and to my noble friend the Secretary of State for the way in which they have accommodated that amendment.
I hope that they are right in their view on the changes of control. I appreciate and thank them for going as far as they have in dealing with the point on reciprocity and I hope that they are right in believing that this measure gives the Government the degree of say which they should have over such important economic levers. I hope that they are right. I should have preferred them to go a little further.
The noble Lord, Lord Bruce of Donington, referred fairly strongly a few moments ago to the question of overseas loans and third world debt. He regretted that provision was not made in the Bill to give greater control over banks' positions in regard to that debt. It would not have been in any way appropriate to introduce such powers in this Bill. This House has no control over the economies of those countries which have large debts. Nothing we can say in this House will control the flight of capital which flows out of Mexico into real estate in Florida or over those other things which have caused or exacerbated many of the problems there.
However, the Bill has added to the supervisory powers that are available to the Bank of England in seeing that banks keep proper capital ratios and make proper provisions for those debts, whether international, sovereign risk or domestic, to take
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account of the risks that are involved in order to protect depositors. The banking system is better and safer as a result of this Bill and I join with other noble Lords in expressing my thanks to my noble friends on the Front Bench who dealt with it so kindly and effectively.
On Question, Bill passed, and returned to the Commons with amendments.

Criminal Justice Bill
5.4 p.m.
The Earl of Caithness: My Lords, I beg to move that this Bill be now read a second time.
The Bill before us is large and wide-ranging, and touches on a number of important issues which I feel sure will be the subject of lively debate in your Lordships' House. Indeed, it gives me great pleasure to welcome to our debate this afternoon the noble Lord, Lord Irvine of Lairg. He is a fellow Scot, an Anglo-Scot, but one who also has a great interest in that line north of Inverness which is sometimes forgotten in your Lordships' House but which I know will not be any longer with the presence of the noble Lord. I look forward with interest to hearing his maiden speech, together with the speeches of other noble Lords. The list of speakers shows the House at its very best; it shows an enormous range of experience and talent.
The Bill was very fully discussed in another place, where with one or two exceptions there was an impressive measure of agreement across party lines that the changes which the Bill would bring are both desirable and worth while. These changes cover aspects of criminal justice as diverse as court powers, the investigation and prosecution of fraud, juries and the law of evidence. The Criminal Injuries Compensation Scheme is put on a statutory footing for the first time, and the Bill re-enacts in more modern form the whole of our law on extradition.
I shall describe some of these in a little more detail later on. However, perhaps I may begin by echoing an observation made by my right honourable friend the Home Secretary when he introduced the Bill in another place. Wide-ranging and important as this Bill is, it is only part of a larger strategy for tackling crime. If crime could be eradicated by legislation—or indeed by the criminal justice system alone—it would not be the intractable and worrying problem that it is. That is why the Government have placed the emphasis they have on crime prevention, on building up the strength of the police force, on the achievement of close co-operation with other countries, to take only three examples. Your Lordships will understand very well the point that I am making. I want neither to understate nor overstate the significance of this Bill. The strengthening of the legal framework which I believe it achieves is a crucial piece in the jigsaw, but it is by no means the whole picture.
Turning now to the content of the Bill, most of the first 20 clauses implement recommendations of the Fraud Trials Committee under the chairmanship of the noble and learned Lord, Lord Roskill, which reported early last year. I am glad to see that the noble and learned Lord intends to contribute to our debate

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today. His committee's report provided an excellent basis for action on serious fraud.
Perhaps I may deal first with investigation and prosecution. The Roskill Committee remarked on the wide variety of bodies charged with investigating and prosecuting fraud. The arrangements for co-ordinating large cases, through the fraud investigation group in the Director of Public Prosecutions Department, were working well; and I say in passing that the Government warmly agree with that assessment. However, there was a case for what the committee described as a unified organisation to deal with the largest and most complex cases.
The Bill provides for such an organisation. The Serious Fraud Office will combine investigation and prosecution under one roof. It will work closely with the police. Its director will act under the superintendence of the Attorney-General, and a director-designate—Mr. John Wood, at present Deputy Director of Public Prosecutions—has already been identified. The new office will have the powers it needs, based closely on those already exercised by the company inspectors of the Department of Trade and Industry.
The noble and learned Lord's committee also homed in on limitations in court procedures as a source of difficulties in bringing complex fraud cases to trial. The Bill responds in three ways, all of which were favoured by the committee. First, it creates a means by which the prosecution would be able to transfer serious and complex fraud cases straight to the Crown Court without the need for committal proceedings. But the accused would not be deprived of the opportunity to put the strength of the prosecution's case to an early test. He would be able to apply to a Crown Court judge for the charges to be dismissed on the ground that there was no case to answer.
Secondly, building on experience of pre-trial reviews, it establishes for such cases a preparatory stage of the trial, before a jury is sworn. The judge would be able to clear the ground, identify the real issues in dispute and thereby ease the task of the jury. Thirdly, it reforms the law on the admissibility of documentary evidence. These are complex provisions, but their guiding principles are ones with which I believe most lay people would sympathise.
These principles are that—with suitable safeguards which the Bill provides—the judges can be trusted to exercise a wider discretion than they have now to admit documents, and juries can be trusted, more than they are at present, to make up their own minds about how much weight to give to documentary evidence. The arguments arise most vividly in relation to fraud. In such cases, documents are often of the essence, and well-founded prosecutions sometimes cannot be brought because of the inflexibility of the law. However, the same principles apply more generally, and these provisions of the Bill therefore extend to all criminal proceedings.
There is one significant recommendation of the Roskill Committee which, as your Lordships will know, we decided not to adopt. All but one member of the committee were persuaded that complex fraud cases raised such impenetrable issues that it should
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sometimes be possible for them to be tried by a specially constituted tribunal instead of a jury. We gave this a lot of thought and have not dismissed it altogether. But it would be a major step to move away from jury trial for serious offences. The changes in the rules of evidence, the better presentation of the evidence which the Roskill Committee recommended and the new system of preparatory hearings should all help to make the task of the jury easier. We do not underestimate for a moment the difficulties facing the jury in massive international frauds but would prefer to see how these changes work out before contemplating more radical change.
The Bill also makes an important change in the arrangements for taking evidence from children. For a child who has been the victim of a violent or sexual offence or has witnessed such an offence appearing in court can be an even greater strain than it is for an adult. Courts are busy, formal places and the circumstances of the offence can be such that even to be in the same room as the offender is a considerable ordeal. We know that as a result charges are sometimes simply not brought. The Bill will allow evidence to be taken from child witnesses by means of a live television link. We have announced today that we shall shortly be publishing a discussion paper on the important practical implications of taking evidence in this way—such matters as whether counsel should be in the same room as the child and so on.
I know that there has also been support for a slightly different approach under which video recordings of interviews with child victims made soon after the event would also be admissible as evidence. This raises more complex issues which need careful consideration and are also gone into in the discussion paper which I have just mentioned.
One of the most pressing problems we face is the substantial increase in the number of cases coming to the Crown Court and the delays to which this gives rise. My noble and learned friend the Lord Chancellor has been able to expand the resources available and to bring about improvements in efficiency. But the problem remains.
Ten years after the Criminal Law Act 1977 which set the existing distribution of business between the Crown Court and the magistrates' courts we thought it was not too soon to consider whether there were changes which could sensibly be made. Although we decided not to revive the James Committee's proposal that minor cases of theft should be triable only by the magistrates, we identified several offences for which the maximum penalty could safely be reduced to be solely within the powers of the magistrates.
These proposals represent a principled attempt to look at the matter afresh. The offences which we propose to reclassify as summary only are by no means trivial but they very rarely attract sentences above those which the magistrates can impose, and that should be the deciding factor.
I come now to a proposal to which I know your Lordships' House will want to give very close attention. Clause 29 gives the Attorney-General power to refer cases to the Court of Appeal for the court to give its opinion on the principles to be followed in sentencing in similar cases in the future. In the

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overwhelming majority of cases dealt with in our courts the sentence passed is, I believe, fully in line with what the public expects. But from time to time an apparently over-lenient sentence can arouse genuine concern. I am not just talking about a fuss in the newspapers, although it is on the newspapers and broadcast media that most people rely for information on matters of this kind. Such concern, even if it is misconceived, can do great damage to public confidence in our system of justice.
Some authoritative figures, including several whose voices carry great authority in your Lordships' House, have said that they see the solution as lying in a procedure under which the prosecution would be able to appeal against any sentence which it regarded as unduly lenient and the Court of Appeal would be able to substitute a more severe sentence. That course will no doubt be argued powerfully, and the Government will want to listen attentively to the arguments. We hesitate to adopt it for two reasons.
The first is that it is strongly ingrained in our system of justice that the prosecution has no direct interest in sentencing. The proposal, which was defeated in your Lordships' House during the passage of the Prosecution of Offences Bill in 1985, was criticised on the ground that it breached that principle. In the Government's view, the criticism was misconceived. But there is no doubt that it would be well made in relation to a full prosecution right of appeal or any other scheme in which the offender was at risk of a more severe sentence.
The second reason is more pragmatic but in its way no less powerful. The Crown Prosecution Service has made great strides in the short time since its establishment. But these are still very early days and the operation of a systematic right of appeal against sentence would, we felt, be an unfamiliar and controversial burden to impose on the service at a difficult time.
Clause 29 therefore contains a different proposal which differs also from the proposal debated in 1985. The main differences are that the procedure would be confined to sentences which in the view of the Attorney-General raised questions of public importance; would require the leave of the Court of Appeal before a reference could be made; and would be forward-looking in the sense that the court would be giving guidance for the future rather than raking over the embers of the past. The virtue of a procedure on these lines is that the prosecution would not be unacceptably involved in sentencing but there would be a means by which the issues raised by a particular case would be brought to the court's attention in the context of that case.
The proposals in the Bill for the confiscation of the proceeds of crime build on the measures in the Drug Trafficking Offences Act 1986. Drug trafficking is perhaps a uniquely heartless and destructive offence. We recognised that in moving on to cover other profitable offences we might not want to follow the scheme in the 1986 Act exactly; nor have we done so.
Under Part V of the Bill, the courts would be able, but not obliged, to make a confiscation order where the profits appeared to exceed £10,000. The power would be confined to offences actually before the
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court, so there would be no presumption, as there was in the 1986 Act, that all of the offender's assets were the proceeds of crime. Nevertheless, the teeth of the confiscation process would be as sharp as ever. The offender's assets could be frozen before trial and steps taken under the authority of the High Court for the realisation of his property to meet the confiscation order. There is also provision for making such orders effective in other countries which have joined with us in reciprocal agreements. These are extensive powers but they meet a feeling on the part of the public which I believe runs very deep that those who engage in highly profitable crimes should not be able to serve their sentences and then live comfortably on the proceeds.
I mentioned the provision in the Bill which will enable child victims of sexual abuse and violent crime to give evidence through a live television link. It is one of a number of steps we are taking in the Bill to improve the position of the victims of crime. The victim tends to be the forgotten man or woman of the criminal justice system whose interests are too often overlooked. We are trying in a variety of ways to correct the balance.
First, the Bill makes several important changes to encourage the court to make greater use of compensation orders, including a new requirement to give reasons where it has power to make an order but decides not to do so. Secondly, Part VI of the Bill puts the criminal injuries compensation scheme on a statutory footing. The scheme has existed on a non-statutory basis since 1964. It is a well-established and valuable means of meeting society's responsibilities towards the victims of violent crime. But it is right that its future form and existence should be put beyond doubt and that the expectation of victims that they will be compensated for their injuries should be entrenched in statute.
Finally on victims, Clause 125 contains a small but important change in the arrangements for preserving the anonymity of rape victims. The dreadful rape at the Ealing vicarage brought home to many of us the harm and distress that can be caused to an innocent victim by irresponsible press coverage of such cases. The law already prohibits the publication, after someone has been charged with the offence, of any matter likely to lead to the identification of the woman. What Clause 125 does is to extend the protection back to the point at which a complaint of rape has been made by prohibiting the publication of the woman's name, address or likeness.
I come now to the proposal in Clause 89, to abolish the right of the defence to remove jurors without giving cause. We seek the abolition of peremptory challenge because, whatever its justification in the past, it now seems wrong in principle that the defence should be able to remove jurors without giving reasons. Furthermore not only is it offensive to the juror who has given up time to perform a public duty which most people still rightly take extremely seriously, but also in cases with large numbers of defendants it has the potential (and I stress the word "potential") to distort the composition of the jury in a way which could be harmful to the interests of justice.
I should mention one closely related matter. My right honourable friend the Home Secretary has

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acknowledged that the abolition of peremptory challenge would have implications for the procedure under which the prosecution can stand jurors by for the Crown. This is used more rarely and for different purposes, but it seems right that if peremptory challenge is to be abolished its future use should be confined to strictly limited categories of cases. My right honourable friend the Attorney-General has drawn up draft guidelines which would have that effect.
I should also like to mention one significant and much less controversial change which the Bill will make. Clause 90 increases the maximum age for jury service from 65 to 70. Service would be optional for those in that age range and they would be excusable as of right. But I know that many of our senior citizens would welcome the chance to serve the community in this way. They have a great deal to contribute.
Clause 94 of the Bill is particularly welcome to me as the Minister responsible for prisons. It allows greater flexibility in the accommodation of young offenders and should make a significant contribution to easing overcrowding by enabling fuller use to be made of the detention centres.
Part IX reforms and re-enacts the law on extradition. Big-time criminals are becoming more and more internationally mobile. The need to pursue them and bring them to justice is something on which we and our international partners can readily find common cause.
Our aim has been to provide procedures which are flexible and effective while retaining crucial safeguards for the fugitive against arbitrary or oppressive treatment. I shall not detain the House with the details of Part IX, save to mention one important point. Clause 101 makes it possible selectively to dispense with the requirement that states seeking the extradition of fugitives from this country should demonstrate a prima facie case. This is at present a great impediment to extradition to countries, including our closest European partners, in whose systems we have complete confidence but whose law does not recognise the concept of the prima facie case. We have made it clear that we shall use this provision highly selectively and after an opportunity for parliamentary debate in each case. Finally I should mention Clause 122, which makes it possible for remands in custody after the first remand to be for a period longer than the present eight days up to a maximum of 28 days. We consulted widely about the idea of a longer remand period. Many of those whom we consulted expressed fears that it might lead to longer periods awaiting trial and therefore a higher remand population. We take these doubts very seriously and would not wish to go ahead if we felt there was a real risk of the proposal back-firing in that way. Nevertheless there remains a powerful argument for change. Routine remand hearings tie up prison staff and therefore indirectly affect the regimes within prisons. Our intention is therefore to mount some experiments under Clause 122 to test the idea. I hope this cautious approach will commend itself to your Lordships.
I have inevitably dealt somewhat selectively with what is a wide-ranging Bill. But I hope I have given
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sufficient of the flavour of what we propose for the purposes of our debate today. The present Bill is the culmination of a series of measures which this Government have brought forward to rationalise the powers of the police and the courts and the arrangements for the prosecution of offences. As with its predecessors, it aims to strike a balance between the essential safeguards for the interests of those accused of crime and the proper enforcement of the law. Our debates will, I suspect, not be untouched by controversy. But I hope that there will be general agreement that over the broad range that I have described the changes which the Bill makes are timely, sensible and well balanced. I beg to move.
Moved, That the Bill be now read a second time.—(The Earl of Caithness.)
Lord Elwyn-Jones: My Lords, Mr. Gladstone in introducing one of his Budgets said that he would not call it a labour of Hercules because Hercules could not have done it. The same might be said of the task of the Minister in moving the Second Reading of this Bill of 134 pages and 136 clauses. Whether the Criminal Justice Bill is intended by the Government as a swan song or an epitaph I know not. Clearly the 20 speakers taking part in this debate—and we look forward particularly to the maiden speech of my noble friend Lord Irvine of Lairg—cannot cover each and every clause of the Bill, although the Minister has made a gallant attempt to cover a good deal of it. If there is to be a Committee stage—and I gather from the assumptions of his speech that there is to be one—it will be long and detailed and there will be an abundance of amendments that noble Lords will wish to put forward in dealing with this important matter.
While we on this side of the House welcome several of the provisions of the Bill, some of which the Minister has identified and stressed in his speech, in my submission it fails to address in any fundamental way the two major problems now facing us on the criminal justice scene. The first is the rising crime rate and the second is the dangerously high and rising prison population. The Bill attempts to deal with the increasing challenge of crime by a mixed bag of piecemeal and unrelated proposals. Some of the most vital matters in the Bill, and especially those affecting our civil liberties, such as the proposed amendments relating to juries and extradition, are squeezed in at the end of the many complex sections of the Bill. We must ensure that if the time comes to consider them they are not considered hastily or because of the pressure of political events which may or may not be pending.
One such provision in the Bill is contained in Clause 89 which abolishes the defence right of peremptory challenge about which the Minister has spoken. It has been sought to justify the change on the alleged ground that defendants have used challenges to obtain acquittals from so-called soft juries. In fact investigation into the matter by the Crown Prosecution Service has revealed a higher rate of convictions in trials in which challenges were made than in those in which the defendants made no challenge. It is a curious statistical fact and it may be no more important than that. But it defeats the basic approach which has been put forward by the Government in the matter.

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The right to challenge for cause is not an adequate substitute for abolishing peremptory challenges altogether, as has been proposed. It could open the door to a series of embarrassing and even unsavoury challenges to which potential jurors would be subjected.
The traditional case for peremptory challenge was stated by the Government in the White Paper issued on the matter. It pointed out that the right of peremptory challenge, which is incidentally older than trial by jury or even the Magna Charta and which has long been a marked feature of our criminal proceedings, is to enable the defendant to have confidence in the jury even when he is unable to assign any specific reasons for objection. In my submission that view is still valid.
Coming back to the major matters to which I referred a few moments ago, the challenge of crime has not yet been defeated by any means. The facts to the contrary are grim and I fear that they speak for themselves. The number of offences recorded by the police in England and Wales rose from 2 million in the mid-1970s to over 3½ million in 1985. There were 3,794,000 offences recorded by the police between October 1985 and September 1986. That was an increase of 6 per cent. on the previous year. Those statistics do not include figures for the considerable amount of unreported and unrecorded crime. In spite of the best and most dedicated efforts of the police, they cannot cope with crime of those dimensions.
Detection and conviction rates have decreased substantially and yet the greater probability of arrest and conviction is surely the most likely way to deter the criminal. However, the facts are that in 1985 nearly two out of every three criminals got away with their crimes; five out of seven burglars escaped with their loot.
I well remember the harsh reproach made by the noble Viscount, Lord Whitelaw, against the Labour Government about 10 years ago. I have mentioned this in his presence on a previous occasion. The situation then was far less serious than the situation we face today. The noble Viscount said:
"A government that cannot protect its own citizens from attack in the streets of its towns and cities; that cannot protect property from damage or homes from intrusion, has failed to face up to the basic duties of government".
What is happening now in the streets of our towns and cities is unhappily far, far worse than when those words were gravely spoken.
The Bill, and if I may say so government policy in general, offer no answers to this problem. As Sir Kenneth Newman the Commissioner of the Metropolitan Police said:
"The volume of reported crime is an indicator of the health of society generally".
Perhaps "ill health" would have been a more appropriate description. Report after report of commissions such as that of the Archbishop of Canterbury and the Commission for Racial Equality have shown that crime on its present scale has its roots in the nature of our society. The problems of crime are inevitably worse in the heart and centre of several of our great cities. Nothing like enough has been done to attack the conditions that breed despair, violence and
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in the end crime; namely, slums, poverty, racial discrimination and disease. Unemployment has clearly been a contributory factor, although it is only with reluctance that the Home Office has conceded that fact.
Surveys by the Association of Chief Officers of Probation have found that a person on a probation officer's caseload is between three and five times more likely to be out of work than a non-offender from the same area. The price we pay for millions and millions of unemployed is not measurable only in economic terms.
The way our penal system has dealt with this situation has been to confine more and more offenders to prison. Relative to our population, the United Kingdom has more people in prison than any other EC country, with the possible exception of Turkey. Our readiness to gaol offenders, as NACRO has shown, has increased over the past decade. I hope I was right about Turkey. I hear some questions.
Lord Mishcon: Turkey is not an EC country.
Lord Elwyn-Jones: I beg your Lordships' pardon. It is not in the EC, but it is a country which has more people in prison. However, with that one exception, and I shall refresh what I am pleased to call my memory about it in due course, our record is the most serious in that respect.
In dealing with this aspect I have in mind not only the serious prison disturbances and the considerable damage that has occurred in our prisons, but the intolerable overcrowding within so many of them. As we have reiterated several times in this House, that has reached not only scandalous but dangerous proportions. The report of Her Majesty's Chief Inspector of Prisons in 1985, published in February of this year, showed that the prison population reached its highest ever levels in 1985. The report states:
"In many cases it was more a question of getting through the day than operating a regime".
The average population in prison establishments in the United Kingdom in 1985 was 53,300. The Government statistical office has projected the total prison population in England and Wales to be between 52,800 and 58,900 in 1994. Yet fewer than one in five of our prisoners has committed a serious crime involving violence, sex or robbery. However, the Bill offers no alleviation to this situation and contains no significant proposals to reduce the number of prisoners. If the appalling conditions in many of our prisons had produced evidence of its influence for good on the conduct of prisoners after leaving prison that at least could be put in their favour. But that is not so. Sixty per cent. of male offenders and 38 per cent. of female offenders leaving penal establishments are back before the courts within two years. Re-offending rates are higher for young offenders, two thirds of whom are reconvicted within two years of release.
As the Home Secretary has said:
"The general idea that a period of incarceration in overcrowded conditions will create a better man is not credible".
Why then have the Government allowed the position to deteriorate year after year as the number of crimes has increased? Several provisions in this Bill instead of increasing alternatives to prison may well result in

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increasing the use of custody. I shall mention only one or two such provisions.
Clause 93 in Schedule 8 of the Bill for example, makes custodial sentences available for breach of specified activities in supervision orders for behaviour which is not in itself criminal. Retrograde also is an amendment to another Act in Clause 122 to permit an experiment to be made—and the noble Earl has referred to it—in certain areas with a new arrangement to replace the present eight-day limit on the length of remands in custody. Under the new arrangements magistrates will be able to remand defendants in custody for 28 days unless they consider that it will be possible to make progress with the case after a shorter remand period. Yet remand hearings are frequently the only time when defendants can see their lawyers. No steps have been taken in the Bill to reduce the considerable number of those remanded in custody, which has gravely aggravated the overcrowding. If the Minister can tell us why we shall be grateful.
Another provision in the Bill which could well increase the prison population is that contained in Clause 30 to substitute life imprisonment for 14 years in the Firearms Act as the maximum penalty for carrying firearms with criminal intent. This may not only add to overcrowding but would have a further serious defect. To provide the same maximum penalty for carrying firearms and for actually using and firing them would disregard proportionality as between one offence and another. The Police Federation—and after all the police are liable to be in the front line in this situation—has expressed concern over this proposal, as it may reduce any incentive in the armed criminal to refrain from using his gun and firing it at the police as a means of escape. It would expose the police to fresh dangers.
In regard to this same need to look to the possibilities of reducing the number of those in prison, why does the Bill make no attempt to reduce the number of fine defaulters who are sent to prison? In 1985, 20,491 fine defaulters were sent to prison. Surely that could be dealt with without exposing our society to the serious risk of increasing crime. Indeed, is there not much to be said in this field—and it has been said by one organisation, I think the probation office but I cannot remember—for making it impossible for a court to commit an offender to prison when the original offence itself is non-imprisonable unless the defendant has wilfully refused to pay? Should not our procedure require the court to consider every other form of enforcement before a defaulter is imprisoned and to review the circumstances of the prisoner as imprisonment continues?
There are other measures which could result in the reduction of the prison population. Perhaps one limiting proposal would be to deal with the fact that there are now 339 inmates in prison in England and Wales with a disorder which in the opinion of the medical officer would make it appropriate for them to be detained not in prison but in hospital under the terms of the Mental Health Act.
We welcome the provision in Clause 33, which I believe was devised by the parliamentary all-party Penal Affairs Group, that tightens up the criteria that
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must be satisfied before a custodial sentence can be passed on an offender aged under 21. Should not consideration be given to extending those criteria to adult offenders? One reason for our large prison population is the length of many prison sentences. In our perilous situation should not a supervised release scheme be introduced for short-term prisoners of the kind that was floated by the Home Office in May 1981 but abandoned later that year? Under that proposal, which I understand would reduce the number of prisoners by 4,000 or 5,000, prisoners would serve a shorter period in prison followed by a period of supervision in the community similar to parole supervision, with the threat of recall to prison if they misbehave—an effective sword of Damocles over the offender's head.
There are many other aspects of the Bill to which it would be of great interest to refer, but I see that there are some most notable and distinguished speakers who are to follow, several of whom are far more qualified than I to speak on these matters. As regards the fraud provisions in the Bill, I am glad to see that the noble and learned Lord, Lord Roskill, is on the roster of speakers and that my noble friend Lord Mishcon has kindly, at my suggestion, agreed to comment on that matter.
Clause 29 will inevitably be a subject of discussion. It will enable the Attorney-General, when he considers that a sentence passed by the court raises a question of public importance, to refer the case to the Court of Appeal for that court to give its opinion on the principles to be observed in sentencing similar cases in the future. It is clearly directed against sentencing which is thought to be too lenient. I have a slight unease about that. Does it not constitute a reversal of our long-established and long-respected tradition that the prosecution, the Crown, takes no position on the sentence that a prisoner should receive? That should be, and is, the responsibility of the judge. Clause 29 throws the Attorney-General right into the sentencing arena.
The fact is that happily the noble and learned Lord the Lord Chief Justice—and it is good to see him here and to know that he is to speak—has not been reluctant to state what principles should apply. He has done so with distinction and authority on many occasions. On this side of the House our preference is for the proposal contained in the White Paper, Criminal Justice—Plans for Legislation, that the Judicial Studies Board should be given a statutory duty to assemble and publish for the benefit of judges, magistrates and the public, the Court of Appeal's guidelines in a single, regularly updated and effective document. I submit that that would be a useful corrective to excessive reliance on imprisonment.
We look forward to hearing the views of noble and learned Lords and other noble Lords on this highly important Bill. I only pray that I may be a little too pessimistic about its possible outcome and that before very long we may be able to tackle those two major matters of concern to our community—too many crimes and too many prisoners.
5.46 p.m.
Lord Harris of Greenwich: My Lords, I join the noble and learned Lord and the noble Earl in express-

