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Lords Chamber

Volume 475: debated on Tuesday 3 June 1986

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House Of Lords

Tuesday, 3rd June, 1986.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Chichester.

Drugs: Nhs Limited List

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

The Question was as follows:

To ask Her Majesty's Government what are their criteria for adding drugs to the limited list.

The Parliamentary Under-Secretary of State, Department of Health and Social Security
(Baroness Trumpington)

My Lords, the criteria used by the Advisory Committee on NHS Drugs in considering whether individual products should be available for prescription under the NHS are the same in each therapeutic group covered by the selected list scheme. First, if the product is required to satisfy a real clinical or therapeutic need not met as effectively by any other product available, it should be made available regardless of cost. Secondly, if it meets a real clinical need or therapeutic need at least as effectively and at the same price as or more cheaply than any other available product, it too should be made available.

My Lords, I thank the noble Baroness for her Answer. May I ask her why there are no mucolytics for children with "glue ear" and for patients with excessive viscous mucous in their respiratory tracks when systemic mucolytics are recognised as being useful for patients under 18 with tracheostomy? May I also ask the noble Baroness whether she will ask the committee to consider adding to the list of systemic decongestants, on the basis that there is no universal drug for every illness?

My Lords, the noble Baroness gave me advance warning. The advisory committee considered a great deal of information about the use and therapeutic value of oral mucolytics not only from within the UK but from America, Australia and elsewhere. They concluded, on the basis of all the evidence available, that patients suffering from chest conditions or "glue ear" will obtain no real advantage from taking oral mucolytics.

My Lords, in thanking the noble Baroness for her replies, especially that to the supplementary, may I ask to what extent there is a social motivation to include medication for people with chronic conditions, bearing in mind particularly the present cost of prescriptions? To what extent is the motivation cash saving as opposed to the promotion of good health?

My Lords, the promotion of good health is always our aim. The aim was to save money by getting the best drugs available for the cheapest price. By so doing we shall save £75 million in the year.

My Lords, can the noble Baroness explain where the saving comes in when a patient with chronic bronchitis has to have his lungs physically drained once a month under anaesthetic in a National Health Service hospital, when previously the mucolytic was given to him orally and he did not suffer from these problems?

My Lords, I cannot answer any question as technical as the one the noble Baroness has asked, but I would point out that our commitment was never to provide exact alternative but appropriate alternative treatment. For many scheduled drugs this means similar, cheaper ones. However, where we are advised by experts that a specified drug is of no proven therapeutic value—for example, in the case of oral mucolytics—the appropriate alternative treatment might involve a very different drug, or indeed no drugs at all.

Importation Of Goods, Conegate Ltd

2.42 p.m.

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

The Question was as follows:

To ask Her Majesty's Government what conclusion they have reached on their consideration of the judgment of the European Court overturning the Customs and Excise ban on the importation of goods by Conegate Ltd. from Germany.

My Lords, under the Treaty of Rome the Government are bound by the judgment of the European Court of Justice. Henceforth Customs and Excise will apply their controls on imported goods in line with the court's judgment.

My Lords, may I thank my noble friend for that reply? However, is he aware that it fails absolutely to meet the substance of the Question—that there is now a loophole in the Customs and Excise power to prevent this offensive pornography flowing into this country from abroad? Is my noble friend aware—bearing in mind in particular the sense of the House yesterday in favouring measures to strengthen the protection of family life and the educating of children sensibly in sex education—that it would be quite out of line to leave this weakness in our legal position? Will my noble friend therefore go back to his right honourable friend the Home Secretary and ask him to study the Obscene Publications Act 1959 and to consider drafting an amending Bill which would add to the Act manufacturing in addition to publication, which it would be perfectly possible to do?

My Lords, the simple fact is that, in accordance with the judgment of the European Court of Justice, we have to apply the same tests to these goods imported from one member state to another as we do to goods on sale within the boundaries of the United Kingdom. However, I very much appreciate the sentiments expressed by my noble friend and I shall certainly draw them to the attention of my right honourable friend the Home Secretary.

My Lords, is the Minister aware of the grossly obscene and indecent nature of these articles? In the judgment of the Crown Court here they were described in this way:

"The dolls when inflated show nearly life-size images of the developed female form with orifices, one with a vibrator being some electrical device attached to the head [and] with simulated pubic hair".
The dolls were,
"variously described as 'Love Love Dolls', 'Miss World Specials' and 'Rubber Ladies'; there were in addition a number of what are called 'Sexy Vacuum Flasks".
Is it not perfectly clear that our Customs were absolutely right in condemning those articles as obscene and indecent and that the courts here were equally completely right and justified on the very grounds of the Treaty of Rome and on the grounds of public morality? In those circumstances arc we not entitled to go by the Treaty of Rome itself and to ignore, if you please, the wrong decisions of the European Court, or can we not tell our courts to cock a snook at the European Court?

My Lords, the fact is that the European Court of Justice has said that we should apply the same test to importing over our national boundary as we apply to the sale of these articles within the United Kingdom. The articles are classified as indecent and not obscene and they are allowed to be sold within the United Kingdom. I shall draw the matter to the attention of my right honourable friend the Home Secretary and no doubt he will be made well aware of all that your Lordships have had to say on the matter.

My Lords, is the noble Lord aware that the judgment in this case—contained in Common Market Law Reports Part 549—is in the Library of your Lordships' House and would, in fact, repay detailed study? Is he also aware that the only reason why the European Court gave the judgment that it did was that it is still permissible to manufacture and to distribute within this country the articles to which the noble and learned Lord, Lord Denning, has referred? If there is any doubt about this, will the noble Lord consider tabling an amendment to the European Communities (Amendment) Bill that is at present going through the House, in order that we may redress the matter on the lines suggested by the noble and learned Lord, Lord Denning?

My Lords, I shall, of course, draw all that has been said in your Lordships' House to the attention of my right honourable friend the Home Secretary. It is for him, or indeed for anyone, to introduce an amendment at any time.

My Lords, would not my noble friend agree that protection of the family takes priority even over the obligation to defend the state and that that must be the first concern of Her Majesty's Government at any time?

Yes, my Lords. As I have said, it is still legal in this country and therefore to look towards Europe as a method of defence against something which is legal in this country is not quite correct. What we should consider is what is allowed in this country.

My Lords, is it not better that men who are so minded should obtain their satisfaction from rubber dolls in private rather than go around terrorising and raping women in the streets?

My Lords, I am not sure that I can see the connection; but it is not for me to say.

Tourist Industry Training

2.46 p.m.

My Lords, on behalf of my noble friend Lady Elliot of Harwood, and with her permission, I beg leave to ask the Question standing in her name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what assistance is being given from public funds to improve training in the tourist industry.

My Lords, the Manpower Services Commission gives assistance towards training and retraining for jobs in the travel and tourism industry under the youth training scheme and a number of adult training schemes. Grants for tourism-related YTS currently amount to around £20 million and more than £8 million is being spent by the Manpower Services Commission on tourism-related training under its adult training schemes. In addition, the provision within the maintained further education sector for vocational education and training for tourism-related jobs at craft, supervisory and management level has expanded rapidly over the past 10 years as tourism has grown in importance, although it is not possible under the block grant system of funding to estimate Government assistance to relevant college courses.

My Lords, I thank my noble friend for that very comprehensive Answer. Will he say what schemes are available in the further education sector—where projects have been so successful—in relation to Scotland?

My Lords, what I can say is that some 46,000 students were involved in non-advanced hotel and catering and travel and tourism courses in 1984. The commencement of courses in those subjects has carried on in 1985 and 1986. Alas, I cannot satisfy my noble friend with specific numbers regarding Scotland; that is slightly another question. However, I shall have the answer put in the Library.

My Lords, will the noble Lord the Secretary of State tell us to what extent the training payments being made for adults in the tourist industry are going to people who are unemployed as distinct from payments for further training of people already in the tourist trade, having regard to the fact that the Manpower Services Commission is putting much greater emphasis in the application of the adult training strategy on the training of employed adults rather than of unemployed adults?

My Lords, I am grateful to the noble Baroness, Lady Seear. Some 2,400 people received training in hotel and catering under the job training scheme in 1984–85 at a cost of some £5·22 million; a further 2,000 received training in 1985–86 under the job training scheme, and they were predominantly unemployed people. Some 750 people working in the hotel and catering sector received training in 1985 and 1986 via local training and local consultancy grants. A further 300 received training under the training for enterprise scheme. They were predominantly employed people. We still have the balance going towards unemployed people.

My Lords, is my noble friend aware that a great deal of trouble is taken in the Lake District and not just in Scotland, which has already been referred to, and that the three colleges in that district run training competitions of different types with great advantage to the industry? Great steps are being made.

My Lords, the drive for more professionalism in tourism is gathering pace. It is paying great benefits for those who are going into employment after completing their courses.

My Lords, will the noble Lord say what, if anything, his department is doing towards the sponsoring of training in languages, which is surely of the essence as regards the tourist industry?

; My Lords, I take responsibility for a great many things, but I think responsibility for language training would lie with my right honourable friend the Secretary of State for Education and Science.

My Lords, in addition to the existing training facilities to do with tourism has any thought been given to the possibility of conjoining the efforts that are to be made with regard to the new litter teams that are envisaged so as to help tourism?

My Lords, I have read a great deal about the new litter teams. I think we should await the formal announcement on them.

Terrorism: Funding

2.51 p.m.

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

The Question was as follows:

To ask Her Majesty's Government whether they have made representations to the Governments of the Irish Republic or the United States of America concerning the sources of the resources which enabled the assassination of the late Earl Mountbatten of Burma.

My Lords, both the Governments of the Irish Republic and the United States are fully committed, as we are, to the fight against terrorism in all its forms. They fully shared our outrage at the murder of Lord Mountbatten. No formal representations were made to either Government.

My Lords, would the Minister agree that this distinguished officer, statesman, and humanitarian and his family were selected as targets by the IRA? It is almost unbelievable, if I understood the noble Minister aright, that no official representation has been made to either the Irish Government or the United States Government when practically all the world knows that the assassination required careful planning and financing, and the overwhelming probability is that the finances came from NORAID in the United States of America. Therefore, they must share the responsibility for aiding terrorists acting against British subjects.

My Lords, the view of the Government of the United States, and of course the other governments involved in this matter, is well known and has been made clear on a number of occasions. As for the position of NORAID, as the noble Lord will be aware, it apparently claims to be raising money only for the welfare of Republican prisoners and their families. However, eight members of NORAID and office holders have been convicted of gun running to the IRA in the United States since 1973.

My Lords, would the noble Lord agree that in the United States of America there is substantial ignorance of the realities of the Irish situation? Can he say what action Her Majesty's Government are taking to explain the true facts to the people of the United States? Secondly, will he confirm that during the last 15 years about 3 million dollars have been sent by NORAID to the IRA, or so it is understood? Can he say whether armaments have been sent over and above the amount of money sent by NORAID?

My Lords, I am not sure that I am in a position to comment on the detailed figures that the noble Lord has given, but like him I have read the reports and I dare say that there is a good deal of truth in them. But I am clear that the United States Government are doing everything they can to halt the illegal activities of these organisations, because I believe there is more than one.

In 1982 a United States court ruled that NORAID must register under the Foreign Agents Registration Act as an agent of the Provisional IRA, and it is now required to submit periodic financial returns. The United States authorities have taken active steps to prosecute those engaged in the export of arms to the terrorists. Indeed, on 20th May this year the FBI in Boston arrested eight people on gun running charges, though I do not yet know whether any of these suspects is connected with NORAID.

My Lords, in view of the facts he has given, can my noble friend say how much money has come from Libya? Is he aware that Colonel Gaddafi continues to claim that he is expending a great deal of effort in training IRA specialists, who then go back to commit their acts of terrorism in Ireland? Is it not a fact that ships have been intercepted with very heavy loads of armaments, bombs and explosives supplied through Libya from Russian sources? Can my noble friend give us some facts to balance what he has said to us about NORAID?

My Lords, I can confirm that there is clear evidence that Libya has provided the Provisional IRA with money and weapons, though I have no figures on the precise amounts. But my noble friend may be interested to know that the major find of arms at Sligo and Roscommon in the Irish Republic on the 26th January this year included rifles and ammunition from Libya.

My Lords, what do the Government think of the chances of the proposed legislation for extradition from America of alleged terrorists; what does the noble Lord think about the prospects of it going through in the near future? Will the Government bring all pressure to bear on the Administration and on Congress to have such legislation passed?

My Lords, as the noble Lord will be aware, that is now a matter for the United States Senate. The view of the United States Government, however, is clear. They have made it absolutely clear that they want to see the treaty approved. Indeed, the President of the United States recently made a broadcast to that effect.

My Lords, would the noble Lord agree that in regard to gun running and other IRA activities in the United States members of the FBI have been showing great courage and skill?

Yes, my Lords, it is certainly the case that they have been conducting many successful operations in this area.

My Lords, would the Minister agree that we are not getting at the root of the Question? Gun runners have been captured. People carrying explosives have been captured. What we cannot capture is the money that comes from America to finance all these operations. The President of the United States should not expect us not to be outraged in the way that he is outraged when an American is the subject of a terrorist attack. He cannot think that we have no right to be outraged when a Britisher is the subject of a terrorist attack. With regard to the arguments submitted against gun running and dragging in Libya, all the Question asks is whether it is not about time that we contributed towards stopping this appalling evil of terrorism by making representations to the United States of America and to the Irish Government along the lines that I have indicated.

My Lords, we are clear that the United States Government are doing everything in their power to stop the flow of illegal funds and arms across the Atlantic. But so far as the treaty is concerned, the President of the United States is no more empowered to direct the Senate than are the British Government to direct your Lordships' House.

My Lords, is the noble Lord surprised—perhaps he is not surprised—that in asking his Question the noble Lord, Lord Molloy, did not pay a handsome tribute to the President of the United States and his Administration for all that they are doing in this matter? Is he surprised that the noble Lord, Lord Molloy, does not seem to understand the United States Constitution, in which the Senate and the Senate Foreign Relations Committee are the places where this Bill will either be passed or will founder? An article in The Times yesterday explained fully why certain Senators have reservations on passing the Bill. Would not the noble Lord agree that they are exactly the same reservations as might be voiced in our country if African nationalists were to find asylum here and the South African Government asked for them to be extradited?

My Lords, I am not sure that I should much assist your Lordships by drawing analogies of the kind that the noble Lord suggests. The position is that the United Kingdom has signed a treaty with the United States Government on this matter, and as the noble Lord will know, under the American Constitution treaties of that kind have to be approved by the Senate. It is that approval that we are now looking forward to.

My Lords, may I say that I understand the American Constitution very well indeed? I have many relatives who are United States citizens. Would the noble Lord not agree that the family of Lord Louis Mountbatten may not be experts on the American Constitution? Will he tell the noble Lord, Lord Annan, that those people who were killed outside Harrods may not particularly have known the American Constitution? What their relatives knew was something which the noble Lord, Lord Annan, probably does not know; they reached the frontiers of real understanding when their souls were smitten with grief.

My Lords, nobody more than I shares the thoughts behind the views of the noble Lord. But it is necessary to proceed in a more measured way. As I have said before, I am clear that the United States Government are doing everything in their power to get this treaty approved.

