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Orders Of The Day

Volume 84: debated on Monday 28 October 1985

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Insolvency Bill

Lords amendments to certain Commons amendments and Lords consequential amendments considered.

The Lords have agreed to the amendment made by the Commons:

After clause 2, insert the following new clause—

Reference to Tribunal:

—(1) A person on whom a notice is served under section [Notices] (2) above may within twenty-eight days after the date of service give written notice to the relevant authority requiring the case to be referred to the Tribunal referred to in subsection (6) below.
(2) Where a requirement is made in accordance with subsection (1) above, then, unless the relevant authority within the period there mentioned—

(a) decides to grant the application or, as the case may be, decides not to withdraw the authorisation; and

(b) gives written notice of that fact to the person by whom the requirement was made,

it shall refer the case to the Tribunal.
(3) On a reference under this section the Tribunal shall—

(a) investigate the case; and

(b) make a report to the relevant authority stating what would in their opinion be the appropriate decision in the matter and the reasons for that opinion;

and it shall be the duty of the relevant authority to decide the matter accordingly.
(4) The Tribunal shall send a copy of the report to the applicant or, as the case may be, the holder of the authorisation; and the relevant authority shall serve him with a written notice of the decision made by it in accordance with the report.
(5) The relevant authority may, if it thinks fit, publish the report of the Tribunal.
(6) For the purposes of this section there shall be a tribunal—

(a) which shall be known as the Insolvency Practitioners Tribunal (in this Part referred to as "the Tribunal"); and

(b) in relation to which the provisions of the Schedule 1 to this Act shall apply.'

Lords amendment: No. 1, in line 2, leave out from beginning to "give" in line 4 and insert—

". —(1) Where a person is served with a notice under section (Notices) (2) above, he may—
  • (a) at any time within twenty-eight days after the date of the service of the notice; or
  • (b) at any time after the making by him of any representations in accordance with section (Right to make Representations) above, and before the end of the period of twenty-eight days after the date of the service on him of a notice by the relevant authority that the relevant authority does not propose to alter its decision in consequence of the representations,"
  • 3.57 pm

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to take Lords amendments Nos. 2 to 5 and 74.

    Lords amendments Nos 1 to 5 inclusive give effect to an undertaking which was given to the right hon. Member for Glasgow, Govan (Mr. Millan) when the Bill was considered on Report. They provide that, where the relevant authority has given notice that it intends to refuse or revoke an authorisation to act as an insolvency practitioner and the person concerned within 14 days makes written representations to the relevant authority as to why it should not, the time limits on the period in which that person may require the case to be referred to the insolvency practitioners tribunal shall not begin to run until he has been made aware that his written representations have been rejected.

    Lords amendment No. 74 ensures that members of the tribunal are subject to equivalent parliamentary disqualification in Northern Ireland as in Great Britain.

    I welcome the Under-Secretary of State to the deliberations of this small and select group which has lived with the Bill for a long time. The group is becoming smaller and more select by the minute.

    The Under-Secretary of State arrives at a rather late stage. We have spent a great deal of time on this measure. It has been something of a marathon, and I think that we can offer the hon. and learned Gentleman nothing more than a gentle canter down the finishing straight. He arrives at a moment when he can perhaps make his own small contribution to what might well become an achievement to be recorded in the "Guinness Book of Records-. I believe that the number of amendments tabled to the Bill throughout its stages in both Houses is likely to exceed 1,200. The Under-Secretary of State will move even more amendments today and thereby add his name to that record-breaking achievement. I am not sure that the hon. and learned Gentleman would wish to be associated with that sort of achievement.

    Despite the scale of the deliberations and the amendments which have been tabled and passed, I believe that many hon. Members and people outside the House would regard the measure as still being seriously deficient. Although I would certainly claim that in many respects it is a better measure than when it first appeared, nevertheless I agree with those, such as the National Consumer Council, the CBI and the Institute of Directors, who have all characterised the Bill as a missed opportunity and one that on present form is unlikely to recur for perhaps another 100 years unless perhaps a Government of a different persuasion were to see the need to introduce further reforms.

    I thank the Under-Secretary of State for the way in which his officials have marshalled the material. It has been done in an extremely helpful and useful way, and I am sure that hon. Members would wish to express their appreciation to the hon. and learned Gentleman and his officials. We could well have wished that the matters that are being brought back to us from another place were of more substance and dealt with some of the remaining pressing concerns about the framework and shape of the Bill. Unfortunately, that is not the case. The matters with which we must deal this afternoon are essentially drafting and technical in almost every case, and so they will not detain us for long. I do not believe that this first group of amendments will detain us long either.

    I welcome the fact that the Government have met the undertaking that they gave to my right hon. Friend the Member for Glasgow, Govan (Mr. Millan). The Opposition are pleased with this group of amendments.

    I thank the hon. Member for Dagenham (Mr. Gould) for his welcome, which I very much appreciate, and for his kind remarks about the way in which departmental officials had marshalled the information. I am particularly pleased to see with us this afternoon my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher) who is entitled to the credit for this legislation and who undertook the considerable work of piloting the Bill through the House.

    The hon. Member for Dagenham referred to the number of amendments that have been tabled. I suggest that they show more than anything else the Government's readiness to listen to the suggestions on how it could be improved that have been made during the passage of the Bill. The Bill has been improved.

    I entirely accept that the Government have listened to some effect. Many of us would make the point, however, that it is a pity that they did not listen a little earlier when they might well have published a draft Bill that could have avoided many of the difficulties that we subsequently encountered.

    I am sure that the hon. Gentleman would not like the door to shut on consultation at any stage. It is right, especially with a measure of this type, that consultation should be a continuing process. Of course it has not proved possible to satisfy everyone, but such a measure involves a delicate balance of interests and, inevitably, some people will be disappointed at the outcome. I commend the amendments to the House as striking the right balance.

    Question put and agreed to.

    Subsequent Lords amendments agreed to.

    The Lords have agreed to the amendment made by the Commons:

    After Clause 10 insert the following new clause:—

    Restriction on use of company names:

    '(1) This section applies to a person where a company ("the relevant company") has gone into insolvent liquidation and he was a director or shadow director of the company at any time in the period of twelve months ending with the day before it went into liquidation; and for the purposes of this section a name is a prohibited name in relation to such a person if—

  • (a) it is a name by which the relevant company was known at any time in the said period; or
  • (b) it is a name which is so similar to a name falling within paragraph (a) above as to suggest an association with the relevant company.
  • (2) Except with the leave of the court a person to whom this section applies shall not at any time in the period of five years beginning with the day on which the relevant company went into liquidation—

  • (a) be a director of any other company that is known by a prohibited name; or
  • (b) in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of any such company; or
  • (c) in any way, whether directly or indirectly, be concerned or take part in the carrying on of a business carried on (otherwise than by a company) under a prohibited name.
  • (3) If a person acts in contravention of this section he shall, in respect of each offence, be liable—

  • (a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both;
  • (b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.
  • (4) In subsection (2) above "the court" means any court having jurisdiction to wind up companies; and on an application for leave under that subsection, the Secretary of State or the official receiver may appear and call the attention of the court to any matters which seem to him to be relevant.

    (5) References in this section, in relation to any time, to a name by which a company is known are references to the name of the company at that time or to any name under which the company carries on business at that time.

    (6) For the purposes of this section a company goes into insolvent liquidation if it goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up.

    (7) In this section "company" includes a company which may be wound up under Part XXI of the 1985 Act.'

    Lords amendment:No. 6, line 13, after "court" insert

    "or in such circumstances as may be prescribed"

    I beg to move, That this House cloth agree with the Lords in the said amendment.

    The new clause was introduced into the Bill in this House but reservations were expressed by my hon. Friend. the Member for Richmond and Barnes (Mr. Hanley) and by practitioners that the provisions could adversely affect the sale of businesses or parts of businesses as going concerns by administrative receivers, administrators and liquidators. The amendment meets that criticism by allowing exemption from the provisions in certain circumstances, which will be prescribed in the rules. Such circumstances will be formulated following discussions in due course with practitioners but will concern sales by administrative receivers, administrators and liquidators who will be under a duty to obtain certain undertakings from the purchasers which will ensure that those subsequently dealing with the new company are adequately informed about the circumstances in which it is using the relevant name and are not misled. I commend the amendment to the House.

    I am content to accept the amendment. It goes some way towards meeting the proper concern expressed in Committee about the difficulties that the preexisting conditions might well have posed to administrators and others. I observe only that this is yet one further example of detailed provisions being siphoned off into the rules, which we have yet to see. I understand why that has been done on this occasion, but it has been a notable and perhaps unfortunate feature of the Bill that so much of what we need to know about the changes to be made to insolvency law has been left as a matter for regulation.

    I very much agree with the latter comments of the hon. Member for Dagenham, (Mr. Gould). I also warmly welcome my hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) to the Front Bench; and I pay warm tribute to the previous Minister, my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher). My hon. Friend the Member for Edinburgh, Central had just as much trouble as we did in trying to absorb the 450 amendments tabled in Standing Committee and the 250 amendments tabled on Report and he deserves as much credit as anyone for the exhaustive way in which we have dealt with the Bill. There is no doubt that he will have a willing place in any firm of insolvency practitioners, because there are probably few people who know as much as he does about the subject, although he did not know much to start with.

    I am grateful to my hon. and learned Friend the present Under-Secretary of State for what he has said about this amendment. Concern was expressed by practitioners that the requirement that court leave was to be obtained could inhibit sales of businesses by insolvency practitioners. After all, the name was often the only valuable asset which was left. Court leave would have not only inhibited the sale of the name but limited the money available for creditors.

    Practitoners welcome the amendment which provides that court leave will not be needed in circumstances to be prescribed. This at least opens the door and allows the name to be sold when it is considered safe. My hon. and learned Friend the Under-Secretary of State said that these circumstances would include sales by insolvency practitioners, provided certain undertakings were given by purchasers. The nature of these undertakings will require careful consideration. I hope that adequate time will be given for this and the very large number of other matters to be dealt with by the rules to be considered by practitioners. I beg my hon. and learned Friend to give practitioners sufficient time to consider these rules. Members of Parliament may be given two days' notice of many complicated amendments; practitioners need much more time. I suggest that there should be three or four months' discussion to ensure that the rules are workable when they eventually become law.

    I confirm that it is our intention to consult practitioners before we finally draw up the rules I would not wish to be held to a time limit, but it is our intention to give them every opportunity to comment and to consider the rules in their final form before they come into force.

    Question put and agreed to.

    Commons amendment: Insert new clause— Challenge of decisions

    '— (1) Subject to the provisions of this section, an application to the court may be made by any of the persons specified in subsection (2) below, on one or both of the following grounds, namely—
  • (a) that a composition or scheme approved at the meetings summoned under section (Summoning of meetings) above unfairly prejudices the interests of a creditor, member or contributory of the company;
  • (b) that there has been some material irregularity at or in relation to either of the meetings.
  • (2) The persons who shall be entitled to make an application under this section shall be—

  • (a) a person entitled, in accordance with the rules, to vote at either of the meetings;
  • (b) the nominee or any person who has replaced him under section (Report by nominee who is not liquidator or administrator) (3) or (Decisions of meetings) (2) above; and
  • (c) if the company is being wound up or an administration order is in force in relation to the company, the liquidator or administrator of the company.
  • (3) An application under this section shall not be made after the end of the period of twenty-eight days beginning with the first day on which each of the reports required by section (Decisions of meetings) (6) above has been made to the court.

    (4) Where on an application under this section the court is satisfied as to either of the grounds mentioned in subsection (1) above, it may do one or both of the following, namely—

  • (a) revoke or suspend the approvals given by the meetings or, in a case falling within subsection (1)(b) above, any approval given by the meeting in question;
  • (b) give a direction to any person for the summoning of further meetings to consider any revised proposal the person who made the original proposal may make or, in a case falling within subsection (1)(b) above, a further company or, as the case may be, creditors' meeting to reconsider the original proposal.
  • (5) Where at any time after giving a direction under subsection (4) (b) above for the summoning of meetings to consider a revised proposal the court is satisfied that the person who made the original proposal does not intend to submit a revised proposal, the court shall revoke the direction and revoke or suspend any approval given at the previous meetings.

    (6) In any case where the court, on an application made under this section with respect to any meeting, gives a direction under subsection (4) (b) above or revokes or suspends an approval under subsection (4) (a) or (5) above, the court may give such supplemental directions as it thinks fit and, in particular, directions with respect to things done since the meeting under any composition or scheme approved by the meetings.

    (7) Except in pursuance of the preceding provisions of this section, an approval given at a meeting summoned under section (Summoning of meetings) above shall not be invalidated by any irregularity at or in relation to the meeting.'

    Lords amendment: No. 7, in subsection (6), at end leave out "meetings" and insert "meeting".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This group of amendments relates to the voluntary arrangement procedure for companies. Amendments Nos. 8 and 9 will enable the court in appropriate cases at the time it makes a winding up order to appoint as liquidator of a company either the official receiver or a person who has previously been acting as the supervisor of a voluntary arrangement in relation to that company. Similar provisions were incorporated into the Bill at an earlier stage where bankruptcy follows an individual voluntary arrangement and where a compulsory liquidation follows the appointment of an administrator.

    Amendments Nos. 9A and 10A ensure that persons bound by a voluntary arrangement are given prompt notice when the supervisor considers his task is complete and also that they shall receive a full report on the administration of the scheme of composition. Such persons may of course challenge the acts of a supervisor before the court.

    When framing the rules which will flow from the enabling provisions, it is our intention not only to provide that notice supported by relevant information is given within 28 days of a supervisor completing his work, but for a penalty to be imposed for non-compliance.

    Amendment No. 11 repeals section 601 of the Companies Act 1985. That section, which provided a means of effecting a binding arrangement with creditors within a voluntary winding up, has been little used and is made redundant by the new more flexible company voluntary arrangement procedure now contained in chapter 1A of part II of the Bill. Consequential thereon is amendment No. 10 which substitutes reference to a corporate voluntary arrangement for reference to a binding arrangement under section 601 in relation to provisions governing the giving of financial assistance under section 153(3) of the principal Act.

    Amendment No. 7 corrects a drafting error.

    I commend acceptance of the amendments to the House.

    Question put and agreed to.

    Subsequent Lords amendments agreed to.

    Clause 15

    Effect Of Application

    Lords amendment: No. 12, in line 3, leave out from "or" to the end of line 5 and insert

    "continued and references to distress being levied shall be omitted."

    I beg to move, That this House doth agree with the Lords in the said amendment.

    Amendment No. 64 made by the House was intended to translate into Scottish legal terminology what is meant by the reference in clauses 15 and 16 to execution being "commenced or continued" and to "distress being levied". The translation, however, went further than intended and the proposed amendment to it, amendment No. 12, ensures that it has a similar effect in Scotland as in England and Wales.

    Amendments Nos. 13 to 17 are designed to meet concern on the part of insolvency practitioners that, after displacement by an administrator, receivers might still be held to be liable to pay preferential debts. Amendment No. 17 makes it clear that they are not liable once displaced, although they continue to be liable for their actions while in office.

    Amendments Nos. 18 and 19 both make further refinements to the Bill's provisions. The first of them enables the company or the directors, as well as a continuing administrator, a committee of creditors or creditors of the company, to apply to the court for an order to fill a vacancy in the office of administrator. The second, amendment No. 19, which was made in response to comments by those who have been consulted, brings administration into line with the winding-up code and receiverships which provide statutory sanction for the giving of directions by the court to compulsory liquidators, receivers and debenture holders.

    Amendment No. 72 introduced a new clause that entitled the administrator to exercise his powers, including his power of disposal, in relation to property covered by a debenture conveying a floating charge capable of leading to the appointment of an administrative receiver, property covered by any fixed charges held by the debenture holder and book debts covered by a charge. The clause preserved the security over such property by providing that any existing security should "follow" the proceeds of property disposed of as if the security, whatever its original nature, were a crystallised or attached floating charge.

    However, we have received strong representations from financial institutions and practitioners and the Government are persuaded that it would be unjust for fixed charges held by a person who also has a floating charge and those over book debts to be dealt with differently from those held by other fixed chargeholders. Amendment No. 20 therefore removes from subsection (1) property subject to fixed charges held by a floating chargeholder and fixed charges over book debts. The administrator must therefore apply to the court for authorisation to dispose of property subject to such charges. He will remain entitled to dispose of assets subject to floating charges.

    To remedy a defect in subsection (4), amendment No. 21 transfers the security holder's priority to any property representing, directly or indirectly, the charged property disposed of. Thus, for example, if the administrator sells charged plant and machinery, the chargeholder's security would attach to the moneys obtained from the sale and then to any asset that those moneys might be converted into.

    4.15 pm

    I make no apology for emphasising that amendment No. 20 effects a substantial change in the manner in which an administrator will conduct the business of the company. We have accepted the strong representations of financial institutions and insolvency practitioners that, in its unamended state, the clause puts the interests of the secured financial creditors at very great risk by enabling the administrator to use their secured assets for trading funds. They saw themselves as being compelled in effect to make "forced loans" to someone over whom they had no control. In such circumstances, where possible, they would always appoint an administrative receiver to obtain control of the secured assets even though that might destroy the company's chances of rehabilitation.

    The widespread adoption of that attitude would make the administration procedure unworkable and we sought by the amendment to meet the fears expressed. We accept in practice that the administrator will, in most cases, need to obtain finance for trading from a company's bankers, but we anticipate that the institutions, having supported or consented to the appointment of the administrator, will play an important role in the achievement of the purposes of the administration and provide on sensible terms the finance required. We trust that the changes in the procedure will improve its acceptability to the present structure of financing business in this country and provide a useful additional means of rehabilitating enterprises that would otherwise be destroyed.

    Finally, amendment No. 22 is a technical amendment which makes it clear that, in Scotland, where any hire purchase goods are disposed of by the administrator, the disposal has the effect of extinguishing any of the rights of the hire purchase owner in the goods. The hire purchase owner would, of course, still have rights to the net value of the goods by virtue of subsection (5) of the new clause inserted by amendment No. 72.

    Amendments Nos. 23 to 27 inclusive are all minor drafting and technical amendments.

    I am happy to give a general welcome to this group of amendments.

    I wish to say only one small word of commendation in respect of amendment No. 20. In the light of the representations that the Minister has received, he was right to move swiftly to make sure that the administration procedure, which I regard as one of the most constructive new features of the Bill, was not jeopardised. Given the hon. and learned Gentleman's explanation of the circumstances as they might have been affected by the Bill as drafted, when creditors with fixed charges might immediately have appointed an adminstrative receiver rather than allow an administration order to be made, the Minister's hon. Friends in another place were right to table the amendment and effect the change. It is important that the administration order procedure is given a fair wind.

    I believe that it would be wise to pay tribute to the many bodies that consulted the Minister and that the Minister consulted over the past few months during the summer recess. I am sure that the House will bear with me if I mention the names of the eight associations because they are important particularly in the development of the amendments that we are now discussing. The Department consulted the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants of Scotland, the Institute of Chartered Accountants in Ireland, the Association of Certified Accountants, the Insolvency Practitioners Association, the Law Society, the Law Society of Scotland and the Committee of London and Scottish Bankers, the latter having the greatest effect on amendment No. 20, which was mentioned by the hon. Member for Dagenham (Mr. Gould).

    It is vital that consultation takes place on technical matters of this sort. I echo the view of the hon. Member for Dagenham that if only a draft Bill had been put forward, many of the 1,000 amendments, in a 200-clause Bill— it is only a 200-clause Bill—would have been avoided. I know that it takes time to formulate a draft Bill, but it requires the confidence of the Government in the House to deal non-politically with matters of technical content. Therefore, if a draft Bill had been devised for the matter, many of the embarrassments over the past months might have been avoided.

    However, the consultation, albeit late, has taken place. I am grateful to my hon. and learned Friend the Minister for allowing changes before Lords amendments. The Lords have changed the Bill from what was very much a disappointing if not an impossible Bill to work into a Bill that has many good chances of surviving in future. It may survive with amendment in future, but we can give it a fair wind.

    With regard to amendment No. 20, in commenting on the provisions concerning administrators as they left this House, many practitioners noted that any banks which held fixed and floating charge security were not likely to allow the appointment of an administrator. It was a great shame, because the administrator is one of the great hopes for saving many businesses. This was because of the effect that they would have had on their fixed charge security, and who could have blamed them?

    The amendments made in the other place have brought major changes to administration orders. The administrator is not the animal that he was when he left this House, and I am grateful. His dominion is now only over floating charged assets. That allays the fears of the financial institutions but it leaves considerable uncertainty as to where an administrator's cash flow is to come from. Where there is a fixed charge on his fixed assets, that is one thing, but where there is a fixed charge on book debts, which is increasingly the case, one wonders where the administrator's funds will come from. Therefore, the practitioners in insolvency can give the amendment only a qualified welcome. The pendulum has swung too often over the procedure for us to know whether it is resting in exactly the right place.

    I thank the hon. Member for Dagenham (Mr. Gould) and my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) for the welcome that they have given to the amendments. In particular, I associate myself and the Government with the tribute paid by my hon. Friend the Member for Richmond and Barnes to the various bodies which have participated in the extensive consultation that has taken place on the contents of the Bill in general and on these clauses in particular.

    Question put and agreed to.

    Lords amendments Nos. 13 to 27 agreed to.

    Clause 37

    Vacation Of Office

    Lords amendment: No. 28, in line 16, after "company" insert "without reasonable excuse".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to take Lords amendments Nos. 29 to 33 and 76.

    The amendments fall into two categories, those which deal with administrative receiver and receiver provisions in England and Wales —amendments Nos. 28 and 76—and those which refine the provisions for receivers in Scotland— amendments Nos. 29 to 33.

    Dealing first with the amendments relating to England and Wales, amendment No. 28 ensures that an administrative receiver will not commit an offence under clause 37(5) if he has a reasonable excuse for not sending the notice of his vacation of office to the registrar of companies, and is in line with other provisions of the Bill. Amendment No. 76 is a drafting amendment.

    With regard to the five amendments to the Scottish provisions, amendments Nos. 29 and 33 are both minor drafting amendments. Amendment No. 30 removes a contradictory qualification on the Scottish receiver's personal liability by removing the reference to section 473(1) of the Companies Act 1985 in section 473(2) of that Act. The consequential amendment No. 31 inserts the relevant words into the repeal schedule to the Bill. Amendment No. 32 makes a minor consequential amendment to section 477 of the Companies Act 1985 following the bringing of the receiver's powers to dispose of any interest in property subject to a security into line with those for England and Wales.

    There is nothing with which I disagree in this group of amendments. However, in the other place there was concern that the Bill did not make clear the position of practitioners with regard to contracts of employment after the 14-day period of grace in respect of adoption by omission had elapsed. In fact, it was I who mentioned the matter to the then Minister, and I was followed by my hon. Friend the Member for Tynemouth (Mr. Trotter), who very much regrets his absence today on parliamentary business.

    During the debate in the other place the Lord Advocate tried to put the minds of practitioners at rest by stating;
    "Where, for example, the contract is not discovered for a month after appointment, the court will not deem adoption to take place by that fact alone."
    With the greatest respect to the Lord Advocate, how can he say what the courts will or will not deem to be the case? It was my understanding—I may be wrong—that courts are not bound by the intention of Ministers in describing legislation. Therefore, if it is the intention that the legislation should not catch such circumstances, surely the amendment should have said so, and the Bill itself should he clearer, rather than hoping what judges might or might not take as being the proper interpretation of the clause.

    My hon. Friend is correct when he says that the courts are not bound by the intentions or, indeed, the observations of Ministers. Nevertheless, in assessing the likely effect and impact of legislation, Ministers are entitled to give the House guidance. The guidance given by the Lord Advocate was guidance given on the basis of my right hon. and learned Friend's experience and expertise in the branch of the law that is relevant to a consideration of the likely effect of the clause to which my hon. Friend has referred. He was not giving any guarantee as to the way in which the clause would be interpreted by the courts; he was giving another place the benefit of his experience and expertise. It was on that basis that another place was content with the clause as drafted, and it is on that basis that I commend it to my hon. Friend and to the House.

    Question put and agreed to.

    Lords amendments Nos. 29 to 33 agreed to.

    Clause 68

    Meeting Of Creditors In Creditors' Voluntary Winding-Up

    Lords amendment: No. 34, in line 9, leave out "two business days stated in the notice and falling" and insert

    "the two business days falling next".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to take Lords amendments Nos. 41 to 48, 70 to 73, 75, and 77 to 79.

    Amendment No. 34 is the first of a group of amendments consisting of drafting and technical amendments relating to winding-up, bankruptcy and miscellaneous matters. They either improve upon and give greater clarity to the Bill or merely involve the reenactment of current provisions in insolvency legislation.

    The amendments fall into four categories: provisions which deal with winding-up—amendments Nos. 34, 75 and 77; definitions—amendments Nos. 41, 43 and 44; bankruptcy—amendments Nos. 42, 45, 46, 47, 48 and 79; and miscellaneous clauses—amendments Nos. 71. 72, 73 and 78.

    Should the House so desire, I am in a position to expand on any individual amendment. Failing that, I do not intend to take up time in going into detail on those matters, and commend the amendments to the House.

    With regard. to amendment No. 77, the Commons amendment No. 458 introduced a new subsection (1A) to section 518 of the Companies Act 1985 by which a company is also deemed unable to pay its debts if the value of its assets is less than its liabilities, taking into account its contingent and prospective liabilities. Practitioners have commented that the amendment introduced a balance sheet test to accompany the existing cash flow test, with which we all agree.