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ing our pleasure that the noble Lord, Lord Irvine, is to make his maiden speech today. We all very much look forward to hearing him.
I think it is true that all opposition parties describe all criminal justice Bills as ragbags. They did so when Mr. Chuter Ede introduced his Criminal Justice Bill in 1947 and as far as I know it has been said about every other criminal justice Bill since then. It has been said about the present Bill. Of course all opposition parties have been broadly right for these measures are in reality criminal justice (miscellaneous provisions) Bills. Although the Home Office does its best to suggest that one or two overriding principles run through each of these Bills, that is rarely the case.
How then should they be judged? The most obvious and sensible test is to examine the central issues of criminal justice policy which cause most public anxiety and also concern the professional and other bodies that work in the system and to see how the current Bill deals with those problems. Let me say at once that the present Bill passes that test on a number of matters. There has been, and remains, serious public concern about the manner in which the victims of crime are treated. It is right, therefore, to express an unqualified welcome to the Government's decision to put the criminal injuries compensation scheme on a statutory basis. Next, the Government are right to move with dispatch to implement one of the most important recommendations of the report of the committee presided over by the noble and learned Lord, Lord Roskill, whom we very much look forward to hearing.
Recent developments in the City and elsewhere have confirmed the judgment of the noble and learned Lord and his colleagues that we require drastically to improve our arrangements for dealing with serious fraud. Therefore, it is right to give an unqualified welcome to the decision to establish a serious fraud office. However, I hope that that office will receive adequate resources. The Crown Prosecution Service—to refer to another new service—was announced with a great rolling of drums and most of us viewed it as a considerable improvement on the situation that preceded it. However, substantial criticisms were made that it was under-resourced. The crucial aspect is that when the Treasury agrees to the establishment of the new services or offices it should agree to give them adequate resources.
I could list a number of other matters, such as the use of video links in child abuse cases, on which we find ourselves in full agreement with the Government. But on a number of other matters, including the important question referred to by the noble and learned Lord, Lord Elwyn-Jones, the proposed amendment to the law relating to peremptory challenge, with which my noble friend Lord Hutchinson of Lullington will deal, on which we are unpersuaded that the Government's decisions are correct.
It is the omissions from the Bill, as much as its content, that cause us most serious concern, because, returning to the criteria that I set out a few moments ago, I should have thought that there would be little doubt about the most serious problems facing our criminal justice system at the moment. What is
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striking about the Bill is that so many of them have been ignored. First, there is deep anxiety about the increasing level of serious crime in this country and about the inadequate resources available to deal with it, especially in some of our most deprived inner-city areas.
I do not propose to become involved in the increasingly childish sport which is popular down the corridor but fortunately is less so in this House in which it is suggested either that the Government are directly and wholly responsible for the alarming increase in crime since 1979 or, alternatively, that the Labour Party consists exclusively of an army of wild-eyed extremists anxious to promote lawlessness in our streets. That type of virulent nonsense indulged in by some of the sillier enthusiasts for the politics of confrontation only damages still further the regard the public has for some of its political leaders.
On a number of occasions we on these Benches have attacked those members of the Labour Party in London and elsewhere who, through their network of publicly financed, so-called police monitoring groups, have with vigour and malice done so much to poison relationships between the police and the community. Fortunately the electorate is now beginning to respond to those excesses in a fairly emphatic manner. Similarly, we have on some occasions criticised the Government. We have drawn attention to a relationship, as the noble and learned Lord did a few moments ago, between high youth unemployment and crime, and on the basis of research evidence to some relationship between unemployment and drug abuse.
It is foolish to suggest that we can experience levels of 70 per cent. or 80 per cent. youth unemployment in some inner-city areas and be surprised if some of those youths turn to crime. It is as foolish to argue that increased crime is caused solely by unemployment as it is to suggest that there is no relationship whatever. One has only to look at the criminal statistics in years of relative economic prosperity to recognise that no such simplistic interpretation is justified.
That brings me to the first significant omission from the Bill. One of the most serious developments during the Government's period of office has been the growth of trafficking in heroin and cocaine. It has created and is creating deep anxiety among parents in both affluent and deprived areas of this country, as I think we all well know. It is a great pity that on one matter the Government have remained wholly inflexible. The noble Earl referred to the Drug Trafficking Offences Act.
As he will recall, when that Bill was going through this House, the noble and learned Lord, Lord Denning, and some of us on these Benches did our best to persuade the Government that in one important respect the Bill was flawed. We pointed out that all American experience had demonstrated—the Government of course rightly drew on American advice for their Bill—that it was essential to make it far more difficult for the sophisticated criminal, responsible for organising the industry, to pay large cash sums over the bank counter and thus into the banking system. That is why the Bank Secrecy Act in the United States is aimed at the laundering of money. It requires all cash deposits of 10,000 dollars or more to be reported to the federal authorities.

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The Federal Bureau of Investigation and the Drug Enforcement Administration have told me that without such a provision they believe that their campaign against the illicit drug industry would be gravely imperilled. The United States Attorney-General has said the same in testimony to Congress. I hope that the Government are prepared to look at this matter again. I am well aware that the banks here are opposed to such a provision in our law, but so of course were the American banks. However, after the evidence given by the Assistant Commissioner (Crime) of Scotland Yard to the Select Committee of another place, I hope that the Government will agree to re-examine the position, because I believe that without such a provision the battle against the importers of heroin and cocaine will be seriously weakened.
I turn from one matter of serious public concern to another—the crisis in our prisons. My noble friends and I should like to express our great pleasure at the major advances that have been made in recent weeks to implement the proposals in the Home Office document Fresh Start. For years, prisons have been plagued by poor industrial relations. A great deal of that has been caused by the excessive level of overtime worked in a number of establishments. We welcome the decision of the POA executive to recommend its members to vote in favour of those proposals. At the same time, it is right to congratulate the department on the highly competent and professional manner in which the work on those proposals was carried through.
I turn now to conditions in the prisons. I must say, as the noble and learned Lord did a few moments ago, that at a time when prison numbers are cruising effortlessly towards 50,000, it seems odd that one of the Government's few significant ideas for dealing with the crisis is to introduce proposals which may increase the size of the prison population. First, why on earth have the Government returned to the idea, twice rejected by the House, of giving the Attorney-General the right to refer cases to the Court of Appeal when he believes the sentence to have been unduly lenient? I believe that that proposal is undesirable in principle and would be ineffective in practice. We shall return to our opposition to the issues of principle. They scarcely require repeating today, because on the last two occasions the argument on principle was decisively against the Government. I realise that the proposal today is rather different, but nevertheless it has the same basic approach.
We should recognise why we are debating the issue today. It is because in a number of cases in recent years a claque of publicity-hungry Members of another place, together with the editors of a number of tabloid newspapers, have chosen to mount a series of assaults on members of the judiciary who have, in their excited and often ignorant view, imposed lenient sentences.
How often have we seen the headline, "Angry MPs demand that judge should go"? I do not know whether the MPs concerned are all that angry, because, as in a number of cases I think their principal interest is self-publicity, I should have thought that following those orgies of tabloid newspaper headlines, they wear not a scowl on their features but a self-satisfied smirk.
The noble and learned Lord the Lord Chancellor complained in strong language about just such
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conduct only a few days ago when he was addressing an audience of solicitors in London. I very much agree with everything that he said. What I have said is very similar to his general approach. But that is surely the right way to deal with this problem: on the public platform and not by a provision of this kind in this Bill. Quite apart from anything else, why does anyone believe that the critics of the judges will be mollified by this proposal? I am firmly opposed to the suggestion that the Court of Criminal Appeal should have the power to increase sentences. But at least I understand the logic of that approach. To give a right of appeal for the courts to lay down only new guidelines which they can do now in any event seems to me entirely pointless. We shall vote against this proposal.
Next, we are entirely opposed to the suggestion that it is desirable to increase the penalty for carrying firearms from 14 years to life. Can it seriously be suggested by anybody that 14 years is a trivial sentence? As the noble and learned Lord, Lord Elwyn-Jones, asked a few moments ago, how can it be right to make no differentiation whatever between the maximum penalties available for carrying firearms and for using them?
We on these Benches supported the proposal to increase to life imprisonment the sentence which could be given to those involved in organising the trafficking in cocaine and heroin, for in many cases the consequences of such behaviour can lead to the death not of a single individual but of many. But we are opposed to increasing still further the number of offences which can attract a sentence of life imprisonment. All that we succeed in doing, if we constantly move in this direction, is to lessen the gravity of the offence of murder.
If, as it is so often argued, criminals involved in serious crime calmly weigh up and calculate the possible length of sentence when considering how they are going to conduct themselves in some criminal enterprise, there is a clear risk that for some it would reduce any incentive to refrain from using firearms as a means of escape. We are opposed to Clause 30 and we shall vote against it.
Finally, I wish to give notice to the Minister of a number of matters on which we shall wish to propose amendments at either Committee or Report stages of the Bill. First, we intend to put down amendments dealing with the issue of Crown privilege for prisons. We share the view of the Home Affairs Select Committee of the House of Commons that it is time to phase it out. We regard it as desirable to follow the example of National Health Service hospitals, where of course the Government at first strongly resisted similar proposals before ultimately conceding the issue after strong and sustained parliamentary pressure.
The abolition of Crown privilege would not end overnight the squalor in our prisons, but we believe that phasing it out, imposing precise time limits for meeting acceptable standards and introducing the policy in the near future for, let us say, all post-second world war prisons, with the rest coming rather later, would have a dramatic effect in speeding up improvements.
Next, we intend to put down amendments relating to the scandal—and scandal it is—of the misuse of

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police cells. We have discussed this in this House on a number of occasions, most recently during the debate initiated by my noble friend Lord Donaldson of Kingsbridge. Let me give three illustrations of what is happening at the moment. This is a letter from a father regarding his 23 year-old son awaiting trial on a charge of theft. He sounds a reasonable man; he pays tribute to the police, the prison service and the Home Office officials with whom he dealt.
He said that this young man was moved from Wormwood Scrubs to an underground cell of the magistrates court at Camberwell Green because of overcrowding. There was no fresh air or daylight and no provision for any exercise. The cell was about six feet by six feet and furnished with a bunk somewhat shorter than he is. After three days in that cell in that magistrates' court building he found that it was far more than he could cope with. He did not know where he was or the time of day. As far as he was concerned he was in a box with a five inch by four inch slit in it.
The father said, and I quote him:
"I contacted the Home Office to find out how long our son would be kept in those conditions. I was informed that had I not complained he could have stayed there for up to three months. I suggested that the Home Office had no right to keep men in such conditions and that my son ought to at least be given the same rights as those afforded to a dumb animal".
He added this:
"I don't understand how any society can tolerate this neglect of human rights"—
and so say many of us in many quarters of this House.
I now turn to the testimony of a justice of the peace who was a member of the board of visitors at Holloway Prison. In her court, South Western at Battersea, the police have to hold 12 women in six cells leading off a small corridor. There was not even a single shower. Daylight came through a high window of opaque glass in each cell. In other cell areas there was, she says, no daylight at all. Here, she says, a woman can live in conditions of sensory deprivation from the outside world for several weeks.
Finally I give an example of another woman prisoner. She says that she and her cellmate had to sleep on the floor. On the first night the other woman threw a fit and tried to slash her wrists with the top off a Coke can. Another woman, suffering from cystitis, had to urinate on the floor because the overwhelmed police officers could not get her out of her cell in time.
Such a situation in this country is wholly outrageous. None of these people has been convicted of any offence, yet they are being treated like battery hens. Many of them will not be convicted; and even many of those who are convicted will not be sentenced to periods of imprisonment. My colleagues and I will be introducing amendments at a later stage of the Bill to deal with this offence against human decency. I hope that we shall not be told once again that it is all the fault of the Government's predecessors and that the prison building programme should have been started earlier.
I have said on a number of occasions, as the noble Earl will be aware, that I support the Government's building programme. But that programme, though desirable, is having little effect on the remand
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population which is rising at a frightening rate. Many of the new prisons which are being built, are being built—for reasons that we all understand—in tranquil, rural England, far away from the major urban centres where most of the remand prison problem arises. The Government are using what is in fact a second prison system administered by the police who want no part in this whatever, as the noble Earl will be aware, and without even the protection of a supervising board of visitors, which at least one has in every prison department establishment. They are doing this at a time when the statisticians warn that at the present rate we could have another 10,000 prisoners in prison department establishments by the middle of the next decade.
A few moments ago the noble and learned Lord, Lord Elwyn-Jones, said that the Bill before us today may not complete its passage through the House before the general election. That in the view of some of us at least may not be too much of a tragedy, for in the dying weeks or months of a Parliament it is inevitable that Ministers find it hard to make some of the concessions on some of the important issues we shall be debating. It is only fair to say that that would have been true of many past governments as well. What makes it even more difficult now is the extravagant language which has become the currency in debates on criminal justice issues.
I think that it is right to express firm views on matters of the sort that we are debating within this Bill. But there is at the same time an overwhelming case for attempting in this House to create a climate of co-operation when we are debating these issues. I think our fellow citizens, some of whom have been the victims of crime and others who are now nervous even of opening their front doors at night, are not impressed by bitter denunciation and counter-denunciation. They expect their Parliament to understand their concerns and do its best to meet them. That, I believe, is what this House will want to do and we shall do our best on these Benches to play our part in that debate.
6.11 p.m.
Lord Roskill: My Lords, perhaps I may first join with those of your Lordships who have already spoken in expressing keen anticipation of the maiden speech of the noble Lord, Lord Irvine of Lairg. Unlike those of your Lordships who have already spoken, I claim the privilege of having listened to the noble Lord on a number of occasions, not, let me hasten to add, in this House or in another place, because that would be wrong, but elsewhere. On some occasions, I have been persuaded that he is right and on some occasions—I am sure the fault was mine—I have not been so persuaded. But win, lose or draw, the noble Lord's arguments have always been most beautifully presented and I am sure he will be a great asset to this House.
The second matter is to proffer a humble apology to your Lordships if I do not stay to the end of the debate, owing to a longstanding commitment. I offer particular apologies to the noble Earl the Minister that I may not hear his reply and to the noble Lord, Lord Mishcon, if it is he who will deal with the instance of fraud upon which I shall concentrate in the next few minutes.

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When in February 1986 the report of the Fraud Trials Committee—I am not sure whether in deference to the noble and learned Lord, Lord Elwyn-Jones, I should call it my swan song or my epitaph—was debated before your Lordships' House, many noble Lords, in agreement with the unanimous view of the committee, stressed the urgency of securing reform of the criminal law in order to deal with the appalling growth of commercial fraud which for some time past had disfigured and disgraced, and is still disfiguring and disgracing, the City of London. In the course of that debate I ventured to say that I did not doubt that some of our committee's proposals were capable of improvement. It is therefore a source of great satisfaction to those of us who laboured long and hard on that committee to see not only the adoption but also the improvement of the majority of our recommendations.
We were of course, limited by our terms of reference to considering only serious commercial fraud cases. But we pointed out that with many of our recommendations, such as the long overdue reform of the rules of evidence in criminal cases, there was no logical reason whatever why our suggested reforms should not be applied through the length and breadth of all criminal trials. I am sure all my colleagues on the committee join me in saying how delighted we are to see that that is now being done.
Nothing, absolutely nothing, that has happened in the City of London since our report was published in January last year has made the reform of the criminal law in relation to serious fraud cases one whit less urgent. If possible, it has become even more urgent. Whatever its fate may be—and I must not for one moment enter into politics—I trust that the early part of this Bill will pass on to the statute book as soon as possible.
It is an unhappy fact that most reports commissioned by governments, whatever their political complexions, gather dust until they moulder and are completely forgotten. I therefore congratulate the Government on the speed with which they have acted on our recommendations. I hope that the Bill, now it has passed through all its stages in another place, may soon find its proper home on the statute book. I confess—and I had better say this now, lest silence suggest otherwise—that I regret, and I am not the only person who regrets, that the Government have not gone further and grasped the nettle regarding jury trials in serious fraud cases. Had they seen, as we saw on the committee, the unbelievable complexity of some commercial frauds which have not even been prosecuted because of that complexity and the difficulties of ordinary people understanding them, they might have been less critical of the proposal.
There is one subsection of the Bill—subsection (8) of Clause 2—the provisions of which I simply do not understand. I do not think it is my fault. The subsection proposes that statements made by persons under investigation by the new Serious Fraud Office, the creation of which we all warmly welcome, should not be admissible in evidence against them, except where, in the case of prosecutions, there is failure to answer questions. I venture to ask the noble Earl the Minister why on earth this should be so. A matter
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which, as he pointed out in opening the debate, greatly troubled the committee, was the fragmentation of the investigation and prosecution processes. One department had one lot of powers; another had another lot of powers. Sometimes my colleagues and I thought they were rather like children saying, "I want my toy, you're not to have it". We hoped that ultimately the same powers would be accorded to whoever was making the investigations in question.
If Clause 2(8) stands as it is, there will be grave inconsistencies between the status of answers given to officials of the Serious Fraud Office and answers given to inspectors such as those at present operating under Sections 434 and 447 of the Companies Act where answers are expressly made admissible in evidence against their makers (that has been so in company law for as long as I can remember) and also, even more important, answers given in investigations under Sections 105 and 177 of the Financial Services Act 1986 where precisely the same position obtains.
Your Lordships will recall that Section 177 deals with the all-too-topical subject of insider dealing. Noble Lords blessed the granting of those powers of investigation and the consequences of the exercise of those powers when that Bill passed into law. It became an Act less than two years ago. I suggest to your Lordships most urgently that Clause 2(8) of the present Bill should be altered lest there be inconsistency between answers given as a result of investigations by the Serious Fraud Office and those other investigations to which I have just referred. The inconsistency seems to me at least to be wholly indefensible and to cut right across the philosophy upon which the creation of the Serious Fraud Office was built.
I do not propose to spend more time on the fraud sections of the Bill. There is much detail which could be discussed and there are, of course, other aspects; the rules of evidence, jury challenge and other matters which have been touched upon. These will be discussed by others and I do not want to delay the House.
I should like to leave the subject of fraud and pass to another topic altogether, although I believe my noble and learned friends the Lord Chief Justice and the Lord Advocate propose to deal with it, more fully no doubt than I shall be able to do in a few minutes.
Clause 29 of the Bill has already been mentioned. I was one of those, as, I think, were all the other Law Lords, who joined forces with the noble Lord, Lord Hutchinson of Lullington, when he put forward an amendment and defeated the Government when this clause last appeared. I see no reason to change the view which then appealed to the majority of your Lordships.
Clause 29 is not the right way of dealing with the problem of sentences which are said to be inadequate. The right way is different from that suggested by my noble and learned friend Lord Elwyn-Jones and by the noble Lord, Lord Harris of Greenwich. I suggest the right way is to go back and to give the Court of Appeal the power to review all sentences, whether upwards or downwards, whenever there is an appeal to that court, and where there is not an appeal, to give the Attorney-General power—not because he is in charge of the prosecution process but because he has a much wider

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duty as Attorney-General (as no one knows better than my noble and learned friend Lord Elwyn-Jones who held that office for so long)—subject to the leave of the Court of Appeal, to refer specific sentences in specific cases so that if those sentences are wrong they can be put right.
I urge this not in any way to stop criticism, whether fair or unfair, of judges. Judges are no more immune from criticism than anybody else. Such criticism is an occupational hazard of modern judicial life, however unpleasant it may be to endure it, and that criticism may be wholly unjustified. My object is a simple one: it is to secure the right sentence in the right case in the right way from the right court which is the Criminal Division of the Court of Appeal.
Another omission in the Bill—though I thought from something I read in the press some time ago that such an omission would not occur—is the failure yet again to give the Court of Appeal power to order a new trial in cases other than those where there is fresh evidence. This power exists in most other Commonwealth countries and, although your Lordships may not know this, it exists in Scotland. Unhappily, there are cases where the evidence against a defendant is extremely strong but where judges do make mistakes. We have all made mistakes, sometimes bad mistakes in our time. With something like 1,500 people trying cases in the Crown Courts up and down the country, it is quite impossible that mistakes will not happen from time to time. Why should a defendant, against whom there really is strong evidence and who was plainly rightly convicted, escape simply because the judge has made a mistake?
The Bill contains much on which lengthy comment could be made. Many of your Lordships are waiting to speak and I shall not lengthen my own speech. As a whole, I respectfully commend the Bill to your Lordships, and I urge that it should find its place, particularly the first three parts and those parts associated with them, on the statute book as soon as possible.
6.23 p.m.
Lord Irvine of Lairg: My Lords, I feel sure that in this House there will be no dispute that every criminal statute should be judged by whether it will promote or hinder the development by the courts of a rational sentencing process. In practice, the hardest task for the judge in a criminal trial is not the law nor the conduct of the trial itself but the duty to sentence when the jury convicts. The sentencer operates in a statutory framework. It is massively complex and he is not responsible for it. But it is the judge who is blamed if the sentence is thought wrong. He works in a growth industry. In 1980, 55,594 cases were committed for trial to the Crown Court: in 1985, 83,898—an increase of over 50 per cent. in a five-year period. The workload requires many part-time judges, so consistency of approach can be harder to achieve.
Delays due to the workload bring demands for speedier disposal of cases. If heeded too much, the quality of justice can suffer. All this growth is accompanied by higher and often conflicting expectations by the public. Concern over the continuing rise in the prison population is matched by demands for tougher sentences for particular crimes.
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The sentencer is unlike most other critical decision-makers in the criminal justice system. He operates in full view of the media. His sentences are as likely to be censured as too low, as too high. Press criticism indeed is often ill-informed. But I think it is often no more useful to bewail unfairness of the press than to rail about the weather.
All this neither judges nor legislators can much affect, but that cannot be said of one major source of the sentencer's workaday problems: the ever-increasing length, complexity and, it may be, doubtful rationality of the rules governing how long people stay in prison. In recent years the Court of Appeal has taken a much more active role in shaping sentencing policy. This has been under the leadership of the noble and learned Lord, Lord Lane, to whose contribution to this debate I look forward. This more active role has been mainly through the growth and refinement of guideline decisions. These spell out the proper approach to particular types of offences or the use of particular sentencing powers.
Scarcely a year passes, however, without some new statute that has a significant impact on sentencing. So no matter how hard the courts try it is just not possible for the courts to fashion a wholly rational process out of the framework that has grown statute after statute and become disjointed and sometimes inevitably irrational when put into practice.
Some of this is as a result of the rules about remission; the rules about credit against sentence for the time spent in custody awaiting trial, and the rules about parole. I am particularly glad that I am to be followed by the noble Lord, Lord Windlesham, whose work as chairman of the Parole Board is held in such high regard. I hope that he will accept that my references to parole are in the context of the operation of the sentencing system as a whole and are in no way a criticism of the excellent way in which the Parole Board operates the system it has been given to administer.
I turn to some ways in which the whole sentencing system works. It may amaze, but it is the fact, that with offenders who have been on bail before trial there is normally no effective difference between sentences of nine, or 12, or 15 or 18 months—each will result in six months in prison in the great majority of cases. Let us take another case. One offender is in custody on remand for six months awaiting trial. Another is on bail during the same period awaiting trial for the very same offence. Both are convicted; both get 18 months and both will probably come out after six months, but the offender who did not have bail will have been in custody for 12 months and the other for only six.
Let us take yet another case of two offenders who have each been in custody for two months before trial and sentence. One gets 12 months and the other two years—double. Both will probably come out of prison on parole after six months.
Every day the sentencing judge solemnly passes sentences that are not remotely related to what will actually happen. So far as concerns the majority of custodial sentences passed by the Crown Court, the relationship between the sentence of the court and the sentence actually served is in fact so tenuous that debates about how to harmonise the decisions of

