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Debtors (Scotland) Bill Lords

Volume 114: debated on Thursday 9 April 1987

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As amended (in the Standing Committee), considered.

New Clause 1

Replacement Of Warrant Sales By Debt Arbitration Service

'(1) Within twelve months of the enactment of this Act, the practice of poinding and warrant sales in connection with domestic debt shall be completely abolished and the Secretary of State shall lay before Parliament an order to set up a Debt Arbitration Service to deal with cases of domestic debt, where either the debtor or the creditor wishes to refer the matter to the Debt Arbitration Service.

(2)For the purposes of this Act, domestic debt means a debt incurred and owed by an individual, as distinct from a company or body corporate.

(3)The order under subsection (1) of this section shall he subject to affirmative approval of the House of Commons'. — [Mr. Canavan.]

Brought up, and read the First time.

5.7 pm

I beg to move, That the clause be read a Second time.

With this it will be convenient to take amendment No. 2, in clause 16, page 14, leave out lines 25 to line 7 on page 15 and insert—

'(2) All household goods belonging to a debtor shall he exempt from poinding.'.

When the Bill was first mentioned in the Queen's Speech last November, I gave it a qualified welcome because, with other hon. Members, I thought that it was long overdue that something should be done to change the law on warrant sales. However, the reason why I gave the Bill only a qualified welcome was that I feared that when it was published it would bring about only minor changes in the existing law, as has happened with these rather pussyfooting proposals, rather than seek the more radical solution of the outright abolition of warrant sales.

When people outside Scotland hear that we still have the practice of poinding and warrant sales, they wonder what sort of civilised society we live in when a sheriff officer can go along and batter on someone's door —in certain circumstances, batter down the door without that person even knowing—and proceed to earmark personal property and goods, to be the subject of a sale. At one time there was certainly much agreement on both sides of the House that something should be done to end this barbaric practice. Indeed, the Scottish Law Commission set up an investigation into the whole system well over a decade ago, but clearly it has been dragging its heels. I understand that its modest proposals are behind the Bill.

My new clause goes further than the Scottish Law Commission's recommendations and considerably further than the proposals in the Bill. The new clause seeks to abolish completely the practice of poinding and warrant sales in Scotland and to replace it with the much fairer system of debt arbitration. That would be in the interests of both debtor and consumer. Rather than try to rush the matter through, I am prepared to give the Secretary of State, the Solicitor-General for Scotland and their ministerial colleagues a 12-month period in which to introduce the appropriate prohibition and parliamentary order to set up the new system of debt arbitration.

I am sure that during the various stages of the Bill it has been suggested that warrant sales are no longer the problem that they once were. It is true that their frequency has decreased in recent years. That may well be partly because of parliamentary pressure from hon. Members, such as me and my late hon. Friend Jimmy Dempsey, who had the privilege to represent the constituency of Coatbridge and Airdrie, now Monklands, West. I pay tribute to my hon. Friend the Member for Monklands, West (Mr. Clarke) and his predecessor for their excellent work, and to the trade unions, such as SOGAT, which took direct action in refusing to advertise warrant sales. Partly because of such pressure, the incidence of warrant sales has decreased in recent years. Indeed, I do not know of a single warrant sale which has taken place in my constituency since I started to apply parliamentary pressure by introducing private Member's Bills.

Although we welcome the decreasing incidence of warrant sales, it is worth pointing out to the Solicitor-General for Scotland that poinding, advertising and the build-up to a warrant sale are a distressing experience, even if the sale is eventually called off. It is a form of legalised intimidation, public humiliation and punishment, rather than a constructive attempt to get a debt repaid.

Most of the debts are personal or domestic as distinct from debts incurred or owed by companies and bodies corporate. That is why my new clause refers only to personal or domestic debts. Most of them amount to less than £100 and are not contested. In the majority of cases the debtor admits that he or she has incurred the debt and is usually willing to make some effort to repay it. But all too often he or she cannot repay the debt, possibly because of a change of circumstance—for example, unemployment, sickness or a change in family circumstances. Certainly the Government must bear some of the responsibility in this respect, as high unemployment has been exacerbated by their economic policies.

5.15 pm

In the majority of cases there is no need to go trailing along to a sheriff court or any other court to prove the debt because the debt is admitted and the debtor is willing to repay it. Surely it makes sense to set up a debt arbitration service where both creditor and debtor can get together through an independent arbitrator and reach some sort of out-of-court settlement. If such a voluntary settlement fails, the debt arbitration officer could be given the power to enforce the repayment by instalments or, in the last resort, by the arrestment of wages.

In the past we have seen similar debts settled with some success by various arbitrators set up by Governments. The Advisory, Conciliation and Arbitration Service, for example, has had some success in settling industrial relations cases, and the rent officer system has in many cases led to the determination of a fair rent rather than an excessive one. Therefore, it seems that the introduction of the system of debt arbitration would be a reasonable and constructive way of dealing with the problem. Certainly it would be more constructive than the existing system of warrant sales or threatened warrant sales.

I have not yet seen the speech of the Solicitor-General for Scotland— and certainly I have not helped him to write it — but he will almost certainly refer to the possible expense of a debt arbitration scheme, but the warrant sales system is considerably expensive. Indeed, the expenses incurred through poinding, advertising and even the sale itself sometimes far outweigh the original debt. Constituents have come to me about expenses which have been 10 or 20 times the amount of the original debt. Therefore, the existing system does not make financial sense.

Moreover, the public purse could save itself court expenses. Obviously, people would go to the debt arbitration officer rather than to court, which would reduce some of the work load and expenses of the court system. If there is any serious threat of an increase in expenditure because of the new system, a levy could be made on credit companies, particularly big credit companies, which do not always act responsibly. Indeed, some act irresponsibly by encouraging people on low incomes to take on debts far beyond their means. Then, when circumstances change, whether through sickness, death in the family or unemployment, those people often find it absolutely impossible to repay the debt under the terms demanded by the credit companies. There may well be a case there for a levy on the credit companies to meet the expense of any new system.

As a long-time campaigner for this measure, I have made several previous attempts to introduce a private Member's Bill. I have checked Hansard for 3 June 1981 and looked at the sponsors I managed to get for my private Member's Bill, because I realise that on such a measure there could sometimes be an advantage in getting support from both sides of the House. Four Scottish Tory Members sponsored me, including Mr. David Myles—who is no longer with us here—his good and dear friend and neighbour the hon. Member for Banff and Buchan (Mr. McQuarrie) and their good friend the hon. Member for Tayside, North (Mr. Walker) as well as the hon. Member for Argyll and Bute (Mr. MacKay), who is now a Minister in the Scottish Office. Unfortunately, whether by accident or design, he is not here. If he were, obviously I should be urging him to support me with his voice and vote.

I appeal to the Solicitor-General, on the ground that there is a consensus within Scotland, irrespective of party political divisions in the House or in Scotland in general, to end this system. The vast majority of the people of Scotland want to end it. They do not want a tinkering with the system through these pussyfooting reforms proposed by the Government; they want complete abolition of the system. The system of warrant sales is seen as a barbaric, inhuman, medieval practice which has caused undue hardship to countless thousands of people and their families. It is high time that the House of Commons abolished it for ever.

I rise to support the new clause and the amendment. We are presumably talking about a small number of cases when we discuss warrant sales, and, as my hon. Friend the Member for Falkirk, West (Mr. Canavan) suggests, an arbitration service could play a useful role. The Solicitor-General knows that I am unhappy with the notion that a debtor's effects can be auctioned off in a local sales room. We disagree about the usefulness of such a measure, On Second Reading I said that holding the sale in an auction room was an improvement on a warrant sale being held in a debtor's house, but that it was an unsatisfactory arrangement because the stigma is still there and little money would be raised from such a sale given the rings that we know are organised by furniture dealers and others when such sales take place.

My hon. Friend's new clause is an even better proposal than that of removing the warrant sale from the debtor's house and taking it to the auction room. I believe that the concept of a debt arbitration service is good and constructive and is certainly worthy of consideration by this Government and their successors.

In addressing myself in the main to amendment No. 2, I must say that I welcome the reference by my hon. Friend the Member for Falkirk, West (Mr. Canavan) to my predecessor, the late Jimmy Dempsey. Jimmy Dempsey shared our repugnance for warrant sales in any form and my hon. Friend, whose comments were most generous and should be much appreciated, will know that on Second Reading, as well as in Committee, the Opposition placed on record very firmly the view that warrant sales in every shape or form ought to be abolished.

In saying that all household goods belonging to a debtor should be exempt from poinding, we are trying to give effect to the thinking expressed in the Scottish Law Commission's report, which obviously influenced the Government in drafting the Bill that they have put before the House. In Committee, I was left with the impression that certainly the Opposition wanted to see householders protected from humiliation and from the idea that sheriff officers can involve themselves in poinding various goods which are outlined in clause 16. Some are exempted: beds or bedding, household linen, and so on. The Solicitor General will recall that in Committee we had some doubts as to whether a washing machine might be the subject of exemption. To put the matter beyond any doubt, we thought it right to table this new clause making it clear that all household goods belonging to a debtor shall be exempt from poinding.

We believe that the Bill would be improved thereby and that assistance would be given to the debtor as well as to the creditor. The great mass of evidence that we have seen suggests that people find themselves in debt not because there is a willingness on their part to be in that position, but for other reasons. We believe that help is needed and that the legislation that we seek to introduce should be of assistance to the debtor and to the creditor in trying to find a solution to the problem by ensuring that the debt is paid, in time, without humiliating the householder or his family.

We believe that if the new clause were accepted, it would put this matter beyond question and, above all, remove any suggestion of humiliation in the way that has rightly been held in contempt by my hon. Friends the Members for Greenock and Port Glasgow (Dr. Godman) and Falkirk, West.

I suspect that I am suffering this afternoon for having pointed out on Second Reading that the hon. Member for Falkirk, West (Mr. Canavan) was not present. Nevertheless, in spite of the crack that I made then, I am grateful to the hon. Gentleman for putting forward this new clause on debt arbitration rather than the arrangements which we discussed in Committee.

As the hon. Gentleman may recall, The Labour party put forward certain proposals to the Scottish Law Commission during the course of its deliberations suggesting that there should be a debt arbitration service of some sort, and the Commissoner recorded the following in paragraph 2.85 of its report;
"It would appear that poindings and warrant sales"—
in relation to such a debt arbitration service—
"would not be permitted, though this is not entirely clear."
The hon Gentleman suggests the introduction of a debt arbitration service and the abolition in its entirety of the diligence of poinding and warrant sale. His colleagues have certainly been criticised during the passage of the Bill for failing to put forward any alternative of this character, and to that extent at least it is interesting that the hon. Gentleman should have done so. But it seems to me that there are a number of quite significant flaws in the way in which he has proposed it.

First, let me say that I am aware of the Bill that the hon. Gentleman introduced in 1981. There was some obscurity in that Bill about what would be required in terms of enforcement. The hon. Gentleman has changed his proposal from personal debt in his Bill in 1981 to domestic debt in this new clause. I think that I understand what is intended, but either definition would take us further into commercial matters than I suspect the hon. Gentleman intended. For instance, partners may in some circumstances be personally liable for the debts of the partnership. Those debts might thus be regarded as domestic within the meaning of the new clause.

5.30 pm

I rehearsed the arguments for and against the retention of poinding and sale at some length during the earlier stages of the Bill. I went into the arguments for reform rather than abolition in some detail on Second Reading. I do not propose to rehearse those arguments again. Suffice to say that the Scottish Law Commission advanced many cogent arguments against abolition in chapter 2 of its report, and the retention of a reformed procedure was the starting point of the recommendations in that report, and indeed that is the foundation on which the Bill is built.

I want to consider the somewhat unspecific debt arbitration service proposed by the hon. Member for Falkirk, West. I suppose that its purpose will be to arrange for payment by instalments and to interrupt enforcement of debts by the diligences still available to creditors. The hon. Gentleman may want the Secretary of State to set up an arbitration service similar to that proposed by the Scottish Consumer Council. Indeed, that might be a more workable system than that suggested by the hon. Gentleman. As the hon. Gentleman has developed his argument, I understand that he wants to get rid of all poinding and warrant sales. He does not simply want that system as an opt-out arrangement as the Scottish Consumer Council suggested.

I understand how a debt arbitration system would work in cases where people had a multiplicity of debts and no significant assets out of which to make payment, but the hon. Gentleman has not addressed himself to the debtor —perhaps the hon. Member for Falkirk, West himself—who is simply unco-operative, but who has sufficient means to pay his debts. Such a person may simply be unco-operative over the payments due. Such a debtor may not be in any real significant financial difficulty; he may simply decline to pay. The hon. Member for Falkirk, West has not made it clear what will happen under a debt arbitration system if a debtor simply declines to participate in that arrangement for debt arbitration. Is that person entitled simply to shrug his shoulders and go off?

I suppose that it is possible, given the very much improved arrangements for arrestment in a later part of the Bill, that the system could be operated. However, what will happen when someone has a valuable moveable asset —for example, a Van Gogh hanging on the wall of his house? In such a circumstance, if the hon. Gentleman's scheme were followed, there would be no way in which the owner of the Van Gogh's perfectly lawful creditors would be able to get satisfaction for the debts owed to them.

The new clause makes it perfectly clear that either the debtor or the creditor can refer the matter to the debt arbitration service in a case such as that outlined by the Solicitor-General, in which a fairly rich debtor is simply being unco-operative in paying the debt. There is nothing to stop the creditor going to the debt arbitration service.

During my speech, I said that the debt arbitration officer could, and in my view should, be given the power to enforce the repayment of the debt in cases where there is clearly an ability to repay the debt, but the debtor is unwilling to pay. I do not know of anyone who has a Van Gogh or a Rembrandt who does not have a few bob in the bank as well. It would be more practical, to achieve a constructive repayment of the debt, to arrest that person's wages or unearned income or whatever than to grab the Rembrandt or Van Gogh and to sell it at a warrant sale. Frankly, the Solicitor-General's example was ridiculous.

The hon. Gentleman is trying to slip around the point. He will not face the fact that the example that he has just given would require the individual — whom he describes as the debt arbitration officer — to have power to enforce the system. The hon. Gentleman must face this point. It is a matter of intellectual argument. What powers of enforcement would he grant to that individual? If a debtor simply says that he accepts that he owes the debt but will not pay it, what will happen then? An arrestment may be made, but that is elaborate and clumsy. If someone owes a large sum of money——

What did the Government do to the National Union of Mineworkers? They seized its bloody funds.

I do not think that I will go down that particular path; nor will I adopt the hon. Gentleman's unparliamentary language.

Is the situation that my hon. and learned Friend has described, in which an arbitrator has no power, similar to that of a Chairman of a Committee of this House who has no power in Committee to eject an hon. Member who is not a member of that Committee, but who is disrupting the proceedings of that Committee and of the House?

I grasp my hon. Friend's allusion, but Opposition Members may rest assured that I shall not follow my hon. Friend down that route.

There is a substantial difficulty. As I said to the hon. Member for Falkirk, West a moment ago, bodies such as the Scottish Consumer Council have carefully considered the possibility of a debt arbitration service. However, those bodies did not slip away from facing up to the difficulty that, if such a system existed, it could be introduced only as an option or alternative. It would not be possible to introduce a coherent and workable scheme if, as an ultimate remedy, no form of enforcement was retained through the reformed procedures of poinding and warrant sales.