My Lords, does the noble Lord not agree with my noble friend Lord Cledwyn that NORAID benefits mainly through the ignorance of the American public about what is happening in Ireland? Does he not agree that the British information service and our consulate-generals in America have a great role to play? Will he give a commitment that any cuts that he may be envisaging will not settle on the British information services in New York?

My Lords, there was one time in my life when, as a junior Minister in the Foreign Office, I had specific responsibility for the matter to which the noble Baroness refers. I can assure her that such matters engage Ministers' continuous attention.


3 p.m.

My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Gas Bill will be adjourned at approximately 7.30 p.m. for approximately one hour and that during this adjournment the Committee stage of the Protection of Military Remains Bill and the Second Reading of the Forestry Bill will be taken.

Your Lordships will be aware that it is intended that the House will sit all night on the Gas Bill. If I may say a word about domestic arrangements, the Guest Room will close at 1 a.m., but the Bishop's Bar and the Grill Room will remain open until the rising of the House.

Committee For Privileges

3.2 p.m.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the Lord Bridge of Harwich be appointed Chairman of the Committee for the consideration of the Strange case—( Lord Aberdare.)

On Question, Motion agreed to.

Procedure Of The House

My Lords, I beg to move that the Second Report from the Procedure Committee be agreed to.

This meeting of the Procedure Committee was solely devoted to considering the procedures in relation to marriage enabling Bills. I think it is universally agreed throughout the House that parliamentary procedures are not the best way of dealing with two people who want to get married but are prohibited by the law that governs the degrees of affinity. However, the fact is that there are hard cases, and also there is the personal Bills procedure. What I have endeavoured to do is to put before the Procedure Committee, and now the House, some proposals which I hope will improve at least the methods that we have used hitherto to deal with these Bills.

The object is to ensure that the Bills themselves are fully examined in Committee rather than on the Floor of the House. In the Committee the evidence will be taken on oath and in private. Therefore there should not recur some of those occasions that we have suffered in the past when a whole lot of personal details have been aired during Second Reading in the House.

The full, detailed procedure is set out in the report of the Procedure Committee. It is based on the hope that your Lordships will take the Second Reading formally, as indeed mostly is the case with Private Bills. This would not in any way commit the House to agreeing with the Bill, just as it does not do so in the case of Private Bills. It would merely be an agreement that that Bill should be examined in the appropriate committee. If any of your Lordships wish to speak on Second Reading, there is no reason why you should not do so just as with Private Bills. But I would hope that if you do, it would be on matters of general principle or directing the attention of the committee to a particular point rather than going into details of the case which I believe would be better examined in the committee.

If I may say a word about the committee, I am grateful to the Bishops. They have agreed that one of their number would take part in the committees which will mean that the committee will have the opportunity to hear their opinion before coming to their conclusions. Finally the House will have the last say when it comes to Third Reading on the Floor of the House.

Since the Procedure Committee met there has been one change because the Bill that was so ably promoted here by the noble Lord, Lord Meston, the Marriage (Prohibited Degrees of Relationship) Bill, has been passed by the House of Commons and is now an Act. When that comes into force it will remove a whole category of step relationships from the scope of any procedure with personal Bills; but even that will not be immediately so because under Clause 6(5) the Act only comes into force on such day as the Secretary of State makes a statutory instrument. So for the time being there will still be hard cases and we shall still need to deal with them. I hope therefore that this revised procedure will appeal to your Lordships, at least on an experimental basis. My Lords, I beg to move.

Moved, That the Second Report from the Select Committee be agreed to.—( Lord Aberdare.)

Following is the report referred to:



The Committee have considered the procedure for dealing with a Personal Bill promoted for the purpose of authorising a marriage between two persons whose relationship falls within the prohibited degrees of affinity laid down by the Marriage Act 1949 and subsequent enactments. Since the presentation of a Personal Bill of this kind in Session 1979–80, an increasing number of such Bills have come forward, and the trend seems likely to continue.

The Committee do not believe that Personal Bill procedure is the most suitable way of deciding whether two people should be able to marry. As the law stands at present, however, there is no alternative in a case where two persons who wish to be married to each other are within the prohibited degrees of affinity. Accordingly, the Committee consider that, by way of experiment, the procedure on such Bills should be adapted, so far as possible, to avoid discussion of personal details on the Floor of the House, while ensuring that the facts stated in the petition for each Bill are properly examined and reported on to the House. The Committee recommend that the procedure should be as follows:

  • (i) The Second Reading of a Marriage Enabling Bill should normally be taken formally, in the same way as the Second Reading of an ordinary Private Bill. The agreement of the House to Second Reading would not imply approval of the purpose of the Bill, but only that it should be sent to an appropriate Committee for examination. It would be open to any Lord to speak on Second Reading in order to offer general guidance to the Committee; but it should he the convention that personal matters ought not to be raised on the floor of the House.
  • (ii) If the purpose of a Bill were to authorise a marriage between persons who would be able to marry under the provisions of the Marriage (Prohibited Degrees of Relationship) Bill [H.L.] passed by the House on 24th March 1986, the Bill would be committed to an Unopposed Bill Committee, which would normally consist of the Chairman of Committees alone.
  • (iii) In cases not within the provisions of the Marriage (Prohibited Degrees of Relationship) Bill [H.L.], the Bill would be committed to a Select Committee, which would consist of the Chairman of Committees, a Bishop and two other Lords.
  • (iv) In either case the Committee would sit in private and take evidence on oath from the parties promoting the Bill, and, if necessary, from others. The Committee would seek to establish the facts and report to the House.
  • (v) The Third Reading of each Bill would give the House an opportunity to decide whether to pass the Bill or not, in the light of the Report from Committee. It would remain desirable that personal details involving those promoting the Bill should not be discussed on the Floor of the House.
  • The Committee do not see this procedure as a permanent one, but hope that it may prove rather more satisfactory than the existing procedure while the law remains unchanged.

    My Lords, having been somewhat connected with this whole procedure, and in view of the limited nature of Lord Meston's Bill, I feel that this is by far the best arrangement that could be made to deal with the residual cases which will not be covered by what is now that Act.

    On Question, Motion agreed to.

    Corneal Tissue Bill

    3.7 p.m.

    My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.

    Moved, That the order of commitment be discharged.—( Lord Cullen of Ashbourne.)

    On Question, Motion agreed to.

    Insolvency Bill Hl

    3.8 p.m.

    My Lords, I rise to move that this Bill be now read a second time.

    It may be for the convenience of the House, though I shall put the Questions separately, if I speak to both Consolidation Bills together. If your Lordships give the Bills a Second Reading, they will both be sent to the Joint Committee; but I have been advised that I should speak at slightly greater length on these two Bills than I normally do with consolidation measures.

    Both Bills were introduced into this House on 13th May. They are linked in that they are the product of a single consolidation exercise, consisting principally of provisions taken from the Companies Act and the Insolvency Act that we passed last year. As your Lordships will recall, the Companies Act was the principal Act of the four Acts which resulted from the consolidation of all the enactments relating to companies from the Act of 1948 onwards. Parts 18 to 21 of the 1985 Act contain provisions about receivership and winding up.

    The Insolvency Act 1985 contains the first major revision of the law of insolvency relating to both companies and individuals for over 70 years. Among other things, it introduced a new bankruptcy code and new procedures, first to enable companies and individuals in financial trouble more easily to make voluntary arrangements with their creditors; and, secondly, to allow companies a better opportunity to trade out of their difficulties through the new concept of administration rather than going into liquidation. In addition, the Act introduces a number of new provisions in relation to receivership and winding up, involving in many instances the amendment or repeal of sections of the existing Companies Act: indeed, more than half of the two hundred sections dealing with those topics were affected in one of those ways.

    Although, therefore, the Insolvency Act contains a comprehensive code for the insolvency of individuals, the same is not true of company insolvency. The relevant provisions are contained in two enactments, one of them heavily amended by the other, and, as your Lordships will appreciate, this is not helpful to the user, whether or not a practitioner in the field.

    The same is true of provisions concerning disqualification from company management. The Insolvency Act introduces more important new provisions in this area, but several disqualification provisions remain in the Companies Act. An added difficulty is that not all the remaining provisions are concerned with disqualification as a result of involvement in insolvency. Disqualification can, for instance, flow from consistent failure to comply with obligations under the Companies Act concerning the submission of returns to the registrar, or be imposed as an additional punishment on conviction for an offence in relation to a company; in addition, there are provisions involving the disqualification of undischarged bankrupts.

    As I have indicated to your Lordships previously, there is no ideal time for a consolidation. But in the case of these two Bills it may be that the timing could not be more appropriate. The greater part of the Insolvency Act 1985 is not yet in force and this consolidation will enable the bringing into force at the end of this year of two comprehensive enactments, dealing with insolvency, on the one hand, and disqualification from company management, on the other. A further advantage of this timing is that the large body of subordinate legislation which is necessary to supplement both these consolidating enactments can be brought into force, or, in the case of the disqualification provisions, re-enacted, at the same time as the consolidation, without the disruption and revision that would have been necessitated by a later consolidation.

    The Insolvency Bill now before your Lordships thus contains a complete code for winding up, receiverships, administration orders and company voluntary arrangements, in addition to the comprehensive bankruptcy and voluntary arrangement provisions for individuals which derive from the Insolvency Act 1985. It also includes the provisions concerning qualified insolvency practitioners introduced by the Insolvency Act, and provisions concerning official receivers and the public administration of insolvency matters.

    The Company Directors Disqualification Bill gathers together the provisions from the Companies Act and the Insolvency Act concerning disqualification from the management of companies.

    My Lords, the two Bills which are the product of this consolidation exercise will make a major contribution to the clarification of, and accessibility to, the law relating to insolvency and disqualification, and have been welcomed by practitioners. I commend both Bills to your Lordships. As I have said, they will go to the Joint Committee on Consolidation Bills if a Second Reading is given. I beg to move that the first of the two Bills standing in my name on the Order Paper be read a second time.

    Moved, That the Bill be now read a second time.—( The Lord Chancellor.)

    3.15 p.m.

    My Lords, I am sure that the House will be grateful to the noble and learned Lord for introducing the proposed consolidation of these two Bills. Unhappily, insolvency has become a matter of considerable importance and increasingly so in recent years, if I may say so without being aggressively party political, so that it was time that the matter was looked at. Indeed, the Company Directors Disqualification Bill is of urgent importance, too.

    What is of great interest in what the noble and learned Lord has said is, first of all, the element of urgency which has prompted the quick introduction of this consolidation measure. I make no complaints about that. But what I found interesting, putting it mildly, was the concept that subordinate legislation which was contemplated under one or other of these separate Bills would not take effect under the consolidated Bill when it becomes an Act. I do not know whether there are any precedents for this; if there are not, it is not a tragic matter but it is certainly a new development, I think, in our procedures. However, in so far as other matters are outstanding the appropriate consolidation committee of experts will be looking into them and it may well be that we shall hear a little more about this proposal in due course.

    My Lords, I am grateful to the noble and learned Lord for what he has said. I do not think that what is proposed about subordinate legislation is altogether unprecedented. It is obviously convenient and slightly unusual, and probably this applies on a bigger scale than, at any rate, has been normally the case either in recent years or before. It is convenient because it enables one set of subordinate legislation to be used by reference to the consolidated legislation when it is passed rather than two sets, which would be both inconvenient and, if the consolidation is passed rapidly, unnecessary. I am grateful to the noble and learned Lord for drawing attention to this point.

    My Lords, I venture to detain the House for a little longer since I was responsible for the Opposition on this subject at the time that the Insolvency Bill went through. I have only one substantial query to put to the noble and learned Lord, which is the fate of the existing consolidated Companies Act 1985, which is already on sale at a price of £19 and at least half of whose provisions now become obsolete. Is it the intention of the Government to do anything further about the Companies Act? The noble and learned Lord will appreciate that for those who write textbooks and those who have to refer to them the numbering of the various sections of the various Acts becomes a matter of some importance.

    I am quite sure that the noble and learned Lord, in particular so far as his own profession is concerned, and, as a by-product, mine also, might see fit to adopt a course of action which would result in the early re-amendment of the Companies Act 1985 so that it can be renumbered, particularly bearing in mind that there are clauses in the Companies Act that are put into the new insolvency consolidation, which tends to make matters a little complicated. I did not give the noble and learned Lord notice of this question but I know that with his usual felicity he already knows the answers.

    My Lords, I do; just in time. If I may have the leave of the House there is no present intention to reconsolidate the Companies Act 1985. The procedure which has happened is the inevitable result of Acts which consolidate a very complicated piece of law and which require discussion; that is followed by a reconsolidation in order to make it convenient for practitioners to go through the ordinary consolidation procedure. I think that that is the position. At present I do not think it will be necessary to reconsolidate the Companies Act 1985. So far as it is necessary, it will be done under the present exercise.

    On Question, Bill read a second time, and referred to the Joint Committee on Consolidated Bills.

    Company Directors Disqualification Bill Hl

    3.19 p.m.

    My Lords, I beg to move that the second Bill standing in my name on the Order Paper be now read a second time.

    Moved, That the Bill be now read a second time.—( The Lord Chancellor.)

    On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

    Gas Bill

    3.20 p.m.

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

    Moved, That the House do now again resolve itself into Committee.—( Lord Belstead.)

    My Lords, I am sorry to have to raise this matter and I shall try not to keep your Lordships too long, but I have to say that on the last day of the Recess I was perturbed to read from the Press Association tapes a statement which quite clearly emanated from the Government and which threw doubt on the Opposition's role in assessing the Gas Bill during its Committee stage in this House. If I may quote from the Press Association release, it said:

    "Peers, many of them aged more than 70, will sit up all night in a line-by-line consideration of one of the Session's most controversial Bills. The measure has already completed its Commons stages but has met with delays in the Lords, largely due to lengthy speeches by the SDP leader Lord Diamond."
    The noble Lord, Lord Diamond, is perfectly able and, I am sure, willing to speak for himself but I think it is right that I should say in his defence that apart from one small lapse at the beginning of the Bill, when he did speak for rather a lengthy period, the noble Lord's contributions have been to the point, succinct, and reasonable, and indeed the points have been well made. No doubt the noble Lord, Lord Diamond, will speak for himself. However, the Press Association report goes on:
    "But after private protests from Lords leader Viscount Whitelaw about slow progress, the Government is determined to complete the Committee stage in the first week after the spring holiday."
    There is an implication there, as I have said, that the Opposition has been using delaying tactics and I have to refute that implication. Indeed, I am quite sure that other noble Lords will join me in refuting that implication. The noble Lord, Lord Boyd-Carpenter, who has spoken in the debate, will know that the debates on the Gas Bill have been reasonable and there has been no attempt to delay or filibuster. Other noble Lords, too, will know (because they have spoken on the Bill) that all contributions have been reasonable. If I may say so, the reason why the House is having to sit late tonight is not because of any actions by the Opposition but is due to the—I will not say to incompetence, because that is perhaps too strong a word to use from this Bench—as the noble Lord, Lord Belstead, will know, that on two occasions when the Opposition wanted to get on with the discussion of this Bill the Government side were unable to keep a House and the Opposition from all parts of the Chamber viewed with regret that they were some 20 amendments short of the target they had sought to achieve on that particular occasion. So there was no delay on the part of the Opposition but there was failure by the Government to keep a House.