    In the debate in the other place the Minister stated that the Commons amendment does not change the law but only gives effect to the way in which the courts have interpreted section 518 of the Companies Act 1985. In support of that contention, the Minister quoted Mr. Justice Nourse in Re: Bond Jewellers, when he said:
    "what I am required to do is to take into account the contingent and prospective liabilities. That cannot mean that I must simply add them up and strike a balance against assets."
    It remains the fear of insolvency practitioners that that is precisely what the new subsection (1A) of section 518 will require the courts to do. It is alarming that such a fundamental matter should remain a matter of such uncertainty at this stage. May I invite my hon. and learned Friend to seek further counsel on this matter? It is fundamental to the definition of insolvency to know exactly what assets are meant to cover what liabilities

    As I understand it, the point made by my hon. Friend relates to an amendment that was considered in the other place but not to an amendment made by another place in relation to the business before the House this afternoon. It does not, therefore, arise for consideration this afternoon and, in any event, I would not wish to add anything to the words of the learned judge cited both in another place and by my hon. Friend.

    Question put and agreed to.

    Clause 84

    Transactions At An Undervalue And Preferences (England And Wales)

    Lords amendment: No. 35, in line 5, leave out "in the ordinary course of and insert "for the purpose of carrying on''.

    4.30 pm

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to take Lords amendments Nos. 36 and 57 to 59.

    These amendments modify the provisions of the Bill relating to preferences given to creditors and transactions carried out at an undervalue, both in winding up and in bankruptcy.

    Amendment No. 35 has been made as a result of representations received from the Law Society. The expression
    "in the ordinary course of '
    in relation to a company's business has been replaced by the expression
    "for the purpose of carrying on",
    so that it is clear that one-off transactions in genuine special circumstances—for example, rescue operations — are not automatically caught by the undervalue transaction provisions.

    Amendments Nos. 36 and 59, which have been made following representations from both the Law Society and the practitioners, ensure that employees of a bankrupt or insolvent company are not regarded as connected persons or associates for the purposes of preferences and undervalue transactions. Here we have in mind instances where persons are connected solely because of their employment. Those who are also directors or officers of a company will still be treated as connected persons.

    It was not intended that the normal receipt by employees of wages and related benefits should be subject to undue scrutiny. These amendments provide that, in relation to someone who is an employee only, transactions with him will be reviewable, as they are under the present law, for a six-month rather than a two-year period. There will be no presumption that a payment to such persons is a preference and, as regards transactions at an undervalue, they will not be required to demonstrate, in order to validate the transactions, that the company or individual was insolvent.

    Amendments Nos. 57 and 58 insert necessary drafting changes consequential upon Commons amendment No. 333.

    I commend the amendments to the House.

    Despite my best efforts and arguments, the Government and the Minister resolutely refused to accept amendments that I tabled in Committee which would have given effect to and recognised the special interest that employees have in the continuing viability of a company, particularly under the administration order procedure. I am glad to see that in this tiny respect, in the ground covered by amendments Nos. 36 and 59, there is some recognition of the special position of employees. I welcome those amendments, but I would prefer to have seen some concession on the more substantial ground.

    Question put and agreed to.

    Lords amendment No. 36 agreed to.

    Clause 87

    Avoidance Of Certain Floating Charges

    Lords amendment:No. 37, in page 70, line 2, after "charge" insert —

    "(aa) the value of so much of that consideration as consists of the discharge or reduction, at the same time as, or after, the creation of the charge, of any debt of the company;"

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to discuss Lords amendments Nos. 38 to 40.

    It has been established in the 1965 cases of the Yeovil Glove Company Ltd. and Thomas Mortimer Ltd. that, where a company instructs a third party to make a payment to a creditor of the company, the payment is deemed to have been made to the company. The provisions of clause 87 in no way alter the existing legislation. Our initial view was that, in the light of the case law, there was no need to deal with the matter in the clause. However, we reconsidered the position and concluded that there was no overriding objection to specifying the position in the statute, as was desired by a noble Lord in another place and by certain of those with whom we consulted. These amendments achieve that purpose.

    Question put and agreed to.

    Lords amendments Nos. 38 to 48 agreed to.

    Clause 144

    Powers Of Court In Respect Of Disclaimed Property

    Lords amendment: No. 49, in line 3, leave out

    "in occupation of or claiming a right"

    and insert

    "who at the time when the bankruptcy petition was presented was in occupation of or entitled"

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be conveniet to take Lords amendments Nos. 50 to 56.

    Amendments Nos. 49 to 56 improve the clarity of the provisions which deal with the bankrupt's home. They are mainly drafting improvements, but they also provide that, in line with other provisions in insolvency law — for example, clause 113 — matters occurring after the presentation of a bankruptcy petition are not to count for the purpose of these provisions. Therefore, any person claiming a right to reside in the property, either for the purposes of the new clauses or in connection with the rights conferred on occupants under the disclaimer provisions, must have had a right of occupation at the date of the bankruptcy petition. This is to prevent the debtor, realising that his bankruptcy is likely, from trying to manoeuvre himself into an artificially advantageous position.

    I commend the amendments to the House.

    Question put and agreed to.

    Lords amendments Nos. 50 to 59 agreed to.

    New Clause

    Cooperation Between Courts Exercising Jurisdiction In Relation To Insolvency Law

    Lords amendment: No. 60, in line 7, leave out from beginning to "shall" in line 8 and insert

    "; but, without prejudice to the following provisions of this section, nothing in this subsection".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to take Lords amendments Nos. 61 to 69 and 73A.

    Amendments Nos. 60 to 63 and 63A enable provisions to be made in subordinate legislation to assist the working of the new inter-jurisdictional clause, introduced by Commons amendment No. 383, and to make it easier for courts to assist insolvency practitioners in their duties.

    Following consultation with the authorities of the three United Kingdom jurisdictions, it appears that provisions need to be made so that, where property exists in one jurisdiction but the insolvency procedures are in another, such property can be protected and claimed for the benefit of the insolvent estate's creditors but without automatic vesting provisions in relation to property in another jurisdiction, which can create serious anomalies—for example, in relation to innocent third parties who purchase land without notice of the bankruptcy of the vendor.

    Amendments Nos. 64 to 69 and 73A are consequential on the previous amendments. The whole group can be said to rationalise the provisions of the insolvency law in the three United Kingdom jurisdictions and the relationships between them.

    Practitioners broadly agree on and are very grateful for the alterations that have been made.

    On the commencement dates of the legislation as a whole, in another place the Minister observed that no decision had been taken on a target date for the various commencement orders. Can my hon. and learned Friend tell us at least when the date is likely to be—this year, next year or 1987? He noted that, although the greater part of the Bill is designed to be brought into effect at the same time, some of the provisions are free standing, such as those relating to the disqualification of directors, so desperately needed, which I believe now, following this Bill, might well work, and the attachment of personal liability for wrongful trading. It seems that those free standing provisions may be brought into effect at an earlier date. I believe that when they will be brought into effect should be known well in advance so that proper advice can be taken. Can my hon. and learned Friend give that assurance?

    Secondly, in another place the Minister stated that the Government had no intention of introducing amending insolvency legislation in the forthcoming Session. I beg my hon. and learned Friend not to have a closed mind. My hon. and learned Friend will know, as his predecessor learnt, that insolvency law is a highly specialised and extremely complex matter. Despite all the changes, there is no guarantee that every matter is now right. Some would guess to the contrary. The Government should monitor the effect of the legislation as soon as possible and, if required, amendment should be made without promises that no amending legislation will occur next Session.

    Lastly, on the rules, I regard the passing of the Bill without knowing the rules as not unlike being asked whether one is Jewish without knowing the contents of the 10 commandments. Consultation needs time. Practitioners are not full-time legislators.

    I am sure that my hon. and learned Friend would wish to acknowledge the assistance of practitoners, so freely and generously given, and to obtain the full benefit of their assistance on the many vital aspects which may be dealt with by way of secondary legislation.

    I should like to add my support to some of the points made by the hon. Members for Dagenham (Mr. Gould) and for Richmond and Barnes (Mr. Hanley). I welcome the Minister to the Dispatch Box.

    From my observation, it was not only the Minister's predecessor who made a contribution to the proceedings on the Bill, but, if I may say in a non-partisan way. the hon. Members for Dagenham, for Richmond and Barnes and for Tynemouth (Mr. Trotter), and they should be commended.

    Many of us who pressed for the Bill thought that it would have a speedy and uncomplicated passage through the two Houses of Parliament. We now know how wrong that hope was. The Bill was introduced in another place on 10 December 1984. Since then, as the hon. Member for Dagenham said, there have been more than 1,200 amendments, which we understand is a parliamentary record. The Bill was brought from the other place on 16 April 1985 and had its Second Reading in this House on 30 April. It has spent almost 35 hours in Committee. Cork was established in January 1977, which is a considerable time ago. One would have hoped that there would have been sufficient time for Government Departments and others to have given it adequate consideration. It is most regrettable that the House was placed in the predicament of having to deal with so many amendments because of the way that the Government introduced the Bill.

    I hope that the Minister and his officials will respond to the appeal made by the hon. Member for Richmond and Barnes, because the Bill, without the rules, is only half a Bill. I hope that they will learn a lesson from recent months and consult widely and seek to reach as broad agreement as possible on the content of those rules. We all realise that there is a balance of arguments and interests to be reached, but I hope that the Government, in the coming weeks and months, will consult widely to ensure that the rules are as acceptable as possible to those who have daily to deal with the legislation.

    Most of us wanted to see the legislation on the statute book because we were aware that a great deal of damage was being done to a large section of industry due to the inadequacy of the law. Despite some of the deficiencies that undoubtedly still exist in the statute, it will overcome some of the problems that were faced by the profession and by those industries that went to the wall and were made bankrupt. If the new procedure had been in operation, they would not have done so.

    4.45 pm

    I thank the hon. Member for Stockton. South (Mr. Wrigglesworth) for his kind welcome to me, and associate myself with the tribute that he paid to the hon. Member for Dagenham (Mr. Gould) and to my hon. Friend the Member for Richmond and Barnes (Mr. Hanley).

    My hon. Friend mentioned a number of points, and I shall endeavour to respond to them. I cannot be precise about commencement dates at this stage. I do not imagine——

    Order. The Minister need feel under no obligation to respond to matters that went beyond the terms of the amendment.

    I am grateful to you for that reminder, Mr. Deputy Speaker, but I am anxious to be as helpful as possible to my hon. Friend.

    The most likely date for commencement is 1986. I can give an assurance that notice of the bringing into effect of any of the free standing provisions to which my hon. Friend referred will be given well in advance. Although I do not resile from what was said in another place—that it was not the Government's intention to introduce any amendment to this legislation—I hope that everything that I have said this afternoon makes it clear that these matters will not be approached with closed minds. Of course, the operation of the legislation will be monitored, and what my hon. Friend has said will be taken to heart.

    Question put and agreed to.

    Subsequent Lords amendments agreed to.

    Bankruptcy (Scotland) Bill Lords

    Lords amendments in lieu of certain Commons amendments, Lords amendments to certain other Commons amendments, and Lords consequential amendments considered.

    Clause 7

    Meaning Of Apparent Insolvency

    The Lords have disagreed to the amendments made by the Commons in page 8, line 14, leave out from 'debt' to 'has' in line 16 and insert

    'of (or debts the aggregate of which is) a relevant amount,'.
    and in

    page 8, line 23, at end insert—

    '(1A) In subsection (1)(d) above, "a relevant amount" means not less than—
  • (a) £750; or
  • (b) such sum as may be prescribed.'.
  • and have made the following amendments to the Bill in lieu thereof:

    Amendment No. 1. in page 8, line 14, after second "a" insert "liquid".

    Amendment No. 2, in page 8, line 15, after "amounts" insert

    "(or liquid debts which in aggregate amount)".

    4.46 pm

    I beg to move, That this House doth not insist upon the amendments made by the Commons to page 8, line 14 and page 8 line 23 and that the House doth agree to amendments Nos. 1 and 2, made by the Lords in lieu of those amendments.

    With this it will be convenient to take Lords amendment No. 4.

    Amendments Nos. 1 and 2 have the effect of providing that a creditor will only be able to use the procedure under clause 7(1)(d) if the debts making up his £750 are liquid debts. The meaning of the term "liquid debt" is a matter for the common law. In essence it means a debt that is of a certain settled amount which is constituted in writing by decree or probative document or is admitted by the debtor. This will constitute a considerable safeguard for the debtor and was suggested by the Scottish Consumer Council.

    Amendment No. 4 restores the position to what it was previously. It makes it clear that the debtor need only deny that there is a debt or that the sum claimed by the creditor is immediately payable. That simplifies the position for the debtor.

    The Opposition are happy and content to accept the Government's position not just on this amendment but on all the amendments selected. I am sure that the Scottish Consumer Council would wish me to pass its thanks to the Solicitor-General for the considerate way in which he has studied their representations. That is true of representations made by various other organisations. When we discussed the Insolvency Bill I said to myself—I can put it on record now — that the miracle is that both the Bills have reached this happy state today, because both Bills were in Committee at the same time. One was subject to amendment as a result of what was happening to the other and at one stage no one would have believed that the Government or anyone else—I do not say this critically —could have produced the sensible proposals that are contained in the Bill.

    Question put and agreed to.

    Lords amendment No. 2 agreed to.

    Lords amendment No. 3: The Lords have agreed to the amendment made by the Commons in

    page 8, line 16, after 'debtor', insert by recorded delivery,'.

    with the following amendment—

    Leave out "recorded delivery" and insert

    "personal service by an officer of court"

    I beg to move, That this House doth agree with the Lords in the said amendment.

    I am grateful to the hon. Member for Falkirk, East (Mr. Ewing) for his remarks on Lords amendment No. 1. What I have to say about this amendment will be in the same category. As the hon. Gentleman rightly said, there were a number of difficulties in Committee when we had two sets of important changes to this area of law proceedings in parallel. It is a matter of enormous relief, not only to myself but to the draftsmen of the Bill, that we should have reached this stage of the Bill today.

    This amendment alters the method by which a demand under clause 7(1)(d) will have to be served upon a debtor from one of service by recorded delivery to one of personal service by an officer of court. This is to ensure that a debtor is capable of being constituted apparently insolvent by this method only if he has personally received the statutory demand. In making this change, we have taken due account of the points raised on Report by the right hon. Member for Glasgow, Govan (Mr. Millan) and the hon. Member for Glasgow, Garscadden (Mr. Dewar). The requirement of personal service will help to alert the debtor to the seriousness of a demand under this provision. I hope that this change will allay many of the anxieties expressed by the Opposition.

    The procedure introduced under clause 7(1)(d) will nevertheless remain a technique that could be used successfully in bankruptcy law in Scotland and from time to time avoid unnecessary expense, allowing what remains of a debtor's estate to be readily distributed among the creditors.

    I welcome the remarks of the Solicitor-General and proffer the apologies of my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) who is absent on Council of Europe business but who particularly asked me to welcome this provision. Although it may seem a minor provision and may not be used very often, it is nevertheless very important in situations where the apparent insolvency of the debtor has to be established by a particular method.

    My right hon. Friend the Member for Govan as well as the Institute of Chartered Accountants regarded it as important that the recipient should be conscious that he was receiving a notification that would establish his insolvency. The original proposal for notification by recorded delivery letter seemed to leave something to be desired. We are therefore grateful to the Government for going along the path suggested by my right hon. Friend the Member for Govan and my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and requiring that an officer should serve the notice. The recipient will thus be fully conscious of the importance of the notification. I am grateful to the Solicitor-General for agreeing to these proposals.

    Question put and agreed to.

    Lords amendment No. 4 agreed to.

    Clause 10

    Concurrent Proceedings For Sequestration Or Analogous Remedy

    Lords amendment No. 5: The Lords have agreed to the amendment made by the Commons in

    page 11, line 23, after '1914', insert 'or under the Insolvency Act 1985'.

    with the following amendment

    Leave out from "23" to the end and add

    "leave out `an administration order under section 48 of the County Courts Act 1959' and insert `under the Insolvency Act 1985 or an administration order under section 112 of the County Courts Act 1984'."

    I beg to move. That this House doth agree with the Lords in the said amendment.

    Amendment No. 5 updates a reference to administration orders made under the County Courts Act 1959. Such orders are now made under the County Courts Act 1984.

    Question put and agreed to.

    Clause 30

    Vesting Of Estate At Date Of Sequestration

    Lords amendment No. 6: The Lords have disagreed to the amendments made by the Commons in

    page 31, line 7, after 'bankruptcy', insert

    `or other similar orders in, or in connection with, bankruptcy proceedings'.
    and

    page 31, line 10, leave out 'to the same effect' and insert

    but any right or interest acquired for value before the registration or publication shall not be prejudiced by the effect of the act and warrant or by such registration or publication.'.
    and have made the following amendments to the Bill in lieu thereof:

    Page 31, line 1, leave out subsection (4).

    I beg to move, That this House doth not insist upon the amendments made by the Commons in page 31, line 7, and in page 31, line 10, but that the House doth agree to amendments Nos. 6 and 7 to the Bill made by the Lords in lieu of those amendments.

    The purpose of the amendments is to restrict to Scotland clauses 30 and 37, which provide for the vesting of the debtor's estate in, and the ingathering of the estate by, the permanent trustee. As my noble and learned Friend the Lord Advocate discussed in some detail when introducing these amendments in another place, they have arisen because of apparent practical difficulty in applying the principle of universal vesting of a debtor's estate in the permanent trustee in other parts of the United Kingdom outwith Scotland. This practical difficulty has been resolved by means of new provisions in the Insolvency Bill which will allow for regulations to provide that the permanent trustee will have the same rights in relation to property in England, Wales and Northern Ireland as he would if he had been appointed a trustee in bankrupty under the law of any of those countries.

    These new provisions will have the effect of putting a permanent trustee in a Scottish sequestration in a stronger position than if he had simply to rely on clause 30 extending to other parts of the United Kingdom outwith Scotland. It also ensures that due account is taken of the position under local law where the property is situated and that there is reciprocity between all parts of the United Kingdom.

    Question put and agreed to.

    Lords amendment No. 7 agreed to.

    Clause 68

    Interpretation

    The Lords have agreed to the amendment made by the Commons in page 66, line 45, at end insert—

    '(4) Any reference in this Act to "the creditors" in the context of their giving consent or doing any other thing shall, unless the context otherwise requires, be construed as a reference to the majority in value of such creditors as vote in that context at a meeting of creditors.
    (5) Any reference in this Act to an enactment relating to the limitation of actions shall not include any such enactment which implements or gives effect to any international agreement or obligation. '.
    with the following amendment—

    In line 7, leave out

    "an enactment relating to the limitation of actions shall not include any such"

    and insert

    "any of the following acts by a creditor barring the effect of any enactment or rule of law relating to the limitation of actions in any part of the United Kingdom, namely—
  • (a) the presentation of a petition for sequestration;
  • Schedule 7

    Consequential Amendments And Re-Enactments

    The Lords have agreed to the amendment by the Commons inpage 87, line 44, at end insert—

    The Local Government (Scotland) Act 1973 (c. 65)

    3A. In section 31(2) (disqualifications regarding members of local authority), for paragraph (b) there shall be substituted the following paragraph—

    "(b) he is discharged under or by virtue of the Bankruptcy (Scotland) Act 1985."

    The Social Security Pensions Act 1975 (c. 60)

    3B. —(1) In section 58 of the Social Security Pensions Act 1975 (under which Schedule 3 to that Act has effect for giving priority in bankruptcy etc. to certain debts) after the word "effect" there shall be inserted the words "for the purposes, in respect of the sequestration of estates in Scotland, of Schedule 3 to the Bankruptcy (Scotland) Act 1985 (preferred debts)"; and, for the purposes of the sequestration of a debtor's estate in Scotland, Schedule 3 to the said Act of 1975 shall have effect—

    (a) before the coming into force of paragraph 26 of Schedule 7 to the Insolvency Act 1985 as if—

    (i) in each of paragraphs 1, 2(1) and 3(1). for the words from the beginning to "included" there were substituted the words "This Schedule applies to";
    (ii) in the said paragraphs 1 and 2(1), for the words "date of the relevant event" there were substituted the words "relevant date" and, in the said paragraph 3(1), for the words "occurrence of the relevant event" there were substituted the words "sequestration of a debtors estate"; and

    (b) the concurrence in such a petition; and

    (c) the submission of a claim,

    shall be construed as a reference to that act having the same effect, for the purposes of any such enactment or rule of law, as an effective acknowledgement of the creditor's claim; and any reference in this Act to any such enactment shall not include a reference to an"

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to consider the following amendments: No. 9, in clause 17, page 17, line 37, leave out

    ", or the barring of the effect of any enactment or rule of law relating to the limitation of actions in any part of the United Kingdom,"

    No. 10, in clause 72, page 69, line 2, leave out "17(5)"

    No. 11, page 69, line 3, leave out "and 52" and insert "52 and 68(5)"

    Amendment No. 8 clarifies those provisions in the Bill that bar the effect of any enactment or rule of law relating to the limitation of actions in any part of the United Kingdom. It provides that what is meant by the presentation of the petition for sequestration or the submission of a claim barring the effect of such enactments or rule of law is that they should have the same effect as an effective acknowledgment of the creditor's claim.

    Lords amendments Nos. 9, 10 and 11 are consequential and remove the provision in clause 17(5) which saves the effect of the interruption of the limitation period on the recall of the sequestration. This is because it is considered unnecessary to do so in English law. They also have the effect of extending the effect of clause 68(5) to other parts of the United Kingdom outwith Scotland.

    Question put and agreed to.

    Lords amendments Nos. 9 to 11 agreed to.

    (iii) in pararaph 4, for the words from "event" to "that Act" there were substituted the words "date" has the same meaning as in Part I of Schedule 3 to the Bankruptcy (Scotland) Act 1985."; and

    (b) after the coming into force of the said paragraph 26 as if—

    (i) in paragraph 3(1), for the words "a person going into liquidation or being adjudged bankrupt" there were substituted the words "the sequestration of a debtor's estate";
    (ii) in paragraph 2(2) for the words "in a case where the relevant event took place on or after the day of Me passing of the Social Security Act 1985" there were substituted the words "in any other case"; and
    (iii) (iii) in paragraph 4, for the words "Schedule 3 to the Insolvency" there were substituted the words "Part I of Schedule 3 to the Bankruptcy (Scotland)".'

    Lords amendment: No. 12, in line 16, leave out from "effect" to "26" in line 32.

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to take the following amendments: No. 13, in line 37, leave out sub-para (ii).

    No. 14. in line 41, leave out "Schedule 3" and insert "Schedule 4".

    Amendments Nos. 12 and 13 have the effect of deleting the amendments which it was proposed to make to the Social Security Pensions Act 1975 in the interim period between the commencement of the Bankruptcy (Scotland) Bill and the Insolvency Bill. These amendments are no longer required because it is not now intended to make them until the equivalent provisions in the Insolvency Bill relating to Crown preferences commence.

    The third change to this amendment is consequential upon the renumbering of the schedule to the Insolvency Bill relating to Crown preferences.

    I thank the Solicitor-General for accepting these important amendments as it seemed unwise to proceed in the way in which the Government had intended to proceed. We are therefore grateful for the Government's change of mind.

    It may seem to be an early Christmas for the Solicitor-General, but I end as I began by saying that we now have a sensible and operable piece of legislation because the Solicitor-General and his ministerial colleagues very generously exchanged with us not only notes on clauses but notes on amendments, which we found most helpful. I place on record my thanks to the Solicitor-General for the way in which he conducted the Committee stage of the Bill.

    Question put and agreed to.

    Subsequent Lords amendments agreed to.

    Law Reform (Miscellaneous Provisions) Scotland) Bill

    Lords amendments considered.

    Clause 8

    Rectification Of Defectively Expressed Documents

    Lords amendment: No. 1, in page 7, line 38, at end insert

    "and contain a description of the land to which the application relates"

    5 pm

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to consider amendment No. 50, in page 44, line 25, at end insert—

    "Titles to Land Consolidation (Scotland) Act 1868 (c. 101)

    . In section 159 (litigiosity not to begin before date of registration in Register of Inhibitions and Adjudications of notice of summons) after the word "summons", where thirdly occurring, there shall be inserted the words "and contain a description of the lands to which the summons relates".

    . In Schedule RR (form of notice of summons) after the word "signeting]" there shall be inserted the words "The Summons relates to [ insert description of lands]."."

    These amendments arise from some concern which was expressed by Opposition peers about the scope of notices of litigiosity under clause 8(8). While the Government were unable to accept the original point, we were persuaded that the present provisions on notices of litigiosity required improvement, and amendments 1 and 50 are designed to achieve this.

    At present, clause 8(8), which deals with notices of litigiosity in relation to actions of rectification, merely requires the notice to give the names and designations of the parties to the application and the date when authority for service or citation was granted. This follows the existing provisions in section 159 and schedule RR of the Titles to Land Consolidation (Scotland) Act 1868 for notices of litigiosity relating to actions for reduction and adjudications. However, lawyers carrying out a search in relation to a transaction involving someone of the same name a pursuer or defender in, for example, a reduction action already encounter difficulties in ascertaining whether the action affects their client's interest, especially where the name is a common one where only a business or agent's address is given. Even when the relevant party has correctly been identified, confusion may arise where he owns pieces of land other than the one affected by the action. While it will usually be possible for the seller of the land to prove the transaction in question is not struck at by the notice of litigiosity, this will involve more delay and expense. Previously these difficulties had been tolerable, but with the increase in number of entries in the register of inhibitions and adjudications, and the vastly increased volume of searches, the problem is becoming a severe one. Therefore, the amendments provide that notices of litigiosity, both under this Bill and the 1868 Act, shall also give a description of the land to which the summons or application mentioned in the notice relates.