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sentencing judges are not realistic. All this results from the interaction of different statutory rules as they have appeared on the statute book. Today I state facts only and do not attempt to offer any controversial solutions.
The Criminal Justice Bill will make its own weighty contribution to the work of sentencers. Clauses 48 to 59 deal with confiscation of the proceeds of crime. These clauses cover nearly 19 pages. They closely resemble but do not duplicate the Drug Trafficking Offences Act 1986. Drug trafficking is among the most evil of crimes. We all agree that the courts should have the strongest powers to trace and to confiscate its proceeds. But though the code in the Criminal Justice Bill is based on the Drug Trafficking Offences Act, the sentencer would err if he thought that both codes were identical. Quite apart from the differences in detail that lay traps for the sentencer, there are surprising differences of substance.
The elaborate provisions of the Drug Trafficking Offences Act are mandatory. Where there is a conviction for a drug trafficking offence the court cannot proceed, straight away, to sentence. First, the court must decide whether he has benefited from drug trafficking. If he has, the court has to assess the value of his proceeds; and then how much is capable of being realised in practice. This will be a time-consuming process. And all this must be before sentence.
Not so with the Criminal Justice Bill. It deals with crimes other than drug trafficking. Under the Bill, as the noble Earl, Lord Caithness, observed, the court may, not must, make a confiscation order if it considers that he has benefited from any offence before the court. So the court has a discretion in every case whether it is worth the effort and cannot make a confiscation order unless for at least £10,000. Not so with the Drug Trafficking Offences Act. The court has no choice. Its procedures must be applied as much to the street corner pusher, living in a squat on supplementary benefit, as to the major suppliers. But under the Criminal Justice Bill the courts will be allowed to confine their attention to the bigger fish. I wonder whether it would have been better to leave it to the discretion of the courts in drug trafficking cases too, with benefit to the size of the remand population.
The drug trafficker, big or small, cannot be sentenced until the court has worked through, to the end, the process of determining the amount of the confiscation order. This is not so with the Criminal Justice Bill. As I read Clause 49, the court can send to prison immediately, and work out the confiscation order at greater leisure; and this though the confiscation order under the Criminal Justice Bill is a simpler task, because the order can be made only in relation to offences actually before the court. This is not so with the Drug Trafficking Offences Act. The court must look not just to the fruits of the offences before the court. It must examine the drug trafficker's whole life history to determine whether he has at any time benefited from trafficking. So, in applying these apparently very similar provisions the sentencer must remember that, though there is much that is much the same, there is much that is very different.
Sound sentencing legislation should surely answer three requirements: first, that it be as short and simple
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as possible and not needlessly complex; secondly, that it be logical, so that the various steps the sentencer may take can be explained rationally; and, thirdly, that the sentences the judges mete out are credible to the public because they are sufficiently related to what will actually happen in practice.
When the dust has settled on the issues in this Bill—the issues that are thought so controversial—Parliament may one day turn to the larger, the all-pervasive, the infinitely more important task of fashioning a rational framework for sentencing, a framework which would carry the support of Parliament, the courts and, above all, the public.
6.33 p.m.
Lord Windlesham: My Lords, we have just listened to a notable maiden speech, no less, I may say, than we had anticipated in view of the high reputation which preceded the noble Lord, Lord Irvine of Lairg, before he came to this House. As a leading counsel, he speaks with knowledge of the law and of the courts too in which he sits as a recorder. Some noble and learned Lords who have already spoken have known the noble Lord as an advocate. Now, in this wider assembly, we share that experience. We admire his eloquence and, on this side of the House, we have had a foretaste of his quality as an adversary. We all greatly look forward to hearing him again in the future.
Although no part of this Bill relates to the early release of prisoners on licence, I should declare an interest as chairman of the Parole Board since I was appointed to that office by the Home Secretary. While independent of the Home Office this vantage point has enabled me to observe the strange and idiosyncratic ways in which criminal justice Bills are prepared.
The original commitment was to place the criminal injuries compensation scheme on a statutory basis, so honouring an undertaking given in this House to the noble Lord, Lord Allen of Abbeydale, and rightly given too, in view of the substantial sums of public money which were being paid out in compensation for criminal injuries on a discretionary basis without any specific parliamentary authority. Then came the report, only a little more than a year ago—some 15 months ago—of the committee of the noble and learned Lord, Lord Roskill, on fraud trials. It contained 112 recommendations in all. That report was perhaps the most important and urgent item that came forward for inclusion in a criminal justice Bill.
But once the prospect of a Bill in the current Session became a strong possibility, then in an indefinable way the opportunity to legislate created its own momentum. Consultative documents appeared, followed by a White Paper. Support for varying subjects waxed and waned. Mediation and reparation were strongly fancied at one time, something close to the heart of the previous Home Secretary, although not in the event finding a place in the Bill. At the same time accretions began to build up; the sentencing powers of the courts, jury challenges, confiscation of the proceeds of highly profitable crimes, and the most vexed of all issues, the so-called lenient sentences imposed in the Crown Court.
Each of these provisions was included in response to events, or the mood of the public—or what was seen as the mood of the public—rather than as a result of

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systematic review leading to proposals for reform. The end-product is before us today. It is the largest Bill to be presented to Parliament in this Session—136 clauses and 13 sometimes lengthy schedules. The lack of a theme is, of course, a constant lament when criminal justice Bills are introduced. The noble Lord, Lord Harris of Greenwich, referred to them as ragbags. So they may be, but the merit of the system of compilation which I have just described is that a Bill of this kind represents a parliamentary response to shifting public attitudes and opinions. There is thus democratic virtue on these grounds, but at the cost of adding still further to the piecemeal nature of the system of criminal justice.
The most solid and carefully considered part of the Bill without question is the first 20 clauses or so containing proposals for the control of financial or commercial fraud, about which the noble and learned Lord, Lord Roskill, has already spoken. For many years, until not so long ago, fraud was the Cinderella of the criminal justice process, receiving only limited police, prosecutorial or media interest. This has now changed, not just in this country but in other developed countries as well, although it is curious that it should ever have been so. The recorded losses involved are far greater than those from burglary, theft or robbery. Fraud recorded by the Metropolitan City of London Fraud Squad represents about three times the total cost of all property crimes in London, and is not far off the combined annual cost of reported thefts, burglaries and robberies throughout England and Wales. The sheer scale and ramifications of the largest frauds are vividly described in the Roskill report.
Fraud is often elusive, hard to define and hard to recognise. Most commercial transactions can be conducted honestly or they can be conducted dishonestly; the dividing lines are not always clear. Financial frauds can be entwined with legitimate trading activities, or they may be wholly fraudulent, like VAT or revenue frauds. Banking frauds may involve ingenious manipulation of accounts and duplicate accounts. Marine frauds may lead to the same cargo being sold many times over by forged bills of lading or other documents. Phoney companies may obtain goods on credit from genuine suppliers; phoney suppliers may sell non-existent goods to genuine buyers. Throughout, the difficulties of investigation are as great as bringing cases before the courts and proving that criminal offences have been committed.
In the Roskill report emphasis was rightly placed on investigation as well as on alternative procedures for trial where there was evidence that a criminal offence might have been committed. This emphasis is reflected in the Bill in the proposal to establish a new body, the Serious Fraud Office. Some kind of overall co-ordinating agency is essential if the most serious and complex frauds are to be investigated and prosecuted speedily and effectively.
There is a paradox in that, while petty frauds which are committed clumsily, perhaps realising only relatively minor proceeds, are likely to be detected and punished, it is all too probable that the largest and most skilfully executed crimes escape punishment.
The Bill envisages that the Serious Fraud Office should be responsible to the Attorney-General. Its composition and staffing, I suspect, will have been
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subject to a certain amount of horse-trading within Whitehall. I anticipate that the staff—perhaps the Minister can confirm this—will be drawn from various parts of Whitehall, supplemented by lawyers, accountants and people with experience of companies legislation from outside.
Three questions arise. First, what is the relationship of the new body to be with the police? This could be of crucial importance. Will police officers be an integral part of the organisation, or will they be separate? Secondly, will the Serious Fraud Office include some of the functions of the Fraud Commission, which was proposed by the Roskill committee but is not pursued in the Bill, for monitoring and generally chasing up progress in major fraud cases? Above all, are Ministers satisfied that the deeply ingrained attitudes and habits which exist in government departments and the enforcement agencies can be overcome to ensure that they pull together? We heard the noble and learned Lord, Lord Roskill, speak of the fragmentation he noted when evidence was given to his committee.
Let me now turn to the matter of lenient sentences. I am sorry to say to the noble Lord the Minister from these Benches that I too regret Clause 29 is in the Bill. Despite all that has been said on the subject since it was last debated, and roundly defeated on the Prosecution of Offences Bill in 1985, the proposal to refer to the Court of Appeal individual cases where there has been an outcry against the sentence still represents an unsatisfactory and, I fear, muddled compromise.
We are on thin ice here, where the powers and the responsibility of the executive bear on the powers and the responsibility of the independent judiciary. Like other noble Lords, I await the contribution of the Lord Chief Justice and of the noble and learned Lord, Lord Ackner, with keen anticipation.
Speaking only for myself, I see two main grounds for objection. I do not like—and I wonder whether former Law Officers like—the bringing in of the Attorney-General to rule on which sentences passed in the Crown Court raise "a question of public importance". It is hard to avoid the conclusion that the test of public importance will be the volume and intensity of public protest. The arrangement is likely to prove capricious and unpredictable in operation, introducing non-judicial yardsticks of leniency or severity resting on some unknown, or unknowable, process of interpreting public feeling. Nor do I think it probable that a general statement of principle by the Court of Appeal on what the sentence ought to have been, but leaving the actual sentence in the case referred to it undisturbed, will have the intended effect of mollifying public anxiety.
No, my Lords, if the Government are convinced that there is a real and deep-seated public dissatisfaction with the present practice, then they should ask Parliament to change the law as it applies to all convicted and sentenced offenders, irrespective of public outcry. If they are not persuaded that the need for a change outweighs the objections outlined by the Minister in his opening speech this afternoon, then I think they should leave the matter alone.
As your Lordships are aware, there is already a right of appeal against sentence by the defence if it believes

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that the sentence is too high. If the Government are really convinced that a change is needed—I do not advocate it myself—then surely the proper course is to broaden the right of appeal into a two-way process, exercisable with leave of the Court of Appeal, if the prosecution believes that the sentence passed is manifestly out of line with normal sentencing practice. In this way, there would be a clear-cut and rationally defensible mechanism for upward adjustment in the interests of consistency when the sentence is too low, in exactly the same way as there is for reduction when the sentence is too high.
6.50 p.m.
Lord Hooson: My Lords, may I first add to the congratulations expressed by the noble Lord, Lord Windlesham, to the noble Lord, Lord Irvine of Lairg, on his notable maiden speech. While keeping within the confines of the convention of not being controversial, he showed the power of penetrating criticism. And rhetorically I am bound to ask the question: if he is as good as this when he is being non-controversial, what will he be like when he is controversial? We look forward very much to hearing the noble Lord again, and very soon.
I should like to apologise to your Lordships for the fact that I have to chair an important meeting in a different part of this building and I shall have to leave your Lordships' House for a certain time. I apologise to those speakers whose contributions I shall not be able to hear but I hope to return in good time for the concluding stages of the debate.
I wish to confine myself, as I support a good many things in this Bill, to something to which I object very much. That is contained in Clause 89. I refer to the abolition of the right of peremptory challenge by the defence. I do not suppose that in 99 cases out of 100 or even in 999 cases out of a thousand it matters very much whether the defence have a right to peremptory challenge or not, but there are certain cases where I think it matters a very great deal.
It so happens, as the noble and learned Lord, Lord Elwyn-Jones, has already said, that this right of challenge is as old as the right to trial by jury. It was in the early 16th century that the right of challenge was restricted to 20 challenges from, I think, something like 35. It is only in our age that the right of challenge has been reduced to the present number of three. In saying that I am totally opposed to its abolition, let me add that in 37 years' practising at the Bar, I have very rarely used the right of challenge.
I was brought up on a circuit—the noble and learned Lords, Lord Edmund-Davies and Lord Elwyn-Jones, were my mentors—where it was thought tactically unwise to challenge without cause unless one was absolutely certain it was necessary. I always told my clients that he or she had the right to challenge but I would let them use that right themselves. They very rarely did, and I can only recollect using the power myself about three or four times. Nevertheless, I think this is a very important right.
The jury system was not the product of logical consideration. It was put together in a haphazard way; it evolved. I have been reminding myself over the weekend and today of that remarkable Hamlyn
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Lecture given by the noble and learned Lord, Lord Devlin, Trial by Jury. I should like to quote two or three passages from the book. He said at page 151:
"Is there then more than one sort of justice? Yes: the justice of the case is the best compromise that can be obtained between the demands of the law and judgment on the merits. Those two points are always separated by some distance, long or short, and justice can be brought to rest anywhere between them; almost inevitably it will be nearer the one than the other".
He goes on to say at page 159:
"For more than seven out of the eight centuries during which the judges of the common law have administered justice in this country, trial by jury ensured that Englishmen got the sort of justice they liked and not the sort of justice that the government or the lawyers or any body of experts thought was good for them".
Having given those quotations, I ask myself the question: is the right of peremptory challenge an important matter when it comes to the selection of a jury? I think that it is. I believe it is absolutely right, for example, that if a black man is on trial and wants to object to certain white people being on the jury, he can make the objection without stating what it is. Likewise, if there is a woman on trial who objects to the fact that it is an all-male jury, she can object to some of the men on the jury in the hope of getting women instead.
There are many circumstances that arise. I have sometimes looked at people coming into the jury box and thought I would very much like to object to some of them. As a matter of tactics, as I have said, I have not done so, but I believe that, particularly in the political case—the one that goes to prove a point—trial by jury is not confined to trying the case entirely according to law. It goes to the merits.
Let me illustrate my argument by reference to the trial of William Penn and his co-defendant in 1670. William Penn's trial was a landmark in the development of our legal history. I have no doubt whatsoever that had William Penn been tried in your Lordships' House at that time, he would have been convicted out of hand, Likewise, had he been tried in the House of Commons at that time he would have been convicted out of hand. I believe the situation would have been the same had he been tried by any of Her Majesty's judges at the time. I am quite certain that in order to get Mr. Bushell on to that jury, and so on, it was essential to have trial by jury. It established certain rights in this country. I believe that the right of peremptory challenge was important then, and it is important today.
In opening the debate, the noble Earl said that in modern conditions this kind of safeguard is no longer required. I respectfully disagree. There is the odd case where the right of challenge is very important. If we do not have it, we shall go down the American road to challenge to cause. We will have the kind of "voir dire" that operates in the United States where weeks are sometimes spent arguing as to who should or should not be on the jury, investigating their backgrounds, and so on. That kind of development has not happened in this country because the judges have been well aware of the right of peremptory challenge. Abolish that right, and which direction will we take in this country?
It is said that there has been misuse of the right of peremptory challenge. I have no doubt that there are some cases where misuse (if that is the right word) has

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taken place. Obviously it is unwise, because the results of research do not bear out the efficacy of jury challenge.
Among modern cases, there was alleged misuse of the peremptory right of challenge in the Cyprus spy trial. It so happens that I was involved as one of the defence counsel in that trial, and because of my upbringing and background at the Bar, I happened to be the only leading counsel in the case for the defence who did not challenge any juror. However, I totally refute the suggestion that there was any misuse of the right of peremptory challenge in that case.
It so happened that I was separately instructed. Six very distinguished leaders at the Bar—one of them was made a High Court judge almost immediately the case was over—met together, so it is said, and decided to object to certain members of the jury.
Let me give your Lordships the background against which they made their decisions. First, the case was to last for six months, so the very distinguished judge—Mr. Justice Stocker as he then was and Lord Justice Stocker as he is now—quite rightly, in my view, asked the members of the jury who had been empanelled whether they had any particular personal problems. It so happened that there were three juries empanelled in that case. One had to be dismissed for some reason or another; at the end of the first prosecution opening the prosecution made a mistake and the second jury had to be dismissed, and a third jury had to be empanelled. As I recollect, I was only there for the first jury, but over 60 members of the panel that had been assembled were exempted by the judge in the exercise of discretion.
Let me give your Lordships examples of grounds. First, people were going on holiday—this was in April. Mothers, or fathers as the case may be, in the jury said that they had booked their holiday to take into account their children. Holidays had already been booked and paid for. The learned judge quite rightly exempted them. Other people said, "I am a one-man business. I shall be ruined or made bankrupt if I am asked to stay on". So those people were exempted. There were many such cases. For example, one person said, "I am a key engineer in a certain firm". The judge asked the defence, "Do you object to him being released?" and received the reply "No". In that way between 60 and 70 people were exempted.
Once one has reached that stage one asks oneself, where is random selection? In that case one was left with the very young who in many cases had secure jobs or were unemployed and with retired people. Therefore there was no random selection. If one envisages that in future there will be cases of that kind and of that length, then is a judge not to have discretion to exempt people? It would be an impossible situation. He is bound to have discretion and it is bound to be used. It is right and sensible that it should be so.
The actual objections in that case were apparently 18 in all, because my colleagues had determined that, as they were conducting a case for young men (the average age was between 19 and 22, with one aged 30), it would be better to have a young jury of contemporaries rather than an old jury. That was their choice. The jury that was finally empanelled—and I
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checked this up today with the Old Bailey—consisted of people whose ages varied between 35 and 18. Only one of them was unemployed.
There was a suggestion made by one learned judge in the Old Bailey, who should have known better, that the aim was to have a jury of unemployed people. Quite the contrary, only one member of the jury was unemployed. They were all highly intelligent people, and whether one was with the defence or the prosecution, everyone agreed that that jury had followed the proceedings with a great deal of intelligence and discrimination.
The attacks that were made on that case—that is, on the exercise of the power of peremptory challenge—were an insult to the jury and to everyone who took part in it. It so happens that after the trial there was a report by Mr. David Calcutt, who is now the distinguished head of a college at Cambridge, which reviewed the evidence. I quote from his report at paragraph 5.44:
"I have already concluded earlier in this chapter that the custody of the eight servicemen was, for part of the time, unlawful and that even after the servicemen had been lawfully arrested on holding charges their continued custody was at least improper".
He concluded at paragraph 5.51:
"I believe that this pressure [due to the unlawful custody] was responsible for some of the demonstrably inaccurate material which appeared in the statements made by the eight servicemen during the interviews".
Having been involved in many trials in my life, I am bound to say that I believe that most juries would have acquitted in that case. I think that all juries would have acquitted some of the accused. I think that to use this case as an attack on the right to peremptory challenge is entirely wrong. If anything, it was a justification because of the lack of random selection which the circumstances of the trial had imposed. In fact it was a justification for the right in question to remain.
I also want to refer to research on this very point which has continued and which is referred to today in the article in The Times by Mr. Bernard Levin. The noble and learned Lord, Lord Elwyn-Jones, has already quoted from it today in your Lordships' House. It shows that generally speaking a right to peremptory challenge, if misused, tends to rebound and that jurors object to the right being exercised on fellow jurors unless there is very good reason for it. I hope that your Lordships will throw out this clause of the Bill.
7.6 p.m.
Lord Lane: My Lords, it was good to hear the wisdom of Caithness matched by that of Sutherland. I too should like to pay a tribute to the quality of the speech of the noble Lord, Lord Irvine, and the eloquence with which it was expressed. It augurs well for the future of your Lordships' House.
I should like to raise just two matters with regard to this Bill, one of which appears in the Bill while the other does not. The first relates to Clause 29. Judges operate in court in the glare of publicity, and it is right that they should do so. It is very conducive to good behaviour on the Bench. However, despite what the media say, judges are human and human beings make mistakes. If mistakes are made it is right that judges should be criticised accordingly, but I suggest that in fairness such criticism should be subject to constraints.