The hon. Member for Falkirk, West said that if we talk to anyone outside Scotland, that person will not have heard of poinding or warrant sales. That is correct. I do not know of any other system with practices called poinding or warrant sales. However, there is no mature legal system—as far as I am aware—that does not have at least a comparable system.

The hon. Member for Monklands, West (Mr. Clarke) spoke briefly about amendment No. 2:
"All household goods belonging to a debtor shall be exempt from poinding."
We had considerable discussion about that in Committee. I immediately have difficulty about the provision that the hon. Gentleman suggests. What are household goods?

The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) is shaking his head in a knowledgeable way. However, according to amendment No. 2, anything that is contained in a house, whatever its value, whatever its use, or whatever reasonable use is required of it—

The hon. Gentleman wants to pursue my example. If there is a valuable painting on a wall, is that "household goods"?

It is highly arguable whether it is. If the hon. Member for Roxburgh and Berwickshire says that it is not part of household goods, he is effectively saying that we should consider the list in clause 16 of the Bill and decide that household goods do not include paintings on walls, satin pillows or such things. Rather, they are goods that are reasonably required for people to carry on their lives. The Government and the Scottish Law Commission believe that——

No, I want to finish my point.

We have said that the proper way to approach the matter is to have an extensive list— one that is much more extensive than the previous list. For example, according to amendment No. 2, if a warehouse were full of refrigerators and there was a commercial debt, there can be no doubt that refrigerators are household goods. In such circumstances, all those items would be exempted from poinding and ultimately from warrant sales.

The hon. Member for Monklands, West has made several efforts to extend the list in clause 16 and to modify some of its provisions. I have given some examples showing how difficult it would be to rely on such a broad test. If we did so, we would be considering what are truly commercial debts. Far from there being less difficulty, there is a grave possibility that we would have to leave it to the courts in circumstance after circumstance to decide whether paintings or other items were truly household goods. Far from Parliament or the Scottish Law Commission deciding what should be included in the list, effectively we would be asking the courts to determine for us what should be included in the definition of household goods.

In Committee, the hon. and learned Gentleman did not have much difficulty in explaining to my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), who had some doubts about whether a washing machine was exempt, that it was. Why is the hon. and learned Gentleman so confident about that? Where does a dish-washing machine figure in the Government's thinking? In the absence of a clear explanation, does the hon. and learned Gentleman not feel that "household goods" is a much clearer definition than what appears in clause 16?

We are going to move quite a long way from the amendment. Clause 16(2) contains an extensive list of what is required. I thought that the right hon. Member for Glasgow, Govan (Mr. Millan) understood from my answer that we did not include the term "washing machine" but relied on a broader definition. We wanted to ensure that we were talking not simply about a washing machine, rather than a spin drier—or, to develop the technology of the times, the two incorporated in a single appliance, with the problem of deciding whether it was or was not a washing machine. Accordingly, we decided that it was safer to use the broader definition in clause 16(2).

I have said why I do not accept the view of the hon. Member for Falkirk, West of a debt arbitration service. I am surprised at the approach of the hon. Member for Monklands, West, who fought valiantly in Committee to refine clause 16(2). He now shrugs his shoulders and says that all household goods are to be exempted. That would mean that the courts would have to decide what should or should not be included.

I have a great deal of sympathy with the point raised by my hon. Friend the Member for Monklands, West (Mr. Clarke) because of the simplicity it offers. I notice that under clause 16(3) the Lord Advocate may add to or delete from the list from time to time. The hon. and learned Gentleman knows very well that it is a long time since we have heard about an exercise in diligence of this kind. Work has been going on for 17 or 18 years on the present exercise. Would the Lord Advocate be prepared to add to or delete from the list annually? Things change rapidly. I, for one, should be greatly reassured if the Lord Advocate were to do this annually.

I cannot give the right hon. Gentleman an undertaking that the Lord Advocate will do so annually. But the right hon. Gentleman clearly appreciates the provisions of clause 16(3), which states:

"The Lord Advocate may by regulations add to the list… delete or vary any of the items".
I cannot immediately envisage any item that needs to be added to or deleted from the list. However, if at any time it is thought that the list should be added to or varied, that can be done without any 10-year consideration of the item. It can be done immediately. I do not envisage that, if the Lord Advocate decided that an item should be added to the list, and accordingly excluded from what might be subject to poinding and warrant sales, it would excite much controversy in the House.

5.45 pm

I do not see any difficulty about the interpretation of "household goods". The Solicitor-General for Scotland is talking absolute rubbish. Under the prohibited items, page 15 of the Bill lists

"tools used for maintenance or repair of the dwellinghouse or of household articles."
"Household articles" is clear by definition and is not subject to interpretation by a sheriff. What, therefore, is wrong with the term "household goods", used by my hon. Friend the Member for Monklands, West (Mr. Clarke)?

I know that the hon. Gentleman had a lot to think about as I was speaking, following my attack on his proposed debt arbitration service.

If I am provoking the hon. Gentleman, I withdraw. I want to get on with the debate. The hon. Gentleman does not seem to have grasped one problem.

If amendment No. 2 were to be accepted, not only would household goods in the debtor's home be excluded from poinding but, if the debtor happened to be a commercial man who had a warehouse full of refrigerators, hi-fis, and so on, those items would not be subject to poinding and warrant sale. For that reason, I hope that the hon. Member for Falkirk, West is prepared to withdraw the motion and new clause. If the hon. Members for Falkirk, West and for Monklands, West continue to have any misgivings about what is excluded in clause 16(2) from poinding and warrant sales, an opportunity remains immediately the Bill becomes law to make representations to the Lord Advocate to add to or vary by regulation what is included in the list.

Question put and negatived.

Clause 5

Time To Pay Orders

I beg to move amendment No. 1, in page 5, line 1, leave out from first 'arrestment' to 'has' in line 2.

This is a technical amendment designed to improve the clarity of the clause.

Amendment agreed to.

Clause 32

Location Of Sale

I beg to move amendment No. 4, in page 25, line 25, leave out from 'except' to end of line 27 and insert

'in the case where an auction room or suitable alternative premises is not available in the vicinity.'.
The amendment is dear to the hearts of a number of my hon. Friends, especially my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman), who expressed some of his opinions earlier today. We are confused about the Government's thinking on where the sale of a person's goods should take place. We do not support the view that it should take place in the house. We resisted the Government's thinking so far as we could on Second Reading and in Committee but could not persuade the Government to share our views.

On Second Reading, the Solicitor-General for Scotland distinguished between circumstances in, for example, the constituency of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) and circumstances in my constituency. Ever since, even after the hon. and learned Gentleman's explanation, I have been thinking about exactly what he meant. In an endeavour to co-operate with his thinking, I suggest that this amendment might be acceptable. It would mean that a sale would not take place in a person's house, even if he had been persuaded against his wishes to hold it there. Even if he exercised all the rights that the Bill would give him to consult with other occupiers, and so on, it would not remove the stigma which long remains after a sale takes place in a person's house. Therefore, in the light of the Government's logic, in so far as we could understand it, there was virtually no case for insisting that a sale should take place in a person's house. We are, therefore, offering the option in this amendment, solely in circumstances where an auction room or other suitable alternative premises is available in the vicinity, for such a sale to take place.

What we have tried to do is to simplify the whole exercise and to introduce as much dignity as we can into these proceedings. We feel that if there is an option available, although the Solicitor-General will say that it might cost money, when set against the humiliation that would be guaranteed if a house is used, the cost of an auction room is the lesser of the two evils. In that spirit I hope that the Solicitor-General will accept the amendment.

This amendment removes the requirement for the written consent of the debtor or occupier to the sale in a dwelling-house and allows such sales to take place where an auction room or suitable alternative premises is not available in the vicinity. With respect to the hon. Gentleman, I think something has gone slightly wrong with his amendment because it removes the critical or crucial requirement for the debtor's or occupier's written consent to a sale in a dwelling-house. I do not think the hon. Gentleman intended the amendment to come out in that way.

If the amendment were to be effected, there would be the opportunity for a sale in a dwelling-house if there were no alternative auction rooms available, but it would remove the requirement for consent. As I said both at Second Reading and in Committee, the circumstances in which a warrant sale might take place in a house are very limited. We believe that if such a sale is to take place, it must be not only with the consent of the debtor but also that of the occupier, who might be a different person in many circumstances.

I am not trying to twist the hon. Gentleman's tail purely for the sheer pleasure of it, but the effect of what he has put down would achieve an objective that is wholly contrary to what he is trying to do. In certain circumstances it might be far more damaging to a debtor than what the Government are proposing.

I am always anxious to reciprocate the generosity that we receive from the Government side of the House, but the Solicitor-General has misunderstood the amendment. The effect of this amendment would underscore our opinion that these sales should not be taking place in homes or houses in any case. If we argue and pursue the principle that it is wrong for sales to take place in a given house, there is no need to qualify that argument by saying that one ought to consult the occupier. The basic thrust of the amendment is that there should not be sales in houses at all unless it can be shown that alternative and suitable premises are not available, so that the sale can take place.

I think the hon. Gentleman is not quite understanding this. Under what we have proposed, where no auction room is immediately available, for example in the north of Scotland, if the debtor or occupier said, "No, you cannot have a warrant sale and I refuse to consent to a warrant sale in the house," steps would have to be taken to get the goods to an auction room, however far away it was.

Curiously, under the hon. Gentleman's proposal, it would be possible in a rural area, where there is no auction room available, to press ahead with a warrant sale without any consideration of whether the debtor or occupier consents. The hon. Gentleman shakes his head but I trust that the penny is beginning to drop with him and that that is a consequence that he cannot have intended to bring about by his amendment.

We understand that the practical ordinary circumstance will be that a warrant sale will take place in an auction room. We accept that that is the most humane and sensible way to approach it, to secure the anonymity of the debtor and avoid personal humiliation and embarrassment. It is only where the debtor or occupier consents—and there may be good reason for that, if he is leaving the neighbourhood and wants to get as much as possible for the goods without the cost of taking them to an auction room — that he might be prepared, but could not be forced, to have a warrant sale in his home.

There is an improvement with the shift to an auction room because it does guarantee anonymity. Is the Solicitor-General satisfied that this Bill protects the interests of a debtor when such a sale takes place in an auction room?

Yes, and that is a point that I ought to have picked up from the hon. Gentleman's earlier intervention. He possibly has not appreciated that once a debtor's goods go to an auction room, the debtor will be wholly anonymous. Nothing will be tagged on to the goods to indicate that they were taken under warrant sale from such a debtor at such an address. That humiliation will not occur. I am satisfied that once the goods go to the warrant sale, the debtor will not be identified in any way, nor will his goods be identified to the public at large as having belonged to him. I hope that the hon. Gentleman will be prepared, now that I have given that explanation, to withdraw his amendment.

Amendment, by leave, withdrawn.

Clause 47

General Effect Of Earnings Arrestment

I beg to move amendment No. 5, in page 37, line 16, after 'recalled', insert

'or abandoned by the creditor.'.

These are technical amendments designed to remove any doubts that an earnings arrestment or a current maintenance arrestment ceases to have effect on its abandonment by the creditor.

Amendment agreed to.

Clause 49

Deductions From Net Earnings To Be Made By Employer

I beg to move amendment No. 6, in page 37, line 38, after '(1)' insert 'Subject to subsection 6(a) below'.

With this we will take the following amendments: No. 7, in page 38, line 15, after `(2)', insert

'Subject to subsection 6(a) below'.

No. 8, in page 38, line 27, after '(3)' insert

'Subject to subsection 6(a) below'.

No. 9, in page 38, line 43, after '(4)' insert

'Subject to subsection 6(a) below'.

No. 10, in page 39, line 1, after '(5)' insert

'Subject to subsection 6(a) below'.

No. 11, in page 39, line 7, after '(6)' insert

'Subject to subsection 6(a) below'.

No. 12, in page 39, line 26, at end insert—

'(6) (a) The Court may, on the application of the debtor, reduce the amounts payable under subsections (1) to (6) above.'.

These amendments deal with the sliding scale of payments that can be deducted from a debtor's earnings under schedule 2 to the Bill. When I first read the Bill, I was worried about the mechanical nature of the arrangements that are being made. I do not object to that in principle, but I was worried that there is no exception to the arrangements that are laid down in the Bill. I now regret that I did not raise my concern on Second Reading and in Committee. I thought then that I was slightly too worried about the arrangements in the schedule.

Following the Committee Stage, the hon. Members who sat on the Committee received a letter from the Scottish Association of Citizens Advice Bureaux expressing similar concerns about the fact that there is no provision in the Bill for an exception to the sliding scale arrangements. That is the reason why I put down the amendments.

6 pm

Of course, we all recognise that the arrangements under the Bill generally are a considerable improvement. No one disputes that. If amounts are to be set down in the legislation, they have to be on a sliding scale because they have to take account of the debtor's income. Nevertheless, the figures in schedule 2 that can be deducted weekly are considerable; similar substantial amounts are calculated on a monthly basis. For someone with weekly earnings exceeding £280 but not exceeding £300, the deduction is £83. That is a very large sum to deduct from anyone's income. Anyone who has a big weekly wage is also likely to have large weekly commitments such as a mortgage payment or rent which it may not be easy to set aside. The figures in the schedule are substantial and take no account of the personal circumstances of the debtor.

The purpose of my amendments is to allow a debtor to make application to the court to have the payments reduced. I would not expect such a provision to he used frequently. If it were, I would not expect the court always to give a favourable response to an application; otherwise, there would be little point in writing a sliding scale into the legislation. Nevertheless, flexibility would be preferable to the provision in the Bill.

It is for that reason that I tabled the amendments. As I said, this part of the Bill has worried me from the beginning. I regret that I did not raise it in Committee but it is better to do it now than not at all. The provisions are causing concern elsewhere among people who are familiar with the working of such arrangements. Therefore, it is well that their concerns should be ventilated.

I see force in what the right hon. Member for Glasgow, Govan (Mr. Millan) has said but I shall not recommend acceptance of the amendment. After a brief explanation, I hope that he will appreciate that the result he seeks can be achieved by a different route. I should point out to him that the Scottish Law Commission considered whether the courts should have the power to vary deductions in paragraphs 6.7 and 6.8 of its report. It concluded that the courts should not have this power, for reasons of practicality. Many earnings arrestments would subsist for only a few months, so that applications for variations of deductions would have to be disposed of quickly; evaluation of the debtor's means and liabilities, however, which is the basis of any application, could take a considerable time.

Moreover, if debtors became aware of the court's powers, there was anxiety that there might be a flood of applications. Clearly, the right hon. Gentleman was aware that that would be an undesirable development. Accordingly, the advantage of simplicity and ease of operation of earnings arrestment would be lost.

From the discussion in Committee, I think we all appreciated that for arrestment of earnings to work satisfactorily it was desirable that the minimum burden should be imposed on the employer, not least because of the difficulties it can cause between employee and employer if the arrangement is too elaborate or clumsy.

What I hope the right hon. Gentleman will appreciate, if he has not done so already. is that if an arrangement is made for earnings arrestment and the debtor finds himself in difficulty in making a payment according to the schedule set out in the Bill, there is an opportunity elsewhere in the Bill for him to apply to the court for a time-to-pay order, proposing a lower rate of payment and a recall of the earnings arrestment. I suggest to the right hon. Gentleman that that will meet his objective. If a debtor found that he could not make a payment, he could make application in this way. If he had a good case, the earnings arrestment would be suspended and a lower rate of payment by instalment rather than by earnings arrestment could be achieved.