    It goes further than the point originally raised by the Opposition and I hope that they support the amendments. I am advised that the amendments enjoy the strong support of the Law Society for Scotland. What started as a minor point has now become a valuable improvement of Scottish law.

    I am happy to say that this amendment enjoys the support of the Opposition.

    Question put and agreed to.

    Clause 13

    Amendments Of Matrimonial Homes (Family Rotection) (Scotland) Act 1981

    Lords amendment: No. 2, in page 12, line 39, leave out "(1)".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will convenient to discuss the following amendments:

    No. 3, in page 12, line 40, after "couples)" insert "(a) in subsection (1)".

    No. 4, in page 12, line 40, at end insert—

    "; and
  • (b) in subsection (6), in the definition of "occupancy rights"
  • (i) in paragraph (a) for the words from "not" to the end there shall be substituted the words "to continue to occupy the house;" and
  • (ii) at the end there shall be inserted the words—"
  • and, without prejudice to the generality of these rights, includes the right to continue to occupy or, as the case may be, to enter and occupy the house together with any child residing with the cohabiting couple"."

    The definition of the occupancy rights of married couples in section 1 of the Amendments of Matrimonial Homes (Family Protection) (Scotland) Act 1981 is amended by clause 13(2) and 13(3) of the Bill. This group of amendments provide that the definition of the occupancy rights of cohabiting couples provided in section 18(6) of the 1981 Act is correspondingly amended. The amendments will make clear that a non-entitled partner's occupancy right is a right to occupy, including all rights normally inherent in the right to occupy, and is not merely a right not to be excluded, and also that the non-entitled partner's right to occupy the house includes the right to have with her any child residing with the cohabiting couple.

    This point vexed the Committee, and concern was expressed by the Opposition and by my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn). I hope that, without prejudice to the generality of the rights, the right to continue to occupy also allows for and includes the right to enter and occupy the house together with any child residing. I hope that this puts the point beyond doubt. Certainly it was not one of controversy for Members on either side of the Committee, but there was anxiety that we should make clear what rights were allowed for.

    Question put and agreed to.

    Clause 18

    Small Claims Proceedings

    Lords amendment: No. 5, in page 16, line 8, leave out from beginning to end of line 14, and insert—

    "18. —(1) For subsection (2) of section 35 of the Sheriff Courts (Scotland) Act 1971 (summary causes) there shall be substituted the following subsection—
  • "(2) There shall be a form of summary cause process, to be known as a "small claim", which shall be used for the purposes of such descriptions of summary cause proceedings as are prescribed by the Lord Advocate by order"."
  • I beg to move, That this House doth agree with the Lords in the said Amendment.

    With this it will be convenient to consider the following amendments:

    No. 6, in page 16, line 20, leave out "small claims proceedings" and insert "a small claim"

    No. 8, in page 16, line 23, leave out "small claims proceedings" and insert "a small claim"

    No. 10, in page 16, line 30, leave out "small claims proceedings" and insert "a small claim"

    No. 11, in page 16, line 34, leave out "claims proceedings" and insert "claim"

    No. 16, in page 17, line 10, leave out "claims proceedings" and insert "claim"

    No. 17, in page 17, line 16, leave out "proceedings" and insert "small claim"

    No. 18, in page 17, line 18, leave out "proceedings" and insert "small claim"

    No. 19, in page 17, line 19, leave out "proceedings" and insert "small claim"

    No. 20, in page 17, line 20, leave out "small claims proceedings" and insert "a small claim"

    No. 21, in page 17, line 21, leave out "proceedings" and insert "small claim"

    No. 22, in page 17, line 23, leave out "small claims proceedings" and insert "a small claim"

    No. 23, in page 17, line 25, leave out "small claims proceedings" and insert "a small claim"

    No. 24, in page 17, line 27, leave out "small claims proceedings" and insert "a small claim"

    No. 25, in page 17, line 30, leave out "small claims proceedings" and insert "a small claim"

    No. 26, in page 17, line 32, leave out "small claims proceedings" and insert "a small claim"

    No. 28, in page 17, line 44, leave out "small claims proceedings" and insert "a small claim"

    The purpose of the first and main amendment of this group is to make clear that there will be a new procedure, within the existing summary cause procedure, which will be known as a "small claim". This procedure will be mandatory for all those proceedings which qualify as a "small claim". These cases will be prescribed in an order which will set out those descriptions of summary causes which are to be treated as small claims and their financial limit. Under a later amendment this order will be subject to affirmative resolution. Cases which fall outside those descriptions and above that financial limit will be dealt with under the present summary cause procedure. This amendment also replaces the term "small claims proceedings" with the more succinct "small claim".

    The remaining amendments are consequential.

    Although in the legislation the description of this new procedure was "small claims proceedings", even in Committee those who were involved, such as the Scottish Consumer Council and the Law Society, are already calling it "small claims" and for that reason it would seem sensible to agree to a change which follows a usage which has probably already become established.

    It always amazes me that we spend an hour or two in Committee trying to find a new description or a new procedure. The term "procedure" is commonly understood and, lo and behold, for this Bill we have found the new terms simply by dropping the word procedure. I am grateful to the Solicitor-General for accepting what was obvious to everyone else in Committee

    Question put and agreed to.

    Lords amendment No. 6 made.

    Lords amendment: No. 7, in page 16, line 20, at end insert—

    "(4) An order under subsection (2) above shall be by statutory instrument but shall not be made unless a draft of it has been approved by a resolution of each House of Parliament."

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to discuss the following amendments:

    No. 14 in page 17, line 3, leave out "made".

    No. 15, in page 17, line 4, leave out from "instrument" to end of line 6 and insert

    "but shall not be made unless a draft of it has been approved by a resolution of each House of Parliament.".

    The orders which the Lord Advocate will make under the new subsection (2) in section 35 of the Sheriff Courts (Scotland) Act 1971 and under subsection (4) of the new section 36B of the 1971 Act are at present subject to negative resolution procedure. These orders will set out the descriptions of summary cause proceedings to be dealt with as small claims, their financial limits, and the limits relating to awards of limited or no expenses. Lord Wilson of Langside, in Committee, proposed that instead affirmative resolution was appropriate for such orders. After consideration the Government agreed that affirmative resolution procedure of a draft of the proposed orders was more appropriate in view of the general importance and interest of the subject matter of these orders.

    I left the burden of my remarks to this group of amendments because the definition and explanation of the limits that are to be embodied in the new small claims are important. In Committee and in the latter stages of the Bill's passage there has been substantial debate on the limits that are to be set. The small claims process can be introduced only when there are statutory instruments showing the limits that the Government intend to apply. When we questioned the Solicitor-General, he seemed hesitant about the timing of the introduction of the statutory instruments and the limits.

    The limits of the small claims and the question of no damages and no expense are crucial to the introduction of the system. I hope that the Minister will give us some idea how early in the new Session the statutory instruments will be introduced as they are crucial to the implementation of the system.

    I received an invitation, as no doubt did the Minister, from the Scottish Consumer Council to celebrate the introduction of small claims. That is a bit premature because it cannot be introduced until we know the limits. I hope that the Solicitor-General will be able to say something about that.

    I am tempted to embark upon some consideration about what might be the appropriate financial limits or the limits to be fixed in relation to limited or no expenses. In view of what I hope the hon. Gentleman will accept as a worthwhile concession in the direction that such matters should be subject to affirmative resolution, a more appropriate moment or consideration of such issues is in the event of the established financial limits proving unsatisfactory to hon. Members. I hope that they will not be unsatisfactory and it is better to leave the matter until the time that they are introduced.

    I am not saying that there will be any marked delay in introducing them, but it would be daft to introduce a limit which eventually proved to be too low. I appreciate, and my noble and learned Friend the Lord Advocate appreciates, that there is a desire to see the limits fixed at a relatively high level. We have received a number of representations from some bodies which show that there could be problems if limits are fixed too high. It would be fair to say that there is concern that they should be fixed on the high side, but it would be wrong to tell the House that representations have gone all one way because that is not the case.

    It is churlish of the hon. Gentleman to say that the invitation extended to him and to me to celebrate the introduction of the small claim is in some way premature. The Scottish Consumer Council clearly does not think so, and, after he has enjoyed its hospitality on Friday, I hope that he too will not think so.

    Question put and agreed to.

    Lords amendment No. 8 agreed to.

    Lords amendment: No. 9, in page 16, line 25, at end insert "or".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    The amendment makes clear that paragraphs (a) and (b) in the new section 36A describe three different types of pursuers, each of whom is ineligible for the services of the sheriff clerk in the service of the small claims summons, as they are not acting in an individual capacity. The three categories are, first, a partnership; second, a body corporate, such as a company; and, third, a pursuer acting in a representative capacity, such as that of a trustee. All this amendment does is make it clear they are not entitled to those services

    Question put and agreed to.

    Lords amendments Nos. 10 and 11 agreed to.

    Lords amendment: No. 12, in page 16, leave out lines 38 to 43 and insert

    "to a party to a small claim—
  • (a) who being a defender—
  • (i) has not stated a defence; or
  • (ii) having stated a defence, has not proceeded with a defence, has not acted in good faith as to its merits; or
  • (b) on whose part there has been unreasonable conduct in relation to the proceedings or the claim".
  • 5.15 pm

    I beg to move, That this House doth agree with the Lords in the said amendment.

    The amendment seeks to make clear the circumstances in which a party to a small claims action, particularly a defender, will lose the benefit of the special provisions relating to expenses whereby no, or a limited amount of, expenses may be awarded against an unsuccessful party. Where the benefit is lost, the normal rules for award of expenses in summary causes would apply. The wording takes account of criticisms made of the original wording by Lord Morton of Shuna.

    Subsection (3) of new section 36B sets out the circumstances in which the normal rules for awarding expenses are to apply, first, in paragraph (a)(i) where the defender has offered no defence. This takes account of the fact that at present summary cause is used extensively for the routine collection of debts. It would be inequitable for the successful pursuer not to have expenses awarded to him in cases where there is no defence to a claim, since otherwise there would be a temptation for debtors not to pay their bills in the hope that the creditor would be discouraged from suing to recover the debt by the prospect of incurring expenses part or all of which could not be recovered.

    The second circumstance is in paragraph (a)(ii) which preserves the existing provision whereby a defender is not to benefit if he states a case but proceeds no further with it. This is intended to prevent a defender lodging a skeletal or spurious defence simply to take advantage of the special rules on expenses. The third circumstance is in paragraph (a)(iii) which covers the possibility of the defender stating a defence and proceeding. with it, but the defence itself is spurious and has clearly been presented in bad faith merely to take advantage of the special expenses provisions.

    Question put and agreed to.

    Lords amendment: No. 13, in page 17, line 1, leave out "(c)" and insert

    "; nor do they apply".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    Paragraph (5) of new section 36B(3) excludes from the special expenses provisions any party, either pursuer or defender, who acted unreasonably either during the proceedings or in relation to the claim itself. This would cover cases where it was clear that there was no proper claim to bring to court, or where a party had been acting in a dilatory manner or in bad faith.

    Question put and agreed to.

    Lords amendments Nos. 14 to 26 agreed to.

    Lords amendment:No. 27, in page 17, line 34, leave out from "(3)" to "(2C)" in line 36 and insert

    "(a) after "(2A)" there shall be inserted the words "(2B) or"'

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This amendment in clause 18(3)(b) is to make clear that the decisions of the sheriff relating to remits made under section 37(3)(a) of the 1971 Act, which are not to be capable of review, are those under subsection (2A), (2B) or (2C) of section 37(3) of the 1971 Act. The present drafting in the clause might imply that the decisions relating to remits may be made only where all three of these subsections are involved, which would not be the case.

    Question put and agreed to.

    Lords amendment No. 28 agreed to.

    Clause 25

    Amendment Of Provisions About Detention Of Children

    Lords amendment: No. 29, in page 21, line 2, leave out from beginning to first "for" in line 4.

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This amendment deletes the change to section 42(3) of the Social Work (Scotland) Act 1968 made by clause 25(1) (a). The effect of paragraph 25(a) is subsumed in paragraph 25(b), and paragraph 25(a) is therefore redundant.

    Question put and agreed to.

    Clause 26

    Amendment Of Power To Detain Children In Secure Accommodation

    Lords amendment: No. 30, in page 22, line 9, leave out "paragraph (b) above" and insert "this subsection"

    I beg to move, That this House doth agree with the Lords in the said amendment.

    The words "paragraph (b) above" are wrong since they relate to a paragraph in the clause, whereas they are part of the text which is to be inserted into section 58E(1) of the Social Work (Scotland) Act 1968.

    Question put and agreed to.

    Clause 32

    Rules As To Valuation Of Sheep Stocks

    Lords amendment: No. 31, in page 24, line 10, leave out "valuation" and insert "variation".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This is a drafting amendment to correct an error in the wording. The corrected wording ensures that, once the formula for valuing sheep stock at the end of a tenancy has been updated, the updated formula can be used only in new leases. It does this by tying the date of the lease to the date of the variation of the formula rather than to the date of the valuation.

    Question put and agreed to.

    Clause 39

    Fines In Respect Of Drug Offences

    Lords amendment: No. 32, in page 32, line 24, after "made" insert "by the offender"

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to discuss the following amendments:

    No. 33, in page 32, line 25, leave out "the accused" and insert "he"

    No. 35, in page 33, line 10, leave out "accused" and insert "offender"

    Amendments Nos. 32 and 33 meet a point raised by the noble and learned Lord Morton of Shuna in another place. They are intended to put it beyond doubt that in cases where an offender convicted of a drug trafficking crime is sentenced by virtue of clause 39 to a fine in addition to a term of imprisonment or detention. the court should bear in mind only the profits which the accused himself has made from the crime and not, for example, profits made by a co-accused.

    As for amendment No. 35, new subsection 193B(5) of the Criminal Procedure (Scotland) Act 1975 as inserted by clause 39 as presently drafted contains a reference to the "accused". As this subsection relates to a person who has already been convicted, this reference is not strictly accurate. The subsection should instead refer to an "offender".

    I do not intend to detain the House for long. I welcome the minor clarification as a result of the efforts of another place on what can be taken into account in deciding where a fine is appropriate under clause 39. The Minister will know from our debates in Committee that we have some doubts about the lack of definition. and that there was some confusion. It was one of those occasions on which we had a change of Minister halfway through our considerations of the Bill, and there was a distinct difference of opinion, or emphasis, between the hon. Member for Edinburgh, South (Mr. Ancram) and the hon. Member for Argyll and Bute (Mr. MacKay) as to exactly what criteria the courts should apply. No doubt the courts will make up their own minds, as they so often do, irrespective of what may be said by either of the two junior Ministers at the Scottish Office.

    We shall watch this matter with curiosity and interest. While we are all totally committed to the campaign to control drug trafficking, I am not as convinced as the Ministers seem to be that this legislation will make an important or particularly significant impact

    Question put and agreed to.

    Lords amendment No. 33 agreed to.

    Lords amendment: No. 34, in page 32, line 28, leave out from "in" to "the" in line 30 and insert

    "paragraphs (a) to (c) of subsection (4) or any offence mentioned in paragraphs (d) to (g) of that subsection where such latter offence involves a controlled drug as defined in section 2(1)(a) of".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    The purpose of this amendment is to extend the measures to be introduced by clause 39 to cover offences involving all categories of controlled drugs as defined in the Misuse of Drugs Act 1971. In doing so it meets and expands upon an amendment tabled at Lords Committee stage by the noble and learned Lord Morton of Shuna, which sought to extend the provisions to include class B drugs. However, the present amendment extends the clause still further to cover all controlled drugs.

    As it left this House, clause 39 provided that anyone convicted of a drug trafficking crime involving class A drugs was to be liable to be fined in addition to a custodial sentence unless it was considered inappropriate to do so. It was originally decided that the new measures introduced by clause 39 should be restricted to class A drugs to be consistent with the measures in what is now the Controlled Drugs (Penalties) Act 1985, which increased the maximum penalty for drug trafficking offences involving class A drugs from 14 years to life imprisonment, and to reflect the especially pernicious nature of class A drugs.

    However, the Government recognise that large profits can also be derived from other controlled drugs in classes B and C. For example, one of the class B drugs is cannabis and large profits can be made from it. Following further consideration, it has been decided to extend the scope of the existing provisions to cover all categories of controlled drugs.

    Question put and agreed to.

    Lords amendment No. 35 agreed to.

    Lords amendment: No. 36, in page 33, line 30, leave out subsection (2).

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to discuss the following amendments:

    No. 45, in clause 59, in page 41, line 7, at end insert—

    "() Schedule (Transitional provisions) to this Act shall have effect for the purpose of making transitional provision."

    No. 57, after schedule 2, insert the following new schedule—

    "Schedule Transitional Provisions

    Section 36

    1. Sections 141A, 141B, 346A and 346B of the Criminal Procedure (Scotland) Act 1975 do not apply in relation to a trial which has commenced before the coming into force of those sections; and, for the purpose of this paragraph, a trial shall be taken to commence—

  • (a) in the case of summary proceedings, when the oath is administered to the jury;
  • (b) in the case of summary proceedings, when the first witness is sworn.
  • Section 38

    2. The amendment to section 120 of the Road Traffic Regulation Act 1984 effected by section 38 of this Act has no effect in relation to proceedings in which the complaint was served on the accused before the coming into force of section 38 of this Act.

    Section 39

    3. Section 193B of the Criminal Procedure (Scotland) Act 1975 shall not affect the punishment for an offence committed before the coming into force of section 39 of this Act.

    4. The amendments to section 407(1A) of the Criminal Procedure (Scotland) Act 1975 effected by section 40 of this Act have no effect in relation to fines imposed in respect of offences committed before the coming into force of section 40 of this Act."

    Clauses 36 and 38 change the rules on admissibility of evidence in court proceedings for sexual offences and vehicle licensing offences, while clauses 39 and 40 change the penalties which can be imposed for an offence in certain circumstances. Clearly it would be unacceptable for the rules of evidence to be changed during the course of a trial.

    Equally it would be unjust, and contrary to article 7 of the European Convention on Human rights, if the penalty for an offence could be retrospectively increased or an additional penalty imposed. The new schedule of transitional provisions therefore provides that clause 36 shall not apply to trials, and clause 38 shall not apply to proceedings, commenced before they come into force. Similarly, clauses 39 and 40 cannot change penalties for offences committed before they came into force. The new schedule is governed by clause 60, and as a consequential to the new schedule the existing transitional provision in clause 40(2) is deleted.

    Question put and agreed to.

    Clause 44

    Functions Of Parole Board For Scotland And Local Review Committees In Relation To Children Detained On Conviction On Indictment

    Lords amendment: No. 37, in page 35, line 12, leave out from "words" to the end of the line and insert

    ""section 12 of the Criminal Justice (Scotland) Act 1963 or section 206 or 206A of the Criminal Procedure (Scotland) Act 1975""

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to discuss the following amendments:

    No. 38, in page 35, line 14, leave out from "(c)" to end of line 15 and insert

    "for the word "applies" there shall be substituted the words "or the said section 206 applies or the recall of persons to whom the said section 12 or the said section 206A applies.""

    No. 39, in page 35, line 23, leave out from "words" to end of line 24 and insert

    ", section 12 of the Criminal Justice (Scotland) act 1963 or section 206 or 206A of the Criminal Procedure (Scotland) Act 1975""

    :Amendments Nos. 37, 38 and 39 are consequential amendments to amendments Nos. 40 and 42 to clause 45 to which we shall come shortly.

    Question put and agreed to.

    Lords amendments Nos. 38 and 39 agreed to.

    Clause 45

    Supervision Of Children Released After Detention

    Lords amendment: No. 40, in page 36, line 8, after "terms" insert

    "and either—
  • (a) the Parole Board for Scotland so recommends; or
  • (b) it appears to him to be in the public interest to do so before consultation with the Board is practicable,"
  • I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to discuss the following amendments.

    No. 41, in page 36, line 11, at end insert—

    "() The Secretary of State shall inform a person recalled under subsection (5) above of the reasons for his recall, so that the person may make representations in writing with respect to his recall to the Parole Board for Scotland; and the Board may, on receipt of such representations, require the Secretary of State to release him forthwith."

    No. 42, in page 36, line 23, at end insert—

    "(2) In section 12 of the Criminal Justice (Scotland) Act 1963 (supervision of persons released from young offenders' institution)—
    (a) in subsection (7) after the word "above", where first occurring, there shall be inserted ("and either—
    (a) the Parole Board for Scotland so recommends; or
    (b) it appears to him to be in the public interest to do so before consultation with the Board is practicable,");
    (b) after that subsection there shall be inserted the following subsection—
    "(7A) The Secretary of State shall inform a person recalled under subsection (7) above of the reasons for his recall, so that the person may make representations in writing with respect to his recall to the Parole Board for Scotland; and the Board may, on receipt of such representations, require the Secretary of State to release him forthwith."; and
    ((c) in subsection (9)—
    (i) for the words "that person" there shall be substituted the words "a person released under subsection (7A) above or this subsection"; and
    (ii) after the word "under", where secondly occurring, there shall be inserted the words "subsection (7A) above or"."

    :These amendments, which were prepared in response to points made in another place by Lord Morton of Shuna, seek to involve the Parole Board for Scotland in the recall procedure for children who have been released on supervision at the end of their sentence. The board is of course already involved, by virtue of section 206(5) and (6) of the Criminal Procedure (Scotland) Act 1975, in those cases where release occurs before the end of sentence. These amendments provide for the board similarly to be involved in the case of children released at the end of sentence. The Secretary of State will thus recall children who have broken their supervision conditions only on the board's recommendation, or where he believes the public interest requires recall before it is practicable to consult the board. He must give reasons for the recall and the person recalled can make representations to the board. The board will have power on receiving such representations to order the Secretary of State to release the child immediately.

    If we provide these safeguards for children released subject to supervision, it is only fair and consistent to provide similar safeguards for young offenders released under supervision under section 12 of the Criminal Justice (Scotland) Act 1963. The amendments therefore provide for the board to be similarly involved in the procedure for the recall of these young offenders.

    I would add that the board has similar functions already, under section 62 of the Criminal Justice Act 1967, in relation to recall of prisoners or young offenders released on licence. These amendments are thus applying well-established machinery and ensuring consistency of procedure.

    5.30 pm

    The Minister is right in saying that the amendments apply consistency of procedure, but they also widen the scope of the work of the parole board. At the moment its work is limited to young offenders and adult prisoners released on licence and subject to recall if they breach the licence conditions. I want to put down a marker with the Minister, because there is growing concern, which I share, about the length of time the parole board is taking to consider cases for parole—the main burden of its work. Evidence is emerging that the period is getting even longer.

    I am strongly in favour of what the Minister has defined. If we put an additional burden on the parole board, we must will to it the means to carry out the duties imposed on it by the House. I hope that the Minister will keep that firmly in mind. The Minister stressed the point about immediacy. There is little point in saying to a child or a young offender at the end of his sentence that he can appeal to the parole board if the power of the parole board to release him immediately is frustrated because of lack of facilities to consider cases urgently. We warmly welcome the amendments.

    I, too, welcome the amendment. Given the structure and constitutional resources of the parole board, is the Minister in a position to predict how long it would take to assess representations and make an instruction to the Secretary of State?

    I could not give to the House the kind of answer requested by the hon. Member for Greenock and Port Glasgow (Dr. Godman). I will watch the matter carefully. In practice, only a few cases will be under consideration in each year because most offenders are released before the end of their sentence. Therefore, if they have to come before the parole board, they are doing so already, so to speak. There are only a few cases which come into the category of supervision after the end of their sentence. Having said that, I can assure the hon. Member for Falkirk, East (Mr. Ewing) that I will watch the matter carefully.

    Question put and agreed to.

    Lords amendments Nos. 41 and 42 agreed to.

    Lords amendment: No. 43, after clause 54, insert the following new clause—

    "Power of Commissioner for Local Administration to investigate Scottish Special Housing Association and new town development corporations

    "(1) In section 23 of the Local Government (Scotland) Act 1975 (authorities subject to investigation)—
  • (a) in subsection (1) there shall be added at the end the words—
  • "(g) the Scottish Special Housing Association;
  • (h) subject to subsection (2A) below. any development corporation established under an order made, or having effect as if made under the New Towns (Scotland) Act 1968 (in this section and section 24 of this Act referred to as a "new town development corporation");"; and
  • (b) after subsection (2) there shall be added the following subsection—
  • "(2A) The application of this Part of this Act to any new town development corporation by virtue of subsection (1)(h) above extends only to the Corporation's functions in relation to housing.".

    (2) In section 24 of that Act (matters subject to investigation)—

    (a) after subsection (3) there shall be inserted the following subsection—
    "(3A) Subsections (2) and (3) above do not apply in relation to the Scottish Special Housing Association or a new town development corporation."; and
    (b) in subsection (4) after the word "concerned" there shall be inserted the words "or, in the case of the Scottish Special Housing Association or a new town development corporation, to the commissioner"."

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this, we may take Lords amendment No. 59, in the Title, in line 4, after "children" insert

    "the functions of the Commissioner for Local Administration;"

    The purpose of the new clause is to extend the jurisdiction of the Commissioner for Local Administration to the Scottish Special Housing Association and to the housing functions of the new town development corporations. Both the hon. Member for Glasgow, Garscadden (Mr. Dewar), whom I see stirring in his seat, and Lord Morton of Shuna put forward similar proposals in the respective Committee stages. Those of us who were members of the Committee can recall the interesting debate on the subject.