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First of all, the criticism should be based on an accurate account of the facts, which it very seldom is. Secondly, perhaps I may suggest that, where the criticism is justified by the facts, there should be an opportunity for the court to put the matter right. By skilful manipulation of the facts it is all too easy to undermine public confidence in the judges, and once public confidence has been so undermined it may take a generation to restore.
Nothing is easier than to criticise a sentence imposed by a judge. As the noble Lord, Lord Irvine, has already said so cogently, sentencing consists in trying to reconcile a number of totally irreconcilable facets. The judge gets very little help in this difficult matter. On a verdict of guilty being returned, prosecuting counsel sits down with a smug look on his face and there is the end of the adversarial system. The judge is out on his own doing the best he can with the assistance of defending counsel, whose prime obligation, subject to his duties to the court, is to do the very best he can for his client. The judge is left to weave his way through the maze of legislation which now surrounds sentences to try to find the correct solution to the problem.
I suggest that it is high time the prosecution started to play a part in the sentencing process by directing the judge to such statutory provisions as may guide him in his sentencing task and to such guidelines laid down by the Court of Appeal as may assist him in non-statutory parts of his duty.
The judge in the Crown Court who passes too severe a sentence knows that the matter will be put right in the Court of Appeal. If he passes what is thought to be too lenient a sentence, and if the case is sufficiently notorious, the media, as has been recently demonstrated, will have a field day. There is no method of correcting misstatements of fact by the media, and no method of putting right what may on examination prove to be a glaring miscarriage of justice. It is the right of the public to have over-leniency corrected just as it is the right of a defendant to be able to appeal against too harsh a penalty.
If I may respectfully say so, the Court of Appeal should have the power to increase sentences in appropriate cases. Most of the cases which excite the attention of the newspapers are found on close examination to be correct in principle, though possibly badly expressed in form. Some are wrong in principle and those should be corrected in order to prevent the very erosion of confidence which I mentioned earlier.
The present Clause 29 has the inestimable disadvantage of providing the worst of both worlds. It will draw attention to faults without remedying them. It will add nothing to the powers which the court already has. We do not require Clause 29 to give us the power to make suggestions or to issue guidelines—call them what you will. We do not require Clause 29 to enable us to tell the errant judge that he has gone wrong. We do that already at various levels according to the level at which the allegedly wrong sentence was expressed. It will gain nothing by being done in public, as it is suggested that it should be, rather than in private as it is now.
The suggestion that the Judicial Studies Board should have some statutory authority fills me with horror. It already collates and publishes the necessary
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decisions and there is no need to give it any statutory power to do that. Clause 29 will do nothing to show the public that a miscarriage of justice has been put right for the simple reason that it has not been put right. Such a power might indeed involve the prosecution in the sentencing process; so much the better. It is high time that they took part in that process. However, that does not mean that they would demand such and such a penalty but that they would provide assistance to the judge which at the moment he must provide, not always successfully, from his own resources.
In other common law jurisdictions the power exists without any of the dire consequences which it has been suggested may result from the power that I have suggested. The power exists in Australia, Canada and New Zealand, to mention only three of the leading Commonwealth countries. They cannot understand why we do not have a similar power. "What happens", they ask, "if a judge in your country has a sudden rush of blood to the head and fines a multiple rapist one dollar? What can you do?" The answer is that we can do nothing. The sentence has been passed and that is the end of the matter. In short, I should like to suggest that the courts be given the power to increase sentences. Failing that, please do not saddle us with Clause 29. It is better to have nothing than to have Clause 29.
I shall mention one other matter very briefly; that is, the question of ordering a retrial. At the moment, as your Lordships know, the Court of Appeal Criminal Division can only order a fresh trial when fresh evidence has become available which renders the verdict at the original trial either unsafe or unsatisfactory. If there has been some irregularity at the trial, the Court of Appeal has the choice of either allowing the appeal and quashing the sentence or of applying the proviso to Section 2(1) of the Criminal Appeal Act 1968, which provides:
"Provided that the Court may, notwithstanding that they are of opinion that the point raised in the appeal might be decided in favour of the appellant, dismiss the appeal if they consider that no miscarriage of justice has actually occurred".
In cases where the irregularity has been of a formal nature on the fringes of the matter, that is enough to solve the difficulty. However, there are cases, as has already been mentioned to your Lordships, when a judge perhaps in an uncertain area of law has given a wrong direction to the jury—for example, on the vexed question of duress. The Court of Appeal may think that the jury would perhaps have convicted had the judge directed it correctly, but it is impossible to know for certain whether it would have done so. In those circumstances it seems contrary to both justice and good sense to allow the defendant to go free without further ado. Once again it is a power which most other common law jurisdictions seem to have. We have been told about Scotland and I believe that it also exists in Northern Ireland. The Law Commission thinks that it is a good idea that the right should be existent in the courts here and so do all the judges to whom I have mentioned the matter. I commend the idea to your Lordships' House.
7.19 p.m.
Lord Campbell of Alloway: My Lords, as is the case with other noble Lords, I also pay tribute to the noble

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Lord, Lord Irvine of Lairg. He is a fair-minded and able opponent in the courts, as I know to my cost, and I look forward, as do other noble Lords, to hearing him on many other occasions in your Lordships' House. It is a rare privilege to follow the noble and learned Lord, Lord Lane, who speaks from the depths of his experience and, as I understand it, on behalf of the majority of the judiciary. The hope must be that your Lordships having had the benefit of his advice will at least be disposed to heed it.
As to this Bill, it is not a Bill drafted or designed to deal with overcrowding in prisons. I accept that the noble and learned Lord, Lord Elwyn-Jones, thinks that it should be—that is fair enough—and so indeed does the noble Lord, Lord Harris of Greenwich. Overcrowding in prisons is a very important subject which has been neglected by administration after administration of either party for far too many years. But it is at least a subject in which this Administration have sought to take an initiative.
This Bill is really the great reform Bill affecting criminal procedure of this century. It resets the balance in equilibrium, which it is not now in, between the interests of the state and those of the accused. Inevitably, much new ground is broken, so—also inevitably—the plethora of novel principles raises sensitive issues; issues which have already attracted public concern, and rightly so, in Parliament, in the press and in the media.
The first of those issues is, assuredly, over-lenient sentencing. Here I agree, as a mere member of the Bar and a recorder, with the views that have been expressed by the noble and learned Lord the Lord Chief Justice, and I have already left in the appropriate office an amendment that seeks to implement the views that the Lord Chief Justice has expressed. The second matter which attracts public concern is child molestation. Does Clause 21 go quite far enough?
The third matter in the Bill which attracts public concern, certainly with the Heysel fiasco recently—and there is no criticism of the courts; it is a criticism of the law—is avoiding conflicts between the judiciary and the executive.
Adjustments may well be required under the proposed scheme, which I wholly endorse, to avoid these.
But there are two matters of omission which are also of public concern. The first is jury nobbling—a grave menace today—of which the Bill takes no note. The other is the absence of the power to order a retrial, of which the noble and learned Lord, Lord Lane, has spoken. Again I have left for the consideration of your Lordships in Committee an amendment which would give effect to that power for the reasons which have been given by the Lord Chief Justice and which require no further elaboration from me.
As to over-lenient sentencing, it is axiomatic that the courts, as the servants of society, may not be isolated from public opinion. It is apparent that the only effective corrective lies within the province of the judiciary and that means a real right of appeal against sentence which has an immediate impact both on the sentence and on the offender. The time has long passed when Parliament, with certain safeguards, ought to have afforded an appeal to the Court of Appeal against
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sentence as a corrective where apparent leniency on certain occasions offends public opinion.
As has been said, Clause 29, as supplemental to the extant system of guidelines, has absolutely nothing to offer. It is a paper placebo for public concern. It in no way forestalls any damage to public confidence, such as my noble friend the Minister referred to. It is a meretricious nonsense, it does nothing, it is totally indefensible and it was defeated in principle by your Lordships by 140 votes to 98 not so very long ago. So why have we got it back again? Perhaps my noble friend the Minister will be able to tell us. I listened with some care to his justification for the clause, but with the greatest respect to my noble friend I could not follow the logic. There has to be some logic in reintroducing this clause, which, in principle, has already been defeated against a strong two-line whip by 140 to 98.
Jury nobbling gnaws at the marrow of justice. Since the armed robbery trials of the 'sixties, it has infected the jury system, at all events in this type of crime. Apart from the mole juror there is the bribery, there are the threats and there is the intimidation. The police lack the manpower and the resources to protect jurors. It is in this day and age wholly unacceptable that juries should be kept in isolation throughout the trial, from the time when they take their oath.
The introduction of majority verdicts in, I think, 1967 has not resolved the problem. This is all too evident from the goings on in the recent trial of Reed and Mitchell at the Old Bailey in the Brinks-Mat case. What is to be done? Frankly I do not know, but something has to be done. If it is right to retain the jury system—and I am a retentionist—abolition of the right of peremptory challenge without cause under Clause 89 must afford challenge for cause with inspection of the jury list under the Juries Act 1974, for that is the means by which you establish the cause. But it is suggested that the jury list should not be available to the defence.
If it is right to retain the system, I hope your Lordships will agree that it would be wrong to water down the majority from ten to two to, so to speak, eight to four, because if you dilute the essence you lose the substance. So, again, what is to be done? As a tentative suggestion, which is the best I can do, perhaps the right to a trial by jury might be withdrawn if during the trial aspects of jury nobbling are brought to the attention of the judge and established to his satisfaction, in which event the judge could not only discharge the jury but could order a retrial by judge alone or perhaps by a judge sitting with two magistrates.
It does not surprise me to see the noble Lord, Lord Mishcon, shaking his head; any of your Lordships would be entitled to a shake of the head whatever suggestions might be made. But this gap in the fence must be mended and mended soon by Parliament. It is a matter for your Lordships to consider how it should be done but not whether it should be done. I am fully conscious that any suggestion I may make as to how it is to be done would be subservient to better and more authoritative opinions. I hand to my noble friend the Minister as a thought for the day that perhaps some provision could be made in Part VII of

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the Bill to curb this menace which warps the due administration of justice.
As regards child molestation, is Clause 21 satisfactory? Ought not a video-taped interview with a child to be admissible at a trial, irrespective of whether the child gives evidence at the trial by video tape? In the case of very young children, ought there not to be some exemption from the hearsay rule which excludes immediate and spontaneous complaint, or the first account of the incident, as constituting corroboration? As regards corroboration, ought there not to be some amendment to the rule that one unsworn witness cannot corroborate another? In the case of assaults of this nature on a series of very young children who are able to give a credible account but unable to understand the nature of the oath, the child molester is quite simply put beyond the reach of the law.
Have we anything to learn from the case of Susie, aged three, where a conviction was obtained in the State of Colorado on video tape of an interview which afforded questioning safeguards for the defence? Susie was not fit to give evidence at the trial; she did not do so. However, under Colorado's exception to the hearsay rule, many of the child's statements would have been admitted and it was no doubt for that reason that counsel agreed and accepted that the video-taped interview should be admissible and agreed to participate in the questioning. I mention that matter to show that if one shifts the law to some degree on hearsay or indeed on corroboration one can produce a situation which may be more satisfactory. Of course one must exercise very great care in this sphere and it may be of interest to your Lordships to know that the accused in Susie's case later confessed his guilt and was shown to be a peristent child molester.
At all events, in this sphere the writings of Professor Glanville Williams and Mr. Spencer, both Cambridge dons, as well as others, have made an unassailable case on reform of the law governing these procedures.
I have gone on too long; I apologise and I shall not deal with the practical aspects of any appropriate amendments to extradition in order to avoid conflicts between the executive and the judiciary.
7.35 p.m.
Baroness Phillips: My Lords, on these occasions I always feel that I should apologise for intervening on Bills which seem to be dealt with almost wholly by practitioners in the law, many of them of great standing and very learned. However, I think it is important to remember that many people have strong feelings about the issues raised in this Bill. Therefore, natural justice is something which we must also consider and this is the moment when we must consider it.
First of all, I add my congratulations to my noble friend on his maiden speech. It was a masterly speech and we shall all look forward to hearing him on subsequent occasions. One is very envious that he is able to speak so admirably.
I believe that we must consider this Bill in conjunction with the White Paper which was issued and which I have studied very carefully. I was also delighted to see that the Home Secretary has provided an introduction
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to his new working paper which gives me a starting point in this discussion. In the working paper we learn that the Government's objectives are to sustain the rule of law (no one can criticise that) by preventing crime wherever possible (and we all want that); by detecting the culprit when crimes are committed (we all want that); by convicting the guilty and acquitting the innocent, and by giving effect to the sentences or orders which are imposed.
My work lies in crime prevention. An important part of these objectives is deterrence. We can prevent crime not only from being repeated but sometimes from being committed if it is known that certain sanctions will follow upon an offence and that the sanctions will be operated. I am very glad to see a clause on firearms. There is also a reference to imitation firearms. Your Lordships will remember that I have raised that matter before. Many horrible crimes have been committed in which it has been found that the victim was challenged by what turned out to be an imitation firearm. That did not prevent their being badly beaten with something else subsequently and I am delighted that imitation firearms will now come into the category in which they always should have been.
Perhaps I may mention in passing that it is far too easy and getting easier for people to buy what are virtually offensive weapons. Shops are springing up all over the country which are called armoury shops or martial arts shops. They do not make any pretence of selling anything for sport; they are simply there to sell things which should not be available. A policeman once said to me, "Criminals do not buy things of that kind". No, but criminals will steal them. We should not put such things all in one place so that they can be obtained much more easily.
I noticed today that the EC (of which I am not very fond) is introducing a new law which will prevent the police intervening when firearms enter this country. I am delighted to see that the Home Secretary is to take action. The use of firearms is increasing dramatically. Someone recently said to me, "We do not want the police to be armed". I pointed out that I do not want criminals to be armed. My chances of being shot as an innocent bystander by a criminal are far greater than my chances of being shot by a policeman.
The victims of crimes get a small mention in this Bill. Victims get smaller mentions than offenders in practically all legislation. The Criminal Injuries Compensation Scheme is excellent. However, I should like to suggest that it is necessary, as is mentioned in the White Paper, to have further legislation concerning victim support schemes. Such schemes were initiated by people themselves and government have rather belatedly begun to give money to the schemes. I should like to ask the Minister whether the Government are giving as much to victim support schemes as they are giving to the National Association for the Care and Rehabilitation of Offenders; and if not, why not?
There is also a point contained in the working paper which does not seem to be mentioned in the Bill. That suggestion was, under the Criminal Injuries Compensation Scheme, to require a court to give reasons for not awarding compensation for injury, loss or damage caused to victims. Perhaps that matter is

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mentioned under some other clause and I shall be glad to know whether it can be included in the Bill.
I recently read a paper written by a barrister (which will impress some of your Lordshps) who echoed my own feelings about the treatment by the legal system of victims of vicious crimes. They are not represented in court and sometimes they do not even know of the hearing. My own grandson was brutally assaulted by three ruffians, who were caught, and only by ringing up my contacts as a magistrate was I able to ascertain anything about the proceedings at all. He did get some meagre compensation awarded. Of course, nothing would wipe out the terrible event from the boy's mind, as was subsequently shown.
The victim must be considered far more, not only in all our legislation but in the operation of our courts. People do not feel that they get justice. Whether we blame the judges, the system, or the courts, I am confronted day after day by people who do not feel that they get justice.
In so far as concerns the law relating to juries, I was interested to see that one noble and learned Lord went back to the 16th century. It was very interesting but of course, as I recall and unless I am greatly mistaken—and I am a historian—the sentences were slightly more savage in the 16th century than they are now. I am glad to see that the Government are tackling the idea of age. It has always seemed to be patent nonsense that if you are over 65 you have no intelligence and therefore cannot sit on a jury. In any case, these are the people with experience and background who will probably be some of the best jurors.
I should like to see the right to peremptory challenge abolished, although I am sure some noble and learned Lords will disagree, as they have done so far. A recent case has shown the importance of this. There is no doubt about the horrifying threatening and nobbling of the jury although it could not be effectually proved. But had they not been able to challenge the jury, they could not have gone on—as I see it, although perhaps I am too simple in this—until they got the jury they wanted.
I cannot see any reason why a woman would particularly want to challenge a jury just to get an all-women jury. When I sat as a magistrate I noticed that the defendants were always very worried when there were three women on the Bench because they knew they were going to get a tougher sentence than when they had three men, because we are a more practical sex—said she, without wishing to be sexist.
Then there is this famous Clause 29. There is no doubt there is a growing volume of complaints from the public concerning over-lenient sentences. I do not wish to bore your Lordships with repeating them but I should like to ask, is it right that a brutal rapist should receive only a three-year sentence? It cannot be right. Whether you blame the judge, the jury or the system, this is the kind of thing that unfortunately damages our judiciary. It is important to safeguard the interests of the ordinary citizen. If you do not punish offenders, at least withdraw them from the situation where they can repeat these horrific crimes.
I was very happy to see that the Master of the Rolls has come out in support of moves to let the prosecution appeal against sentences. I was also very
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heartened to hear the noble and learned Lord, Lord Lane, and also the noble Lord, Lord Windlesham, say what I am going to say; namely, that I am very much in favour of this and I think that the clause in question is not strong enough. I am hoping that I shall get some very distinguished support when I put down an amendment, which will have to be very carefully thought out, to deal with this particular point.
Appeal courts exist because judges sometimes make mistakes. As a magistrate, people could appeal against my decision, and rightly so, magistrates sit in threes, so there is less chance of us making a mistake. But if you sit alone you sit as God; there is no question about that. Therefore, some mistakes will be made. Quite rightly, where the convicted person thinks the sentence imposed is too severe he may appeal to a higher court. That court has power to reduce, but not increase, the sentence. That is something totally nonsensical. I listened with great care to the explanation from the noble Lord, Lord Hooson. It did not make me any wiser. I am sure that as this Bill goes through your Lordships' House some noble Lords will suggest that it is not consistent.
I remember that when we debated this matter in 1985 I had the distinction of being the only person who supported the noble and learned Lord the Lord Chancellor—as I pointed out, the only time I have been his bed-fellow, and that only in the nicest way. The Attorney-General would have been empowered to refer cases to the Court of Appeal for its opinion as to whether the correct sentence had been imposed, but not to give the Court of Appeal power to increase the sentence if it was considered to be too lenient. It seems to me that Clause 29 seeks to repeat this rather weak principle and I hope during the passage of the Bill to move an amendment strengthening this but carrying out what I hope is the Government's intention. The Attorney-General should be empowered to appeal to the Court of Appeal where he thinks the sentence is too lenient, but also the court should be empowered on such an appeal to increase, reduce or confirm the sentence so the accused cannot be said to have been in double jeopardy. I noticed with great interest that the noble Lord, Lord Windlesham, seemed to have some doubts about this matter, so I hope for his support too.
I believe that this Bill has a great deal to commend it and I hope that it will rapidly pass through Parliament before the Government decide to go to the country so that there will be something on the statute book which will show that the Government have a concern that natural justice shall be carried out.
7.46 p.m.
Lord Hutchinson of Lullington: My Lords, it is always a great pleasure to follow the noble Baroness, Lady Phillips. Listening to her speech I was seriously considering whether to put down an amendment to give power to challenge benches of magistrates.
This is indeed the third major government Bill dealing with the criminal justice system to reach the House in the past three years. No one can say that the Government have been idle. They must be given credit at least for addressing a range of issues which have long required attention. As my noble friend Lord Harris has pointed out, they have failed utterly to grapple

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with the greatest social problem of our time; namely, the steadily growing cancer within the prison service.
It must also be said that the Police and Criminal Evidence Bill and the Public Order Bill were largely flawed before reaching this House by damaging political input. PACE, as we now call it, might so easily have been a great reforming Bill but it was spoilt in my opinion by the political wrangling in the other place. The passage of this Bill has been very different and I should like to pay tribute to the Minister, Mr. David Mellor, for the manner in which he and his colleague Mr. Hogg piloted this Bill through the Committee in the other place. It is largely due to their co-operative and receptive attitude to constructive criticism that the Bill is now an infinitely better one than it was when it was first printed. I am sure the noble Earl will adopt a similar conciliatory stance during Committee stage, that he will assist us all to understand and in understanding to improve some of the measures in this Bill which to me remain still almost incomprehensible.
There is surely too much crammed into the Bill. Part IX concerning extradition, Parts V and VI concerning confiscation and compensation might well have been Bills in themselves. I fear there are some "Carolean carbuncles," if I may call them that, on the face of the Bill—Clauses 89 and 29 and (dare I say it in the presence of the noble and learned Lord, Lord Roskill?) the Clauses in Part II, which if I understand them properly would seem to sweep away the safeguards surrounding hearsay evidence in criminal trials. Making the surrender of our nationals to foreign states in Part IX an executive act rather than a judicial process is a revolutionary proposal which I suggest demands the closest and the most careful attention of the House during Committee.
I must say a few words about Clause 89. In my view outright abolition of the right to peremptory challenge by one party to the trial will do untold harm to the administration of criminal law. I find it difficult to understand why the Government seek to make this clause some sort of virility symbol. Is it perhaps because they had to abandon the other abolition proposed by the Roskill Committee—that of jury trial itself, the abandonment of which was disapproved of so much by the noble and learned Lord, Lord Roskill, earlier today? Significantly, it was the Home Secretary himself who made a rare appearance in Committee and shepherded this clause through on a single vote majority.
I suggest that abolition would undermine public confidence in the impartiality of the courts. Participants in the criminal process will come to doubt whether trials are fair, unbiased, and are seen to be so. Abolition has its origin (dare I say it?) in one of the less well-written chapters in the Roskill report. Challenge of a juryman had no relevance to the subject under inquiry by that committee. In the evidence which is now reposing in the Public Record Office there is not one fact to support the idea that a single verdict in a fraud case has ever been affected by the use of the challenge; yet the committee seemed bent on recommending abolition. Indeed, the Commissioner of the Metropolitan Police in his evidence to the committee had no complaint on the trials of fraud
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cases in London, where challenges are more often used, achieving the remarkable conviction rate of no less than 90 per cent.
The report stated that the Attorney-General had arranged for a CPS survey to:
"obtain a basis of fact on which the Government can decide whether action is needed".
Those facts have been obtained and they show, as we have heard, that the exercise of the challenge has had no effect whatever on the likelihood of conviction; nor has it distorted any trial; but the Government still suggest that action is needed. Surely we have reached a time in Parliament when we no longer legislate on hunch, anecdote, prejudice or fear, but on evidence and on reason.
The survey found as it did because the aim of the challenge is not to rig, to distort or to engineer but simply to ensure as far as possible a fair, unbiased and balanced jury. I ask the Minister: how on earth can that be wrong in principle? The Government insist on a highly intellectual concept—the sanctity of random choice. Randomness is merely a method of first selection. It may not achieve the result that we all want. If you choose plants at random for a mixed border you may, as every gardener knows, end up with flowers all of one colour.
If a defendant is faced with a jury of all women, all men, all young people, all old people, all people from one district or all people from one apparent class, how can it be wrong in principle if that defendant wishes to challenge some of those people for the jury? How can that be wrong? How can that be rigging the jury? That is what peremptory challenge is all about. It is challenge that makes an essential contribution to the perceived fairness and justice of our criminal procedure and that is why lawyers—the Law Society and the Criminal Bar Association, as they represent prosecuting lawyers and defending lawyers—are implacably against this abolition. It is because we know in all the trials in which we take part, on whichever side we are, that the peremptory challenge has an important part to play in the perceived justice which people expect to get in our courts when charged with a serious crime. Moreover, it gives the accused a final protection against the manipulation or the rigging of a jury. I suggest that it is the ultimate protection against the abuse of power.
As has already been said, challenge for cause will not do as it leads inevitably to embarrassing submissions in open court, the questioning of jurors, the using up of valuable time and the descent of the judge into the arena. If the exercise of this fundamental right has, in a few rare cases of multiple defendants, resulted in inconvenience and annoyance to the court surely in this imperfect world that is a very small price to pay.
I sincerely hope that every Member of this House will read Mr. Levin's brilliant article in The Times today and will appreciate—I hope I am right about this; the Minister will be the first to put me right if I am not—that this House not very long ago approved three challenges as being right in Scotland. I hope that this House, on a strictly non-political basis, will remove this carbuncle from the Bill.
I too welcome Part I of the Bill as implementing most of what is best in the Roskill report and I approve

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absolutely of the determined effort shown by the Government to deal with high level fraud. I particularly approve of the preparatory hearing, in Clauses 7 to 10 which incorporate so many of the reforms so long advanced by the Criminal Bar Association and put into writing as long ago as 1980. However, there are two matters which disturb me because we must not be carried away with our desire to clamp down on one type of crime.
I refer to the extent of the draconian powers given to the director of the Serious Fraud Office and his investigators: the power to interrogate any person that they reasonably believe has relevant information about any aspect of anyone else's affairs and to obtain possession of any document which appears to them relevant, under pain of prosecution and six months' imprisonment if he or she refuses to answer without reasonable excuse. Those are indeed draconian powers. There is no distinction between suspect and innocent witness. There is no caution, no right of silence and a complete discretion in the director. The only safeguard is that no statement so made may be used in evidence.
The House heard earlier this afternoon the noble and learned Lord, Lord Roskill, regarding that single safeguard as being unacceptable. Why on earth, he asked, is that in the Bill? Why is it there? I say to the noble and learned Lord, with the greatest respect, that, on the face of it, under these draconian powers it is the only safeguard that the innocent person being interrogated in that way will have. Moreover, as the noble and learned Lord knows more than anyone else, documents and information obtained under that interrogation, under power of imprisonment, will be admissible in law. That seems to raise matters at which we should look with care. Persons under that pressure, if they produce documents or give information, will not be able to say, "I do not wish to do that from the point of view of self-incrimination".
The justification for those powers and the extensive powers of search is, as we have already heard from the noble and learned Lord, that those powers are similar to those to be found in the Companies Act, the Financial Services Act, the Banking Bill, and so forth, but their extent would seem to be far wider under this Bill. There are grave dangers in a creeping extension into the criminal law of those powers of interrogation under threat. It would not be long before they are asked for in drug cases, rape cases, and so on.
A second matter for concern is the power given to the judge under Clause 9 to order the defence at the preliminary hearing to specify the facts upon which it proposes to rely at trial, with the sanction that the jury may infer guilt if the defence departs from or refuses to disclose those facts. That is another direct removal of the right of silence which requires careful examination in Committee.
Clauses 13 and 14 appear to abolish all the protection which an accused has in a criminal trial against the use of hearsay evidence. Hitherto, a rule of law has guaranteed the right of cross-examination which I suggest lies at the basis of the Anglo-American trial system. It now appears—I say "appears", because this part of the Bill reads at times more like an academic exercise than a practical guide to a fairer and
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more efficient criminal trial—that entries in diaries, passages in letters and copies of documents will all be evidence of the truth of what is written in them without the accused being able to cross-examine the person who made the document. It is to be left to the jury to assess the weight of what is in the document.
The Police and Criminal Evidence Act sensibly relaxed the rules about hearsay. Your Lordships will remember that we discussed that matter at length and strict safeguards were inserted into the Act. But under this Bill those safeguards, only recently debated in this House, are now suddenly to be repealed. Instead of a rule of law, we are to have the fragile and subjective discretion of the judge who will have an exclusory discretion, with the onus on the accused to make his case. The removal of that bulwark against wrongful conviction will also need the closest examination in Committee.
The noble and learned Lord, Lord Roskill, has said that he believes in the power being given to the judges. He also wants juries replaced in fraud cases and the tribunal to consist of a judge and City experts. There is a division of view. With the greatest respect, I prefer a jury and a rule of law to a judge's discretion. The noble and learned Lord also wants the power to increase sentences to be in the hands of the judges of the Court of Appeal. We have had the heavy artillery down here to blow Clause 29 out of the Bill, not to leave things as they are but instead to give the power to increase sentences to the Court of Appeal.
With all the logic of the highest judicial intellect, it has been argued that a lenient sentence should be put right just as an over-excessive one should. But that is not a matter of logic. Behind the sentence is a human being who has gone through the trauma of a trial, whose advocate has spoken, whose probation officer has made a report, whose witnesses have been called and whose judge has seen him over a period in the witness box. The judge decides to fine him. "Huh", says the Sun newspaper, "that is outrageous". Before long it is suggested that that case is to be taken to the Court of Appeal, and many months later that man, having been fined, returned to his home, his job and his family will be dragged up to London and there three judges, reading the papers, will decide that imprisonment was what ought to have been imposed. That is, as the noble Lord, Lord Windlesham, has called it, an adjustment upwards. That is the other side of the power to increase sentences. It is one which in due course I shall urge the House to reject.
Finally, I shall deal with Part IX. It relates to extradition, which has not yet been mentioned. Present procedures under which nationals are surrendered to foreign states, other than the Commonwealth, have become exceedingly complex and tied into meticulous demands for precise observance of procedural rules. But those requirements have an honourable history. It is the determination not to subject our nationals to the trauma of arrest, incarceration, removal and eventual trial under a foreign jurisprudence without our courts ensuring that there is sufficent evidence to establish a prima facie case of guilt; in other words, a judicial examination of the law and the evidence.
Our neighbours in Europe, with a wholly different legal system and approach, have become disenchanted