If we are to move away from the statutory schedule of what should be deducted, the advantage of using the time-to-pay order is that the employer would not be asked to apply a different figure and would not have to instruct his or her bookkeeper to make a further deduction. That is a simple and effective way to deal with the matter. I hope I have satisfied the right hon. Gentleman that we take his point, but that it is appropriately dealt with in the Bill.

I am grateful for the explanation. I had not realised on reading the Bill that once the process was in operation it would still be open to the debtor to apply to the court for a different arrangement. Whether in practice there would be time for that to be done successfully before the whole debt had been recovered must be doubtful in most cases, but I am satisfied with the explanation given, that there is a mechanism available which I had not understood before. In those circumstances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 73

Interpretation Of Part Iii

I beg to move amendment No. 14, in page 57, line 23, at end insert 'or'.

With this it will be convenient to discuss the following amendments: No. 15, in page 57, line 29. leave out from 'employment' to end of line 30.

No. 16, in page 58, line 4, at end insert—
'(h) statutory sick pay.'.

The purpose of these amendments is to take statutory sick pay out of the list of items which are included in earnings for arrestment purposes and put it into the list of items which are not to be treated as earnings in the arrestment arrangements. Again I am obliged to the Scottish Association of Citizens Advice Bureaux for pointing this out, because I missed it on reading the Bill initially.

I find it odd that statutory sick pay, which is like a social security benefit, should be included in the determination of earnings for arrestment purposes. Under the clause, other pensions, allowances or benefits payable under social security legislation are excluded. In those circumstances I do not understand why statutory sick pay should be included. In fairness, statutory sick pay should be excluded. I hope the Solicitor-General will agree to statutory sick pay being transferred to the category of items which are not to be included as earnings for arrestment purposes.

Hon. Members will be aware that the Bill makes a deliberate and careful distinction between payments—pensions, allowances and benefits — made under social security legislation and statutory sick pay. Payments under social security legislation are expressly provided to be not equivalent to earnings. Such payments are therefore quite rightly not taken into account in the Bill's provisions about which deductions are to be made under an earnings arrestment from weekly or monthly earnings.

On the other hand, statutory sick pay is payable in replacement of earnings when an employee is sick. It is therefore entirely reasonable and logical that what an employee receives from his employer, whether as earned wages or statutory sick pay, should be treated as earnings for the purposes of the Bill's provisions. That was the intention of the Scottish Law Commission, which it expressed in paragraph 6.36 of its report. The provisions simply bring Scotland into line with England and Wales.

In 1985 the relevant English legislation about attachment of earnings was amended by the Social Security Act 1985. This House and the other House have accepted the principle that statutory sick pay is to be equated with earnings. For that reason it is difficult to see why the right hon. Member for Glasgow, Govan (Mr. Millan) foresees any distinction being brought about between Scotland and the rest of the country.

The system that we have is designed to safeguard the interests of the debtor and creditor by ensuring that regular payments are made to the creditor to reduce the debt. The regular instalments are of an amount which the debtor can be reasonably expected to contribute. This scheme would be disrupted if, in a week in which the employee was sick, no deductions from his earnings were to be made. It would produce quite unnecessary complications for the employer — who must operate the arrestments — and the employee. The disruption in the smooth running of earnings arrestment is not necessary or justifiable on the ground of principle. The right hon. Member for Govan probably is aware that the Scottish Association of Citizens Advice Bureaux has made that point.

What should be made clear is that if deductions are to be made from statutory sick pay they should be on the basis of the net earnings as set out in the schedule to the Bill. The amount of deduction would not continue at the rate appropriate to the wages received prior the period of sickness.

As the right hon. Gentleman will appreciate, it is not just statutory sick pay arrangements that are made; certain additional sick pay arrangements are also made. If what the right hon. Member suggested were to be incorporated in the Bill it would leave the employer in the extremely complicated position of trying to work out exactly what was to be included in earnings, from which a deduction could be made, and what was to be excluded.

On that basis I hope that the right hon. Gentleman will withdraw his amendment.

I rise because I was not quick enough to catch the eye of Solicitor-General for Scotland. Am I right in assuming that the new statutory maternity pay would come under the social security legislation, to which he adverted, and therefore would be exempt? That is a detailed point, so if he cannot answer it now I should like some assurance at a later date.

I cannot be certain on this point. If the hon. Gentleman wants me to pursue it, I shall write to him.

I am not convinced by the argument of the Solicitor-General for Scotland. I did not mention any distinction between Scotland and England; I was not aware that there was a difference. The argument that Scotland must be brought into line with England for consistency reasons is an unattractive one. It persuades me that my amendment is a good one.

Statutory sick pay is what would otherwise be a national insurance benefit. The Solicitor-General for Scotland shakes his head, but that is what it is. It puts a certain obligation on the employer in circumstances where previously national insurance benefits were paid. It should be included, analagously, with national insurance benefits in the items which are excluded from the definition of earnings for the purposes of this clause. I am not persuaded by the argument of the Solicitor-General for Scotland and I feel disposed to take this to a Division.

Amendment negatived.

6.15 pm

I must apologise to the House because I omitted to deal with amendment No. 13. Will the Solicitor-General for Scotland please move it formally?

Amendment made: No. 13, in clause 51, page 40, line 28, at end insert 'or abandoned by the creditor.'. — [The Solicitor-General for Scotland.]

Clause 101

Adjudication For Debt

I beg to move, amendment No. 17, in page 73, line 41, after first 'debt', insert

'(other than an auction under section 23(5) of the Conveyancing (Scotland) Act 1924)'.

With this it will be convenient to take Government amendment No. 18.

Amendment agreed to

Amendment made: No. 18, in page 73, line 43, at end insert—

'(aa) the debt is a debitum fundi; or'.;—[The Solicitor-General for Scotland.]

Order for Third Reading read.—[Queen's Consent on behalf of the Crown, signified.]

6.18 pm

I beg to move, That the Bill be now read the Third time.

I should like to thank right hon. and hon. Members for the general welcome that they have given the Bill. The welcome was not as unqualified as we might have wished, but nevertheless it ensured that consideration of the Bill both here and in Committee proceeded in a constructive manner.

As I mentioned in Committee, the Bill was dealt with expeditiously, but that did not prevent us giving a good airing to the main points at issue. I am grateful to my hon. Friends for their contributions and particularly to the Scottish Law Commission. It was a long time in gestation of these proposals, but now that we have concluded consideration of them, I am sure that in Scotland it will be considered that its deliberations and our own have been worthwhile in bringing about a reform of this part of the private law of Scotland which has been long awaited. Much of the humiliation and embarrassment that has been at the centre of attention in recent years as a result of warrant sales will be part of our history and not part of our present practice.

6.19 pm

It would be churlish and ungracious of me not to acknowledge that the Bill is a substantial improvement on the present system. Although I have a number of serious reservations about it, I welcome the Bill and I hope that it will become an Act in the fulness of time. As the Solicitor-General for Scotland, my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) and my hon. Friend the Member for Glasgow, Provan (Mr. Brown) know, we have been opposed to the present system for many years. It is humiliating to ordinary people and is fair neither to debtor nor creditor. We still have some substantial reservations about it and about debt arrangements. We hope that the Solicitor-General will keep an open mind on that.

We have serious reservations on the whole question of whether warrant sales should still continue. Over the past few weeks the Solicitor-General has tweaked our tails by asking what we have in mind to put in its place. If he pressed me too hard I would have to say that I would go and ask my noble and learned Friend the Lord Morton of Shuna. That is the best answer I can think of at the moment.

The only other reservation I have is a purely personal one. The only private Member's Bill that I have got through the House in the past 23 years is now being repealed by this Bill, which I welcome. I will not have my name on the statute book ever again but, that apart, I give a general welcome to the Bill.

6.21 pm

I thank my right hon. Friend the Member for Glagow, Rutherglen (Mr. MacKenzie) who was extremely helpful throughout our proceedings on the Bill, as was my right hon. Friend the Member for Glasgow. Govan (Mr. Millan). I would also like to thank my other hon. Friends for the contribution they have made to our constructive response to the Government's Bill.

We said on Second Reading that we welcome the Bill, and we do. In Committee we attempted to offer some constructive suggestions and we regret that the Solicitor-General for Scotland did not find it possible to accept all our proposals. Nevertheless, it would be churlish not to acknowledge that the Bill is a progressive measure. We would, as the hon. and learned Gentleman knows, have acted differently on matters such as medical aid. I will not go any further on that because I am worried about his blood pressure. We might even have gone further on the arrangements which the Law Commission suggested about multiple debt. We would have gone much further on many other aspects of the recommendations of the Law Commission. We still feel a repugnance about having any sales at all in a household.

However, that said, there is no doubt that, given some of the scars of the past and some of the social stigmas which were inflicted upon families and upon communities, the Bill as it now stands does represent progress. For our part we shall represent our views as the Bill is enacted and we shall monitor the legislation. We regard it as an extremely helpful Bill and we have said so at each stage of its consideration. We also feel — this should be put on record — that it represents a framework for future legislation. I look forward to the Labour Government that we can expect in the not too distant future, as readers of The Guardian will have noted this morning. When that day comes we shall be well on our way towards the abolition of warrant sales, which Opposition Members see as the ultimate and urgent objective.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.

Pilotage Bill Lords

Considered in Committee.

[MR. HAROLD WALKER in the Chair]

Clause 1

Meaning Of "Competent Harbour Authority" And "Harbour"

6.23 pm

I beg to move amendment No. 1, in page 1, line 15, after 'and', insert `subject to subsection (1A) below,'.

With this it will be convenient to consider the following amendments: No. 2, in page 1, line 19, at end insert—

'(1A) Where any part of a harbour authority's harbour is contiguous to an area which (apart from this subsection) is not within its harbour or the harbour of any other competent harbour authority but which is within an active former pilotage district, any reference in this Act to the authority's harbour or its approaches shall, subject to any order made under subsection (3) below, include a reference to that area; and where by virtue of this subsection an area is included in the harbour of more than one harbour authority, those authorities shall exercise their pilotage functions in relation to that area jointly.'.

No. 4, in page 2, line 11, leave out subsection (3) and


'(3) If the Secretary of State considers that it is not necessary in the interests of efficiency and safety of navigation:
  • (a) that a competent harbour authority should exercise pilotage functions as respects any area or part of any area which is included in its harbour by virtue of subsection (1A) above, he may by order exclude that area or part from the area of its harbour; or
  • (b) for a competent harbour authority to exercise pilotage functions as respects its harbour, he may by order provide that that authority shall cease to be a competent harbour authority for the purposes of this Act;
  • and the Secretary of State may in any case where he considers that it is necessary in the interests of efficiency and safety of navigation that a competent harbour authority should exercise pilotage functions as respects any harbour authority's harbour he may by order provide that this Act shall apply to that competent harbour authority as if its harbour included that other harbour.'.

    No. 45, in clause 12, page 11, line 5, after ' (a)' insert

    'apart from section 1(1 A) above,'.

    Clause 1 ensures that responsibility for considering pilotage requirements is placed on the appropriate harbour authorities. The clause empowers the Secretary of State, where there are likely to be overlapping or conflicting jurisdictions between different harbour authorities, to provide by order that designated harbour authorities should exercise functions that would otherwise be enjoyed by another harbour authority.

    As the Bill stands, the present pilotage limits will be drawn solely by reference to the relevant harbour limits. That will mean a fragmented pilotage service in the Thames estuary. This is especially relevant to the maintenance of maritime safety as it will leave areas of hazardous waters outside the proposed limits for compulsory pilotage.

    As we all know, the Thames estuary is an area of comparatively shallow water, heavily used by all sorts of traffic such as chemical carriers, container ships, supertankers and passenger ferries at the mouth of the Thames just 10 miles off shore. That ought not to be left to commercial considerations alone. In order to reach the oil wharves on the tide, deep-draughted tankers drawing up to 45 ft and carrying 100,000 tonnes of oil must negotiate the area south of the Trinity buoy at low water with only 4 ft under-keel clearance. The bottom there is notoriously unstable and subject to sand waves. The navigable channel is only about half a mile wide at best and requires a constant update of knowledge. There is no discernible radar picture and it is just 12 miles off the Essex coast, being some 15 miles seaward of the Port of London authority limit.

    Do the Government really consider that the pilotage can be safely withdrawn from that area, which is very busy and close to the population centres around Margate and the north Kent coast as well as Essex? It is also a well-used fishing ground.

    Immediately north of the Sunk and 10 miles beyond the Harwich harbour board limit is the approach channel to the Haven ports of Ipswich, Harwich and Felixstowe. Ships of up to 13 m draught have to navigate there, dependent on the rise of the tide, with just 1 m under-keel clearance in a channel half a mile wide in a cross tide to the busiest port in the United Kingdom. All in all, that, arguably the busiest stretch of water off our shores, is a somewhat hazardous area in which to navigate. Yet, in the proposed legislation, it falls into no man's land.

    The sea is an unforgiving element, as we have learned just recently to our cost in the tragic ferry disaster. We must not take unnecessary risks. That is why the amendments to clause 1 will maintain the present pilotage limits allowing competent harbour authorities to reduce pilotage limit only upon application to the Secretary of State. That will give effect to the Select Committee's recommendation that initially harbour authorities should take over responsibility for pilotage districts as they presently exist, and harbour authorities which consider that the pilotage districts may he safely reduced should have to seek parliamentary approval.

    Clause 12 deals with joint arrangements. The amendment to the clause is consequential to the new inserted subsection of clause 1(1A). It ensures that any provision for joint arrangements made under clause 12 does not affect the mandatory requirement for joint arrangements under clause 1.

    I hope, in the interests of safety alone, that the Minister will pay attention to the amendments I have moved, and that he will accept them.

    I want to intervene on a point of legality to find out whether the competent harbour authorities are to include the Queen's harbourmasters. It seems that there may be a difference of opinion here because in my part of southern England there are four competent harbour authorities but there is also a Queen's harbourmaster.

    I wish to ask the Minister a question about the clause, with which I have a great deal of sympathy. My question concerns the Minches. If the clause were agreed to, would the Stornoway authority be the competent harbour authority? What kind of authority would it exercise over the passage of what I believe are called the ULCCs, which go down through those waters from Sullom Voe in Shetland? I accept what the pilots have told me— that it is a safe area through which to navigate huge ships.

    6.30 pm

    However, I am not sure whether ships with draughts of up to 80 ft can safely navigate the passage. Speaking as a layman with no navigational expertise, I recall a large stern trawler from Hull — a ship that is very much smaller than a tanker — going aground in the Minches when fishing for mackerel some years ago. Despite the reassurances that have been offered by the pilots. those tankers should be directed to the west of Lewis and the Western Isles when they are proceeding to and from Sullom Voe. If the clause were accepted, would the Stornoway harbour authority become the competent harbour authority for the Minches?

    I wish to join my hon. Friend the Member for Harwich (Sir J. Ridsdale) in expressing some doubt about the clause. I support his amendments. The question of harbour limits is a crucial one in my part of the world. The Gloucester port is slightly outside my constituency, but Sharpness is in it. The pilots go aboard to bring vessels to those two ports way down the Welsh coast at Barry, which is many miles away.

    As everyone knows, the Severn is a notoriously difficult river. It frequently shifts its channel, has the highest tides in the United Kingdom—almost in the world—and is a tricky business. It is not clear from the arrangements that are outlined in the Bill which harbour authority will be responsible for it. There are three candidates: the Gloucester harbour trustees, the Sharpness board or the British Waterways board. I understand from a letter that I have received from my noble Friend Lord Brabazon of Tara, who introduced the Bill in the other place, that those authorities will have to sort that matter out among themselves.