    My noble and learned Friend the Lord Advocate and I explained then that the Government were still considering various aspects of these innovations and undertook to bring forward, if at all possible, a new clause for inclusion at a later stage of the Bill's progress. This amendment fulfils that undertaking. Since this is a new subject, there is a consequential amendment to the Long Title of the Bill.

    This is indeed a small but welcome sign of flexibility by the Government. When Lord Cameron of Lochbroom came into our midst, I did not think that I would see him as the wind of change in person— a radical reformer storming the ramparts on behalf of open government. I guess— I base this purely on objective memories of the speeches made by the hon. Member for Argyll and Bute (Mr. MacKay) in Committee—that the Lord Advocate has turned out to be a persuasive and formidable ally.

    There is a long history to the amendment. I pay tribute to my hon. Friend the Member for Cumbernauld and Kilsyth (Mr. Hogg) who, many months ago, first tried to persuade the Government of the value of the change. I remember an exchange during the passage of the New Towns Act 1980 in which he attempted to persuade the Under-Secretary of State for the Environment that an extension of the powers of the local government ombudsman would be welcome and sensible. Understandably, he was told by the English Minister that it should be brought up when an appropriate occasion arose. Of course, an appropriate occasion arose with the Law Reform (Miscellaneous Provisions) (Scotland) Bill.

    I think that I am entitled to be vaguely curious as to why my amendment, which was straighforward, was formidably and persistently opposed by Ministers earlier. There was no suggestion that there was a minor drafting error that required a new version of the amendment; we were told that it was not on. When my noble Friend Lord Morton of Shuna introduced a similar amendment in another place, again it was opposed. Therefore, it came as something of a surprise to us when this popped up at a very late stage, the Report stage in another place, and has now found its way to us.

    However, it is not for me to be ungracious. [Interruption.] The Solicitor-General for Scotland had better wait. Anticipating the coming Session. I think that we may have another law reform Bill, so he had better not encourage me too much at this stage.

    This is a minor but useful change. There is no conceivable reason why the ombudsman's powers should not apply to housing complaints about the Scottish Special Housing Association and new town development corporations. That has been the view for a long time of myself and my colleagues. I know that it is also the view of the ombudsman, because he was courteous enough to explain that not just to Labour Members of Parliament but to the Members of Parliament from other parties. It is good that the little anomaly has been overcome with the introduction of this logical extension to the ombudsman's powers.

    It leaves other ends which are perhaps more difficult of solution. The most outstanding, with which the Minister will be familiar, is the need, in the opinion of the ombudsman and of some other people, to consider problems of enforcement and the relationship between a local authority and the ombudsman in the implementation of his decision. In one or two worrying cases in recent years authorities have begged to differ from the ombudsman, and no action has followed a definitive ruling by that official. That is a much more prickly and sensitive area which will have to be considered soon.

    The simple amendment before us is a matter for comment because it has taken so long and because it pops up at this stage as a Government amendment, unexplained and unheralded at earlier stages, despite the best efforts of Opposition Members. However, sinners repent. That may be overstating it. I am sure that the hon. Member for Argyll and Bute is spotless in—I was about to say his personal habits, but that might be misinterpreted. No doubt he is well intentioned in all things. I am glad that he has worked his way round to agreeing with me and my hon. Friends on this matter.

    My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said that he was surprised that the amendment had come before the House, but the House is full of surprises, and the events of last week make me something of an authority on surprises.

    I welcome the Lords amendment which comes a long time after the press release in which the Scottish Office said that it would be presenting the amendment. I note the pleasure on the face of the Under-Secretary, the hon. Member for Eastwood (Mr. Stewart), who had a difficult time explaining to me why it was not appropriate to introduce such a provision into the New Towns Act 1980. However, we have finally got there, and I am glad that the Government accepted the advice of my noble Friend Lord Morton of Shuna.

    The amendment will be particularly welcome in new towns where the development corporations are the largest housing authorities, and it will be very welcome in my constituency. I do not expect there to be many complaints to the ombudsman, because the housing authorities in the new towns are generally well run, but some people fall out of the system and the amendment will give tenants a right to go to the ombudsman. It is proper that tenants' rights should be extended.

    Question put and agreed to.

    Clause 55

    Amendment Of Enactments Relating To Solicitors

    Lords amendment: No. 44, in page 40, line 22, leave out clause 55 and insert the following new clause—

    Amendment of enactments relating to solicitors

    "55. The enactments specified in Schedule 1 to this Act (Part I of which Schedule contains amendments relating to the incorporation of solicitors' practices and Part II amendments relating to other matters relating to solicitors) shall have effect subject to the amendments to these enactments there set out.".

    I beg to move, That this House doth agree with the Lords in the said amendment

    With this, we may take the following Lords amendments No. 48, in schedule 1, page 42, line 2, at end insert—

    Part I

    Incorporation Of Solicitors' Practices

    Solicitors (Scotland) Act 1980 C 46

    1. In section 16(1) (appeal to Court of Session against decisions of Council in relation to practising certificates)—

  • (a) after the word "where" there shall be inserted "(a)"; and
  • (b) after the word "applicant" there shall be inserted ";
  • (b) the Council refuse to recognise a body corporate as being suitable in terms of section 34(1A)(b), the body corporate".
  • 2. In section 18 (suspension of practising certificates)—

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

    "(1A) If—
  • (a) an administration or winding up order, or an appointment of a provisional liquidator, liquidator, receiver or judicial factor has been made in relation to the incorporated practice; or
  • (b) a resolution has been passed for the voluntary winding up of an incorporated practice (other than a resolution passed solely for the purposes of reconstruction or amalgamation of the incorporated practice with another incorporated practice),
  • the recognition under section 34(1A) of the incorporated practice shall be thereby revoked.";

    (b) after subsection (3) there shall be inserted the following subsection—

    "(3A) On the occurrence of the circumstances mentioned in—
  • (a) paragraph (a) of subsection (1A), the administrator, provisional liquidator, liquidator, receiver or, as the case may be, judicial factor appointed in relation to the incorporated practice;
  • (b) paragraph (b) of subsection (1A), the incorporated practice
  • shall immediately intimate that fact to the Council.".

    3. In section 21(3) (definition of "consultant" in relation to requirement upon consultants to hold practising certificates)—

  • (a) after the word "who" there shall be inserted "(a)";
  • (b) after the word "name", where thirdly occurring, there shall be inserted—
  • "(b) not being a director of an incorporated practice, causes or permits his name to be associated with that incorporated practice,".
  • 4. In section 26 (offence for solicitors to act as agents for unqualified persons)—

  • (a) in subsection (1)—
  • (i) after the word "who" there shall be inserted the words "incorporated practice which";
  • (ii) in each of paragraphs (b) and (d) after the word "his" there shall be inserted "or, as the case may be, its";
  • (b) in subsection (3) there shall be inserted at the end the words "but "unqualified person" does not include an incorporated practice".
  • 5. In section 27 (offence for solicitors to share fees with unqualified person)—

  • (a) in subsection (1)—
  • (i) after the word "solicitor" there shall be inserted the words "or incorporated practice";
  • (ii) after the word "him" there shall be inserted the words "or, as the case may be, it";
  • (b) in subsection (2)—
  • (i) after the "solicitor", where first occurring, there shall be inserted the words "or incorporated practice";
  • (ii) in paragraph (a) after the word "him" there shall be inserted the words "or, as the case may be, to it, and after the word "business", where secondly occurring, there shall be inserted the words "or former director of the incorporated practice";
  • (iii) in paragraph (b), after the word "business", where first occurring, there shall be inserted the words "or, as the case may be, a director or member of the incorporated practice" and after the word "he" there shall be inserted the words "or, as the case may be, it";
  • (iv) in paragraph c) after the word "him" there shall be inserted the words "or, as the case may be, it".
  • 6. In section 28 (disqualified solicitors not to seek employment without informing employer)—

  • (a) after the word "practice" where thirdly occurring, there shall be inserted the words "or by an incorporated practice";
  • (b) after the word "him" there shall be inserted the words "or, as the case may be, it".
  • 7. In section 30 (liability for fees of another solicitor)—

  • (a) after the word "solicitor", where first occurring, there shall be inserted the words "or an incorporated practice";
  • (b) after that word, where secondly and thirdly occurring, there shall be inserted the words "or incorporated practice";
  • (c) after the word "he" in each place where it occurs, there shall be inserted the words "or, as the case may be, it";
  • (d) after the word "solicitor's" there shall he inserted the words "or incorporated practice's".
  • 8. Section 31 (offence for unqualified persons to pretend to be solicitors or notaries public) shall be renumbered as subsection (1) of that section and—

    (a)in that subsection (as so renumbered) there shall be inserted at the end the following—

    "In this section, "unqualified person" does not include an incorporated practice";

    (b)after that subsection there shall be inserted the following subsections—

    "(2) Any person (including a body corporate) who either by himself or together with others, wilfully and falsely—
  • (a)pretends to be an incorporated practice;
  • (b)takes or uses any name, title, addition or description implying that he is an incorporated practice,
  • shall be guilty of an offence.
    (3) Where an offence under this section which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, the director, manager, secretary or other similar officer of the body corporate, or any person purporting to act in any such capacity, he as well as the body corporate shall be guilty of the offence and shall be liable to be proceeded against and punished ccordingly."

    9. In section 32(2) (persons to whom offence of preparing certain documents does not apply) there shall be inserted at the end the following—"; or

  • (e) an incorporated practice.".
  • 10. In section 33 (unqualified persons not entitled to fees etc.) there shall be inserted at the end—

    "This section does not apply to an incorporated practice.".

    11. After section 33 there shall be inserted the following section—

    "Privilege of incorporated practices from disclosure etc.

    33A.—(1) Any communication made to or by an incorporated practice in the course of its acting as such for a client shall in any legal proceedings be privileged from disclosure in like manner as if the body had at all material times been a solicitor acting for the client.

    (2) Any enactment or instrument making special provision in relation to a solicitor or other legal representative as to the disclosure of information, or as to the production, seizure or removal of documents, with respect to which a claim to professional privilege could be maintained. shall, with any necessary modifications, have effect in relation to an incorporated practice as it has effect in relation to a solicitor.".

    12. In section 34 (rules as to professional practice, conduct and discipline)—

    (a)in subsection (1) at the end there shall be inserted the words "and incorporated practices";

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

    "(1A) Rules made under this section may—
  • (a)provide as to the management and control by—
  • (i)solicitors holding practising certificates or their executors;
  • (ii)other incorporated practices of bodies corporate carrying on businesses consisting of the provision of professional services such as are provided by individuals and firms practising as solicitors being bodies the membership of which is restricted to such solicitors, executors and other incorporated practices;
  • (b)prescribe the circumstances in which such bodies may be recognised by the Council as being suitable to undertake the provision of any such services;
  • (c) prescribe the conditions which (subject to any exceptions provided by the rules) must at all times be satisfied by bodies corporate so recognised if they are to remain so recognised (which bodies, when and for so long as so recognised, are in this Act referred to as "incorporated practices");
  • (d) regulate the conduct of the affairs of incorporated practices; and
  • (e)provide—
  • (i)for the manner and form in which applications for recognition under this section are to be made, and for the payment of fees in connection with such applications;
  • (ii)for regulating the names that may be used by incorporated practices;
  • (iii)as to the period for which any recognition granted under this section shall (subject to the provisions of this Act) remain in force;
  • (iv)for the revocation of any such recognition on the grounds that it was granted as a result of any error or fraud;
  • (v)for the keeping by the Society of a list containing the names and places of business of all incorporated practices and for the information contained in any such list to be available for inspection;
  • (vi)for rules made under any provision of this Act to have effect in relation to incorporated practices with such additions, ommissions or other modifications as appear to the Council to be necessary or expedient;
  • (vii)for empowering the Council to take such steps as they consider necessary or expedient to ascertain whether or not any rules applicable to incorporated practices by virtue of this section are being complied with.
  • (c)after subsection (4) there shall be inserted the following subsections—

    "(4A) A certificate purporting to be signed by an officer of the Society and stating that any body corporate is or is not an incorporated practice shall, unless the contrary is proved, be sufficient evidence of that fact.
    (4B) Subject to the provisions of this Act, the Secretary of State may, by order made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament, provide for any enactment or instrument passed or made before the commencement of section (1A) above and having effect in relation to solicitors to have effect in relation to incorporated practices with such additions, omissions, or other modifications as appear to him to be necessary or expedient.".

    13. In section 35(1) (accounts rules) after the word "solicitors", in each place where it occurs, there shall be inserted the words "and incorporated practices".

    14. In section 36 (interest on client's money)—

  • (a)in subsection (1)—
  • (i)after the word "solicitor", where first occurring, there shall be inserted the words "or an incorporated practice";
  • (ii)after the word "his" there shall be inserted the words "or, as the case may be, by the incorporated practice in its";
  • (iii)after the word "solicitor's" there shall be inserted the words "or, as the case may be, the incorporated practice's";
  • (b)in subsection (2) after the word "solicitor" there shall be inserted the words "or incorporated practice";
  • (c)in subsection (3)—
  • (i)after the word "solicitor", where first occurring, there shall be inserted the words "or incorporated practice";
  • (ii)after the word "solicitor", where lastly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice";
  • (iii)after the word "his" there shall be inserted the words "or, as the case may be, its";
  • (d)in subsection (4) after the word "client" there shall be inserted the words "or an incorporated practice and its client".
  • 15. In section 37 (accountant's certificates)—

  • (a)in subsection (2) after the word "solicitor" there shall be inserted the words "and incorporated practice";
  • (b)in subsection (3) after the word "firm" there shall be inserted the words "or of an incorporated practice";
  • (c)in subsection (5)—
  • (i)in paragraph (a)after the word "who" there shall be inserted the words "or incorporated practice which", after the word "firm" there shall be substituted the words "or, as the case may be, of the incorporated practice" and after the word "them" there shall be inserted the words "or, as the case may be, it";
  • (ii)in paragraph (b), after the word "solicitor" there shall be inserted the words "or incorporated practice" and after the word "practice" there shall be inserted the words "or, as the case may be, it has not";
  • (d)after subsection (6)—
  • (i)in paragraph (a)(iii) after the word "solicitors" there shall be inserted the words "or incorporated practices";
  • (ii)after the word "he" there shall be inserted the words "or, as the case may be, an incorporated practice which satisfies the Council that it";
  • (e)in subsection (7)—
  • (i)after the word "solicitor" there shall be inserted the words "or incorporated practice";
  • (ii)after the word "him" there shall be inserted the words "or, as the case may be, it".
  • 16. In section 38 (powers of Council where dishonesty alleged)—

  • (a)in subsection (1)—
  • (i)after the word "his", where first occurring, there shall be inserted the words "or an incorporated practice or any employee thereof';
  • (ii)after the word "firm" there shall be inserted the words "or, as the case may be, such incorporated practice";
  • (b)in subsection (2)—
  • (i)in paragraph (a), there shall be inserted at the end the words "or, as the case may be, such incorporated practice";
  • (ii)in paragraph (b), there shall be inserted at the end the words "or, as the case may be, of which the incorporated practice or one of its employees is a sole trustee or it is a co-trustee only with one or more of its employees.".
  • 17. In section 39 (Council's powers where delay alleged)—

  • (a)in subsection (1)—
  • (i) after the word "solicitor" there shall be inserted the words "or an incorporated practice";
  • (ii) after the word "firm" there shall be inserted the words "or, as the case may be, it";
  • (iii) after the word "employees" there shall be inserted the words "or, as the case may be, the incorporated practice or one of its employees was the sole trustee or it was a co-trustee only with one or more of its employees";
  • (iv) after the word "solicitor" where secondly occurring, there shall be inserted the words "or, as the case may be, incorporated practice";
  • (b) in subsection (2)—
  • (i) after the word "solicitor", where first and lastly occurring, there shall be inserted the words "or, as the case may be, incorporated practice";
  • (ii) after the word "he" there shall be inserted the words "or, as the case may be, it";
  • (iii) after the word "firm" there shall be inserted the words "or, as the case may be, to that incorporated practice.".
  • 18. In section 40 (Council's powers where failure to comply with accounts rules etc.)—

  • (a) in subsection (1)—
  • (i) after the word "solicitor", where first occurring, there shall be inserted the words "or incorporated practice";
  • (ii) after the word "solicitor", where secondly and thirdly occurring, there shall be inserted the words "or, as the case may be, incorporated practice";
  • (iii) after the word "his" there shall be inserted the words "or, as the case may be, its";
  • (iv) after the word "section", where lastly occurring, there shall be inserted "(a)";
  • (v) for the words "and the certificate" there shall be substituted the following "; or, as the case may be—
  • (b) withdraw the practising certificate or certificates of any or all of the solicitors who are directors of the incorporated practice,
    • and a certificate so withdrawn";
  • (b) in subsection (2)—
  • (i) after the word "he" there shall be inserted the words "or, as the case may be, by the incorporated practice that it";
  • (ii) after the word "solicitor" where secondly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice";
  • (iii) for the words from "and" onward there shall be substituted the words "or solicitors concerned and shall restore to him or them any practising certificate or certificates held by him or them for the practice year then current.".
  • (c) in subsection (3) for the word "the", where secondly occurring, there shall be substituted the word "a".
  • 19. In section 41 (appointment of judicial factor)—

  • (a) after the word "solicitor", where first occurring, there shall be inserted the words "or an incorporated practice";
  • (b) after the word "solicitor" where secondly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice";
  • (c) for the words "in connection with his practice as a solicitor" there shall be substituted the words ", in the case of a solicitor, in connection with his practice a ssuch";
  • (d) after the word "arise" there shall be inserted the following "; or
  • (c) that, in the case of an incorporated practice, either —
  • (i) its liabilities exceed its assets, or
  • (ii) its books, accounts and other documents are in such a condition that it is not reasonably practicable to ascertain definitely whether its liabilities exceed its assets, or
  • (iii) there is reasonable ground for apprehending that a claim on the guarantee fund may arise";
  • (e) after the word "solicitor", where fourthly occurring, there shall be inserted the words "or, as the case may be, of the incorporated practice";
  • (f) after the word "solicitor", where fifthly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice";
  • (g) for the words "the solicitor's" there shall be subsitiuted the word "such".
  • 20. In section 42 (distribution of sums in client bank account)—

  • (a) in subsection (1)—
  • (i) after the word "(2)" there shall be inserted the words "or (2A)";
  • (ii) after the word "solicitor", where first occuring, there shall be inserted the words "or an incorporated practice";
  • (iii) after the word "him", where first and thirdly occurring, there shall be inserted the words "or, as the case may be, by it";
  • (iv) after the word "clients", where firstly occurring, there shall be inserted the words "or, as the case may be, by it on behalf of its clients";
  • (v) after the word "solicitor", where secondly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice";
  • (vi) after the word "behalf', where secondly occurrring, there shall be inserted the words "or, as the case may be, by it on their behalf;
  • (vii) after the word "him", where lastly occurring, there shall be inserted the words "or, as the case may be, by it";
  • (b) after subsection (2) there shall be inserted the following subsection—
    "(2A) The events to which subsection (1) applies are in relation to any incorporated practice—
  • (a) the making of an administration or winding up order or the appointment of a provisional liquidator, liquidator, receiver or judicial factor; or
  • (b) the passing of a resolution for voluntary winding-up (other than one passed solely for the purposes of reconstruction or amalgamation with another incorporated practice)";
  • (c) in subsection (3)—
  • (i) after the word "solicitor", where first occurring, there shall be inserted the words "or. an incorporated practice";
  • (ii) after the word "his", where first occurring, there shall be inserted the words "or, as the case may be, its";
  • (iii) after the word "client", where secondly occurring, there shall be inserted the words "or, as the case may be, by the incorporated practice on that behalf';
  • (b) after the word "him" there shall be inserted the words "or, as the case may be, by it";
  • (v) after the word "name" there shall be inserted the words "or, as the case may be, by the incorporated practice in its own name".
  • 21. In section 43 (Guarantee Fund)—

    (a) in subsection (2) after the words "part of there shall be inserted "(a)" and at the end there shall be inserted "; or
    (b) any incorporated practice or any director, manager, secretary or other employee of an incorporated practice, nothwithstanding that subsequent to the commission of that act it may have ceased to be recognised under section 34(1A) or have been wound up";
    (c)in subsection (3), after paragraph (c), there shall be added the following—
    "(cc) to an incorporated practice or any director or member thereof in respect of a loss suffered by it or him by reason of dishonesty on the part of any director, manager, secretary or other employee of the incorporated practice in connection with the practice";
    (d)in subsection (7)(c) there shall be inserted at the end the following "or in the employment of an incorporated practice".

    22. In section 44 (professional indemnity)—

  • (a)in subsection(1) —
  • (i) after the word "solicitors", where secondly occurring, there shall be inserted the words "and incorporated practices";
  • (ii) in pargraph (c) after the word "solicitors", where secondly occurring, there shall be inserted the words "and incorporated practices or any specified class thereof';
  • (b) in subsection (3)—
  • (i) in each of paragraphs (b) and (c) after the word "solicitors", where secondly occurring, there shall be inserted the words "and incorporated practices or any class of incorporated practices";
  • (ii) in paragraph (f) after the word "solicitor" there shall be inserted the words "or incorporated practice" and after each of the words "he" and "him" there shall be inserted the words "or, as the case may be, it";
  • (iii) in paragraph (g) after the word "solicitors" there shall be inserted the words "and incorporated practices";
  • (c) in subsection (5) there shall be inserted at the end the words "and, as respects incorporated practices, means any liability incurred by it which if it had been incurred by a solicitor would constitute such civil liability";
  • 23. In section 45 (safeguarding interests of clients of solicitors struck off or suspended)—

  • (a) in subsection (1) at the end there shall be inserted the words "and, in relation to any incorporated practice, the recognition under section 34(1A) of which is revoked";
  • (b) in subsection (2)—
  • (i) at the beginning there shall be inserted the words "In the case of a solicitor,";
  • (ii) after the words "solicitors" there shall be inserted the words "or incorporated practice";
  • (c) after subsection (2) there shall be inserted the following subsection—
    "(2A) In the case of an incorporated practice, it shall within 21 days of the material date satisfy the Council that it has made suitable arrangements for making available to its clients or to some other solicitor or solicitors or incorporated practice instructed by its clients or itself—
  • (a) all deeds, wills, securities, papers, books of accounts, records, vouchers and other documents in its possession or control which are held on behalf of its clients or which relate to any trust of which it is sole trustee or co-trustee only with one or more of its employees; and
  • (b)all sums of money due from it or held by it on behalf of its clients or subject to any trust as aforesaid.";
  • (d) in subsection (3)—
  • (i) after the word "solicitor" in both places where it occurs, there shall be inserted the words "or, as the case may be, incorporated practice";
  • (ii) after the word "he" there shall be inserted the words "or, as the case may be, any director, manager, secretary or other employee of the incorporated practice";
  • (e) in subsection (5), after the word "practice" there shall be inserted the words "or, as the case may be, the recognition under section 34(1A) is revoked.".
  • 24. In section 47 (restriction on employing solicitor struck off or suspended)—

  • (a) in subsection (1)—
  • ((i)) after the word "solicitor", where secondly occurring, there shall be inserted the words "and, unless it has such permission, an incorporated practice shall not";
  • (ii) after the word "his", where first occurring, there shall be inserted the word "or, as the case may be, its";
  • (b) in subsection (3) after the words "solicitor" there shall be inserted the words "or, as the case may be, incorporated practice";
  • (c)in subsection (4) at the end there shall be inserted the words "and if any incorporated practice so acts its recognition under section 34(1A) shall be revoked.".
  • 25. In section 49 (investigation by lay observer of Society's treatment of complaients), in subsection (1) after the word "solicitor", where secondly occurring, there shall be inserted the words "or about an incorporated practice or an employee thereof'.

    26. In section 51(2) (complaints to Discipline Tribunal) after the words "client)" there shall be inserted the words "or an incorporated practice may have failed to comply with any provision of this Act or of rules made under this Act applicable to it".

    27. In section 52(1) (procedure and powers of Discipline Tribunal) there shall be inserted at the end the words "or an incorporated practice".

    28. In section 53 (powers of Discipline Tribunal)—

    (a) in subsection (1) there shall be inserted at the end—
    "; or
  • (c) an incorporated practice has been convicted by any court of an offence, which conviction the Tribunal is satisfied renders it unsuitable to continue to be recognised under section 34(1A); or
  • (d) after holding an inquiry into a complaint, the Tribunal is satisfied that an incorporated practice has failed to comply with any provision of this Act or of rules made under this Act applicable to it.".
  • (b) in subsection (2) (powers of Discipline Tribunal)—
  • (i) in paragraphs (c) and (d) after the word "solicitor" there shall be inserted the words "or, as the case may be, the incorporated practice".
  • (ii) in paragraph (e) after the word "him" there shall be inserted the words "or, as the case may be, it".
  • (iii) after paragraph (e) there shall be added the following—"or
  • (f) order that the recognition under section 34(1A) of the incorporated practice be revoked".
  • (c) after subsection (6) (effective date of striking off or suspension of solicitor) there shall be inserted the following subsection—
    "(6A) Where the Tribunal order that the recognition under section 34(1A) of an incorporated practice be revoked, the Tribunal shall direct that the order shall take effect on such date as the Tribunal specifies, being a date not earlier than 60 days after its order is intimated to the incorporated practice, and such an order shall take effect accordingly.".
    (d) in subsection (7) after the word "(6)" there shall be inserted the words "or (6A)" and for the words "that subsection" there shall be substituted the words "subsection (6) or, as the case may be, subsection (6A)".