    Then there was the occasion when the Government put up another Bill in front of the Gas Bill so that the Gas Bill thereby lost three and a half hours of debate. That is the reason why your Lordships are being called upon by the Chief Whip—not by us, the Opposition, because we believe there is plenty of time to consider this Bill and that plenty of time should be given to that consideration—to sit tonight. It is not because of any obstruction, as is alleged by the Government, on the part of the Opposition.

    As I have said, I do not wish to delay your Lordships for too long but there is one further point I must raise, because, finally, the report says this:
    "However, the Government is anxious to return the Gas Bill to the Commons in July and has allowed only four days' debate on the Report stage and one day for Third Reading."
    I do not know whether that has been discussed through the usual channels. I sincerely hope it has, but I have to say that it has not yet come to my knowledge and I would have thought, frankly, that it was not a question of the Government—perhaps we have had too much of this already—laying down a timetable which they think is adequate for the Bill but rather of agreeing a timetable with all parts of the House to ensure that the Bill has a reasonable passage.

    I do not wish to make much more of this, but I have to say that we do resent listening to the radio in the morning, as we did today, and being told that the Opposition are being obstructive. They have not been obstructive, and indeed I have to tell your Lordships that my noble friend Lord Bruce of Donington, in order to assist the passage of this Bill, said that he would not press for a Private Notice Question put down in the other place to be repeated here. So in fact we have been doing all we can to assist the Government in the passage of this Bill. I do hope they will not persist with these leaks, press conferences or whatever they are, accusing the Opposition side of this House of deliberately obstructing the Bill. That has not been so and will not be so. And after all it is up to the Government to get their business through.

    My Lords, the noble Lord, Lord Stoddart of Swindon, sought to call me as a witness in support of his proposition. I am surprised that someone with his experience as an advocate has not realised the danger of calling a witness without first ascertaining what that witness is likely to say. I am afraid that the effort of the noble Lord, Lord Stoddart, in this respect is an example of that, because he was kind enough to say that I have taken a certain part in the discussions on this Bill, and I had not intended to make any comment on the Opposition's behaviour until he provoked me into doing so.

    However, as he has done so, I must say to your Lordships—this is certainly my evidence—that the proceedings so far have been unduly prolonged, not perhaps quite so much by the Official Opposition but certainly by the Liberal-SDP Alliance. Even the noble Lord, Lord Stoddart of Swindon, referred to a speech by one of the official spokesmen for the Alliance, who spoke for 40 minutes on one not very important Committee stage amendment. That is plainly not in accordance with the general way in which we conduct business in this House.

    The final point I would make simply rests on the facts. We are now on, I think, the fifth day of the Committee stage and we are beginning with amendments at the start of Clause 7. I do not dispute that this is an important Bill; I do not think it is the most important Bill of the Session by any manner of means, but it is quite an important Bill. However, it is not in accordance with the normal practice of this House to take so much time over a Committee stage, Nor, again, if I may say so with very great respect, is it in accordance with normal practice to table so many amendments which broadly say the same thing or seek to effect the same result with slightly different wording.

    Therefore if we are to distribute responsibility—and the noble Lord, Lord Stoddart of Swindon, has invited the House to express an opinion—for the time so far taken on this Bill and for the rather dreary prospect in front of us tonight, I think it is only fair, certainly to my noble friends, to say that responsibility for that lies in the way in which noble Lords in both sections of the Opposition, but particularly in the Liberal-SDP Alliance, have seen fit to conduct the debate. Therefore that is where responsibility lies. If they think they have done a good job for the Bill, for the country or for the House, that is up to them. I do not happen to think so.

    My Lords, the Motion has been put, That the House do now again resolve itself into a Committee upon the said Bill. I beg the noble Lord's pardon, I did not see him rise.

    3.30 p.m.

    My Lords, the noble and learned Lord is obviously quite right. I did not attempt to rise until the Government had said something as to the authority, the propriety and the accuracy of the statement which is being referred to. I do not propose to indulge in an individual argument with an individual noble Lord on the other side, but I was hoping that the Government would say something. If what the Government had to say disposed of the matter there would be no need to say anything further. If what the Government had to say did not dispose of the matter, then it might be necessary to delay your Lordships a moment or two.

    My Lords, the last of my desires would be that your Lordships should be delayed in the discussion of this Bill, so I will of course respond to the noble Lord. I have not seen this particular press report. As your Lordships will appreciate, I was not very likely to see it where I have been for the last 10 days. Certainly I do not think I should have been aware of any leaks in the place where I have been. I must say that if this report did appear in the press it certainly had absolutely no authorisation from me—which I am sure your Lordships will immediately accept—or indeed from anybody else I know of who has anything to do with the Government. Of course, if it were proved that that was so, then I should be very upset because I would not wish that to be said at all and I would wish to repudiate that suggestion.

    I hope your Lordships will be able to accept that I am sorry about the long time we have to take on this Bill; I am sorry for the long hours we have to undertake, but I hope we can make good progress. It is a famous principle of progress that the quicker you deal with what you are seeking to do, within reason, the more progress you make. I hope that on that basis we shall be able to proceed with the Bill and give it the really full and proper scrutiny it of course deserves. However, I hope equally that we shall make good progress.

    On Question, Motion agreed to.

    House in Committee accordingly.

    [The LORD ABERDARE in the Chair.]

    Clause 7 [ Authorisation of public gas suppliers]:

    moved Amendment No. 60:

    Page 5, line 1. at end insert (", the Gas Consumers' Council, trade unions and other relevant bodies").

    The noble Lord said: Amendment No. 60 is concerned with the question of authorisation and I think it will be generally agreed that authorisation under the Bill is a very important part of it. Indeed, it is the main point of control of public gas suppliers under the Bill and furthermore, once granted, the authorisation will last for a considerable number of years.

    Although the Secretary of State is required under the authorisation procedure to consider objections to proposed authorisations, there is no public examination in advance of those objections. This absence of public examination of such an important issue contrasts sharply with, for example, town and country planning procedures in Britain and indeed with the procedure which normally attends the promotion of Private Bill legislation in both Houses of Parliament. Consultation with the Director General of Gas Supply, Ofgas, is provided for in Clause 7 and we welcome this. However, we feel that the process of consultation needs extending and that is the principal purpose of Amendment No. 60, and indeed of Amendment No. 61. In a sense, they give an alternative choice to the Government, and no doubt when the Minister comes to reply he will indicate which, if either, of those choices he prefers.

    An aspiring gas supplier under the present arrangements for authorisation need not make his position public. The Secretary of State is therefore in a situation in which he can make private arrangements with such aspiring gas suppliers. While those arrangements may seem appropriate to the Secretary of State, it does not necessarily follow that they are in all respects in the best interests of users. Authorisation itself covers a wide range of matters including standing charges, connection charges, accounting methods and pricing for tariff and contract customers.

    Turning to the specific provisions of Amendment No. 60, we are suggesting that at page 5, line 1, there should be inserted, after "Director", the words,

    "the Gas Consumers' Council, trade unions and other relevant bodies".

    I think the importance of consultation with the national Gas Consumers' Council is obvious. They are the body charged under the Bill with representing consumers in general, and I think they are entitled to be consulted in advance of authorisations being granted. Trade unions also have a prime interest in the authorisation because, apart from their basic role of safeguarding the interests of their members in respect of wages and conditions, other factors also may enter into the reckoning.

    One can of course recall that in 1948, when the first nationalisation measure created British Gas, among the undertakings to be taken into public ownership at the time—following an independent public inquiry, I might add—was the largest of all the bodies at that time involved in the gas industry, namely, the Gas Lighting Company. That company was noted in the gas industry for its policy even then of paying bonuses on wages; so in addition to the normal questions concerning wages and conditions, the bonus and wages issue may now be relevant so far as authorisations are concerned. Indeed, the Government themselves have, in a sense, made it relevant by their recent proposals for profit sharing and, without in any way seeking to endorse or recommend the proposals, it is an undoubted factor with which trade unions will have to live in the future. What better way to begin than by conferring about this issue, if they are to be consulted before authorisations are granted?

    Of the other relevant bodies mentioned in the amendment, I think local planning authorities are an obvious example of bodies who ought to be consulted. They have a major interest in planning matters and an authorised gas supplier is someone who will inevitably be heavily involved in planning machinery. One recalls again that under the 1948 Act no fewer than 300 municipalities were engaged in the gas industry. They are well aware of the factors which planning subsequent to their own involvement requires and I think that justifies full consultation with them.

    The other relevant bodies might include representatives of industry and commerce in the areas concerned, and here again substantial users are likely to be interested in authorisations. I feel they should be consulted in advance of authorisations being granted. That is the purpose of Amendment No. 60. I beg to move.

    I appreciate the concern of the noble Lord, Lord Gallacher, that there should be proper consultation on the important matters associated with public gas supply; in particular, on the question of the authorisation itself. This is, I agree, a matter of the widest public interest and it is right that the legitimate views of all interested parties should be taken into account.

    Where I part company with the noble Lord is that I think that the Bill provides precisely for public interest to be taken into account in the granting of authorisations. I say that because Clause 7 of the Bill already provides for the publication by my right honourable friend of notice of the Government's intention to grant an authorisation when that happens and to give reasons. In reaching a view the Secretary of State will take into account a wide variety of matters; in particular, his duty in Clause 4 to secure the satisfaction of all reasonable demands for gas. The consumers' interest will therefore be a prime consideration.

    But in a sense the Bill goes further than the amendment, because my right honourable friend is also required under the Bill, before granting an authorisation, to allow a period for representations or objections. There is no restriction as to who may make such representations or objections and once made they cannot be rejected out of hand. They must be properly considered—that is specifically written into the Bill—whether the objections or representations come from individuals or from representative bodies. It is for that reason that I feel that we have made in Clause 7 as wide provision as is possible for public consultation on possible future authorisations. Although I quite understand the thinking behind this amendment, I like to think that the Bill has got it just about right.

    I think that the Minister's reply, though not unexpected, is somewhat disappointing. Indeed, if I may say so without disrespect to the Government Front Bench, it follows the tenor of all the replies we have had to all the amendments on the four previous Committee days and I think that it indicates in some measure a fairly closed mind so far as the Government are concerned which, in itself, is indicative of a determination to see this Bill not merely on the statute book, which would be understandable and acceptable, but on the statute book without any single amendment. We on these Benches, at least, find that to be completely unacceptable.

    The Minister said that there is provision in Clause 7 for the consideration of objections to the authorisation, and that is not in dispute. What is at issue between us is whether or not, before the event rather than after it, there should be consultation. Our firm view is that such pre-consultation should take place because of the importance of the authorisation document per se and because of the variety of interests involved so far as the granting of an authorisation is concerned. For those reasons I think, unless the Minister can give me some encouragement in respect of Amendment No. 60, or even No. 61, I shall have little option but to test the feeling of the Committee on the matter.

    Would the noble Lord not agree that there ought to be in such an important matter consultation with other relevant bodies? If the noble Lord would be prepared to consider such an amendment, I think that some of us would be quite happy with that. But the suggestion of simply consulting the director and not other relevant bodies seems to us to mean that a decision could be reached without full consideration of the issue.

    With great respect to the noble Lord, Lord Ezra, the Bill does not substantiate what the noble Lord has just asserted. If he would care to glance at page 5 of the Bill, he will read there that before—not after—granting an authorisation the Secretary of State shall give notice that he proposes to grant the authorisation, that he must state his reasons and that he must specify,

    "the time (not being less than three months from the date of publication of the notice) within which representations or objections … to the proposed authorisation may be made, and shall consider"—
    that is a duty—
    "any representations or objections which are duly made and not withdrawn".
    It is therefore not possible for there to be given, by some sleight of hand, an authorisation without giving the fullest possible opportunities for consultation.

    3.45 p.m.

    On Question, Whether the said amendment (No. 60) shall be agreed to?

    Their Lordships divided: Contents, 89; Not-Contents, 121.



    Airedale, L.Crawshaw of Aintree, L.
    Amherst, E.David, B. [Teller.]
    Ardwick, L.Davies of Penrhys, L.
    Aylestone, L.Dean of Beswick, L.
    Bacon, B.Diamond, L.
    Banks, L.Dowding, L.
    Beswick, L.Elwyn-Jones, L.
    Birk, B.Elystan-Morgan, L.
    Blyton, L.Ennals, L.
    Bottomley, L.Ewart-Biggs, B.
    Brockway, L.Ezra, L.
    Brooks of Tremorfa, L.Fisher of Rednal, B.
    Bruce of Donington, L.Gallacher, L.
    Burton of Coventry, B.Galpern, L.
    Carmichael of Kelvingrove, L.Gladwyn, L.
    Cledwyn of Penrhos, L.Glenamara, L.

    Graham of Edmonton, L.Ponsonby of Shulbrede, L. [Teller.]
    Grey, E.
    Hampton, L.Prys-Davies, L.
    Hanworth, V.Ritchie of Dundee, L.
    Hatch of Lusby, L.Roberthall, L.
    Heycock, L.Scanlon, L.
    Hirshfield, L.Seear, B.
    Houghton of Sowerby, L.Shackleton, L.
    Hunt, L.Stallard, L.
    John-Mackie, L.Stedman, B.
    Kagan, L.Stewart of Fulham, L.
    Kilbracken, L.Stoddart of Swindon, L.
    Kilmarnock, L.Strabolgi, L.
    Kinloss, Ly.Strauss, L.
    Leatherland, L.Taylor of Blackburn, L.
    Listowel, E.Taylor of Gryfe, L.
    Llewelyn-Davies of Hastoe, B.Taylor of Mansfield, L.
    Lloyd of Hampstead, L.Tordoff, L.
    Lloyd of Kilgerran, L.Turner of Camden, B.
    Lockwood, B.Underhill, L.
    McCarthy, L.Vernon, L.
    Mar, C.Walston, L.
    Maybray-King, L.Wells-Pestell, L.
    Mayhew, L.Whaddon, L.
    Morton of Shuna, L.White, B.
    Nicol, B.Wigoder, L.
    Northfield, L.Williams of Elvel, L.
    Oram, L.Winstanley, L.
    Phillips, B.Ypres, E.


    Ailesbury, M.Hemphill, L.
    Aldington, L.Henderson of Brompton, L.
    Alexander of Tunis, E.Hives, L.
    Allenby of Megiddo, V.Hooper, B.
    Allerton, L.Hunter of Newington, L.
    Auckland, L.Hylton-Foster, B.
    Bauer, L.Inglewood, L.
    Belstead, L.Kaberry, of Adel, L.
    Bessborough, E.Killearn, L.
    Boyd-Carpenter, L.Kinnaird, L.
    Brabazon of Tara, L.Kitchener, E.
    Brougham and Vaux, L.Lauderdale, E.
    Butterworth, L.Lawrence, L.
    Caccia, L.Layton, L.
    Caithness, E.Long, V. [Teller.]
    Campbell of Alloway, L.Lothian, M.
    Campbell of Croy, L.Lovat, L.
    Chelmer, L.Lucas of Chilworth, L.
    Constantine of Stanmore, L.Luke, L.
    Cottesloe, L.Lyell, L.
    Cowley, E.Macleod of Borve, B.
    Cox, B.Mancroft, L.
    Craigavon, V.Manton, L.
    Crawford and Balcarres, E.Marsh, L.
    Cullen of Ashbourne, L.Merrivale, L.
    Davidson, V.Mersey, V.
    De Freyne, L.Montgomery of Alamein, V.
    Denham, L. [Teller.]Morris, L.
    Denning, L.Mottistone, L.
    Drumalbyn, L.Munster, E.
    Dundee, E.Norfolk, D.
    Eccles, V.Norrie, L.
    Effingham, E.O'Brien of Lothbury, L.
    Ellenborough, L.Orkney, E.
    Elliot of Harwood, B.Orr-Ewing, L.
    Elton, L.Peyton of Yeovil, L.
    Faithfull, B.Porritt, L.
    Fortescue, E.Portland, D.
    Fraser of Kilmorack, L.Rankeillour, L.
    Gibson-Watt, L.Reay, L.
    Glenarthur, L.Reigate, L.
    Granville of Eye, L.Reilly, L.
    Gray, L.Renton, L.
    Gray of Contin, L.Rochdale, V.
    Gridley, L.Romney, E.
    Grimthorpe, L.Rugby, L.
    Hailsham of Saint Marylebone, L.St. Aldwyn, E.
    St. Davids, V.
    Harmar-Nicholls, L.Sandford, L.
    Harris of High Cross, L.Sandys, L.