    There is an element of vagueness about the arrangements which is undesirable in so difficult and dangerous a channel, and I hope that my hon. Friend the Minister can tell us which authority will be responsible and what its duties will be. I hope that he will be able to set at rest our anxieties about pilotage in the area.

    I wish to support the amendments of my hon. Friend the Member for Harwich (Sir J. Ridsdale), which have a vital part to play in pilotage in the outer reaches of the Thames. My hon. Friend has explained the technicalities, so I shall not dwell on them. The Minister well knows my reservations about the Bill, which seems to represent a piecemeal approach to the problem. As I understand it, responsibility will ultimately be given to the Port of London Authority, a body in which I do not have complete faith. In a letter to me, the Minister mentioned that it had undergone a sea change. That was a somewhat Freudian remark. Will the Minister accept the amendment so that that sea change can also be a safe change?

    I have great sympathy with the amendment moved by my hon. Friend the Member for Harwich (Sir J. Ridsdale), and I await the Minister's answers with great interest. Many of us will attach great significance to those answers. I hope that the Minister will understand that it is not enough to give us a generalised answer; we need a specific assurance that he and his colleagues have grasped the safety aspect of what we are saying. We are entitled to a clear assurance about some of the hazardous areas from which compulsory pilotage has been withdrawn, and we need to know that the Minister is satisfied that the safety of those at sea is not being endangered. That is the point that has been put to us by pilots. I suspect that my hon. Friends, too, have been approached by pilots and persuaded of the importance of the case.

    The Bill proposes that certain areas shall have compulsory pilotage withdrawn from them, and that the limits will be reduced back to the areas of the harbour authorities. Thereafter, the harbour authorities may apply for the limits to be extended, but an appeal can be made against such an application. The Goodwin sands, the north foreland of Kent, the Trinity buoy area and the Thames estuarial area are self-evidently hazardous places, and that is why they were included in the pilotage districts before. The Minister says that it is unnecessary to have compulsory pilotage in those areas, and that the matter should be left to the judgment of the new competent harbour authorities.

    I am certainly one of those hon. Members who needs persuading that it is right, in the interests of safety, to make this withdrawal of compulsory pilotage. I hope that my hon. Friend the Minister has some convincing explanations if he intends to oppose the amendment. I hope that he will give us some assurance, perhaps even in the form of accepting the proposals.

    Anyone who knows the Mersey knows that, in the past, we have had a number of harbour authorities. We had the Mersey docks and harbours board in my day. Then there were the Manchester ship canal, the Manchester docks and so on. The harbour authorities of Liverpool, Manchester and Garston have made an effort to provide the means whereby the Mersey Docks and Harbour Company could, if required, exercise pilotage functions on their behalf.

    As no commitment has been given, I want to know whether the Government's view is that that can be agreed. At the moment the matter is up in the air, and I do not know what is happening. If the changes are to come about, we should know precisely what is happening, what harbour authorities are likely to take over and what the special problems in certain areas will be. I am not an expert on pilotage, unlike the hon. Member for Crosby (Mr. Thompson), who is a much greater expert than I, because he was a Mersey pilot and understands the business thoroughly. He worked on the river for years; I worked only on the boats that were tied up. We need an answer to this question about what is happening, and whether the best arrangements are being made.

    I wish to add my voice to that of the hon. Member for Liverpool, Walton (Mr. Heffer) who, I am delighted to hear, did some work in Liverpool at some stage of his career. What concerns me is that the Minister will tell us whether commercial or safety interests are to be paramount. That is what the amendment is about. The pilots on the River Mersey have said, both to my right hon. Friend and others, that they fear that the competent harbour authority might pay more attention to commercial interests than safety interests.

    I trust that the Minister will reassure us that safety will be the paramount consideration and that commercial interests will take second place.

    The hon. Members for Wirral, South (Mr. Porter) and for Faversham (Mr. Moate) spoke about safety, and I suspect that "safety" will be the key word throughout our debates. It is important that we have safety in the forefront of our minds when we talk about pilotage, and it must not be overridden by commercial considerations.

    The hon. Member for Harwich (Sir J. Ridsdale) has introduced an interesting amendment which highlights the problem of overlapping competent harbour authorities in areas that are dangerous for shipping. I listened to the hon. Gentleman with care when he spoke about the Trinity buoy. At low water there is only 4 ft of under-keel clearance. The sea bottom is notoriously unstable and subject to sand waves, the channel is not easily navigable by radar and it is only 10 miles away from the Essex coast. The Thames estuary and the east coast ports of Felixtowe and Harwich are areas of great activity. There is a great deal of continental traffic and there are many ferries and ro-ro vessels. It is a hive of activity. We must know who is to be responsible for the safe navigation of these waters and which harbour authority will have that responsibility. Emphasis must be placed upon the safe navigation of our waters around the United Kingdom and where pilotage is necessary, pilotage must be provided.

    There is no dispute about safety being paramount, and the Bill places an absolute obligation on ensuring safety. Competent harbour authorities will be subject to the responsibilities and duties that are set out in clause 2. The only matter for debate is where responsibility lies for safety — in other words, where does the buck stop? It has been difficult in the past to determine where the buck stops, and this has had a bearing on the number of pilots that have been required. It has been a matter of great debate within the industry over many years, and it has addressed itself constantly to the sort of pilotage that is required and the number of pilots that are needed.

    My hon. Friend the Member for Southampton, Test (Mr. Hill) spoke about the Queen's harbourmasters. They will not be competent harbour authorities. There are provisions in clauses 12 and 13 for determining the relationships between them and the competent authorities. The hon. Member for Liverpool, Walton (Mr. Heffer) asked about the problems that might be associated with the Manchester and Mersey docks. We hope that agreement will be reached on sensible proposals for the estuary. If that is not possible, clause 12 allows the Secretary of State to call for information that will enable him to make satisfactory arrangements. We hope that there can be voluntary agreement.

    We are dealing with a complex Bill that contains many clauses, and one gathers that we shall be doing so for two or three hours. My hon. Friends the Members for Harwich and for Crosby (Mr. Thornton) and I are being told that it is hoped that satisfactory arrangements will be made, but the hon. Member for Liverpool, Walton (Mr. Heffer) has asked for specific assurances. We want to know what is to happen, and so do pilots. The response of my hon. Friend the Minister is hardly satisfactory.

    Where there are overlapping responsibilities between competent harbour authorities as defined in the Bill, the authorities will get together and make arrangements for pilotage. If it is found that it is not possible voluntarily to make such arrangements, there are powers in the Bill for the Secretary of State to intervene. I have to tell my hon. Friend the Member for Stroud (Sir A. Kershaw) that there is a problem about Gloucester and Sharpness. I shall be introducing an amendment to enable the Secretary of State to deal with problems of passage.

    I think that there is an agreement already between the harbour authorities in the area which I represent in part that will result in a Mersey docks company. In the past there was a tremendous number of ships on the Mersey and a considerable number of pilots were required. The comparison between Merseyside then and now is a tragic one. Those of us who come from Merseyside feel ill every time we look at the river. There is nothing much moving on it but there is still some activity. Some pilots will be needed but there will be others who will not be required. Who will be responsible for paying off the pilots who are not needed? From where will the money come? I want a firm assurance from the Minister. Will the new authorities have to find the money, or will they be given special assistance by the Government to help them overcome the problem?

    6.45 pm

    It seems that we are embarking on a Second Reading debate. We shall be dealing with the details of compensation arrangements and who will pay. The short answer is that the ports will pay. We shall deal with the details of the compensation arrangements as we proceed with our consideration of the Bill.

    There are areas that have special problems because of their history and it is not good enough to say "the ports". There are real problems and the Government should have a responsibility to help the ports to deal with them. If there is a good answer set out in the Bill, I shall be prepared to accept it, hut I am not satisfied with the Minister's response so far.

    The hon. Gentleman is entitled to ask questions and as we continue to discuss the Bill he will receive detailed answers. If I may say so, he is asking questions which are related more directly to other amendments.

    The present system of compulsory pilotage is limited. In the London district, for example, compulsory pilotage applies only to ships going to and from ports in London districts. Vessels going through the district are not required to take pilots. I discovered this when I visited the constituency of my hon. Friend the Member for Harwich (Sir J. Ridsdale). It is possible for vessels making their way to Ipswich not to take on a pilot as they pass Harwich. We must not run away with the idea that the present system is all-embracing, and that we are ruining it through the Bill.

    The amendments assume that the justifications of the boundaries of the pilotage districts remain valid, although they were drawn up at the turn of the century or, in some cases, earlier. But it must be recognised that conditions have changed dramatically since then. Patterns of trade, shipping movements and the available navigational equipment, for instance, have altered beyond recognition.

    I have two further objections to the amendments. First, they would give the Secretary of State responsibility for setting the limits of pilotage, whereas one of the prime purposes of the Bill — I appreciate that this is a controversial matter — is that they should be locally determined. Secondly, they would require the competent harbour authorities to operate jointly in the outer pilotage areas. In some areas, that would be an unecessary administrative complication. Surely it would be better to leave the local competent harbour authorities to decide the best arrangements in their local circumstances.

    We believe that the sensible way forward is to allow the competent harbour authorities to consider the pilotage needs of their ports afresh in the light of modern conditions, without being constrained by a structure that grew up in wholly different circumstances.

    My hon. Friend has made much of the Government's desire to pass on the final and ultimate decision to the local authorities concerned. How does he square that with the Secretary of State's remarks in the House on 9 March? My right hon. Friend said:

    "Safety cannot be inhibited by any pressures. It is the first prerequisite, and all hon Members would expect it to be the prerequisite of any Government, to establish regulations on safety at sea."—[Official Report, 9 March 1987; Vol. 112, c. 23.]
    My right hon. Friend was saying that safety was the Government's responsibility. Should not the Government therefore take responsibility for it in the Bill?

    The Government are taking the responsibility of hoping to obtain the agreement of Parliament to the Bill. We believe that the people who know the local conditions in the approaches to the quayside are the right people to determine the number of pilots that will allow for the safest possible conduct of shipping within their authorities. I know that that is a matter for debate, but it is precisely because the Government believe that the local competent harbour authorities are best able to determine the safe number of pilots that we are trying to persuade the House to accept the Bill.

    The hon. Member for Greenock and Port Glasgow (Dr. Godman) talked about Stornoway. Stornoway is not a competent harbour authority, because it is not at present an active pilotage district. However, if it wishes to become so, under the terms of the Bill, it can apply for an order.

    I should be grateful if my hon. Friend would answer a specific question. He tells us that conditions have changed since the pilotage districts were first established. Does that mean that some body or authority has made a scientific reassessment of pilotage needs? In the case of the Thames estuary, for example, has some body decided that there is no longer a prima facie need for compulsory pilotage from the Goodwin sands? Or does my hon. Friend mean that an arbitrary decision has been made, and that hopefully we shall eventually claw our way back to common sense when the needs of the area have been established? If there has been a reassessment, is not my hon. Friend obliged to place the evidence on safety before the House before asking us to reduce the pilotage areas'?

    I am informed that the London pilots accept that there is no need for the Goodwin sands to be covered by compulsory pilotage.

    The Minister answered my question about Stornoway. If the authorities in Stornoway were to apply successfully for CHA status, would they then have control over navigation through the Minches?

    The competent harbour authority would not necessarily have navigation control, unless it asked for the appropriate orders. If it did so, it could then take control if it felt that that was part of the CHA's responsibility under the Act, which is to ensure safe passage not only within their areas, but in the approaches to their harbours.

    That partly answers my hon. Friend the Member for Faversham (Mr. Moate); however, let me reply to his question about how the competent harbour authorities were originally designated. The definition of such authorities arose out of a number of byelaws and historical precedents. There is discretion for those who know what part of the competent harbour area they can designate for compulsory pilotage. If, knowing the local conditions, they are not satisfied about the harbour limits, it is open to them to extend those limits.

    I hope that, even if I have not answered all the questions to everyone's satisfaction, I have at least addressed the points that have been made. I ask the Committee not to accept the amendments.

    I have had to weigh carefully in my mind the paramount importance of safety. When such a change is made, I feel that safety must overrule what my hon. Friend the Minister has been saying. He has not convinced me, and I have a feeling that he has not convinced many of my hon. Friends. I only wish that he had been able to do so.

    I would emphasise that the matter was considered by the Select Committee on Transport, which recommended that initially harbour authorities should take over responsibility for pilotage districts as they now exist. My view, therefore, is backed up by the Select Committee. Bearing in mind the dangers of the approaches to the Thames estuary——

    My hon. Friend the Member for Harwich (Sir J. Ridsdale) and others have underlined the fundamental flaw in the Bill. The Secretary of State, on behalf of the Government, is handing over totally, the responsibility for compulsory pilotage in the waters around this country. As my hon. Friend the Member for Faversham (Mr. Moate) pointed out, that is to be done without any assessment of whether safety measures have been examined or brought up to date. The point does not concern the number of pilots; it goes to the core of the safety argument. We have heard nothing this evening that convinces us—convinces me, at any rate— that anything has been done that should relieve the Government of the ultimate responsibility for ensuring safety. It is not sufficient to hand over that responsibility to CHAs. I should like my hon. Friend the Minister to address his closing remarks to the question of who polices the policemen. We are giving the responsibility to the CHAs, and the Government will have no responsibility for seeing what they do thereafter.

    7 pm

    I am grateful to my hon. Friend the Member for Crosby (Mr. Thornton). I agree with him. In view of his experience as a pilot and because I have talked to pilots who know what the waters are like in the Thames estuary, I cannot withdraw the amendment. I must push it to a Division.

    Question put, That the amendment be made:

    The Committee divided: Ayes 32, Noes 76.

    Division No. 143]

    [7.00 pm


    Anderson, DonaldMadden, Max
    Banks, Tony (Newham NW)Meadowcroft, Michael
    Beith, A. J.Moate, Roger
    Bermingham, GeraldPike, Peter
    Brinton, TimPorter, Barry
    Campbell-Savours, DalePowell, Raymond (Ogmore)
    Carlile, Alexander (Montg'y)Ross, Ernest (Dundee W)
    Godman, Dr NormanSkinner, Dennis
    Golding, Mrs LlinSpearing, Nigel
    Gould, BryanSteel, Rt Hon David
    Hamilton, W. W. (Fife Central)Stott, Roger
    Haynes, FrankTaylor, Matthew
    Heffer, Eric S.Trotter, Neville
    Howells, GeraintWallace, James
    Hughes, Robert (Aberdeen N)
    Kennedy, CharlesTellers for the Ayes:
    Kirkwood, ArchySir Julian Ridsdale and Mr. Malcolm Thornton.
    McKay, Allen (Penistone)


    Ancram, MichaelJones, Robert (Herts W)
    Baker, Nicholas (Dorset N)Kershaw, Sir Anthony
    Bellingham, HenryKnowles, Michael
    Biggs-Davison, Sir JohnLawrence, Ivan
    Boscawen, Hon RobertLeigh, Edward (Gainsbor'gh)
    Bottomley, PeterLennox-Boyd, Hon Mark
    Bowden, Gerald (Dulwich)Lloyd, Peter (Fareham)
    Bright, GrahamMcCrindle, Robert
    Browne, JohnMalone, Gerald
    Bruinvels, PeterMarlow, Antony
    Bryan, Sir PaulMorris, M. (N'hampton S)
    Burt, AlistairMoynihan, Hon C.
    Butterfill, JohnNeubert, Michael
    Carlisle, Rt Hon M. (W'ton S)Norris, Steven
    Colvin, MichaelOnslow, Cranley
    Cope, JohnPattie, Rt Hon Geoffrey
    Couchman, JamesPortillo, Michael
    Dickens, GeoffreyPowley, John
    Eyre, Sir ReginaldRathbone, Tim
    Fallon, MichaelRossi, Sir Hugh
    Favell, AnthonySackville, Hon Thomas
    Finsberg, Sir GeoffreySainsbury, Hon Timothy
    Forth, EricSpencer, Derek
    Fox, Sir MarcusSpicer, Michael (S Worcs)
    Galley, RoyStanbrook, Ivor
    Greenway, HarryStern, Michael
    Gregory, ConalTaylor, Teddy (S'end E)
    Griffiths, Peter (Portsm'th N)Thompson, Patrick (N'ich N)
    Hampson, Dr KeithTwinn, Dr Ian
    Hargreaves, KennethWaddington, Rt Hon David
    Harris, DavidWaller, Gary
    Hawkins, Sir Paul (N'folk SW)Wardle, C. (Bexhill)
    Heddle, JohnWells, Bowen (Hertford)
    Hind, KennethWheeler, John
    Hordern, Sir PeterWiggin, Jerry
    Howarth, Alan (Stratf'd-on-A)Wilkinson, John
    Howarth, Gerald (Cannock)
    Hunt, John (Ravensbourne)Tellers for the Noes:
    Jackson, RobertMr. David Lightbown and Mr. Richard Ryder.
    Jessel, Toby

    Question accordingly negatived.