    29. In section 54 (appeals by solicitors from decisions of the Discipline Tribunal)—

  • (a) in subsection (1) for the word "him" there shall be substituted the words "that person";
  • (b) in subsection (2)—
  • (i) after the word "Where" there shall be inserted "(a)";
  • (ii) after the word "effect", where secondly occurring, there shall be inserted—
  • (b) the Tribunal has ordered the revocation of the recognition under section 34(A) of an incorporated practice, the incorporated practice may within 21 days of the date when the order is intimated to it apply to the court for an order varying (subject to the limit of 60 days referred to in subsection (6A) of section 53) the direction under that subsection;"
  • 30. In section 60 (offence for notaries public to act for unqualified persons) in subsection (2) there shall be inserted at the end the words "but "unqualified person" does not include an incorporated practice".

    31. In section 61 (protection of banks)—

  • (a) in each of subsections (1) and (2) after the word "solicitor" there shall be inserted the words "or an incorporated practice";
  • (b) in subsection (3) after the word "solicitor", where first occurring, there shall be inserted the words "or an incorporated practice" and after that word, where secondly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice".
  • 32. In section 64 (service of notices) there shall be inserted at the end the words "or, in the case of an incorporated practice, if it is left at, or delivered or sent by post to, its registered office".

    33. In section 65(1) (interpretation) after the definition of "functions" there shall be inserted the following—

    "incorporated practice" has the meaning given by section 34(1A)(c);"

    34. In Schedule 3 (The Scottish Solicitors' Guarantee Fund)—

    (a) in paragraph 1—
    (i) after sub-paragraph (2) there shall be inserted the following sub-paragraphs —
    "(2A) Sub-paragraphs (1) and (2) do not apply to solicitors who are directors of incorporated practices.
    (2B) Subject to the provisions of this Act, there shall be paid to the Society on behalf of the Guarantee Fund by every incorporated practice in respect of each year during which, or part of which, it is recognised under section 34(1 A) a contribution (hereafter referred to as an "annual corporate contribution") in accordance with the scale of such contributions referred to in subparagraph (3).
  • (ii) in sub-paragraph (3) there shall be inserted at the end the words "and the scale of the annual corporate contributions to be so paid, which scale shall be fixed by reference to factors which shall include the number of solicitors who are directors or employees of each of the incorporated practices to which the scale relates.";
  • (iii) in sub-paragraph (4) after the word "solicitor" there shall be inserted the words "and no annual corporate contribution by an incorporated practice";
  • (iv) in sub-paragraph (5) for the words "a special", where secondly occurring, there shall be substituted the words "upon every incorporated practice a contribution (hereafter referred to as a "special corporate contribution") in accordance with a scale of such contributions fixed by the Council as under sub-paragraph (3), and a special or special corporate";
  • (v) in paragraph 1(8) after the word "solicitors" there shall be inserted the words "or of an incorporated practice";
  • (b) in paragraph 3(2) after the word "solicitors", where first occurring, there shall be inserted the words "and incorporated practices" and after that word, where secondly occurring, there shall be inserted the words "or incorporated practice or practices";
  • (c) in paragraph 4(2) after the word "employee" there shall be inserted the words "or the incorporated practice in question or its employee";
  • (d) in paragraph 5(2) after the word "solicitor" there shall be inserted the words "or incorporated practice".
  • 35. In Schedule 4 (constitution, procedure and powers of Tribunal)—

  • (a)in paragraph 9—
  • (i) after the word "solicitor", where first and secondly occurring, there shall be inserted respectively the words "or an incorporated practice" and "or the incorporated practice"; and
  • (ii) after the word "him" there shall be inserted the words "or, as the case may be, it";
  • (iii) after the word "solicitor" where thirdly and lastly occurring there shall be inserted, in each case, the words, "or, of failure on the part of the incorporated practice to comply with arty provision of this Act or of rules made under this Act";
  • (b) in paragraph 10 (duty of Discipline Tribunal) to give respondent solicitor notice of complaint)
  • (i) after the word "solicitor" there shall be inserted the words "or incorporated practice";
  • (ii) after the words "him" and "his" there shall be inserted respectively the words "or, as the case may be, it" and "or, as the case may be, its".
  • (c) In paragraph 16 —
  • (i) in each of paragraphs (c) and (d) after the word "solicitor" there shall be inserted the words "or an incorporated practice";
  • (ii) after paragraph (d) there shall be added—"or
  • (e) order that the recognition under section 34(1A) of an incorporated practice be revoked";
  • (iii) for "(d)" where secondly occurring, there shall be substituted "(e)";
  • (iv) after the word "court", where secondly occurring, there shall be inserted the words "or under section 53(6A) which has not been varied by the court";
  • (v) after the word "roll", where secondly occurring, there shall be inserted the words "or as to revoking the recognition under section 34(1A) of an incorporated practice".
  • Building Societies Act 1962 (C 37)

    36. In section 34(4) (restriction on commissions for introduction of business) after the word "solicitor" there shall be inserted the words "(including that of an incorporated practice within the meaning of the Solicitors (Scotland) Act 1980)".

    Legal Aid (Scotland) Act 1967 (C 43)

    37. In section 6(3)(a) (exclusion of certain solicitors from giving legal aid) the word "or" immediately preceding subparagraph (iii) shall be omitted and after that sub-paragraph there shall be inserted the following—

    "or
    (iv) in the case of a director of an incorporated practice, such conduct on the part of any person who is for the time being a director of the incorporated practice. ".

    Income And Corporation Taxes Act 1970 (C 10)

    38. In sections 481(3) and 490(3) (savings for solicitors in relation to certain requirements to furnish information to Inland Revenue) any reference to a solicitor shall include a reference to an incorporated practice within the meaning of the Solicitors (Scotland) Act 1980 and any reference to a solicitor's client shall, in relation to a solicitor who is a director, manager, secretary or employee of such a practice, be construed as a reference to a client of that practice.

    Legal Advice And Assistance Act 1972 (C 50)

    39.In section 5(2) (definition of "the solicitor" for purposes of rules relating to payment of certain charges or fees), after the word "solicitors", where first occurring, there shall be inserted the words "or by an incorporated practice (within the meaning of the Solicitors (Scotland) Act 1980") and after that word, where secondly occurring, there shall be inserted the words", incorporated practice".

    Estate Agents Act 1979 (C 38)

    40. In section 1(2) (a) (disapplication of Act to practising solicitors and their employees) after the word "him" there shall be inserted the words "or by an incorporated practice (within the meaning of the Solicitors (Scotland) Act 1980) or a person employed by it".

    Finance Act 1980 (C 48)

    41. In section 30(5) (saving for solicitors in relation to requirement to furnish certain information to Inland Revenue) any reference to a solicitor shall include a reference to an incorporated practice and any reference to a solicitor's client shall, in relation to a solicitor who is a director, manager, secretary or employee of an incorporated practice within the meaning of the Solicitors (Scotland) Act 1980, be construed as a reference to a client of that practice.

    Part Ii"

    No. 49, in page 42, line 41, after "solicitor" insert "or incorporated practice".

    No. 60, in the Title, line 4, after "children;" insert "solicitors;".

    I have to inform the House that amendment No. 48 involves privilege.

    The amendments are simple in essence and introduce a matter of some novelty in Scotland. They allow Scottish solicitors to incorporate themselves into companies under the Companies Acts, instead of being able to practise only as individuals or in partnership. Similar provision has already been made for English solicitors in the Administration of Justice Bill, and these amendments have the support of the Law Society of Scotland.

    Hon. Members may wonder why such a simple change requires such lengthy amendments. It is because it seemed sensible to go through each provision of the Solicitors (Scotland) Act 1980 making clear to what extent it is to apply to the new incorporated practices, and hon. Members will have noted that most of the amendments are variations on the theme after "solicitor", insert "or incorporated practice". We have also decided to proceed by amending the 1980 Act rather than producing separate, free standing provisions, so that almost all provisions on Scottish solicitors will be found in a single Act. The 1980 Act will, of course, be reprinted with the amendments in "Statutes in Force" and will also be easily available in its revised form to Scottish practitioners in the "Parliament House Book". Because of the length of the provisions, an amendment has been tabled to include a reference to solicitors in the Long Title.

    The amendments provide that the incorporated practices, although not themselves solicitors, will in general be able to do the things which a solicitor can—other, of course, than such things as appearing in court which, by their nature, require an individual. The shareholders and directors of the incorporated practices will generally have to be practising solicitors and will, therefore, be persons who are subject to professional discipline as individuals. It will be an offence to pretend to be an incorporated practice as it is at present to pretend to be a qualified solicitor.

    Incorporated practices will be subject to the same disciplinary procedures and rules, with some modification, on such matters as accounts, as are individual solicitors. They will also have to contribute to the Scottish solicitors guarantee fund and to be covered by idemnity insurance. There will therefore be no diminution in the protection afforded to solicitors' clients whose interests the Government and the Law Society agree must remain paramount.

    The matter was not debated in detail in this House, either in Committee or on Report, but in view of the provisions that have already been made for England and Wales and of the considerable consideration that has already been given to the issue by the Law Society of Scotland, I hope that the amendments commend themselves to the House. It may seem odd to bring in such lengthy amendments at this stage, but this is a worthwhile opportunity to seize, and I know that it is much appreciated by the Law Society of Scotland.

    Question put and agreed to.

    Lords amendment No. 45 agreed to.

    Clause 59

    Citation, Commencement And Extent

    Lords amendment: No. 46, in page 41, line 9, after "54" insert

    "(Amendments of certain controls in relation to the provision of pharmaceutical services)"

    5.45 pm

    I beg to move, That this House doth disagree with the Lords in the said amendment.

    With this, we may take the following Lords amendments: No. 61, in the Title, line 5, leave out "and".

    No. 62, in the Title, line 5, after "stocks" insert

    "and the control of pharmaceutical services".

    :The amendments were consequential to a new clause on pharmaceutical services which was inserted in another place and subsequently deleted. The amendments therefore no longer serve any purpose and should also be deleted.

    I expected a much better and more extensive explanation from the Minister. Perhaps he had to drop his children off at school today and did not have time to get properly briefed on the background to this matter.

    My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) thanked the Minister for something that had been inserted on Report in another place, and I am grateful to the other place for deleting on Report something that was inserted during the Committee stage there. This is a much more important matter than the Minister conveyed with his few brief and curt remarks. The background must be explained for the benefit of the House and, particularly, the public.

    The Government have been negotiating a new contract with the pharmaceutical societies in England and Wales and in Scotland. As part of that, a deal has been struck that pharmacies that dispense fewer than 1,300 prescriptions a month will be subject to a buy-out arrangement which is to be jointly financed by the pharmaceutical societies and the Government. Such an arrangement would have had far-reaching effects in many parts of Scotland and may yet have such effects if the Government introduce primary legislation to implement a contract whose terms we have not yet seen in writing. There are 290 pharmacies in Scotland that dispense fewer than 1,300 prescriptions a month, and most of them are in rural areas.

    The hon. Member for Stirling (Mr. Forsyth) is not present. I do not make a point of that, but it was interesting to note that the day after the Government suffered the defeat that led to the House being recommended to reject these amendments, the hon. Member tabled an early-day motion — which still stands on the Order Paper, supported by a fair number of Tory Members — congratulating the other place on the defeat that it had inflicted on the Govenment and the removal from the Bill of the provisions to which the Ministry briefly referred.

    I must make it clear to the Minister that what happened in this case is not acceptable. The Department of Health and Social Security in England and Wales backed away from this proposal, on legal advice. The DHSS had intended to pursue the proposal, but it took legal advice and announced that it would deal with the matter through primary legislation. I took that to mean legislation in the next Session, though that was not stated specifically. The Scottish Office knows full well that the Department of Health and Social Security in England and Wales has been given legal advice against going ahead with it at this stage, and that the matter should be dealt with in primary legislation. Once again, the Scottish Office is prepared to subject the people of Scotland to something from which the Government have backed away in England and Wales. In passing, may I say that this seems to be revaluation all over again.

    I have made inquiries and tried to obtain a copy of the negotiated contract, but I understand that it is not yet in written form. I am trying to be as gentle as I can with the Minister. But it is important that, as soon as the contract is in written form, copies are placed in the Library so that hon. Members on both sides of the House can see in detail what the contract means for pharmacists in their constituencies. The loss of 290 pharmacies in Scotland is not acceptable.

    I am not saying that if and when the legislation is introduced Opposition Members will oppose it root and branch. Although I cannot speak for Conservative Members, I suspect that sonic will share our view that the legislation will be judged not with regard to the interests of the pharmacists, and even less the interests of the Government's spending programmes, but on its benefit or damage to patients or consumers.

    For the past three years Scottish Members—this does not apply to English Members— have been receiving letters from constituents about proposals to close the school of pharmacy at Heriott Watt university. We have sent those letters to Ministers and received the standard reply—that it is part of the Government's attempt to cut public expenditure. I accept that answer, but what makes me so angry is the attempt to bring the measure in through the back door. There is a conspiracy between the Pharmaceutical Society of Great Britain and the Government to limit the number of students entering pharmacy school. That conspiracy has led to proposals for the closure of the school of pharmacy at Heriott Watt university. The contract extends throughout the United Kingdom.

    There is a provision to set up pharmacy committees for each area health board in Scotland and for the equivalent in England and Wales. The pharmacy committees are to have extensive powers. The committee will consist of three local pharmacists, three members of the area health board and an independent chairman. How independent is independent? It is difficult to understand who could be an independent chairman in those circumstances. The committees will he all-powerful. The pharmacy committee will decide whether an application to receive a National Health Service contract is granted. The committee will also have the right to lay down conditions and standards that the pharmacist and, I suspect, his premises must meet before the contract is granted. There would be no appeal against the decision of the pharmacy committee.

    I appreciate that you have been very tolerant with me. Mr. Deputy Speaker. This issue is far too important to be allowed merely to slip past tonight without any comment on the background to the reasons why the Government have urged the House to disagree with the Lords amendments.

    I am grateful for the opportunity to alert hon. Members on both sides of the House to what is going on. The legislation will not only affect Labour constituencies. I do not wish to be political about this, which will surprise the Minister, but the strong balance of probability is that it will have a greater and more devastating effect in Conservative constituencies—although it will affect my constituency. I wish to give a warning and fire a shot across the bows of the Minister and his colleagues. By the time this legislation is introduced, the Government will have been forgiven for dragging it in through the back door. It will be judged not on the back-door methods, but en the advantages or disadvantages to the patients who have their prescriptions dispensed at pharmacies.

    The hon. Member for Falkirk, East (Mr. Ewing) is right about the amendments having greater significance than might appear at first, but he is wrong in many other respects.

    The amendments have a profound effect on the pharmaceutical business in the whole of the United Kingdom, not only in Scotland. The defeat last week in the other place is a defeat not for the Government but. sadly, for the community and the rural pharmacies. For the past two years the national pharmaceutical negotiating committee in England and Wales and its Scottish equivalent have been negotiating jointly with the Department of Health and Social Security, the Minister for Health and my hon. Friend the Under-Secretary of State for Scotland.

    I am sure you will recall, Mr. Deputy Speaker, that in the small hours of a winter morning, I raised the future of the community and rural pharmacists on an Adjournment debate. I am sorry that the hon. Member for Falkirk, East was not present to hear it. At that time, there was grave concern, as there still is, for the future of the community and rural pharmacists. Pharmacists felt that the negotiations for their future contract were unduly prolonged, that no end was in sight, and that as a result many association members were likely to suffer severe financial hardship and, in some cases, bankruptcy. The negotiations continue. Before the summer recess an agreement was reached between the two negotiating committees in Scotland and in ngland and Wales with the respective Ministers. A new contract was drawn up that was endorsed overwhelmingly by pharmacists. The contract covered not only remuneration but the service that pharmacists wish to provide to the community. It is absolutely correct to say that the provisions of the new contract would have had an effect on some pharmacists who issued fewer than 16,000 scrips a year. As the hon. Member for Falkirk, East rightly said, 300 pharmacists would undoubtedly have suffered severely financially. As I understand it, there was no suggestion of an enforced buy-out——.

    I shall give way in a moment. However, provision was made for compensation for those who wished to leave the business. We know that some small pharmacists actively wished to take that opportunity.

    6 pm

    The hon. Gentleman covered the point that I wanted to raise in an intervention. It relates to a difference of opinion between us. He speaks of "compensation" while I speak of a "buy-out". The documents from the Scottish Office and other sources make it clear that the buy-out was to be financed jointly by the Government and the Pharmaceutical Society. The Pharmaceutical Society would not have made the contribution expected of it unless its remaining members would receive substantial improvements in their remuneration and income.

    Like the hon. Gentleman, I, too, must confess that I have not seen the contracts and, therefore, we are both working a little in the dark. However, the representatives of the negotiating committee have assured me that its members were satisfied with the options offered, and that there was to be no compulsion of any kind, but an offer of compensation for those who wished to take it. Nevertheless, I take the hon. Gentleman's point.

    In addition to that arrangement, provision was made to deal with a problem which was and still is escalating—the leapfrogging of pharmacists closer to doctors' surgeries. That mitigates heavily against rural pharmacists —exactly those to whom the hon. Gentleman referred. When a pharmacist opens a shop he takes business from another pharmacist half a mile from the surgery, who in turn has a choice either to move closer to the surgery or to go to the wall. The poor rural pharmacist and genuine community pharmacist who provide extremely valuable service—as I serve a partly rural constituency I am well aware of this—are in dire trouble. They came to me mid-winter last year seeking assistance because their foreseeable future, if not destroyed, had been severely threatened by the failure to pass the legislation.

    In addition to the agreements, the Department and the Scottish Office decided to introduce through the family practitioner committee and the pharmaceutical services negotiating committee in Scotland regulations to allow those respective committees to license, not existing, but new pharmacies, to put an end to leapfrogging and to prevent the further extension of what is rapidly becoming nonsense for the Health Service and those who seek to practise. This clause would have dealt with that.

    A relevant side issue is that the result of the negotiations would have meant a £4 million a year saving for the Health Service. That sum was to be ploughed back into exactly the kind of further benefits which pharmacists wished, and still wish, to provide —counselling services, assistant pharmacists, and other benefits for the entire community, rural and otherwise. That agreement was reached for Scotland, England and Wales prior to the summer recess, and pharmacists confidently expected that those regulations would be in force by now.

    My hon. Friend the Minister for Health took further legal advice and decided that he did not have the power to introduce the regulations. My hon. Friend the Scottish Minister with responsibility for health took advantage of the legislation before the House to have introduced in the other place a clause which would at least have given the Scottish Office the power to allow Scottish pharmacists to take the lead, as Scotland so often does. In that way the new contract would at least have been introduced in Scotland. However, because of the machinations of Lord Ross and others the baby has been thrown out with the bath water, and Scottish pharmacists will not only not get their new contract, which has been under negotiation for two years, as has the English and Welsh one, but will not even be brought into line with United Kingdom legislation. As I said, that is a defeat not for the Government, but for pharmacists and, therefore, the communities that they serve.

    If my hon. Friend the Minister bumps into the Secretary of State for Social Services, will he mention that hon. Members who represent English and Welsh constituencies are worried at the outcome of the matter, and wait with bated breath to know what new moves will be taken to resolve the negotiating difficulties that pharmacists face? Will my hon. Friend be kind enough to tell the House tonight how he and his Department propose to resolve the problem for the Scottish pharmacists who have been badly let down in another place?.

    In the narrow issue before the House I agree with the Minister that we should disagree with the Lords amendment. This is merely a tidying up matter, consequential on the main vote of the other place last week. I am informed that, apart from the Lord Advocate, no one was prepared to speak in favour of the clause.

    The hon. Members for Thanet, North (Mr. Gale) and for Falkirk, East (Mr. Ewing) told the House why the step taken in the other place was correct. It appears that the Department decided that the matter could not be dealt with during the present Session, and probably required primary legislation, and that Scotland would be bounced into accepting the measure through a late amendment tabled in the other place. Although the matter is being debated this evening, it is not subject to the scrutiny that would have occurred if it had been part of the original Bill. It would have been extensively debated on Second Reading, in Committee—members of the Committee will agree that on the whole our debates were constructive—and on Report before reaching the other place.

    The hon. Member for Thanet, North made it clear that the measures were important and wide-ranging. He accepted the principal criticism of the hon. Member for Falkirk, East that the proposals would hit hard pharmacists in sparsely populated rural areas such as the one I represent. In Orkney and Shetland, where there are no pharmacists for many miles, doctors must already dispense prescriptions. I continue to receive letters from those doctors. The limited list has put them in an invidious position, and they find that they must prescribe privately for patients when the drug that a patient requires is not on the list. Many doctors find that wholly unacceptable, and it goes against the grain. That serves to illustrate the important consequences which would have followed had the amendment not been defeated in another place. I believe that it is incumbent on the Minister to tell us what the Government's intentions are and not to leave us with his brief but correct opening remarks.

    I shall be brief in speaking in support of my hon. Friend the Member for Thanet, North (Mr. Gale). The decision that was taken in another place will have far-reaching implications. I shall not deal with Scottish matters because I know that the problems are different there.

    If the contract applied to the issuing of new NHS pharmacy contracts, the many small pharmacists who it is thought might lose their pharmacies would be reduced considerably. I know that in England and Wales the numbers are low—they amount to 30 or 40—but the figures that have been quoted for Scotland are extremely high. I accept that there may be special considerations when dealing with Scotland.

    It would seem that the problem is acute. The negotiations that have taken place to try to secure agreement on the contracts were approved unanimously by the general council of the Pharmaceutical Society, which included Scottish interests. It is important that we achieve some resolution of what will be an ongoing problem throughout Scotland, England and Wales.

    I hope that my hon. Friend the Under-Secretary of State will give us some inkling of the Government's intentions. The objectives are to secure a better use of NHS resources and a properly controlled network of pharmacies throughout the country, and to overcome the difficulties which have developed over the years, especially with rural pharmacies. I hope that my hon. Friend will give a fuller explanation of the Government's legislative plans.

    As the hon. Member for Orkney and Shetland (Mr. Wallace) said, I did not say too much in my remarks when asking the House to disagree with the Lords in the amendment. The amendments that we are discussing are extremely small or limited and arise because I am not asking the House to agree with the amendments which were made in another place. Their Lordships chose not to accept the Government's invitation to amend these provisions in a certain way when the Bill was before them.

    As there has been a discussion this evening, I shall say a few words about the amendments. My hon. Friends the Members for Thanet, North (Mr. Gale) and for Exeter (Mr. Hannam) have a greater grasp of the issue than the hon. Member for Orkney and Shetland. The hon. Member for Falkirk, East (Mr. Ewing) has decided to keep his options open by telling the House that he was not exactly asking the Opposition to vote against any legislation that will be forthcoming.

    The principle of the clause, which was defeated in another place, was to provide the Secretary of State for Scotland with the power to make regulations modifying the health boards' obligation to admit to their pharmaceutical lists every qualified person who asks for admission. That was what the clause provided. If that clause had been passed in another place, any regulations made under it would have been subject to the negative resolution procedure and thus the House would have been able to debate the regulations. I do not think that we were rushing through Parliament a proposal that would have prevented the regulations from being discussed. The regulations were the all-important factor.

    6.15 pm

    I think that all Scottish Members received a letter from the Pharmaceutical General Council of Scotland dated 18 October. Colin Virden, the secretary, wrote
    "the proposals in the Minister's new contract package have the unanimous support of the Pharmaceutical General Council, which represents retail pharmacists throughout Scotland".
    Equally, the Pharmaceutical Society of Great Britain, Scottish Department, has confirmed support for the proposed legislation, which it considers would be greatly to the benefit of both the public and the profession in Scotland.

    The new contract provides for compensation to small pharmacies which are uneconomical from the point of view of the contractor and from that of the Health Service which are run by pharmacists who wish to terminate their NHS contracts. There would have been provision for compensation. That could have been done, but in the absence of the clause that we invited those in another place to insert there was a danger that someone could have taken compensation and then applied for automatic readmission to the lists. I do not think that hon. Members, especially those on the Opposition Benches, who are for ever telling us how important the Health Service is, would want to see NHS resources used in that wasteful manner.

    The Government and the profession have a shared commitment to providing an NHS pharmaceutical service where it best meets the needs of the patients. We believe that the proposed new contract arrangements would have done that. We contend that they would have ensured a network of pharmacies where necessary and in a way that would be desirable for patient care without extravagant use of NHS resources.

    The greatest misconception was voiced by the hon. Member for Orkney and Shetland, who said that all rural pharmacies would suffer. That is not so. There would be safeguards covering the financing of essential small pharmacies, which are mainly but not exclusively in rural areas, by means of special funding arrangements. As my hon. Friend the Member for Thanet, North said, the idea of making admission to the lists non-automatic was to prevent leapfrogging, which can affect adversely the small pharmacies about which many hon. Members are worried.

    I am sure that the Minister would not want to mislead the House. However, he is giving the impression that the arrangements for essential pharmacies. are contained in the new contract without explaining that for a considerable time there have been arrangements to finance essential pharmacies through the essential pharmacy allowance. Those arrangements are to continue and they are not part of the new contract. No one should be under any misapprehension about that.

    I am not denying that. I did not imply that those arrangements did not exist. However, the accusation has been made that if the new contract came into being the protection of and help for small rural pharmacies would no longer exist. I am saying that that is not true. The financing of essential rural services would be continued by means of special funding arrangements.

    My hon. Friends the Members for Thanet, North and for Exeter want to know what the Government intend to do in the situation in which my right hon. Friend the Secretary of State for Social Services and I find ourselves. We remain fully committed to the recent agreements on a new NHS contract for community pharmacists. We intend to introduce at the earliest possible opportunity the legislation that is necessary to control entry to the pharmaceutical list. Any new legislation will cover the agreements reached in England and Wales and those in Scotland and Northern Ireland. I cannot predict when it will be possible to introduce such legislation.