    Savile, L.Thorneycroft, L.
    Seebohm, L.Tranmire, L.
    Shannon, E.Trenchard, V.
    Skelmersdale, L.Trumpington, B.
    Somers, L.Vaux of Harrowden, L.
    Stamp, L.Vickers, B.
    Stockton, E.Vivian, L.
    Stodart of Leaston, L.Ward of Witley, V.
    Strathspey, L.Westbury, L.
    Terrington, L.Whitelaw, V.
    Teviot, L.Wolfson, L.

    Resolved in the negative, and amendment disagreed to accordingly.

    3.45 p.m.

    moved Amendment No. 61:

    Page 5, line 1, at end insert ("and after a public hearing")

    The noble Lord said: Amendment No. 61 is in some respects similar to Amendment No. 60 although it gives the Government an alternative option which I hope may appeal to them. This would provide that in addition to consulting with the Director General of Gas Supply before granting an authorisation the Minister should call a public hearing. The idea of a public hearing before granting an authorisation is one which should appeal to all parties because it is in keeping with the current vogue and fashion of open government and of making information to the public fully and freely available whenever this is possible. The granting of an authorisation is just such an occasion.

    I do not think that a public hearing of this character need in any way be bureaucratic; neither need it be time-consuming. Nor do I think that the information which may be divulged at a public hearing would be too revealing from the commercial angle or indeed that the cost of holding the public hearing as such would be excessively expensive, having regard to the importance of the issue involved and the amount of money which an authorisation represents for the public gas supplier.

    There have been criticisms of the concept of public hearings based on the system of public hearings in the United States. While the system in the United States is not devoid of merit, I do not think necessarily that a public hearing in Britain need follow the American example, although some of the information which is made available at public hearings in the United States would be of considerable value to consumers in this country. It is mildly ironic that the citadel of private enterprise can arrange public hearings of this kind whereas I fear we are going to listen to a rejection by the Minister of the same concept in the United Kingdom.

    The number of authorisations under the Bill is likely to be fairly limited so that the feasibility of public hearings is, as I say, quite assured. Similarly, the expense of an occasion such as this would also be limited. Indeed, the regulatory system provided in the Bill is to be met by fees on public gas suppliers. I do not think it is unreasonable that, in addition to the cost of the regulatory system, the gas suppliers should bear the cost of public hearings. Those of us who are concerned with the interests of consumers know full well that, although in the first instance the public gas supplier may bear the cost of a public hearing, ultimately the gas user or consumer will pay for it as part of the price structure of the industry.

    For these reasons and many others it would be a sound concept to have a public hearing prior to the granting of an authorisation, rather than merely dealing with complaints after the authorisation has been granted. I hope that the Government will see their way clear to accepting the amendment. I beg to move.

    The noble Lord, Lord Gallacher, is very persuasive in putting forward this amendment; but I must confess that first and foremost it would have the effect of leading to quite substantial delays before supplies were authorised and consumers received the gas for which they were waiting. Having said that, I think we ought to keep this in proportion.

    We are talking about the possibility of an authorisation, in addition to the authorisation planned for British Gas, some time in the future. In advance of granting such an authorisation, the Secretary of State, as we said on the previous amendment, will have to wait for the public to make representations or objections, and statutorily the Secretary of State will have to give proper consideration to those representations and objections. Despite the persuasive powers of the noble Lord, I do not like the idea of overlaying public inquiries on the top of all that procedure which is already in Clause 7.

    We are sorry that the noble Lord has not seen fit to accept this amendment. At first he said we ought to realise that it would have very limited effect because he did not anticipate there being many applications for authorisation. Then he said that in any event they were likely to take a long time. If the applications were reasonable they ought not to take a long time. If they were unreasonable in themselves, surely this fortifies the necessity for having a public inquiry.

    I am bound to return to the point made so ably by my noble friend concerning the practice in free enterprise America. They apparently do not find it incompatible with the working of a predominantly free market system to have in the case of monopolies, particularly private monopolies—in some cases going only over one state, but one state is very often the size of the United Kingdom—proper public inquiries. I cannot see why the noble Lord takes such a view against them. If he had been at the Department of Industry instead of at his parent department, the Ministry of Agriculture, then he might have taken a slightly more refined view.

    The relationship between the Ministry of Agriculture and the farmers is a very cosy one. The National Farmers' Union and the Ministry of Agriculture live on terms of easy amity. One very often wonders which is which, for there is so much unanimity of view. But here we are dealing with a matter of commerce. How on earth is the ordinary machinery of free enterprise interfered with to any greater extent than it is in the United States, by holding what on the noble Lord's own say-so must be a comparatively rare event—that is, a public inquiry?

    One of the difficulties is that the noble Lord seems to think that precisely because a complaint can be made after an authorisation, or because there is machinery for complaining after the Government themselves have made a decision, that satisfies the position. I remind the noble Lord that there is a world of difference between consultation while or even before a decision is made and consultation, or listening to representations, after a decision has been made.

    The noble Lord must know, having spent some time in public life, that one of the nuances of being in government in particular is that one should never take up a public position from which one cannot retreat. That is one of the dicta in which noble Lords opposite must have been instructed by their civil servants when they assumed office. What we are really trying to do is to rescue the noble Lord, to prevent him from taking up a public position from which, as a matter of prestige, he would find it difficult to retreat following representations.

    Surely it is better for good government that consultation should take place and that a private inquiry should take place before the making of a decision. It is the difference between what one might call positive democracy and negatived-by-objection democracy. I appeal to the noble Lord to be reasonable about this matter. It does not strike at the roots of this Bill—a sordid little Bill that is merely concerned with the raising of money for the Government. It does not strike even at the root of that. It is a proposal to which any reasonable person anxious to make progress with the Bill would immediately agree. Unless the noble Lord considers that he has already taken up a public position from which he cannot retreat, then I implore him to accept the amendment.

    I feel more strongly about the amendment upon which we have just voted, when the Opposition was defeated, than I do about this amendment. However, I am worried about the attitude of the Government towards consumers, which does not seem to have made the progress that the Government believe that it has. The noble Lord, Lord Belstead, in replying to the previous amendment, stated that before authorisation was given various things would be done. I thought at the time that surely—and this is what the noble Lord, Lord Bruce, has just been saying—discussions should take place before the authorisation, or whatever it is, is made.

    Those of us who have worked with consumer councils, particularly consumer councils concerned with nationalised industries, know full well that they are told of events after they have been arranged and that opinion has never been sought beforehand. I would have thought that the gas consumers council would have merited the opportunity of being able to give an opinion on such matters before the Government implements them. I agree entirely with what the noble Lord has just said.

    Obviously it is much easier for the Government to —shall I say?—amend what they have said before taking up a public position. It is very much more difficult to do that afterwards. Although I feel more strongly about the amendment that we on this side of the Committee have just lost, I think that the Government should allow the consumer council to have more say in such matters, and seek its opinion, before decisions are taken.

    I rise to support that which has just been said by my noble friend Lady Burton of Coventry. Indeed, I support what the noble Lord, Lord Bruce of Donington has said: that consultation before a decision is taken is far better and more democratic than consultation after a decision has been made. If the noble Lord, Lord Belstead, were to argue that supplies of gas to consumers would be seriously jeopardised if the amendment were agreed, then I am sure we would have to think again. If that is not the case, however, then there is a strong argument for supporting wider consultation before decisions are reached.

    The noble Lord, Lord Ezra, puts a direct point to me, which refers back to one that was made by the noble Lord, Lord Bruce, about experience in the United States. With respect to the noble Lord, I do not think that the United States experience is a very good one to follow. My advice is that in the 1970s the need for public hearings contributed significantly to delays in processing applications for price rises and the regulatory chaos that led to mass shortages in gas supply. That is not an example we would want to follow.

    My conclusion is that although it is the case that we must not get this matter out of proportion—and we are talking only about the possibility of some applications for authorisations in the future after British Gas has its authorisation—nonetheless, I believe that if we overlay the provisions for public consultation that are in Clause 7 with provisions for public hearings, then there could genuinely be a danger, when there is an application for an authorisation, of having a long delay for consumers wanting to receive gas.

    I remind the Committee that one of the primary duties of the Secretary of State under Clause 4 of the Bill will be to satisfy all reasonable demands for gas, and that a director will be appointed to oversee the regulation of gas supplies. His expertise will be available to my right honourable friend, and then, as I have already endeavoured to explain, the views of the public will also be available before, and not after, a decision is taken. Although I quite understand the case that has been put to the Government, I do not consider it is reasonable to lay a provision for public hearings on top of all the existing safeguards.

    The Minister's reply is quite disappointing. He paid me the compliment of saying that I was persuasive. All I can say in answer to that is I am grateful for the fact that I am not being paid by results. If so, I should be in danger of dying from starvation. I do not believe that the suggested delays to consumers that the Minister has mentioned are not capable of being borne by consumers. Neither do I believe that the analogy with the United States that the Minister called in aid, that public hearings there had resulted in delays in price increases, would be likely to find disfavour with consumers in the United Kingdom. My own view is that a public hearing will satisfy the legitimate interests of a wide variety of people as to what is happening. Moreover, it will have the effect ultimately of reducing the number of rejections subsequent to the granting of an authorisation, if people have had their say before the authorisation itself has been granted. Therefore, to that extent it is a case of swings and roundabouts so far as the time factor is concerned.

    The Minister did not say, in answer to the noble Lord, Lord Ezra, that there was the likelihood of public jeopardy so far as supplies are concerned, if hearings have to take place in advance of authorisations. Taking this and the other arguments adduced into consideration, and the response of the Minister to those arguments, I think we should once again seek to divide the House.

    4.11 p.m.

    On Question, Whether the said amendment (No. 61) shall be agreed to?

    Their Lordships divided: Contents, 89; Not-Contents, 127.



    Airedale, L.Lovell-Davis, L.
    Amherst, E.McCarthy, L.
    Ardwick, L.Mayhew, L.
    Aylestone, L.Molloy, L.
    Bacon, B.Morton of Shuna, L.
    Banks, L.Mulley, L.
    Beswick, L.Nicol, B.
    Birk, B.Northfield, L.
    Bottomley, L.Oram, L.
    Brockway, L.Phillips, B.
    Brooks of Tremorfa, L.Pitt of Hampstead, L.
    Bruce of Donington, L.Ponsonby of Shulbrede, L. [Teller.]
    Burton of Coventry, B.
    Carmichael of Kelvingrove, L.Prys-Davies, L.
    Cledwyn of Penrhos, L.Ritchie of Dundee, L.
    Crawshaw of Aintree, L.Roberthall, L.
    David, B. [Teller.]Rochester, L.
    Davies of Penrhys, L.Sainsbury, L.
    Dean of Beswick, L.Scanlon, L.
    Diamond, L.Seear, B.
    Elwyn-Jones, L.Sefton of Garston, L.
    Elystan-Morgan, L.Shackleton, L.
    Ennals, L.Simon, V.
    Ewart-Biggs, B.Stallard, L.
    Ezra, L.Stedman, B.
    Fisher of Rednal, B.Stewart of Fulham, L.
    Gallacher, L.Stoddart of Swindon, L.
    Galpern, L.Strabolgi, L.
    Gladwyn, L.Taylor of Blackburn, L.
    Glenamara, L.Taylor of Gryfe, L.
    Graham of Edmonton, L.Taylor of Mansfield, L.
    Grey, E.Tordoff, L.
    Hampton, L.Turner of Camden, B.
    Hatch of Lusby, L.Underhill, L.
    Heycock, L.Vernon, L.
    Hirshfield, L.Walston, L.
    Houghton of Sowerby, L.Wells-Pestell, L.
    Hunt, L.Whaddon, L.
    John-Mackie, L.White, B.
    Kilbracken, L.Williams of Elvel, L.
    Kilmarnock, L.Winchilsea and Nottingham, E.
    Leatherland, L.
    Listowel, E.Winstanley, L.
    Llewelyn-Davies of Hastoe, B.Winterbottom, L.
    Lloyd of Kilgerran, L.Ypres, E.
    Lockwood, B.


    Ailesbury, M.Belstead, L.
    Aldington, L.Bessborough, E.
    Alexander of Tunis, E.Birdwood, L.
    Allerton, L.Boyd-Carpenter, L.
    Ashbourne, L.Brabazon of Tara, L.
    Auckland, L.Brougham and Vaux, L.
    Bauer, L.Butterworth, L.

    Caccia, L.Macleod of Borve, B.
    Caithness, E.Mancroft, L.
    Campbell of Alloway, L.Manton, L.
    Campbell of Croy, L.Mar, C.
    Chelmer, L.Margadale, L.
    Clinton, L.Marsh, L.
    Constantino of Stanmore, L.Maude of Stratford-upon-Avon, L.
    Cottesloe, L.
    Cox, B.Merrivale, L.
    Craigavon, V.Mersey, V.
    Crawford and Balcarres, E.Montgomery of Alamein, V.
    Cullen of Ashbourne, L.Morris, L.
    Davidson, V.Mottistone, L.
    De Freyne, L.Munster, E.
    Denham, L. [Teller.]Norfolk, D.
    Dilhorne, V.Norrie, L.
    Drumalbyn, L.O'Brien of Lothbury, L.
    Duncan-Sandys, L.Onslow, E.
    Dundee, E.Orkney, E.
    Eccles, V.Orr-Ewing, L.
    Ellenborough, L.Pender, L.
    Elliot of Harwood, B.Peyton of Yeovil, L.
    Elton, L.Porritt, L.
    Faithfull, B.Portland, D.
    Fortescue, E.Rankeillour, L.
    Fraser of Kilmorack, L.Reay, L.
    Gardner of Parkes, B.Reigate, L.
    Gibson-Watt, L.Renton, L.
    Gisborough, L.Rochdale, V.
    Glenarthur, L.Romney, E.
    Gray, L.Rugby, L.
    Gray of Contin, L.St. Aldwyn, E.
    Gridley, L.St. Davids, V.
    Grimthorpe, L.Sanderson of Bowden, L.
    Hailsham of Saint Marylebone, L.Sandford, L.
    Sandys, L.
    Harmar-Nicholls, L.Savile, L.
    Harris of High Cross, L.Seebohm, L.
    Hemphill, L.Shaughnessy, L.
    Henderson of Brompton, L.Skelmersdale, L.
    Hives, L.Somers, L.
    Hooper, B.Stamp, L.
    Hunter of Newington, L.Stockton, E.
    Hylton-Foster, B.Stodart of Leaston, L.
    Inglewood, L.Strathspey, L.
    Kaberry, of Adel, L.Terrington, L.
    Kimball, L.Teviot, L.
    Kinloss, Ly.Tranmire, L.
    Kitchener, E.Trenchard, V.
    Lauderdale, E.Trumpington, B.
    Lawrence, L.Vaux of Harrowden, L.
    Layton, L.Vickers, B.
    Lloyd of Hampstead, L.Vivian, L.
    Long, V. [Teller.]Ward of Witley, V.
    Lovat, L.Westbury, L.
    Lucas of Chilworth, L.Whitelaw, V.
    Luke, L.Wolfson, L.
    McAlpine of Moffat, L.