    I beg to move amendment No. 3, in page 2, line 3, leave out 'or 1986' and insert '1986 or 1987'.

    This is a constituency-based amendment. At the present time, Scalloway, in the Shetland Isles, is not within a pilotage area although pilotage operations take place. It is the will of the harbour authority — the Shetland Islands council — that Scalloway be formally made a pilotage area. If it had to wait until after the Bill becomes law, it would be unable to license those persons who presently carry out the pilot duties— albeit on a part-time basis—but would be bound by the four-year period from the appointed day.

    It has been suggested that a pilotage order could he promoted prior to the appointed day and that has much to commend it. It was originally suggested by the noble Lord Brabazon that Scalloway should be included as part of the Sullom Voe district. With respect to the noble Lord, I must point out that Scalloway is on the west coast and Sullom Voe is on the east coast, so perhaps, geographically, that is not the most sensible solution.

    If a pilotage order was promoted, there is a possible difficulty — that the Bill as it stands does not make provision for an act of pilotage in the present calendar year, 1987. Obviously, if a pilotage order was to be promoted and passed and if the district was to be an active district as defined in the Bill, the only time that would be available for an act of pilotage to be made and in respect of which a return could be made, would be in the year 1987.

    It is for that reason that this simple amendment is made to extend, by one further calendar year, the years in which returns can be made in respect of acts of pilotage.

    I am advised that our lawyers do not think that this amendment is strictly necessary to achieve what is desired by the hon. Member for Orkney and Shetland (Mr. Wallace)—to have Scalloway made an active pilotage district. However, we accept his point, and to make things clear we are prepared to accept the amendment.

    I am grateful to the Minister. May I take this opportunity to say how grateful the officials of the Orkney Islands council and the Shetland Islands council, and myself, have been for the co-operation they have received from the officials at the Department of Transport.

    Amendment agreed to.

    Clause 1, as amended ordered to stand part of the Bill.

    Clause 2 ordered to stand part of the Bill.

    Clause 3

    Authorisation And Employment Of Pilots

    I beg to move amendment No. 5, in page 4, line 15, after 'period', insert 'which are not renewable'

    Liverpool pilots have been concerned that their licences, which are renewed annually, may be taken to be licences for a limited period. If that was so, they would lose the priority that former licensed pilots are given by the Bill in relation to authorisations during the first four years after its implementation. This amendment makes it clear that it is only provisional pilots, whose licences are issued for a limited period and are not renewable, as are Liverpool pilots' licences, who will be excluded from the priority provisions.

    Amendment agreed to.

    7.15 pm

    I beg to move amendment No. 7, in page 4, line 33, leave out paragraphs (c) and (d).

    With this it will be convenient to take the following: Government amendments Nos. 8 and 9.

    Amendment No. 20, in page 4, line 40, leave out ' (a)'.

    Government amendment No. 11.

    Amendment No. 12, in page 4, line 43, at end insert —

    '( ) An authorised person who has made representations under subsection (6) above and who remains aggrieved by a decision of a competent harbour authority to suspend or revoke an authorisation under subsection (5) above may appeal to the Secretary of State who may, if he sees fit, direct the competent harbour authority to withdraw the suspension or revocation and the competent harbour authority shall comply with any such direction.'.

    Government amendment No. 13.

    The introduction to the White Paper tells us, amongst other things:

    "The Green Paper proposed that under the new regime the administration of pilotage should be greatly simplified."
    It also states:
    "In recent years there has been growing concern about the cost of using British ports, in particular compared with those on the continent, and the Government is anxious to seek ways of helping to reduce the costs. One element in a port's costs is the cost of the pilotage service. This has meant that the cost of pilotage is often greater than it need be."
    The Bill does a great deal to achieve those objectives, but it still contains much that is not needed to achieve those objectives, including the two paragraphs I have quoted. In an age when we are trying to reduce bureaucracy — its existence is dependent upon regulations and laws—we can only be successful if legislation is kept to a minimum. With regard to the two paragraphs, the test to determine whether they are necessary is not so simple.

    First, is the intention of the paragraphs met by other legislation or by other self-regulating means? Secondly, are they necessary to reduce costs? I suggest that the answer to the first question is yes, but the answer to the second is no. Before I demonstrate that to be so, I should like to make a general point. Those two paragraphs will give competent harbour authorities unfettered power over pilots. They will be able to exercise that power at will without challenge as to whether, in the exercise of it, they have had due regard, among other things, to natural justice. They will be able to remove a man's livelihood — for whatever reason — without being accountable to anyone. They will be able to exercise the power in a discriminatory manner.

    Bearing in mind the wide terms in which subsection (5)(c) is drafted — that it is the competent harbour authority alone which will decide the number of persons required to be authorised the criteria for such a determination will be the authority's and the authority's alone. Therefore, that determination is capable of variation at will. An authority will be able to use such power in a discriminatory manner. It could, for example, revoke the authorisation of a pilot, who, in fulfilling his functions by virtue of section 742 of the Merchant Shipping Act 1894——
    "'Pilot' means any person not belonging to a ship who has the conduct thereof"—
    has, in the commercial judgment of the competent harbour authority, acted in too prudent a manner. However, according to Captain Lecky—considered by professional seamen to be the unquestioned authority in such matters—prudence is the very essence and quality required of those making executive decisions in ship handling, namely, pilots.

    That is a general, but important point. The existence of those two paragraphs that I have quoted will undoubtedly inhibite a pilot from having proper regard to the noncommercial, wider responsibilities of his functions—the public officer element of his responsibilities. I referred to that on Second Reading and to the report produced by the Canadian commission that referred to pilots as "environmental protection officers".

    In the more specific tests to be applied, regard has to be had to the employed and self-employed options that the Bill provides for the continuing pilots. Taking the employed option first, clause 4(2) provides:
    "A competent harbour authority shall offer to employ under a contract of employment any person it authorises under section 3 above".
    Prima facie, it appears that provided a person is authorised as a pilot, the competent harbour authority has to offer that person a contract of employment, and, provided that he is authorised, his contract of employment stands. But is that really the case?

    Section 54 of the Employment Protection (Consolidation) Act 1978 says, among other things:
    "(1) In every employment to which this section applies every employee shall have the right not to be unfairly dismissed by his employer."
    Of course, the corollary to that is that every employer has the right to dismiss any employee fairly. That is spelt out in section 57 of the 1978 Act. Surely the fact that the employer has no work and that therefore the employee is redundant falls under that head. That is what the paragraph is all about.

    As the legislation places no requirement on the length of time for which an authorisation has to remain in force, clearly such authorisation can be revoked at the same time as the contract of employment is terminated. In the case of employed pilots, these two subsections are unnecessary, unless it is the aim of Government, with respect to employed pilots, to circumvent the provisions of the 1978 Act.

    Despite the noble Lord Brabazon's protestations to the contrary, pilots believe this to be a strong possibility. That is because these two paragraphs appear to conflict with sections 49 and 50 of the 1978 Act. They give the rights to provide an employee with a minimum period of notice before a contract of employment is terminated and, when taken in conjunction with subsection (6) of this clause, the right to circumvent section 53 of that Act, which requires written notice to be provided. If that is the case, it gives the lie to the repeated statements by individual Ministers and by the Government that continuing pilots will be fairly and equitably treated. That is a source of considerable anxiety to pilots throughout Britain.

    In Committee in the other place the Minister, Lord Brabazon said:
    "nothing in the clause affects the operation of employment protection legislation and a pilot who is employed whether by a CHA or anyone else, and whose authorisation i s revoked will remain eligible for the same rights and protection from that legislation as any other employed person."—[Official Report, House of Lords, Public Bill Committee, 9 December 1986; c. 38.]
    On Report in the other place that positive statement was somewhat diluted. At that time Lord Brabazon said:
    "and I made it clear that in our view a pilot's rights in such matters as employment protection should be attached to his contract of employment or other agreement under which he carries out pilotage for the CHA."—[Official Report, House of Lords, 12 February 1987; Vol. 484, c. 774.]
    Frankly, the Government statement, "in our view", is just not good enough. I should like to know from the Minister whether these paragraphs are subordinate to the Employment Protection (Consolidation) Act 1978. If they are, they are unnecessary. If not, then the pilots have been misled. A definitive answer is required. What happens if a competent harbour authority refuses to attach such rights, whatever they may be, to the contract of employment?

    I shall now deal with the matter of pilots who decide not to accept a contract of employment with a competent harbour authority and who, in all likelihood, will be self-employed. In this case I submit that these two paragraphs are equally unnecessary. It is acknowledged that employment protection legislation is irrelevant to the self-employed and probably also to the agency scenario. Therefore, the justification for the inclusion of these two paragraphs must rest on costs, but the implementation of their intent will not reduce costs.

    I am following my hon. Friend's complicated argument. Is he saying that there is some doubt whether employed pilots have the protection of normal employment and redundancy legislation? Surely that cannot be right. Of course they have, and is that not indicated in the Bill?

    That is the point that I am asking the Minister to clarify. Certainly, on a reading of Hansard from the other place, and especially on Report, the words "in our view" seem to dilute the absolute statement that was made earlier. I seek an assurance from the Minister that that is not so.

    All pilotage revenue will be controlled by a competent harbour authority. In the case of an agency arrangement, the competent harbour authority will presumably negotiate the provision of pilotage services on a fixed-price annual lump sum arrangement and, in the case of the self-employed, on a per ship basis. In effect, always provided that the number of persons authorised is sufficient to do the work, in terms of costs it is immaterial whether there are more persons than are strictly necessary because the costs will remain the same. Indeed, it could be argued that it would be in a competent harbour authority's interests for more persons to be authorised than are strictly necessary, as the service would then be able more readily to cope with unexpected peak demands. Anyone who knows anything about shipping knows that such demands are by no means unusual.

    For the reasons stated, it is clear that neither of these two paragraphs is necessary for either the employed or the self-employed agency regimes. They are unnecessary regulations and should be removed.

    I shall now turn to amendment No. 20. The Bill as drafted requires a competent harbour authority to give written notice of its intention to suspend or revoke authorisation only
    "if it appears to it that the authorised person has been guilty of any incompetence or misconduct affecting his capability as a pilot".
    In speaking to the first amendment, I explained how subsections (5)(c) and (d) give unfettered power to competent harbour authorities, which could, if they wished, use it in a capricious and discriminatory manner. Those paragraphs arc written in terms that are wide enough to steer a large carrier through — wider than some of the channels in many of our ports. The same applies to subsection (5)(b) which says that an authorisation may be suspended or revoked when a person ceases or fails
    "to provide evidence that he continues to have"
    the qualifications required.

    what are those qualifications? Clause 3(2) tells us:
    "The authority may determine the qualifications in respect of age, physical fitness, time of service, local knowledge, skill, character and otherwise to be required".
    It does not say what those qualifications have to be or whether they will be fixed. For that reason, they can be varied from time to time by the competent harbour authority. What is the determinant of the qualifications in respect of character? What does "otherwise" mean? What criteria will be used to determine the degree of physical fitness that is required? Will it be the length of time taken to climb a 30-ft pilot ladder when the ship is rolling in heavy seas? All these maters are capable of wide interpretation and, therefore, capable of discrimination. There could be no objection to the Government amendment if all competent harbour authorities were to exercise their powers in such matters in a responsible, fair and just manner. This amendment would only give those pilots who elect for the self-employed option the same rights as those who accept a contract of employment.

    7.30 pm

    This statement is made against the background of the fact that in Committee in the House of Lords the Minister stated quite categorically that pilots accepting contracts of employment would enjoy all the rights and benefits afforded by the employment protection legislation, just like any other employee. That being so, all employed pilots will, by virtue of section 53 of the Employment Protection (Consolidation) Act 1978, be entitled to reasons, in writing, why their contract of employment is to be terminated. That must follow revocation of an authorisation as surely as Might follows day.

    Therefore, it can be argued that, as drafted, the subsection is in conflict with section 53 of the 1978 Act. This amendment seeks only to extend that provision to those who opt for self-employment. However, it will not be sufficient for the written notice to say that the contract of employment is being terminated as a consequence of the revocation of the authorisation. I hope that the Minister will assure us on that point today. If he cannot, it will be clear that this subsection has been drafted to enable CHAs to circumvent section 53 of the Employment Protection (Consolidation) Act to the detriment of their prospective employees.

    Finally, I turn to amendment No. 12. On the clear understanding that the provisions of the 1978 Act apply in full to pilots accepting contracts of employment from competent harbour authorities, especially that a written statement by an employer that an authorisation has been revoked will not be sufficient to satisfy the requirements of section 53 of that Act, and that the reasons for the revocation of that authorisation must also be given—which, it can be argued, will in any case be necessary to satisfy section 57(3) of that Act — this amendment is necessary to ensure the equitable treatment of those pilots not accepting contracts of employment, vis-a-vis those who do, and also to ensure that a competent harbour authority cannot act in a capricious or discriminatory manner.

    If no guarantee can be given that the relevant subsections of clause 3 are subordinate to the Employment Protection (Consolidation) Act 1978, this amendment will be necessary to protect continuing pilots. The recent history of the actions of some port authorities has not inspired confidence in pilots as to their ability to act in a responsible manner, free from prejudice or discrimination. If the continuing pilots are to be treated fairly, as has been firmly promised by the Government, they must be protected against such attitudes.

    I am glad to support my hon. Friend the Member for Crosby (Mr. Thornton), who, with his knowledge and personal experience of piloting, has moved the amendment so ably. He has quite rightly said that paragraphs (c) and (d) are unnecessary, as far as employment of pilots are concerned. I wished to move an amendment which has not been called, that lines 33 and 34 should be deleted. I did that because I want to make it easier for pilots to remain self-employed.