    Question put and disagreed to.

    Lords amendment: No. 47, in page 41, line 9, after "28" insert "and 28B".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will. be convenient to discuss Lords amendment No. 56, in page 48, line 32, at end insert—

    "The Representation Of The People Act 1985 (C 50)

    28B. In Schedule 4, in paragraph 61 (b) (amendments of the Representation of the People Act 1983 relating to time limit for prosecutions) after the word "without" there shall be inserted the word "undue"."

    Amendment No. 56 corrects a mistake in paragraph 61(b) of schedule 4 to the Representation of the People Act 1985. Amendment No. 47 is consequential to that.

    Section 61(b) substitutes a new subsection (2) in section 176 of the Representation of the People Act 1983. New section 176(2) refers, in its application to Scotland, to the execution of a warrant "without delay" instead of "without undue delay", which is the wording used in section 331 of the Criminal Procedure (Scotland) Act 1975 from which the new section is derived. The amendment converts the reference to "without undue delay" to be consistent with the wording in the 1975 Act.

    Paragraph 61(b) of schedule 4 to the 1985 Act, as enacted, came into operation on 1 October 1985. The amendment to clause 59 of the Bill provides for this amendment to come into operation as soon as practicable after 1 October.

    Question put and agreed to.

    Schedule 1

    Amendments Of Legal Aid And Solicitors (Scotland) Act 1949 And Solicitors (Scotland) Act 1980

    Lords amendment agreed to: No. 48, in page 42, line 2, at end insert—

    Part I

    Incorporation Of Solicitors' Practices

    Solicitors (Scotland) Act 1980 C 46

    1. In section 16(1) (appeal to Court of Session against decisions of Council in relation to practising certificates)—

  • (a) after the word "where" there shall be inserted "(a)"; and
  • (b) after the word "applicant" there shall be inserted ";
  • (b) the Council refuse to recognise a body corporate as being suitable in terms of section 34(1A)(b), the body corporate".
  • 2. In section 18 (suspension of practising certificates)—

    (a) after subsection (1) there shall be inserted the following subsection—
    "(1A) If—
  • (a) an administration or winding up order, or an appointment of a provisional liquidator, liquidator, receiver or judicial factor has been made in relation to the incorporated practice; or
  • (b) a resolution has been passed for the voluntary winding up of an incorporated practice (other than a resolution passed solely for the purposes of reconstruction or amalgamation of the incorporated practice with another incorporated practice),
  • the recognition under section 34(1A) of the incorporated practice shall be thereby revoked.";
    (b) after subsection (3) there shall be inserted the following subsection'—
    "(3A) On the occurrence of the circumstances mentioned in—
  • (a) paragraph (a) of subsection (1A), the administrator, provisional liquidator, liquidator, receiver or, as the case may be, judicial factor appointed in relation to the incorporated practice;
  • (b) paragraph (b) of subsection (1A), the incorporated practice
  • shall immediately intimate that fact to the Council.".

    3. In section 21(3) (definition of "consultant" in relation to requirement upon consultants to hold practising certificates).—

    (a) after the word "who" there shall be inserted "(a)";
    (b) after the word "name", where thirdly occurring, there shall be inserted—
    "(b) not being a director of an incorporated practice, causes or permits his name to be associated with that incorporated practice,".

    4. In section 26 (offence for solicitors to act as agents for unqualified persons)—

  • (a) in subsection (1)—
  • (i) after the word "who" there shall be inserted the words "incorporated practice which";
  • (ii) in each of paragraphs (b) and (d) after the word "his" there shall be inserted "or, as the case may be, its";
  • (b) in subsection (3) there shall be inserted at the end the words "but "unqualified person" does not include an incorporated practice".
  • 5. In section 27 (offence for solicitors to share fees with unqualified person)—

  • (a) in subsection (1)—
  • (i) after the word "solicitor" there shall be inserted the words "or incorporated practice";
  • (ii) after the word "him" there shall be inserted the words "or, as the case may be. it";
  • (b) in subsection (2)—
  • (i) after the "solicitor", where first occurring, there shall be inserted the words "or incorporated practice";
  • (ii) in paragraph (a) after the word "him" there shall be inserted the words "or, as the case may be, to it, and after the word "business", where secondly occurring, there shall be inserted the words "or former director of the incorporated practice":
  • (iii) in paragraph (b), after the word "business", where first occurring, there shall be inserted the words "or, as the case may be, a director or member of the incorporated practice" and after the word "he" there shall be inserted the words "or, as the case may be, it";
  • (iv) in paragraph c) after the word "him" there shall be inserted the words "or, as the case may be, it"
  • 6. In section 28 (disqualified solicitors not to seek employment without informing employer)—

  • (a) after the word "practice" where thirdly occurring, there shall be inserted the words "or by an incorporated practice";
  • (b) after the word "him" there shall be inserted the words "or, as the case may be, it".
  • 7. In section 30 (liability for fees of another solicitor)—

  • (a) after the word "solicitor", where first occurring, there shall be inserted the words "or an incorporated practice";
  • (b) after that word, where secondly and thirdly occurring, there shall be inserted the words "or incorporated practice";
  • (c) after the word "he" in each place where it occurs, there shall be inserted the words "or, as the case may be, it";
  • (d) after the word "solicitor's" there shall be inserted the words "or incorporated practice's".
  • 8. Section 31 (offence for unqualified persons to pretend to be solicitors or notaries public) shall be renumbered as subsection (1) of that section and—

    (a) in that subsection (as so renumbered) there shall be inserted at the end the following—
    "In this section, "unqualified person" does not include an incorporated practice";
    (b) after that subsection there shall be inserted the following subsections
    "(2) Any person (including a body corporate) who either by himself or together with others, wilfully and falsely—
  • (a) pretends to be an incorporated practice;
  • (b) takes or uses any name, title, addition or description implying that he is an incorporated practice,
  • shall be guilty of an offence.
    (3) Where an offence under this section which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, the director, manager, secretary or other similar officer of the body corporate, or any person purporting to act in any such capacity, he as well as the body corporate shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly.".

    9. In section 32(2) (persons to whom offence of preparing certain documents does not apply) there shall be inserted at the end the following—"; or

  • (e) an incorporated practice.".
  • 10. In section 33 (unqualified persons not entitled to fees etc.) there shall be inserted at the end—

    "This section does not apply to an incorporated practice.".

    11. After section 33 there shall be inserted the following section—

    "Privilege Of Incorporated Practices From Disclosure Etc

    33A.—(1) Any communication made to or by an incorporated practice in the course of its acting as such for a client shall in any legal proceedings be privileged from disclosure in like manner as if the body had at all material times been a solicitor acting for the client.

    (2) Any enactment or instrument making special provision in relation to a solicitor or other legal representative as to the disclosure of information, or as to the production, seizure or removal of documents, with respect to which a claim to professional privilege could be maintained shall, with any necessary modifications, have effect in relation to an incorporated practice as it has effect in relation to a solicitor.".

    12. In section 34 (rules as to professional practice, conduct and discipline)—

    (a) in subsection (1) at the end there shall be inserted the words "and incorporated practices";
    (b) after subsection (1) there shall be inserted the following subsection—
    "(1A) Rules made under this section may—
  • (a) provide as to the management and control by—
  • (i) solicitors holding practising certificates or their executors;
  • (ii) other incorporated practices of bodies corporate carrying on businesses consisting of the provision of professional services such as are provided by individuals and firms practising as solicitors being bodies the membership of which is restricted to such solicitors, executors and other incorporated practices;
  • (b) prescribe the circumstances in which such bodies may be recognised by the Council as being suitable to undertake the provision of any such services;
  • (c) prescribe the conditions which (subject to any exceptions provided by the rules) must at all times be satisfied by bodies corporate so recognised if they are to remain so recognised (which bodies, when and for so long as so recognised, are in this Act referred to as "incorporated practices");
  • (d) regulate the conduct of the affairs of incorporated practices; and
  • (e) provide—
  • (i) for the manner and form in which applications for recognition under this section are to be made, and for the payment of fees in connection with such applications;
  • (ii) for regulating the names that may be used by incorporated practices;
  • (iii) as to the period for which any recognition granted under this section shall (subject to the provisions of this Act) remain in force;
  • (iv) for the revocation of any such recognition on the grounds that it was granted as a result of any error or fraud;
  • (v) for the keeping by the Society of a list containing the names and places of business of all incorporated practices and for the information contained in any such list to be available for inspection;
  • (vi) for rules made under any provision of this Act to have effect in relation to incorporated practices with such additions, ommissions or other modifications as appear to the Council to be necessary or expedient;
  • (vii) for empowering the Council to take such steps as they consider necessary or expedient to ascertain whether or not any rules applicable to incorporated practices by virtue of this section are being complied with.
  • (c) after subsection (4) there shall be inserted the following subsections—
    "(4A) A certificate purporting to be signed by an officer of the Society and stating that any body corporate is or is not an incorporated practice shall, unless the contrary is proved, be sufficient evidence of that fact.
    (4B) Subject to the provisions of this Act, the Secretary of State may, by order made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament, provide for any enactment or instrument passed or made before the commencement of section (1A) above and having effect in relation to solicitors to have effect in relation to incorporated practices with such additions, omissions, or other modifications as appear to him to be necessary or expedient.".

    13. In section 35(1) (accounts rules) after the word "solicitors", in each place where it occurs, there shall be inserted the words "and incorporated practices".

    14. In section 36 (interest on client's money)—

  • (a) in subsection (1)—
  • (i) after the word "solicitor", where first occurring, there shall be inserted the words "or an incorporated practice";
  • (ii) after the word "his" there shall be inserted the words "or, as the case may be, by the incorporated practice in its";
  • (iii) after the word "solicitor's" there shall be inserted the words "or, as the case may be, the incorporated practice's";
  • (b) in subsection (2) after the word "solicitor" there shall be inserted the words "or incorporated practice";
  • (c) in subsection (3)—
  • (i) after the word "solicitor", where first occurring, there shall be inserted the words "or incorporated practice'';
  • (ii) after the word "solicitor", where lastly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice";
  • (iii) after the word "his" there shall be inserted the words "or, as the case may be, its";
  • (d) in subsection (4) after the word "client" there shall be inserted the words "or an incorporated practice and its client".
  • 15. In section 37 (accountant's certificates)—

  • (a) in subsection (2) after the word "solicitor" there shall be inserted the words "and incorporated practice";
  • (b) in subsection (3) after the word "firm" there shall be inserted the words "or of an incorporated practice";
  • (c) in subsection (5)—
  • (i) in paragraph (a) after the word "who" there shall be inserted the words "or incorporated practice which", after the word "firm" there shall be substituted the words "or, as the case may be, of the incorporated practice" and after the word "them" there shall be inserted the words "or, as the case may be, it";
  • (ii) in paragraph (b), after the word "solicitor" there shall be inserted the words "or incorporated practice" and after the word "practice" there shall be inserted the words "or, as the case may be, it has not";
  • (d) after subsection (6)—
  • (i) in paragraph (a)(iii) after the word "solicitors" there shall be inserted the words "or incorporated practices";
  • (ii) after the word "he" there shall be inserted the words "or, as the case may be, an incorporated practice which satisfies the Council that it";
  • (e) in subsection (7)—
  • (i) after the word "solicitor" there shall be inserted the words "or incorporated practice";
  • (ii) after the word "him" there shall be inserted the words "or, as the case may be, it".
  • 16. In section 38 (powers of Council where dishonesty alleged)—

  • (a) in subsection (1)—
  • (i) after the word "his", where first occurring, there shall be inserted the words "or an incorporated practice or any employee thereof';
  • (ii) after the word "firm" there shall be inserted the words "or, as the case may be, such incorporated practice";
  • (b) in subsection (2)—
  • (i) in paragraph (a), there shall be inserted at the end the words "or, as the case may be, such incorporated practice";
  • (ii) in paragraph (b), there shall be inserted at the end the words "or, as the case may be, of which the incorporated practice or one of its employees is a sole trustee or it is a co-trustee only with one or more of its employees.".
  • 17. In section 39 (Council's powers where delay alleged)—

  • (a) in subsection (1)—
  • (i) after the word "solicitor" there shall be inserted the words "or an incorporated practice";
  • (ii) after the word "firm" there shall be inserted the words "or, as the case may be, it";
  • (iii) after the word "employees" there shall be inserted the words "or, as the case may be, the incorporated practice or one of its employees was the sole trustee or it was a co-trustee only with one or more of its employees";
  • (iv) after the word "solicitor" where secondly occurring, there shall be inserted the words "or, as the case may be, incorporated practice";
  • (b) in subsection (2)—
  • (i) after the word "solicitor", where first and lastly occurring, there shall be inserted the words "or, as the case may be, incorporated practice";
  • (ii) after the word "he" there shall be inserted the words "or, as the case may be, it";
  • (iii) after the word "firm" there shall be inserted the words "or, as the case may be, to that incorporated practice.".
  • 18. In section 40 (Council's powers where failure to comply with accounts rules etc.)—

  • (a) in subsection (1)—
  • (i) after the word "solicitor", where first occurring, there shall be inserted the words "or incorporated practice";
  • (ii) after the word "solicitor", where secondly and thirdly occurring, there shall be inserted the words "or, as the case may be, incorporated practice";
  • (iii) after the word "his" there shall be inserted the words "or, as the case may be, its";
  • (iv) after the word "section", where lastly occurring, there shall be inserted "(a)";
  • (v) for the words "and the certificate" there shall be substituted the following "; or, as the case may be—
  • (b) withdraw the practising certificate or certificates of any or all of the solicitors who are directors of the incorporated practice,
    • and a certificate so withdrawn";
  • (b) in subsection (2)—
  • (i) after the word "he" there shall be inserted the words "or, as the case may be, by the incorporated practice that it";
  • (ii) after the word "solicitor" where secondly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice";
  • (iii) for the words from "and" onward there shall be substituted the words "or solicitors concerned and shall restore to him or them any practising certificate or certificates held by him or them for the practice year then current.".
  • (c) in subsection (3) for the word "the", where secondly occurring, there shall be substituted the word "a".
  • 19. In section 41 (appointment of judicial factor)—

  • (a) after the word "solicitor", where first occurring, there shall be inserted the words "or an incorporated practice";
  • (b) after the word "solicitor" where secondly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice";
  • (c) for the words "in connection with his practice as a solicitor" there shall be substituted the words ", in the case of a solicitor, in connection with his practice a ssuch";
  • (d) after the word "arise" there shall be inserted the following "; or
  • (c) that, in the case of an incorporated practice, either—
  • (i) its liabilities exceed its assets, or
  • (ii) its books, accounts and other documents are in such a condition that it is not reasonably practicable to ascertain definitely whether its liabilities exceed its assets, or
  • (iii) there is reasonable ground for apprehending that a claim on the guarantee fund may arise";
  • (e) after the word "solicitor", where fourthly occurring, there shall be inserted the words "or, as the case may be, of the incorporated practice";
  • (f) after the word "solicitor", where fifthly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice";
  • (g) for the words "the solicitor's" there shall be subsitiuted the word "such".
  • 20. In section 42 (distribution of sums in client bank account)—

  • (a) in subsection (1)—
  • (i) after the word "(2)" there shall be inserted the words "or (2A)";
  • (ii) after the word "solicitor", where first occuring, there shall be inserted the words "or an incorporated practice";
  • (iii) after the word "him", where first and thirdly occurring, there shall be inserted the words "or, as the case may be, by it";
  • (iv) after the word "clients", where firstly occurring, there shall be inserted the words "or, as the case may be, by it on behalf of its clients";
  • (v) after the word "solicitor", where secondly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice";
  • (vi) after the word "behalf', where secondly occurring, there shall be inserted the words "or, as the case may be, by it on their behalf';
  • (vii) after the word "him", where lastly occurring, there shall be inserted the words "or, as the case may be, by it";
  • (b) after subsection (2) there shall be inserted the following subsection—
    "(2A) The events to which subsection (1) applies are in relation to any incorporated practice—
  • (a) the making of an administration or winding up order or the appointment of a provisional liquidator, liquidator, receiver or judicial factor; or
  • (b) the passing of a resolution for voluntary winding-up (other than one passed solely for the purposes of reconstruction or amalgamation with another incorporated practice)";
  • (c) in subsection (3)—
  • (i) after the word "solicitor", where first occurring, there shall be inserted the words "on an incorporated practice";
  • (ii) after the word "his", where first occurring, there shall be inserted the words "or, as the case may be, its";
  • (iii) after the word "client", where secondly occurring, there shall be inserted the words "or, as the case may be, by the incorporated practice on that behalf':
  • (b) after the word "him" there shall be inserted the words "or, as the case may be, by it";
  • (v) after the word "name" there shall be inserted the words "or, as the case may be, by the incorporated practice in its own name".
  • 21. In section 43 (Guarantee Fund)—

    (a) in subsection (2) after the words "part of there shall be inserted "(a)" and at the end there shall be inserted "; or
    (b) any incorporated practice or any director, manager, secretary or other employee of an incorporated practice, nothwithstanding that subsequent to the commission of that act it may have ceased to be recognised under section 34(1A) or have been wound up";
    (c) in subsection (3), after paragraph (c), there shall be added the following—
    "(cc) to an incorporated practice or any director or member thereof in respect of a loss suffered by it or him by reason of dishonesty on the part of any director, manager, secretary or other employee of the incorporated practice in connection with the practice";
    (d) in subsection (7)(c) there shall be inserted at the end the following "or in the employment of an incorporated practice".

    22. In section 44 (professional indemnity)—

  • (a) in subsection (1)—
  • (i) after the word "solicitors", where secondly occurring, there shall be inserted the words "and incorporated practices";
  • (ii) in pargraph (c) after the word "solicitors", where secondly occurring, there shall be inserted the words "and incorporated practices or any specified class thereof';
  • (b) in subsection (3)—
  • (i) in each of paragraphs (b) and (c) after the word "solicitors", where secondly occurring, there shall be inserted the words "and incorporated practices or any class of incorporated practices";
  • (ii) in paragraph (f) after the word "solicitor" there shall be inserted the words "or incorporated practice" and after each of the words "he" and "him" there shall be inserted the words "or, as the case may be, it";
  • (iii) in paragraph (g) after the word "solicitors" there shall be inserted the words "and incorporated practices";
  • (c) in subsection (5) there shall be inserted at the end the words "and, as respects incorporated practices, means any liability incurred by it which if it had been incurred by a solicitor would constitute such civil liability";
  • 23. In section 45 (safeguarding interests of clients of solicitors struck off or suspended)—

    (a) in subsection (1) at the end there shall be inserted the words "and, in relation to any incorporated practice, the recognition under section 34(1A) of which is revoked";
    (b) in subsection (2)—
  • (i) at the beginning there shall be inserted the words "In the case of a solicitor,";
  • (ii) after the words "solicitors" there shall be inserted the words "or incorporated practice";
  • (c) after subsection (2) there shall be inserted the following subsection—
    "(2A) In the case of an incorporated practice, it shall within 21 days of the material date satisfy the Council that it has made suitable arrangements for making available to its clients or to some other solicitor or solicitors or incorporated practice instructed by its clients or itself—
  • (a) all deeds, wills, securities, papers, books of accounts, records, vouchers and other documents in its possession or control which are held on behalf of its clients or which relate to any trust of which it is sole trustee or co-trustee only with one or more of its employees; and
  • (b) all sums of money due from it or held by it on behalf of its clients or subject to any trust as aforesaid.";
  • (d) in subsection (3)—
  • (i) after the word "solicitor" in both places where it occurs, there shall be inserted the worth "or, as the case may be, incorporated practice";
  • (ii) after the word "he" there shall be inserted the words "or, as the case may be, any director, manager, secretary or other employee of the incorporated practice";
  • (e) in subsection (5), after the word "practice" there shall be inserted the words "or, as the case may be. the recognition under section 34(1A) is revoked.".

    24. In section 47 (restriction on employing solicitor struck off or suspended)—

  • (a) in subsection (1)—
  • ((i)) after the word "solicitor", where secondly occurring, there shall be inserted the words "and, unless it has such permission, an incorporated practice shall not";
  • (ii) after the word "his", where first occurring, there shall be inserted the word "or, as the case may be, its";
  • (b) in subsection (3) after the words "solicitor" there shall be inserted the words "or, as the case may be, incorporated practice";
  • (c) in subsection (4) at the end there shall be inserted the words "and if any incorporated practice so acts its recognition under section 34(1A) shall be revoked.".
  • 25. In section 49 (investigation by lay observer of Society's treatment of complaients), in subsection (1) after the word "solicitor", where secondly occurring, there shall be inserted the words "or about an incorporated practice or an employee thereof'.

    26. In section 51(2) (complaints to Discipline Tribunal) after the words "client)" there shall be inserted the words "or an incorporated practice may have failed to comply with any provision of this Act or of rules made under this Act applicable to it".

    27. In section 52(1) (procedure and powers of Discipline Tribunal) there shall be inserted at the end the words "or an incorporated practice".

    28. In section 53 (powers of Discipline Tribunal)—

    (a) in subsection (1) there shall be inserted at the end;—
    "or
  • (c) an incorporated practice has been convicted by any court of an offence, which conviction the Tribunal is satisfied renders it unsuitable to continue to be recognised under section 34(1A); or
  • (d) after holding an inquiry into a complaint, the Tribunal is satisfied that an incorporated practice has failed to comply with any provision of this Act or of rules made under this Act applicable to it.".
  • (b) in subsection (2) (powers of Discipline Tribunal)—
  • (i) in paragraphs (c) and (d) after the word "solicitor" there shall be inserted the words "or, as the case may be, the incorporated practice".
  • (ii) in paragraph (e) after the word "him" there shall be inserted the words "or, as the case may be, it".
  • (iii) after paragraph (e) there shall be added the following—"or
  • (f) order that the recognition under section 34(1A) of the incorporated practice be revoked".
  • (c) after subsection (6) (effective date of striking off or suspension of solicitor) there shall be inserted the following subsection—
    "(6A) Where the Tribunal order that the recognition under section 34(1A) of an incorporated practice be revoked, the Tribunal shall direct that the order shall take effect on such date as the Tribunal specifies, being a date not earlier than 60 days after its order is intimated to the incorporated practice, and such an order shall take effect accordingly.".
    (d) in subsection (7) after the word "(6)" there shall be inserted the words "or (6A)" and for the words "that subsection" there shall be substituted the words "subsection (6) or, as the case may be, subsection (6A)".

    29. In section 54 (appeals by solicitors from decisions of the Discipline Tribunal)—

  • (a) in subsection (1) for the word "him" there shall be substituted the words "that person";
  • (b) in subsection (2)—
  • (i) after the word "Where" there shall be inserted "(a)";
  • (ii) after the word "effect", where secondly occurring, there shall be inserted—
    • ";
  • (b) the Tribunal has ordered the revocation of the recognition under section 34(A) of an incorporated practice, the incorporated practice may within 21 days of the date when the order is intimated to it apply to the court for an order varying (subject to the limit of 60 days referred to in subsection (6A) of section 53) the direction under that subsection,"
  • 30. In section 60 (offence for notaries public to act for unqualified persons) in subsection (2) there shall be inserted at the end the words "but "unqualified person" does not include an incorporated practice".

    31. In section 61 (protection of banks)—

  • (a) in each of subsections (1) and (2) after the word "solicitor" there shall be inserted the words "or an incorporated practice";
  • (b) in subsection (3) after the word "solicitor", where first occurring, there shall be inserted the words "or an incorporated practice" and after that word, where secondly occurring, there shall be inserted the words "or, as the case may be, the incorporated practice".
  • 32. In section 64 (service of notices) there shall be inserted at the end the words "or, in the case of an incorporated practice, if it is left at, or delivered or sent by post to, its registered office".

    33. In section 65(1) (interpretation) after the definition of "functions" there shall be inserted the following—

    • "incorporated practice" has the meaning given by section 34(1A)(c);"

    34. In Schedule 3 (The Scottish Solicitors' Guarantee Fund)—

    (a) in paragraph 1—
  • (i) after sub-paragraph (2) there shall be inserted the following sub-paragraphs—
  • "(2A) Sub-paragraphs (1) and (2) do not apply to solicitors who are directors of incorporated practices.
    (2B) Subject to the provisions of this Act, there shall be paid to the Society on behalf of the Guarantee Fund by every incorporated practice in respect of each year during which, or part of which, it is recognised under section 34(1A) a contribution (hereafter referred to as an "annual corporate contribution") in accordance with the scale of such contributions referred to in subparagraph (3).
  • (ii) in sub-paragraph (3) there shall be inserted at the end the words "and the scale of the annual corporate contributions to be so paid, which scale shall be fixed by reference to factors which shall include the number of solicitors who are directors or employees of each of the incorporated practices to which the scale relates.";
  • (iii) in sub-paragraph (4) after the word "solicitor" there shall be inserted the words "and no annual corporate contribution by an incorporated practice";
  • (iv) in sub-paragraph (5) for the words "a special", where secondly occurring, there shall be substituted the words "upon every incorporated practice a contribution (hereafter referred to as a "special corporate contribution") in accordance with a scale of such contributions fixed by the Council as under sub-paragraph (3), and a special or special corporate";
  • (v) in paragraph 1(8) after the word "solicitors" there shall be inserted the words "or of an incorporated practice";
  • (b) in paragraph 3(2) after the word "solicitors", where first occurring, there shall be inserted the words "and incorporated practices" and after that word, where secondly occurring, there shall be inserted the words "or incorporated practice or practices";
    (c) in paragraph 4(2) after the word "employee" there shall be inserted the words "or the incorporated practice in question or its employee";
    (d) in paragraph 5(2) after the word "solicitor" there shall be inserted the words "or incorporated practice".