    Resolved in the negative, and amendment disagreed to accordingly.

    4.19 p.m.

    moved Amendment No. 62:

    Page 5, line 2, after ("authorise") insert ("by order").

    The noble Lord said: I beg leave to move Amendment No. 62, with which I propose to discuss Amendments Nos. 63 and 63ZA. Since these amendments are concerned with Clause 7, it might be for the convenience of the Committee if I read subsection (2) as it would appear if these three amendments were accepted. It would then read:

    "The Secretary of State after consultation with the Director may authorise by order any person to supply gas through pipes to any premises in that person's authorised area, that is to say, so much of the area designated in the authorisation as is not for the time being designated in a subsequent authorisation under this section".

    There would then be a new subsection reading:

    "No order shall be made under subsection (2) above unless a draft of it has been laid before and approved by both Houses of Parliament".

    By inserting Amendment No. 63ZA there will be a further subsection stating:

    "An order under subsection (2) above shall not come into operation until after the end of the period of 28 days beginning with—
  • (a) the day on which copies of the order and of the authorisation are laid before each House of Parliament; or
  • (b) if such copies are so laid on different days, the last of those days".
  • The purpose of this series of amendments is to incorporate in this Bill the identical provisions in the Telecommunications Act on the issue of licences. Precisely because that is so and in order to save the time of the Committee I shall not elaborate further, because I assume that the Government are prepared to accept the amendments automatically without the necessity of my having to address the Committee. In the confident belief that the Government are bound to accept these reasonable amendments, I beg to move.

    The noble Lord, Lord Bruce, is basing his argument for this group of amendments which hang on Amendment No. 62 on the fact that there is a parallel with the Telecommunications Act. Indeed, I agree with the noble Lord that the provisions of Section 9(2) of the Telecommunications Act provide that where an order designating a public telecommunications operator is given it shall be subject to a parliamentary procedure.

    I agree with the noble Lord so far, but I do no think that the analogy with this Bill is a proper one. In the case of telecommunications the licence to be given to operators provides the main legal framework for an operator's activities and can vary from licensee to licensee, whereas in the case of gas the regulation of those matters which affect all public gas suppliers is to be dealt with in the Bill itself; for example, the specific duty in Clause 10 to supply, the gas supply code in Schedule 5 and the provisions concerning compulsory purchase of land and the breaking up of streets in Schedules 3 and 4.

    Parliament will have given its approval for these provisions which will apply automatically to any public gas supplier who is granted an authorisation. Therefore, I am saying that what the amendments seek is already adequately covered by the consultation provisions in the Bill—which is the case I have made on the last two amendments—and by the procedure for parliamentary scrutiny. With respect to the noble Lord, and for the reasons I have given, I do not think that the analogy with the Telecommunications Act is apt in this case.

    I am sorry that the noble Lord has taken that attitude. While it is true, as the noble Lord said, that much of the regulatory machinery is incorporated in the Bill, that was also the case in the Telecommunications Bill. There is certainly a deal of regulatory matter of very considerable importance to Parliament contained in the proposed authorisation.

    The noble Lord is really seeking to say that the authorisation itself is of little consequence to Parliament and that it does not contain matters of any vital substance that need go before the Houses of Parliament. Surely that must be wrong, as anyone who has seen the proposed authorisation must agree.

    It seems to me that the noble Lord is quite incapable of putting himself in the kind of political position in which his noble friend the noble Lord, Lord Cockfield, was put when we were dealing with the Telecommunications Bill. The noble Lord, Lord Cockfield was, and is, a man of some intellectual attainments and is a very good politician. He knew quite well how to persuade the Committee to get through a Bill with the greatest possible speed. When the noble Lord, Lord Cockfield, was confronted with the situation that the main purposes of the Bill might be held up for a considerable time he tended to be more and more reasonable.

    The arguments that I have in support of my amendments I did not advance earlier because it never occurrred to me that the noble Lord the Minister would not accept them. The noble Lord, Lord Cockfield, when dealing with the Telecommunications Bill said:
    "My Lords, this amendment gives effect to an undertaking that I gave in Committee to ensure that there would be effective parliamentary scrutiny of British Telecom's licence. I then said it was important also to ensure that the arrangements made preserve the independence of the director general in carrying out his regulatory functions, and equally preserve the flexibility of the licence modification procedures. I proposed, therefore, that we should proceed by building on the procedures in Clause 9 under which a system, the running of which is authorised by a licence to which Clause 8 applies, can be designated as a public telecommunications system and the licensee as a public telecommunications operator".
    The noble Lord, Lord Cockfield, went on to deal with the second part of the amendment that he had introduced and which was accepted by the House. He continued:
    "In providing a 28-day period, we believe we are providing a reasonable and sensible period of consideration before the order takes effect. But I can give your Lordships a firm assurance that we will lay British Telecom's licence and the order designating British Telecom as a public telecommunications operator while Parliament is sitting and that the 28-day period will also run while Parliament is sitting. It would be our intention that if noble Lords were to indicate that they wished to debate the order and the licence, such a debate would, business of the House permitting, also take place during the 28 days".—[Official Report, 12/3/84; cols. 618–620.]
    In that instance the noble Lord, Lord Cockfield, was showing a degree of reasonableness which in the case of the Gas Bill we feel we have every right to demand. The supply of gas is in many ways much more vital than the provision of a telecommunications system. Certainly a telecommunications system does not carry the dangers that a gas supply does because we are dealing with a very different material.

    I cannot see why the noble Lord is afraid of bringing the whole business under proper parliamentary control. It seems to me that the noble Lord, Lord Cockfield, was careful to adduce the arguments, and as the Committee will know the noble Lord, Lord Cockfield, could, when provoked, be very abrasive, to put the least construction upon it, but there he was agreeing to do something that is eminently reasonable.

    The distinction that the noble Lord makes between the contents of a licence and the contents of an authorisation is an extremely fine one. It can do no harm at all to have the procedure which was good enough for the Government in the case of the granting of a licence applied to this Bill in regard to the granting of an authorisation. I sincerely hope that, if only to expedite business, and even after he has taken up a public position from which he may not feel able to retreat, the noble Lord will on reflection see fit to reconsider and accept the amendment.

    4.30 p.m.

    The noble Lord, Lord Bruce, has put forward one argument to which I think the House will want a reply. Understandably, the noble Lord has said that when dealing with matters relating to the supply of gas, the public mind is immediately drawn to the need for particular safety measures. Perhaps I may quickly say that in my understanding and experience British Gas are to be congratulated on the great care that they take in regard to safety.

    Nonetheless, the noble Lord makes a perfectly valid point when he says that safety must be in the forefront of our minds when dealing with legislation connected with gas, and therefore that this is one reason why Parliament should in the future be able to approve (or not approve) by order the authorisation of a public gas supplier. But if the noble Lord cares to glance at the Bill, he will see that the code of safety, as it is called (and which in effect has been in existence since Victorian times), has been put firmly into the Bill and not into the authorisation. It forms Schedule 5 to the Bill. Therefore, if I may say so, the argument that in some way Parliament ought to have a hand in granting individual authorisations on grounds of safety falls because the main safety requirements are not in the authorisation but are in the Bill.

    The reason why I am resistant to the idea of Parliament being involved in every detail of future authorisations is because I think that these amendments would lay additional burdens on both Houses and would create considerable delays in the granting of an authorisation. After all, as I have already explained, we have provided in the Bill for a full system of consultation prior to the issue of an authorisation to a public gas supplier. I like to think that we have already provided ample opportunity for Parliament to scrutinise and comment on the draft authorisation of British Gas. It was published in another place before the Second Reading of the Bill and on behalf of the Government I had a revised copy of the authorisation put into the Printed Paper Office well before the Committee stage of the Bill began.

    Your Lordships have only to glance at the Marshalled List to see that we shall have many amendments during this sitting today which refer to the authorisation either directly or in some way or another. So there is enormous opportunity in your Lordships' House as there was in another place for debating matters which are proposed to be put in the authorisation.

    There is the final reason, which did not appeal to the noble Lord but which nonetheless I think is a valid one: we are not talking about the Telecommunications Act. In talking about government spokesmen. I am sorry if we do not have such a good government spokesman as was my noble friend Lord Cockfield, but we are certainly not talking about the Telecommunications Act. There is this difference: in the Telecommunications Act the main legal framework for the operator's activities was contained in the licence, and that is not the case in this Bill.

    At the beginning of my final remarks I gave one example: the safety provisions which will affect British Gas and affect any subsequent public gas suppliers are in fact in the Bill and not in the authorisation. It is for that reason that, though the noble Lord has been persuasive, I do not think that it would be right to have Parliament drawn into individual authorisations after this Bill becomes law.

    4.35 p.m.

    On Question, Whether the said amendment (No. 62) shall be agreed to?

    Their Lordships divided: Contents, 85; Not-Contents, 122.



    Airedale, L.Lockwood, B.
    Amherst, E.Lovell-Davis, L.
    Ardwick, L.McNair, L.
    Aylestone, L.Mar, C.
    Bacon, B.Molloy, L.
    Banks, L.Morris of Grasmere, L.
    Birk, B.Morton of Shuna, L.
    Boston of Faversham, L.Mulley, L.
    Bottomley, L.Nicol, B.
    Briginshaw, L.Northfield, L.
    Brockway, L.Oram, L.
    Brooks of Tremorfa, L.Phillips, B.
    Bruce of Donington, L.Pitt of Hampstead, L.
    Burton of Coventry, B.Ponsonby of Shulbrede, L. [Teller.]
    Carmichael of Kelvingrove, L.
    Cledwyn of Penrhos, L.Prys-Davies, L.
    Crawshaw of Aintree, L.Ritchie of Dundee, L.
    David, B. [Teller.]Rochester, L.
    Davies of Penrhys, L.Sainsbury, L.
    Dean of Beswick, L.Seear, B.
    Diamond, L.Sefton of Garston, L.
    Elwyn-Jones, L.Shackleton, L.
    Elystan-Morgan, L.Stallard, L.
    Ennals, L.Stedman, B.
    Ewart-Biggs, B.Stewart of Fulham, L.
    Ezra, L.Stoddart of Swindon, L.
    Fisher of Rednal, B.Strabolgi, L.
    Gallacher, L.Taylor of Blackburn, L.
    Galpern, L.Taylor of Mansfield, L.
    Gladwyn, L.Tordoff, L.
    Glenamara, L.Turner of Camden, B.
    Grey, E.Underhill, L.
    Hampton, L.Vernon, L.
    Hatch of Lusby, L.Walston, L.
    Hayter, L.Wells-Pestell, L.
    Heycock, L.Whaddon, L.
    Hunt, L.White, B.
    John-Mackie, L.Wigoder, L.
    Kilbracken, L.Williams of Elvel, L.
    Kilmarnock, L.Winchilsea and Nottingham, E.
    Leatherland, L.
    Listowel, E.Winterbottom, L.
    Llewelyn-Davies of Hastoe, B.Ypres, E.
    Lloyd of Kilgerran, L.


    Aldington, L.Alport, L.
    Alexander of Tunis, E.Auckland, L.
    Allenby of Megiddo, V.Bauer, L.
    Allerton, L.Beloff, L.

    Belstead, L.Lucas of Chilworth, L.
    Bessborough, E.Luke, L.
    Birdwood, L.McAlpine of Moffat, L.
    Boyd-Carpenter, L.Macleod of Borve, B.
    Brabazon of Tara, L.Mancroft, L.
    Brougham and Vaux, L.Manton, L.
    Butterworth, L.Margadale, L.
    Caccia, L.Marsh, L.
    Caithness, E.Maude of Stratford-upon-Avon, L.
    Campbell of Alloway, L.
    Campbell of Croy, L.Merrivale, L.
    Cathcart, E.Mersey, V.
    Chelmer, L.Montgomery of Alamein, V.
    Clinton, L.Morris, L.
    Constantine of Stanmore, L.Mottistone, L.
    Cottesloe, L.Munster, E.
    Cox, B.Norfolk, D.
    Craigavon, V.Norrie, L.
    Crawford and Balcarres, E.O'Brien of Lothbury, L.
    Cullen of Ashbourne, L.Onslow, E.
    Davidson, V.Orr-Ewing, L.
    Denham, L. [Teller.]Pender, L.
    Dilhorne, V.Peyton of Yeovil, L.
    Drumalbyn, L.Porritt, L.
    Dundee, E.Portland, D.
    Eccles, V.Rankeillour, L.
    Ellenborough, L.Reay, L.
    Elliot of Harwood, B.Reigate, L.
    Elton, L.Renton, L.
    Faithfull, B.Richardson, L.
    Ferrers, E.Rochdale, V.
    Fortescue, E.Romney, E.
    Fraser of Kilmorack, L.Rugby, L.
    Gibson-Watt, L.St. Davids, V.
    Gisborough, L.Sanderson of Bowden, L.
    Glenarthur, L.Sandford, L.
    Gray, L.Sandys, L.
    Gray of Contin, L.Savile, L.
    Gridley, L.Seebohm, L.
    Grimthorpe, L.Shaughnessy, L.
    Hailsham of Saint Marylebone, L.Skelmersdale, L.
    Somers, L.
    Harmar-Nicholls, L.Stamp, L.
    Harris of High Cross, L.Stockton, E.
    Harvington, L.Stodart of Leaston, L.
    Hives, L.Strathspey, L.
    Hooper, B.Terrington, L.
    Hunter of Newington, L.Teviot, L.
    Hylton-Foster, B.Thorneycroft, L.
    Inglewood, L.Trenchard, V.
    Kaberry, of Adel, L.Trumpington, B.
    Kimball, L.Vaux of Harrowden, L.
    Kitchener, E.Vivian, L.
    Lauderdale, E.Ward of Witley, V.
    Lawrence, L.Westbury, L.
    Layton, L.Whitelaw, V.
    Lloyd of Hampstead, L.Wolfson, L.
    Long, V. [Teller.]Zouche of Haryngworth, L.

    Resolved in the negative, and amendment disagreed to accordingly.

    4.42 p.m.

    moved Amendment No. 62A:

    Page 5, line 6, at end insert ("in accordance with the provision contained in Schedule (Standing Charges) to this Act.")

    The noble Lord said: I understand that it will be for the convenience of the Committee if we discuss at the same time Amendment No. 84B; that is to say, a new schedule. What we are talking about is a matter of common interest on which I do not think there is much dispute among many members of the Committee; namely, the importance of protecting the consumer in particular in relation to standing charges. A private monopoly is being created and obviously more has to be done to protect the consumer because he will be at greater risk than with a nationalized corporation, with all the protections that are available through Ministers, the two Houses of Parliament, and so on.