    On Second Reading we were delighted that the Government promised to bring forward an amendment to make the continuing provision of self-employed services by pilots a more viable proposition. With the support of my hon. and learned Friend the Under-Secretary of State for Trade and Industry, the Member for Folkestone and Hythe (Mr. Howard) who has great interest in such matters, I went to see the Minister to discuss sell-employment and how we could make that easier. On Second Reading the Minister said:
    "Harbour authorities will have several means of controlling pilotage costs through their control over charges and over the terms of contract for the provision of pilotage services where they are not employing pilots directly. We do not, therefore, consider that it will be necessary for the harbour authorities to have the power to withdraw pilot authorisation on the ground that the number of pilots is greater than is required where pilotage is being provided under a service contract and the pilots may he self-employed. I shall therefore be introducing an amendment in Committee that will limit the powers of harbour authorities in this respect."
    I have examined carefully the Minister's amendment but it goes only halfway to meeting what we tried to achieve when my hon. and learned Friend the Under-Secretary of State, myself and others went to see the Minister to discuss the ways in which we would be able to keep self-employment, as well as employed status, for the pilots. I am sorry that amendment No. 9 that he has tabled to clause 3, page 4, line 38, goes only part of the way to meeting the principle that he stated on Second Reading. Of course, we should have preferred leaving out lines 33 and 34 of clause 3, page 4, or to go along with my hon. Friend the Member for Crosby.

    As the Minister said on Second Reading:
    "Harbour authorities will have several means of controlling pilotage costs through their control over charges and over the terms of contract for the provision of pilotage services where they are not employing pilots directly."
    I should like to repeat once again what the Minister said on Second Reading. I apologise to my hon. Friends for repeating it, but it is important for the self-employment of pilots. Running through this entire Bill is the desire to look after not only employed pilots, but also those in self-employment; that is a principle which is very close to our beliefs. The Minister said:
    "We do not, therefore, consider that it will be necessary for the harbour authorities to have the power to withdraw pilot authorisation on the ground that the number of pilots is greater than is required where pilotage is being provided under a service contract and the pilots may be self-employed." —[Official Report, 30 March 1987; Vol. 113, c. 834–5.]
    As I have said, I apologise for repeating that. I hope that the Minister will explain how his amendment meets his undertaking. Amendment No. 9 is only a shadow of what the Minister promised on Second Reading. I cannot advise my hon. Friends that it will make it easier to secure self-employment. Therefore, I hope that the Minister will agree that the aim of my hon. Friends and myself is to make the continuity of self-employment services a more viable proposition. We must pay a great deal of attention to that, because we are in danger of pushing all pilots into salaried employment rather than keeping them self-employed. I shall listen carefully to what the Minister says and I shall measure it against what he said on Second Reading, to see whether it is being fulfilled.

    I support both my hon. Friend the Member for Crosby (Mr. Thornton), who has a detailed knowledge of these matters, and my hon. Friend the Member for Harwich (Sir J. Ridsdale). I am satisfied that under the Bill employed pilots are protected, but I am not entirely satisfied that self-employed pilots are likely to be protected from capricious or unfair competent harbour authorities. Certainly the detailed amendments do not seem to cover them. When the Minister replies to this short debate I should like him to make it clear beyond peradventure that self-employed pilots will be treated fairly and that competent harbour authorities cannot treat them in the way that my hon. Friend the Member for Crosby suggested might be possible under the legislation.

    I hope that my hon. Friend the Minister will be able to put at rest the anxieties expressed by my hon. Friends about redundancy and conditions for pilots.

    There are other difficulties for small authorities. I understand that under the Bill the responsibilities for pilots in the Gloucester-Sharpness area will be transferred to the Gloucester harbour trustees who must employ the pilots, if requested to do so. Gloucester harbour trustees do not want to employ pilots because the harbour has too many. It has 12 pilots and needs only eight. Even if it wished to employ them it does not have any money. Its only income comes from the payments of light dues by vessels coming into Sharpness which has diminished sharply in recent years and is less than the obligations which it would incur towards the pilots. Will my hon. Friend say hat the harbour trustees should do?

    If the amendment of my hon. Friend the Member for Harwich (Sir J. Ridsdale) had been selected it would have affected directly employed as much as self-employed pilots and that would go against the spirit of the Bill.

    I am afraid that I cannot agree that the appeal procedure in amendment No. 12 can be justified. A pilot will have his contract of employment or other arrangement with the competent harbour authority. If there is any question of unfair dismissal or breach of contract, his remedies under the 1978 Act will be clear. If he wishes to appeal because he disagrees with the judgments of the competent harbour authority about the number of pilots needed in the port or about whether pilotage is to be provided by directly employed pilots, an agency or by some other arrangement, these matters should be the ultimate responsibility of the competent harbour authority. Therefore, I must ask for amendment No. 12 to be either withdrawn or rejected.

    Amendment No. 7 seeks to remove from the competent harbour authority the power to suspend or revoke authorisations where there are too many pilots in the port and where there is a change in the arrangements for providing pilotage in the port. It would undo much of the purpose of the Bill, which is to allow pilot numbers to be kept in line with the genuine requirements. I assure my hon. Friend the Member for Stroud (Sir A. Kershaw) that later we shall discuss compensation and general arrangements for pilots who will no longer receive authorisation because there are too many of them. Therefore, amendment No. 7 would have a direct wrecking effect on the main purpose of the Bill and I must ask for it either to be withdrawn or rejected.

    However, on several occasions it has been suggested that the ability of competent harbour authorities to revoke authorisations on grounds of excess numbers creates a degree of uncertainty for those who wish to be self-employed. Several of my hon. Friends have referred to that matter and it is a fair point. I hope to persuade my hon. Friend the Member for Harwich that I have fully honoured the commitment that I gave on Second Reading. We have tabled amendment No. 9 which confines the power of a competent harbour authority to suspend or revoke authorisations on the grounds of numbers to those cases where it employs pilots directly. I thought that that was what my hon. Friend wanted and I am surprised at his general attitude to amendment No. 9. It may have to do with the qualification in the amendment.

    7.45 pm

    We have allowed an exception to the general rule for pilots who are authorised temporarily before the appointed day while the possibility is explored of them transferring to another port where there are vacancies. I would have thought that hon. Members on both sides of the House would think that that that was a good idea. The representatives of the ports and pilots are discussing the details of such a transfer procedure. From their meetings it seems likely to be agreed that surplus pilots will be authorised for a limited period, for example three to six months, while the possibilities of a transfer are explored. The amendment merely allows the self-employed to benefit from the temporary arrangements in the same way as those directly employed by a competent harbour authority.

    Under the new legislation competent harbour authorities will have several ways of ensuring that costs are kept under control, even where they do not employ pilots directly, principally through their powers to set original numbers of authorisations, to set pilotage charges and through the terms of the contracts or agreements that will govern the provision of pilotage services by agents or self-employed pilots. They will also have the power under clause 3(5) to change the arrangements in the port from an agency arrangement to direct employment. Termination of a contract will remain a ground on which pilot authorisations may be suspended or revoked. However, amendment No. 8 makes it clear that the termination of a contract, not a mere alteration, will provide such grounds. I hope that that clears up that point.

    In another place my noble friend Lord Brabazon accepted in principle an amendment requiring a competent harbour authority to give a pilot a document which he could use as a reference if it had been found necessary to suspend or revoke his authorisation on grounds unconnected with his competence, conduct or qualifications. Amendment No. 13 fulfils that commitment.

    My noble Friend also agreed to consider a suggestion by Lord Underhill that the provisions in clause 3(6), requiring a competent harbour authority to give a pilot notice in advance if his authorisation is to be suspended on grounds of incompetence or misconduct, should be extended also to cover cases where a pilot no longer meets the competent harbour authority's qualifications for a pilot—in other words the provisions set out in clause 3(5)(b). We agree that there is some similarity between those types of case, which is why amendment No. 11 will extend the notice provision accordingly.

    Amendment No. 20 would go much further than that in requiring a competent harbour authority, before suspending or revoking an authorisation, to give written notice in all cases, not solely those where misconduct, incompetence or lapsed qualifications are involved. We do not think that that would be appropriate. Therefore I ask the House to support amendments Nos. 9, 11 and 13 and to reject amendments Nos. 7, 20 and 12.

    Amendment negatived.

    Amendments made: No. 8, in page 4, line 36, leave out

    `any alteration in or'.

    No. 9, in clause 3, page 4, line 38, at end insert

    '; but the authorisation of a person who provides his services as a pilot under a contract for services may not be revoked by an authority by virtue of paragraph (c) above unless it gave him notice before the appointed day that the number of persons it proposed to authorise exceeded the number required to be authorised and it proposed to revoke his authorisation after allowing him a reasonable period from the appointed day to seek authorisation by another competent harbour authority.'.

    No. 11, in clause 3, page 4, line 40, after ` (a)', insert or (b)'.

    No. 13, in clause 3, page 4, line 43, at end insert—

    `( ) Where a competent harbour authority suspends or revokes an authorisation of any person by virtue of paragraph (c) or (d) of subsection (5) above, it shall give him notice in writing—
  • (a) stating that the suspension or revocation was by virtue of that paragraph; and
  • (b) specifying the duration of the authorisation in question and any previous authorisations granted to that person by the authority.'. —[Mr. Michael Spicer.]
  • I beg to move amendment No. 14, in page 4, line 49, after 'is' insert '(a)'.

    With this it will be convenient to take amendment No. 15, in page 4, line 50, leave out from second 'authority' to 'be' in line 51 and insert

  • (b) an officer of such a harbour authority as is mentioned in paragraph (a) above, having duties which involve the supervision and management of the authorised pilots for such a harbour,
  • shall not by reason of his employment as a pilot or his holding any such office as is mentioned above.'.

    This amendment deals with cases in which the competent harbour authority is also the local authority and, because of the general legislation, which does not permit employees of a local authority to be members of committees of that local authority, would allow exceptions to that general rule in cases of pilotage committees.

    The Bill as it stands allows for an exception in the case of persons who hold any office or employment as a pilot. The cases to which the amendment is directed are such cases as those of a senior or principal harbourmaster who has been a pilot and held a licence but, possibly because he has been taken into administrative duties, is no longer a licence holder and after the passage of this Bill will not be an authorised pilot. Nevertheless, the local authorities in my own constituency, which will be the competent harbour authorities for their areas, certainly feel that it will be of great value to have on committees, particularly the examination committee, which will examine pilots and grant authorisations, and sometimes the disciplinary committee, the services of a senior officer such as a harbourmaster or pilot-master, who has no doubt had long experience and acquired expertise in this area. The local authorities do not wish to find themselves in a position in which the pilots may have representation from their own number, which is right and proper, but they cannot have their officer because he is no longer an authorised pilot.

    This matter has been pressed with the Department of Transport for some time and the Under-Secretary of State gave me the following response in a recent letter:
    "I find it hard to see the case for this in principle, given that management in other local authority departments enjoys no such exemption."
    In response to that, first in terms of Scottish legislation, section 126 of the Local Government (Scotland) Act 1973 provides that teachers may be members of the education committee and its sub-committees. No distinction is made between teachers and head teachers, so quite clearly people well up the ladder are permitted to be members of that committee. So what I am suggesting is no major breach of principle.

    The Bill as it stands allows authorised pilots who would technically be employees of the authority to sit on committees. So again there is an exception to the general principle. At present, senior officials do sit on committees. I am thinking in particular of the director of ports and harbours for Shetland Islands council. He is not a licensed pilot, but he has been one and has considerable nautical expertise, and he is a member of the examination committee. That has been allowed under the primary legislation, with the pilotage order and the byelaws which have been made under that. So there is indeed a precedent.

    The other reason why this case is different from other cases, in which it would not be expected that a senior member of management would also be a member of a local authority committee, is that we are dealing with a situation in which that expertise can often be very valuable and necessary. Indeed, there is judicial authority for this. In a case in Glasgow sheriff court back in 1951, the case of Conway v. Clyde pilotage authority, the sheriff, in his judgment, said that the most convenient method of providing a proper committee
    "would seem to be the setting up of small standing tribunal, on which the pilot master and deputy pilot master, the representatives of the pilots and other persons with nautical skill would be in the majority and which would be charged with reporting to the executive committee its conclusions on the facts of the accident …"
    There we have judicial authority for the desirability of having a committee which contains people with expertise.

    If this Bill is not extended in the way that my amendment seeks, I believe that there could be serious prejudice or at least considerable disadvantage to a local authority, which would suffer if on the committee in question the pilots had their own representatives with that expertise but the local authority would have to be represented by a layman, an ordinary elected councillor, possibly. That could be a disadvantage not only to the local authority — in this case the competent harbour authority — but also to the pilot, if it is a matter of discipline, or the person seeking authorisation.

    I think that it is to the advantage of all concerned that the committees in question should have on them people with expertise. I very much hope that the Minister will allow this amendment. As I have indicated, I do not think that there is any major departure of principle; it would only permit what has been happening up to now to continue.

    In another place, as has been said, we accepted an amendment exempting authorised pilots from the normal bar on employees of local authorities from membership of local authority committees, on the grounds that there might be some committees, for instance those inquiring into accidents, on which the up-to-date experience and knowledge of pilots might be useful. These amendments, however, seek to extend that exemption to members of the harbour management. I know that this has been asked for by Shetland Islands council.

    We feel that we must resist the amendment, given that the management in other local authority departments does not have these exemptions and, perhaps more important, other local authorities which already have pilotage responsibilities find no difficulty in dealing with all aspects of pilotage services, including such matters as examination and discipline, despite the fact that their directors are unable to sit as members of the relevant committee.

    For those reasons, we must resist these amendments.

    I do not think that the hon. Gentleman has said anything new. I merely observe that the proposal is an enabling measure; it would not compel any local authority which is also a competent harbour authority to engage a senior member of management. Quite clearly, however, we have not over many months now been able to persuade the Minister or his colleagues. I will not press this to a Division.

    Amendment negatived.

    Clause 3, as amended, ordered to stand part of the Bill.

    Clause 4

    Employment Etc Of Authorised Pilots

    I beg to move amendment No. 16, in page 5, line 24, after 'above', insert

    'who is not already employed by it under such a contract'.
    In a few ports, again in Orkney and Shetland, pilots are already directly employed by the harbour authority in its role as the pilotage authority. This amendment is to make it clear that where such arrangements exist, the authority is not obliged to make a fresh offer of employment or to upset existing arrangements.

    I thank the Minister for this helpful amendment. It helps to clarify the position, as I understand the next two Government amendments do. This is something which could have been unclear and could have led to further difficulties, and we certainly welcome this clarification.

    Amendment agreed to.

    I beg to move amendment No. 17 in, page 5, line 28, leave out

    'this subsection shall not apply'
    and insert
    'it need not do so'.

    With this it will be convenient to take Government amendment No. 18.

    The competent harbour authority will be obliged to offer direct employment to authorised pilots unless the pilots have decided that they need not do so —for instance, if they wish to be self-employed. But the pilots cannot prevent the competent harbour authority from employing them directly should the ports wish to do so. As the Bill stands, there has been some concern that, if pilots wish to be self-employed, ports will be obliged to accept that. The amendments make it clear that the ports merely have the option to accept self-employment or other arrangements.

    Amendment agreed to.

    Amendment made: No. 18, in page 5, line 30, leave out' this subsection shall not apply' and insert 'it need not do so'.

    8 pm

    I beg to move amendment No. 19, in age 5, line 30, at end insert—

    '( ) Where by virtue of subsection (2) above a competent harbour authority is obliged to offer to employ any person, that offer shall be for not less than one year and shall in respect of remuneration and pension be no less favourable than those recommended immediately before the appointed day for the former pilotage district in which the harbour of the competent authority falls.'.
    Amendment No. 19 contains two elements which I will deal with separately. The first is that the offer of employment under a contract of employment to be made under subsection 2 shall be for a period of
    "not less than one year."
    By tabling the amendment I am not attempting to circumvent clause 3(5), especially paragraphs (a) and (b) which, by and large, will only apply to exceptional cases. I acknowledge that the contract of employment is dependent upon a person being authorised. Should a person lose his authorisation for a proper reason, I accept that, subject to the satisfaction of the provisions of the Employment Protection (Consolidation) Act 1978, his contract of employment should be terminated.

