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Lords Chamber

Volume 413: debated on Thursday 23 October 1980

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House Of Lords

Thursday, 23rd October, 1980.

The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Southwell.

Helsinki Final Act: Soviet Violations

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government, whether in view of the "Helsinki" meeting in Madrid in November, they will list and date the main Soviet transgressions since the original agreement was signed.

My Lords, I would refer my noble friend to the series of six-monthly reports to Parliament which have been deposited in the Library. The last of these was made on 2nd July, by my honourable friend in another place, Mr. Blaker, and a copy was circulated in our Official Report on 10th July. My noble friend will find that Soviet violations of the Helsinki Final Act, such as in Afghanistan and concerning human rights matters, are detailed in full.

My Lords, while thanking my noble friend for that reply, drawing our attention to these facts, may I ask him how the Soviets can reconcile their war in Afghanistan with the continued talk of détente and their Helsinki pledge not to use military force or coercion against other sovereign states? Does it make sense to go and negotiate a continuation of this treaty when there is such flagrant disregard of the terms which they signed in 1975?

My Lords, my noble friend is quite right. The difficulty is that there are a number of misconceptions in the Soviet mind. The most important one is perhaps that détente is some divisible thing and you can have détente for example in Europe, or so they think, while at the same time trampling roughshod over the poor people of Afghanistan.

My Lords, in the discussions at Madrid, will the noble Lord and his colleagues pay particular attention to the provisions regarding reunification of families in the Helsinki accords, and to the cases of Victor Korchnoi, whose wife and son have been prevented from leaving the Soviet Union to join him in Switzerland, and, more recently, that of Anatoly Shcharansky, who we now hear is desperately ill in the prison camp where he is confined and is being prevented from joining his wife Avatali in Israel?

My Lords, our delegation to the Madrid Conference will certainly be fully briefed on such cases. Whether or not a particular case is raised will have to depend on the circumstances of the meeting, but it will certainly be necessary to illustrate violations of the provisions of the Final Act by reference to specific examples.

My Lords, is it not possible for our Government to protest particularly about the jamming of Western broadcasts, which I think is absolutely monstrous, and also about the recent charges in East Germany to Germans going over to the East, which is only exacerbating a situation which everybody is hoping to be able to cool down?

My Lords, with regard to the first point, about jamming, we shall certainly be making our views known on that matter to the Soviets, as we have done already, As for the second point my noble friend raised, about the East German minimum exchange requirement, we are deeply dismayed by this increase which was announced the other day. This is certainly a serious blow to co-operation in Europe.

My Lords, may I ask the Minister whether he will keep these matters in perspective? Is it not the case that all the main Governments have been guilty of such aggression: America in Vietnam, Britain in the Suez Canal, France in Central Africa at the very time of Afghanistan? While we vehemently denounce what happened in Afghanistan, we have to realise that other Governments are guilty as well.

My Lords, I think that in the past we have indeed failed to keep these things in perspective. We have not attached enough importance to the gravity of the situation in Soviet Russia and elsewhere. It is perhaps worth remembering that since the Russians signed the Helsinki accord the emigration of Jews from the Soviet Union, for example, has dropped from 4,000 a month to 2,500 a month, because they are now applying stricter definitions of kinship, and the number of people who have been arrested is now worse than anything under the Stalin era.

My Lords, while very much welcoming what the Minister has said in answer to these various questions, they do address themselves perhaps principally to the review period when the conference starts in Madrid. May I ask him, therefore, what progress there has been so far in regard to persuading the Soviet Union to allow sufficient time for this review to be a reality? Has there been any progress to report on that point?

My Lords, I fear not. We are extremely disappointed at the slow progress that has so far been made. This is because of constant attempts by Warsaw Pact countries to limit severely the amount of time which should be available for the review of implementation. The Soviets know, I am sure, that the western countries cannot accept this, but we do still expect the review meeting to open as planned on 11th November.

My Lords, may I ask Her Majesty's Government whether they will draw the attention of the Soviet Union at Madrid to the transgressions against the Christian community? Your Lordships may not know that this is perhaps the last time I may have the privilege of addressing your Lordships or being present in your Lordships' House. I would like my last appearance to be associated with a request to Her Majesty's Government that they should ask the Soviet Govern- ment why it is that Christians of all persuasions within the Christian community are still subject to violence; after being drugged and violated they are produced on television to make false confessions. This is a violation against all human rights.

My Lords, I entirely agree with the right reverend Prelate. Indeed, the right reverend Prelate will know of the recent trial, among others of Father Gleb Yakunin, who was the founder member of the Christian Committee for the Defence of Believers in the Soviet Union and who has been sentenced, I hear, to five years in a strict régime and five years' internal exile. I can assure the right reverend Prelate that the Government have issued a press statement condemning these trials in all cases.

My Lords, I should like to take a rather unorthodox action and say how sorry we shall be to miss the right reverend Prelate. He has played many important roles, not only within the Church but outside, and we shall always remember him as a really good democrat.

My Lords. I should like to echo those sentiments. The right reverend Prelate will be much missed in this House.

My Lords, is not the Soviets' recent action of ferrying Soviet arms from their stockpiles in Libya to Iran, further evidence of their total disregard for the Helsinki spirit?

My Lords, I too, have seen a number of press reports on that matter, but it would be wrong for me, I think, to comment on their accuracy or otherwise. Naturally, we should deplore any development that led to an extension or escalation of the conflict in the Middle East.

My Lords, however great the lack of progress in the present preliminary discussions in Madrid, is it certain that the official talks must open next month? Is it inevitable that they must do so?

Yes, my Lords, I understand that the official talks will open even if there is no agreement at the preliminary meetings.

My Lords, would the noble Lord agree that it is extremely important that the British public be kept fully informed of the progress of these proceedings, as there are occasionally times when the British public is a little unwilling to draw the right conclusions from what happens?

My Lords, there is, of course, verywidespread parliamentary and other interest in this matter and I have no doubt that many noble Lords will question me about progress, if no other way is found.

My Lords, will my noble friend bear in mind that the West may be deceiving itself and its electorates by continuing with negotiations based on Helsinki, when these transgressions are continuing and, in fact, increasing in the present climate of Soviet thinking and actions?

My Lords, we have to judge what action to take in these matters by what we think will be in our best interests. Where we can achieve meaningful agreement with the Soviet authorities we shall pursue negotiations.

My Lords, did I understand from the noble Lord that the list of transgressions is to be placed in the Library? Does he not think that it would be better if it were issued publicly not only to Members of this House, but to the press and the general public?

My Lords, on the last occasion that I reported to the House on this matter it was done by means of a Written Answer.

The Parliamentary Boundary Commissions

3.17 p.m.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what steps they are taking to expedite the deliberations of the Parliamentary Boundary Commissions.

My Lords, the four Parliamentary Boundary Commissions are independent statutory bodies, and the Government have no power to intervene in the conduct of their reviews.

My Lords, I thank my noble friend for that somewhat austere reply. I should like to ask whether he is not aware of the fact that we have already reached a situation in which an elector in Buckingham, for example, has only one-quarter or one-fifth of the voting power of an elector in some of the city centres. That surely brings discredit upon representative democracy, and will not my noble friend confirm that the Government are at least on speaking terms with the Boundary Commissions and could pass on this novel idea to them?

My Lords, I entirely agree with my noble friend that, owing to discrepancies in the sizes of the electorates in constituencies, the reviews of the Boundary Commissions are of the very greatest importance. Perhaps I may remind my noble friend that the commissions are statutorily required to report by the spring of 1984, at the latest.

My Lords, are they not also independent bodies, not subject to pressure, even from this House?

My Lords, while the Boundary Commissions must report by the spring of 1984, they can report up to five years earlier. My noble friend has indicated on previous occasions that the reports will be ready by 1982. However, have the Government yet decided whether to propose amending the 1978 Act in order to allow the corn-missions to complete their reviews of the Westminster constituencies before having to review the European Parliamentary constituencies? Is it not more important that the general election, when it takes place, should be based upon constituencies which do not contain the present great disparities?

My Lords, the Government have been considering the matter which my noble friend has just raised, and the result of our deliberations will be announced in due course.

My Lords, will the noble Lord assure me that he will not foist upon the overworked British public a system of electoral colleges?

My Lords, is it not a fact that the local government Boundary Commissions, having completed their review of electoral areas so that the Parliamentary Boundary Commissions can do their work, will then have to look at the boundaries of local authorities? Therefore, could we not once again have a situation where, if we have an early report from the parliamentary commissions, we shall find the parliamentary constituencies out of step with local government areas? Therefore, would it not be best to try to unite the work of the two commissions and delay the report of the Boundary Commission as long as possible?

My Lords, the noble Lord has raised this matter before and I have checked on it again. I understand that the interrelation between the work of the local government and the Parliamentary Boundary Commissions is not causing any delay in the present review of parliamentary constituencies.

My Lords, I should like to ask whether the Minister will not consider any delay. It is already getting difficult for political parties of all persuasions to choose their candidates when they do not know whether the constituency concerned will be entirely wiped out or changed.

My Lords, I understand that the Parliamentary Boundary Commissions for England, Scotland and Northern Ireland are likely to have completed their reviews during 1982, and although the commission for Wales has not yet begun its review it is expected to do so very shortly indeed. That is the state of play and I can add nothing further in answer to my noble friend.

My Lords, granted that the Boundary Commissions are independent statutory bodies, if the Government can properly tell magistrates' courts to be realistic in sentencing policy, is there anything really inappropriate in their telling the Boundary Commissions to hurry up?

My Lords, does the noble Lord not realise that there is a precedent, not for Governments talking to Boundary Commissions, but for representatives of all parties speaking to them on such matters as are worrying the parties? In fact, I was a member of such a delegation to the Boundary Commission in 1948.

Chemical Weapons: Discussions With Usa

3.23 p.m.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what decision has been reached in discussions with representatives of the United States on the production of chemical weapons.

My Lords, as I have told the House before, the Government view with increasing concern the Soviet Union's offensive chemical warfare capability. We have no plans for acquiring an offensive capability of our own, but we cannot ignore the issues raised by the existence of the Soviet stocks. We have, therefore, encouraged discussion of these important issues. No decisions have been called for from these continuing exchanges.

My Lords, can the Minister confirm that there is already an international convention limiting the use of chemical weapons, and that 10 years ago both the United States of America and the Soviet Union stopped producing them? Is it not also the case that hardline evidence about Soviet stockpiling of chemical weapons is very flimsy as is also evidence of their use of nerve gas in Afghanistan? In view of the fact that there is no definite evidence of these charges, is not this premature action?

My Lords, I am not certain to what international convention the noble Lord refers. I would very much doubt whether we in this country would believe that the Soviet Union has not produced chemical weapons in the last 10 years. On the last part of the noble Lord's question, I would agree with him that there is no completely irrefutable evidence of the use of these weapons, but of their possession by the Soviet Union we are in no doubt.

My Lords, can my noble friend say it is the opinion of the Supreme Allied Command Headquarters in NATO, that if, alas!, an offensive should be staged by the Soviet Union, they are quite convinced at headquarters that chemical warfare will result? In view of that, is it not vital that NATO, or in particular the Americans, have adequate stocks of chemical warfare to use as a deterrent against the Soviets using them?

My Lords, my noble friend referred to precisely the kind of misgivings that have been expressed on a number of occasions by a number of people in this country, including myself at this Dispatch Box. These are precisely the issues that we are addressing at the present time.

My Lords, is it not the case that the cruelty, appalling suffering and injury to combatants and non-combatants inherent in the use of chemical warfare have long ago led to the prohibition of its use, both in customary law and in a number of existing international instruments, like more than one Hague Convention and more than one treaty? Is not there now a case for pressing for an international convention, first, for the prohibition of the manufacture of chemical and bacteriological weapons and, secondly, for the destruction of any stockpiles of these commodities that already exist? Should not an effort be made towards achieving this convention?

My Lords, I do not think that I would disagree with anything that the noble and learned Lord has said. May I remind him—and I have said it on a number of occasions here and I would not wish to bore the House—that the United Kingdom is committed to seeking an arms control solution of this problem. We have backed that policy with initiatives. In 1976 the United Kingdom tabled a draft text in the Committee on Disarmament to assist in those negotiations. That draft text would have proscribed not just the use of chemical weapons but, as the noble Lord says, their possession. Of course the difficulty in getting any agreement with Soviet Russia on any of these issues is the problem of the Soviet Union accepting adequate verification. Most of these agreements are meaningless unless you have some means of ensuring that the other side is sticking to them.

My Lords, can the noble Lord tell us whether the use of chemical weapons has ever produced a battle casualty rate to compare with that produced by the musket in the Napoleonic wars? In point of fact, in this nuclear age are not artificial distinctions as to weapons a little absurd?

My Lords, I would defer to the noble Lord in his knowledge of military history. However, I have to say two things to him. I have to say, first, that it is hard to believe that the Soviet Union would bother to possess these weapons unless they had at least given consideration to the possibility of using them. That being so, I should also like to tell him that we have a very good defensive capability against people using these weapons. But the problem is that if you have to put on what are commonly known as "Noddy" suits, your ability to perform is considerably degraded and, therefore, you are at a grave disadvantage vis-à-vis those on the other side.

My Lords, will the noble Lord confirm that the United States' Government has published a number of documents confirming the possession of these weapons by the Soviet Union? Will the noble Lord arrange for copies of those documents to be obtained and placed in the Library of the House? Secondly, can he confirm that reports have appeared that chemical weapons have not only been used in Afghanistan but have been stockpiled in Ethiopia for use against the Eritrean Peoples' Liberation Front? Will he obtain copies of any evidence to that effect and also place it in the Library of the House?

My Lords, I do not think that I could go quite so far as to give an undertaking to assemble all this information, but I certainly hear what the noble Lord has said. Indeed, it is perfectly true that there have been a number of allegations at various times. I shall try to discover exactly how solid the evidence is.

My Lords, is the Minister aware that there would be a very considerable body of support among those experts in this matter that Her Majesty's Government will not waste very scarce defence funds on the resumption of production by ourselves of these rather inefficient weapons?

My Lords, I am sure that the House is grateful for that intervention, coming as it does from someone with the authority of the noble and gallant Lord. Again, this is clearly one of the considerations that would have to be borne in mind in addressing this very difficult problem.

My Lords, does not the Minister's last answer but two virtually admit that there is no real defence against nerve gases? Is not the most significant international reform now required the total disarmament provided for under the Final Act of the special session of 1978? Will the Government give their wholehearted attention to making that policy effective and accepted within an early future?

My Lords, I have to repeat that we remain committed to the notion of this kind of disarmament if agreement could be reached. We continue to exert every effort in that direction. The problem is, I repeat, persuading the other side to permit the necessary measures of verification. So far as the first half of the noble Lord's question is concerned, I think it is an exaggeration to say that there is no defence. We have good defensive equipment which certainly gives some measure of protection.

My Lords, would the Minister tell the House whether it is true that in conditions approaching parity most staff studies say that the use of chemical warfare is unprofitable?

My Lords, I take it that the noble Lord is referring to the parity in nuclear weaponry?

My Lords, there is no question of parity between ourselves and the Soviet Union so far as chemical warfare capability is concerned. This is exactly the problem, as I have been trying to explain to the House. We do not have any offensive capability. Because we have no offensive capability and the other side do, there has to be a temptation to them under certain circumstances to exercise the advantage that they enjoy. We regard that as a very unhappy state of affairs.

My Lords, can the Minister confirm that the United States has an offensive capability?

My Lords, the United States has a very antiquated capability, and the capability of that capability is questionable, to say the least.

My Lords, may I ask the Minister whether he can confirm or deny the report that a Pentagon agency has urged the establishment of a British base for Bigeye 15 nerve gas bombs? Is he conscious of the opposition in Europe, particularly in Western Germany, to reverting to chemical weapons while this matter is being discussed at the Geneva committee?

My Lords, if I understand the noble Lord correctly he is suggesting that we might he asked to stockpile American chemical weapons in this country. If that is so, that has not arisen, and it is a hypothetical situation with which I can hardly deal this afternoon.

"Statutes In Force": Publication Date

3.33 p.m.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what progress is being made with the production of Statutes in Force, and whether enough qualified staff are available to enable this important work to be accelerated.

My Lords, I am grateful to my noble friend for asking this Question. The work known as Statutes in Force is now five-sixths complete. As the editorial work on the remaining sections has been finished, it would not be practicable to accelerate publication. This is expected to be completed by late 1981.

My Lords, I thank my noble and learned friend for that largely satisfactory reply. Is he aware that until the completion of Statutes in Force each parliamentary draftsman has to have his own up-to-date and complete set of revised statutes based on 1948 as the starting point, and further that this means at least 4,000 amendments each year to that set, plus the addition of at least another thousand pages a year? Therefore, the information that my noble and learned friend has given us about the completion of Statutes in Force is indeed welcome.

My Lords, I thank my noble friend. I have always taken a great deal of interest in this publication. It was not exactly my invention, as the White Knight said, but I think I was one of the midwives who brought it into being.

My Lords, is not the near completion of this work a matter for immense gratification and gratitude to those who have been engaged upon this arduous and often unrewarding work?

My Lords, I am much obliged to the noble and learned Lord. I absolutely agree with him. When complete, the edition will comprise 124 subject groups alone, and that is an enormous undertaking. I hope it will provide—if they can afford it—the practitioners and the parliamentary draftsmen with a working copy of the statutes which will save them an immensity of time and labour because what they will have will be virtually a loose-leaf copy of the statutes kept up to date.

My Lords, may I ask the noble and learned Lord whether we are reaching the stage where we can get microfilm of these valuable documents?

My Lords, I do not know about microfilm. What we have is an up-to-date technological method of typesetting. It is computerised. I am not sure whether microfilm would be much help.