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with the difficulties of trying to understand what on earth is a prima facie case and what on earth is hearsay evidence. For them extradition is an executive act. They usually do not surrender their nationals. They claim extra-territorial jurisdiction over them. In Part IX it is proposed entirely to scrap the old safeguards and to recognise extra-territoriality and, in relation to any country covered by an appropriate Order in Council, make a surrender here an executive act.
The Minister says that crucial safeguards are retained in the Bill, but the safeguards in the hands of the Home Secretary under Clause 104 do not include any reference to the quality of the evidence which is submitted. If the Home Secretary receives a warrant in proper form and evidence of identity, and the document discloses an alleged extradition crime, he issues authority to the court, which court must then commit the person. Under Clause 101, the court is forbidden to consider the quality of the evidence; in other words, we must trust implicitly not the judicial system of our neighbours in Europe but the executive in those countries.
The aim of course is to enable this country to ratify the European convention on extradition but to adhere to the old evidence rule in relation to the Commonwealth under the Fugitive Offenders Act and reciprocally with the United States of America. I confess to a strong European bias towards the new procedure. However, I suggest that the Government must give an undertaking to file a reservation, if they ratify the convention, requiring the production of evidence. As I understand it, the Scandinavian countries, Israel and Ireland have all done that. I should like to hear from the Minister whether that is the intention of the Government.
This is indeed a complex and dense—if I may coin a phrase—ragbag of a Bill. It will require much thought in Committee and much effort, I fear.
8.10 p.m.
Lord Ackner: My Lords, it is a particular pleasure to commence my address by adding my congratulations to those of your Lordships to my noble friend Lord Irvine of Lairg. I fell under the spell of his advocacy some seven and a half years ago. I had just been elevated to the Court of Appeal and I was doing my three weeks' compulsory pupillage sitting on the left of the Master of the Rolls, Lord Denning, with a large "L" around my neck—visible certainly to the Bar if to nobody else. We assented to his propositions very speedily but apparently the magic was not strong enough for what we referred to as the "voices of infallibility" higher up the scale. But then the noble Lord, Lord Denning, used to say—perhaps he still does—that those were not vintage years in the upper House.
I shall spend little time on the merits of Clause 29 because I cannot find them. It is a hollow, empty clause. I used to share some of the concern of the noble Earl, Lord Caithness, that the prosecution should have no direct interest in sentencing. But of course that is wrong: they have a direct interest in sentencing now. They have the duty to put before the court all the facts that are material to the sentence, in particular the past record of the accused and the very circumstances in
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which he has committed the offence. I have been brought round recently to supporting the proposition that the prosecution should have the right to appeal against the sentence. I have been brought round for two quite separate reasons. The first is that I learned—perhaps I should have known before—that such a provision exists in Australia, Canada and New Zealand, for whose jurisprudence we all have considerable respect. I accordingly wrote to a friend of mine, the Chief Justice of British Columbia, for his comment on how the system worked and he said that it was admirable. I also wrote to one of the senior judges of the Court of Appeal in New Zealand, Sir Ivor Richardson, with whom we had the privilege of sitting in the Privy Council for three months this year. He wrote me at length and one particular paragraph of his letter is worth quoting. He set out the various figures from 1971 to 1986. He then said:
"The 1986 figures not only show a surge in such applications"—
that is for leave to appeal—
"but also in the success rate. Without detailed analysis of the judgments, I can only think that this reflects a considerable unevenness of sentencing in some areas of particular community concern, where there has been a great increase in the rates of offending. The three areas concerned are serious sexual offending, crimes of violence (particularly associated with robbery), and serious drug dealing".
He might have been writing about our own problems here.
There has been concern voiced about what are the duty and limitations to be put upon the prosecution and what is their role if this right is allowed. I spoke to the Chief Justice of Australia at the Third International Appeal Judges Conference in Kuala Lumpur, which ended last Friday. Through him I achieved a certain amount of material. Perhaps I may quote two portions from the Australian Criminal Law Journal of 1985. They cite this from the judgment of Chief Justice King in the case of R. v. Wilton decided in 1981.
"It remains true that the Crown is required to make its submissions as to sentence fairly and in an even-handed manner, and that the Crown does not, as an adversary, press the sentencing court for a heavy sentence. The Crown has a duty to the court to assist it in the task of passing sentence, by an adequate presentation of the facts"—
I interpose, as we have here—
"by an appropriate reference to any special principles of sentencing which might reasonably be thought to be relevant to the case in hand, and by a fair testing of the defendant's case so far as it appears to require it".
The same Chief Justice in another case in 1982, R. v. Osenkowski, said this:
"The proper role for prosecution appeals in my view, is to enable the courts to establish and maintain adequate standards of punishment for crime, to enable idiosyncratic views of individual judges as to particular crimes or types of crimes to be corrected, and occasionally to correct a sentence which is so disproportionate to the seriousness of a crime as to shock the public conscience".
As is so often the case, we have been harrowed by the situation of the accused faced with an appeal against the leniency of a sentence. But what is frequently overlooked, and what causes much problem in our courts, are the sentences which are disparate and the sense of grievance which arises—as it does on occasions—where prisoner A is sentenced by Judge X and prisoner B, involved in the same offence but because, for one reason or another their trials

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cannot be brought on together, is sentenced by Judge Y, and there is great disparity between the sentences. The right way—and this is the way to deal with the public concern—is to impose the right sentence on each for the crime. That is what the public is interested in.
My second ground for changing my approach is this. There has grown up in recent times the sinister new blood sport of attacking Her Majesty's judges and then attacking them again if they have the effrontery—which they rarely do—to defend themselves. This is very valuable grist to the subversive mill. Undermine the public confidence in the judiciary and you have achieved a short cut to destabilising society. The popularity of this sport has even spilled over into a recent consultation paper, emanating from the Lord Chancellor's department, which hit the headlines in this country with the suggestion that High Court judges do not work hard enough. It hit the headlines not only here but in the Far East and I am delighted to say that the Lord Chancellor, in a question and answer exercise in Kuala Lumpur himself disowned the suggestion. By a strange coincidence, I had the same questions asked of me a fortnight ago at the end of addressing 400 judges and lawyers in Singapore, and I equally was able to reject the suggestions. But that is the fashion of the times.
Perhaps I may quote from the end of an excellent article in The Times of 9th February by a lecturer in law at Cambridge University, Mr. John Spencer. He said this:
"Even the best judges, being human, can make mistakes. If British justice is really the best in the world it ought to be able to correct them".
The other point which I wish to make, like my noble and learned friend the Lord Chief Justice, relates to the absence of powers in the Court of Appeal, except in highly limited circumstances, to order a retrial. I hope an amendment to achieve this extra power will go through undefended. Perhaps I may read just a small paragraph out of a report prepared by the criminal law team of the Law Commission:
"So far as can be ascertained, in every jurisdiction that was within the former British Empire the criminal appeal court has the power to order a retrial where appropriate. These include every State in Australia, every Province in Canada, New Zealand, India, South Africa, Nigeria, Kenya and Hong Kong. It seems of particular significance that in these jurisdictions the power existed well before 1907 and at a time when the common law of the Empire was controlled from London. The power also exists in every State in the USA and in the Republic of Ireland."
To interpolate, as your Lordships know, it now exists in Scotland and Northern Ireland. The article continues:
"The position in England and Wales seems now to be unique. Moreover, it would now be impossible to say … that there is a principle of the common law that once a jury has given its verdict a man cannot be subjected for a second time to the ordeal of a criminal trial. If there is such a principle it is limited to England and Wales. The near-unanimity of other common law jurisdictions on the point may tend to the conclusion that what has on occasion been perceived as a principle could now more accurately be described as a peculiarity."
It was not long ago that I addressed your Lordships' House in a debate about the overcrowding of prisons when I deprived the noble Lord, Lord Mishcon, of five minutes of the time appropriate to him. I could not apologise then; I apologise now and I make good my apology by ceasing now to address your Lordships.
8.25 p.m.
Viscount Mountgarret: My Lords, some years ago the mythical Mikado of Japan was made to say by the late Sir William Gilbert that his object, all sublime, was to make the punishment fit the crime. I think that notwithstanding the 136 pages of the Bill before us, it is a question not so much of what is in it as what it leaves out. I should like to address my remarks to, and concentrate upon, the theme with which I began. I do not believe that there is enough existing emphasis nor indeed any provision in this Bill to achieve that object. There is insufficient attempt to combat the everlasting and ever-increasing rate of crime in this country. I hope that we might be able to apply our minds to this and try to do something about it.
There is a general increase in crime, as the noble and learned Lord, Lord Elwyn-Jones rightly suggested. I do not have the percentage. But all 43 police forces last year reported more crime in 1986 than in 1985. The clear-up rate, on the other hand, has declined from 43 per cent. some 10 years ago to 31 per cent or thereabouts today. So, on the one hand, we have an increase in crime and, on the other, for whatever reason, a less efficient way of clearing it up. The crime prevention department states that the ethos of its policy is to encourage the public into policing itself. The department says, in its own words, that this is the only way. That is very wrong. There are many other ways which should be tried. We have persisted with the same methods over the last 20 years. That is too long. At the least, an effective and deterring punishment is needed.
Quite by chance I read the colour supplement of the Sunday Telegraph yesterday. Some of your Lordships have probably also seen it. The policy of the public defending themselves should, I think, fill your Lordships and indeed the country with horror. Your Lordships have probably heard quite recently of the young American on the suburban railway in New York who was attacked by a gang of four people who relieved him of some five dollars. Ostensibly to defend himself, he pumped the contents of a pistol which he owned into them, and he is now being hailed as a hero. Whether that was right or wrong I do not know. But that is the gist of what it would appear the crime prevention department is saying.
The article asks whether we are aware that it is estimated that around two million people keep some form of defensive weapon, an iron bar, a kitchen knife or what-you-will, beside their beds. Very laudable, but woe betide you; if you use them, you will be in the wrong. You have to wait until you are hit first, and by then it may be too late.
What is the point of saying you must defend yourselves? The noble Baroness, Lady Phillips referred to the increase in firearms. I share her concern. In the Metropolitan Police area alone, last year there were apparently 5,000 new applications for shotgun licences. I find it very difficult to believe that there is extra space for some 5,000 shotgun enthusiasts in pheasant-shooting syndicates or shotgun clubs in the space of one year. It makes one wonder why there is that increase in the number of applications. One might do well to look at that article. It is concerned that we are encouraged to get the public to defend themselves, however laudable the underlying thought may be.

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I should like to concentrate on three specific aspects of crime which I think give rise to great concern. The first is rape. The deterrent for rape does not seem in many ways to be working particularly well. It is a most appalling crime, sometimes uncontrollable by the person committing it. Naturally, sympathy and understanding must be very much borne in mind. But if one casts the mind back only a few weeks, for a child aged four to be raped by somebody is almost too sickening. If there are people like that who cannot control their instincts, for whatever reason, does it not give rise to the question that castration might be an answer?
I ask your Lordships to consider the crimes of violence against the elderly and muggings. We read endlessly every single week that the homes of another two ladies have been broken into, that they have been mugged and that their savings have been taken—savings that amount to half of nothing at all but which to them are their life savings. Those people suffer worry, concern and injury from bullies. For that is what they are; they are bullies. What do we do with them? We imprison them. Birching is the answer. Some of us were brought up to know how to treat the school bully. We treated a bully like a bully. We gave him some of his own medicine. He went away and did not do it again.
I have some statistics for which I am extremely grateful to my noble friend on the Front Bench. These statistics come from the Isle of Man where birching was abolished, I believe, in 1967. The number of crimes of violence committed on the island then was 42. In 1984, the last year for which I have the figures, the number had risen by 300 per cent. to 121. The population had remained virtually static. I agree it had gone up by about 4,000: but to all intents and purposes, out of a population of 60,000, such an increase is virtually static. Yet the second page of the informative letter I received says:
"The figures were compiled by the Isle of Man police who do not believe that the stopping of birching has affected the crime figures".
I ask who is trying to kid whom? Who is trying to pull the wool over whose eyes? The next thing we shall be told is that the moon is made of cream cheese. Of course there is a connection between the two. It must be obvious. If I am accused of trying to pretend something that is different, very well, my answer is that we should perhaps consider giving it a try. We have tried the soft soap approach for a number of years. It does not seem to have worked very well. A different and rather more severe approach may be necessary.
The last point inevitably concerns the death penalty. We have had this bandied about uphill and down dale endlessly. It is said to be vindictive, to be an anachronism, un-Christian, sadistic and all the rest of it. We seem to forget that we are fortunately still—for how much longer I do not quite know if our crime rate continues as it is—a free society. If one is a member of a free society, it is rather like being a member of a club. When one joins that club there are certain rules and regulations by which one is expected to abide. If you break the rules, then you are invited to resign from the club and if you do not resign you are ejected.
A free society life is exactly the same sort of thing. If the ultimate rules are ignored or disobeyed on a
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continual basis in a severe enough way, then the offender must be required to leave that society, and in terms of human life that means death. It does not mean that one has to go through the rather gruesome (and I agree not a very attractive) proposition of hanging. That, I think is probably unnecessary. It is probably offensive to many people who would rather not have the death penalty at all. But things can be done in different ways. We are lucky that we now have very effective medicine and that sort of thing. An injection administered humanely, quietly and reverently could be given in decency and privacy to take away the rather more gruesome aspects of other means which I do not support.
However, we have a duty to look after our potential victims. For what would we have the death penalty? We have a responsibility already to our judiciary. We have regrettably seen the effect only this week on a most eminent and much loved judge as a result of his administration of the law. As regards the police, can we really expect young recruits to parade the streets of Tottenham where that awful thing happened, where a young man was hacked to death with a machete? Is that not simply ghastly? We have a duty to protect our police.
If we get these violent criminals into prison, who will look after them? The prison warders? What is to stop a mass of prisoners turning on prison warders and perhaps killing one. We have a duty to look after them. I say that for causing the death of police officers or prison warders, for terrorism, and in determined furtherance of theft where a person is prepared to kill in order to acquire that to which he is not entitled, the crime should be punishable by death—but not for crimes of passion. We all know that there are times when the string breaks and something goes a bit wrong. That must be treated with compassion and understanding.
As I said, this has been argued uphill and down dale before. We are concerned that in another place Members are elected by their constituents ostensibly to represent their views. I say "ostensibly" because there are too many occasions when those views are not represented. We all accept that the rules of government must proceed and that one must toe the party line, for want of a better word. But there are some occasions when there is no party line as such and there is a free and open vote. I have heard it said—I do not think anyone will contradict unless they have factual evidence—that about 80 to 83 per cent. of the people in this country would favour and welcome the reintroduction of some form of death penalty on the lines that I have outlined. Even if that is not so, there is a lot of difference between 83 per cent. and less than half. If that is so, then I ask myself what are the Members of Parliament doing by not taking on board the known views of their constituents? They are merely, in my view, voting according to the dictates of their own consciences. Therefore, it could be construed that they are not doing the job for which they are elected.
Your Lordships' House has a duty to reflect the wishes of the country. When another place seems unable or not prepared to do it, then we should think very carefully indeed about our role. I hope that the

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few remarks I have made on this aspect will be borne very much in mind.
There are other areas to which one could perhaps give consideration. We are told that the prisons are over-populated, that there is not enough room. We shall be increasing, or are proposing to increase, the length of prison sentences for certain crimes under the existing Bill. Where will they all go? We used to have deportation. It begs the question of whether that might not have to be thought of again.
Noble Lords: Oh!
Viscount Mountgarret: It is not a frivolous question, my Lords. If we could find a suitable place for people who could not be contained in this country and who cost the taxpayer an enormous sum of money—and I do not have the figures with me—there would be nothing wrong in letting them live on an island, having given them the necessary equipment to start off their existence, letting them get on with it themselves and letting them make their own rules. It would then require a certain amount of patrolling by ship. One has to think of some alternative.
We want to repay the victims of crime and repay their theft. Part V of the Bill refers to,
"offenders convicted of highly profitable crimes".
Who is going to decide what is highly profitable? Any crime, any theft against the person, is a considerable loss to the person concerned, although in terms of money in the world at large, it may not be so great. To the person concerned however it is a great deal, whether it is a memento or whatever. People who have stolen and who are caught must be required to repay that which has been taken. If it is found that the person is unemployed, that he has very few assets or whatever, he has to be made to work. If he goes to prison and earns some money, that money must be kept on one side to repay the person until the debt is paid off. If somebody says, "What about his family and his children?", my answer is, "Tough cookie, you should not have gone and stolen in the first instance". Such provision should be considered carefully.
I should have thought that the Bill might perhaps be an engine in some way to take care of some of these ideas, although some noble Lords may feel that they are slightly draconian. None the less they should perhaps he given a try in the light of the obvious failure of our punishments in the past 20 years or so.
8.41 p.m.
Lord Morton of Shuna: My Lords, I had intended to speak only on the provisions relating to the Criminal Injuries Compensation Board, but my first duty is to congratulate my noble friend Lord Irvine of Lairg on his excellent speech. It is a great pleasure to welcome another Scot to this side of the House and especially one who had the good sense to graduate from Glasgow University.
Before turning to the criminal injuries provisions perhaps I may deal shortly with two or three other matters. I should like first to welcome, subject of course to the criticisms that were so eloquently put by the noble Lord, Lord Hutchinson of Lullington, the provisions on extradition in so far as they give the
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Scottish courts the jurisdiction to deal with appropriate cases. So far that is welcome to a Scottish lawyer. I should also like to comment, if I may as a Scot, on the provisions in Clause 29 and the argument that has developed. If there is to be a right for the prosecution to appeal against an inadequate sentence in England and Wales, it would perhaps be probable that that might follow in Scotland.
The whole of the argument that has taken place, and especially the speech we have just heard from the noble Viscount, Lord Mountgarret, works on a basis which in my view is in error—that it is the sentence which is a deterrent. Having worked on prosecution for about 10 years I am convinced that the main deterrent to crime is the possibility of conviction. If a criminal sets out knowing that he has a one in five chance of getting caught he is far more likely to do it than if he knows he has a four in five chance of getting caught. The sentence is far less significant than the actual conviction.
On the matter of the death penalty, I suggest that it has been far easier to obtain a conviction on sufficient evidence since the death penalty was abolished than it ever was when the death penalty existed. It was extremely difficult—the standard of proof was very high—and therefore if the death penalty returns more murderers will be acquitted. If that is what the country wants, so be it.
It would be unfortunate if an appeal against sentence was open to the prosecution. The trial judge has heard all the evidence. He knows the flavour and significance of the evidence. He has heard the way the injured people and the other witnesses have given evidence. It is extremely difficult to suggest that on paper a Court of Appeal would be able to say that a sentence was clearly inadequate when it did not have the advantage that we have been told so often by the Court of Appeal and by this House in its judical capacity is available to the judge at first instance, of seeing what a former Lord of Appeal referred to as the flick of the eyebrow of the witness. It is very difficult to see how that could be done properly. It becomes impossible if the tabloid press has attacked the sentence of the judge of first instance and there is some form of public outcry about the sentence which forces the Attorney-General to send it to the Court of Appeal. It is very difficult indeed for anybody, even a judge of the Court of Appeal, to put out of his mind such matters.
I turn now to the provisions of Clauses 79 to 88 and Schedules 6 and 7, which deal with the provisions for the Criminal Injuries Compensation Board. I have to declare an interest as I have been a member of the board since 1979. The board has existed since 1964 as a non-statutory scheme. There can be no objection to making it statutory. It is unfortunate, however, that the present scheme, which runs to 25 paragraphs covering six sheets of paper of exactly the same size as we have in the printed Bill, is to be replaced by 10 clauses and 30 paragraphs of schedule extending to 16 sheets. It would have helped if the extension had made the provisions easier to understand because the purpose of the scheme is that victims of crimes of violence should be able to apply themselves, understand the scheme and see what it is all about.

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If one turns to Clause 80(10) one finds the first complication which no doubt will be put right in Committee. There are two paragaphs (a) and two paragraphs (b) in subsection (10). At paragraph (b)(ii) there is this remarkable phrase:
"if the person injured has not so ceased to live, that he is prevented by circumstances from doing so".
There is a meaning to this and one can find it out if one has legal training, but if somebody—for example, the notional old-age pensioner—gets hold of this clause of the Bill and has to work out whether he has a right to apply and he reads this, he will begin to wonder what it means. The phrase,
"if the person injured has not so ceased to live, that he is prevented by circumstances from doing so",
is not clear in its meaning.
Under the scheme compensation was payable for personal injury directly attributable to a crime of violence (including arson and poisoning) or to attempts to arrest offenders or prevent offences. It is far from clear why it is necessary to go into a more extensive definition.
Clause 80 attempts to define what is meant by a violent offence. This is done in rather tortuous langauge:
"conduct constituting—

(i) a violent offence or;

(ii) an offence specified in subsection (4)".