    The amendment is designed to allow pilots and other suitably qualified people with the potential to become pilots to make a commitment to pilotage in the new regimes that will come into existence on the appointed day. Those people are hardly likely to do that in the knowledge that they could be authorised under clause 3(1) and accept a contract of employment under clause 4(2) on one day and then, for whatever reason, have the authorisation revoked the next day and, as a consequence, have their contracts of employment terminated. That is not a climate conducive to encouraging the competent and efficient to remain in the profession or attract the right calibre of man into the profession in the future.

    A similar amendment was tabled at the Committee stage in the House of Lords. In a debate on 9 December the Minister said:
    "But I think that the suggestion of a fixed term which may be extended — and I emphasise the word 'may' — during which authorisations will remain in force is a helpful one, and the minimum period of one year would also help the pilots to plan ahead. But we had to think a little about the relationship to a pilot's contract of employment or other agreement with the CHA."—[Official Report, House of Lords, Public Bill Committee, 9 December 1986, c. 31.]
    I could not agree more. Unfortunately on Report in another place on 12 February, the Minister said:
    "On reflection, I am afraid I do not think that this would he desirable. In future a pilot's security about his future must rest on the terms of his agreement with the CHA" —[Official Report, House of Lords,12 February 1987, Vol. 484, c. 758.]
    It is difficult to understand the change in attitude and equally how the results of "reflection" equate with the Government's promise to ensure the equitable treatment of the continuing pilot. That promise, I remind the Committee, was responsible for the pilots' qualified support for reform.

    Secondly, the amendment contains provision to ensure that in financial terms pilots will receive not less than that to which — for a negotiated level of work — they are presently entitled. Reference has already been made to the fact that pilots have given their qualified support to reform on the basis of Government promises ensuring the equitable treatment of pilots. It may be appropriate to quote some of the references. The Green Paper "Marine Pilotage: A Consultative Document" published in December 1984 states in paragraph 8.1:
    "The Government accept that the proposals in this paper will represent a fundamental change in the organisation of pilotage which entails an obligation to ensure that the existing members of the profession are treated fairly and equitably when the new policy is implemented."
    In a letter to my hon. Friend the Member for Harwich (Sir J. Ridsdale) dated April 1986 my right hon. Friend the Prime Minister said:
    "But in drawing up the new proposals the Government's aim will be to deal equitably with all those involved including in particular both the pilots who will be retiring and those who will be continuing."
    In a letter to the chairman of the pilots national organisation, the United Kingdom Pilots Association (Marine) dated May 1986:
    "I am satisfied too that what we propose will deal fairly with the members of your distinguished profession."
    My right hon. Friend the Secretary of State for Transport in a speech to the pilots' annual conference in October 1986 said:
    "Both I and the Minister for Shipping, Lord Brabazon, will do all we can to ease that transaction and to ensure that you get a fair deal."
    Finally, the White Paper "Marine Pilotage: Legislative Proposals" published in November 1986 states in paragraph 41:
    "The Government …is confident too that the legislation will provide a lasting basis for the future of Marine Pilotage while at the same time providing equitable treatment to the present and future members of a distinguished profession."
    If' those guarantees are to be fulfilled, undertakings would have to be entered into through legislation or binding agreement. First, there would have to be guarantees that entry into the new regimes would be at an income level of not less than the present level of earnings and, in addition, that pension contributions would be maintained at the present level.

    Secondly, continuing pilots should be deemed to have been employed since the date of the first licensing. Thirdly, there should be protection of pension rights, including the doubling up of years between the ages of 60 and 65 and the continuation of the enhanced early retirement scheme as an on-going benefit of the fund.

    Finally, the provision of the lump sum compensation agreement should continue for a period of not less than, for example, 10 years. The amendment addresses only the first of those four matters.

    It is interesting to note what the Pilotage Commission had to say in a submission to the Minister responsible for shipping on 6 June 1985. It stated that in any future reform pilotage service the Commission believed that
    "Regard must be had to the fair treatment of the continuing pilots who should not be disadvantaged in respect of their overall service entitlements."
    In a letter to Lord Brabazon, the Under-Secretary of State, dated 26 November 1986, the Pilotage Commission stated:
    "You will recall that in commenting on the Green Paper the Commission stressed that Harbour Authorities should be required to employ pilots on fairly negotiated terms in respect of pay and conditions having regard to the pilots current recommended level of earnings and other entitlements. In this respect the Bill contains no safeguard to ensure the equitable treatment of pilots and I would wish to place on record the Commission's view as to the need for a suitably worded amendment to remedy this defect."
    That point was picked up by Viscount Simon in Committee stage in the House of Lords. He said:
    "We regard this as one of the most important amendments that we have to consider in this Bill, because the Government have given an assurance, I understand, in several forms to the pilots, that those who are at present licensed pilots and who wish to continue as authorised pilots under the new pilotage authorities will be fairly and equitably treated. That is something which I think the whole Committee would wish to see done. But there is nothing at all that I can see in the Bill which makes provision for this and that is why we have put the amendment down."
    In reply, among other things, the Minister said:
    "It is not unusual for legislation to provide that, where employees of one body are being transferred to a new employer, their level of earnings should be preserved. But in this case self-employed members of the profession are being offered employment."
    However, the noble Lord Brightman had already said:
    "I also support the spirit although not the form of the amendment … but an obligation to offer a contract of employment does not have any meaning as a matter of law, unless there is spelt out the terms on which that offer is to be made. I therefore ask: where in the Bill do we find the terms of the obligatory offer? What does the harbour authority have to do in order to fulfil its statutory obligations? Will any old offer do?

    If nothing is spelt out as regards the ascertainment of the terms of the offer, which, by statute, the harbour authority will have to make, it seems to me that the obligation is really meaningless."—[Official Report, House of Lords, Public Bill Committee, 10 December 1986; c. 45–51.]
    So much for the value of a contract of employment.

    At this stage, nothing has yet been spelt out on the terms of the offer. In any case, are the pilots truly self employed? My right hon. Friend the Prime Minister obviously does not think so because in the letter to Mr. Wilkin, to which I referred, she stated:
    "and in any case I think you will agree that, although pilots are treated as self employed for Inland Revenue purposes, the profession has few of the characteristics normally associated with self employment."
    On Report, the Government introduced an amendment which is now clause 5 of the Bill. The clause is entitled:
    "Temporary procedure for resolving disputes as to terms of employment".
    In introducing the amendment, the Minister said:
    "I made it plain, and I have made it plain again today, that I did not regard such a guarantee as justifiable, but I recognised that there was a feeling in the Committee that the provision about the offer of employment needed to be supplemented. Several noble Lords suggested that an arbitration procedure should be considered. These amendments set out such a procedure which I hope your Lordships will accept." —[Official Report, House of Lords, 12 February 1987; Vol. 39, c. 812.]
    It has been made clear by the pilots that this is no substitute for Government guarantees, a fact that was conveyed to Lord Brabazon by Lord Underhill in a letter which stated:
    "The main question however"—
    it remains unanswered—
    "is what is the Government proposing to insert in the Bill to carry out the many undertakings given to pilots on the conditions of service and benefits for continuing pilots."
    On Third Reading in the House of Lords, the Minister referred at column 791 to the terms of the general guidance that the Secretary of State will give to the arbitration panel under clause 5(3) which he said should, if at all possible, be agreed in advance by both the pilots and the ports. He went on to say that the pilots and ports had already been able to agree on seven general considerations to which the panel would be required to have regard as appropriate in making its determinations while recognising that others may also need to be taken into account in some cases. It appears that the Government believe that they are fulfilling their promises and undertakings to the pilots by the institution of an arbitration panel which shall have to have regard "as it considers appropriate" to some general guidance notes provided by the Secretary of State. I suggest that any reasonable man can come to his own conclusions on whether that is the case. The pilots do not think so, nor do I.

    The amendment is intended to assist the Government to fulfil part of their repeated promises to ensure the equitable treatment of the continuing pilots. The guarantees have been given successively by my right hon. Friend the Prime Minister, my right hon. Friend the Secretary of State, Lord Brabazon and my hon. Friend the Under-Secretary of State for Transport — the hon. Member for Worcestershire, South (Mr. Spicer) —hon Second Reading. I should like to hear from my hon. Friend the Under-Secretary of State how the Government proposes to deliver that commitment. Without such a provision in the Bill, the Government's promises will have been meaningless.

    I have good deal of sympathy for the amendment. It states:

    "a competent harbour authority is obliged to offer to employ any person".
    Should not that obligation be extended to those who work on, say, pilot cutters and to those who do pilotage work within ports? I am sure that the Minister will acknowledge that I have given him notice, albeit just a few hours, of the questions that I should like to put to him and to put in the Official Report.

    8.15 pm

    Will the Minister give the Committee an assurance that the Bill's provisions will not have an adverse effect on the future employment of licensed river and dock pilots in the port of London and on those employed as licensed dock and harbour pilots in south Wales ports? I need hardly remind the Minister that those men have given excellent service over many years in meeting the needs of shipping in those ports. Is the Minister satisfied that the Bill's provisions for the future employment of and compensation for persons employed in the pilotage service, other than pilotage authority staff, will ensure that such persons are treated no less favourably than those employed by pilotage authorities?

    My next question is important to ancillary employees. What criteria will the Pilotage Commission apply in carrying out its responsibilities under the Bill's provisions for the making of arrangements under schemes which will apply to employees as well — for example, pilot boat crews and others on the staff of the pilotage authorities? The amendment is concerned with the terms and conditions of employment of pilots, but the provisions need to be extended to those other employees. Will the Minister's officials give guidance to the Pilotage Commission to ensure that those employees are dealt with fairly and that the commission applies the same standards in making arrangements for a scheme for such employees as for pilotage authority staff?

    The hon. Member for Crosby (Mr. Thornton) said that concern had been expressed in the other place about the need to treat pilots equitably. I wholeheartedly share that concern, but my concern extends to those who assist pilots to fulfil their responsibilities. The hon. Member for Crosby mentioned clause 5. Does clause 5 cover those employees and other persons in terms of arbitration? Their terms and conditions of employment must not be ignored by the Government or by the competent harbour authorities.

    I listened with great interest to what the hon. Member for Crosby (Mr. Thornton) said in a long contribution on an important matter. The Bill's main thrust is clearly to change the procedure whereby pilots are employed. In general, it is reasonable for the Minister to say that when the Government actively seek by legislation to change the terms of reference of any person's employment, certain matters will be taken into account. Those points could be made in respect of steelmen, miners and many other people. I had hoped that Conservative Members would join us in making that point. This does not in any sense dilute what the hon. Member for Crosby said about the group of people whose terms of employment are being changed by an Act of Parliament. As legislators we must be sure that we are fair, just and equitable in the way in which we proceed.

    I shall be interested to hear the Minister's reply to his hon. Friend, who made a very telling intervention. I have read the Bill from cover to cover, but I can find nothing to suggest that ancillary staff will have access to an arbitration tribunal if the terms of reference of their employment are altered as a consequence of the Bill. We are talking not only about a change to the pilotage service, but the effect that that will have on ancillary staff in the pilotage service—for example, those who are employed on pilot cutters. My hon. Friend the Member for Greenoch and Port Glasgow (Dr. Goodman) asked whether there is anything in the Bill that will benefit them in respect of an appeal to a tribunal. We are talking not only about pilots in the United Kingdom but about others who work on pilot cutters, who also have rights and contracts of employment. We should not lose sight of that fact when discussing changes in pilot employment contracts.

    Like the rest of the Committee, I shall be interested to hear the Minister's reply on a very important and fundamental principle in the Bill.

    There has been—certainly on Second Reading —consensus on the Bill and on a rationalisation of pilotage services in the United Kingdom. It is essential that Parliament, in taking this step, which will have such impact on the lives and employment prospects of so many people, should address the conditions that will affect the incomes of those people. The guidance note contains a provision which, if applied, could lead to fair and equitable treatment of pilots.

    A distinction must be drawn between employees and those who are self-employed. Self-employment carries risks and uncertainties that are not always felt by employees who enjoy the full protection of employment legislation. The Secretary of State should also include it in his guidance note that when pilots become employed and are brought into the staff structure of competent harbour authorities, their remuneration will have effect and will be noted by other senior officers of the harbour authority.

    I cannot claim any experience in negotiations, but one does not need to have that experience to observe that differentials in salaries often lead to conflict and difficulty in industrial relations. That should be borne in mind when new rates of remuneration are fixed. Throughout the passage of the Bill in the other place and in the time leading up to the presentation of the Bill, pilots have been given assurances that they will he treated fairly and reasonably and that principles of equity will apply. The hon. Member for Crosby (Mr. Thornton) is right to press the Government.

    How many ancillary employees are employed by the Shetland pilotage authority?

    I would have needed advance notice of that specific question. Perhaps I could write and tell the hon. Member.

    We ask the Government to assure us that what they are proposing will be fair and reasonable. We ask the Minister to say whether there is any way in which the guidance notes can be made more binding on the arbitration panel. The guidance notes that have been agreed between the two sides of the industry will help to ensure some degree of fairness. Will the Minister tell us how they will become more binding on the panel?

    My hon. Friend the Member for Crosby (Mr. Thornton), who quoted the Pilotage Commission and also my noble Friend Lord Brabazon, was being a little unfair because those quotations were taken from a point in the debate before we had agreed to the statutory arbitration procedures to be included in the Bill.

    In answer to the question by the hon. Member for Greenock and Port Glasgow (Dr. Godman), supported by the hon. Member for Wigan (Mr. Stott), boat crews and other staff employed by the pilotage authorities will be included in the schemes under clause 24 and will be transferred to the employment of the appropriate competent harbour authority. If they are employed by a private company, they will not be included in the schemes because, unlike the pilotage authorities, the employees of private companies will not have been abolished, as it were. If the competent harbour authority decides to make changes in the arrangements for boat services which involve redundancy, the employer will have to meet his obligations in the normal way.

    The only exemption or exception is where boat crews or other people are employed by the pilots themselves. In that case the Pilotage Commission will have discretion to include them in the winding-up scheme. We arc discussing these details at official level with the Pilotage Commission. So far as those who are employed by pilots are concerned, the Pilotage Commission will have discretion over the scheme that it puts forward.

    The amendment is intended to require a competent harbour authority which employs pilots to guarantee rates of remuneration under the new arrangements. We do not agree that it is reasonable for pilots to have a cast-iron guarantee of this sort, because it would severely hamstring the ability of competent harbour authorities to negotiate sensible improvements in the efficiency of the service. The pilots' position is well protected by the arbitration provisions in clause 5. General guidance to the panel will be given by the Secretary of State, and representatives of pilots and the ports have agreed a list of considerations which, in their view, should constitute that advice.

    Among the considerations are the pilots' past earnings, recommended and actual. The British Ports Association has indicated that it would be willing to include these considerations in agreed guidelines for the employment of pilots by port authorities. I have seen no evidence that the ports are seeking to press down levels of earnings or to get pilots' services on the cheap. Even if they were, the arbitration procedure amounts to considerable protection. The going rate of pay for a pilot will, I am sure, remain much as it is at present, but it is important that the competent harbour authorities should have the ability to negotiate with the pilots to see that in return there is an acceptable level of productivity in the port.