Ministerial Statements

My Lords, may I ask the noble Lord the Chief Whip a question on business? Many noble Lords will have seen on the tape and heard on the one o'clock news that the Secretary of State for the Environment has announced a virtual freeze on council house building. He has given most important directions to local authorities which are of vital interest to Parliament, and particularly to your Lordships' House when we are in the middle of a local government Bill.

We had previously secured from the noble Lord the Chief Whip an assurance that anything which merited a Statement in Parliament would be given in this House whether or not another place were sitting. Is he aware that we feel most strongly that important directions such as these—so apposite to our discussions—should have been made here? Does he agree that the Secretary of State for the Environment has once again treated Parliament with disrespect?

My Lords, may I endorse exactly what the noble Baroness, Lady Llewelyn-Davies of Hastoe, has said? This is a matter of some constitutional importance. Not only is there a relevant Bill going through this House, but when one House is sitting, Parliament is sitting, and the purpose of a Statement is that it should enable the Opposition in particular to question Ministers and the Government on the content of that Statement. I hope that we can make this protest in terms which will enable us to say that it will never be repeated in this form.

My Lords, I have listened very carefully to what the noble Baroness and the noble Lord, Lord Byers, have said. Of course I agree in principle and in general with almost all of what they have said. I must of course say that I have not had time yet to look into this particular case. I can assure the noble Baroness and the noble Lord, Lord Byers, that the Government have intended no discourtesy whatsoever to this House and that Ministers are well aware that, where appropriate, Government announcements should be made on the Floor of this House.

My initial reaction—and I must tell the House that I have had very little time in which to confirm this—is that a circular of this kind issued by the Secretary of State would not normally be accompanied by a Statement to Parliament. I shall of course look into this matter further and when I have done so I shall consult with the usual channels as to whether a further Statement to the House at a convenient moment later this afternoon would be desirable.

My Lords, we would not propose to discuss the merits of this now provided that the noble Lord gives us an assurance that he will give us his reactions today to what has taken place. Perhaps I had better add that I hope he is aware that he will have to have a jolly good case, because we do not think this ought to be done in a circular, or, if it is done in a circular, only after Parliament has been informed.

My Lords, would we be right to conclude that the Chief Whip himself had no notice of this?

My Lords, Chief Whips are omniscient, as is well known, but I shall certainly take note of what the noble Baroness and the noble Lord have said further. I am not trying to escape from coming to the House later. I was just leaving the option that, if the noble Baroness and noble Lord find on consideration when I have made my further inquiries that we need not trouble the House further, we need not do so, but I do not want to escape doing so if it is necessary to do so.

My Lords, is the noble Lord aware that it is not necessary to carry loyalty to the point of self-destruction?

My Lords, as regards parliamentary business, I am not sure that that is true.

Civil Aviation Bill

3.40 p.m.

Report received.

Clause 3 [ Vesting of property, etc., of British Airways Board in a company nominated by the Secretary of State]:

Page 2, line 36, at end insert—

("and in the appointment of the directors of which the Secretary of State shall exercise fully his responsibilities as a substantial shareholder.").

The noble Lord said: My Lords, if I may have the attention of the House, I should like to move the amendment standing in my name on the Order Paper. The general thinking behind this amendment has been advanced before. I believe it is well understood, and it has been supported from all sides of the House. We believe that a major, and certainly the majority, shareholder of a company should accept responsibility for the composition of the board of that company. Ministers have said, in language which was—I say this with the utmost respect—more forceful than logical or sensible, that they do not intend to take any part in the process of appointments. They cover up their anomalous position with emotive arguments about leaving the new company free to get on with its job. They seem unable to understand the simple doctrine of delegated responsibility.

There is nothing at all between us in regard to the need for this company, if and when it is established, to be able to get on with its job free from unnecessary intervention or interference from Her Majesty's Government. But that does not mean to say that the major shareholder in the company should not be seen to have the responsibility for the composition of the board.

I am as strongly opposed as the Government, and probably more strongly opposed, to interference, but I say equally strongly that the principal shareholder should accept a proper share of responsibility for the board to which they are going to delegate the task of running the company. Very significantly, when the noble Lord spoke to my amendment on the Committee stage, he trimmed his previous objections to what is now proposed. He said the Government would ensure that there was a good team on the board. But, if they are to make sure that there is a good team on the board, then that must mean that they should accept, and should be known to accept, the responsibilities to which I refer. However, the noble Lord said at Committee stage that he could not accept my amendment because it was too restrictive. I had then referred to the desirability of appointing the board front the present board members of the British Airways Corporation. That, he said, would be too restrictive and they might wish to change a non-executive director. He said that my previous amendment could not be accepted on that account. Therefore, I have removed the particular words to which exception was taken and I hope that the noble Lord will now have no difficulty at all in accepting the amendment. I beg to move.

This amendment concerns a question which was covered exhaustively in another place and on which, as the noble Lord recognises, we have already had some discussion in your Lordships' House. Its wording would, I think, give rise to considerable difficulties in interpretation since I am not aware of any legal standard which would enable the responsibilities of a majority shareholder in relation to the appointment of directors to be determined. These are questions of discretion to be exercised by each shareholder as he thinks best. Therefore, I think we would be most unwise to accept the amendment, but I hope I can satisfy the noble Lord on the nature of the relationship which we envisage between the Government and the successor company. First, let me repeat what has been said before, and what I cannot emphasise too strongly. The Government have no intention whatsoever of controlling the activities of the successor company in the way British Airways is at present controlled as a nationalised industry. In other words, we shall no longer need to approve all the airline's aircraft and equipment purchases and other capital purchases over £5 million. We shall no longer place limits on the total amount of investment it may make, or on the money it may borrow in any one year. We shall no longer need to approve individual borrowings or set a financial target.

As the noble Lord said during our Committee stage debate, once the board are appointed they should be left to get on with running the business. I agree with that wholeheartedly. As I have also emphasised previously, the board of the successor company on the appointed day will be one to which all the members have been specifically appointed by the Secretary of State as promoter of the company. Thereafter, and when shares are sold, the procedure for appointments to the board will be governed by the company's own articles of association, in which there are the normal provisions for the retirement of directors in rotation to face re-election and for filling vacancies as they arise. This is consistent with the Government's wish that the successor company should be constituted as an ordinary private sector limited company incorporated under and governed by the Companies Acts. The Government's role in relation to that company will be like that of any other major shareholder. They will have no special rights or privileges in relation to the company. The Government will not seek to influence, or intervene in, the administration of the company as a commercial concern.

As provided for in the articles, the initiative as regards changes in board membership will be primarily with the board itself after the appointed day, but such changes will be subject to approval by the shareholders. It has already been made clear that there will be no Government directors as such, but, like any other shareholder, the Government's shares will have voting power in respect of resolutions proposed by the board relating to board membership. I do not readily foresee circumstances in which the Government would use their majority vote to veto the proposals of the board in this respect, but the Government's prime concern in relation to voting rights will be what is in the best interests of the company. The aim is for the company to be run by directors in whom the shareholders, including the Government, have confidence. That, I would suggest, is the best way in which the Government should exercise fully the responsibility of a substantial shareholder and that is the way we shall proceed. The interests of the company will be the prime consideration in our minds at all times. I hope this explanation satisfies the noble Lord, and that he will not feel inclined to press his amendment further.

My Lords, it does not satisfy me at all. With respect to the noble Lord, I think what he has read out is a whole maze of contradictions. It is much less convincing than the answer he gave me on Committee stage. He says they will act as would the major shareholders of any other company. But the major shareholders of any other company are not discharging their proper responsibilities if they do not take action which would lead to a board in which they have confidence. The noble Lord himself said that they would leave the initiative to others. But if the thing is going badly and changes are necessary, surely the noble Lord will have to consider whether the composition of the board is right. Surely they will have to express a view; surely they will use their votes. He says they will have theoretical control and they will use that theoretical control. As would be the case with any other major shareholder in any other company, they can control only through the annual general meeting.

There are other aspects of this matter. I believe that the noble Lord's right honourable friend, or some of his honourable colleagues, have given assurances to the present board members. At the moment there is nothing in the Bill which would show those board members that the Secretary of State is in a position, or intends to put himself in a position, to see that those undertakings are carried out. The undertakings will be carried out if, as a major or majority shareholder, he accepts his proper responsibilities on the composition of the board. Therefore, I hope that the House will have no difficulty in accepting the amendment, which the noble Lord himself went a long way to accept at Committee stage.

My Lords, if I may have the leave of the House to make a further observation. I will try to illustrate how we see this matter working by reference to what might be a hypothetical situation, and certainly is for the moment, when, for example, minority shareholders might seek to appoint directors thought to be unsuitable. As I said, the normal procedure is for the board of a private sector company to take the initiative in changes of directors, and I have explained our position as a shareholder in that context. However, I acknowledge that, for example, it is conceivable that a group of minority shareholders might seek to make their own unsuitable nominees for board membership. Indeed, that has been known to happen on occasion in other companies, but not very often. I could not of course say what the Government's attitude would be to any particular nomination—because we are dealing with a hypothetical situation—but generally our policy would be the same. We shall have uppermost in our minds the interests of the company itself in relation to the voting rights in such circumstances. To encapsulate that again, in the event of an unsuitable nomination coming forward we would have uppermost in our minds the interests of the company itself.

My Lords, may I ask the Minister to explain exactly how that would be exercised? The Secretary of State does not propose to take any active part, and the shareholders happen to be the State. Precisely who will make this particular move in regard to the possibility of an unsuitable nominee for the board if all the other members of the board accept that nomination? What


Airedale, L.Gladwyn, L.Mishcon, L.
Amulree, L.Gienamara, L.Monson, L.
Ardwick, L.Gordon-Walker, L.Oram, L.
Avebury, L.Gosford, E.Paget of Northampton, L.
Aylestone, L.Granville of Eye, L.Pargiter, L.
Balogh, L.Gregson, L.Peart, L.
Banks, L.Grey, E.Ponsonby of Shulbrede, L.
Beswick, L.Hale, L.Rathcreedan, L.
Birk, B.Hall, V.Rhodes, L.
Blease, L.Hampton, L.Ritchie-Calder, L.
Boston of Faversham, L.Hatch of Lusby, L.Rochester, L.
Bowden, L.Henderson, L.Ross of Marnock, L.
Briginshaw, L.Hooson, L.Rugby, L.
Buckinghamshire, E.Houghton of Sowerby, L.Segal, L.
Byers, L.Hughes, L.Shackleton, L.
Chitnis, L.Ilchester, E.Shinwell, L.
Clancarty, E.Jacobson, L.Stamp, L.
Cledwyn of Penrhos, L.Jacques, L.Stedman, B.
Cooper of Stockton Heath, L.Jeger, B.Stewart of Alvechurch, B.
Crook, L.Kilbracken, L.Stewart of Fulham, L.
Darling of Hillsborough, L.Kilmarnock, L.Stone, L.
David, B. [Teller.]Kings Norton, L.Strabolgi, L. [Teller.]
Davies of Leek, L.Kinloss, Ly.Taylor of Mansfield, L.
Davies of Penrhys, L.Leatherland, L.Thurso, V.
Donaldson of Kingsbridge, L.Listowel, E.Underhill, L.
Elwyn-Jones, L.Llewelyn-Davies of Hastoe, B.Whaddon, L.
Evans of Claughton, L.McGregor of Durris, L.White, B.
Evans of Hungershall, L.Mackie of Benshie, L.Wigoder, L.
Gaitskell, B.McNair, L.Wootton of Abinger, B.
Galpern, L.Meston, L.


Adeane, L.Boardman, L.Cottesloe, L.
Alport, L.Boyd-Carpenter, L.Crathorne, L.
Amory, V.Caithness, E.Cullen of Ashbourne, L.
Ampthill, L.Campbell of Croy, L.De Freyne, L.
Avon, E.Cathcart, E.Denham, L. [Teller.]
Barnby, L.Clitheroe, L.Derwent, L.
Bellwin, L.Clwyd, L.Drumalbyn, L.
Berkeley, B.Cockfield, L.Ebbisham, L.
Bessborough, E.Cork and Orrery, E.Effingham, E.

steps would be taken, and how? It is all very well to say that steps would be taken, but we should be told how they would be taken.

My Lords, I rise with diffidence, and I hope still with the leave of the House, to answer that specific point. All shareholders have certain rights, including, if necessary, casting their votes at an annual general meeting or an extraordinary general meeting, but I must say that the prospect of the Government using their votes is likely to conic about only in the most extraordinary circumstances.

3.53 p.m.

On Question, Whether the said amendment (No. 1) shall he agreed to?

Their Lordships divided: Contents, 89; Not-Contents, 105.

Energlyn, L.McFadzean, L.St. Germans, E.
Falkland, V.Macpherson of Drumochter, L.Salmon, L.
Ferrers, E.Mancroft, L.Sandys, L. [Teller.]
Fortescue, E.Mansfield, E.Savile, L.
Frascr of Kilmorack, L.Margadale, L.Sempill, Ly.
Garner, L.Marley, L.Soames, L. (L. President.)
Gisborough, L.Marshall of Leeds, L.Somers, L.
Gore-Booth, L.Melville, V.Spens, L.
Gowrie, E.Milverton, L.Strathclyde, L.
Gray, L.Morris, L.Strathcona and Mount Royal, L.
Gridley, L.Mowbray and Stourton, L.Sudeley, L.
Hailsham of Saint Marylebone, L. (L. Chancellor.)Murton of Lindisfarne, L.Swansea, L.
Newall, L.Swinfen, L.
Halsbury, E.Northchurch, B.Thorneycroft, L.
Hankey, L.Nugent of Guildford, L.Trefgarne, L.
Hanworth, V.Nunburnholme, L.Trenchard, V.
Hawke, L.Onslow, E.Trumpington, B.
Henley, L.Orr-Ewing, L.Vaux of Harrowden, L.
Hylton-Foster, B.Penrhyn, L.Vickers, B.
Kemsley, V.Radnor, E.Vivian, L.
Killearn, L.Reigate, L.Wakefield of Kendal, L.
Kimberley, E.Renton, L.Willoughby de Broke, L.
Kinnaird, L.Rochdale, V.Wilson of Langside, L.
Long, V.Romney, E.Windlesham, L.
Lucas of Chilworth, L.St. Aldwyn, E.Wise, L.
Lyell, L.St. Davids, V.Wynford, L.
McAlpine of Moffat, L.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 12 [ General objectives of Civil Aviation Authority]:

4.2 p.m.

Page 14, line 24, at end insert—

("( ) After subsection (6) of section 26 of the Act of 1971 there shall be inserted:—
"Provided that the power granted to the Secretary of State to allow in whole or in part an appeal from any decision of the Authority with respect to an application for a licence shall be exercised only in circumstances which are in his opinion exceptional or of substantial public interest; and in the event of his exercise of such power he shall lay before both Houses of Parliament the reasons for his decision."").

The noble Lord said: My Lords, I said at Committee stage that I would return to this question of licensing. I have since had the advantage of considering the reasons which the Government advanced when they turned down the amendment tabled at Committee stage by the noble Lord, Lord Boyd-Carpenter, as well as the one which I had also ventured to table and which suffered a similar fate. The noble Lord, Lord Trefgarne, said then that a fixed time limit for considering appeals was impracticable. I have therefore now tabled the amendment moved in Committee by the noble Lord, Lord Boyd-Carpenter, but without the time limit, and that removes the understandable objection which the noble Lord, Lord Trefgarne, advanced at Committee stage. Having taken that obstacle away, I hope we can now have agreement.

The noble Lord was also briefed, however, to raise other, less understandable objections, and perhaps we might briefly consider them. He said that there could be occasions when there was a very minor matter which would lead the Secretary of State to override the Civil Aviation Authority. I leave your Lordships to judge the validity of this objection. I doubt very much whether any noble Lord can make the case for setting up another licensing body, another body of opinion, simply to consider what the noble Lord described as "some minor matter." That is especially difficult to accept because such a minor matter, even if there were one, would have needed to come up on the original appeal; otherwise, according to the procedures, it was not to be taken into account later on by anyone—the Secretary of State or the Civil Aviation Authority.

Then someone in the department thought up another objection: that it was unreasonable to have to report appeal decisions to Parliament. Having put that reason very forcefully before the House, within less than a week he was reporting to us why they had overridden certain other decisions of the Civil Aviation Authority. At any rate, he demonstrated that the objection he had held so strongly a week before was scarcely as tenable as he tried to make out. I doubt whether he will advance that argument again today.

Then the noble Lord, Lord Trefgarne, said that the Secretary of State would in any case use his powers only in what he described as "exceptional cases". Yet again, extraordinarily, within a week we were told that the Secretary of State had reversed another decision of the Civil Aviation Authority because, he said, of "a balance of advantages"; that is to say, apparently the judgment of the Secretary of State or of his advisers in the department tilted one way while the considered judgment of the authority tilted another way. It is not for me to say which judgment was correct in that particular case, but I do say that there is no point in having a Civil Aviation Authority if there is a superior body of opinion in the Secretary of State's department. I thought we were now agreed that there should be one authority. There is a case for having it in the Department of the Environment; there is a case for setting up an independent authority; but there is not a case—there cannot be a case—for having a decision taken by the properly constituted authority and then the balance of advantages being weighed again by someone else and a different view taken.

My Lords, that brings me to the other point made by the noble Lord, Lord Trefgarne, last week against the amendments moved by the noble Lord opposite and myself. Last week the noble Lord made much play of the fact that within the past nine years the Secretary of State, under the appeal procedure to himself, had overturned the authority's decisions on "very few occasions." Yet again, within days the Secretary of State thought it necessary to summon press conferences and to have statements made in the House about another batch of four decisions, two of which he had overturned.

The noble Lord accused me of being flippant when I asked whether the quota for the next nine years had now been exhausted. My Lords, I was not flippant; I was rather sad. It grieves me, the Government having made out such a strong case, as undoubtedly they had, for the authority of the Civil Aviation Authority to be developed; when they had said in such strong terms in the other place, and again here, that the Secretary of State would not intervene and that, following the time-honoured precedent, having appointed a dog they were not proposing to bark themselves—having done all that—there was first the Hong Kong case and then the other cases we have had this week. I hope that the noble Lord will drop his charge of flippancy, because I feel that this is something which ought very seriously to be considered.