The injury has to be:
"immediately caused by or closely connected with",
the violent offence. What is the purpose of changing the words "directly attributable to" to "immediately caused by"?
We are fairly well accustomed in law to knowing what is meant by "caused". "Immediately caused" is a new concept. It will surely give the courts a wonderful time working out what is immediate and what is not. Apparently what is not immediate is not to be given compensation.
Then one has an even more difficult legal concept to define: what is "closely connected with" a crime of violence but not "caused by" it. I suggest that to have left the wording as it was would have caused the courts no trouble.
Lord Justice Lawton in the Warner case said:
"I do not think it prudent to attempt a definition of words of ordinary usage in English which the Board, as a fact finding body, have to apply to the case before them. They will recognise a crime of violence when they hear about it, even though as a matter of semantics it may be difficult to produce a definition which is not too narrow or so wide as to produce absurd consequences".
I am afraid that what has been produced is an absurd consequence. Under Clause 80(2)(a)(ii) one finds:
"conduct constituting a violent offence; or an offence specified in subsection (4)".
Under subsection (4) the first offence is rape. According to this, therefore, rape is not a crime of violence. That is surely absurd. Rape in my understanding has always been a crime of violence.
Then one comes to an offence that falls to be charged as arson. I am sorry to put on my Scottish hat again, but there is no such crime in Scotland; it is called wilful fire-raising. There is no definition saying
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that wilful fire- raising is to be read in Scotland as meaning arson in England.
Then comes an offence under the Explosive Substances Act 1883 and under the Firearms Act 1968. As I understand it, the point concerns people who possess explosives or firearms with intent to do various things. The penalty on the person is because of his possession, not because he causes an explosion or uses the firearm. It is because he is in possession at the time of the robbery or in the street and so on. The intention is to attack the possession. The possession does not cause the crime of violence; it is the use. The whole concept of using firearms and explosive substances legislation in the case of a crime of violence shows a complete misunderstanding of the purposes of the legislation.
I suggest that it would be better to return to something fairly simple, to cut out about 30 lines and to say that persons who suffer personal injury caused by a crime of violence are entitled to compensation. But perhaps that is too simple.
I pass on to some more minor matters. Under Clause 81 there is provision for Schedule 7 to permit a three-year limit on reopening cases. It has been the habit of the board over the years to tell applicants who have a risk of severe deterioration—for example, epilepsy or blindness due to a detached retina—as the result of an assault that they can come back at any time if that occurs. We are now to have a three-year limit. The board is therefore, breaking its word to all the people to whom it has given assurance in the past.
Secondly, and perhaps as important, this goes against the approach of the civil courts, which in the last few years have gone in for making awards of provisional damage. It is a retrograde step to say that compensation must be given for the risk that a person may suffer epilepsy in future. If one compensates for risk, one is always wrong. Either the person gets epilepsy, in which case one has given him too little, or the person never gets it, in which case one has given him too much.
There are other retrograde steps which I hope can be put right in Committee. As the Bill is presently drafted, clothing is to be excluded. When a pensioner or an unemployed person gets mugged in the street, such a person is often wearing his only coat. It is intolerable to say that a person shall not get compensation for the clothing that he is wearing. Similarly people may have glasses or a hearing aid for which they have paid a fairly substantial sum of money. These are to be replaced by property of equal utility though not of equal value. Thus the cheapest spectacles will replace the more valuable ones. The earnings limit is to be reduced from two to one-and-a-half times the national average wage, which seems a fairly mean approach.
Then one comes to medical expenses. The scheme at present allows the board to pay private medical costs if it considers these reasonable. Paragraph 5(5) of Schedule 7 provides that private treatment is to be allowed only if it is essential. In the case of a person with a scar on his face, what is "essential" about repairing the scar? There are waiting lists for plastic surgery on the National Health Service. This in effect amounts to waiting for people on the list to die. There

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are also waiting lists for surgery to people's noses. The waiting lists can be as long as four, five or more years. Two or three months ago in London there was a young boy of Indian origin who had to have his nose straightened to allow him to breathe properly. He had been waiting four years for an NHS operation, and it was estimated that he would have to wait another two. It would surely be reasonable to allow private treatment in such a case. But would this be said to be essential? Is that what is being cut out?
Given that the cost of the criminal injuries scheme is roughly equivalent to the cost of maintaining military bands, I think it is rather unfortunate for us to consider approving measures as penny-pinching as these. As a lawyer, it is difficult to see that if we spend on criminal injury compensation roughly one tenth of what is spent on legal aid, we cannot afford to replace people's coats or give them private operations if that is necessary.
The next matter I wish to raise is that of nervous shock. I had understood that pressure had been put on the Government and they had undertaken to meet the type of case where a railway driver suffers shock because of somebody having committed suicide in front of his train. As we know, there have been numerous such cases recently before the courts. We understood that the Government had said this was to be within the scheme.
However, if one looks at Clause 80(11) and (12) one finds that nervous shock is excluded unless it amounts to a psychiatric illness. The railway driver, when somebody throws himself in front of his train, does not suffer a psychiatric illness as a general rule; he suffers nervous shock. He is off work for perhaps four or five weeks, or possibly two or three months, and then he goes back to work. I should have thought he would be entitled to compensation; but that would be ruled out by this part of the Bill. Is that really what is meant?
Finally, I should like to refer to the staff question. It is unfortunate that, despite the recommendations following the Civil Service inspection in 1983 that an increase of staff was then needed to reduce the backlog, in spite of the situation last year when there was a three-month delay between applications being received and anything being done about them and in spite of the promises of additional staff given in the form of Answers in this House on 8th April and 16th July 1986, the additional staff have not yet appeared. We understand they are coming in June—but then other things are perhaps coming in June and that may be the reason that the staff are at last coming. They are three-and-a-half years late.
The delays caused by insufficient staff have brought distress to applicants and have made a very loyal staff grossly overworked. However, the Bill provides that they are not to be Crown servants. I trust the Minister will be able to assure the House that the staff will continue to receive remuneration and other emoluments on the same basis as civil servants and that the present useful system, by which members of staff work for the board for some time and then can look for promotion elsewhere in the Civil Service, will continue.
I regret having taken so much time. It is important that this scheme, when it is made statutory, is as near
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correct as it can be made. It is also important that its provisions should be able to be easily read and understood, unless there is to be provision that everybody applying to the board shall be given free legal aid to understand the scheme. I suggest that there is no need for that. It could be made much more simple and should be.
9.3 p.m.
Lord Meston: My Lords, as has already been said, this is a very disparate Bill and at Second Reading one must be selective about what one says, particularly at this stage of the evening when everything one wanted to say has already been said, and said much better.
This Bill is welcome but it contains flaws and inadequacies. As my noble friend Lord Hutchinson said, Part II makes far-reaching inroads into the rule against hearsay evidence. It allows documents to speak for themselves in the perhaps oversimplified words of the White Paper. It follows, as he told your Lordships, another relaxation of the hearsay rule very recently in Sections 68 and 69 of the Police and Criminal Evidence Act 1984. But there was one important difference. Under Section 68 of the 1984 Act, as under the Civil Evidence Act 1968, before a document becomes admissible it must be shown that there is a good reason for not calling the author of that document. This Bill does not have that same emphasis. I would suggest that the Bill would not be damaged if it were tightened so that there have to be shown to be good reasons why a document cannot be called, and also there should be safeguards to ensure that such documents as are admitted are intrinsically reliable.
Of course we can overhaul the rules of evidence, but I would hope that we should do so in such a way as to bring in more clarity and less judicial discretion than the methods selected in this Bill. Otherwise we might find ourselves in the curious position that we would have more stringent rules about admitting hearsay evidence in civil cases than in criminal cases. This is not just a technical area. It affects the fundamental right of an accused person to test evidence by cross-examination.
Moving on to Part III of the Bill, that same basic right concerns the lawyers in relation to Part III. Part III introduces live video links. That is a valuable enabling provision which if well used could improve the quality of evidence before the courts. However sensitively handled, there are some features in the criminal procedure which will, and do, frighten already frightened children. We cannot shrug that off. It is hard to think of a more difficult place than a court for a child to talk of a distressing experience such as sexual abuse.
The provisions of this Bill are useful but I join the noble Lord, Lord Campbell of Alloway, in saying that it does not go far enough. As he told your Lordships, there has been considerable authoritative pressure in the legal journals to persuade the Government to enable video taped interviews of abused children to become admissible in evidence. I would support that, subject to suitable rules and safeguards, including the opportunity for cross-examination.
The best evidence is the freshest evidence. Delay weakens any evidence, and in the case of child abuse

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it exposes the child witness to pressures. If the child's version of what happened can be video-taped at an earlier stage, it would be better evidence and there would also be a better chance of a guilty plea being made in appropriate places. There is conversely less opportunity for the child being persuaded, perhaps by his or her mother who does not want the father to go to prison, to retract or trim his or her evidence.
In improving and modernising the rules of evidence in criminal cases, there should be a valuable spin-off into civil cases involving children in which video evidence is already used with a mixed response from the judiciary. Of course, not all cases lead to criminal charges and not all criminal charges lead to convictions. Yet very often a court exercising a family jurisdiction has to pick up the pieces and assess not so much the guilt or innocence of the adults involved as the future risks to the children. If the quality of the evidence and the techniques of filming and interviewing children for clinical as well as forensic purposes can be improved, so much the better, but it will be necessary to do further work on reconciling the clinical and forensic techniques.
The collecting of evidence as part of a co-ordinated procedure dealing with cases of sexual abuse has already been undertaken using the co-ordinated expertise of social workers, police officers and the like. Those who have been involved with this area of the law now know of what is called the Bexley experiment, and I wish also to pay tribute to the Kensington and Chelsea social services department which has done pioneering work in that direction. There is some way to go and it may be that all that we can ask the Government to do is to give us an enabling provision, but we should at least have that.
During the dying stages of this Bill in another place it was understood that the Government intended to move on this matter. Today we are told that there will be a discussion paper. A discussion paper is welcome, but, as I indicated to your Lordships, there has already been considerable discussion. This is a valuable opportunity to get this matter right and put on the statute book particularly as we are increasingly aware of the problem of the sexual abuse of children. Fresh thought is also needed on the rules of corroboration in child cases. If we are to shake up the evidence and blow away the cobwebs in the rules relating to fraud cases, let us do the same in relation to cases that involve children.
I turn to about the only aspect of this Bill that has not been touched on previously; namely, Clause 125, which deals with the alleged victims of rape. This clause goes some way toward guaranteeing the anonymity of rape victims but it is still deficient. It does not meet either of the points made in an authoritative letter to the The Times, printed on the 25th March 1986. That letter pointed out that there are still insufficient penalties to deter the wealthy, ruthless newspaper proprietor, and furthermore that, although rape victims are protected, there is no protection for the victims of other almost equally abhorrent sexual offences. I should have hoped that the opportunity could be taken to rectify those two deficiencies.
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We have heard about the abolition of peremptory challenge from those who are more experienced in this matter than I shall ever be. One simply has to ask why. Where is the evidence that it is misused? If there is evidence of it being misused, possibly in multiple defendant cases, why can we simply not have an upper limit in such cases? At the very best it is a right that is valuable, albeit limited, and at the least it is a useful safety valve. Its counterpart is found in the finality of a jury's verdict. Surely the Government can rely on the restraint of responsible counsel, among whom I hope I can include myself. Like my noble friend Lord Hooson, when advising a client I am aware of the fact that challenging a juror can be counterproductive. I always tell a client, "You have the right to challenge a juror but, unless your mother-in-law or someone else whom you would rather not have on the jury turns up, I should keep quiet because you will irritate the judge and raise questions in the minds of the rest of the jury".
However, if that right is to be abolished—and I hope that it will not be—we must have better safeguards against unsuitable people sitting on the jury. I hasten to say that I would not suggest that Welshmen are inherently unsuitable members of a jury but some of your Lordships may remember the case of Thomas that was reported in 1933, in which after a trial that was conducted substantially in English, it was discovered that two of the jurors spoke only Welsh. That is all very amusing but it had an echo in a case that was reported in the newspapers last year—I think it was at Knightsbridge Crown Court—in which a trial had to be restarted after it was discovered that the jury included an Asian lady who had not understood a word of the proceedings.
It is not just a question of language problems. Certainly in the last jury trial in which I appeared prosecuting counsel told me that he would ask one of the jurors to stand by because it turned out that he had quite a serious criminal conviction. The juror stood by and was presumably sent home. No doubt he lost a day's work and had to be paid his juror's expenses, which was a waste of his time and the taxpayers' money. I inquired in a friendly fashion how he got there in the first place and there was a widespread shrugging of shoulders: he should not have been there in the first place.
Your Lordships may have seen the letter in The Times last week from a lady who reported that her 88 year-old husband had just received a jury summons. One's heart sometimes sinks when one hears a juror struggling through the oath either because he is not properly literate or because he is not familiar with the English language.
One difficulty—and perhaps we can deal with this if nothing else—is that strictly speaking a challenge has to be made before a juror starts the oath. Once he has started to take the oath, strictly speaking again, it is a matter for the judge's discretion as to whether he can be removed. Surely the time has come to alter that rule.
We are opening the door to challenges for cause. We all look at America and say, "Well I hope it will not happen in this country as it happens in America". The case of Jack Ruby, in which over 15 days 162 potential

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jurors were examined, is always cited. However, there are no up-to-date guidelines on how challenges for cause will be conducted. From my limited researches such case law as there appears to be is archaic. I suggest that we should leave peremptory challenge alone; if not, the courts must have better guidelines for an effective way of dealing with challenges.
Turning to the question of sentence, I share your Lordships' dismay that Clause 29 appears in the Bill. Appeals by the prosecution was a half-baked idea when it was rejected by your Lordships' House on 24th January 1985 and it is a half-baked idea now. As your Lordships have already said more eloquently than I can, it will expose judges to criticism from the ill-informed or the partially informed and it will expose the Attorney-General of the day to pressure to placate public opinion generated by the press.
The Court of Appeal may say that the sentence was right or within the acceptable range of sentence, which may or may not reassure the public; or it may say that the judge was wholly wrong, that he went right off the bottom of the scale but that it cannot do anything about it in that individual case. That can only add to public dissatisfaction. However, that overlooks the fact that day in and day out sentences are being passed which do not attract press attention and which are entirely consistent with the guidelines that are laid down and regularly reviewed by the Court of Appeal. Clause 29 proposes an unnecessary academic exercise, as many of your Lorships have already said. The question is therefore where we go from there.
Some of your Lordships have argued that we must go the whole way and have full-blown appeals by the prosecution against sentences or, as the noble Lord, Lord Windlesham, argued, that we should leave things as they are. I agree with him that we should leave things as they are and that we must think long and hard before we interfere with the well-established principle that the prosecution plays no part in the sentencing process and the long-established principle that a defendant should not be exposed to double jeopardy.
This Bill increases a number of sentences in accordance with the recommendations in the White Paper and I cannot do better than remind your Lordships of comments that were made in an editorial in the Criminal Law Review in response to the White Paper in May of 1986. It stated:
"There is every reason why maxima should 'be kept under constant review', as the White Paper says. Yet these proposals and the other recent changes amount to piecemeal adjustments in one direction only, without a rounded consideration of the overall structure…what is needed is a systematic review, going further than that conducted by the Advisory Council on the Penal System in its 1978 report, a qualitative rather than a quantitative evaluation…it is vital to retain a sense of proportion, and to show equal concern to the large numbers of small-time thieves and handlers of stolen goods who receive relatively harsh punishments and swell the prison population".
Finally, I turn to young offenders. I welcome the reference made by the noble Earl to flexibility in this regard and, in anticipation of amendments which may be tabled by my noble friend Lord Hunt, I argue for a single generic custodial sentence for the younger offender. I understand there has been an indication from the Government that they would consider that course. I welcome that indication, if I am correct. If I
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am not, I give warning that there will be amendments by my noble friend. Although this Bill improved itself in another place, there was, I am afraid, too much time spent on hanging and flogging. This Bill requires the detailed thought of your Lordships' House as a revising Chamber.
9.20 p.m.
Lord Denning: My Lords, I should first like to add my tribute to the speech of my noble friend Lord Irvine. I have had the pleasure of hearing him in court as an advocate. I hope that we shall have further opportunities of hearing him in this House.
As regards this Bill, serious fraud in the City of London has become one of the most objectionable features of our time. But many of those frauds have not been prosecuted because it is far too difficult and takes too long to get a trial or, more than that, to get the offender convicted. That is because fraud is too complicated for the ordinary jury to understand. The great thing which has been done by the committee of the noble and learned Lord, Lord Roskill, and his colleagues is to produce the first parts of this Bill, and may I say how much they should be welcomed by all of us. Serious frauds are to be in a department by themselves under a Serious Fraud Office, with its director taking charge of the cases from the beginning, and, furthermore, with a new procedure of preparatory hearings and the like bringing it much more into tune with modern times.
Added to that, our old rules of evidence which were based on oral testimony by witnesses—and often, in those days, juries could not read or write—are really out of date. In all our many practical affairs nowadays we go by the documents, we go by the writing made at the time, and the like. So how much it has to be welcomed from the report, which is brought into the Bill, that the rules of evidence are to be modernised by allowing documents in evidence far more than has ever been done before. Then, following the drug trafficking cases, offenders in great robberies with millions of pounds being stolen should not be allowed to get away with their proceeds. They should be confiscated and we should have all the machinery at hand to stop offenders taking their proceeds out of the country and laundering them so that no one can get at them. Again, how welcome that should be.
I think I remember taking part in the debates about 20-odd years ago on compensation for victims of crimes of violence. It was brought in as a voluntary system and has developed so well that it is most important. It should now be put on a statutory basis and this Bill is doing that. Then there is extradition and the like. This Bill has most valuable provisions in it. I hesitate to go further except on the two or three points of principle which have been discussed this evening.
Let me first take Clause 29. That should be rejected altogether. It is neither one thing nor the other. There ought to be either no appeal by the prosecution or a full appeal as for the defence. What is the reason for all this turmoil? I must say that like my noble and learned friend Lord Ackner I have altered my mind about the question of appeals by the prosecution when it is said that too lenient a sentence has been passed. The reason

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that I have changed my mind is the importance of maintaining the confidence of the public in our administration of justice. That confidence has been gravely impaired by the actions of the media in criticising judgments as being too lenient and the outcry which inevitably follows. Of course we all remember the Ealing vicarage case. The judge in that case, realising how important the case was, gave a reasoned judgment is his decision. It seems to me that he was a good judge and that the judgment was well reasoned. However, the media commented and there was then an outcry.
I do not blame the media; they are doing their job. I should like to read the words of Lord Atkin in the very important case of Ambad v. Attorney-General of Trinidad which is contained in the 1936 appeal case reports at page 333. He said:
"No wrong is committed by any member of the public who exercises the ordinary right of criticising in good faith, in private and in public, the public act done in a court of justice. The path of criticism is a public way: the wrong-headed are permitted to err therein. Justice is not a cloistered virtue. She must be allowed to suffer the scrutiny and respectful, even though outspoken, comments of ordinary men".
Therefore the media are doing what they are entitled to do. They are entitled to inform the public of what happens in a court of justice. They are entitled to express their view that a sentence is too lenient because they are, so to speak, the voice of the public who hear and understand. Therefore I do not criticise the media for doing their job. However, it means that if a sentence is too lenient and if it shakes the confidence of the public in the administration of justice. it should be open to correction in the Court of Appeal. It means altering the tradition of centuries.
I have tried many cases. As the Lord Chief Justice has said, the accused, with the eloquence of his counsel, puts the case for mitigation. The prosecution says, "I leave it to your Lordship". Let me give your Lordships an illustration of a case which I tried many years ago at the Old Bailey. The driver of a large car—perhaps an embasssy car—was a man of high reputation and character. He was driving along one of the streets in North London. He overtook wrongly, went on the wrong side of the road and killed two young girls who were cycling along the other side of the road. I listened to the advocate for the defence. I was influenced by him. The defendant was a man of the highest possible character who had that mischance and misadventure which was caused by an error of judgment on that occasion. Influenced by that, I sentenced him at once to nine months' imprisonment. I had not heard counsel for the prosecution.
That evening I thought of the parents of those two girls. I thought of the public reaction to my sentence—ought I not to have sentenced him to two years? I think I ought, and I say now that I ought to have done so. If I had heard the prosecution, if they had been able to speak to me and remind me of those other factors then I think and hope that I should have come to the right decision of two years for manslaughter. There, that is just experience. It is that experience and also the reporting of the Ealing vicarage case that leads me to change my mind. As the Lord Chief Justice has said, let the prosecution put forward their case, not suggesting any particular
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sentence, just putting before the trial judge the points which have to be considered from the public point of view. Then, if the sentence is too lenient let the matter go to the Court of Appeal.
If I may say so I should imagine that very often the Court of Appeal will not interfere because it will not have had the advantages which the trial judge has had; namely, seeing the witnesses and the accused, learning whether he is repentant, and hearing argument from both sides. I believe that rarely will the Court of Appeal interfere. But, on balance and in order to keep the confidence of the public in the administration of justice in the face of attacks by the media, I have changed my mind and now think, as does the Lord Chief Justice, that there should be a right of appeal. Perhaps I may also ask where now an appeal is allowed and it is not a matter of fresh evidence—perhaps the judge has made a misdirection—ought there not to be a power in the Court of Appeal to retry the case or to order a retrial? My answer, in accord with the Lord Chief Justice, would be, "Yes, but it is not in the Bill yet—let us hope that it may be".
I have only a few words to say concerning the question of juries. Much has been forgotten about their history. Let me remind noble Lords that since 1825 there has always been a property qualification for juries. A juror had to be a householder, which usually meant the husband, the man of the house, and there had to be a rateable value of £30 on the house, which was quite a considerable sum. So we had on the jury what Lord Devlin once described as "all male, middle-class and middle-aged"—and a jolly good jury they were. If I may go further, I have addressed many juries and have had the greatest confidence in their intelligence and in their ability to follow the evidence, and the written material if need be. They were first rate.
I do not remember, and I do not think there was ever one, a challenge in any of the courts where I sat. There was never a challenge in those days. In his book written in 1956 Lord Devlin said the challenge for cause was obsolescent and that peremptory challenges were virtually out of date and very rare. What is the reason for the difference now? Instead of being male, middle-class and middle-aged, in 1974, following Lord Morrison's committee, everything changed. Anyone, however poor, however rich, over 18 and up to 65, could be on a jury so long as he was on the voting list. It did not matter whether or not he understood English or whether he could speak only Asian, Welsh or whatever it might be, and there would be no one to interpret the evidence to those who did not know our language.
I believe it is essential£and I think the committee of Lord Morrison said this£in order to try a case properly for the jury to be able not only to hear the evidence but to read and write. In a fraud case members of the jury ought to be able to understand accounts. They should be able not only to add up and subtract and, these days, work a computer but to follow accounts and examine them to see how these fraudsters can wangle matters, putting money from one account into another, and so on. In order to try such a case a jury should have all those qualities. The jury should be able to understand the evidence and its implications.