    8.30 pm

    It seems likely that most pilots will remain in the pilots' national pension fund. As that is a private pension fund, I do not believe that we should legislate to pre-empt the decisions of the managers. In any event, the British Ports Association, which, with the pilots, will he responsible for the fund under the new regime, has already given undertakings that current levels of benefit will be maintained, subject always to the financial position of the fund. Therefore, I ask my hon. Friend to withdraw the amendment.

    I have listened carefully to what the Minister has said and I accept entirely his expression of good will. However, I must press the amendment to a Division because ministerial expressions of good will are not a bankable commodity for the future fair and equitable treatment of pilots. Therefore, I ask the Committee to support the amendment.

    Question put,That the amendment be made:—

    The Committee divided: Ayes 14, Noes 85.

    Division No. 144]

    [8.31 pm


    Anderson, DonaldPrescott, John
    Carlile, Alexander (Montg'y)Skinner, Dennis
    Foot, Rt Hon MichaelStott, Roger
    Golding, Mrs LlinTaylor, Matthew
    Haynes, FrankWallace, James
    Howells, Geraint
    Hughes, Robert (Aberdeen N)Tellers for the Ayes:
    Kirkwood, ArchyMr. Malcolm Thornton and Dr. Norman A. Godman.
    Powell, Raymond (Ogmore)


    Amess, DavidHordern, Sir Peter
    Ancram, MichaelHowarth, Gerald (Cannock)
    Arnold, TomHowell, Ralph (Norfolk, N)
    Ashby, DavidJessel, Toby
    Atkins, Rt Hon Sir H.Jones, Robert (Herts W)
    Atkins, Robert (South Ribble)Kershaw, Sir Anthony
    Baker, Nicholas (Dorset N)Lawrence, Ivan
    Baldry, TonyLennox-Boyd, Hon Mark
    Batiste, SpencerLloyd, Peter (Fareham)
    Bellingham, HenryMcCrindle, Robert
    Biggs-Davison, Sir JohnMalone, Gerald
    Boscawen, Hon RobertMarlow, Antony
    Bottomley, PeterMoate, Roger
    Bowden, Gerald (Dulwich)Moynihan, Hon C.
    Braine, Rt Hon Sir BernardNeubert, Michael
    Bryan, Sir PaulNewton, Tony
    Burt, AlistairNorris, Steven
    Butterfill, JohnOnslow, Cranley
    Chope, ChristopherPercival, Rt Hon Sir Ian
    Clark, Hon A. (Plym'th S'n)Portillo, Michael
    Colvin, MichaelPowley, John
    Cope, JohnProctor, K. Harvey
    Couchman, JamesRathbone, Tim
    Dorrell, StephenRidsdale, Sir Julian
    Durant, TonyRyder, Richard
    Eyre, Sir ReginaldSainsbury, Hon Timothy
    Fallon, MichaelSmith, Tim (Beaconsfield)
    Favell, AnthonySpencer, Derek
    Fenner, Dame PeggySpicer, Michael (S Worcs)
    Forth, EricStanbrook, Ivor
    Fox, Sir MarcusStern, Michael
    Freeman, RogerStevens, Lewis (Nuneaton)
    Goodhart, Sir PhilipTaylor, Teddy (S'end E)
    Greenway, HarryThompson, Patrick (N'ich N)
    Gregory, ConalTwinn, Dr Ian
    Griffiths, Peter (Portsm'th N)Waddington, Rt Hon David
    Ground, PatrickWakeham, Rt Hon John
    Hamilton, Hon A. (Epsom)Wells, Bowen (Hertford)
    Hampson, Dr KeithWheeler, John
    Hargreaves, KennethWiggin, Jerry
    Harris, David
    Hawkins, Sir Paul (N'folk SW)Tellers for the Noes:
    Heseltine, Rt Hon MichaelMr. Francis Maude and Mr. David Lightbown.
    Hill, James
    Hind, Kenneth

    Question accordingly negatived.

    I beg to move, amendment No. 21, in page 6, line 3, leave out subsection (4).

    Subsection 4(4) states:
    "A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot in accordance with the arrangements made for the provision of such services in its area."
    Prior to Third Reading in the Lords, the subsection read:
    "A competent harbour authority may refuse to authorise any person who is not willing to provide his services as a pilot in accordance with such arrangements as the authority considers appropriate under subsection (1) above."
    That clause was so draconian as to be untrue. It effectively negated all the promises that were made by the Government that they would ensure the equitable treatment of pilots. It effectively nullified the intention of the newly introduced arbitration board.

    In view of the statements that the Minister made in the last debate, I do not believe that this subsection, as redrafted, improves on that situation. It is clearly subordinate to subsection (1) of the clause, which states:
    "Subject to subsection (2) below, a competent harbour authority may make such arrangements as it considers appropriate for the provision of the services of authorised pilots in the area in relation to which its duty under section 2(1) above is exercisable (whether under a contract of employment or a contract for services)."
    I have underlined the important aspect to which subsection (4) clearly is subordinate—such arrangements as it considers appropriate for the provision of services. This amendment serves no useful purpose, in that the general terms in which the Bill is written do not impose a duty on any competent harbour authority to authorise any person it does not wish to.

    I shall comment on this amendment in relation to the Minister's remarks in the last debate. He feels that the assurances that have been given are sufficient. Clearly the pilots do not. The guidelines that have been laid down, unless they are contained somewhere in the Bill or schedule, need to be more substantive than a ministerial assurance.

    Nothing that I have heard tonight allays my fears that the pilots may find themselves unable to receive the sort of treatment which the Prime Minister, my right hon. Friend the Secretary of State, as well as the noble Lord, Lord Brabazon, promised that they would.

    This amendment may remove the competent harbour authority's right to have the final say as to whether it will offer direct employment. Since that is fundamental to the Bill I must ask my hon. Friend to withdraw it, or we should resist it.

    I have been puzzling over this amendment. I am an amateur and I do not understand the technicalities. However, it seems to me that this paragraph means that the authority that decides on qualifications of a professional pilot also decides whether he should be employed. If he is not willing to be employed by that authority, does that mean that he loses his qualifications to work as a pilot?

    It is the authorisation that gives the pilot his status. It then becomes another matter as to whether he is given sufficient opportunity to be employed.

    Amendment negatived.

    Clause 4, as amended, ordered to stand part of the Bill.

    Clause 5

    Temporary Procedure For Resolving Disputes As To Terms Of Employment

    8.45 pm

    I beg to move amendment No. 22, in page 6, line 15, after 'employment' insert 'or contract of services'.

    With this it will be convenient to take amendment No. 24, in page 6, line 22, after 'employment' insert

    'or the kinds of contracts of services'.

    The purpose of this amendment is to ensure that all the continuing pilots will be treated in a similar fashion — that is, both those who accept contracts of employment under section 4(2) and those who opt for alternative methods of employment.

    The Government see the clause as a means whereby they are fulfilling the several undertakings given to pilots. The clause was written into the Bill as an amendment on Report in another place. In moving the Amendment, the Minister stated:
    "I believe that with the acceptance of these amendments there can no longer be any doubt in anyone's mind that the Government are fulfilling the undertakings we have given the pilots who continue in the profession, no less than those who retire, that they will receive fair and equitable treatment." —[Official Report, House of Lords, 12 February 1987; Vol. 484, c. 813.]
    As worded, this clause will apply only to those pilots who accept contracts of employment and obviously, if not amended in the manner suggested, the Government would not be fulfilling their undertaking—as exemplified by the amendment to clause 4 —to a large number, perhaps the majority, of the continuing pilots.

    This is in line with amendments previously introduced into the Bill by the Government — for example, by amending clause 4(1) to include
    "(whether under a contract of employment or a contract for services)."
    That would make self-employment an option which could be considered. Without it, self-employment is not a starter. I hope that the Minister will accept this amendment.

    We have introduced into the Bill, by way of an amendment in the House of Lords, a temporary arbitration procedure with regard to contracts of employment between the competent harbour authorities and the pilots.

    The suggestion in these amendments is that those arbitration procedures should also be applied to a case where pilots are not directly employed by the competent harbour authority. We believe that to be unnecessary, since any such arrangements can be introduced only if there is an agreement between the parties.

    There is a further point. Contracts for services may, in some cases, be placed as a result of competitive tenders put out to two or more possible contractors. Clearly, arbitration would have no place in determining what the terms of a contract resulting from competitive tendering should be.

    I must ask my hon. Friend to withdraw this amendment or urge the Committee to resist it.

    Amendment, by leave, withdrawn.

    I beg to move amendment No. 23 in page 6, line 20, leave out second 'the' and insert 'an'.

    This is a technical amendment to make it clear that the chairman and or members of the arbitration panel may he different in different cases of dispute.

    Amendment agreed to.

    I beg to move amendment No. 25, in page 6, line 26, leave out from first 'of to 'by' in line 27 and insert

    'three members, one appointed by the Secretary of State, one'.

    With this it will be convenient to take the following: Amendment No. 26, in page 6, line 26, leave out from first 'of' to `by' in line 27 and insert

    'three members, one, the Chairman, appointed by the Secretary of State, one'.

    Government amendments Nos. 27 and 28.

    Amendment No. 26, tabled by my hon. Friend the Member for Crosby (Mr. Thornton) makes it clear that the bodies representing the ports and the pilots are each to appoint one member of the arbitration panel. It also provides that the member of the panel appointed by the Secretary of State should be as chairman. I am happy to accept that amendment, and therefore not to press amendments Nos. 25 and 28. However, I would wish to move amendment No. 27, which complements my hon. Friend's amendment and which I will ask the Committee to accept.

    I am afraid that there are difficulties here. Certainly, the British Ports Association, Associated British Ports and the United Kingdom Pilots Association have all raised serious queries about the arbitration panel. We understand that there will be a chairman appointed by the Secretary of State who will be completely independent —that goes without saying. Perhaps my hon. Friend the Minister will reaffirm that when he sums up. Also, the chairman would have to be of a legal persuasion. He would have to have some experience in arbitration matters and would perhaps have served a considerable time on some industrial panel. I think that my hon. Friend the Minister will be able to confirm those points.

    One of the queries from the United Kingdom Pilots Association is, how will the operating costs of the panel be funded? I am sure that there is a fairly simple explanation but the association does not seem to understand that side of the matter yet. When is the arbitration panel scheduled to be in operation? Is there some time scale that my hon. Friend the Minister could give us?

    Another difficulty has arisen. The British Ports Association is not necessarily representative of all the employers in the ports.

    I am receiving confirmation of that fact from the Opposition, so it must be right. Associated British Ports is not a member of the British Ports Association. There are rumours — no doubt the Department of Transport will know whether they are true — that other ports are leaving the British Ports Association and that there may be difficulties in the future in getting a representative port view on the arbitration panel.

    The hon. Gentleman talked about the chairman of the panel in his view being someone from the legal profession — perhaps a QC, as is often the case with arbitration panels. Would he expect one of the other two members to be a practising pilot?

    I think that the Minister will agree with me that that would be the right way to proceed. The difficulty is that the arbitration panel would at the same time have to have a fair voice from the port employers; it would not necessarily have to be weighed completely towards the pilotage employees.

    Associated British Ports is suggesting that the two other members of the panel—the hon. Member for Greenock and Port Glasgow (Dr. Godman) mentioned the pilot—can either be regarded as acting in a quasi-judicial capacity, in which case they should have no connection with either of the parties subject to the arbitration, or they should be direct representatives chosen by the parties concerned. I know that Associated British Ports will have no argument about that. Therefore, that confirms what I said to the hon. Member for Greenock and Port Glasgow.

    The Bill currently does not provide for either of those alternatives. The pilots will be able to choose a direct representative, which is fair and equitable, but the port industry nominees envisage having no direct connection with the port subject to arbitration. Therefore, the essential balance of the three-man panel will be lacking. The idea is being floated that if the essential balance is lacking it may mean that the port representative might be employed by a competitor and might have an interest in achieving a result favourable to the pilots. I do not feel that there is any foundation in that, but, at this stage of setting up an arbitration panel, the port authorities will be just as sensitive to the make-up of the arbitration panel as the pilots themselves.

    A suggestion has been made to a Mr. Finney of the British Ports Association that the list of the harbour authorities' representatives should consist of two names —that is, on the panel itself—nominated by Associated British Ports together with British ports authorities' representatives. I can see that that could be carried still further. If there are port authorities that are not members of the British Ports Association, obviously they would have to have some understanding as well.

    I am listening carefully to what the hon. Gentleman says. However, I wonder whether it would be more beneficial if he were to use his undoubted talent and powers of persuasion to persuade Associated British Ports to rejoin the British Ports Association. That would resolve the problem completely.

    I shall definitely do what little I can to achieve that but it is far beyond a lone Back-Bencher's commitment. I know that all the bodies involved in this tussle for control — that is what it is — will be listening this evening and they will have to finalise that between themselves. I think that there will be an equitable arrangement on the ports side.

    All I am saying is that all is not harmony and light on the matter of the arbitration panel. There will have to be more talks in depth with the possible members of the panel and I certainly feel that the pilots must have a firm representation. The ports authorities must have a firm representation and I could even see, as was mentioned earlier, that there might be an ancillary staff representation, because my understanding of the debate is that their voice will also be heard in arbitration matters.

    Obviously my hon. Friend the Minister will not be able to give me a positive answer. He will have to find out from his Department whether there are difficulties. I believe that more port authorities are thinking of leaving the British Ports Association. However, having said that, I see a glimmer of a message coming from the Box. Perhaps if I stall for 10 seconds or more I might find out whether it will help. I know that my hon. Friend the Minister has a good grasp of the Bill and is only too anxious to cast some light on it this evening.

    I am told that the note does not help much, so I shall try on my own.

    In answer to my hon. Friend the Member for Southampton, Test (Mr. Hill), the costs will be met from the Pilotage Commission funds, which were part of the scheme that was proposed to the Secretary of State. They will come into operation as soon as there is a dispute that makes that necessary. That could be before the appointed day, if necessary.

    As for the machinations between ABP and the BPA, I do not think that my hon. Friend the Member for Test would expect me to join in those. It is for those bodies to come to an agreement. It is certainly the intention of the Government that the port should be properly represented. If there is any doubt about the extent of representation for the ports, the Secretary of State has powers under the Bill to make regulations, after considering the views of the parties. The position is clear: we want representatives of the ports to be on the arbitration panel.

    Amendment negatived.

    Amendments made: No. 26, in page 6, line 26, leave out from first 'of' to `by' in line 27 and insert

    'three members, one, the Chairman, appointed by the Secretary of State, one'.

    No. 27, in page 6, line 29, after 'and', insert 'one by'. — [Mr. Michael Spicer.]

    I beg to move amendment No. 29, in page 6, line 42, at end insert—

    '(4A) The references to contracts in subsection (1) above do not include contracts of employment entered into before the appointed day for provision of services as a pilot before that day.'.

    With this, it will be convenient to take Government amendment No. 80.

    9 pm

    The temporary arbitration procedure is intended to apply to cases in which a formerly self-employed pilot has been taken into employment by the competent harbour authority. In a few ports, notably Orkney and Shetland, pilots are already employed under well-established arrangements. There is no need, therefore, for special arbitration arrangements to apply. The amendments would exclude those cases from the temporary arbitration procedure.

    Amendment agreed to.

    Clause 5, as amended, ordered to stand part of the Bill.