I had accepted what had been said by Ministers earlier, that they would enhance the standing of the Civil Aviation Authority. I thought that there was something in their view that true economy of administration in the country meant that responsibility was delegated and that people were left to discharge that responsibility. With the cases that we now have before us, I hope that the amendment (which was drafted very carefully and from which has been cut the offending words regarding the time limit) will now be acceptable to Her Majesty's Government and to the House. I beg to move.

4.9 p.m.

My Lords, many of your Lordships are aware of' the fact that from 1972 to 1977 I was the first chairman of the Civil Aviation Authority. I mention that now only in case any of your Lordships should think that in what I say this afternoon I am affected by unconscious bias arising from that experience. I try to address myself to this objectively, but none of us can be a hundred per cent. sure that we succeed in such a task. I thought it right to mention that fact so that if your Lordships feel that what I say this afternoon should not be taken as seriously as it otherwise might be because of a possible bias, then your Lordships are free to do so.

I was glad that the noble Lord, Lord Beswick, admitted to plagiarism in the drafting of this amendment. It reproduces a large part of an amendment that I put down at the Committee stage, but, after all, imitation is the sincerest form of flattery, and, as I understand it, certainly there is no copyright in amendments tabled in this House. On the amendment at the Committee stage a week ago we had quite a long debate, which the noble Lord, Lord Trefgarne, dealt with with his usual patience, good humour, and reasoned argument.

However, in the course of his speech on that occasion the noble Lord used some words which I think have since gathered increased significance. He said, as reported at column 1561 of the Official Report of 16th October:
"In the nine years or so in which the Civil Aviation Act 1971 and the Civil Aviation Authority Regulations 1972 have been in operation there have been very few occasions on which the air transport licensing decisions of the authority have not been upheld on appeal to the Secretary of State. I think that this shows very clearly that the Secretary of State does not reverse or vary his decisions lightly or without the most serious consideration, and there is no reason to think that that situation will change in future."
In the week that has elapsed since then, the Secretary of State has—if I may use a colloquialism—been and gone and done it again. The decision to which I invited attention—the Hong Kong decision, which the noble Lord, Lord Beswick, has already mentioned—was the first major exercise of this power in the whole nine years' life of the authority, and therefore my noble friend on the Front Bench was in a position to argue, as he did, that this power was so infrequently and cautiously used that on the whole it was unnecessary for your Lordships to insert an amendment restricting its operation.

However, I think that my noble friend as a fair-minded man will himself have to concede that the fact that this has been done again since he spoke puts a somewhat different light on the intentions, attitude and policy of at any rate the present Secretary of State in regard to this matter. As the noble Lord, Lord Beswick, said, in the last day or two the Secretary of State allowed two appeals. One was allowed with the agreement of the authority, correcting what was undoubtedly a technical error. However, the other appeal, which concerned the case of the Laker Services from Manchester and Prestwick to Miami, involved a straight reversal of the decision of the authority; the second straight such reversal by way of an appeal decision. I do not need to go over what I said at the Committee stage, but obviously continued reversal of this kind, if unchecked, must inevitably undermine the status of the authority, its standing with the industry that it is supposed to regulate, and indeed the confidence which airlines can place in air transport licences when granted them by the authority.

It has certainly been the case over the years—it was certainly so during my tenure of the chairmanship—that although a right of appeal existed, and could be exercised for a limited period, airlines, when granted a licence by the authority, went ahead, bought aircraft, incurred expenditure, went into route proving and all the preliminaries (with which my noble friend from his own previous capacity is very familiar), on the basis that they had obtained a licence and that it was extraordinarily unlikely that the Secretary of State would vary the matter.

However, all that has now been changed, and in all seriousness I suggest to my noble friend that, unless Parliament now marks its feelings on this matter, not by eliminating the appeal, but by restricting its operation in some measure, then both the standing of the authority—which I think has established a good record in its nine years' life—and the confidence of the industry in its licences will be quite seriously undermined. That must be a matter of concern to the Government, in particular at a time when, I hardly need add, the whole civil aviation industry is going through a very difficult period indeed.

I should like to add a word of praise to my noble friend. I was very glad that upon the Secretary of State deciding to take this action, my noble friend came to the Dispatch Box the day before yesterday and, in accordance with what was suggested in the previous amendment and in this amendment, made a Statement to that part of Parliament which is sitting at the moment. I was very glad that my noble friend did that and thereby, very sensibly, appeared to accept that this part of both of these amendments was sound and that when the Secretary of State made decisions of this kind he should announce them publicly to Parliament and stand up to any criticism that there might be.

I wonder whether your Lordships will allow me—because I think it is relevant to this matter; and I promise to be as brief as possible—to sketch in what is involved in these appeals. On a licensing application the authority sits in public, and hears evidence, and the parties are, or can be, represented either by lawyers or by their officials. Each is in a position to cross-examine the other's witnesses. The procedure is quasi-judicial. Every point of view is aired in public, and every piece of evidence can be challenged. As I say, the procedure is quasi-judicial, and it is supervised by the Council on Tribunals. Indeed I understand that should the authority commit a serious error in conducting its quasi-judicial proceedings, the Divisional Court could intervene by way of what used to be called the old prerogative writs. So there is really every safeguard.

The appeal, on the other hand, is dealt with by the Secretary of State in private. He deals with it on the basis of the documentation that appeared at the original hearing, plus the documents submitted by the appellants and the other parties; and he does this sitting in private. From many points of view, on issues that sometimes are of very great importance to the airlines concerned, I think it is important to look at the two procedures and to see which of them, in terms of the general public mind, the general sense of justice of the public and of this House, is perhaps the better method of deciding these questions.

At this stage I should mention a matter that arose not on my amendment, but in connection with it during discussion of a later amendment. I think that it was on the amendment moved by the noble Earl, Lord Kinnoull. It involved the question of whether in the case that we were then discussing—the Hong Kong case—the Secretary of State had taken account of matters not before the parties at the original hearing or on the appeal; that is to say, any representations that might have been made by the Government of Hong Kong, who were of course extremely interested in the success of an application, which the authority had rejected, by Cathay Pacific Airways, who were appellants in the case.

My noble friend, with his habitual courtesy, offered to write to me, and to the noble Lord, Lord George-Brown, (whom I do not think is in his place) a letter explaining what happened. The letter is not marked "confidential". As I understand it, my noble friend is perfectly happy that it should be quoted to the House, though he did not, I think, feel very enthusiastic about my request that he would include it in the Official Report. As I say, the letter is not marked "confidential", and if my noble friend is content, I should like to read the relevant passage from it, and of course my noble friend can add any comments he may wish to add when he replies.

I leave out the preliminary, opening paragraph. For fairness I must read the whole of the following paragraph, though I apologise to your Lordships if it is a trifle long. The letter states:
"I can confirm that no communication from the Government of Hong Kong was taken into account in the appeal procedure which was not available to other parties. However, as the Secretary of State said in his statement in the House of Commons on 17th June, he received representations from the Government of Hong Kong that under the powers conferred on him by Section 4(3) of the Civil Aviation Act 1971 he should direct the authority to licence Cathay Pacific in the interests of the United Kingdom's relations with Hong Kong. In the event, the Secretary of State decided that he should not issue a section 4 direction. The Hong Kong representations on this matter were put firmly on one side and not taken into account since the appeal was dealt with in accordance with tile normal appeal criteria. The Hong Kong Government was of course itself a party to the original case and a party to the appeal. It made representations to the Secretary of State as part of the appeal procedure. These representations were taken into account by the Secretary of State and were of course copied to the other parties."
Let me say at once that knowing as I do the Secretary of State as a man of the highest honour, if he says that he put aside the earlier representations made to him by the Hong Kong Government, I accept that without qualification. But the fact that he had to do so—and when you are dealing with a matter of this sort, it is extraordinarily difficult to know which of the factors finally influenced you—having received very strong representations from an influential part of the colonial empire, indicates some of the disadvantages of this procedure.

All the decisions of the Civil Aviation Authority are taken on the basis of public argument and publicly-given evidence. Here is the Secretary of State, a man of the most scrupulous conscientiousness in this matter—and I repeat that—none the less put in a position of having to disregard representations (which, in his ministerial capacity and as a member of the Administration, he may have thought had some serious import) in order to decide an appeal in respect of which those representations of which the other parties were not aware were in their substance, material. It indicates the difficulty into which this Secretary of State, or any Secretary of State, is put in exercising this jurisdiction.

That leads me to this conclusion. I think that Parliament probably will feel—although some noble Lords have suggested that there should be a totally different appeal procedure to an independent panel—that Ministers in their ultimate responsibility to Parliament should not be entirely cut off from these decisions of very substantial economic and sometimes international importance. But I think, equally, that opinion generally will feel that both for the reasons I have given in respect of the standing and effectiveness of the authority, as also from the point of view of the difficulties of the appeals procedure for those who have to operate it, the actual grant of these appeals and therefore the encouragement of more parties to appeal ought really to be kept to a minimum. It is my understanding in the very short time which has elapsed since this recent hatch of decisions was announced at the Box by the noble Lord a couple of days ago that quite considerable disturbance has been caused in the industry about the attitude which the present Secretary of State is taking to the exercise of his functions, which he is legally fully entitled to exercise, in the frequency with which he will not only consider but allow appeals.

Therefore, I say to the noble Lord that I think that even at this stage, at the Report stage, it is up to him and his colleagues to consider whether some reassurance should not be given. I am a little biased as to the terms of this amendment because its parentage has been disclosed. I would not say it was perfect wording, and possibly something can be done at Third Reading. But I think that some mark of Parliament's view that the Secretary of State's jurisdiction in these matters should be exercised only in the most infrequent circumstances of major public importance, and then automatically reported to Parliament as my noble friend did two days ago, would help to give reassurance in a position which is—and I ask my noble friend to take this from me —causing concern in an already harassed industry.

My Lords, when the noble Lord, Lord Beswick, comes to reply to this short debate, I wonder whether he will be kind enough to remove the only slight anxiety I feel about this amendment, which is this. It emerged in the course of the debate on the Statement the day before yesterday that when the authority is sitting in order to decide whether to grant an application for a licence—a matter which might have the most grave commercial as well as political implications—the tribunal consists simply of one member of the authority. This would appear on the face of it to be not a satisfactory situation. So long as that situation persists and is allowed to continue, the only question that I would venture to ask the noble Lord, Lord Beswick, is this. Is it wise in those circumstances to attempt to restrict the discretion of the Secretary of State in dealing with an appeal?

My Lords, this amendment is similar in form and substance to the amendments tabled and spoken to by my noble friend Lord Boyd-Carpenter and the noble Lord, Lord Beswick, at the Committee stage; and the intention is broadly the same even though there are some minor variations in the wording. Again, as at Committee stage, there is, I am afraid, the mistaken reference to Section 26 instead of Section 24 of the 1971 Act which, arising out of the conversations which have taken place this afternoon, I imagine that my noble friend Lord Boyd-Carpenter now knows about. But I will address myself to what is the substance of the amendment.

It appears to have two objectives: One, to restrict the Secretary of State in reversing or varying the authority's decisions to circumstances which are in his opinion exceptional or of substantial public interest; and the other to require the Secretary of State whenever he reverses or varies an authority decision to lay before both Houses of Parliament the reasons for his decision.

The purpose of the amendment, as has been made clear, is to impose upon the Secretary of State severe constraints in the exercise of his judgment. While I understand the reasons behind this desire, I must say that in the Government's view such an intention is neither necessary nor desirable. It is unnecessary because in all the time since the Civil Aviation Authority has been set up there have been only three occasions on which the Secretary of State has reversed or varied its decisions in a licensing case. One was in connection with the London/Hong Kong route and that decision has been very thoroughly discussed and, I hope, justified; although not, I fear, to my noble friend. The other two, as your Lordships know, were announced earlier this week. The Secretary of State's reversal of the authority's decision not to grant the application of British Caledonian for the revocation of certain British Airways' licences to operate out of Gatwick does not really represent an upset in the normal sense since the authority indicated that it had acted inconsistently and that it was ready for its decision to be reversed.

This leaves only the decision that Laker should be able to operate on the Manchester and Prestwick to Miami route as well as London to Miami. I accept that this is a matter of judgment, but I am satisfied that my right honourable friend has provided a convincing case for this decision. May I ask noble Lords with a particular interest in the Miami appeal to study the announcement which my right honourable friend made on this case and the formal decision letter explaining why the authority's original decision to allow flights from Gatwick but not from Prestwick or Manchester was reviewed? My right honourable friend, while appreciating the authority's reluctance to allow development of services from Manchester and Prestwick which might prejudice the development of the London services, believed that the appellant and its potential passengers should not be denied the benefit of operating from the other two airports. My right honourable friend also considered—and this is very important—that the authority paid insufficient attention to the very important evidence of the airports policy implications of the case. It is worth mentioning that the advisory committee on airports policy, of which the authority is a member, recommended that the authority should license as many services between regional airports and foreign destinations as is consistent with its statutory obligations.

The authority's original decision hardly touched upon the airport implications. Incidentally, it dealt with them in a single paragraph in its submission to my right honourable friend at the appeal stage. Clearly, however, the airport implications are most important and a great many air travellers living outside London will benefit from my right honourable friend's decision, as at least one noble Lord commented when I informed your Lordships of the outcome of this case earlier this week. In effect, therefore, there have been only two reversals of authority decisions in some nine years. In parenthesis, may I say that I think that, prior to the Hong Kong decision, there were two directions to the Civil Aviation Authority to re-hear applications?

Even given that these two have occurred in the past few months, this is surely little enough of a foundation upon which to build a case for emasculating the Secretary of State's powers, which are never likely to be used frequently and will certainly never be used indiscriminately or without the most careful and thorough consideration. The amendment would, as is obvious, also remove the Secretary of State's ability to attend to a minor matter such as British Caledonian's application for revocation of certain British Airways licences to operate out of Gatwick even when the CAA was in agreement. I accept that my right honourable friend could have referred this case back to the authority for a re-hearing, but that would be an expensive and cumbersome exercise in the circumstances. It is surely better that he should rectify an error by a simple decision on appeal; and to remove his power to do so would therefore be undesirable. May I also add that my right honourable friend will be announcing today that he is upholding two further decisions of the Civil Aviation Authority relating to applications by Air UK?

On the second part of the amendment, requiring the Secretary of State to report to Parliament each reversal or variation, I feel bound to suggest that goes too far. It is already the practice for the Secretary of State, in giving his appeal decisions, to set out in his decision letter those considerations to which he had special regard in reaching his decision. In important cases, as your Lordships will be aware, my right honourable friend has taken appropriate steps to report to Parliament, and it would surely be sensible to leave him with a reasonable measure of discretion. There may occasionally he circumstances—perhaps like those in the British Caledonian appeal to which I have already referred—where a minor case would not justify a report to Parliament as a matter of routine.

If your Lordships or members in another place felt there was a need for Parliamentary discussion in a particular case, there are always ways of bringing that about. I hope that I have said enough to set the minds of most of your Lordships at rest and that the noble Lord will therefore not press the amendment.

4.34 p.m.

I rise on Report stage to reply to the debate. The noble Lord has made a very convincing case, but not about my amendment. There was the minor point about Section 26 as against Section 24; but if we agree with the substance of the amendment it is not beyond the possibilities that we can have a further amendment on Third Reading along the lines suggested, making it Section 24 instead of Section 26. That is no reason why we should not accept this amendment.

The noble Lord went into some detail about the three cases that we have had. He said again—and he makes a strong point of it—"There have been only three cases". It is extraordinary that there have been those three cases since they made the great declaration that they were not going to interfere. There have been three cases in the past six or seven weeks. I am not saying that on occasions there should be decisions by the Secretary of State which are contrary to those of the Civil Aviation Authority. The noble Lord made a good point about the need to have the national interest well in mind; and he made a great point about the airports policy. I agree with him that it is conceivable that the authority may not have taken into account the national policy with regard to the development of airports outside the London area. In that case, my amendment would enable the Secretary of State to exercise his powers. That would be a matter of substantial public interest, and he could exercise his powers.

If it be a matter of Hong Kong and some national interest there, I listened with great interest to what was said by the noble Lord, Lord Boyd-Carpenter. I can well imagine that there were some public interest matters at the back of the Secretary of State's mind, but he did not allow himself to be directly influenced by them. Nevertheless, they were there. If he seriously thought that it was in the public interest to vary the decision so far as Hong Kong was concerned on the grounds of public interest, he would be perfectly entitled to do so even if this amendment were accepted. There is no question of emasculating, as the noble Lord said.

I admire Lord Boyd-Carpenter's Parliamentary skill so much that I used his words in this amendment. He was suggesting that there might be something on Third Reading, and he referred to the infrequent and automatic use of the powers. I say "quite exceptional", which are the words he originally used; and, in the case of reporting to Parliament, that there shall be this automatic laying before Parliament. With respect, his original words were better than the words he produced this afternoon.

There was the point made about the constitution of the tribunal, which is a fair and proper one to make. It is suggested that the tribunal might not be properly constituted. I have never heard before that any decision of the tribunal resulted because it was inadequately manned. There may well be a need for ensuring that when they have before them significant appeals or applications there should be more than one person on the tribunal. As I understand it, it is now a matter for the judgment of the chairman of the tribunal, and there is seldom only one person I may be corrected on that.

My Lords, would the noble Lord allow me to speak by way of intervention in his speech? I do not think I need the leave of the House. May I tell him that during my own tenure of office as chairman (and I do not think there has been any change) in cases of substance we generally sat three to a tribunal—perhaps, on occasion, two. There is under the regulations power for one member of the authority to exercise the jurisdiction. It is very convenient when some minor correction of a licence arises, a technical point, to do it. It saves money and time. I do not believe that there has been a departure from the general practice, although I cannot give evidence of it, that three people sit on a tribunal on any major issue, which is likely to go to the Secretary of State anyhow.