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We do not have that. Even now, as we have heard, if a jury is needed to try a long case of fraud, who is able to give six months of his life to sitting in a jury box? The unemployed or the retired are the people one gets. Is that fair to either side; to the prosecution or the defence? That is why prosecutions are not brought when they should be. That is why the noble and learned Lord, Lord Roskill, and his committee said we should not have an inexpert and perhaps ignorant body of people of any age or ability so long as they are between 18 and 65 and on the voters' list, but a tribunal which can follow the case, understand it and detect the implications. There should be a judge with two expert assessors and accountants. The committee gave all its reasons and it was right in suggesting that there should be a special frauds tribunal.
No doubt the Government listened to the protests from all the people who claim that we should be losing our great right of trial by jury, and they did not include that proposal in the Bill. I suggest that, in these days of serious and severe fraud which is bringing the name of the City of London into disrepute, we should think again about the proposal for a special tribunal for serious fraud.
I have little time available for my last point, which concerns peremptory challenge. As I have said, in the old days I never heard of a challenge and I did not have one. Challenges only arise because we have everyone on the voting list able to serve on a jury. Challenges first came about when a jury of all men or all women was required. There were some challenges then. However, one can see the danger now. Even with three peremptory challenges, if there are 11 or 12 accused, that can result in 33 or more challenges. One can see the dismay of a perfectly respectable citizen who has been summoned to do his public service on a jury. He puts on his best suit and goes to court hoping to be chosen. He is called but as he goes into court he is challenged. No one says why. He is turned down and not allowed to do the public service which he was called to do. There is dismay for the ordinary citizen who is challenged in that way for no apparent reason.
We have heard that counsel get together to decide on what their policy should be. Some say that they should accept the intelligent jurors and challenge the ignorant, or perhaps the other way about. It depends on counsel's view as to the best tactics. If he challenges one juror, he does not know what the next man will be, Peremptory challenge, as it exists today, is completely illogical. I wholeheartedly support Clause 89, which abolishes peremptory challenge.
I have covered much too much ground, but this is an important Bill. There will be plenty of controversy. I congratulate the Government on putting it forward. I am sure that it can be helped in Committee. It is a matter for congratulation that the Government have done so much already.
9.40 p.m.
Baroness Faithfull: My Lords, with others I congratulate the noble Lord, Lord Irvine, on his maiden speech. I trust that he will support the amendments that I hope to move and then I know that there will be a chance of getting them through. I am sure that the Minister will also support them.
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As one who worked for 10 years in the children's branch of the Home Office and in the Department of Health and Social Security and who was a children's officer and a director of social services, I shall inevitably confine my remarks to children and young persons. I am a little sad that in over four hours only four Members of your Lordships' House have mentioned children and young persons. They were my noble friends the Minister and Lord Campbell of Alloway and the noble Lords, Lord Harris of Greenwich and Lord Meston.
I shall make just one comment:
"The child is father to the man".
If we had a policy for children and families, I wonder whether we should need to build so many prisons to which people could go in later life. I remember talking to the noble Lord, Lord Windlesham, the chairman of the Parole Board. He said to me one day that if social workers did better with children the Parole Board would not have so much work. I believe that to be true.
I shall refer briefly to three points. The first relates to detention centres. Detention centres—the short, sharp shock—were set up approximately 16 years ago. I did not agree with them then; I do not agree with them now. I am told that they were set up because in those far-off days there were detention centres in the services. The service detention centres were a success and it was therefore thought that detention centres for children and young persons would be a success in civilian life.
For a time it was my privilege to visit the Royal Naval detention quarters in Portsmouth and the military corrective training centre at Colchester. They are both splendid places. They offer a splendid service, but neither of them resembles detention centres in civilian life.
I agree with the noble Lord, Lord Meston, that the time has come to stop wasting money on detention centres. The figures and research show that they produce a bad recidivist rate. I have had letters from the Magistrates' Association, the probation service and social services asking whether under this Bill one custodial sentence could be provided instead of detention centres and youth custody centres, which are underused because they are expensive, and whether this is the time to take up the matter.
I was a little concerned that the Minister said it was hoped that young people would not be sent to prison but instead would go to detention centres. I am not sure what was meant by this. Is it automatic that they would go, or are we going to deal with each child and young person according to their need?
My second point concerns the Criminal Justice Act 1982 which gave courts the power to include specified activities in supervision orders on juvenile offenders. Those specified activities included intermediate treatment and other activities. In this Bill in Schedule 8 the courts are to be given powers to send a juvenile into custody for breach of specified activities requirements in supervision orders. Is this not a retrograde step?
First, a child or young person is being sent into custody for behaviour which in itself is not an offence. This is also inappropriate. I suggest that in other areas

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of our legislation emphasis is being laid on community care. This would not be community care. This would be extending custody. We have more children in custodial care in this country than any other EC country. I hope that we shall press for this clause not to go forward. If it does, it will mean that we shall not improve our community services; we shall rely on custody, which I think would be a retrograde step.
I then come to Clause 21 about which the noble Lord, Lord Meston, spoke so well. Perhaps I may speak on it also. First, I have received the figures from the Leeds Infirmary. In the last two years it has had 300 cases of child sexual abuse. Of those, one-third were under five. I pay tribute to Her Majesty's Government for Clause 21 but, like other noble Lords who have spoken, I do not think that it goes far enough.
With regard to the video link with the court, we all support this. The trauma of children or young persons appearing before the court and having to face the person who has committed the crime against them is something that I know children find an almost impossible experience to contain. I should like to ask the Minister this. Is there any good reason why 14 was chosen for the age below which children would appear on video link with the court in sexual abuse cases? I imagine that it is to do with either the 1933 or 1939 Children and Young Persons Act, but I have to ask whether it is in accordance with the new child care law which is being looked at in the Department of Health and Social Security.
I then come to a point made by my noble friend Lord Campbell of Alloway on the question of evidence by children immediately after the event. I have dealt with many children. I wonder whether any noble Lord has had to deal with a child who has been sexually abused. First, in my experience they immediately tell one the truth; they have no other way. But I have to say that they do not know what truth is. I asked a child one day, "Susie, is that the truth?"; she looked at me in the most endearing way and asked, "Who is Mr. Truth?". Children do not know the truth but they speak the truth immediately after an event has taken place.
It is said that it is dangerous to have admitted in evidence a report that has been taken; I know that many people are against this. It is with great regret and sadness that I say that in the years past the Great Ormond Street Hospital for Sick Children has given and is giving a magnificent service to children. But the one area in which it has perhaps not given a good service—and I am sure that the staff of Great Ormond Street will forgive me if I say so—is that it produced videos which were not applicable for court work. I know that many of the judiciary saw those videos and were horrified at them; they thought that they represented a video which could be given in evidence.
If the court agrees on those who should interview the child—and I suggest there should be two people interviewing the child—consideration might be given to one of them being a member of the police, a policewoman. At this stage perhaps I may say how much those of us who are social workers regret the passing of the special policewomen who used to be
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trained in interviewing those who had been raped, children who had been hurt, children who had been interfered with and sexual abuse cases. Never did I take a child to a police station through the normal entrance because in the area where I worked the policewomen, who were highly trained, had a special area where one could take such cases. I hope that we might consider bringing back those specially qualified policewomen to deal with child abuse cases.
I would make another point. If one is dealing with a child who has been seriously abused one must immediately have that child physically treated because he or she will in very many cases have been physically interfered with and damaged. But also one must carry out therapy. The children must learn to come to terms with and live with the experience that they have had. You cannot leave it until the court case takes place. Therefore if you do not admit the evidence taken immediately after the event has happened and if you wait until the court case three months or six months later, you will get the child saying quite a different thing, with quite a different colour, quite a different complexion.
There are other factors such as interference and so on, but I very much hope that in this Bill we might somehow come to terms with admitting evidence given at the very time of the event. I ask my noble friend the Minister exactly what the position is. I wrote down that he said there would be consultations. I think there has been a project in Bexley in which the Metropolitan Police were also involved, but I understand that it was carried out some time ago and has finished. How are we to get such a provision into this Bill if there is still to be consultation? Are there going to be consultations, with regulations written into the Bill? How will we get the recommendations which so many people in this country want into this Bill if there is to be further consultation? I should be most grateful if my noble friend could let us know about this.
Very briefly, I hope that Her Majesty's Government, who have always been very good about children and families, will seriously consider the recommendations made so that we may give a better service to children.
9.54 p.m.
Baroness Ewart-Biggs: My Lords, I find myself very much in agreement with my noble friend Lady Phillips when she said that those of us who have the temerity to speak in this debate and who are not part of that magic circle made up of eminent judges, lawyers and recorders, feel very much like intruders. However, I shall be making only a brief intervention in language which I know the Minister at least will understand because he and I are agreed that we are the only ordinary mortals taking part in this debate this evening.
I should first like to reiterate what many previous speakers have said in admiration of the maiden speech of my noble friend Lord Irvine. Unfortunately he has left the Chamber to revive himself, but nevertheless I should like to say what a very great relief it gives to those of us on this side of the House to have him with us. I can only imagine that those noble Lords sitting

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on the opposite side of the House must be feeling the reverse.
I should also like to reiterate a basic fact which my noble and learned friend Lord Elwyn-Jones stated (a very long time ago it seems now) when he said that the major criticism which must be levelled against the Bill is that it lacks significant proposals to reduce this country's excessive use of imprisonment. Not only is this true, but what makes this omission the more regrettable is the ever-growing evidence that an excessive use of custodial sentences, apart from a lack of humanity, fails also to deter. This proof lies in the fact that 60 per cent. of male offenders, 38 per cent. of females and two-thirds of young offenders come back before the courts within two years of their release. There is nothing to be proud of about those figures. That is the only general comment I want to make about this very wide-ranging legislation.
More specifically, I should like to follow the noble Baroness, Lady Faithfull, and make a few specific but brief points about how the Bill will affect children and young people. I should first like to mention the provisions which will benefit young people. In this category we have Clause 21, about which I shall not say anything else as it has been referred to by the noble Baroness, Lady Faithfull, using all the experience she has on this matter. It was also mentioned by the noble Lords, Lord Campbell and Lord Meston.
Following the sympathetic and positive approach that the Minister in another place took when being presented with the alternative methods used in examining a child and using a video recording made by a child immediately after the offence had taken place—the Minister in another place looked at these proposals and treated them in a very sympathetic way—I hope that the Minister here will take them up again at Committee stage and improve them.
Next there is Clause 33, which strengthens the criteria under the Criminal Justice Act 1982 governing the imposition of custodial sentences on young offenders. This is a step, although only a very small one, in the right direction towards reducing the numbers of young people in custody. Clause 34 is also to be welcomed in that it removes from magistrates the power to order a young person convicted of an imprisonable offence to be detained for up to four days in a police cell. We agree that a police cell is not a suitable place for a young person.
The last clause in this category of those which benefit young people in this law is Clause 122, in which young people are excluded from the provisions which permit magistrates to remand an accused person for up to 28 days. This seems quite right in that for a young person who is refused bail and remanded into care, time spent in care does not count towards sentence. Therefore it seems quite right that young people should be excluded from these provisions.
Those are the proposals in the Bill which will be slightly to the benefit of young people. Unfortunately the Bill contains several clauses which could have the most dramatic effects on children and on young people and their families. I think it is also disappointing to all of us who are interested in how young people will be affected by the Bill to recognise that there are so many lost opportunities which the Government could have
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seized to promote young people's rights and in particular to take much more substantial measures to reduce the growing number of young people receiving custodial sentences. This has been said so often in this House. Indeed, we now have the example of so many other countries which are realising that putting young people into custody will mean that, as the noble Baroness, Lady Faithfull, said, they will become hardened criminals when they are grown up.
Perhaps I may mention one or two clauses which worry me greatly. Clause 92 requires parents to pay fines imposed on juveniles who fail to comply with the requirements in supervision orders and community service orders. One should recognise that in the majority of families parents have a great deal of influence over their children and are able to teach them to respect law and order. However, there are cases, particularly in respect of teenagers, where parents are unable to do so and have little influence on their children.
This often relates to multiple disadvantages experienced by the parents themselves. If this clause is enacted parents who already have problems with their children will be placed in a terrible dilemma. If they want to avoid paying the fine they will be forced into a position of informing on their child who is not co-operating with the requirements under the order and reporting them as being beyond control to avoid paying the fine. Surely such families, which are already experiencing great strain, would be placed in an intolerable position with their children. Single parents would be very much affected in this way. A single parent is more likely not to be totally in control of a child. In this case the relationship between the parent and the child would be immeasurably harmed.
Clause 93 seeks to provide school attendance as a condition in a supervision order. Again, I find this a worrying proposal because if enacted this clause would further criminalise school non-attendance. The reasons for children not going to school are complicated and vary from one individual child to another and need to be dealt with in an atmosphere of trust and co-operation between the parent, the school and the child. It is hard to see how this climate of co-operation and trust can be achieved when in effect the young person has been, so to speak, sentenced to attend school.
The clause also implies a direct and simple link between non-attendance and delinquency when in fact most research suggests that this is not the case and that children refuse to go to school for a multitude of different reasons—because they are being bullied, because they feel lonely there or because they are simply bored. But it has nothing to do with delinquency at all.
Lastly, there is Clause 94. I was sad to hear the Minister say that he welcomed this provision. However, the noble Baroness, Lady Faithfull, and the noble Lord, Lord Meston, seemed to think otherwise. I agree with them that in recent years there has been mounting criticism of detention centres. Calls for an independent inquiry into allegations of abuse and assault at detention centres have been repeatedly turned down. Clause 94 aims to remedy the under-use of detention centres and to make more room in

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overcrowded youth custody centres. I understand that the Home Office, in its response to the recent report of Her Majesty's Chief Inspector of Prisons which he made in 1985, has spoken of a number of adjustments which could be made to the detention centre regime in order to develop its positive aspects; that is, to bring its aims more into line with those of youth custody centres.
This being so, surely it would be more logical for the Government to grasp the nettle and abolish detention centres completely. In this regard, I hope that in Committee the Government will look favourably at the proposal aimed at abolishing detention centres and substituting a single sentence for all offenders between 15 and 21 years of age, as described by the noble Lord, Lord Meston.
My last point is in connection with the proposal to strengthen courts' powers to deprive convicted offenders of the proceeds of their crimes and to order the forfeiture of property used in connection with the crimes. Although like other noble Lords I appreciate the aim of ensuring that offenders do not benefit from their crimes, I am a little worried about the manner in which dependants could be affected by these measures.
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It must be recognised that it is the dependants, the wife and children, who already suffer a great deal from the imprisonment of the husband. They are left to cope with great financial and emotional problems. Children thus deprived of even minimal financial security may feel alienated and are increasingly at risk of becoming offenders.
In this instance I feel that there should be a safeguard incorporated in the Bill in terms of an order to deprive offenders of the proceeds of their crime, and the court should have regard to the likely consequence of such an order, particularly on any children of the offender. Such a proviso would be essential in cases where there is any doubt that such proceeds or property were obtained as a result of the crime. I look forward to Committee stage when I hope these points which I have brought up and which interest me will be looked at favourably by the noble Earl.
I also look forward to the changes to clauses mentioned by my noble friend Lord Morton of Shuna relating to the criminal injuries compensation scheme. He made some pertinent points about specific examples of how improvements could be made to the scheme.
10.8 p.m.
Lord Wigoder: My Lords, it is a convention of your Lordships' House that a maiden speaker is congratulated only by the speaker immediately following him. The fact that that convention has been so widely breached this afternoon and evening is the simplest possible tribute to the impressive contribution of the noble Lord, Lord Irvine of Lairg, to the debate.
This is not the easiest of Bills upon which to make a speech on Second Reading. My noble friend Lord Harris of Greenwich said that he was tempted to call it a rag-bag, with a dash of originality. I was going to call it a hotch-potch, but I bow to his description.
The contributions to the debate inevitably have given the impression at times that there were many distinguished Members of your Lordships' House each riding a somewhat unruly hobby horse in a variety of different directions. In those circumstances, it is not an easy debate to attempt to sum up.
Perhaps it does not help very much to look at the Bill and then decide what it does not do or what it might have done if it were a totally different Bill. As I see it, this is not a Bill to empty the prisons or to remove crime from the streets, highly desirable though those two objectives are. This Bill, it seems to me, is essentially one which seeks to modernise and improve our criminal procedures. Because of that, primarily this is not a Bill on which one can or ought to make party political points. It is a Bill on which those of us who think we may have some small contribution to make should seek to make it together to try to improve our criminal procedures. Therefore I seek to comment this evening in some cases very briefly, only on five of the issues that have been raised.
I begin with Part I of the Bill, which relates to fraud. I say at once that I believe the Government should be given every possible credit for having resisted the temptation to go along with the extremely skilful report of the noble and learned Lord, Lord Roskill, and abolish juries in serious fraud cases. It would have been an easy and popular course to take and the Government deserve great credit for having resisted such a temptation. I add that I observed with interest the comment made by the noble and learned Lord, Lord Denning, at one stage in his speech that jurors ought to be people who understand accounts. I hope he will forgive my saying that if one were to take a random selection of 12 High Court judges, I do not think that every one of them would be able to understand accounts.
The Government are right to adopt the rest of the proposals of the Roskill Report and to take the view that stringent improvements in the evidence and procedure provisions in serious fraud cases should be able to solve the many problems that have arisen without resort to the extreme remedy suggested by the noble and learned Lord, Lord Roskill.
The second matter—I have already mentioned the question of juries—is the abolition of the peremptory challenge. I come by a rather different route to a similar conclusion to that reached by my noble friends Lord Hooson and Lord Hutchinson of Lullington. I could have been persuaded if the Government were to be even-handed about it of the strength of the Government's case. I could have been persuaded that
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there is inconvenience in collecting large numbers of citizens together in order that half of them should be sent away without their services being used. I could have been persuaded that there is embarrassment, as the noble and learned Lord, Lord Denning, so rightly said. I could have been persuaded that there is a case for having an entirely random jury. I have never taken the view, although obviously many defendants do, that if a defendant is a left-handed, bald-headed Cockney, for some reason or other there should be either more or less bald-headed, left-handed Cockneys on the jury trying that defendant.
I could have found it difficult to accept that in exercising the right of peremptory challenge defendants are necessarily seeking to secure a balanced jury. I think most defendants—and it is the defendant who has the right to challenge, not counsel—if they were asked what they were doing when their barrister on their instructions made the challenge, would be somewhat startled if it were suggested that it was in order to secure a balanced jury. Of course it is not. They are doing it in order to seek to secure the most favourable jury possible; and there is nothing wrong in that under our present system.
As I say, I could have been persuaded on all these matters if only the Government were prepared to be even-handed and if only they were prepared to say that they would abolish the centuries old right of the defence of peremptory challenge, but they would also abolish the prosecution's right of peremptory challenge, which is called standing by for the Crown.
I do not believe that administrative directions given by the Attorney-General are any answer. Indeed, I had a letter from the Home Office—and I believe that other noble Lords also had one today—which sets out the effect of those directions. It is made quite clear that the Government are not prepared to abolish the right of stand by for the Crown. It is made quite clear that that right will be preserved; for example, so that prosecuting counsel can stand a juror by if he appears on first impressions to be illiterate or undesirable in some way. It is made quite clear that the prosecution will preserve the right of standing by where it has exercised its very great privilege of jury vetting and some matter has come to light that warrants removing a juror.
It is not necessary that it should be done through standing by. I suggest that it can very easily be done by the prosecution challenging for cause not in open court but in chambers where the judge can be told what has been revealed by the jury vetting and the judge could rule upon it. However, as long as the Government are not prepared for the statutory abolition of the right of stand by on the part of the prosecution, I believe that they have no case when they seek to abolish the defence right of peremptory challenge. I am therefore driven to go along with my noble and learned friends in the stance that they take on the issue.
The third matter on which I want to say a few words concerns Clause 29, already referred to many times. If I may say so, that proposal is now really a "goner". I need not say very much about it because, as it stands, it is quite obvious that the weight of opinion in your Lordships' House is solidly against it. It is a naïve proposal in that, at the moment, the Court of Appeal can do precisely what the Government want it to do.

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If there is a case today in which a sentence appears to be inadequate, it is no problem whatever, should the Court of Appeal have a similar case in the list within the next seven days, for the noble and learned Lord the Lord Chief Justice to issue guidelines when that case is dealt with. It is naïve and it is impractical. It is impractical because the judge will not be represented. Nobody will know why the judge passed the sentence that he gave. The defendant will not be represented. Why should he bother to be present if he will not be affected in any way by the result?
It is undesirable because, obviously, it involves counsel for the prosecution in matters of sentence. I shall come back to that point in a moment. Furthermore, it completely pillories the judge and the whole system of justice. The Minister, in his opening speech, referred to the present position causing great damage to public confidence. I think that those were his very words. I suggest to him that that is an accurate description of the position as it would be if Clause 29 in its present form were passed by your Lordships' House.
Therefore, I have no doubt that Clause 29 in its present form will go. The real and serious question that has arisen in the course of our discussion is whether there is anything to replace it. A strong body of opinion led by the noble and learned Lord the Lord Chief Justice and many of his very senior colleagues suggests that Clause 29 should go but that it should be replaced by a power given to the Court of Appeal to increase sentence. I suppose that one possible reason for that suggestion might have been that the noble and learned Lord the Lord Chief Justice feels, with some reason, that there is an immense burden of work on the Court of Appeal, that many appeals are verging on the frivolous and that a measure of that nature would serve to discourage a certain number of such appeals. I know that if that were the reason at the back of his mind, he would have said so. I think therefore that we can reject that suggestion completely as having nothing to do with the argument.
The real issue is whether it is a matter of public policy that there should be such a path to increased sentence. There is no need to be too dramatic about it. My first thought, when I heard it put forward, was that we were going down the road taken by certain countries in some parts of the world where a wretched prisoner is given 20 years for some minor piece of alleged disloyalty, is promptly taken off to the Court of Appeal or to the supreme court, ordered to be executed and then executed. I think there is no need to go to those limits. However, I must confess that when I thought of the likely results of the procedure being advocated by the noble and learned Lord the Lord Chief Justice and some of his colleagues, I began to think in exactly the same terms and in almost exactly the same words (without having had any prior consultation of any kind) as those used by my noble friend Lord Hutchinson of Lullington.
Before my noble friend Lord Hutchinson mentioned it, I was thinking that it would be quite outrageous that a man who has undergone a long trial and the agony of a long jury retirement, together with protracted mitigation proceedings, and who then hears
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the judge say that it was a case for two years' imprisonment but that on balance it might just be proper to suspend the sentence (and he suspends it) and who goes home, back to his wife and children and rebuilds his family life and his job should find six months later—because that is what it would be—that he is solemnly taken back to the Court of Appeal and told that the judge was wrong in principle, that the sentence should not have been suspended and that he will go to prison straightaway.
I do not believe that any public in this country would wish that to happen. Quite simply, it would be extremely cruel. And it is a form of cruelty which I thoroughly detest. There was this power in the Court of Appeal many years ago. At that time it was exercised very largely by the then Lord Chief Justice, Lord Goddard. Some of us here took part in proceedings where that happened. They were extremely unpleasant, not merely for the defendants (because it may be said that they had brought it on their own heads) but for every member of the Bar who took part and for every member of the public who was present. I do not believe that the judges, apart perhaps from the then Lord Chief Justice, enjoyed exercising that power and I believe that it brought the whole system of justice at that time into substantial disrepute.
I add one final observation on the matter. Of course, if one is going to have a power to increase sentence in this way, it will involve counsel for the prosecution in some way in matters of sentence. It may start off in a very limited way but it is bound to increase. I do not see how one can draw the line and eventually avoid the ludicrous and appalling farce that took place in France recently where, for reasons of state, prosecuting counsel solemnly urged upon the court that it should pass a particularly lenient sentence in a serious terrorist case. Reasons of state are bound to be involved in those circumstances, and that would be a very dangerous path down which to tread.
I mentioned the unpleasantness of appearing in the Court of Appeal in those circumstances. Some of us will remember, in order to advise one's client whether or not he dared go ahead with his case, how desperate we were to know which judge was sitting and who his colleagues were on that day. How was it that sometimes they appeared to be for one in the morning but coming back after what must have been a very unpleasant lunch one suddenly found that the sentence was increased. All the signs during the morning had been that the appeal was going extremely well. It became a gamble and a very undesirable one.
There are two other matters to which I wish to make the briefest of references: first, the extradition proposals have not received quite the careful examination today that perhaps they deserve. I entirely agree with what was said by my noble friend Lord Hutchinson of Lullington. It would be quite wrong that there should ever be cases in which we extradite people to other countries without there being proper evidence, properly proved, in our courts.
The other matter upon which I wish to say one word is that much has been said about one omission from the Bill, and that is the possible power of retrial that

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should be given to the Court of Appeal. It has met with widespread support, particularly from the noble and learned Lord the Lord Chief Justice and from the noble and learned Lords, Lord Ackner and Lord Denning. I entirely agree, if I may very respectfully do so, that the Court of Appeal should have an extended power of retrial. But we must draft that power with some care.
It was no pure chance that the only example given by the noble and learned Lords who spoke of the need for such a power was that there might be people who had been wrongly acquitted and that the use of this power might help to ensure that they were properly convicted. I agree with that, but we ought not to forget also—and I am sure that the noble and learned Lords concerned do not forget—that there are some people who have been wrongly convicted, and that the use of this power might help to ensure that they were properly acquitted in a new trial.
There is, I think, very little doubt that on many occasions at the moment the Court of Appeal finds itself inhibited in ordering a new trial. It does not have the power to do so and therefore, rather than quash a conviction, it lets the conviction stand and I believe that the power of retrial would help to avoid that undesirable position.
When, many hours ago now, this discussion began, some comment was made about the fact that the Bill may not come to fruition in the near future. It may be that it will not. I suggest to your Lordships that it is nevertheless important that we do not treat it lightly, that we go into Committee determined to examine all the clauses carefully and to improve the Bill wherever possible, because, sooner or later, many of its provisions will come back to this House. If they do, it is better that they should come back on a well-informed basis after having been improved by your Lordships.
10.26 p.m.
Lord Mishcon: My Lords, it seems a very long time since the Minister made his introductory speech to this Bill, a Bill described as a hotch-potch ragbag by two of the principal speakers for the Alliance. One admires the political objectivity which they have shown in such a description. I noted that the noble Lord, Lord Wigoder, said that he intended to keep politics out of this completely. I, with far more objectivity but without trumpeting it before the House, will not indulge in that description at all, but will merely say that this Bill has merits in some parts of it and demerits in another, and it is our hope that the House will turn out a better Bill than it now is.
Having said that, perhaps I may quickly move to a pleasure that I have from this Front Bench. It is the first time that a member of the Front Bench on this side has been able to do it. My noble and learned friend Lord Elwyn-Jones looked forward with keen anticipation to the maiden speech made by my noble friend Lord Irvine of Lairg. I have the privilege, having heard that speech, of saying how much we all admired it and how much we look forward to his future contributions.
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The Criminal Injuries Compensation Board has been mentioned in the course of this debate, and very learnedly by my noble friend Lord Morton. My memory goes back, if your Lordships will permit a personal anecdote, to the maiden speech that I had the privilege of making in your Lordships' House some nine years ago, when I urged in a debate which took place at the instance of my noble friend Lord Longford, in connection with those who suffered from crime, that the voluntary scheme as it then was, a scheme that came out of the grace of Her Majesty, should be turned into a statutory scheme.
Until I leave your Lordships' House for the house of the Lord himself, I shall always try to think that that speech that I made nine years ago is responsible for that part of this Bill which creates the statutory scheme of a Criminal Injuries Compensation Board. I know it to be a dream of mine with no reality at all, but maybe the maiden speaker in this debate will think that his maiden speech will have the same effect in possibly a lesser period of time than nine years.
Many interesting matters of principle have been discussed in the course of this debate, and it is matters of principle about which we ought to be talking at Second Reading. If I may, I shall move at once to Clause 29. It is quite right that if one listens to the speeches made this afternoon and tonight, coming as they do from one who has had the honour of being a Lord Chancellor in this House, one who had the honour of being Master of the Rolls, from the Lord Chief Justice and from Lords of Appeal in Ordinary, one would think that Clause 29 has died a respectable death. In crushing a worm, one must be careful that a serpent does not rise in its stead. I listened with some fear to some of the alternatives to a dead Clause 29 that were being put forward.
One of the alternatives suggested was not simply that in a case coming before the Court of Appeal in which someone was appealing against sentence that court might have the power to increase the sentence. It was, as I heard the alternative, that the prosecution itself would have the power to appeal to the Court of Appeal. I listened with great care to the noble and learned Lord, Lord Ackner, as one always does when he speaks in debate, with a brevity which he so courteously ascribed to something he had done on a previous occasion. I assure him that I bore no malice whatsoever. I also listened to the noble and learned Lord, Lord Denning. Both of them said that they had changed their minds concerning opinions whch they had previously held in regard to giving such powers to the prosecution.
I shall not repeat arguments which were advanced about a Sword of Damocles hanging over someone's head because the prosecution might appeal against a sentence. I certainly adopt that argument. However, I am going to introduce an additional argument. Judges are human beings, as we all know. The temptation to think, when adjudicating what a sentence should be, that one had best not be too lenient because the prosecution might appeal will lead, if I may say so with great respect, to judges trying to harden their hearts against pleas in mitigation.
The noble and learned Lord, Lord Denning, thought that he might, in later years, have altered a sentence of