    35. In Schedule 4 (constitution, procedure and powers of Tribunal)—

  • (a) in paragraph 9—
  • (i) after the word "solicitor", where first and secondly occurring, there shall be inserted respectively the words "or an incorporated practice" and "or the incorporated practice"; and
  • (ii) after the word "him" there shall be inserted the words "or, as the case may be, it";
  • (iii) after the word "solicitor" where thirdly and lastly occurring there shall be inserted, in each case, the words, "or, of failure on the part of the incorporated practice to comply with any provision of this Act or of rules made under this Act";
  • (b) in paragraph 10 (duty of Discipline Tribunal) to give respondent solicitor notice of complaint)—
  • (i) after the word "solicitor" there shall be inserted the words "or incorporated practice";
  • (ii) after the words "him" and "his" there shall be inserted respectively the words "or, as the case may be, it" and "or, as the case may be, its".
  • (c) In paragraph 16—
  • (i) in each of paragraphs (c) and (d) after the word "solicitor" there shall be inserted the words "or an incorporated practice";
  • (ii) after paragraph (d) there shall be added—"or
  • (e) order that the recognition under section 34(1A) of an incorporated practice be revoked";
  • (iii) for "(d)" where secondly occurring, there shall be substituted "(e)";
  • (iv) after the word "court", where secondly occurring, there shall be inserted the words "or under section 53(6A) which has not been varied by the court";
  • (v) after the word "roll", where secondly occurring, there shall be inserted the words "or as to revoking the recognition under section 34(IA) of an incorporated practice".
  • Building Societies Act 1962 (C 37)

    36. In section 34(4) (restriction on commissions for introduction of business) after the word "solicitor" there shall be inserted the words "(including that of an incorporated practice within the meaning of the Solicitors (Scotland) Act 1980)".

    Legal Aid (Scotland) Act 1967 (C 43)

    37. In section 6(3) (a) (exclusion of certain solicitors from giving legal aid) the word "or" immediately preceding subparagraph (iii) shall be omitted and after that sub-paragraph there shall be inserted the following—

    "or
  • (iv) in the case of a director of an incorporated practice, such conduct on the part of any person who is for the time being a director of the incorporated practice.".
  • Income And Corporation Taxes Act 1970 (C 10)

    38. In sections 481(3) and 490(3) (savings for solicitors in relation to certain requirements to furnish information to Inland Revenue) any reference to a solicitor shall include a reference to an incorporated practice within the meaning of the Solicitors (Scotland) Act 1980 and any reference to a solicitor's client shall, in relation to a solicitor who is a director, manager, secretary or employee of such a practice, be construed as a reference to a client of that practice.

    Legal Advice And Assistance Act 1972 (C 50)

    39. In section 5(2) (definition of "the solicitor" for purposes of rules relating to payment of certain charges or fees), after the word "solicitors", where first occurring, there shall be inserted the words "or by an incorporated practice (within the meaning of the Solicitors (Scotland) Act 1980") and after that word, where secondly occurring, there shall be inserted the words", incorporated practice".

    Estate Agents Act 1979 (C 38)

    40. In section 1(2) (a) (disapplication of Act to practising solicitors and their employees) after the word "him" there shall be inserted the words "or by an incorporated practice (within the meaning of the Solicitors (Scotland) Act 1980) or a person employed by it".

    Finance Act 1980 (C 48)

    41. In section 30(5) (saving for solicitors in relation to requirement to furnish certain information to Inland Revenue) any reference to a solicitor shall include a reference to an incorporated practice and any reference to a solicitor's client shall, in relation to a solicitor who is a director, manager, secretary or employee of an incorporated practice within the meaning of the Solicitors (Scotland) Act 1980, be construed as a reference to a client of that practice. — [The Solicitor-General for Scotland.]

    Privilege is involved in this amendment. I shall ensure that an entry is made in the Journal.

    Lords amendment No. 49 agreed to.

    Schedule 2

    Amendment Of Enactments

    Lords amendment No. 50 agreed to.

    Lords amendment: No. 51, in page 45, line 37, after "court)" insert " (a)".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to consider the following Lords amendments:

    No. 52, in page 45, line 40, at end insert

    "; and
  • (b) in paragraph (i) of the proviso after the word "Act" there shall be inserted the words "(as amended by the Law Reform (Miscellaneous Provisions) (Scotland Act 1985"."
  • No. 54, in page 47, line 12, leave out "section 19 of"

    No. 55, in page 48, line 32, at end insert—

    "The Family Law (Scotland) Act 1985(C 37)

    28A. In section 27(1) (interpretation) in the definition of "matrimonial home" there shall be added at the end of the words "as amended by section 13(10) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985"."

    Question put and agreed to.

    Lords amendment No. 52 agreed to.

    Lords amendment No. 53, in page 46, line 4, after "cause" insert "proceedings".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This is a drafting amendment.

    Question put and agreed to.

    Lords amendments Nos. 54 to 57 agreed to.

    Schedule 3

    Repeals

    Lords amendment: No. 58, in page 49, line 24, after "words" insert "convicted".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This is a drafting amendment to correct an omission in the wording of an appeal.

    It is significant that the last amendment with which we shall deal contains the word "convicted'. I think that this is appropriate in relation to the Government.

    Question put and agreed to.

    Lords amendments Nos. 59 and 60 agreed to.

    Lords amendments Nos. 61 and 62 disagreed to.

    Committee appointed to draw up reasons to be assigned to the Lords for disagreeing to certain of their amendments to the Bill: Mr. Dewar, Mr. Ewing, Mr. John MacKay, the Solicitor-General for Scotland and Mr. Allan Stewart; Three to be the quorum.— [Mr. John MacKay.]

    To withdraw immediately.

    European Communities

    6.25 pm

    I beg to move,

    That the draft European Communities (Definition of Treaties) (North Atlantic Salmon Conservation Organization) Order 1985, which was laid before this House on 17th July, be approved.
    It may be for the convenience of the House if we consider also the following motion:
    That the draft European Communities (Immunities and Privileges of the North Atlantic Salmon Conservation Organization) Order 1985, which was laid before this House on 17th July, be approved.

    The North Atlantic Salmon Conservation Organisation—known as NASCO—was established by the convention for the conservation of salmon in the north Atlantic ocean. This convention was opened for signature at Reykjavik on 2 March 1982. NASCO's principal objective is to contribute to the conservation, restoration and rational management of salmon stocks in the north Atlantic, with the aid of the best available scientific information.

    The establishment of the organisation was welcomed by the Government as a significant development in the management of salmon stocks in the high seas, thus having a beneficial effect on salmon stocks in our rivers. We have a strong interest in restricting as far as possible catches of salmon originating from our rivers, but caught in the waters of the Faroe islands and Greenland where they feed —the intercepting fisheries. We hope, therefore, that the convention, through NASCO, will enable these fisheries to be carefully managed and preserved.

    The location of the headquarters in Edinburgh has also been welcomed by the Government—not only for the benefit to the local economy from holding meetings there, but as a recognition of the importance to the United Kingdom as a whole of salmon fishing as a commercial and recreational resource, particularly in remote areas like the Scottish Highlands where it is so important to the tourist industry. We believe, therefore, that it is highly appropriate that the headquarters is located in Scotland. It is, in fact, the first recognised international organisation to be based in Scotland.

    The convention entered into force on 1 October 1983. The European Economic Community is a party to the convention and a member of the organisation, together with Canada, Denmark— in respect of Greenland and the Faroe Islands—Finland, Iceland, Norway, Sweden and the United States. The headquarters agreement with the organisation, which implements article 3 of the convention, was signed on 26 April at its new offices in Rutland square, Edinburgh. It will enter into force when the necessary legislation is in place— in other words, once the two draft orders now under consideration have been made.

    As the EC is a party to the convention, it is a Community treaty for the purposes of the European Communities Act 1972. It is proposed that the first draft order before the House— that relating to definition of treaties—should be made under section 1(3) of the 1972 Act specifying the headquarters agreement as a Community treaty. This order provides the basis for the second order — that relating to the immunities and privileges of NASCO provided by the headquarters agreement, which will be made under section 2(2) of the European Communities Act. The headquarters agreement implements article 3 of the convention by specifying the privileges and immunities that NASCO is to enjoy in the United Kingdom. This agreement is similar to other headquarters agreements entered into by the United Kingdom with international organisations having their headquarters here—for example, the International Tin Council, the International Lead and Zinc Study Group and the Commonwealth Foundation.

    Certain principal privileges and immunities will be conferred. NASCO will be provided with legal capacity, inviolability of archives, exemptions from taxes on income and capital gains, the same rating relief as is accorded to a diplomatic mission, relief from car tax and VAT and exemption from import duties.

    The representatives of parties will be provided with immunity from suit and legal process in respect of their official acts and inviolability for official papers and documents.

    Staff members of NASCO will be provided with immunity from suit and legal process in respect of their official acts, exemption from income tax, "first arrival" customs privileges and exemption from social security legislation.

    Those privileges and immunities are conferred on a strict basis of functional necessity. The House will note that nobody is given the full immunity from jurisdiction of a diplomatic agent.

    The House will wish to know that NASCO currently employs only two staff members and both are permanently resident in the United Kingdom.

    I believe that NASCO will help protect a valuable and vulnerable resource. Even those among us who are not given to the solitary joys of river fishing will recognise that the disappearance of the salmon from our rivers would represent an irreparable loss; not only in terms of wildlife conservation, important though that is, but for the incalculable effect it would have on commercial salmon fisheries and on tourism in the remotest parts of the land where the local people rely even more heavily on incomes earned during the tourist season. If one takes away the fish, one takes away the fishermen and the incomes they generate.

    I hope therefore that Members on both sides of the House will want to signal their welcome of NASCO to its Edinburgh home by supporting the draft orders before the House, and will join us in making a positive contribution to the preservation of a vulnerable resource.

    6.30 pm

    I am grateful to the Minister of State for explaining the orders. Some of the comments that he made are right. The salmon species in Scotland is in almost as grave a situation as the Conservative party in Scotland. It is right that we should be doing something about endangered fish, but I am not so certain about the Conservative party.

    The Minister said that there are only two members of staff working for NASCO, so that will not impose any particular burdens or difficulties on Edinburgh. Like the Minister of State, I represent a constituency in Lothian region and I welcome the fact that this interesting and useful international organisation has located its headquarters in Edinburgh. However, I suspect that the Minister of State will agree with me when I say that it is already difficult to find a parking place in Edinburgh without having to compete with people from Canada, Finland or the Faroes who might be able to claim immunity from parking regulations. Perhaps the Minister will say something about that.

    I hope that we will be permitted to speak about the background to the work of the North Atlantic Salmon Conservation Organisation. There is no doubt that stocks of migratory salmon in British rivers are critically low and declining at an alarming rate. Indeed, it is a pity that we are not talking about immunity for the salmon rather than immunity for the bureaucrats. It is worth while to encourage scientific study and international co-operation in order to protect that and other species, and that is NASCO's function. There is a risk of too much talk and too little action.

    I live near the river Tweed and, although I have never attempted to catch a salmon, I am well placed to witness some of the action that takes place on the river, in the estuary and offshore. Perfectly legitimate net fisheries and sporting anglers are losing out year after year to large-scale illegal fishing. That is compounded on the river Tweed, if I might say so in the presence of the hon. Member for Berwick-upon-Tweed (Mr. Beith), by the extraordinary phenomenon of legal drift net fishery for salmon off Northumberland.

    Will the hon. Gentleman declare any interest he might have in that area?.

    I have never caught a fish in my life and I do not particularly want to.

    Article 8 of the convention says that one of the functions of the North-East Atlantic Commission with regard to its area shall be
    "to propose regulatory measures for fishing in the area of fisheries jurisdiction of a member of salmon originating in the rivers of other Parties".
    Salmon that originate in Scotland are being intercepted by what are at present legal fisheries off the north-east coast of England. That is causing problens, and I expect some hon. Members may wish to say something about it.

    The Government are constantly saying that they will do something about those problems. A scheme was mooted some years ago for tagging salmon to ensure that only legitimately caught fish could be marketed in this country. We also have the North Atlantic Salmon Conservation Organisation, but while the Government fiddle, salmon stocks are being exterminated. I believe that the fundamental problem is that the current freshwater fisheries legislation is transparently unfair. It is designed to protect the vested interests of riparian owners and to exclude virtually everyone else. I recognise that it is not appropriate in the debate to raise the need for a complete overhaul of freshwater fisheries legislation, but that is what we ought to be doing sooner or later, preferably sooner.

    We need a framework of freshwater and coastal fisheries management that will command respect from all concerned. It is absurd that so many rivers and estuaries are still under the authority of bodies that are effectively controlled by landowners.

    The river that I know the best is the river Tweed and on the council of the commission that controls the fisheries on that river are two dukes, two earls, one viscount, one marquis, one baronet and four retired officers. It is a bit much to expect the ordinary punters of that neighbourhood to have a lot of time for an organisation that is composed of such members.

    Since the hon. Gentleman claims to speak for the ordinary punter of the Tweed area, would it be fair to tell the House whether he has ever been a Tweed commissioner or whether he owns any land in the area?.

    I own land in that area. On one occasion I was a representative commissioner for Berwickshire district council. I was elected to that post, so there is a distinction.

    We wish the North Atlantic Salmon Conservation Organisation well. We warn the Government that they must heed the growing scientific evidence about the depletion of salmon stocks. We do not need much in the way of bureaucratic immunity, but we need genuine effective action to protect the salmon species.

    6.37 pm

    I welcome the orders and the fact that NASCO is to be resident in Edinburgh. Like the hon. Member for East Lothian (Mr. Home Robertson), I hope that we shall see action. The action will have to come from a combination of that organisation and the Government. It is depressing that we have made no more progress to assist the survival of the wild salmon over recent years. The words "wild salmon" have crept into our vocabulary since the introduction of farmed salmon. which have been a spectacular success, particularly on the west coast of Scotland.

    Tonight we are interested in conservation, the survival at sea of the migratory salmon and its survival in United Kingdom rivers. If Britain does not set an example, we cannot expect others to take the vital steps that are required internationally. The economy of Scotland and of the areas of England and Wales that have salmon rivers is most concerned about the progress made by that organisation. The rural economy surrounding those rivers is affected, whether it is a question of hotels, shops, travel and tourism or the local authority rates, because the valuation in salmon fishing areas is extremely high, particularly in Scotland. Therefore, the success of salmon fishing is of crucial importance. Employment, the ghillies, other aspects of river management, the construction of boats, angling equipment and clothes are all most important.

    The consumption of salmon is being maintained only because of the great success of farmed fish. I believe that we can now compete with Norway and other parts of the world. If we did not have farmed salmon, salmon from the wild would be extremely scarce because of the overkill of our resources, not by rod but certainly by net. Like the hon. Member for East Lothian, I would not claim to be an active fisherman, but we must look seriously in the world of conservation at drift nets and other methods of fishing in the sea, bearing in mind the migratory nature of the life of a salmon.

    Drift nets, as my hon. Friend the Minister of State mentioned, are banned in Scotland, but not in England and Wales. There is exceptional confusion in the Solway area, close to the national boundary between England and Scotland. The area of navigable water is relatively small and there are continual arguments as to the side of the border on which the boats are operating.

    A crucial decision must be made with regard to the Northumberland coast. The hon. Member for Berwick-upon-Tweed (Mr. Beith) will probably speak about that later. I know that it is an old, traditional fishery. Everything would be fine if the people in the area were using the old, traditional methods of catching, with relatively few boats and old-style nets. However, today there is a modern fleet. I was told in July, in answer to a parliamentary question, that there were 121 licences issued by the Northumberland water authority. In the 1950s the average catch was a little over 2,000 fish a year. Last year, 77,200 fish were caught. Therefore, there has been a dramatic increase in the number of salmon caught off the Northumberland coast. It is having a dramatic impact on the number of salmon returning to the Scottish rivers. If they do not return, eventually we shall have no stock.

    I am a member of the Nature Conservancy Council. If the council had responsibility for salmon, I am sure that we would be considering it as an endangered species. We consider the life cycle of birds and other mammals and we know how serious the position will be if we do not conserve what we have.

    I am glad that the new organisation has been set up in Edinburgh, but most of us are aware that all true wildlife lives a precarious existence. There are limits to what we can take from the wild unless sufficient steps are taken to ensure conservation.

    It is obvious that drift netting is the main danger. We have to deal with the problem in relation also to the Greenland fisheries and particularly the Faroes. In addition, we must have consultation with our friends in Ireland about their activities off the Donegal coast.

    As I said earlier, we must put our own house in order. We have to look closely at stake netting and also at the fixed engines. They are important and operate legitimately around our coast but we must, as conservationists, ensure that there is no overkill.

    With regard to the question of conserving a precarious species, is it not the fact that the danger presented by the English drift net fishermen pales into insignificance when compared with the activities of the Faroese and the Greenland fishermen?.

    I know that the hon. Gentleman has great expertise in fishing and I will accept that what he says as true, particularly with regard to developments in the Faroes in the past 10 years. It has been very significant and it must be looked at in international negotiation.

    I welcome the inshore fishing regulations that were introduced by the Government in the summer. While not affecting salmon, they prevent mobile gear from sweeping into the bays and estuaries of Scotland and damaging our salmon fishing.

    I am glad that the Government have looked seriously at the problems of salmon poaching, salmon sales and tagging. We must try to resolve those problems as soon as possible. Fishery protection has been stepped up by the introduction of fishery protection vessels, and by the purchase of an aircraft in the past year. It has been very effective in dealing with salmon fishing. I pay tribute to our district boards for their part in salmon conservation and for the employment they provide for the water bailiffs.

    I reiterate that, if we are to take salmon conservation seriously, we must look at the problem of drift netting and be prepared to take action. We must also be prepared to negotiate with the Faroese and the Greenland Government about their activities in the Atlantic. I hope that the Minister will comment on that matter in his reply.

    6.45 pm

    Although I welcome the establishment on the North Atlantic Salmon Conservation Organisation in Edinburgh, I hope that the Government will see fit, after it has been established, to take some positive steps, as a matter of urgency, to reverse the decline in our salmon stocks.

    The two orders before the House are particularly concerned with salmon conservation. Although a number of countries that fish for salmon on the high seas have agreed to quotas, and in some instances have agreed reductions, so far the United Kingdom has not responded in any positive way and is still allowing indiscriminate, wholesale netting, legally and illegally, of the shoals of salmon returning to the United Kingdom rivers.

    There is no doubt that if the United Kingdom does not act soon, our NASCO partners will call for action, or else there may be retaliation by the salmon quota countries, which could abolish their quotas, slaughter stocks and ignore conservation, as a retaliation to our unseemly and selfish attitude to salmon conservation.

    As a result, the Atlantic salmon will go unprotected, its life span as a species will be seriously jeopardised, and Scotland, as well as to a lesser extent England and Wales, will suffer a disastrous decline in salmon searching for their spawning rivers. The economic and financial consequences of such action to sea fishermen in Scotland, to rod anglers and to tourism will be very serious. It could be long-lasting, and perhaps the salmon industry and the related industries would never recover.

    On salmon conservation, at least three major steps should be taken. Drift netting off the north-east coast should cease. Nylon monofilament gill nets should be banned and a more serious attitude adopted by the Government, fishery boards, water authorities, magistrates and courts to the salmon poachers.

    All the major organisations, the Atlantic Salmon Trust, trout and salmon and other conservation associations, have called unanimously for the end of drift netting. It was accomplished along the Scottish coast many years ago, but there is no such restriction along the Yorkshire and Northumberland coastline. It would mean restricting and possibly ending the licensing of fishing vessels using the drift netting technique, and thereby allowing the returning salmon to find their own spawning grounds.

    According to the Atlantic Salmon Trust, the catches declared by the Northumbria and Yorkshire authorities are in the region of 60,000 salmon annually. The Ministry of Agriculture, Fisheries and Food estimated that 95 per cent. of them are intercepted in their passage to the estuaries of eastern Scotland.

    Did not the same Ministry report that the effect that that fishing is supposed to have on the Scottish rivers is not more than 7·5 per cent.? Will the right hon. Gentleman bear in mind that he is talking about the livelihood of a great many fishermen and their families, whose fathers and grandfathers before them were also fishermen?.

    The hon. Gentleman has his point of view, and those Conservative Members in the north-east who want to register that point of view today are obviously entitled to do so. but if we are to take salmon conservation seriously, the problem of drift netting has to be tackled.

    In The Times not long ago the chairman of the River Tweed Commissioners said:
    "It is quite scandalous that the Government continues to turn a blind eye to this slaughter of returning Scottish salmon at a time when there is mounting concern over diminishing stocks."
    The chairman went on to say:
    "It is galling that English nets can intercept salmon only a few miles from our rivermouth, using these deadly drift netting techniques which were outlawed in Scotland years ago, and still contribute absolutely nothing to the management costs of the parent river".
    According to statistics prepared by the British Field Sports Society, the north-east drift net fishery has considerably increased its catches in recent years.Between 1950 and 1959 about 2,000 fish were taken per year. Between 1970 and 1979 nearly 5,000 fish were caught per year. But in 1984 alone 7,700 fish were taken. Yet in Scotland the annual sea catch returns show that between 1970 and 1979 about 400,000 fish were taken, while in 1984 this had dropped to 280,000. So there is no doubt that this interceptory drift netting is having a calamitous effect on salmon stocks, on conservation and on legal salmon fishing off Scotland.

    America and Canada have already placed restrictions on their catches. Greenland's salmon quota has been further reduced. Unless they see, as a result of NASCO being formed. the United Kingdom being subjected to a more common objective by the salmon states to conserve, they may have to apply pressure on the United Kingdom to take salmon conservation more seriously.

    The Government must take steps to ban the use of this cruel and deadly nylon monofilament gill net. When I questioned the Minister of Agriculture in December 1983 about a ban, he stated that our fishery scientists were conducting research into the effects of using monofilament nets. I do not know with w hat results, but it has not led to a ban.

    Some research has been done elsewhere. In British Columbia a report on a test which resulted in these nets being banned said:
    "It has been established that mono-filament nets will, under certain conditions, out-fish all other regular gill nets to a degree where serious management of resources would follow … widespread adoption of the gear".
    Some idea of the deadly efficiency of these nets was shown in an experiment in the river inlet fishery. In one week, when the average catch of all ordinary gill net boats was 410, two fishermen using complete monofilament nets took 1,100 and 1,546 fish respectively. Hence the imposition of the ban. Not only is it a deadly piece of equipment, it is cruel too, causing considerable damage to escaping fish which drown as a result of gill injuries, or become diseased and then pollute the rivers. Broken nylon monofilament gill nets become ghost nets hanging in the seas and river estuaries, killing fish slowly as they hang from their gills. Because these nets do not rot like hemp ones, they go on killing and injuring fish, seals and sea birds. Gannets and sea-diving birds have no chance of seeing them because of their invisibility under water.

    The Royal Society for the Protection of Birds and the World Wildlife Organisation are adamant, as are the Salmon and Trout Association and the Atlantic Salmon Trust, that these nets should be banned. Their use is a form of cruel mass slaughter at sea of one of our finest fish species, the survival of which is undoubtedly being threatened.

    What are the Government doing to curb the mass growth of salmon poaching to help conserve the salmon? It is now no longer the odd man in the village taking one to sell for a couple of pints; it is highly organised, with gangs poaching on a large scale, intimidating bailiffs, wrecking their boats, and having a range of outlets for their ill-gotten gains. Using gas, cyanide and nets, they are emptying our estuaries and rivers of countless salmon.

    Every salmon river in the United Kingdom reports an increase in the discovery of broken illegal nets year after year. This includes the Scottish coastline too. A special article in The Scotsman said:
    "It is no big secret that motor boats from Peterhead and Fraserburgh are to be seen returning at night with their lights off and weighed down with dead salmon, destined to end up remarkably quickly on slabs at Billingsgate. They too, use monofilament gill nets but, unlike England, there is no right here to drift net for salmon off the coast. Peterhead Police say, 'It seems to be increasing and it seems to be a situation which is getting out of hand.'"
    Questioning Lord Belstead in another place in July-1983, Lord Chelwood said:
    "Is my noble friend further aware that, as proof of how serious the decline in Atlantic salmon seems to be, figures seem to show that licensed netsmen in Scotland in the last decade have seen the tonnage caught decline by nearly 50 per cent.? Is this not a really serious matter? … Are we not prepared to face up to it?
    Lord Belstead replied:
    "My Lords, I entirely agree with my noble friend Lord Chelwood that there is undoubtedly evidence of illegal catching of salmon and that it is on a substantial scale. I can assure my noble friend that the Government are well aware of the need for prompt action."— [Official Report, House of Lords, 25 July 1983; Vol. 443, c. 1368.]
    Prompt action? What action? The Government started a consultative review, a review of fisheries in England and Wales, in July 1981. Thereafter, a salmon sales group was established and that reported in July 1983. Its report was entitled, "Salmon Conservation—A New Approach." It recommended a salmon-tagging scheme to curb poaching. The report stated:
    "Illegal fishing for salmon and trout has reached epidemic proportions in England and Wales. Impossible to quantify as to extent or effect, reliable, experienced opinion nevertheless holds that in some areas illegal catches regularly exceed the legal and threaten to destroy the resource."
    Over four years ago, the review began. Over two years ago a salmon-tagging scheme was recommended by a team of specialists. As yet we have made no progress. Rod and line anglers and fly fishers are incensed. Tourist returns on fishing in Scotland are on the decline. Fly fishers, of course, have long distances to travel and expensive journeys, and it is still costly on most rivers, but there are fewer and fewer catches and so fewer return to Scotland to catch a salmon with rod and line.