I am very grateful to the noble Lord. I hope that satisfies the point. I agree with what the noble Lord, Lord Trefgarne, said as to how these matters should be handled. I do


Ampthill, L.Gisborough, L.Pargiter, L.
Ardwick, L.Gordon-Walker, L.Peart, L.
Aylestone, L.Gosford, E.Phillips, B.
Balogh, L.Granville of Eye, L.Ponsonby of Shulbrede, L.
Beswick, L.Gregson, L.Rhodes, L.
Birk, B.Hale, L.Ritchie-Calder, L.
Blease, L.Hankey, L.Ross of Marnock, L.
Blyton, L.Hatch of Lusby, L.Rugby, L.
Boston of Faversham, L.Hayter, L.Shackleton, L.
Bowden, L.Henderson, L.Shinwell, L.
Boyd-Carpenter, L.Houghton of Sowerby, L.Somers, L.
Briginshaw, L.Ilchester, E.Southwell, Bp.
Brockway, L.Jacobson, L.Stamp, L.
Clancarty, E.Jacques, L.Stedman, B.
Collison, L.Jeger, B.Stewart of Alvechurch, B.
Cooper of Stockton Heath, L.Kilbracken, L.Stewart of Fulham, L.
Crowther-Hunt, L.Kilmarnock, L.Stone, L.
David, B. [Teller.]Kinnoull, E.Strabolgi, L. [Teller.]
Davies of Leek, L.Leatherland, L.Strathcarron, L.
Davies of Penrhys, L.Listowel, E.Strauss, L.
De Freyne, L.Llewelyn-Davies of Hastoe, B.Taylor of Mansfield, L.
Donaldson of Kingsbridge, L.Lovell-Davis, L.Underhill, L.
Elwyn-Jones, L.Mishcon, L.Whaddon, L.
Ferrier, L.Morris, L.White, B.
Gaitskell, B.Oram, L.Wootton of Abinger, B.
Galpern, L.Orr-Ewing, L.Wynne-Jones, L.
Garner, L.


Alport, L.Duncan-Sandys, L.Kinloss, Ly.
Amory, V.Ebbisham, L.Kinnaird, L.
Auckland, L.Elliot of Harwood, B.Long, V.
Avon, E.Falkland, V.Lyell, L.
Beliwin, L.Ferrers, E.McAlpine of Moffat, L.
Berkeley, B.Fortescue, E.McFadzean, L.
Bessborough, E.Fraser of Kilmorack, L.Mancroft, L.
Boardman, L.Freyberg, L.Mansfield, E.
Boothby, L.Gowrie, E.Margadale, L.
Caithness, E.Gray, L.Marley, L.
Campbell of Croy, L.Gridley, L.Melville, V.
Cathcart, E.Grimston of Westbury, L.Milverton, L.
Chelwood, L.Hailsham of Saint Marylebone, L. (L. Chancellor.)Monson, L.
Clwyd, L.Mowbray and Stourton, L.
Cockfield, L.Hanworth, V.Murton of Lindisfarne, L.
Cork and Orrery, E.Hawke, L.Netherthorpe, L.
Cottesloe, L.Henley, L.Newall, L.
Craigton, L.Hill of Luton, L.Northchurch, B.
Crathorne, L.Hylton-Foster, B.Nugent of Guildford, L.
Cullen of Ashbourne, L.Inchyra, L.Onslow, E.
de Clifford, L.Inglewood, L.Orkney, E.
Denham, L. [Teller.]Kemsley, V.Penrhyn, L.
Derwent, L.Killearn, L.Radnor, E.
Drumalbyn, L.Kimberley, E.Reigate, L.

not agree that what he said in any way argues against the amendment which I venture to put before your Lordships' House.

4.38 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 80; Not-Contents, 98.

Renton, L.Sempill, Ly.Trenchard, V.
Rochdale, V.Soames, L. (L. President.)Trumpington, B.
Romney, E.Spens, L.Tweedsmuir, L.
St. Davids, V.Strathclyde, L.Vaux of Harrowden, L.
St. Germans, E.Strathcona and Mount Royal, L.Vickers, B.
Saint Oswald, L.Swansea, L.Vivian, L.
Sandford, L.Swinfen, L.Willoughby de Broke, L.
Sandys, L. [Teller.]Teviot, L.Windlesham, L.
Savile, L.Trefgarne, L.Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

moved Amendment No. 3:

After Clause 16, insert the following new clause:
(". The following words shall be inserted at the end of section 34(1)(a) of the Act of 1971—"and this shall include information relating to any appeal against a licence granted by the Authority where the Secretary of State is satisfied that the question of control by United Kingdom nationals is relevant to the determination of that appeal.".").

The noble Earl said: My Lords, I beg to move Amendment No. 3. This is a small, less contentious, narrow and short amendment. My noble friend already knows my arguments, since I have expressed them during the Committee stage, but this is really an attempt to put into the Bill a power that the Minister at present lacks on appeal.

I will not go into a long and boring description of the issue. The issue is very simple: It is that where an applicant makes an application to the Civil Aviation Authority for a licence he can submit information which is sensitive to his company and, understandably, the authority regards that as confidential. If someone appeals against that licence, if it is granted, the Minister for some reason—and this is the gap—cannot call for that sensitive information which may have a bearing on a particular issue (the issue which I have put into this amendment) concerning the control of the company which has applied for the licence and, in particular, the influence on that control by foreign interests.

My noble friend on a past occasion suggested that the Government would amend this by regulation. I would suggest to my noble friend that it is far better to amend it in this way in the Bill, and indeed perhaps by regulation as well, because regulations tend to deal with precise details and the Bill represents principles. I hope that my noble friend can accept this amendment, if not in its present state then perhaps in principle, so that it can be polished up, if necessary, before the next occasion. I beg to move.

My Lords, I am happy to be able to assure my noble friend that the Government are fully alive to the deficiency in existing procedures which was revealed by the recent appeal case to which he has referred. It is indeed unsatisfactory that confidential information which is, or may be, highly relevant to a decision taken by the Civil Aviation Authority should not then be available to the Secretary of State on appeal. Such information, where it is pertinent to the decision of an appeal, ought to be available to the Secretary of State, subject of course to appropriate safeguards as to the continued confidentiality of that information. This applies, whatever may be the issue at stake in the appeal, including the one to which my noble friend refers in his amendment.

However, I should point out that there is no need for a change in the primary legislation to put this matter right. The procedures at CAA licence hearings and in appeals to the Secretary of State are governed by the Civil Aviation Authority Regulations 1972, as amended, these are made under powers conferred on the Secretary of State by various provisions of the Civil Aviation Act 1971. An appropriate amendment to these regulations to rectify the deficiency to which my noble friend has drawn attention is currently being prepared and I expect that a statutory instrument will shortly be laid before Parliament. The Council on Tribunals is being consulted on the terms of the order at present in preparation. I hope that, in view of this assurance, my noble friend will feel able to withdraw his amendment.

My Lords, I am indeed grateful for my noble friend's positive assurance. I am sorry that he feels there is no need to put this into primary legislation. I feel that it would have been helpful to those who read the Acts of Parliament. Nevertheless, I entirely accept his assurance and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.52 p.m.

moved Amendment No. 4:

After Clause 22, insert the following new clause:

( "Aviation Security Fund

.—(1) Section 1 of the Civil Aviation Act 1978 shall be amended in accordance with the provisions of this section.

(2) In subsection (2) after the word "shall" there shall be inserted the words "subject to subsection 2B below, and".

(3) The following subsections shall he inserted after subsection (2):—

"(2B) The Secretary of State shall ensure that
  • (a) expenses due to be reimbursed under paragraphs (a) and (b) of subsection (2) above by payments from the Fund have been properly and directly incurred for the purposes provided in those paragraphs: and
  • (b) aircraft operators, aerodrome authorities and managers and others whose expenses are to be so reimbursed by payments from the Fund secure at all times that the protection and policing operations for which they are responsible are carried out with economy and efficiency.".").
  • "The noble Lord said: My Lords, last week at Committee stage I moved an amendment to establish review committees at each aerodrome to keep under constant review the efficiency and economy of research and security operations. That amendment did not find favour with the noble Lord, and the amendment that I have tabled today seeks to allay the criticisms by users of the system in a different way; that is, by the provisions of information and by establishing a duty to see that the protection and policing operations are carried out with economy and efficiency. I shall not weary your Lordships again with the details of how the security charges have increased by 80 per cent. in the past two years. However, I should like to deal with the two principal criticisms made by users of the existing fund system, and its expense.

    First, are the costs properly allocated'? This year, some £6.3 million will be paid out of the fund as reimbursement of police costs, but unless the users are aware of the total police costs at airports, and of the proportion of those costs which are directly attributable to security and antiterrorism measures the suspicion will linger that other police work—the prevention and detection of theft and more general police duties—are being substantially underwritten by the fund. Then the Customs and immigration services benefit hugely from the airside security measures undertaken by British Airports Authority's staff and, indeed take advantage of them in carrying out their own duties, yet, so far as can be deduced, make no contribution to the costs involved. Finally, there is the cost of special protection measures in respect of British Airways' Belfast and Concorde services, at around three-quarters of a million pounds this year. Is it right that other airlines and passengers from other countries should be paying for these special measures, and, if so, for what proportion?

    Secondly, is the searching and security efficient and economic? At British Airports Authority airports, the manpower involved is now very considerable—some 2,222, according to the authority's last annual report. Nearly two years ago, on 6th February 1979, the noble Lord, Lord Trefgarne, himself expressed concern about this. He said, to quote Hansard:

    "… I therefore view with some trepidation the creation of this vast army of personnel to see to these tasks",

    and looked forward to its eventual reduction. He went on:

    "I wonder … whether it would be possible to run down this huge private army … as and when the time comes … It may not be this year or next year, or even the year after, but I would not hope that it would go on much longer than that".—[Col. 676.]

    As we enter the "year after what has happened? This private army has grown from 1,500 to over 2,200—an increase of nearly 50 per cent. and the noble Lord, Lord Trefgarne, is indeed adjutant of that army.

    The size of the army and its £20 million cost this year should put an increasing responsibility on the department to seek economies and greater efficiency, wherever possible, so long as standards of security are not affected. The move to centralised screening in Terminal 3 is to be welcomed, though it is long overdue. But the changeover itself will have been in vain, unless it is accompanied by the economies that were found to justify it. Will there be a reduction in Terminal 3 searching staff of around 100, saving £1 million a year, as the British Airport Authority's report prescribed?

    There is also a need to ensure that manning levels at centralised searching points in all three terminals are strictly tailored to demand. If the immigration service can adjust its staff throughout the day to cope with peak flows, and throughout the year to cope with high and low season levels, there is no reason why the British Airports Authority's staff cannot be similarly managed.

    Expenditure of some £38 million of public money is a matter of legitimate public concern. Earlier this year, the noble Lord, Lord Trefgarne, said that the Government were,

    "not satisfied that the present system gives airports and airlines adequate incentive to contain security expenditure".—[Official Report, 17/1/80;Col. 309.]

    At Committee stage last week, he recognised,

    "the need to ensure that aviation security measures are implemented as cost efficiently as possible".

    He said that when rejecting my amendment and added:

    "These are matters which are … better handled administratively".— [Official Report, 16/10/80; Cols. 1599–1600.]

    If that is so, the Secretary of State and his department must take fuller responsibility and play a more effective part in providing the necessary incentives to economy and efficiency. If review committees are thought to be too burdensome, then the Secretary of State's duties should be made clearer and more explicit. That is the purpose of this amendment to the 1978 Act. He is, in any case, responsible for defraying expenses out of the fund, and my paragraph ( a) attempts to put a greater responsibility on him to ensure that these expenses are proper. Paragraph ( b) writes into the Act a more general duty to secure efficiency and economy, and to make clear the line of responsibility from airport authorities to the Government. The aim of the amendment is simply to make the Secretary of

    State more clearly responsible to the taxpayer and to the travelling consumer, for the effective and economical use of these very substantial sums of public money. My Lords, I beg to move.

    4.59 p.m.

    My Lords, this amendment, as the noble Lord has explained, is similar in purpose to one which he put forward at Committee stage. Let me first acknowledge that the noble Lord has gone some way in this latest proposal to meet the objections which I saw in his earlier one. But I am sorry to say that I still cannot accept what he proposes.

    The amendment aims to put an express obligation on the Secretary of State to ensure two things: first, that expenses due for reimbursement from the Aviation Security Fund have been "properly and directly incurred" for the purposes laid down in the legislation; and, secondly, that those who receive reimbursement from the fund see to it that their protection and policing operations are, as he said, "carried out with economy and efficiency". Let me make clear at the outset that of course I entirely share the noble Lord's zeal for propriety and efficiency in these matters, but I submit none the less that the amendment is unnecessary.

    In the first place it is unnecessary because the Secretary of State is clearly obliged to see that expenses due for reimbursement from the fund have been "properly" incurred for the purposes stipulated in the legislation. The Secretary of State has no power to make reimbursements from the fund unless the expenditure was properly incurred in the first place for those purposes. I can assure your Lordships that the department are assiduous in seeing that money is only paid out from the fund in respect of expenditure that is so properly incurred. And to the extent that any further safeguard is required, it is provided by Section 1(3) of the Civil Aviation Act 1978 which obliges the Department of Trade to prepare accounts of the fund and to have them audited by the Comptroller and Auditor General, who is in turn required to "examine and certify" every account. The amendment is equally unnecesssary in respect of the "economy and efficiency" of the protection and policing operations.

    May I refer at this juncture to the noble Lord's point about cross-subsidisation of the security fund. It is true that some cross-subsidisation occurs between different airports and between different types of operation, but I suggest that security in these matters is indivisible and that breaches of security in one area would endanger people and operations elsewhere. If, for example, security were lax at Belfast and a terrorist got on board an aircraft there, he could wreak havoc at London Airport when he got there. Thus, it is very difficult to distinguish between one airport and another in the way that the fund is distributed or collected.

    I am not sure what mechanism the noble Lord has in mind for ensuring this economy and efficiency. If he has in mind an inspection system under which vast numbers of civil servants would troop around the country verifying the economy and efficiency with which protection and policing are carried out at various airports, then the cure, your Lordships may think, might well be worse than the disease, if disease there be.

    I am sure that the right way to maintain economy and efficiency is through regular discussions between aerodrome authorities and airlines, with the Department of Trade playing its part, too. As I explained at Committee stage, airport security committees already exist at every airport, where airlines can seek information from the airport managements regarding security operations and discuss their efficiency; and, at Government level, the Department of Trade chair the Working Group on the Aviation Security Fund, which includes user representatives and which spends a great deal of time discussing the efficient administration of the fund. The tripartite reviews—including the recent review of Heathrow Terminal 3 which I said to your Lordships during the Committee stage my honourable friend Mr. Tebbit has accepted—have already emerged out of these discussions. I can assure your Lordships that the department continue to regard it as an important part of their role to promote economy and efficiency in this field, wherever they can. Reimbursements from the fund are at the department's discretion, and they are not obliged to reimburse expenditure which they have reason to believe has been incurred extravagantly or without due regard for efficiency. Further statutory obligations are therefore, I suggest, unnecessary.

    To sum up, I submit that this amendment is quite unnecessary in imposing duties on the Secretary of State that he already recognises. Unnecessary legislation is something that we should do all we can to avoid. I hope therefore that the noble Lord will not press this amendment.

    My Lords, I thank the noble Lord for his reply. I felt that it was rather unsatisfactory but I shall study it with interest. There was a particular area of concern which the noble Lord did not recognise in his reply. He said that the fund only had the duty to pay out expenses which had been properly incurred. As the noble Lord knows and as all noble Lords know, when one is trying to apportion costs there are, very often, many different ways in which particular costs can be apportioned. If the airlines had more information made available to them as to how these amounts were arrived at, I think that an element of the dissatisfaction could be cured.

    In moving the amendment I quoted some items about police costs and items about other costs. Nobody can know, without fuller information, whether these costs have been properly apportioned, and I had hoped that the noble Lord would be seized of this concern. However, I do not intend to press the amendment to a Division this afternoon, although I shall reserve my right to return to it, if necessary, at Third Reading.

    Amendment, by leave, withdrawn.

    5.6 p.m.

    moved Amendment No. 5:

    After Clause 23, insert the following new clause:

    ( "The Authority's harrowing powers

    . At the end of subsection (2) of section 5 of the Airports Authority Act 1975 the following words shall be inserted "but the consent of the Secretary of State, or the approval of the Treasury, shall not be withheld under paragraph ( c) of this subsection if the Authority is thereby unable to carry out its duty under section 3(1) of this Act without levying charges upon users of its services and facilities that unreasonably exceed, or are disproportionate to, the cost of providing each such service and facility.".").

    The noble Lord said: My Lords, last week the Committee stage of this Bill coincided with the start of an action between a number of airlines and the Secretary of State for Trade and the British Airports Authority on the legality of the British Airports Authority's current financial target in consequence of its charging policy. My amendment on landing charges themselves was not discussed last week during the Committee stage, as the question was raised whether the remarks I should make in moving it would be sub judice. It has now been clarified that such remarks would not have been sub judice as the sub judice rules do not apply to Bills. The rules go on to say that the House itself will of course recognise that it is often undesirable for Parliament to intervene in the settlement of matters upon which the decision has been delegated to others by Parliament itself. In view of this, I have decided not to press forward with the amendment on landing charges, which would have effectively required the authority to alter its charging policies. That might be thought by your Lordships to be sailing rather close to an intervention in this matter. I have decided, however, to go ahead with the amendment on the borrowing powers of the authority.