    One sees on the Marshalled List a number of amendments seeking to add protection for the consumer. There is a particular responsibility on those of us who wish to add to the protection of the consumer where standing charges are concerned, because they fall most heavily on those in the bottom income groups. They use their gas supply least, and so their charges per therm are less important to them than the standing charge. They pay more than we do per therm consumed overall, because the standing charges are based that way and form a large part of a small consumer's bill. In protecting the consumer, it is particularly important that we should protect those most affected by the standing charges.

    That is why it is proposed in Amendment No. 84B that:

    "The supplier shall ensure that from 1st April 1987 the standing charges payable by tariff customers in any relevant year do not exceed the standing charges payable by such customers in the first relevant year as increased by the percentage increase in the Retail Price Index from 1st April 1987".

    It is a proposal to limit the increase in standing charges to the amount of the increase in the RPI.

    I feel that so far that is fairly common ground in all parts of the Committee. The difference arises here. I suspect that the Government will say—I do not wish to put words in the noble Lord's mouth—"We have taken the point on board and we have a provision in the proposed authorisation covering it". There is a provision: Condition 4 on standing charges in the proposed authorisation. That shows that the Government are at one with those of us who believe that standing charges are particularly sensitive and therefore particular protection is required. There are two answers to the suggestion that the matter is satisfactorily dealt with by leaving it as it is in the authorisation. The first is that the words in the authorisation are inadequate and the second is that having something in the authorisation is not the same as having it in statute.

    Let me deal with the first and read Condition 4, "Standing charges", in the proposed authorisation. I underline the word "proposed". The provision may be in the final authorisation, but, as I think happened with British Telecom, it may be found convenient to make certain alterations. At all events, it is a proposed authorisation and not part of the Bill. It states:

    "The supplier shall use its best endeavours to secure that … the standing charges payable by tariff customers … do not exceed the standing charges … as increased by the percentage increase in the Retail Price Index".

    There is no great difference on method or measurement. The question is how the consumer will get the extra protection needed because of the extra pressures in favour of the shareholder and against the consumer as a result of privatisation. The extra protection will not be secured by talking about a supplier using "its best endeavours". I have no doubt that best endeavours have been used hitherto, and we want more than that. We want a clear assurance that the standing charges will not be increased by more than the increase in the RPI.

    The proposed conditions are inadequate and are too weakly worded. Moreover, they are, as I keep indicating, proposed conditions. They are not conditions that are in the Bill. We seek to give statutory increased protection of the required amount to those who are in particular affected by standing charges—that is to say, all the lower income groups who have to use gas. It is no answer for the Government to say that it is the same thing. Of course, it is not the same thing. The noble Lord the Minister reminded us only on the last amendment that where you have something as important as safety you do not leave it to the proposed authorisation alone. You put it in the Bill so as to give it statutory backing. That is what is done with regard to safety.

    As all your Lordships who have read the proceedings in another place will know, there was discussion about the supply of back-up gas. I do not need to describe to such a knowledgeable audience what back-up gas is. I am however going to suggest to all your Lordships who know about back-up gas that it is not as important as protecting the consumer. Back-up gas affects one or two individuals. Protecting the consumer affects 16 million. Protecting the poorer section of the community affects, I imagine, something like 8 million, to whom standing charges are a very relevant proportion of their bills. Back-up gas was provided for only in the authorisation. However, as a result of arguments put forward in another place, it was transferred to the Bill and now has statutory protection. I am therefore suggesting that inasmuch as important issues of this kind have either been in the Bill from the beginning or have been moved into the Bill to provide statutory protection, protecting the consumer—giving a modicum of additional protection that he will undoubtedly need once the supply of gas is privatised—should be put in the statute in the words of my amendment. I beg to move.

    I rise to support my noble friend Lord Diamond in the amendment that he has proposed. I should like to suggest to the Committee that this is one of the most sensitive issues in this very important Bill. There must be grave concern in the country about the impact of the transfer when a very large enterprise, which is a monopoly in the public sector, becomes a monopoly in the private sector. The Government have gone some way towards recognising this through the various provisions they have made for safeguarding the public. An essential provision, however, is to safeguard the individual consumer of gas over the prices to be charged for the supply of gas. There is a formula on the tariff price. But, so far as the standing charge is concerned, the "best endeavours" clause does not really go far enough, as my noble friend has indicated.

    I do not know why the Government should resist giving up "best endeavours" and laying down once and for all that the standing charge shall not rise in any one year by more than the retail price index. As my noble friend has pointed out, the latitude that is given by the "best endeavours" clause could mean that the poorest users of gas ended up paying most per them because their standing charge goes up at a greater rate than their overall consumption of gas would justify. That seems to us, on social grounds, on grounds of equity and fairness and on grounds of reassurance to the public, to indicate that this amendment should be given serious consideration by the Government in order to ensure that the public are satisfied that, following due deliberation in this House, we have taken their interests into account.

    I should like to support the amendment, particularly from the viewpoint of elderly people. We have heard a great deal during the past terrible winter about elderly people and their problems. I am sure that the Minister will know that elderly people use less gas than most of us because of its cost. The standing charges form, therefore, a high proportion of what they have to pay. I wonder, however, whether the Minister is aware that there are real fears among elderly people and among the organisations that cater for them that, under a privatised British Gas, standing charges may increase disproportionately in future years. Many elderly people will therefore have greater difficulty still in paying their bills.

    There hs been reference already to Condition 4 of the authorisation. I have noted the reply given in the debate in Standing Committee in another place that gas suppliers should use their best endeavours to see that standing charges do not rise disproportionately. Most of us who for a long time have sat in one House or the other, are not impressed by "best endeavours" whoever the Minister and whatever the party in power. For "best endeavours" are not a firm commitment. I should like very much to support the amendment. I hope that the Government will feel able to write into the Bill what my noble friend Lord Diamond asks.

    5 p.m.

    I also should like to support the amendment, although noble Lords will note that there is a further amendment, Amendment No. 93A, in my name and that of my noble friend Lord Bruce of Donington, under Clause 14 which mentions that a gas supplier may make a standing charge. Our amendment goes rather further than the amendment of the noble Lord, Lord Diamond. In certain circumstances, we seek to see that the standing charge is actually reduced. However, we shall no doubt come to that amendment later. I wish to express my support for the amendment now before the Committee, Amendment No. 62A, and also Amendment No. 84B.

    Reference has been made to the phrase "best endeavours". It is a great sounding phrase. I suppose that the Opposition would claim that they have been using their best endeavours to make progress on the Bill. The Government apparently do not agree. Certainly, the noble Lord, Lord Boyd-Carpenter, does not agree, because he said so earlier. It is, however, our opinion that we have used our best endeavours to make progress. There is disagreement about that. There will be a disagreement about the best endeavours of the gas supplier to limit increases in the standing charges payable by tariff customers to the rise in the retail price index. I feel sure that on the basis of our experience of discussions of the Bill so far, noble Lords opposite will agree that the phrase "best endeavours" simply is not good enough.

    The noble Baroness, Lady Burton, mentioned the fear that, following privatisation, standing charges would be increased disproportionately. There is a very real danger that this could happen. That is the easy way of putting up gas prices. That is the way which has a great deal of attraction. It is a straight charge which is passed on to people.

    I have to tell the noble Lord that the only reason why standing charges have not increased to a greater degree than they have over the past few years is parliamentary pressure in the House of Commons. Had he represented a constituency—as my noble friends Lord Diamond, Lady Burton, Lord Bruce of Donington, and I have—he would know that one issue which over the last few years has made the pensioners' association see red is that relating to standing charges. I have had people in my "surgery" blaming me—I do not know why they should do so, because I was on their side. They have attended meetings in the House of Commons and have pressurised every single Member of that House to the extent that Members on all sides there have been forced to ensure that the gas and electricity boards—and British Telecom when it was nationalised—limited the amount of the standing charge.

    Once British Gas is privatised the parliamentary pressure will not be there. We have been trying to write into the Bill some role for Parliament, but the noble Lord opposite has resisted every attempt we have made, and will undoubtedly resist any further attempts that we make. There will therefore be no parliamentary pressure. That is why it is important that this item, limiting standing charges, is written into the Bill. The pensioners, the low paid, the most disadvantaged in our society, are entitled to expect this consideration from this Chamber, which has a great care for individuals. I have learned since I have been here that noble Lords have a great care for people. We can be proud that we have. I believe it will be expected that this Chamber will safeguard the interests of those people I have mentioned. I hope, therefore, that if the noble Lord will not accept this amendment—and I sincerely hope that he will—noble Lords, in their usual caring way, will vote for it and pass it into law.

    The noble Lord, Lord Stoddart of Swindon, said that the best endeavours are not good enough. In certain circumstances they are not good enough. One circumstance concerns Amendment No. 84ZB, after Clause 9, relating to special services for supply to the elderly and infirm. It is proposed in that amendment that the provision should have legal effect in a code of practice. The issue was introduced by the noble Baroness, Lady Burton of Coventry. There is a distinction between special services for the infirm and the elderly and standing charges. If one dissects the problem it is different; but I thought it right at this stage, as I propose to move Amendment No. 84ZB in due course, to say with regard to special services that best endeavours assuredly would not be good enough.

    All the noble Lords who have spoken in support of this amendment have explained their concern that there should be proper control over the standing charge so that there is no possibility of unfairness. The Government share the view of noble Lords. It is for this reason that the draft authorisation for British Gas which has been made public includes provisions for controlling standing charges.

    I rather felt that the noble Lord, Lord Ezra, and the noble Baroness, Lady Burton, had overlooked that there are two safeguards provided on standing charges. The first is that standing charges fall within the general control of prices under the price formula set out in Condition 3. The noble Lord, Lord Stoddart, made a reference to this in his remarks. Under this formula British Gas will have a clear and strong incentive to reduce the costs within their control and customers will benefit from improved efficiency through the efficiency factor which is called X. There will therefore be a proper incentive on British Gas to keep the costs associated with the standing charge as low as possible because standing charges come within the price formula. That is one safeguard.

    There is in addition an important question as to how the total ought to be recovered between the standing charge and the rate per therm which underlaid much of what the noble Lord, Lord Diamond, said in his opening remarks. In order to prevent unreasonable increases in standing charges, the Government believe that there should be a further control to ensure that the standing charges rise no faster than general inflation. Therefore, as the noble Lord, Lord Diamond, quite correctly recorded, Condition 4 of the draft authorisation sets out such an obligation and the amendment of the noble Lord seeks to do the same. As the noble Lord, Lord Diamond, said, so far is common ground.

    However, there were then two criticisms which came from noble Lords. The first was that the amendment is seeking to put the obligation in the Bill, whereas at the moment the obligations about the standing charge rising no faster than the rate of inflation is in the authorisation.

    Yes. The Government have put a condition in the authorisation. I believe that this is the right place for it. It is true that it is a proposed authorisation but it is subject to exhaustive parliamentary discussion. It is quite clear that once Parliament has finished discussing the authorisation then Parliament can be assured that that is what the authorisation will look like.

    Do not let us forget that there is then a mechanism which has been put in the Bill, between Clauses 23 and 27, to make it clear that one cannot change the authorisation without using the mechanisms which are in the Bill. Let us be quite clear on this point: the authorisation cannot be fiddled about with once we have it. Once we have it we can only change it by going back to the Bill.

    Perhaps I may say on this first criticism that we on this side of the Chamber believe that it would be very undesirable to freeze in the statute a provision about how fast the standing charge can be changed. We believe that if it is in the authorisation, steps can be taken to modify it to meet changing circumstances, if necessary to impose a tighter control on the standing charge. I cannot at this point resist saying that I do not think the present management of British Gas needs a very great deal of encouragement on this point. On 18th April the announcement was made that standing charges will be reduced by £1 a quarter for some 15 million credit customers. That shows the attitude of the management of British Gas to this issue.

    That was the first criticism. I shall deal with the second criticism and then give way to the noble Lord, Lord Ezra. The second criticism which your Lordships have made is that the drafting of the condition in the authorisation uses the words, "best endeavours". Before I deal with that matter, perhaps I should give way to the noble Lord, Lord Ezra.

    Throughout the debates that we have had on this Bill so far, none of us has criticised the present management of British Gas. We think that it has done a marvellous job. However, we are here concerned with a Bill which is looking forward 25 years. That alters the whole complexion of the situation. We have to legislate for that period ahead irrespective of the very successful way in which the present managers of British Gas have run the enterprise.

    On the same point, I should like to say that in relation to Condition No. 3 of the authorisation dealing with price control, there is only certainty that that price control will last for five years—not 25 years.

    That is a somewhat different matter. Both of the points which noble Lords have made are reasonable points, but the one which the noble Lord, Lord Ezra, put to me is directly and wholly relevant. I should now like to prove to noble Lords opposite that I have tried to listen.

    The Government explained in another place—and, indeed, my noble friend Lord Campbell of Alloway referred to this matter in his brief intervention—that we believe that the words "best endeavours" place a strong legal obligation on British Gas. However, Members of the Committee opposite are suspicious of the use of the words "best endeavours". I accept that it would be possible to frame our obligation in a more direct way. Bearing in mind as the noble Lord, Lord Ezra, has said that we are providing, through our debates on this Bill and on the authorisation, for many years ahead, I should like to give a commitment as regards this particular amendment; namely, that the Government will respond to what has been said on this particular point by bringing forward to noble Lords ahead of the Report stage a revised draft Condition No. 4 for the authorisation, which will omit the words "best endeavours".

    However, as regards the first criticism which noble Lords have levelled, I believe that, for the reasons which I have endeavoured to give, it ought to be in the authorisation and not in the Bill.

    Those of us on these Benches are undoubtedly grateful to the noble Lord the Minister for the consideration which he has given to the arguments which have been put forward and for his understanding of what lay behind our arguments. It is certainly encouraging to know—assisted by the intervention of one of the noble Lord's own distinguished supporters (not only a distinguished supporter, but a distinguished lawyer as well)—that the words which we find inadequate will be reconsidered and removed at a later stage.

    The question which we have to consider is this. Having met us on one point only, what should we invite the Committee to do on the second point? The second point is that in accordance with the precedent which has been set by the Government, there should be a transfer of an important undertaking from a proposed condition in a proposed authorisation to a statute which is subject to consideration by both Houses of Parliament.

    I am very tempted to say that the noble Lord has not gone far enough. I think that that would represent our considered view. However, we must have time to consider the situation. Therefore, what I am saying to the noble Lord is that we are very grateful to him for meeting us halfway; half a loaf in these circumstances is better than no loaf at all. Indeed, I believe that this is the first crumb of comfort that has come from the Government Benches.

    All right, it is the second crumb; I do not want to be unjust. We are grateful for that reconsideration; but we must make it absolutely clear that when we come to the Report stage we shall have to think very carefully indeed about whether the extra protection to which all of us referred is adequately provided for in what the noble Lord proposes. Does the noble Lord wish to comment?

    I do not know whether the noble Lord will withdraw his amendment. However, I agree with him that the offer of a concession has to be considered. Of course, the noble Lord, Lord Diamond, will realise that I am left with Amendment No. 93A, which goes a bit further. I wonder if, through the noble Lord, Lord Diamond, I could ask whether the Minister would go a bit further and say that in his consideration he will also take into account the points which are made in Amendment No. 93A. If he were able to say that, it may help us to proceed faster with the Bill beecause I may not then need to move that amendment.