    All who are interested in salmon conservation should ponder what is being lost because there is a case to be made for the promotion of rod fishing at the expense of restricting netting, but especially for recognising that the legal sea netters are not getting the returns that they would like and the illegal ones are not spreading their returns in Scotland or creating much allied industry with their operations. Rod fishermen are also incensed that netsmen contribute so little to conservation and restocking when they take so large a portion of the catch.

    A recent survey put the value of the salmon catch on Scottish rivers at £2·6 million a year. Then there are the wages of bailiffs and ghillies, the employment generated in legal netting, in hotels, tackle manufacturers and shops, boat building and hirers, smoking businesses, food processing and fishing holiday sales—all worth scores of millions of pounds to Scotland. That is money often going into otherwise impoverished rural communities in the form of jobs. All is at risk unless something is done to cut back this alarming growth of salmon poaching. Those in Scotland who oppose the salmon-tagging scheme are cutting off their noses to spite their faces.

    Another factor that may well bedevil the sea salmon netters is the growth of salmon fish farming. As these fish farms increase in numbers and inland farmed salmon multiply with increased annual production, prices for salmon will tumble. Sea netting may not be worth while. The salmon will then get back up the river and the rod and line angler will benefit. So will all those multifarious activities connected with rod and line salmon fishing. Scotland's tourist industry could benefit enormously and the fly fisher will come back into his own.

    I end as I began. When we are fully participating in the North Atlantic Salmon Conservation Organisation we shall have to say clearly to all its members that we take salmon conservation seriously and that we shall at least curtail the use of the drift net, abolish the use of the nylon monofilament net and introduce measures to curb the activities of those criminals who are poaching the seas and rivers of salmon.

    6.59 pm

    I do not wish to keep the House long because the admirable speech of the right hon. Member for Barnsley, Central (Mr. Mason) has covered much of the ground that I should have covered. He mentioned one point on which I must correct him. He is being exceptionally optimistic if he supposes that the spread of fish farming and the increase in the numbers of farmed salmon will have the effect that he imagines. There is no evidence to suggest that there is the connection that he sought to draw. Many of us hoped that there might be. but I am afraid that experience has shown that it is an illusion. There will still be the poacher looking for stolen fish, however many farmed fish may reach the market. The House can unfortunately draw no comfort from the point put forward by the right hon. Gentleman.

    I should declare an interest. I am chairman of the British Field Sports Society's fishery committee, and a colleague of my hon. Friend the Member for Wealden (Sir G. Johnson Smith) on the Salmon and Trout Association Council, and I am involved with the Anglers' Co-operative Association, as is more than one Opposition Member. I am a salmon fisherman. I own a small stretch of river in Wales. During the past five years I have caught the grand total of two fish in it, but not for want of trying. I have also been lucky enough to catch a few fish on other stretches of water.

    I am especially glad to see not just my hon. Friend the Minister of State, Foreign and Commonwealth Office, but sitting beside him my hon. Friend the Member for Argyll and Bute (Mr. MacKay) the Parliamentary Under-Secretary of State for Scotland, who has been known to hold a rod in his hand from time to time. It is also especially gratifying for the House to have the company, albeit practically silent, of my hon. Friend the Member for Crawley (Mr. Soames) who is Parliamentary Private Secretary to my right hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food, who has a great deal to do with this issue. His predecessor, who has now gone to a harder job, was closely involved with some of the discussions about salmon conservation which have been taking place over the past couple of years.

    If the gentlemen from the North Atlantic Salmon Conservation Organisation come to Edinburgh and if the other members of that organisation are to visit Edinburgh, apart from the pleasures of so doing, they may well ask themselves what type of salmon conservation policy their host country has. It may not be easy for them to find the answer if we rely on what we have now, because there is no doubt that the salmon that breed in British waters face the most appalling array of threats to their survival, not all of which have been listed in the debate. We have heard some mention, not unnaturally, of the north-east drift net fishery. The right hon. Member for Barnsley, Central quoted some figures, as did my hon. Friend the Member for Dumfries (Sir H. Monro).

    It is significant that the average declared catch from the north-east drift net fishery — anyone who knows anything about that fishery knows there is also a great deal of undeclared catch—between 1970 and 1979 equalled one ninth of the total catch in all Scottish waters, whereas in 1984 the overall declared catch was one quarter of the total catch in all Scottish waters, including all rivers and estuaries.

    Complacent as the hon. Member for Berwick-upon-Tweed (Mr. Beith) may be about those figures, and anxious though he may be to defend his constituency interest, he cannot brush aside, in the way he sought, the inexorable trend that they show towards the extinction of salmon in some east coast Scottish rivers.

    Why does the hon. Gentleman assume that there is a substantial undeclared catch from the sea fishery but no undeclared catch from the river fishery?.

    Because it is much easier for someone fishing the north-east drift net fishery to transfer his catch at night to a Dutch or German trawler to be taken to the continent and sold there. If the hon. Gentleman is not aware that that type of thing happens, he should perhaps make some further inquiries in his area. It is much harder to quantify the poached catch from Scottish rivers, but all the evidence shows that there is much less fish there to start with. The hon. Gentleman could usefully do a little more research on that matter.

    The threat to the salmon is not confined to Scottish east coast rivers. There is a similar threat on the north-west coast of Scotland. I have a letter written by someone from Sutherland referring to the illegal inshore and offshore netting that goes on there. He says:
    "We believe this to be particularly bad on the North West coast. Once the legal nets come off, then practically every crofter or small boat owner is out somewhere with a nylon net."
    If we go round the coast, we come to the estuaries of the rivers Dee and Clwyd. There is an interesting report, dating from 1982, which describes how the poachers work the Dee estuary. It describes how the
    "so-called sea fishermen do catch and take considerable numbers of salmon during the course of a season in addition to their normal catches of sea fish. They simply adjust their activities to the fish that are most abundant at the time and this includes salmon and just by watching the successes or otherwise of the legitimate salmon trammel netsmen can quickly assess the run of fish taking place. They can, if they wish, move into the productive zone of the low water channel pushing out the licensed men and then block the channel completely. There is no fear of retaliation from the licensed salmon netsmen as they are considerably outnumbered and the bailiffs can do little as the practice is perfectly lawful until attempts are made to bring any catch ashore."
    I have a letter dated August 1985 from a Dee water bailiff in which he talks about illegal fishing. He says:
    "this is the real problem, which has escalated dramatically over the five years to such an extent now that I am physically and mentally exhausted. I don't know which way to turn and am seriously thinking of quitting after fourteen years service, because I cannot take any more aggravation, abuse and seeing fish killed and not have any authority to do anything about it. There must be a change in byelaws, and it must come soon. This river to me is dying. This is the worst I have seen on it for migratory fish, and it's been sliding for the last three years. This is the problem … and it is causing a breakdown of morals and laws within the river system, that if some form of check is not brought in then it will be out of hand, because its just like having a supermarket and leaving all the doors open."
    If we go further round the coast, we reach the Torridge, which is a river in Devon that I have fished for over 20 years. I have a report from one of the local angling organisations, which states:
    "In 1982 1,000 Salmon and 3,000 Sea Trout were taken illegally in the estuary of the Taw and Torridge. There was a declared catch of 22 netsmen of 1,394 Salmon and 3,576 Sea Trout. 1982 Rod catch of the Torridge was 46 Salmon, and 460 Sea Trout."
    On that estuary, unless there is enough rain to bring the river down in flood and so make it possible for the fish to run, they wash up beyond Bideford and down again. The netsmen who are working the banks of the Torridge simply scoop up the fish without any restraint or control. It is hardly surprising that most people who know anything about that river regarded it at the beginning of this year as having virtually ceased to be a salmon river.

    We could go on round the coast, but perhaps I can rest with the threats that the salmon face in the estuary. The threat does not come just from the poachers. The Torridge estuary has a bad record of pollution caused by inadequate sewage works. There are other estuaries with similar problems where a great slug of poisoned water washes up and down with the tide and makes it impossible for the salmon to get through to the rivers and live.

    But when salmon get through to the rivers, what do they find? They find the poachers there as well. We have heard tonight of the threat on the river Wye. There has been something like open warfare on the lower Wye where wires have been stretched across the river to catch the bailiffs' boats. Stones have been dropped from bridges. Bailiffs are rightly afraid to go around singly, unless they have a large dog. The Bridport gang, the Monmouth boys and all the other gangs of poachers mentioned by the right hon. Member for Barnsley, Central know that part of the river well. They know where the fish are and will steal them given half the chance. The task of the water bailiffs on the Wye can be very daunting.

    On the river Esk in Yorkshire, which is nearer to the right hon. Gentleman's part of the country, the poachers have won the battle. They will stone a legitimate angler to get him off the water so that they can poach.

    The situation is not quite the same on the river Dovey in Wales, but poachers have come from Birmingham and Manchester, poisoned the river and scooped up all the fish. Fortunately, in one case they were caught and received severe sentences. We must not ignore that aspect of the fight.

    Pollution is an important factor. It would be a mistake to ignore the fact that water extraction—pumping water out of the river for irrigation, as farmers increasingly do these days — works against the chances of salmon survival because it lowers river levels to a point where they cannot survive.

    Water quality is also affected by run-off from the spreading of fertilisers on riverside fields. That also makes it impossible for salmon parr, salmon smolts and mature salmon to survive in the river.

    Land drainage, which is still heavily subsidised, has the effect of turning rivers into drains and lowering their levels through the years of drought such as we experienced last year and the year before.

    Forestry is another source of drainage. It is a great promoter of acidification because of its effects on run-off. Indeed, it is probably a more serious contributor to acidification of our rivers than the so-called acid rain.

    Finally, there are the pests — the mink, the goosanders and the seals. Seals arouse conflicting emotions in people who do not have the interests of salmon at heart. The Government seem at present to be relying on a document produced by the sea mammals research unit. That paper is based largely on research undertaken, curiously enough, at the kind of place where one would not have found many salmon for the seals to feed on at that time of the year. I know that my hon. Friend the Member for Crawley has taken a close interest in the problem, and I hope that he will have the opportunity to say and do something about it on another occasion.

    Against that background, it may be thought odd that I should also cavil at the absence of a quota on our own catches of salmon. Certainly it is not worthy that there is no quota imposed by our Government on the United Kingdom salmon catch. We are the largest producer of salmon in the European Community. The Greenlanders and the Faroese wonder why they should suffer under salmon quotas when we, as the largest producer country, cannot get round to imposing a quota on our own catch. The pressure for the acceptance of a quota will mount, and so it should, but the species must first survive for a quota to become a really effective defence.

    I agree that we must have action by the Government, but I disagree with the right hon. Member for Barnsley, Central that it is reasonable to suppose that a salmon-tagging scheme would prove as effective a defence here as it may have proved in Canada. In fact, I believe that the Canadians are having second thoughts about it. The French, however, are considering the possibility of introducing such a scheme, and it certainly has theoretical attractions. The difficulty is how to implement it in practice without creating a back door to the black market, which is the very thing that we are trying to prevent. How would the tags be controlled? How can poachers be prevented from obtaining tags? How will imports be controlled? How will fish from fish farms be dealt with? It would be very difficult for the Ministry of Agriculture, Fisheries and Food to propose legislation to implement such measures in so convincing a way that the House would pass it without challenge. I am sorry to have to say that, because I know that for the past two years the Department has honestly and genuinely been trying to see whether it could make a salmon-tagging scheme look convincing, and I and others have done all that we can to help.

    There is, however, an alternative which I believe would have an equally good effect but be much less cumbersome to administer. It is to reverse the onus of proof and to provide that anyone having a salmon in his possession must show legal title to it—a licence or permit to catch salmon, or a receipt to prove his title, whether the salmon be in a hotel deep freeze or in a council house freezer. Anyone who can show legal possession will have no cause to fear. Only people who cannot establish that legal entitlement will face further inquiries and possible prosecution.

    It has been a cherished principle of our law that the onus of proof should not be reversed without good cause, but in recent years there have been two examples of such a reversal. The first is in the Deer Acts. Secondly, under the Wildlife and Countryside (Amendment) Act anyone sending dogs underground is required to show that he is not digging for badgers. Personally, I do not take exception to that. I believe that the onus of proof could be transferred in the same way in this case. I hope that such provision will be foreshadowed in the Queen's Speech so that the poacher can be cut off from the market for stolen fish. I believe that that should be a priority.

    Something must also be done about the north-east drift net fishery—a problem which is confined to part of the United Kingdom salmon conservation issue. I do not agree that it should be stamped out entirely and at once, as some hon. Members wish, but I believe that it is reasonable to provide that the number of endorsees should be severely restricted and that the right to operate a net should apply only when the licensee is in the boat operating the net. That would have a powerful effect. I should also like use of the monofilament net in daylight to be completely outlawed. That, too, would have a powerful and interesting self-policing effect on the use of a device which it may prove harder to stamp out in English than in Scottish waters.

    Insistence that the owner of the licence should be in the boat with the drift net might put a considerable number of people out of work if the owner were temporarily unable to go out with the boat due to illness or some other cause. That problem would have to be faced.

    I accept that it could put a number of people out of that line of employment. Whether it would put them out of work altogether is another matter. If that type of fishery is restricted, it is inevitable that some people will be denied that occupation. In that context, my hon. Friend might reflect on the number of ghillies and others on Scottish rivers who are currently being put out of work by the north-east drift net fishery.

    A number of ghillies in my constituency have been given notice this year that their jobs are to disappear.

    If the income of an estate is diminished because it can no longer attract fishermen from England, Scotland, Wales, France, or wherever, to pay the traditional fishing rent because there are no fish to be caught, the ghillies' jobs will inevitably be at risk. No one is more aware of that than the unfortunate ghillies. I believe the river Tay never ran down to summer level at all this year, although that was purely due to the weather. My hon. Friend the Member for Scarborough (Sir M. Shaw) should bear in mind that his drift net fishermen can fish the sea throughout their limited season, but that the possibility of catching fish in rivers depends on the rivers being in order. I believe most salmon anglers in this country are quite prepared to face the consequence of a shift in employment from south of the border to the north. It is not difficult to imagine that for every job that might be lost because the licensee had to be on a boat which would be drift-netting off Northumberland, four or five jobs would be created in the constituency of my hon. Friend the Member for Tayside, North (Mr. Walker) and elsewhere in Scotland.

    Does my hon. Friend agree that we must bear in mind the importance of the employment of extra ghillies and the consequent opportunities for the whole of the Scottish industry?.

    I am grateful to my hon. Friend for raising that point. My hon. Friend the Member for Tayside, North is well placed, as he represents an area where all this happens. It is no good promoting Scottish rivers for salmon fishing if the salmon have already been swept up in the North sea's drift net fisheries. This is an important subject because of the employment opportunities that the salmon fishing industry can provide in areas where they are sorely needed, and for the conservation and protection of a scarce species from which many of us have drawn great pleasure, and which many of us enjoy watching as well as fishing for. Not every salmon angler wants to kill every fish he sees or catches — he wants to see fish; he wants to know they are there. What he does when he catches them is up to him. A chance must he a fine thing, and we badly need a chance for the salmon to survive.

    7.22 pm

    I also welcome the agreement and creation of the North Atlantic Salmon Conservation Organisation. As a Scot, I welcome the fact that its headquarters will be in Edinburgh. Several hon. Members have emphasised the importance of conservation measures, especially with a view to getting more fish going up our rivers. Several hon. Members, in particular the right hon. Member for Barnsley, Central (Mr. Mason), have mentioned the importance of salmon fishing to the local economies of many parts of Scotland, its importance to the tourist industry and the jobs that might be created directly and indirectly. The North sea drift net fishermen seem to be the Aunt Sally of the evening, and, as this debate can run for another four hours and eight minutes, if my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) manages to catch your eye, Mr. Deputy Speaker, he will have something to say on this important matter.

    We are all sensitive about jobs in our own communities, but I hope that none of us is so bold or brash as to say, "Jobs in my community at the expense of jobs in someone else's community".

    We are talking about fishing which has gone on since time immemorial. There was a vast increase in drift net salmon fishing in the 1960s and a form of licensing was introduced. It may be that further conservation measures will be needed, and licensing is often a means of reconciling conflicting interests. However, the hon. Member for Argyll and Bute (Mr. MacKay) last week in a Standing Committee lectured me on inshore Scottish fishing and the need for scientific evidence before conservation measures are taken. The Government will not proceed with such measures unless they have scientific evidence.

    Perhaps the Minister will state what scientific evidence the Government have on this matter, or whether they are commissioning any such evidence. One cannot help but see the obvious connection between drift netting in the north-east of England and its immediate impact on the river Tweed. However, there is surely not enough evidence to justify the statement that the loss of one job drift netting off the north-east coast of England could create four jobs for ghillies, jobs on the river Tay. I suspect that the impact declines the further north one goes.

    The hon. Gentleman must be aware of the evidence that shows that 90 per cent. of the fish caught off the north-east coast of England were destined for Scottish waters, including the Tay.

    I accept that 90 per cent. were destined for Scottish waters — most for the Tweed. The report also states that, if one takes account of non-catch fishing mortality, the total effect of English fishing in Scotland would be 7·5 per cent. This underlines the point that there is a need for sound evidence to avoid such generalised statements. The hon. Member for Dumfries (Sir H. Monro) mentioned the Solway firth. It is very difficult to see how it is affected by something on a completely different coast. More is involved than one drift net fishery and several of the other factors, such as poaching, have been mentioned.

    I am impressed with the organisation's first report. It intends to establish a scientific data base so that conservation measures might be more effective. Perhaps the Minister will tell us about the Government's funding of it.

    During the recess, I had an opportunity to visit a research laboratory in the constituency of the Minister, the hon. Member for Argyll and Bute. We discussed a whole host of problems, although admittedly not the salmon fishery, and it was clear that, like many other research laboratories which are funded substantially publicly, it is having to consider carefully what projects it can undertake because of funding costs. It is important to know what support the Government are giving this organisation.

    A ban on monofilament gill nets has been asked for. The Minister might confirm that the Inshore Fishing (Scotland) Act 1985 outlawed such fishing in Scotland. We had debates similar to this on the Report stage of that Bill. How many prosecutions have there been since that Bill was enacted?

    Salmon tagging has been considered at length in the Department. If it is proposed to take tagging a step further, I hope that the administrative and bureaucratic problems that it could pose for those involved in fish farming will be considered. A considerable volume of fish now go through fish farms in the north of Scotland and in my constituency. People involved are worried about those potential burdens, which could add significantly to their costs.

    We should consider other means of tackling poaching. I take what the hon. Member for Woking (Mr. Onslow) said about the balance of proof, but I wonder what measures might be involved. There would be howls of protest if it were suggested that the police should be empowered to search domestic deep freezes. All manner of safeguards would have to be considered.

    It would not be necessary for the police to make searches. Members of the public health department might come across salmon in a hotel's deep freeze and reasonably ask where they came from. If any type of enforcement is to be effective, it must be seen through to its logical conclusion.

    I am not certain whether that is possible. I cannot imagine public health authorities having similar access to the council house deep freeze which the hon. Gentleman also mentioned. It is important that we tackle poaching, but we must be careful about civil liberties implications before changing the burden of proof.

    I welcome the orders.

    7.30 pm

    This is a serious debate, and the more one hears the views of hon. Members the more one realises that perhaps we should have had a whole day's debate on this subject a long time ago. Perhaps we shall have.

    I was particularly interested in the remarks of my hon. Friend the Member for Woking (Mr. Onslow). I did not agree with all he said, but he put his finger on the chief problem—illegal fishing, wherever it may be found. His idea of possibly moving towards a quota system may be something for future consideration, but there is no point in having a quota system unless one solves the problem of illegal fishing. The result would be simply to drive everyone into illegal fishing, and that would make the matter worse rather than better.

    We all welcome the setting up in Scotland of the North Atlantic Salmon Conservation Organisation. As every speaker in this debate has said, it raises the whole question of salmon conservation. I am speaking on this subject because of the deep anxiety of many of my constituents. The river Esk is the only salmon river in Yorkshire and in recent years it has become almost denuded of salmon, particularly in its upper reaches. That has had serious consequences not only for those licensed fishermen who have paid their dues and expect proper sport, but also for the future of salmon stocks and the future management of the river.

    The activities of poachers have become so widespread that serious damage and inconvenience are being caused in the harbour and to the boats of the fishing fleet itself. In one instance the lifeboat was fouled by poaching equipment left lying in the water, an incident which in other circumstances could have been extremely serious for those for whom the lifeboat might have been launched. Much blame is being put upon my drift net fishermen. It is claimed that the chief cause of the decline in the number of salmon is the result, mainly, of excessive drift netting off the coast of north-east England. Let me examine this case first.

    It is claimed that there is no control over drift net fishing. Licensed drift netters are, in fact, closely regulated. My drift netters will shortly have to pay £425 for a licence, a vast increase over the cost a few years ago. Nets are restricted in length. In the case of Yorkshire it is 400 yd. The number of drift net licences issued by the Yorkshire water authority is limited to 29. The regulations are there all right, but the trouble is that fishermen are taking up drift netting without a licence.

    The hon. Gentleman mentioned the length of the nets—I think he said 400 yd. What is the depth of an average net?.

    I think it is 15 ft, but I am not absolutely certain. As I say, there are regulations, but fishermen are taking up drift netting without a licence. My licensed drift netters complain to me that little or nothing is done about it, not even, it is said, when offenders are pointed out to the bailiffs. One does not want to be hard on bailiffs because theirs is a difficult job. particularly with the law as it stands, but, when fishing of that sort goes on so obviously and nothing is done about it, it is tremendously discouraging, indeed almost inciting, to licensed drift netters. The complaint cannot be of a lack of regulation, but it must be said that there are grounds for serious complaint about lack of enforcement.

    My drift netters are represented on the river Esk management committee and contribute one penny in the pound of gross earnings from salmon fishing towards an Esk stocking fund. The drift netters and those seeking to manage the Esk are working as one because they do not believe their interests are inimical. It is claimed that my Yorkshire drift net fishermen catch the salmon on their way north. That is true, but the corollary is that the salmon running into the Esk are not caught by local drift netters —they tend not to run at the same time. Why, then, is there such a dangerous drop in the number of salmon in the Esk? It is because poaching has developed into big business, because it has become known that efforts to prevent it are ineffective, and because wholesale poaching, particularly in the lower reaches of the river, is highly profitable.

    All those connected with the river Esk—the riparian owners, the Esk management committee, the harbour committee and the fishermen—are united in believing that the cause is virtually uncontrolled poaching. The salmon get into the mouth of the river, but then they disappear. My hon. Friend the Member for Woking is right when he says that at night people dare not go anywhere near parts of the river. Some people who inadvertently go there and see what is going on pretend they have not seen anything and go away as fast as they can. It would be dangerous for them to do otherwise.

    The law and the regulations are in existence and the duties laid upon the water authorities by the 1975 Act are quite clear. However, in the case of my constituents those duties are not being carried out effectively, and the longer poaching is left to go unchecked the harder it will be to control. The water authorities will have to do their best to take effective action, or perhaps things have become so impossible that the law itself will have to be changed. I do not know which it should be, but something will have to be done about it now.

    It will take manpower, determination and money. There is not a water authority in existence which does not regret being responsible for looking after salmon waters. I have arranged a meeting later this month of interested parties with the chairman of the Yorkshire water authority to discuss action on the problem and we shall try to have some decisive action taken. The problem becomes more difficult year by year, and the longer such action is deferred the more difficult the problem will become to solve. Here we have a specific case in which the salmon have almost disappeared from a river which we know does not suffer from drift netting. Why should Scottish rivers be any different?

    I am convinced that the cause of the problem in Scotland is poaching, and, of course, the fish caught are not counted. As with the Esk, there will be many houses near the rivers of Scotland with deep freezers, far more deep freezers than any single household could want, and they will contain 13,14 or more salmon, caught we know not how but we can well guess. This is a serious problem and it has to be tackled. Poaching is the cause, poaching not only in the river but at sea as well. I say in all sincerity and without trying to be extreme that the licensed drift netters are not the culprits in this great problem.

    7.40 pm

    I thoroughly enjoyed the contribution of my right hon. Friend the Member for Barnsley, Central (Mr. Mason). It was an excellent summary of the case for conservation. My right hon. Friend is a conservationist. I know that because I go fishing with him. He goes out of his way to make sure that he does not catch any fish—and that is only trout! His rule for salmon is that after he has caught 20, he goes home. I shall adopt no such rule.

    Although I am on the council of the Atlantic Salmon Trust, my aim is not to speak for conservation. That is not where my interest lies, and I would be hypocritical if I said that. The hon. Member for Woking (Mr. Onslow) said that we liked to look at salmon. That frustrates me. I like to catch them. I want salmon in our rivers so that we can catch them. It is cant to talk merely in terms of conservation. We want salmon in abundance so that we have a better chance of catching them w hen we go fishing, and that is my starting point.

    There was some embarrassment on the Opposition Benches at the beginning of the debate because my hon. Friend the Member for East Lothian (Mr. Home Robertson) is a landowner and one of the gentry. I go from bad to worse by saying that he is a farmer and prosperous, but that should not mislead the House. One of the problems of arguing the case for salmon fishing is that it is associated only with the aristocracy and the gentry. That may be true of some rivers in Scotland, but it is not true of many places elsewhere.

    When I attend a branch meeting of the Union of Communication Workers, two or three members out of t