    The amendment has been redrafted from the amendment which was on the Marshalled List last week and now relates solely to this matter. The borrowing powers are set out in Section 5 of the 1975 Act and may be exercised only with the consent of the Secretary of State and the approval of the Treasury. The amendment provides that in the case of borrowing on the commercial markets only, consent and approval shall not be withheld if certain undesirable circumstances are to result. I regret that the amendment is deficient as it stands. It should have been accompanied by a related amendment to remove from paragraph ( c) the words

    "other than sterling".

    The point at issue is the future of airport development. On 17th December 1979, in his Statement on airports policy in another place the Secretary of State made it clear that the entire cost of developing Stansted would be borne by the British Airports Authority and not by the taxpayer. When this policy was debated in another place, the Minister declared

    that it is a requirement that the British Airports Authority should finance the development of the airport without the cost falling on the taxpayer. When asked why he thought that the users of today should pay for the airports of tomorrow, the Minister was only able to reply that it is right that the airport and airline industries and the passengers should pay for what they use.

    In conjunction with its financial target—an average annual rate of return on net assets of 6 per cent. over the years 1981 to 1983, which is now the subject of legal action—the authority was also refused permission to borrow on the capital markets. It is this restriction, which may be repeated for the next financial year, which is the real cause of the present situation and one which is wholly the responsibility of the Government and their economic policies, especially those towards the nationalised industries. When applied to a basically successful and profitable nationalised industry like the British Airports Authority, this veto on borrowing shows an extraordinary inconsistency. If the British Airports Authority is to remain part of the public sector, then it should not be required to make commercial profits, but, if it is to be regarded as a commercial enterprise, then it should be allowed to act commercially and to borrow on the commercial markets. Future airport development is a sound and attractive proposition for these markets.

    The 1978 White Paper on the nationalised industries put forward four principal arguments against dierct access to the markets: that the industries would have to pay slightly more than the Government would; that they might absorb funds already earmarked for the public sector debt instead of new risk capital; that borrowing in the form of stock issues would complicate the management of the gilt-edged market and that medium-term bank loans might deprive the private sector of funds. It is difficult to see how any of those arguments, other than the second, is directly relevant to the British Airports Authority case. The argument that medium-term borrowing would simply replace at greater cost a corresponding amount of pubic sector debt of a similar maturitiy is powerful so long as one assumes that the two debts would be of a similar quality. In fact, as the authority enters a period of very substantial capital expenditure at all three London Airports, what is required is the sort of imaginative blend of public and private finance to which similar developments in the United States of America have pointed the way. One wonders, for example, whether the Government have explored the possibility of seeking guarantees for such a scheme from other quarters, such as the European Communities.

    The double imposition of a financial target and a veto on borrowing means that, whatever savings are made by the authority, the cost of this major programme of capital expenditure will fall on present users in the form of ever-rising charges. It cannot be right that the independence of the authority in matters of financial policy can be endlessly chipped away in this fashion. If developed logically, the policy could quickly result in the authority being forced to risk losing its own customers as London becomes more and more expensive than other European capitals.

    The amendment is therefore designed to protect the authority from such interference. It introduces into the Airports Authority Act 1975 a clear link between the provisions on borrowing and those on charging. If the authority was being pushed into a position where it was likely to have to increase its charges to a level which seemed to be questionable in terms of its obligations under the 1975 Act or the United Kingdom's international commitments, this amendment would at least allow it unhindered access to the private markets in order to find the additional monies required.

    Unless some safety valve of this sort is devised, there would be at least two undesirable effects. First, London will price itself out of the European market, with serious consequences for tourism revenue, especially from chartered tours originating in the United States. Secondly, the principle that the user of today must pay for a service which he may never use tomorrow has alarming implications for international aviation. The United Kingdom has enormous influence in world aviation affairs. If this can be allowed in an industrialised, relatively prosperous country, how much greater will be the temptation for less prosperous countries in Asia and Africa to finance their future development by transferring the cost to the present traveller. I beg to move.

    My Lords, I wish first to recognise the statesmanship (if that is the right word) of the noble Lord, Lord Ponsonby, in not pursuing his amendments at an earlier stage, when a doubt was raised about the sub judice position. I promised then that, if he would withdraw them at that moment, I would deal with them as fully as I could at a later stage and in honouring that undertaking I hope your Lordships will bear with me if I deal with this amendment at rather greater length than I would normally do.

    The amendment is not, as might at first appear, directly concerned with the level, reasonableness or structure of the charges imposed by the BAA at its airports. It is, rather, concerned with the exercise of the powers granted to the Secretary of State and the Treasury under Section 5(2) of the Airports Authority Act to control the borrowings, other than by way of temporary overdraft, of this nationalised industry. As drafted, it would require the Secretary of State to give his consent to any request for borrowing by the authority if that borrowing were necessary to enable the authority to carry out its duties under Section 3(1) of the Act without producing charges which, and I quote, "unreasonably exceed or are disproportionate to, the cost of providing each such service and facility". Your Lordships will note, therefore, that the amendment places no obligation on the authority itself as to the charging policies it should adopt; the question of whether charges are unreasonable or disproportionate would only arise in the context of the exercise of the Government's statutory powers to control the BAA's borrowings.

    The reasoning behind the amendment is therefore based on two assumptions: first that, in the exercise of his powers over the BAA's borrowings, the Secretary of State has at some stage in the past, or is likely at some stage in the future, to force the BAA to charge airlines at rates which are unreasonable, excessive, or do not reflect the true costs of the services and facilities which are provided. That assumption I am afraid I must reject. Secondly, the amendment seeks to define a reasonable charge as one which is not disproportionate to the cost of providing each service and facility offered. Let us examine these propositions more closely.

    The first assumption rests, if I may say so, on a fallacy. It is based on an allegation by some airlines that the Government, in the exercise of their powers over the BAA's external borrowing, are adopting a policy of self-financing: that is that the BAA is being forced to raise, through its charges and profits, the full cost of its current and prospective investment programme, thus forcing present users of BAA's airports to pay for future investment entirely out of revenue. My Lords, that is not the case. The Government's policy in respect of the BAA is not one of self-financing. In considering the need for external financing, the Government must take account of a number of different factors, but in particular they must form a view of how well a nationalised industry is using its total assets, and whether the prices it charges are set at a proper economic level which reflects the full costs of supply. Subject to the overriding need to contain the PSBR, we have always recognised that there will be occasions when the authority will need to borrow to smooth out the peaks in its capital expenditure programme and we shall make appropriate provision for such borrowings in the future. Thus in the current year, the BAA has been given an external financing limit of £20 million and we are presently considering an appropriate provision for borrowings in the next financial year.

    In the early 1970s the BAA achieved CCA (that is current cost accounting) rates of return of about 6 per cent. per annum, but in their last financial year this return was only 2·1 per cent. Over this same period, landing and parking fees per passenger have fallen steadily and, even after the increases on 1st April, are still in real terms lower than they were a decade ago. Thus, in their last financial year, the BAA actually made a trading loss on its traffic operations of over £25 million on a current accounting basis. I might add that this loss on traffic operations was incurred at all BAA airports, including Heathrow, and was only recovered by the very substantial commercial profits which were earned at four of the seven BAA airports.

    The situation was clarified earlier this year when the authority adopted a financial target to achieve an average return of 6 per cent. on net assets revalued at current cost over the three financial years 1980–81 to 1982–83. This target was formulated so as to be consistent with the principles set out in the White Paper on Nationalised Industries (Cmnd. 7131) produced by the previous Administration in 1978, to which the noble Lord referred. This White Paper set out clearly the factors which should be taken into account in agreeing financial targets, including the expected return from effective cost conscious management of existing and new assets. The policy that nationalised industries should earn a proper return on the assets they employ is one which has been shared by successive Governments, and is itself based on the principle that the prices of public sector goods and services should reflect the full economic costs of supply. I am sure that the noble Lord is not suggesting that this Government, any more than their predecessors, should encourage a situation in which a nationalised industry is automatically able to add to public sector borrowing regardless of its overall performance, but that is the implication of his amendment.

    Let us turn, therefore, to the second proposition which underlies this amendment; that is, the inclusion in the definition of what constitutes reasonable charges of the suggestion that they should reflect the cost of providing each service and facility which is offered. On the face of it, that sounds reasonable, but the intention of those air carriers who make such a suggestion is to prevent what was explicitly endorsed by both the 1967 and 1978 White Papers on Nationalised Industries; that is, that nationalised industries should price to cover their long-run marginal costs. I apologise to your Lordships for introducing this economists' jargon, but it really is very important to understand the implications of this concept.

    I can perhaps best illustrate the difference by pointing to the differential in current charges between Heathrow and Gatwick which is so bitterly criticised by those operators who currently use Heathrow at peak periods. The authority's present policy is to treat its three airports in the South-East as a single system for pricing purposes. The charges at Heathrow are substantially above those at Gatwick, particularly during peak periods in the summer, because by using the airport at those times the airlines are contributing to growing congestion which can only be met by providing new facilities at Heathrow or elsewhere to meet these peak levels of demand. At a time when there is available capacity elsewhere in the system, the only rational pricing policy is one which is designed to ensure that operators using the airports system at its most congested point should pay the true economic costs of doing so if they wish to continue to exercise that choice. This is not so very different from the pricing policies the airlines themselves often use in filling their own aircraft.

    The alternative to such a policy—and it is the alternative implied by the wording of this amendment—is that prices should be lowest for those using Heathrow in those periods of the year when it is most congested, since average direct costs per unit will be lowest at such times, and should be highest for those airlines using other airport facilities at times when there is the greatest spare capacity. A moments reflection will, I am sure, demonstrate that such a pricing policy would be neither reasonable nor based on sound economic principles.

    My Lords, the issues raised by the noble Lord are both important and complex, and I have tried to answer some of them. Meanwhile, I would suggest that to alter the Airports Authority Act in the manner suggested would neither clarify matters nor be in accordance with the policies which have been endorsed by successive Governments. I hope the noble Lord will see fit to withdraw this amendment.

    My Lords, I thank the noble Lord for his very full reply to the moving of this amendment. I will need to study his reply in detail, but for the present I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Clause 25 [ Acquisition of land by agreement by British Airports Authority]:

    5.23 p.m.

    moved Amendment No. 6:

    Page 25, line 10, leave out ("subsection") and insert ("subsections").

    The noble Earl said: My Lords, I beg to move Amendment No. 6 and speak to Amendment No. 7. On the last occasion when we considered this Bill I raised the plight of the Stansted farmers who have been caught in the blight net under the proposals for the expansion of Stansted airport but who at present do not have any blight protection in law. They are the farmers in the second phase of these proposals, the farmers in the 2,500 acres. Their position at the moment is that although they have received an assurance, as set out in the Minister's Statement last December, that they would not suffer blight, and although the British Airports Authority have announced that they are prepared to purchase by agreement, in technical compensation terms their compensation could fall far short of that of their brethren in phase 1.

    I am sure Her Majesty's Government do not wish this. I am sure the British Airports Authority do not wish this. But I really feel this could happen. I think there is a danger that the British Airports Authority valuers could well say that they can go no further under their present terms of reference to cover what they would by law have to offer the farmers in Phase 1. It would be clearly unfair, unjust, and could cause hardship.

    I move these two amendments to give my noble friend an opportunity to reassure the farmers in this plight that they will be treated fairly, that the British Airports Authority will discuss with the National Farmers' Union the guidelines on compensation for these farmers, that the farmers will receive no less than under normal compensation law, and that a proper system of arbitration will apply to resolve questions of valuation between themselves and the British Airports Authority. On the last occasion the noble Lord, Lord Beswick, threw his considerable weight behind this amendment and suggested very helpfully that we should have talks before this next occasion. I am glad to tell him that talks did take place, and I await my noble friend's reply to see how fruitful they were. I beg to move.

    My Lords, my noble friend raised this matter at the Committee stage on 16th October, and I undertook to look again at the arrangements for the purchase of land in the "outer" area at Stansted. I am glad to say that my noble friend and representatives of the National Farmers' Union were able to discuss the matter in some detail with my honourable friend the Parliamentary Under-Secretary of State for Trade, Mr. Tebbit, and I believe this has helped to clarify a number of points which had concerned my noble friend. As I said the other day, the purpose of Clause 25 is to enable the BAA, in order to relieve hardship, to buy land which may at some stage in the future be required for further airport development. Such sales must be on a voluntary basis. Since there is no formal planning application for development of this area, there is therefore no question of statutory blight arising at this stage. These powers will allow the BAA to deal with cases of hardship arising from uncertainty about the future.

    I can confirm that it is the Government's intention that anyone in the outer area who sells his property to the authority should receive its full unblighted value; that is, the value they would have obtained on the open market if there were no plans for the development of the airport. If a decision were made to allow the proposed development of the "15 million passengers per annum" terminal to go ahead on the inner 1,500 acres, it would then be open to the Secretary of State for the Environment to introduce statutory blight arrangements in the wider area by virtue of an Article 10 direction or similar measure for safeguarding the area.

    Any problems therefore arise only in the interim period before final decisions are made on the airport development, and I understand that the BAA are willing to discuss with the NFU the arrangements for the purchase of properties during this period, the guidelines they propose to use, and the possibility of mediation of any difficulties over price in the case of disagreement. I understand that the NFU will now be approaching the BAA to discuss these matters, and I hope that in these circumstances my noble friend will feel able to withdraw his amendment.

    My Lords, I was hoping that the noble Lord, Lord Beswick, might take part in this discussion. I am very grateful to my noble friend for that helpful assurance and I am sure it will be considered a satisfactory reply. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendment No. 7 not moved.]

    Tenants' Rights, Etc (Scotland) Amendment Bill Hl

    5.30 p.m.

    My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

    Moved, that the House do now resolve itself into Committee.—( The Earl of Mansfield.)

    On Question, Motion agreed to.

    House in Committee accordingly.

    [The Baroness WOOTTON OF ABINGER in the Chair.]

    Clause 1 [ Secretary of State's power to authorise refusal to sell certain dwelling-houses provided for elderly persons]:

    moved Amendment No. 1:

    Page 1, line 12, leave out from ("which") to end of line 13.

    The noble Lord said: I beg to move Amendment No. I and I hope that it will be for the convenience of the Committee if I also speak to Amendments Nos. 2, 3 and 5 because they all hang together.

    I interrupt only to say that I think that Amendment No. 5 covers rather different ground.

    I do not think that I mentioned Amendment No. 5. I mentioned Amendments Nos. 1, 2, 3 and 6. If I said Amendment No. 5, I apologise.

    I should like to ask a question. The noble Lord's first amendment reads:

    "Page 1, line 12, leave out from ('which')".
    The word "which" occurs twice in line 12. I presume that he means the first "which". I think that the amendment would read better from there rather than from the second "which". Perhaps the noble Lord could tell us?

    I would be very glad to do so—it is the first "which". Of course, part of this confusion arises from the fact that we had the Second Reading debate just the other night and the time between the Second Reading and the Committee stage has been just a day or so, which is not all that convenient—

    The noble Lord has misunderstood me. Let me read what it says:

    "Page 1, line 12, leave out from ('which') to the end of line 13".
    The word "which" occurs twice. All that I am asking is, which "which" is referred to?

    I think that the noble Lord has already answered the point: it is the first "which".

    Yes, it is the first "which". I hope to explain the amendments and I shall try to read the clause as it is proposed to be amended.

    Your Lordships will recollect that during the passage of both the Housing Bill and the Tenants' Rights, Etc. (Scotland) Bill the House evinced a very considerable interest in houses for old people and expressed a considerable concern about the problem and the availability of a stock of such housing to meet the obligations that have been placed upon the local authorities or housing authorities by Parliament.

    As a result, a change was made in the English Bill. It was considered in another place and the Government decided to accept, in principle, the change that was made, and their acceptance of that was not a little influenced by the fact that business had got into a bit of disarray down there. When they considered what they would do—and there were meetings with the Opposition—certain pledges were made to the effect that whatever was done for England would also be done for Scotland. It was very, very clear. It was stated not by one Minister but by two Ministers. Indeed, they were both Cabinet Ministers—the Leader of the House of Commons and the Minister for the Environment. The pledge was made not once, but over and over again.

    If any noble Lord has not read the Second Reading debate I would remind them of what happened. At col. 528 for 5th August the Leader of the House, Mr. St. John-Stevas said, in reply to Mr. David Steel:
    "On the Housing Bill it is vital that Scotland and England should be treated equally in these matters. Therefore, it is right that the interests of Scotland should be taken into account on an equal basis with the interests of England".
    Then, at column 531, he said:
    "If an agreement in principle is reached that Scotland and England should be treated equally in this matter, how that is done becomes a matter of technicalities".
    The pledge was repeated again by the Secretary of State for the Environment. He was asked for a similar amendment to be inserted in the Tenants' Rights, Etc. (Scotland) Bill, but, of course, it could not be done because there was no amendment; this noble House failed to be consistent in its approach to the problem. However, Mr. Heseltine said, at column 564:
    "it would be the intention of my right hon. Friend the Secretary of State to seek the earliest opportunity to introduce separate legislation for this purpose".
    Of course, that purpose was to produce a similar situation in Scotland as in England. I think that it is fair enough. Later he said that the position would be clarified in respect of Scotland.

    I raised the matter when we discussed the amendments which were returned to this noble House and it was the Minister of State who drew my attention to the statements that had been made in another place. In fact, I had already read them, but he suggested that I read them. I read them again and I have given the gist of them to your Lordships. I suggest that the failure to match that promise in words is the reason for my amendments.

    What was the amendment that was made in respect of the English Bill? Very simply they brought in a new category of housing and said that the Secretary of State must be satisfied that the dwelling- house is designed or specially adapted for occupation by persons of pensionable age and that it is the practice of the landlord to let it only for occupation by such persons. The consequences of my amendments, as taken together, are fairly simple. The provision will read:
    "This section applies to a dwelling-house which has been designed or specially adapted for occupation by an elderly person".
    Then, I would define "elderly person" as:
    "a person of pensionable age".
    It will read exactly the same in the Scottish Bill as it does in the English Act. That will be carrying out the pledge that was given by the Leader of the House and by the Secretary of State and which the noble Lord the Minister of State for Scotland suggested that I read and be reassured about. Your Lordships can imagine my surprise when I read this Bill, because it provides nothing like it.