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nine months' imprisonment to two years' imprisonment in a case where a man had crossed over the road and quite inadvertently and tragically killed two people. I have no doubt that he will carry that memory with him to the end of his days. The noble and learned Lord said that he would have increased the sentence, having escaped from the oratory of a defending counsel. How much more would he have hardened his heart if he had thought that the prosecution might appeal against the sentence? I wonder whether he might not have made the sentence even more than two years.
Why have two noble and learned Lords altered their minds after this passage of time? I suspect that it may be because they have left their sentencing years far behind them and are in the splendid atmosphere of either the Court of Appeal or the Court of your Lordships' House. I believe that it would be safer to leave their views where they formed them as humane judges of first instance, when they dealt with the human beings in front of them in the dock. I therefore leave Clause 29 with the humble prayer that when someone moves in your Lordships' House that that clause do not form part of this Bill, there will be no amendments such as those introduced in today's debate, however learned the source of those amendments.
In so far as concerns jury challenge, again this is a matter of principle which was raised in most interesting speeches that were made in this debate. I do not want to repeat points that have already been made to your Lordships with great lucidity and force. I want only to add one point which I did not hear made. If it was made and I am merely repeating it, I apologise to the noble Lord who made it.
To challenge with cause is a very difficult operation. One of the speakers in your Lordships' debate—shall I be forgiven for having forgotten for a moment which one of your Lordships it was?—talked in terms of it being quite justifiable and right that somebody who was black should oppose the fact that there were too many white people on the jury. I assume that it was equally meant that it was quite right for somebody who was white to oppose the fact that there were too many people who were black on the jury.
A right of peremptory challenge because an accused may think that he is not going to get a fair trial with the initial composition of the jury is a perfectly human challenge which causes no hurt and causes no racial tension. I was envisaging somebody either having the courage to say it, or not having the courage to say it, and saying, "I object to two jurors sitting over there, they are black and there are already five black jurymen and I cannot have seven", or vice versa.
I think that that is another argument against the abolition of peremptory challenge. I add one last argument and it is this. If you have a great tradition going over the centuries in connection with the rights of defendants, I believe that, unless there is a most convincing case for doing away with that tradition, which is the right of a defendant, your Lordships will want to walk with a timorous step. We do not exist in this House of great tradition to undermine or destroy traditions if they have been of value over the centuries.
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That is where I leave the general principle of jury challenge, if I may.
Perhaps I may take up the next couple of minutes in a speech which your Lordships have been kind enough to view with some amount of patience so far in considering the question of fraud and the way that this has been dealt with in the Bill. Perhaps I may say at once that we on this side who have witnessed, as all noble Lords have, the cases of Lloyd's, will remember how the noble Lord, Lord Windlesham, moved his Bill with great ability and much sympathy from your Lordships. We talked on all sides—and I had the privilege of doing so from these Benches—of the integrity of Lloyd's, and its example to the whole commercial world of insurance. We all did so with great sincerity. It must have been painful to the noble Lord, Lord Windlesham, and others who have taken a meritorious part in keeping the name of the City and the name of Lloyd's clean, when those diabolical frauds occurred. We have had to witness the fact that as yet no prosecutions have been brought.
There have been other frauds since. The noble and learned Lord, Lord Denning, spoke in terms of the ignorance of jurors. That was not the reason why prosecutions were not brought. As I understand it, the reason was the difficulty in regard to evidence and the difficulty arising from the complexity of the cases involved, relating not only Lloyd's but to other examples of serious fraud, and the fact that there were literally not the people in the DPP's office who had either the time or the expertise to examine these cases and prepare them in a way which would have merited their being brought and which would give a chance, a proper chance, of obtaining guilty verdicts.
I mention that point for this reason. We are setting up a Serious Fraud Office. It is absolutely right that we should. But let us not make the same mistake as the Government made with the prosecution service. That, too, was an admirable suggestion. We all backed it. We said we hoped that the prosecution service throughout the kingdom would employ the type of people who would be able to examine police cases, decide whether or not there should be prosecutions and conduct those cases with ability. The salaries first offered were such that the quality of the service was not what any of your Lordships would want it to be. It is now improving and the conditions are a little better.
I say this to the noble Earl, the Minister: please do not let this Serious Fraud Office become a mockery. You will need men of great expertise to be able to conduct that office properly if the object of the exercise in the Bill is to be achieved. That means getting people who do not want just to try to learn something and then go elsewhere. A stable series of officers who are both capable and who will make it their career is required for that office. I ask the Minister to consider that on behalf of the Government.
My final comment on the fraud aspect—I could say much—is that we have to be a little careful. It is terribly easy when one is speaking about drugs—and we all hate the suppliers of drugs and regard them as being almost, if not completely, murderers—and when we come to legislation to say that because we regard this offence with such loathing we are going to dispense with some of the provisions that might in fact stop-

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convictions in ordinary criminal cases and make a special case of those who deal in drugs. Such precedents will suddenly become part of our criminal law if we are not careful.
We are doing the same in regard to serious fraud. We are doing something with the right of silence. We are not describing in the Bill what is a serious fraud. We speak about it being complex and about it being serious. We give terrific powers of investigation. We do not define what will start off that investigation and what it means. In the Police and Criminal Evidence Act we defined an arrestable offence as something giving great financial loss to the person concerned or great financial gain to the criminal himself. We went through that definition. We had doubts about it but we defined it before we gave the powers of arrest. We must do the same about investigation.
As has been said, the Committee stage will be interesting but it will be vital in order to make this a better Bill.
10.45 p.m.
The Earl of Caithness: My Lords, we have had a most interesting and valuable debate, much of which has taken place on the high ground of principle, which is as it should be. It has benefited also from the practical experience of our courts which many of your Lordships have brought to our proceedings. I should like to join in the tributes which have been paid to the noble Lord, Lord Irvine of Lairg, for what, as others have said, was a most thoughtful and stimulating maiden speech. I shall read it with interest tomorrow to see how he managed to keep it uncontroversial when the subject with which he was dealing is so controversial.
Three issues have dominated the debate and I shall concentrate on them. I hope that I shall also have the time to deal with other points raised by your Lordships, but as so many have been raised I shall be unable to answer them all. The three issues are: references of sentences to the Court of Appeal, the abolition of peremptory challenge and the measures proposed to implement the Roskill report. I shall begin with this first, greatly helped by the valuable contribution of the noble and learned Lord, Lord Roskill, and encouraged by the strident support of the noble and learned Lord, Lord Denning.
I was a little surprised that the noble Lord, Lord Hutchinson of Lullington, should say in effect that the proposed SFO powers were oppressive. I do not believe that they are disproportionate to the task facing those charged with the investigation of the most serious and complex frauds. They are well precedented in companies' legislation and in the Financial Services Act. In debates in another place, my honourable friend the Minister was able to make some important adjustments which went a considerable way towards meeting concerns which had been expressed. The noble Lord said that the powers provided for no right of silence. Under the Bill there is a right of silence in the court, the point that the noble and learned Lord, Lord Roskill, took up and one to which we have given much consideration.
As the Bill stands, evidence obtained by the SFO under its compulsory powers would not under Clause
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2(8) be able to be used against the person providing it. The reasoning behind that was that, while it seemed entirely sensible to enable the SFO to require suspects to answer questions as a means of furthering the investigation, to allow those answers to be used in court might be thought to infringe the principle, which is deeply rooted in our system, that the accused should not be required to incriminate himself. Nevertheless, that is the one respect in which we have not followed the precedents provided in companies and financial legislation.
When an inspector appointed by the Department of Trade and Industry uses his powers to require answers in the course of an investigation of a company's affairs, there is nothing to prevent the answers being used in any ensuing criminal proceedings. Companies investigations are of course a narrower field than that in which the SFO will be operating and less directly connected to criminal investigations and prosecutions. The point the noble and learned Lord raised is important, and I should like to reflect upon it further. We do not want the SFO's effectiveness to be limited by vulnerability to the suspect exploiting the fact that his answers cannot be used in evidence; for example, by giving the court a completely different story.
My noble friend Lord Windlesham asked how the SFO would work with the police. In London, the designated police officers from the Metropolitan and City Company Fraud Department will work with the SFO. Outside London, effective practical arrangements will be made on a case-by-case basis involving close contact between the chief constable of the relevant area and the director of the SFO. The usual chain of police command and control will be maintained. We seek to build on the work that has been done by the FIG. I believe that the SFO proposals will be of enormous benefit.
The noble Lord, Lord Wigoder, was pleased that we had not followed the route taken by the majority of the committee, which was to abolish jury trials, something that the noble and learned Lord, Lord Denning, thought that we could have introduced. We have not ruled out for all time the possibility of such a tribunal. We believe that the weight of evidence in the report, even though it is minority evidence, is such that for the time being we should stick with jury trials, as I said when I opened the debate.
I turn to Clause 29 and lenient sentences. This has produced some very stimulating debate. We have, as the noble Lord, Lord Mishcon, said, the change of mind of two noble and learned Lords, Lord Denning and Lord Ackner; and indeed the change of mind of my noble friend Lord Campbell of Alloway over two years. They are supported in that claim for a prosecution right of appeal by the noble and learned Lord, Lord Lane, and the noble and learned Lord, Lord Roskill. Against that is a formidable array of QCs and others with great experience in the legal world: the noble Lords, Lord Harris of Greenwich, Lord Hutchinson of Lullington, Lord Morton of Shuna, Lord Meston, Lord Wigoder, and the noble Lord, Lord Mishcon. Indeed, my noble friend Lord Windlesham felt that things were probably better as they are but would be happy to listen to the case for a prosecution right of appeal.

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I listened with great interest to the arguments put forward by the noble and learned Lords about this matter. Indeed, my noble friend Lord Campbell of Alloway courteously gave notice that in Committee he would table an amendment to the effect that he described. We shall no doubt have an opportunity to discuss the matter more fully then.
As I said in introducing the debate, we hesitate to go down the path of a prosecution right of appeal. The main reason is that to do so would represent a major change in the role of the prosecution. As several noble Lords have reminded us, by long tradition it is no part of a prosecutor's function to seek to affect the sentence to be passed. One must also consider the position of the offender himself. The noble Lord, Lord Morton of Shuna, made what seemed to me a telling point when he referred to the danger of imposing a more severe sentence after no more than a paper consideration of the case. If we were to go down the road recommended by the noble and learned Lord and others, more practical questions would also arise.
I do not wish to dismiss out of hand such a proposal from such distinguished and experienced speakers. My right honourable friend will want to consider and reflect very carefully on what has been said today. If I may say so, however, several of your Lordships have done less than justice to the proposal which is in the Bill. A rather similar position, under which points of law arising in acquittals can be referred by the Attorney-General for the opinion of the Court of Appeal, has operated satisfactorily since 1972. There is therefore a good precedent there.
Several of your Lordships have said that the Court of Appeal already takes the opportunity, in giving judgment in appeals by defendants against sentence, to offer general guidance to the lower courts on sentencing matters. The Government very much welcome this practice, which has flourished in the time of the noble and learned Lord, Lord Lane, as Lord Chief Justice. But when there has been a case which raises genuine issues of concern to the public it is surely artificial and unsatisfactory that the court should have to comb through its list to find a case which is a suitable vehicle for the necessary guidance. It may not be possible to find a case which bears more than indirectly on the issues which have been raised.
The clause provides a means by which the court can address the question of sentencing principles in the context in which they have arisen and give guidance for the future. The public are not generally harshly retributive about sentencing, but when mistakes occur they want to be clear that lessons will be learnt for the future.
Before leaving lenient sentences, I was a little surprised by what I heard the noble Lord, Lord Wigoder, say. I must admit that having combed through the debate on the Address and read in particular his words on 18th November I thought that he very clearly was in favour of the proposition that we are putting forward in the Bill. However, I shall read what he has said today because that is clearly very different.
Turning to peremptory challenge, on which we have had another lively debate, I do not intend to respond in detail to points which have been made, although we
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shall want to go into them fully in Committee. However, perhaps I may respond to one point which the noble Lord, Lord Hooson, made. The peremptory challenge is valuable because it provides a means by which the accused can influence the balance of the jury. The question of whether it will help increase the confidence of the black defendant in our system of justice if he were tried by a jury which includes one or more black people, or the young defendant if he did not have to face a wholly middle-aged jury, is a serious one which I do not dismiss for a moment. But I would ask your Lordships to pause over its implications.
Do we really want to construct a system of jury selection on the assumption—explicit or implicit—that any one of our citizens cannot expect a fair trial from 12 of his fellow citizens, selected as the present arrangements provide? Even if we did, does peremptory challenge really help? Peremptory challenge allows the defendant to challenge people off the jury on a very superficial basis. It does not ensure that people sympathetic to or representative of the defendant's background will come on to the jury. Our view, as I stated at the beginning of this debate, is that it is reasonable as a matter of principle, not—as the noble and learned Lord, Lord Elwyn-Jones implied—because of any effect, real or imagined, on convictions or acquittal, that the accused should take the jury as he finds it. But clearly today's discussion has been a foretaste of what will be a lively debate at the Committee stage.
I say to the noble Lord, Lord Wigoder, that I think there is a distinct difference between peremptory challenge and the right of stand by. As he knows better than I, the prosecutor is certainly under no duty to use stand by to further the Crown's tactical interest and indeed it is discouraged from doing so. Stand by is therefore less frequently used, and this was borne out in the CPS survey which showed that it was used at about 5 per cent. to 6 per cent. of trials, compared with 22 per cent. of peremptory challenge.
Turning from the three main points to some other points, I am sorely tempted to follow the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Harris of Greenwich, down a long debate on crime, the recorded crime and the prison population, but I think it would be wrong for me to do so at this stage of our evening's discussion. Perhaps on another occasion we can pursue the matter further.
I would just pick up one point which the noble and learned Lord made about imprisonment of fine defaulters. I believe that custody must remain available as a last resort for wilful refusal to comply with the order imposed by a court. The court already normally has to satisfy itself after a means inquiry that the non-payment is deliberate and only resort to custody if all other alternatives have not worked. Clause 42 of the Bill reinforces that principle by spelling out what those alternatives are. I believe that will be very helpful.
The noble Lord, Lord Harris of Greenwich, kindly complimented us on the work undertaken on Fresh Start. As the noble Lord and indeed other will know, much depends on the POA ballot in early May, in which over 50 per cent. of the membership have to vote for such a change, but I believe that it would be

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a very sad day for the prison service if they were to turn down this opportunity. I say no more to the noble Lord, Lord Mishcon, at this stage.
With regard to prisoners held in police cells, a point mentioned by the noble Lord, Lord Harris of Greenwich, and indeed the noble Baroness, Lady Ewart-Biggs, of course we very much regret the need to hold some prisoners in police cells and readily accept that these are totally inadequate for the prolonged detention of prisoners. I am conscious that prisoners held there do not receive the full range of facilities to which they would be entitled in prison, although I am aware that the police are doing everything possible under the most difficult circumstances to provide the best conditions they can. The need to hold prisoners in police cells is a direct consequence of the steady rise in the prison population, especially the untried prisoners in the South-East. But I believe the building programme that we have in hand, the biggest this century, will make good inroads into this problem.
On the Court of Appeal power to order a retrial, a point raised by the noble and learned Lord, Lord Roskill, supported by the noble and learned Lords, Lord Lane and Lord Ackner, backed by my noble friend Lord Campbell of Alloway and the noble Lord, Lord Wigoder, we issued a consultation document last month inviting comments on the proposal to widen the Court of Appeal's power to order a retrial, as the noble and learned Lord urged. In the light of comments we received, we shall consider whether to bring forward an amendment to that effect at a later stage of the Bill.
The noble Lord, Lord Irvine of Lairg, was concerned, I think, about the difference in the provisions for the Drug Trafficking Offences Act and the confiscation provisions as put forward in this Bill. When the Act was before us last year, there was agreement in both Houses that the special importance of the cutting off of the circulation of large sums of money in the drugs trade demanded the most stringent measures, not all of which would be appropriate in the context of other crimes. I can assure the noble Lord that the Drug Trafficking Offences Act is flexible enough to allow smaller cases to be dealt with more speedily and directly when it comes to evaluating and confiscating offenders' proceeds.
My noble friend Lord Campbell of Alloway raised the very important question of admitting video recordings of children's evidence, a point picked up by my noble friend Lady Faithfull and by the noble Baroness, Lady Ewart-Biggs, and the noble Lord, Lord Meston. I listened with very great interest to what they said about this. The Government's aim is exactly their aim, which is to make it easier to bring to justice the perpetrators of these awful crimes while avoiding adding to the child's ordeal. The proposal which is already in the Bill to make it possible for the child to give evidence at the trial through a live video seems to us the single most helpful step that can be taken.
We also very much admire the work which the Metropolitan Police are undertaking in Bexley, experimenting in the use of video recordings in the investigation of child abuse. The question is whether when such recordings have been made they should be readily admissable in any subsequent trial. The
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recording would then need to supplement the child's oral evidence at the trial rather than replace it, because, as my honourable friend the Minister of State has made clear, we would not be ready to contemplate denying the accused his right to cross-examine such a key witness. There is perhaps a risk that cross-examination of the child would focus on trying to establish inconsistencies with the recording. The arguments are therefore not completely clear cut and that is why we think it is worth setting them out in a little detail in the discussion paper which I mentioned earlier and which I hope will be published next month.
The noble Baroness, Lady Phillips, asked for money for victim support schemes. I can tell her in her absence that this year's Home Office grant to the national association is £160,000. But also the good news is that a further £9 million will be made available over the next three years to strengthen local voluntary victim support by providing funding for salaried coordinators for the majority of schemes.
I am grateful for the kind words that the noble Lord, Lord Hutchinson of Lullington, said about my honourable friends in another place. He generally welcomed the Bill, as did so many of your Lordships. But he again said that there were difficulties and raised in particular the point on extradition: that the loss of the prima facie requirement would ruin all existing safeguards. He raised a point on the European Convention on Extradiction. It is certainly not the intention of this Government to enter a reservation to the European Convention on Extradition whereby the UK could require a requesting state to make a prima facie case. Where we have any reason to, we shall be able to require a prima facie case in our treaties, but we see no reason in relation to European convention countries. My right honourable friend the Secretary of State has a right to refuse surrender in any case and in particular where the request is not made in the interests of justice. I hope that that goes some way to satisfying the noble Lord.
My noble friend Lord Mountgarret raised a matter that was debated at some length in another place, capital punishment, and I am sure he will wish to draw that to our attention during the Committee stage.
There is perhaps no greater expert in your Lordships' House than the noble Lord, Lord Morton of Shuna, when it comes to general criminal injuries compensation schemes. He raised a number of detailed points which I look forward to discussing with him at the Committee stage.
I just take up one matter to give the noble Lord the assurance that he seeks with regard to the board staff. There are no plans to change the current arrangements which have worked well over the years. However, as he will know from his reading of the Bill, there is flexibility for the board to engage its own staff if circumstances so require.
The noble Lord, Lord Meston, raised many important points. One which he singled out concerned the confining of anonymity to victims in rape cases. We do not believe that anonymity is necessary or justified for the adult victims of other crimes. The general rule is that court proceedings are conducted openly, and it seems right to hold to that principle. We believe that rape is a special case because the prospect

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of being identified is such a significant and particular disincentive to victims to report what happened to the police.
In an interesting talk on young offenders, my noble friend Lady Faithfull asked about the breach of supervision orders, as did the noble Baroness, Lady Ewart-Biggs. Clause 93 widens the powers of the courts when dealing with a breach of the requirements of a supervision order. At present the sanctions for failure to observe these requirements are very limited—essentially a fine or an attendance centre order.
The Magistrates' Association represented to us that the courts would be encouraged to make fuller use of the strengthened supervision orders instead of custody if more substantial sanctions were available. That seemed to us a persuasive argument. We were, however, conscious of the risk that widening the range of sanctions would increase the use of custody overall. The wider powers are therefore to be available only in relation to the special strengthened orders requiring participation in schemes such as intensive intermediate treatment and where the order was explicitly made as an alternative to custody. I look forward to discussing at Committee stage the point raised by the noble Baronesses and also by the noble Lord, Lord Meston, in regard to a single generic sentence.
As I said in opening the debate, the Bill covers a very wide range, but if I were to pick out two general themes they would be these. First, the Bill strikes several severe blows against organised serious crime. The provisions on fraud, on the confiscation of offenders' assets and on extradition will each in different ways, and if applied with skill and resolution, make life more uncomfortable for the professional criminal. Secondly, there are the provisions I have mentioned which affect the position of the victims of crime. They are important in themselves but their wider significance is as part of a general realisation that the system should be much more responsive to the needs and interests of victims. On one or two specific points the debate has uncovered striking divergencies of view which we shall no doubt pursue further at the Committee stage. I do not underestimate the importance of these differences nor the strength of feelings which lie behind them, but I have been much heartened by the wide measure of support that has been shown for the Bill as a whole. On that basis, I ask your Lordships with confidence to grant it a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

George Donald Evans and Deborah Jane Evans (Mariage Enabling) Bill [H.L.]
Returned from the Commons agreed to.
Debtors (Scotland) Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments ordered to be printed.
Pilotage Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments ordered to be printed.

John Ernest Rolfe and Florence Iveen Rolfe (Marriage Enabling) Bill [H.L.]:
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.
House adjourned at eight minutes past eleven o'clock.

  ROYAL FAMILY: AVOIDANCE OF CONTROVERSY
  ROYAL FAMILY: AVOIDANCE OF CONTROVERSY
  CHILD ABUSE
  CHILD ABUSE
  MR. WINSTON SILCOTT: BAIL GRANT
  MR. WINSTON SILCOTT: BAIL GRANT
  BADGER CONTROL
  BADGER CONTROL
  WORKS OF ART UNDER RESTORATION: INDEMNITY COVER
  WORKS OF ART UNDER RESTORATION: INDEMNITY COVER
  SEAL RESEARCH
  SEAL RESEARCH
  BERKELEY SOUND, FALKLAND ISLANDS: FOREIGN FISHING VESSELS
  BERKELEY SOUND, FALKLAND ISLANDS: FOREIGN FISHING VESSELS
  Mr. RAOUL WALLENBERG
  Mr. RAOUL WALLENBERG
  HARINGEY EDUCATION COMMITTEE: HOMOSEXUALITY POLICY
  HARINGEY EDUCATION COMMITTEE: HOMOSEXUALITY POLICY
  LITERACY STATISTICS
  LITERACY STATISTICS
  DEFENCE SCIENTISTS' DEATHS
  DEFENCE SCIENTISTS' DEATHS
  CROWN ESTATE PAVING COMMISSIONS: POWERS
  CROWN ESTATE PAVING COMMISSIONS: POWERS
  BUTTER SALES STATISTICS
  BUTTER SALES STATISTICS