    5.15 p.m.

    I have to confess that I have discovered that the brief in front of me for Amendment No. 93A has the word "Resist" written on it at the top. However, I am sure that when I come to that particular amendment I could put the situation in rather more parliamentary language for the noble Lord.

    I am sure the noble Lord will not think that I am being unfriendly when I say that noble Lords opposite must decide how they want to deal with the matter. If the noble Lord really would like to speak to Amendment No. 93A as part of these amendments, then I shall do my very best to give a considered reply. However, if, as I understand the noble Lord, he would prefer to leave Amendment No. 93A, then I had better not push off into the rapids of that particular amendment.

    I should like to ask the noble Lord a question. Is he aware that by most courteously and considerately offering to change the proposed—and I emphasise the word "proposed" advisedly—authorisation and to eliminate that part of it concerned with "best endeavours", all he is doing is reducing it to a form that is already in Amendment No. 84B? In other words, the case for Amendment No. 84B in terms of the elimination of "best endeavours" fully justifies the wording of Amendment No. 84B. The only difference between us now, on the assumption that the words "best endeavours" are eliminated, is whether the provision should be in the authorisation or whether it should be in the Bill. There is now no difference in principle between us.

    Let me take the noble Lord back to his previous argument when he said that the great advantage of not having the authorisation itself subject to the detailed scrutiny of both Houses, under the method that I suggested in Amendment No. 62, was that the Bill—the legislation—contained the whole guts of the matter. By his own statement he has agreed that this is an important matter. Having agreed the principle of the abandonment of "best endeavours", why does he now resist incorporating it in the Bill itself?

    The noble Lord also submits the conflicting arguments that somehow it is all taken care of in the price formula, the detailed consideration of which will have to wait for a later amendment or indeed when we come to the actual clause itself. If it is automatically taken care of in the formula itself, why all the hoo-ha about it? Is it not the fact that the formula itself is so loose? One of the reasons why the City is so enamoured of the Bill is the flexibility in regard to charging that is in the formula itself. The noble Lord has referred to the X factor. He could spend two hours explaining his views on what the X factor ought to be, but he will not get any further because nobody can tell him what it is. He does not even know it himself. But in the City they are under no illusions. The Daily Telegraph of 29th May says this referring to Sir Denis Rooke:
    "Sir Denis has so far won the major privatisation battles with an accommodating energy secretary, Mr. Walker. He will be operating under a relaxed regulatory regime, and a not excessively demanding price restraint formula".
    The views of the Daily Telegraph—which is not normally the house organ of the Opposition—for once coincide with our own, as indeed will emerge when we examine the formula itself. The only way in which we can safeguard the standing charges is not by having them in the regulation but by having them in the Bill, and the noble Lord should recognise that.

    It only falls to me to say once more that we are grateful to the Minister, but the more one considers it the more one realises that perhaps I was being over generous in saying that he has given us half a loaf. The expression "a crumb" is a better evaluation of the size. However, we shall look carefully at this and await what the noble Lord has to put on the Marshalled List at Report stage. In the meantime, I seek leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendments Nos. 63 and 63ZA not moved.]

    Page 5, line 24, at end insert—

    ("( ) Before granting an authorisation, the Secretary of State shall require any public gas supplier, following consultations with the Director and the Council, to prepare codes of practice specifying—
  • (a) the nature of service available to tariff customers in relation to gas supplied by the supplier;
  • (b) the conditions attached to the payment of gas bills including guidance to domestic customers if they have difficulty in paying; and
  • (c) the provision of special services for elderly and disabled persons and any public gas supplier shall arrange for the publication of such codes of practice in such form and such manner as the Director may consider appropriate.
  • ( ) The Director and the Council shall collect information on, and keep under review, all matters relating to such codes of practice under subsection (5) above with respect to which the functions of the Director or the Council are exercisable.").

    The noble Baroness said: The noble Lord, Lord Diamond, said that he was happy with a few crumbs. I intend to get the loaf, after perhaps some persuasion, from my noble friend the Minister. The proposed authorisation also concerns codes of practice. Today I hope to speak briefly to Amendment 63A which deals with codes of practice for tariff customers in their paying of gas bills, but also includes guidance for domestic tariff customers. In the authorisation, Condition 12 mentions in the code of practice the parts I am concerned about in this amendment. Therefore, I propose to deal only with paragraph ( c) in the amendment which deals with the elderly and disabled.

    Other noble Lords have paid tribute to the care that at the moment British Gas gives to customers in our society in the elderly and disabled class. They provide special services and facilities, and give free safety checks on gas appliances and installations. They also provide a range of special controls for those with stiff joints—in other words, rheumatism and arthritis. They also give Braille or studded controls on some gas fires, cookers, and central heating for blind and partially-sighted customers. They will also move a gas meter for easier access. This is all done free, or for a nominal charge.

    The purpose of my amendment is to put these obligations into the codes of practice which will be within the proposed authorisation. We all know that British Gas do it now; but as some noble Lords have said—and I think that the noble Lord, Lord Ezra, in particular told us this, and we are cognisant of it—other people some 25 or perhaps even 50 years in the future dealing with British Gas may not be so thorough in their help to the elderly and disabled.

    I should like to ensure that these facilities are continued. I feel that this part of the wording after paragraphs ( a) and ( b), which are already in the codes of practice of the authorisation, should be in the Bill. Knowing, as my noble friend the Minister does so well, the needs of the elderly and disabled, I hope that he will agree to this amendment. I beg to move.

    I am sure we would all agree on the importance of seeing that the elderly are protected and given the facilities which they now have and will require. Perhaps the Minister will tell us once again that this is covered in the Bill. But there is another point. The noble Lord, Lord Campbell of Alloway, has tabled Amendment No. 84ZB, which is intended to achieve the same result.

    For various reasons the noble Lord believes that his amendment is stronger, more useful, and has more legal consequence than the present amendment under consideration. I do not want to comment on that point. No doubt the noble Lord will do so himself. What matters to us is that we should achieve at least one of these amendments. Perhaps the Minister would indicate which he is going to accept.

    I support the spirit of paragraph (c), to which my noble friend Lady Macleod of Borve has spoken, and so indeed does the noble Lord, Lord Henderson of Brompton, who asked me to say that he supports the spirit of it. This having been said, I have to say to the Committee with respect and reluctance that the amendment generally, and also paragraph (c), are open to a series of objections. I am grateful to the noble Viscount, Lord Hanworth, who withdrew his support from this amendment on the Fourth Marshalled List and proposes to support Amendment No. 84ZB.

    Without in any way anticipating the amendment which I propose to move in due course, it is only right that I should give the Committee the reasoned objections to this amendment, because if your Lordships are with me on the objections that will save time when we consider Amendment 84ZB on its own merits. I am in total agreement with the noble Viscount when he says that something along these lines for the elderly and infirm must indeed be done. The question is, what?

    The first, and serious, objection to this amendment now before the Committee is that nothing at all is said about the status of the code of practice: this notwithstanding that since the debate in your Lordships' House on 15th January of this year your Lordships have ever since insisted on clarity in this regard. Is the intention that the code should have any legal efficacy or that it should have none? If it is the intention that it is to have none, then I say roundly that that is not good enough for the elderly and the infirm. It is not an appropriate provision. That is one of the points taken in Amendment No. 84ZB.

    5.30 p.m.

    However, if it is to have legal efficacy then it is not appropriate, your Lordships may well think, for paragraphs ( a) or ( b). It is not appropriate for services generally, for tariff customers or for guidance to domestic consumers to have a code of practice with legal efficacy. Indeed, as regards paragraphs ( a) and ( b) the Committee may think that it is much to be doubted whether a code of practice is appropriate at all and whether mere publication of information is all that is requisite.

    The next objection is that the amendment as it stands would appear to envisage a code of practice

    covering paragraphs ( a), ( b) and ( c), which is a mere code of guidance with no legal effect at all, and this as a prerequisite to the grant of authorisation under Clause 8 of the Bill which is granted by the Secretary of State. Apart from the concept of the gas supplier preparing the code being cumbersome, it is, with the utmost respect, ill-conceived and warps the whole structure of Clause 7. The gas supplier has to consult the director and the council, but there appears to be no control under this amendment as to what is to be specified in paragraphs ( a), ( b) and ( c)—or only as to form and manner of publication, but, as the Committee will observe from looking at the wording closely, nothing as to content.

    It is within the province, your Lordships may well think, of the Secretary of State, in consultation with the director and the council, to prepare a code of general application—not the gas supplier. It is not within the province of the gas supplier. It is within the province of the Secretary of State, and it is for him not only to prepare it but to lay it before Parliament for approval, whether it is a code of guidance giving no legal effect—as was the case under Section 118 of the Mental Health Act—or whether it is to have legal affect. These matters are for decision on the subsequent amendment. But the point of objection to this amendment is that it is not within the province of the Gas Council; it is within the province of the Secretary of State to prepare the code and to lay it before Parliament.

    Of course, the amendment in spirit is, as I have said before, wholly acceptable because it evinces proper concern for the elderly and the infirm. In that sense it is welcome, but for the reasons I have sought to give, if they commend themselves to the Committee—it is a matter for your Lordships entirely—I would respectfully suggest it should not be supported.

    I should like to support the noble Baroness, Lady Macleod of Borve, in her moving of this amendment. It has been said many times in this Chamber that we look very carefully at the needs of those who are disadvantaged; the elderly and disabled come into that category. I look forward to hearing what the Minister has to say on subsection (5)(c) which deals with elderly and disabled persons.

    I am not a lawyer, and I am looking for a loaf as well in this amendment. I believe that we are right to consider the situation over the next 25 years, as has been pointed out by the noble Lord, Lord Ezra. We know at present that the British Gas Corporation looks after the elderly, the disadvantaged and the disabled very well indeed. What I propose to see is that when this corporation is privatised the conditions which are applicable now are continued. I hope that not only will we see this written into the proposed authorisation but perhaps on to the face of the Bill.

    I should like to emphasise paragraph (b) in Amendment No. 63A, which the noble Baroness said was quite obvious to everybody. I feel that under the present codes the elderly have a lot of safeguards and all of us hope that those will be continued, as does the noble Baroness who is asking for this to be included in the Bill. We know that the elderly are protected from disconnection during the winter months. But other people are included in the amendment who are not elderly. These are the poorer consumers in the country. Very often they become the poorer consumers through a marriage breakdown. There are many people these days who are heavily in debt not only with rent arrears and gas arrears, but with all kinds of arrears. Everybody who has dealings with the unemployed finds that this is a problem.

    Often a marriage breaks down through debts. It can happen that there are two quarters of gas owing. The wife is left with three children in a deprived position, she is unable to pay and the gas could easily be turned off. These people do not have the protection that the elderly have unless one operates a code of practice. If we look at the figures of disconnections, last year nearly 36,000 people in this country were disconnected from the gas supply. That was an increase of 5·5 per cent. on the previous year.

    The payment of gas bills is a very serious problem for many people as well as the elderly and the disabled who need other provisions. It is for that reason that I support the noble Baroness, Lady Macleod, in her amendment and my noble friend Lord Stoddart of Swindon because the codes that are suggested are more comprehensive.

    We are in a bit of difficulty here, are we not? The noble Lord, Lord Campbell of Alloway, has referred to his own amendment, which in respect of people who receive state benefits by reason of age or infirmity is drawn very tightly indeed. It puts a legal obligation upon the gas supplier to ensure that duties are carried out. As I read it, it ensures that the code can be enforced through the courts. That is quite a different matter and a different amendment from that of the noble Baroness, Lady Macleod, to which I have also put my name. I think that what the noble Baroness is seeking to achieve—indeed, she told us what she was seeking to achieve and I agree with it—is to have written into the Bill a code of practice about which there can be absolutely no doubt and over which the director and the council have had some control and some input.

    In Condition 12 of the authorisation there is a reference to a code of practice for tariff gas supplies and payment of bills: but in paragraph 2 it is provided that:
    "The Supplier shall consult the Gas Consumers' Council and the Director about the presentation of each such Code"—
    not about its contents: only about the presentation. That is what Condition 12 of the proposed authorisation says.

    What the noble Baroness seeks to do is to write into the Bill that there shall be consultation with and an input from the director and the council regarding these matters in paragraphs (a) (b) and (c)—is the House on fire? There seems to be some smoke or something coming from over there. It is steam, is it? Well. I hope it is not coming from me. Ah, it is hot air, is it? I sincerely hope that it is not that. However. I take it that the House is in no danger and that we may cam on.

    The noble Baroness. Lady Macleod, is seeking to write this consultative procedure into the Bill. Undoubtedly, the matters raised in (a), (b) and (c) are very important indeed. Certainly on (c) I agree with her about,
    "the provision of special services for elderly and disabled persons".
    They must be protected, but, similarly, the general public is entitled to know what sort of service it is to get. Also, as my noble friend Lady Fisher has remarked, it is necessary to protect poor people in the matter of payments of bills, because they not only need assistance but need guidance as well.

    So far as I can see, there is absolutely no reason why the Minister should not accept the amendment moved by the noble Baroness and also the amendment which is to be moved by the noble Lord, Lord Campbell of Alloway. I see absolutely no reason why the two cannot go together, but perhaps the Minister or even the noble Lord, Lord Campbell of Alloway, himself might explain to me why the two matters should not be written into the Bill.

    Paragraph (c) in this amendment would tread on the toes of Amendment 84BZ. You could not really run—as I see it, whether it is for me or against me, but objectively—paragraph (c) of this amendment in tandem with my amendment.

    Is the noble Lord, Lord Campbell of Alloway, telling us that (a) and (b) are still valid, because I think that those who are listening intently to this debate and who are anxious to help those in difficult circumstances would like to make good use of these two very valuable amendments. The best thing that could happen would be for them to be reconciled. As I understand it, paragraphs (a) and (b) are valid in their own right, but (c) needs to be reconciled with the amendment of the noble Lord, Lord Campbell of Alloway.

    Subject to this. It is a matter for your Lordships' decision whether (a) and/or (b) ought to be subject to the code of practice, or merely to a code of guidance.

    Am I correct in thinking that if we pass Amendment No. 63A it would be possible, at a later stage of the Bill, for the noble Lord, Lord Campbell of Alloway, then to move an amendment which would make (c) specifically enforceable in the courts, or, at that stage, to break up the amendment and make it suitable to his own amendment?

    I will not waste time. I could not do so, I am afraid, even if I wished to. It would not make sense.

    5.45 p.m.

    Paragraphs (a) and (b) of the amendment of my noble friend Lady Macleod, Amendment No. 63A, cover very much the same ground as paragraphs 1(a) and 1(b) of Condition 12 of the authorisation which is proposed for British Gas which deal with the nature of the gas supply service and the payment of bills, including guidance to customers who have difficulty in paying. The condition also covers consultation with the director and the consumers' council. Both the director and the council have to be consulted before publication of the codes can come forward.

    I am saying this because the noble Baroness, Lady Fisher, made her speech about paragraph (b) of this amendment, and others of your Lordships have joined in and have said that they attach importance—the noble Lord, Lord Ezra, did so in particular—to both paragraphs (a) and (b) even though my noble friend Lady Macleod has confined her speech to moving paragraph (c) of the amendment and saying—

    It seemed to me that (a) and (b) were already in the codes of practice which is part of the authorisation. As I understand it from British Gas, with whom I have talked, no authorisation will be given to anybody unless they also accept the codes of practice.