    The noble Lord, Lord Bellwin, when he dealt with the new proposal that came from the Commons and commended it to the House said, "It will introduce a new category". There is no new category introduced in the Scottish Bill and anyone who goes through the Scottish Bill will recognise the wording because the wording is lifted, I think, from Clause 4(4) of the Scottish Act where a right of pre-emption was given to local authorities in respect of the sale or resale of a local authority house:
    "except in the case of a dwelling-house which has facilities which are substantially different from those of an ordinary dwelling-house and which has been designed or adapted for occupation by an elderly or disabled person whose special needs require accommodation of the kind provided by the dwelling-house".
    These words have been lifted out and included here to give the possibility of exercising the right not to sell on the say-so, of course, of the Secretary of State. With all due respect, that is not a new category. The noble Lord, Lord Bellwin, said it was not only a new category but it meant that sheltered housing was automatically out, as it is in Scotland, but that this new category would be determined by the Secretary of State. This is not a new category as regards Scotland; it is just this old category given this new power.

    The noble Earl will remember that he gave us a figure as to how many more people would be covered by this. We should remember that there are 1 million local authority houses in Scotland. The number that will be covered by the Bill as it stands will be about 6,000. The number to which extension of exclusion is given in England and Wales is 221,000. There used to be something called the Goschen formula; if you referred to Scotland, you had the Goschen formula—eleven-eightieths. That lasted until the 1950s, when we had the rate support grant; and it was the equalisation grant before that. That was instead of getting eleven-eightieths of whatever England received. It would be very much to Scotland's advantage financially if it received eleven-eightieths; but that is water under the bridge.

    The point is that in proportion to persons there are more local authority houses in Scotland. That is because of the need. It is equally true that in proportion to persons in England and Wales we have more old people. Therefore, one of the biggest problems in Highland areas, the Borders and elsewhere, is to meet the genuine needs of old people. This is also true of rural areas and the whole pattern of movement and retiral from agriculture.

    But there is another point in relation to these statistics. There are 184,000 married couples in Scotland where the man is over 65 years of age, and there are 448,000 single people who are over pension age. That makes 632,000 family units, because single people have demands and need housing—and most of them are dependent on local authority housing. The Minister expects us to think him generous with an extension which is much more strict than the English one and which gives an extra 6,000 houses. It is not good enough.

    I understand the noble Earl's fears. His fears are for recalcitrant local authorities, reluctant local authorities and local authorities that are downright opposed to the Act—and there are very few local authorities in Scotland that are not opposed to the Act. But certainly the advice that I have given to those local authorities to which I have spoken is that they should obey the law; that once the Tenants' Rights Act is law, their battle is not with the Government, their battle is with an individual tenant. In people's minds that is very different from a battle with the Government.

    I believe that this new Bill, drafted with care but with reluctance, has been (if I may coin a phrase) designed and adapted to meet the special prejudices, suspicions and fears of the men presently in the Scottish Office. I think that it is quite unjustified and quite wrong. The person who has the last word and who has to make the determination before any house qualifies is the Secretary of State. The words that I have used are the words in the English Act, and they are equally concerned about opening the gates too wide. It is exactly the same. With the protections that are there, I am perfectly sure that we could rest content.

    I hope that the noble Earl has got rid of his Victorian prejudices for coaches and horses. He almost has a fixation for them. He would have made a splendid accident prevention officer, probably about 150 years ago. As regards my amendment, there is no question of even a Metro or a tractor, far less a coach and horses, being driven through the Bill. These amendments contain the same protections as there are in the English Act. If it was good enough for England, it is all right for Scotland. That is what I am saying, and I am prepared to accept it. I do not know what the noble Earl feels about it.

    I have had to redefine "elderly person" because it is in the Long Title and I could not readily change that. That is why Amendment No. 6 has been tabled. An elderly person is defined as "a person of pensionable age." So the words in the clause as amended will be the same as the words in the English Act. I challenge the conscience of all those English Members who wanted Scottish matters to be dealt with on the floor of this House and not somewhere in Edinburgh. Let us be fair to Scotland; let us give the local authorities in Scotland in respect of old people's houses the same kind of exemption as we insisted on for England and Wales. I beg to move.

    Does the noble Lord wish to move Amendments Nos. 1, 2 and 3 en bloc, with the leave of the Committee, or shall I put them separately?

    I rise to support the noble Lord, Lord Ross of Marnock, in this very important amendment. I am sorry if I repeat some of the remarks he made, but the assurance given to my right honourable friend David Steel in the House of Commons was categorical when the Leader of the House said:

    "On the Housing Bill, it is vital that Scotland and England should be treated equally …".
    Frankly, this amendment does not go very far towards treating them equally. It deals with the main points, but it omits another vital factor. In Schedule 1 to the English Act it says quite clearly that also exempted are:
    "The dwelling-house which has features which are substantially different from those of ordinary dwelling-houses and which are designed to make it suitable for occupation by physically disabled persons".
    In the English Act, the sale of the house can be exempted, and the local authority need not sell it. In the Scottish Act, the local authority can certainly buy it back, but local authorities do not always have the money to buy back such houses. At the time a local authority may have spent a lot of money on doing up a house, rightly and properly, for a physically disabled person. That person may then buy the house, and at the end of the day, when the time comes to buy back the house from someone else, the local authority may not have the money available. It seems nonsense to prepare a special facility, sell it and buy it back. Certainly that is in the English Act.

    I must say that Schedule I to the English Act states it simply:
    "The Secretary of State shall so determine if satisfied—
  • (a) that the dwelling-house is designed or specially adapted for occupation by persons of pensionable age; and
  • (b) that it is the practice of the landlord to let it only for occupation by such persons".
  • That is straightforward and simple.

    However, I wholly agree with the noble Lord, Lord Ross, that the Scottish Office and Scottish Ministers have extraordinary fears. Surely the people who really require the facility for retiral are in the country areas of Scotland, where there is no chance of the authorities being particularly hostile in a political sense. They are the people who will suffer. It is extraordinary. I should like the noble Earl when he replies to tell me what this extraordinary wording means. Let me read it again:
    "This section applies to a dwelling-house which has facilities which are substantially different from those of an ordinary dwelling-house and which has been designed or adapted for occupation by an elderly person whose special needs"—
    not an ordinary elderly person—
    "require accommodation of the kind provided by the dwelling-house".
    It seems to me to be going to extraordinary lengths.

    If the noble Earl can say that this definition will apply to small houses specially provided—small houses; nothing specially adapted about them or substantially different—in a group for retired persons in the country areas of Scotland, in the East of Scotland and in the rural areas, then I shall be surprised. However, if he gives me the assurance that this applies to them then of course I would not support the amendment, but I do not see how it can. It simply cannot do it.

    In fact, it borrows largely from the English definition of a house adapted for a physically handicapped person. I do not think that the Government are aware that they have really got themselves over a barrel over it, but I think that noble Lords from the country areas who have the good of the countryside of Scotland at heart ought to support this amendment.

    I know, and so do other noble Lords, that the success of agriculture in Scotland and our isolated farms depend largely on the tied house. In our area people are happy to be in tied houses, and to provide their own houses for all these years, because they know that they can get a house on retiral from the council. Our council, for example, has a system with a lot of extra points for retiring farm-workers.

    It is an essential part of the life of rural Scotland. Definitely this extraordinary definition here in Section 3A does not in my view include that type of house, and these sections of houses which are presently let as a practice to retired people. I am prepared at the moment to let slide the fact that we do not have the same facilities for a council retaining houses for handicapped people on which they have spent substantial sums. I think this is the main amendment we must support, and I appeal to noble Lords from country areas on the other side to right this quite apparent injustice.

    May I rise briefly to support this series of amendments to which my name is also attached. What has gone wrong here is that the formula in the Government's amendment Bill is really a conflation of the arrangement for the physically disabled in Section 3 and for the elderly in paragraph 4 of Schedule 1 to the English Act. The result is that this compilation has come down to us in a—I said conflated, perhaps I should say deflated form, and appears with a certain loss of safeguard and precision en route.

    As the noble Lord, Lord Mackie, pointed out there is an extraordinary combination of two concepts in the Section 3A proposed here.
    "a dwelling-house which has facilities which are substantially different from those of an ordinary dwelling-house".
    That is obviously really intended for the disabled rather than for the elderly. Many old people's homes do not have facilities which are substantially different from those of any other dwelling-house. A far more important consideration in an old person's home is the location of that home in relation to certain services; that is, shops, the post office, or whatever it may be. Therefore, you may have a home which is substantially the same as that for a normal person but it has certain advantages for an elderly person in its location. That type of home would not be covered by Section 3A here.

    It therefore seems to me that the series of amendments tabled by the noble Lord, Lord Ross, and supported by the noble Lord, Lord Mackie, and the noble Baroness, Lady Birk, and I in fact achieves three things. It restores the wording in the English Act whereby the landlord's practice to let those houses for that purpose is taken into account, which is not taken into account in the Government's Scottish version. It restores the six-week period of grace for the local authority which has been reduced to only four weeks or one month in the Government's present formula, and it also clarifies, as the noble Lord, Lord Ross, pointed out the definition of elderly person. Those are three elements of precision which somehow got lost en route and which have been reintroduced by this series of amendments. With those few remarks, I should like to state my support for the amendment, and I hope that many of your Lordships will join us in support of it.

    5.56 p.m.

    I would not put my toes into Scottish waters unless I felt that this was something of such importance that it has much more even than a Scottish dimension. I moved the original amendment on Report on the English Bill, which was accepted and passed by a majority of 35 in this House. Among its supporters there were Scottish Peers, Conservatives, Liberals and Independents. As my noble friend Lord Ross explained, so I shall not repeat it, it then went to the House of Commons. After a certain amount of commotion a compromise was agreed and it then came back to this House.

    What I find extremely disturbing, as do other noble Lords who have spoken—and I hope that the other Members of the Committee will also find disturbing—is that this had made the whole thing much more restirctive than it was ever intended to be. When I moved my amendment the Government at the time had an amendment down which was similar to part of the amendment Bill this evening. It referred to:
    "Dwellings which have features which are substantially different from those of an ordinary dwelling-house".
    It also had the pre-emptive right in it, which this does not have, but as the noble Lord, Lord Kilmarnock, pointed out, Section 4(4) has in fact in the Tenants' Rights, Etc. (Scotland) Act, which my noble friend Lord Ross tried to get changed during the passage of that Act but unfortunately he was unsuccessful. When we looked at the amendment tabled by the Government on the English Bill the Association of Metropolitan Authorities took legal advice. The legal advice was that the words:
    "substantially different from those of an ordinary dwelling-house"
    impose such limitations that in practice they do not add significantly to the exclusion already provided for in Section 4 of Schedule 1 to the Bill. That is to the English Bill, but it is almost identical to Section 1(12)(c) in the Scottish Act. They both refer to sheltered houses.

    I imagine that the noble Earl will say that this is exactly what he intended; to restrict this, and to narrow it down in this way. But this was not the intention of Parliament. It was not the intention of this House when it voted by a majority for the amendment which I moved at that time. Nor was it the final decision of another place, and nor was it changed when it came back to this House.

    If that is looked at, together with the quotation which my noble friend Lord Ross gave from what was said by the Leader of the House in another place and by the Secretary of the State for the Environment, it is absolutely clear to all of us—and I was in the House of Commons listening at that time—that it was intended that there should in this area be parity in the Scottish amendment Bill with the English Housing Act.

    On Second Reading the noble Earl said, at column 1912:
    "This procedure is modelled on the procedure now embodied in the English Housing Act".
    If I may say so, that is taking a tremendous liberty with words and with drafting, because it is nothing of the sort. What is done, as the noble Lord, Lord Kilmarnock, pointed out, is to take the section from the Tenants Rights Act and then include it in this and link it together with the physically disabled. The noble Earl also said on Second Reading that this would free 6,000 more houses. Let us compare the population of Scotland with that of England. If on the English example we were, by the addition of the new paragraph to Schedule 1, to enable 221,000 houses, at the discretion of the local authorities, to be kept for elderly persons, for persons of pensionable age, then around 20,000 should be kept in that way in Scotland. Instead, the noble Earl himself used the figure of 6,000. I am not pretending that either of the figures can be exact, but they do indicate the proportions.

    I speak with some temerity, as it is a Scottish Bill, but I do so because it has this much wider dimension and because of our concern, which is a universal one, for the housing of elderly people, whether it is in Scotland or in England. As the noble Lord, Lord Mackie of Benshie, pointed out, many of the same factors apply in the rural areas, and under this restriction people will be able to buy up houses which it has been the practice to use for old people and use them as holiday homes or second homes. In view of what we have heard today and what has happened before—the tremendous cuts in public expenditure and now in housing, which it is possible will slide forward into Scotland as well—the hope for elderly people, unless they are disabled as well and have these very special needs, is going to be practically nil. Housing for elderly people, which is what we have put forward in our amendment, which is designed or specially adapted—that appeared to everybody to be a fair compromise—is not going to operate at all. The houses will have to be houses really for the disabled and will also be used by the elderly and disabled. I submit that this is not the intention of Parliament and that it would be absolutely wrong if we in this House allowed it to go through in this form. So I hope the House will support the amendment in the name of my noble friend and other noble Lords.

    I should like to ask the noble Earl, Lord Mansfield, a simple question. Does he really wish to help the elderly people whom we are trying to help by way of this amendment? If he answers, "Yes", then his action is a very simple one. It is to accept the amendment and enable the people for whom we are speaking to be allowed to occupy these houses and not have them being sold. I speak on behalf of the hundreds of tenants in Glasgow who are sitting in waiting for houses of a type not substantially different from ordinary dwelling-houses but which have facilities for occupation by elderly persons. To me, the reason for the insertion of the words "substantially different" gives a clue to what will be the yardstick for deciding whether a house that has been adapted for occupation really is to be excluded by way of sale. If, on the one hand, one is going to argue that it must be substantially different, then it seems to me that a house adapted for occupation or designed for that purpose will equally have to be substantially different; whereas the type of houses that I know of in the city of Glasgow have facilities but are not specially designed or substantially different. They have facilities which make life easier for these elderly people to be tenants. I hope that the noble Earl will try to help these people who are pleading for help at this particular time.

    I hope Her Majesty's Government and the noble Earl, Lord Mansfield, will be able to accept the amendment of the noble Lord, Lord Ross of Marnock. If there is a Division, and if I am still able to be here—probably I shall compel myself to be here—I feel I would wish to support the noble Lord, Lord Ross. Possibly that may not be a surprise to noble Lords. If I remember aright, I was one of those who helped to achieve that majority of 35 which was mentioned by the noble Baroness, Lady Birk. I hope the Government will be able to accept this amendment. If they cannot, then presumably the noble Earl will have to give a very good reason why they cannot.

    May I ask just one question? Perhaps it is a related question. Can my noble friend confirm that instructions were given to the draftsmen to bring this new Bill into line—this is the right phrase to use; it is the phrase that was used by Mr. Heseltine when asked by Mr. Hattersley what he meant—with the English Bill? When he received the drafts, were he himself and the Secretary of State satisfied that those instructions had been carried out? That is the important thing. It is very difficult for us to be sure how exactly the two Bills match up in the circumstances, in the light of what has been referred to as the technicalities involved. I hope my noble friend will be able to give us that assurance; and, if so, I hope the House will accept it.

    I welcome the Government's introduction of this amending Bill, as did the noble Lord, Lord Ross of Marnock, when he spoke at Second Reading on Tuesday night—although he went on to give it what I think might fairly be termed a rather cavalier reception. Since listening to the noble Lord's Second Reading speech, I have taken the trouble to read and re-read the report of proceedings in another place to which he referred In the context of the questions to which the answers he has quoted were given and the circumstances under which both the questions were put and the answers given, I believe that the undertaking that was given has been met. Seriously, I do not consider that on a careful reading anyone could suggest that there was a specific undertaking to put into the Scottish Act exactly the words that have been put into the English Act. Frequently we all want more from the Government than we get.

    I have said that I welcome this Bill, and I believe that it would be a mistake to accept the amendments. I find it quite reasonable, and I suggest to the House that it is so, that the words in Section 4(4) of the Scottish Act, where it deals with the right of pre-emption that may be put into a title where special housing is concerned, are quite appropriate to be put into this new Section 3A which this Bill will import into the Act. It can fairly be argued that Clause 1(2) sets out a clear definition and some sensible and suitable criteria which can be applied. If one watered that down one would surely enter questions of doubt, and difficulties of interpretation might arise. On Second Reading, the noble Lord, Lord Ross of Marnock, took issue with the word "ordinary" and in particular said he did not think he knew what an "ordinary house" was. Surely that word is there to enable the draftsman to do just what he has done, which is to give a clear and unmistakeable definition of what is intended.

    The noble Lord when moving the amendment addressed his remarks to Amendments Nos. 2 and 3. No. 2 need not concern me because I do not think the word "specially" has much effect either way. The words in Amendment No. 3 are also a straight importation from the English Act, and perhaps I may be petty for a moment and simply point out that the amendment is technically defective, in that it uses the word "persons" in the plural whereas the subsection of the Bill with which it deals talks about a person. However, no doubt that could be taken care of. I do not think the amendment would be particularly harmful, but it would not improve the situation. We have an example here of what the Minister said on Second Reading; namely, when he suggested that in many respects the Scottish measure has clearer and better wording than the English one. It is the dwelling-house, not the occupant at any particular date, with which the clause is concerned.

    I have a feeling that the amendment, if made, might actually weaken the position of the local authority. It does not say "of a type normally let to an elederly person"; if it had, I might have been able to understand it. The word "only" in the amendment strikes me as counterproductive. There are a number of situations where the amendment could give rise to difficulty, and I will give just one example. What if there were a joint tenancy and the survivor of that tenancy, who was not elderly, was applying to buy? What would then be the situation? Frankly, I do not find this series of amendments necessary. I believe that the words already in the measure suit the circumstances and should be employed in this provision.

    During my 27 years in your Lordships' House I have known only about three occasions on which amendments moved by the Opposition have been accepted by the Government of the day. I sincerely hope that on this occasion the noble Earl will forget his party principles and give the amendment the support it deserves.

    I wish from these Benches to add my support to this group of amendments. It happens that I have to hold a fairly lone station here this week as my fellow Bishops are all in conclave, but I am sure that if they were here I should have more support. It seems to me to be a matter of vital importance that the law should be the same on both sides of the border and, if I understand the arguments that have been put forward, that is the intention of these amendments. Beyond that, there is also the question of humanity, and I believe that where one is dealing with accommodation for old people as well as for the handicapped, it is right for the Government to err on the side of humanity. I therefore add my support for these amendments and hope the Minister will accept them.

    I intervene briefly to follow the line taken by the noble Lord, Lord Ross of Marnock, who referred to the importance of the words

    "which are substantially different from those of an ordinary dwelling-house"
    in the Bill as drafted. I agree with him that generally speaking the houses for elderly people in Scotland about which we are speaking are not substantially different, except in one particular; they are smaller and are often houses with a living room and one bedroom. Will the Government say that a dwelling-house of that kind, different only in size from the majority of houses, would come into the category of houses which are substantially different? There are very few of those houses being built nowadays and the waiting lists for elderly people wanting to get into these houses grow longer and longer. In some areas they have stopped putting people on the list, on the basis that it is not much good telling a 66 year-old applying for an old person's house, "Yes, we will put your name on the list but unfortunately the numbers already on the list are such that we cannot expect to give you a house for 12 years".

    If any of these houses are going to be sold off, the 12 years may become 20, and it is not much good telling people, "We will take elderly people so long as they will guarantee to live till 85, when their turn will come". On that basis, if the Minister refuses to accept this series of amendments and persuades noble Lords to agree with him, will be undertake that that type of small house will be regarded by the Government as being substantially different from an ordinary dwelling-house? If he will not give an undertaking of that kind, the hulk of these houses will be in danger of disappearing from renting in Scotland.

    6.18 p.m.

    The Committee is being invited to consider the proposition that the best way to amend Scottish legislation is to borrow verbatim from legislation for England and Wales which is in virtually every respect drafted differently from the Scottish legislation which is to be amended. I hope the noble Lord, Lord Somers, who I do not think took part in our deliberations in the summer, my noble friend Lord Milford and, rising up the ecclesiastical scale, the right reverend Prelate the Bishop of Southwell, will listen to the arguments, which I am afraid have been adduced before your Lordships on three previous occasions, before making up their minds. This is now the fourth time that we have discussed this particular point. I would say to the noble Lord, Lord Kilmarnock, that the Scottish verbiage and wordage is not borrowed or taken from the English Act. It was drafted specifically by Scottish draftsmen, I think before the English Act was ready, with specifically Scottish law and Scottish interests in mind.

    The noble Baroness, Lady Birk, complains of the wording of Section 4(4) of the Act. Whatever legal advice in England she has had upon it, I would tell her that COSLA in Scotland has made no such representations to us. We must try to keep Scotland and England separate in these matters of phraseology and law, at least so far as we can.

    Before I deal with the main part of the argument, I want to take two points which detract from it. First, I must repudiate any suggestion that in bringing forward this Bill the Government have in any way failed to honour the undertakings given in the other place before the Recess. As I made plain on Second Reading, the undertaking given on behalf of the Secretary of State for Scotland by the Secretary of State for the Environment was that the change introduced for Scotland would be along the lines of that announced for England and Wales. It has not been quoted, and I want to do so now. It was in answer to an intervention by Mr. Hattersley, who said:
    "It would help if the Secretary of State were to state clearly and categorically that the Government will no longer pursue the sale of those properties that are specifically designed for the use of, and occupation by, the elderly".
    My right honourable friend Mr. Heseltine said:
    "My right honourable Friend the Secretary of State for Scotland has authorised me to say, as regards the Tenants' Rights, Etd. (Scotland) Bill, that he will facilitate legislation to make a change along the lines that I have announced, at the earliest convenient moment". [Official Report, Commons, 6/8/80, col. 562.]
    It is extremely important that the terms of the undertaking are precise and right, because it was apparent from the outset that any provision inserted into the Tenant's Rights Act would need to be drafted differently from the amendment then being discussed to the Housing Act, because the two Acts were already drafted in completely different ways.

    When, on Second Reading, the noble Lord, Lord Mackie, and his noble friend Lord Thurso complained that this Bill in effect does not apply to houses for the disabled—that is, the Bill your Lordships are discussing this evening—the answer is that such would not only be outside the terms of the Long Title but would be outside the scope of the Bill, and, more importantly, would be outside the scope of the undertaking given in the House of Commons.

    The Leader of the House, another Cabinet Minister, said, on the Housing Bill:

    "It is vital that Scotland and England should be treated equally in these matters".
    There is a substantial difference which is apparent to a number of his friends.

    I take the noble Lord's point, or rather I hear what he says, but I think that one was a specific undertaking to a specific question and the other was a fairly sweeping remark which could have applied to almost anything.

    Perhaps my noble friend would allow me to say that it was not as sweeping as all that. It was immediately qualified by the words

    "how that is done becomes a matter of technicalities".

    Which we are going into most fully this evening. I do not wish to be unduly critical of the Housing Act, although I am bound to say that I have criticised the drafting of it from time to time, but the provision that was inserted into that Act was drafted within the space of a few hours in the circumstances which the noble Lord, Lord Ross of Marnock, described so graphically for us in his speech on the Second Reading of this Bill. On occasions such concessions to necessity must be made, but it is hardly credible to me that your Lordships should be asked to accept that a provision drafted in such a manner should be preferred to a provision taken word for word from an existing provision in the Tenants' Rights Act, which has the considerable merit of having been through every stage of the normal process of consideration by both Houses of Parliament.

    The noble Baroness, Lady Birk, complains about the wording of Section 4(4), to which I shall have to return anon. No such considerations, however, prompted the minds of her noble friend Lord Underhill on one of the many occasions when we discussed this and when he was going into the wording of Section 4(4) on 29th July 1980 at column 779. It is most unfortunate that I cannot, by the Rules of your Lordships' House, quote the noble Lord verbatim, which would be much more satisfactory; I can only paraphrase what he said. He took the phrase "a dwelling-house specially designed or adapted for the needs of disabled persons"; he took the then amendment "a dwelling-house designed or specially adapted to make it suitable for occupation by persons of pensionable age"; he took Section 4(4), which says "a dwelling-house which has been designed or adapted for occupation by art elderly or disabled person"; and then he went on to say words to the effect that every noble Lord in the building would pause and might come to the conclusion that all three were almost the same. I think he accused me then of laughing, but I will gloss over that.

    This is an example of how a provision which was carefully drafted and which has been considered by your Lordships on a number of occasions in extenso has now become the object of criticism, particularly by people who have not, as it were, grown up with the Scottish Bill. As regards the types of housing, as understand it the amendment to the English Bill created a new class of housing.

    Very well—category. I am obliged to the noble Lord. In other words, before that amendment there was no category between sheltered housing, where there was no right to buy on the part of the tenant, and all other types of housing, where the tenant was granted by the Bill an unfettered right to buy. The English amendment created this third class. In Scotland we already have three categories, and if we adopt the English amendment we would then be creating four without, as I suggest, any reason or justification for so doing.

    As I said on Second Reading, the wording proposed in this Bill as a definition of the category of houses specially adapted for the elderly, who are to be excluded from the right to buy, is taken directly from Section 4(4) of the Act, which gives landlords the right to impose a preemption condition when they sell such houses. The right of pre-emption is well-known and understood in Scottish law, but hardly enters into the scheme of things in the English law of real property. The Government's intention is to extend the landlord's range of choice in relation to such houses so that they can seek authority not to sell as an alternative to selling with a pre-emption condition. In our discussions on the Tenants' Rights Act, as it now is, I emphasised that the Government fully accepted the case for protecting the community's interest in these specially adapted houses, and that the issue was the way in which that interest should be protected. This Bill is about adding to the methods of protecting the community's interest.

    Again, I must take issue with the noble Lord, Lord Mackie of Benshie, and indeed the noble Lord, Lord Hughes, in regard to what he said in his intervention. Neither this Bill nor the Housing Act is intended to exclude houses from the right to buy merely because they are small. It never has been, and it was certainly not part of the undertaking. So I hope that that deals with that point. Now—

    In that case, may I put the question in another way? Will the noble Earl tell us of the type of house that is described as being substantially different from an ordinary dwelling-house and which made up the figure of 6,000, which he apparently quoted at the last stage?

    Yes, I am coming to that. All good things have to come to an end, including my speech, but not yet—

    I gain that impression from the rapt attention with which it is being greeted by the Committee.

    Despite the fact that Section 4(4) was on four occasions thoroughly considered by your Lordships' House and found acceptable, it is now being suggested that its meaning is obscure. When noble Lords are invited to believe that no one knows what an "ordinary dwelling-house" is, as they were a few days ago by the noble Lord, Lord Ross of Marnock, I should like to invite the Committee to reflect that it is not only in Section 4(4) of the Tenants' Rights Act that the use of that term is considered acceptable. It is used also in Ground 10 of Part I of Schedule 4 to the Housing Act 1980, and since noble Lords opposite clearly consider that that Act is the fountain of all drafting wisdom, that must surely place it as being above suspicion as a satisfactory piece of drafting—

    I hope that the noble Earl will appreciate that the definition of "dwelling-house" is very different in Scotland from what it is in England. So he should not cite an English Act in relation to a Scottish matter.

    I think it was the word "ordinary" that upset the noble Lord last time, and perhaps he should not wriggle about too much when I answer his point on this matter.

    There are two categories of specially adapted housing for the elderly which have been recognised in Scotland by Governments of both parties in guidance issued to housing authorities since 1975. These categories are: sheltered housing, which is already excluded from the right to buy; and amenity housing, which this Bill will, without a shadow of a doubt, allow to be excluded from the right to buy, if it is passed in its present form. There is no sleight of hand by the Government in this matter, and I hope that I can persuade your Lordships' Committee that it is a sensible measure and, much more importantly, a sensible way of amending the Tenants' Rights Act; that is to say, to use the definition that the House has already approved in the Act for a very closely related purpose. It is principally for those reasons that the amendments to which the noble Lord, Lord Ross, has spoken are unacceptable.

    I am invited to describe these categories of housing. First, at the top of the list comes general needs housing, and beneath that there is housing with the addition of such embellishments, or adaptations (which I think is a better word) as whole-house heating, grab rails, adjustments to power points, special work-tops, and so on. These constitute what in Scotland are described as amenity housing, a concept which is not recognised in England. We have this category of housing which is quite different from what they have in England. It is this amenity housing that is taken outside the previous ambit of Section 4(4) and put into our new clause in this Bill. Before I conclude I shall describe the effect that it has on the liberty of the local authorities.

    I think that I should complete the picture of Scottish housing, and so I come to the third category: amenity housing plus the warden service and the alarm call system, which then turns it into sheltered housing. There, we have provided in the Act that the right to buy does not exist. As I said on Second Reading, in regard to this particular category of house we have in effect given the local authorities more freedom than they had before. In other words, they can refuse to sell; or they can sell with a right of pre-emption; or they can sell without such a condition being part of the bargain.

    I want to say to noble Lords who have perhaps implied that the Government are in some way being hard or onerous about this point, that it really is not so. I mentioned the figure of 6,000 houses, which has been held up, somewhat unfairly, against the English total. What I say about that is that, taking like with like, the proportion to be removed from the houses that must be sold by a local authority will be the same as was provided for by the amendment of the noble Baroness, Lady Birk, in relation to the English Act. The houses may be much fewer in number, but I am informed that comparatively speaking the proportion is the same—

    I wonder whether the noble Earl would write to me about that? I find it very difficult to accept it. There may be some misunderstanding about the figures, but they just do not add up.

    They certainly do not add up; they are not really meant to. It is a matter of comparison, and that is what I am informed. But certainly I shall check my facts.

    Why then do the Opposition object to the wording? It is really a question of the rights of local authorities not to sell and on more than one occasion I have said that the drafting of this amendment Bill is fair, that it gives effect to the undertakings which were given in the other place.

    I must make the point—though the noble Lord, Lord Ross, twitted me about it—that the effect of the provision as drafted is to make it more difficult for a recalcitrant local authority which wishes to defy the intentions of Parliament to be in a position so to do. The Government have been advised all along that if the amendment that the noble Lord, Lord Ross, now proposes should be substituted for the wording in the clause it could—as on one occasion I said in a perhaps simplistic phrase—drive a coach and horses through the legislation. I shall try to think of another phrase. What I say is that it could be used by local authorities who have said, and said repeatedly, and who even up to last week were still saying, that they would use every device they could to defeat this legislation. It would make their task that much easier. It is in that spirit that I hope that the House will regard this Bill and these amendments to it proposed by the noble Lord, Lord Ross. We have been as fair as we can and consistent, I hope, with the undertakings given and with the general purposes of the original Act.

    I should like to be fair to the Minister. I understood him to say that smallness is not included in the category of exceptions, and that he does not accept either the English category, which says that it is the practice of the landlord to let it only for occupation by such persons. I want to be fair.

    Having had something to do with housing in Scotland in other years, I should like to speak briefly on this amendment. The Bill as it stands amends the Tenants' Rights (Scotland) Act, and as we read what it intends to do, it gives the Secretary of State power to authorise refusal to sell certain dwelling-houses provided for elderly persons. I cannot see that the amendments put down by the noble Lord differ greatly from what the Amendment Act intends to be done. I have in mind that it is essential that the Secretary of State should have this power without any alteration whatsoever.

    I remember visiting a series of houses built and specially designed by the corporation of Aberdeen for elderly people. It would be a shame if such were able to be bought by other people. They consisted of a large dwelling room which could be divided in half by a curtain. The object of that was that elderly people like warmth and the best way to get them warm was to have heat from the fire in the living room available to the bedroom as well. The bathroom accommodation provided was for elderly people. They could sit in the bath instead of lying down. They could get in and out without trouble. Houses like that built for the special purposes of elderly people should remain so. That is what I think this Amendment Act does. I cannot see much difference in the noble Lord's amendment. It alters the wording but it does not do anything else so far as I can understand it. I hope that we shall certainly stick to the Bill as it stands and not agree to the amendment proposed.

    I have been interested in the efforts made by the noble Earl the Minister somehow to suggest that I and others have been doing less than justice to what was said by Cabinet Ministers in the other place, suggestions that I have been reading them out of context. The words are all there; there is no question of reading out of context. In relation to the Housing Bill, the first remark was by the Leader of the House that there should be equality of treatment. That was repeated by him—and this was the question of technicalities. The former Secretary of State, Mr. Millan, the Member for Craigton, suggested that it should be done at the same time. The Leader of the House said that it would be done but that how it would be done was a matter of technicality. It could not be done because there was no amendment before the Commons to effect anything at all about that. That was a false point.

    The noble Lord seemed to think we were being unfair to Mr. Heseltine. Mr. Heseltine said the change would be made—and he was authorised to say this by the Secretary of State for Scotland—"along the lines I have announced". What did he announce?
    "The Government have considered the amendment"—
    that was the one which came from here—
    "and have decided to widen the exclusions so that genuine elderly persons' accommodation is excluded".
    They then produced the compromise amendment. The noble Lord was critical of the words, critical of the drafting. It was passed in another place and passed here.

    There is nothing wrong with the amendment. When it was suggested to Lord Bellwin that certain local authorities would take advantage of it further to widen it, he relied on the fact that the Secretary of State had the last word, that the determination was made by him. I have his speech here. It is a very good speech. My noble friend Lord Shinwell congratulated him on it. I could have done so myself; because he was gracefully accepting the will of Parliament. What the noble Earl is doing tonight is as best he can ungraciously not accepting the will of Parliament, the statements in another place. I am sorry about this. He suggested that I was somehow wrong in talking about an ordinary dwelling-house. An ordinary dwelling-house is practically indefinable. A "dwelling-house" has been defined but I doubt if you will find a definition of an "ordinary dwelling-house". It was not a facetious point that I made in suggesting that the definitions of "dwelling-house" in Scotland and in England are different. I can tell you that it led to some misleading statistics on a census. A dwelling-house is different in relation to the whole dwelling as to whether it is made into flats or not. There are different definitions in Scotland and England in relation to that.

    There is another definition that has not been given—and it is not given in the Government clause—and that is, the definition of "elderly". I put to the Minister at the end of the debate how he defines "elderly"? Here is the answer. He said that the meaning of an "elderly person" depends on the circumstances of the case. It is not necessary to have a rigid definition.

    If I may interrupt the noble Lord, I may say that I have not spoken to Amendment No. 6.

    No, but the whole thing hinges on that. I think this was the whole point. This is why I defined it as it is in the English Bill—persons of pensionable age. What I tried to do, even to putting in the word "specially" in relation to the adaptation, was to be true to what was done in the English Bill and what was passed by another place and by this House. What I come back to is that if there is to be fairness of treatment, this is the only way it can be done.

    I must correct the noble Lord over one matter, when he claimed that the Secretary of State has the last word and is what I might call the long stop. Under the legislation the Secretary of State is required to grant authority if the house meets the criteria in the legislation.


    Ampthill, L.Elwyn-Jones, L.Ponsonby of Shulbrede, L. [Teller.]
    Ardwick, L.Evans of Claughton, L.
    Balogh, L.Galpern, L.Ritchie-Calder, L.
    Beswick, L.Gladwyn, L.Ross of Marnock, L.
    Birk, B.Gosford, E.Segal, L.
    Blease, L.Gregson, L.Shannon, E.
    Blyton, L.Hale, L.Somers, L.
    Boothby, L.Hampton, L.Southwell, Bp.
    Boston of Faversham, L.Hanworth, V.Stedman, B.
    Bowden, L.Houghton of Sowerby, L.Stewart of Alvechurch, B.
    Brockway, L.Hughes, L.Stewart of Fulham, L.
    Brooks of Tremorfa, L.Jacques, L.Stone, L.
    Bruce of Donington, L.Kilmarnock, L.Strabolgi, L.
    Cledwyn of Penrhos, L.Llewelyn-Davies of Hastoe, B.Taylor of Blackburn, L.
    Collison, L.Longford, E.Taylor of Mansfield, L.
    Cooper of Stockton Heath, L.Mackie of Benshie, L.Underhill, L.
    Craigavon, V.Milverton, L.Whaddon, L.
    David, B. [Teller.]Mountevans, L.White, B.
    Davies of Leek, L.Peart, L.Wigoder, L.
    Davies of Penrhys, L.Phillips, B.Winterbottom, L.
    de Clifford, L.Pitt of Hampstead, L.Wynne-Jones, L.

    few seconds. He cannot disregard the criteria merely because the conditions are loosely drafted; so I am afraid the noble Lord must realise that to regard the Secretary of State as in any way able to say what otherwise would be a bad decision on the part of the local authority is quite wrong.

    I draw the noble Earl's attention to the speech by his noble friend who dealt with this particular point. He did so voluntarily. He was not asked to do so, but he knew certain of his noble friends behind him were concerned about this. He answered the point by saying that this was why it was there, the determination by the Secretary of State. The Secretary of State has to be satisfied. It is also in the clause as I read it.

    On that point, might I read from subsection (4) where it says:

    "Where the Secretary of State has received an application under this section and it appears to him …".
    So he does have the last word".

    6.50 p.m.

    On Question, Whether the said amendment (No. 1) shall be agreed to?

    Their Lordships divided: Contents, 62; Not-Contents, 72.


    Ailsa, M.Gainford, L.Murton of Lindisfarne, L.
    Amory, V.Gainsborough, E.Netherthorpe, L.
    Auckland, L.Gowrie, E.Newall, L.
    Avon, E.Gray, L.Onslow, E.
    Bellwin, L.Greenway, L.Orkney, E.
    Belstead, L.Grimston of Westbury, L.Pender, L.
    Bessborough, E.Hailsham of Saint Marylebone, L. (L. Chancellor.)Penrhyn, L.
    Boardman, L.Redesdale, L.
    Boyd-Carpenter, L.Henley, L.Reigate, L.
    Brougham and Vaux, L.Hornsby-Smith, B.Rochdale, V.
    Caithness, E.Inchyra, L.Sandys, L. [Teller.]
    Cathcart, E.Kemsley, V.Savile, L.
    Chelwood, L.Kinnaird, L.Sempill, Ly.
    Cockfield, L.Linlithgow, M.Soames, L. (L. President.)
    Cork and Orrery, E.Long, V.Spens, L.
    Crathorne, L.Lyell, L.Strathclyde, L.
    Cullen of Ashbourne, L.McAlpine of Moffat, L.Strathcona and Mount Royal, L.
    Denham, L. [Teller.]McFadzean, L.Sudeley, L.
    Drumalbyn, L.Mansfield, E.Swansea, L.
    Ellenborough, L.Margadale, L.Swinfen, L.
    Elliot of Harwood, B.Marley, L.Trefgarne, L.
    Falkland, V.Montgomery of Alamein, V.Trenchard, V.
    Ferrers, E.Mottistone, L.Vaux of Harrowden, L.
    Ferrier, L.Mowbray and Stourton, L.Wynford, L.
    Freyberg, L.

    Resolved in the negative, and amendment disagreed to accordingly.

    6.57 p.m.

    I think that it may be for the convenience of the House if we take the Statement now. Therefore, I beg to move that the House do now resume for the Statement.

    Moved accordingly, and, on Question, Motion agreed to.

    House resumed.

    Housing Investment Programme Expenditure

    (Lord Bellwin)

    My Lords, with the leave of the House and following my noble friend's undertaking earlier today that the Government would make a further Statement on the point raised by the noble Baroness, Lady Llewelyn-Davies of Hastoe, I should now like to make a Statement on housing investment by local authorities in the present financial year. Before doing so, I should like to tell the House that the Government certainly intended no discourtesy to the House. We formed the view that the announcement by my right honourable friend the Secretary of State was not one which should be made in the form of a Statement to Parliament. However, following Lady Llewelyn-Davies's remarks, the Government are now quite content to make the following Statement.

    By means of a circular, my right honourable friend the Secretary of State for the Environment has today informed local authorities in England that the figures available to him indicate that there is a high risk of overspending this year on their housing investment programmes. The figures from the local authorities' returns of spending between April and June and from their more recent housing investment programme submissions for 1981–82 suggest that the overspend could be up to £180 millions.

    The Government attach fundamental importance to ensuring that cash limits are observed, and my right honourable friend considers it essential to take all possible steps to ensure that the cash limit on housing capital expenditure is not overspent.

    In these circumstances, the first need is to obtain the most up-to-date assessment possible of the spending in 1980–81 which will result from commitments which have already been made by local authorities under their housing investment programmes. Each local authority has therefore been asked to provide by Friday, 31st October, a revised estimate of capital expenditure on housing which they expect in 1980–81 on the basis of existing commitments, together with their estimated expenditure on statutory grants during the rest of the financial year. On the basis of these figures we shall then be able to see what action is needed in the longer term.

    But, if there is a risk to the cash limit of the order of magnitude which appears at present, it would be wrong for the Government to allow spending to continue in the normal way while local authorities are providing new figures. At the same time as requesting revised estimates from the local authorities, my right honourable friend has therefore done, in essence, two things: first, he has asked local authorities not to enter any new housing commitments, except for those which follow from a statutory obligation; secondly, he has withdrawn the related borrowing approvals, except those needed to cover payments resulting from existing commitments.

    When the latest estimate of committed expenditure for 1980–81 on housing investment programmes is available, my right honourable friend will consider what scope there is for additional commitments this year, and will make a further announcement.

    My Lords, first, may I thank the noble Lord, the Minister, for coming to the House to make the Statement and also for responding to my noble friend Lady Llewelyn-Davies, who raised the point earlier today? I must say right away that although the Statement says that the announcement was not one which should be made in the form of a Statement to Parliament, we all consider—certainly my noble friends beside me and behind me—that it is a matter so serious that it certainly should be stated to Parliament.

    The Statement really must be taken in conjunction with the circular which has been sent to local authorities. It must also be seen in the context of a million families on the housing waiting lists and of 200,000 unemployed in the building industries, and with bankruptcies going up every week. We also have to remember the figure of unemployed that was given yesterday.

    It is in this context that we have to look at what is a very serious position, added to the fact that up to now 75 per cent. of the cuts in public expenditure have in fact been borne by housing. This Statement means no further housing contracts for local authorities, for new building, modernisation, improvement or renovation; that there will be severe restrictions on borrowing approvals; and that there will be no more improvement grants at the moment in respect of private housing.

    In addition, it seems a very extraordinary way to run a Government to put on this very severe, dramatic and drastic moratorium now, and yet ask local authorities for information to be delivered by 31st October. One would have thought the Government would have got the information first, perhaps issuing a warning to local authorities in the circular and then deciding what they would do when they got the proper assessment from the local authorities.

    We believe that this is quite unjustified, because there is no record of overspending on capital expenditure by local authorities on housing expenditure since the HIPs have already been drastically reduced. The housing investment programmes have been cut by one-half for 1980/81, and the freezes and standstills caused by this mean that, for example, 42 per cent. of the 300 authorities have already stopped or restricted improvement grants, and 17 out of 28 metropolitan authorities have stopped or cut back their new council building. If there is to be an overspend of £180 million, as the Secretary of State alleges, that is not due to over-programming by local authorities but rather to the effects of the Government's economic and monetary policies on the building industries. To base the freeze on only one quarter's housing investment programme spending by local authorities is to do it far too soon and, as I said, with too little information.

    The housing prospects have been made even worse by this. I do not know whether the Government really want to usher in a winter of misery for thousands of families in this country, especially when the Housing Act was fought hard and debated strongly in this House, and certainly help was given on the improvement grants. All that is now going to be eroded. I consider that this is a very serious situation, and that to have made a Statement to the House on it is really the least the Government could do in view of the anger and misery this is going to cause.

    My Lords, from these Benches I should like to thank the noble Lord the Minister for his Statement. I should also like to say that it appears to us that this is another panic move by the Government. It is basically a further erosion of the liberty and independence of local government which we have experienced during the course of the Housing Bill, and particularly during the course of the Local Government, Planning and Land Bill. How is it, when housing expenditure generally over the past five years has been reduced by £2,454 million and when the housing investment programme has been slashed over the last 12 months by a cut of £1,092 million, that the Government can allege there is danger of overspending when they have not even got the results of the second quarter? Surely, as I understand it, they have sufficient results from some local authorities on the second quarter to give them an indication and to avoid the necessity to take this panic measure.

    My Lords, if, as is suggested, £180 million may be overspent, rather than this being caused by the extravagance of local authorities, is it not caused by inflation brought about by the Government's policies, by the acceleration of building contracts due to the gross shortage of work in many parts of the country and, of course, by pressure on the contractors for early payment of their accounts? As far as we on these Benches are concerned, while we thank the Minister for his courtesy in making the Statement we reject completely the necessity to take this step.

    7.8 p.m.

    My Lords, perhaps I might comment first on what the noble Baroness, Lady Birk, said, which I felt was really rather more of a general speech on the Government's housing and economic policies than on the Statement itself. If I may pick up the points that she made, I think what we must either accept or not accept right from the beginning is whether or not a cash limit is sacrosanct. I think everyone is coming to realise that when the Government say a cash limit is a figure, that is exactly what they mean; and if there are indications that it is going to be, or could be, exceeded—even if it is only by £180 million—then what the noble Lord, Lord Evans, referred to as a panic measure I would have thought was the sort of measure that was long overdue by any Government; because if there had been the same willingness in the past to look at realities and at what was happening, as opposed to what one hoped would happen, we might not be in the mess that we are in today.

    When the noble Baroness says that there is no record of overspending on HIPs, the fact is that this step is based upon three factors. The first of them concerns the first quarter's figures: what was actually spent. The second factor is the HIP submissions, in which the authorities give their own estimates of what they think they will spend. Thirdly, there is the fact that there is always an on-going dialogue between regional offices and local authorities on their submissions, and indeed these submissions still continue.

    I would have thought that when all those indicators clearly show the likelihood of £180 million being overspent, it is not at all unreasonable for a Government to say: "Look, we are going to have these figures absolutely accurate now, and we have no time to hang around while we are getting them, so in the meantime we are immediately putting on a stopper". We are not cutting back anything. The £2.2 billion allocation is exactly as it was. In no way is that reduced. We are simply saying that there is a danger of a significant—and I consider £180 million very significant—overspend. In those circumstances, we want to be quite sure that we do not exceed the £2.2 billion that was allocated. That is really what we are doing.

    I could very easily comment upon the other points that the noble Baroness made, by again pointing out, on her point that we cut the HIP allocations by a half, that they were 24 per cent. lower than the 1979–80 outturn, and that her Government cut the HIP allocations by 50 per cent. during their term of office. So let us keep everything in its proper context.

    I do not at all consider this a panic move. I say again that, if we had been as positive in the past, it would not be so necessary today to show a firm line. That is why, when there is a danger of overspending of this kind, a Government would be failing in their duty if they did not take steps to say to authorities, "Come on. Let us have a look at this. It is very serious, and what are we going to do about it?"

    My Lords, in his Statement the noble Lord referred specifically to England. May we take it that this dismal proposal does not, in fact, extend to Wales?

    Yes, my Lords. The position of Wales and Scotland is an entirely separate matter for the Secretaries of State there.

    My Lords, at the beginning of his Statement the noble Lord said that a circular had gone out to local authorities today. Is he aware that my own district council in Peterborough received a telephone call from his department earlier this afternoon, giving them the gist of the Statement and saying that it took effect from the time of that telephone call? Is he further aware that local authorities will not take very kindly to this form of instant government by telephone?

    My Lords, if I may be allowed to respond, the noble Baroness asked me whether I was aware. Of course, I was not aware that that phone call had been made. I am not sure of the significance of a particular authority being called by my department. It must be that they have some very special line into the authority. I really do not know why and I truly do not appreciate the significance of the point made.

    My Lords, the Government are talking about not spending money, but they are spending their time making these calls to all the district authorities.

    My Lords, is the noble Lord aware that one of the things we are worried about is the peremptory and draconic way in which this Government are uttering diktats, and expecting a reply in a week or a fortnight from areas in which they have bulldozed thousands of houses, as in the case of Stoke-on-Trent? Private small builders have no chance at all; the cash flow is falling, and I believe sincerely that all that this is doing is increasing the depression. Finally, the right honourable lady the Prime Minister said that she wanted mobility, and thought that people should look elsewhere for work, but where the hell are they going to look if no houses are being built?

    My Lords, I come back to my first point. Either we believe that a cash limit is what it says, or we do not. If we do, and say that this is what the country can afford on this item of expenditure, it is surely not wrong for a Government, seeing an indication of a very considerable overspend, to want to say, "You must look at it, because you cannot exceed it. There ain't any more money for it".

    My Lords, is it not true that the Government said there should be no further spending by the Ministry of Defence, because it had overshot its cash limits by £500 million? Is it not also true that noble Lords opposite are basically saying, "We will spend more than Parliament has allowed us to spend"? That £2,000 million is money that has been voted by Parliament and we cannot afford to spend money as anybody feels like it, just for the hell of it, because that is the surest way to bankruptcy.

    My Lords, I cannot comment on the individual figures that my noble friend mentioned. But I think it ought, also, to be said that if, when we have the information required, it proves that the figure is not to be that then the Government will decide what they have to do. But I do not consider it at all unreasonable to call for the information, and that is what this circular does, in the form that it does and within the time that it does. I think it is essential.

    My Lords, am I to understand that the moratorium is for an unlimited period, but that the Government hope, when they get their figures, to be able to make a further Statement about that? Secondly, in all temerity—and I am sure that the noble Lord will be equally timorous in answering me—I ask whether a similar Statement is to be made which will be applicable to Scotland? I ask that only because the noble Lord has instant advice on his left, in the form of the Minister of State for Scotland.

    My Lords, I am responding to this, and I cannot make any comment on Scotland. I have no information at all and I do not want to start to conjecture on that. I am sorry, but what was the noble Lord's first point?

    My Lords, it was about a further Statement and the length of the moratorium.

    Yes, my Lords. Clearly we hope to have the information by 31st October. As soon as we get it, we will immediately start to analyse it and see exactly what it shows. Of course, there will be a decision to be taken as to where we stand, once we see exactly what it means. As I said, if it proves that the indicators are wrong, then we shall know how to act. But, of course, another announcement will be made, based upon the outcome of what we find.

    My Lords, may ask the noble Lord whether he will bear in mind that Mr. Macmillan became Prime Minister and kept the Tory Party in power for six years because he built houses, and far more houses than the Labour Government ever attempted to do? Therefore, I ask him no more than this. Will he also bear in mind that there are grave dangers—political and economic—in continuing the policy of stopping all housing construction, at a time of cruel shortage of houses, and that this should not be regarded as a permanent policy, but as a temporary policy to meet an immediate crisis?

    My Lords, there is no intention whatsoever to stop building. The intention is that the £2·2 billion, which has been allocated for housing, should be spent. What we are concerned about is that there should not be spending in excess of that—certainly, not to the tune of £180 million. So you have to decide whether the £2·2 billion is indeed, in the context of present-day public expenditure, a figure which is fair and reasonable. That is the view which the Government took, and which we still take. We do not wish to reduce that by one penny. It is the excess above that, that we are concerned about.

    My Lords, will the noble Lord answer one question? Does this blanket operation mean that it does not matter what are the needs of the community; it still remains the same? So that councils which need houses, and councils which have houses to spare, will both he treated the same?

    My Lords, when the allocations were first made in February, the needs and requirements of authorities were then considered and allocations were made based upon that. It is those figures which it is still important that authorities spend—not more than that, but not less than that. Therefore, the question of need was decided in February. What we are now talking about is an increase above that, decided—if the figures prove to be so—by the authorities.

    My Lords, will the noble Lord answer this question straight? If a need for more houses can be shown, will councils be prevented from meeting it by this edict? A council that does not need houses does not want them, and a council that needs them cannot go on with them.

    My Lords, if I add more I shall be repeating myself. I am sure that the noble Lord does not wish me to do that. The time for deciding on the needs, on the one hand, and the availability of resources to go towards those needs, on the other, is when the allocations are made. That was done in February. If there is now to be a very substantial overspend of that, then that is something that breaches the figures and that we just cannot have, for the simple reason that we cannot afford it.

    Tenants' Rights, Etc (Scotland) Amendment Bill H L

    7.20 p.m.

    House again in Committee on Clause 1.

    [ Amendments Nos. 2 to 5 not moved.]

    Page 2, line 37, at end insert—

    ("(7) In this section "elderly person" means a person of pensionable age.").

    The noble Lord said: We discussed this—at least I did, although the Government were at pains to tell us that they had not discussed it. However, I move it formally. I beg to move.

    In practical terms, I do not believe that there is much to choose between the two terms "elderly person" and "a person of pensionable age". I am quite sure that no Secretary of State for Scotland would ever take the view that a person of pensionable age was not an elderly person for the purposes of this legislation. Having said that, I am prepared in principle to accept the noble Lord's amendment. I need say no more.

    On Question, amendment agreed to.

    Clause 1, as amended, agreed to.

    Remaining clauses agreed to.

    House resumed: Bill reported with an amendment.