    I am grateful to my noble friend. If I may say so, I was not putting it as well as that. My noble friend has put it much better than I did. It is for the reason she has mentioned that my noble friend did not speak to (a) and (b). Nonetheless, for the reason which my noble friend has just given, I think it can reasonably be said that the authorisation in Condition 12 is directly in line with what this amendment is seeking to achieve in paragraphs (a) and (b).

    I have not yet started to answer my noble friend, but by all means intervene.

    It is a point of clarification. The authorisation which I have says that the supplier shall consult the Gas Consumers' Council and the director about the presentation of each such code—not about the content of the code. As I understand the amendment of the noble Baroness, Lady Macleod, that would have the effect of giving them the right to be consulted about the content of the codes of practice. Therefore, there is a distinct difference. Will the noble Lord confirm that I have the right authorisation? Perhaps I have one that is out of date. Has it been altered without my knowledge.

    It has been made clear in another place that the authorisation text has been published in draft—and, indeed, we have referred to this earlier this afternoon. I can understand the noble Lord, Lord Stoddart, feeling that the obligation here is not as clear as it ought to be because of the words "about the presentation of [the] code" being used. Therefore, I am perfectly willing to take away that particular wording with a view to bringing forward a clearer text, so far as that is concerned, before the Report stage.

    May I turn to paragraph (c), which is really the pith and kernel of this debate, which concerns the wish—as put forward in the amendment of my noble friend—to see that publication of codes of practice for special services for elderly and disabled persons by any public gas supplier shall be in such form and such manner as the director may consider appropriate. I would stress that the Bill already provides the power for the Secretary of State to include conditions in the authorisation concerning the supply of gas to elderly and disabled consumers by virtue of the general wording of Clause 7 as it is drafted. Indeed, I was grateful to my noble friend Lady Macleod, speaking from her great experience of the gas industry from the time when she was the first chairman of the Gas Consumers Council, for mentioning some of the very valuable facilities and services which British Gas provide already for elderly and disabled people.

    What I have just said about Clause 7 already being a vehicle which could provide for special services for the elderly and the disabled is obviously not going to please your Lordships. Nor will it please my noble friend, because she has put down this amendment and wants something specially put into the authorisation for the elderly and disabled. Therefore I should like first of all to say, in response to my noble friend, that I can see the desirability of clarifying Condition 12 of the authorisation, in order to ensure specifically that proper steps are taken to publicise the special services for the elderly and the disabled. I should like to say to both the noble Lord, Lord Stoddart, and my noble friend Lady Macleod that I am ready to take away the wording of Condition 12, with the intention of including a provision for ensuring that services for the elderly and disabled are effectively publicised. We would make such a change to Condition 12 by bringing back a proposal to this effect.

    The only difficulty with that undertaking is that already I am set on a course of which my noble friend Lord Campbell of Alloway does not approve. My noble friend Lord Campbell has various criticisms of this amendment but he was particularly critical of the fact that the Secretary of State is really entirely omitted from Amendment No. 63A. My noble friend said that if one looked ahead to his Amendment No. 84ZB, one would find that there shall be a code which will be written by the Secretary of State.

    I wonder whether I might make a response to my noble friend Lady Macleod, keeping my noble friend Lord Campbell of Alloway very much in mind, by saying this. I think that in addition to the undertaking I have given to my noble friend and to the noble Lord, Lord Stoddart, on Amendment No. 63A, it is necessary to underpin what I said by making a special mention in the Bill of the position of the elderly and the disabled.

    The Government believe that the right way to do this would be to draw the attention of the Secretary of State and the Director to the particular position of elderly and disabled people and their special requirements. That could be done by examining the duties set out in Clause 4 for the Secretary of State and the Director, which guide their actions under the Bill, and doing this with a view to preparing an appropriate amendment to bring foward at the Report stage, which we would put into Clause 4. I hope that my noble friend Lady Macleod and of course the noble Lord, Lord Stoddart, would feel that the Government are making a really valid response to their amendment by saying that we will make a change to the authorisation and also put something into Clause 4 of the Bill. However, I realise that my noble friend Lord Campbell will not agree with that.

    Although we are in a difficult position, it may not in fact be quite as difficult as it might seem, because I hope that my noble friend Lady Macleod will not feel that she needs to press her amendment as it stands. If that is the case, we can wait and debate the amendment of my noble friend Lord Campbell when we come to it later, In the meantime my assurance stands. The Government would be very ready, unless your Lordships feel that there should be a change of course (having debated Amendment No. 84ZB) to make a change to the authorisation to the kind that I have put forward and also to bring forward an amendment to Clause 4 of the Bill so that we shall have something on the face of the Bill; namely, another duty to guide my right honourable friend and the director.

    Before the noble Baroness decides what she wants to do about this amendment, I should like to say how very much we on these Benches appreciate what the Minister has just said and particularly his understanding that producing something to be put in the statute will have a very important effect on our thinking. We are very grateful to him; and of course if the noble Baroness wants to pursue the matter, I always support her whatever she does, but I hope that she might feel, as I do, that the Minister has gone a very long way indeed on this issue.

    Before the noble Baroness speaks—I think this will be helpful to her —may I say, as a signatory to the amendment, that what the noble Lord has said is very valuable indeed, not only in respect of the promise he has given on the wording of the authorisation but, very significantly I think, his promise to come forward with an amendment to Clause 4 to make the position absolutely clear in respect of the infirm, the elderly and the disabled. That is a very valuable point and we shall obviously be interested to see what happens in the future; but if the noble Baroness wishes not to proceed with her amendment, I should be quite happy.

    I am most grateful to the noble Lord, Lord Stoddart, for what he has just said and also to the noble Lord, Lord Diamond. I am particularly grateful, naturally, to my noble friend the Minister. I shall take it that the loaf is now in the oven. We hope that it will be baked and that when he comes back with an amendment to Clause 4 we shall be ready and willing to eat the loaf. I should like to say how grateful I am to the Minister for the help that he has given to us in what I personally—and I think also other Members of the Committee—feel is a very important part of this Bill. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Page 5, line 34, leave out subsection (6) and insert—

    (" (6) The Secretary of State may at any time revoke an authorisation under this section by 30 days' notice in writing given to the supplier at its registered or principal office in any of the following circumstances—
  • (a) if the supplier agrees in writing with the Secretary of State that the authorisation should be revoked;
  • (b) if any amount payable under Condition 14 of this authorisation is unpaid 30 days after it becomes due and remains unpaid for a period of 14 days after the Secretary of State notifies the supplier that the amount is overdue such notification not to be given earlier than the sixteenth day after the day on which the amount payable became due;
  • (c) if the supplier fails to comply with a final order (within the meaning of section 28 of the Act) or a provisional order (within the meaning of that section) which has been confirmed under that section and such failure is not rectified to the satisfaction of the Secretary of State within 3 months after the Secretary of State has given notice in writing of such failure to the supplier provided that no notice under this paragraph shall be given by the Secretary of State before the expiration of the period within which an application under section 30 of the Act could be made questioning the validity of the final or provisional order or before any such application, if made, is finally adjudicated upon;
  • (d) if the supplier fails to comply with any order made by the Secretary of State under section 56, 73, 74 or 89 of the Fair Trading Act 1973 or section 10 of the Competition Act 1980 which relates to the gas supply business;
  • (e) if the supplier ceases to carry on its business as a public gas supplier;
  • (f) if the supplier, being a company formed and registered under the Companies Act 1985,—
  • (i) is unable to pay its debts (with the meaning of section 518 of the Companies Act 1985, but subject to paragraph 2 below) or makes any agreement with its creditors generally for the composition of its debts;
  • (ii) has a receiver of the whole or any material part of its assets or undertaking appointed;
  • (iii) passes any resolution for winding up other than a resolution previously approved in writing by the Secretary of State; or
  • (iv) becomes subject to an order by the High Court for winding up.
  • (6A) For the purposes of subsection (6)(f)(i) above, section 518(1)(a) of the Companies Act 1985 shall have effect as if for "£750– there was substituted"£250,000" or such higher figure as the Director may from time to time determine and the said section 518(1)(a) shall not apply if the demand therein referred to is being contested in good faith by the supplier with recourse to all appropriate measures and procedures or if the demand is satisfied prior to the expiry of the notice given to the supplier by the Secretary of State.
    (6B) Unless the authorisation is revoked, it shall continue in force for a period of 25 years in the first instance and thereafter in further periods of 25 years unless the Secretary of State gives at least 10 years' notice of revocation, that to be in writing.")

    The noble Lord said: In moving this amendment, I am trying to build on the remarks made by the Minister in connection with the previous amendment. In the concession I think that he was making he indicated that he would be prepared to see two changes: one in the authorisation and the other on the face of the Bill. Here we come, if I might put it like this, to the narrow divide between what is in the authorisation and what is on the face of the Bill because, as we shall see when we come to later amendments to be moved by Members on this side, we believe there are certain aspects in the proposed authorisation that should be on the face of the Bill. I am encouraged by what the Minister has just said about one particular aspect that he may agree with that particular position. There are certain things which should be in the Bill and not merely confined to the authorisation.

    This amendment, No. 63B, refers to Schedule 2 of the proposed authorisation which the Government have produced and which, as the Committee are aware, is still in draft. It deals with the circumstances in which an authorisation may be revoked. Clearly, when a gas supplier undertakes the provision of gas, he needs appropriate protection. He needs it because he will have to invest sums of money. He will have to develop a long-term strategy for the development of his business and he cannot be taken by surprise in any respect by a Secretary of State revoking the authorisation.

    The terms under which the authorisation can be revoked at the moment are only in the draft authorisation, and Clause 7(6) reads:

    "An authorisation under this section shall be in writing and, unless previously revoked in accordance with any term in that behalf contained in the authorisation,".

    So we are really in a slightly circular position where the authorisation can be revoked so long as it is in the terms of the authorisation.

    There seem to me to be two problems involved. The first is that the security is not there for gas suppliers on the face of the Bill but it is contained in the draft authorisation which will become an authorisation as and when we get to that point.

    The second problem is slightly more serious and goes to the point in which, as I think the Minister will be aware, I myself am interested, which is the term of reference of the Monopolies and Mergers Commission when it considers references either from the director, where it is referred specifically to Clause 4 in the public interest, or as clause 27, to which the Minister referred when he was talking about modifications, to orders made by the Secretary of State under the Fair Trading Act 1973 or the Competition Act 1980.

    The terms of reference for the Monopolies and Mergers Commission when it is dealing with references under the Fair Trading Act 1973 or the Competition Act 1980 are wholly different, if I may say so, from the terms of reference under which the Monopolies and Mergers Commission will be delaying when it has a reference from the director on modification of the reference where the public interest criteria apply and they are referred to Clause 4.

    Let me give the Committee one example. Suppose that a gas supplier has an authorisation and that that authorised supplier then decides to merge with another supplier. Suppose that merger becomes the object of a merger reference under Section 73(1) of the Fair Trading Act and the Secretary of State is entitled to make an order on report on that merger reference. The Monopolies and Mergers Commission, in making their recommendation, will be guided by the criteria of Section 84 of the Fair Trading Act and the Secretary of State will be entitled to make an order under that Act. That order will be carried through under the provisions of the Bill as it is presently drafted.

    I suspect that here we have a certain illogicality in the Government position which we on this side of the Committee would like to see cleared up. I make no bones about it. We would like to see (and we will be moving amendments later to this effect) the Section 84 criteria of the Fair Trading Act applied to all references to the Monopolies and Mergers Commission of public gas suppliers, whether by the director under the present Bill or by the Secretary of State under the Fair Trading Act 1973 or the Competition Act 1980. However, that is not the case in the Bill as presently drafted. We will come back to that, but I believe there is a point which the Minister might wish to concentrate upon.

    We have chosen the question of revocation of the authorisation as an example or as a probing amendment, if you like, to see whether there is any flexibility in the Government's mind on all or part of the authorisation being on the face of the Bill; whether there might be amendments that the Government would consider (as the Minister considered previously referring to the authorisation rather more specifically on the face of the Bill in tightening up the authorisation itself) or whether indeed the Monopolies and Mergers Commission under its terms of reference is not liable to be somewhat schizophrenic in looking on different occasions at the same organisation using different public interest criteria. I think that the Minister might finally address himself to the specific question of whether the gas supplier should not somewhere on the face of the Bill have an assurance that the revocation is a matter which is not solely concerned with the authorisation but is a matter of statute. If it is to be done, it should be done in accordance with a statutory authority.

    I have raised a number of what I am afraid are rather technical points on this amendment. I say again that this is in the nature of a probing amendment because it raises a number of points, and I am sorry if I have burdened the Minister. I beg to move.

    This amendment seeks to insert Schedule 2 of the revocation terms for an authorisation into the Bill. I can see that because Clause 7 specifies how a public gas supplier's authorisation should be issued it may seem appropriate to provide the terms under which an authorisation, once issued, can be revoked. However, the Government, both in drafting the Bill and also in drawing up the authorisation, do not believe that the same applies to revocation of an authorisation.

    Whereas there are certain procedures (for instance, publication, the giving of reasons, the right to make objections and the duty to consider any representations or objections) which clearly ought to apply to the granting of an authorisation to any public gas supplier and therefore ought to be in the Bill, I think, if I may say so, we are in a rather different scene when we come to withdrawing an authorisation, because the supplier does not want to go on, is not fit to go on, or for whatever reason. Of course, the amendment deals with those reasons because the amendment takes out the provisions from the authorisation and endeavours to put it in the Bill. The terms of the revocation provisions included in the authorisation and, as I say, repeated in this amendment are designed for the authorisation to be issued to British Gas. There is no possible way of telling at this stage what revocation terms might be appropriate for a future authorisation that might be issued to other public gas suppliers.

    I ask the Committee to bear in mind the considerations that must apply when framing legislation in that it really must be flexible enough to cope with whatever situation might develop. It must be right that legislation should not be so encumbered with detail of this kind that it could be rendered ineffective or even irrelevant in a future situation. Legislation, after all, is supposed to apply, and not to apply only to one particular case. I think we could be coming near to the danger of such legislation applying to one particular case—namely, the removing of an authorisation from British Gas—and trying to apply that to possible authorisations in the future.

    Having said that, it is the case that the noble Lord, Lord Williams, indeed put to me some technical points which I did not find entirely easy, but there are two things that I would like to say to him. The first is that my advice is that the provisions for revocation of the authorisation are not conditions of the authorisation but terms of the authorisation. The points which the noble Lord, Lord Williams, made concerning the modification of authorisation conditions under Clauses 23 to 27 are therefore, on my advice, not relevant to this particular amendment.

    If the noble Lord disagrees with me on that particular point, or feels that some of the detailed points he put to me nonetheless override what I have just said (which is my single reply to his many technical points), I shall gladly give way to the noble Lord. If he wishes to repeat one or two of them, I give him an undertaking that I shall take this matter away and look at it with care. I shall of course do that anyway, but I am giving an open invitation to the noble Lord to expand if he feels he needs to do so, because I do know that this is a matter which the noble Lord feels very seriously about and I think it is important that I listen carefully to the noble Lord before we leave this Chamber.

    I am grateful to the noble Lord and I shall respond straight away. It really does not need a great deal of expansion. The terms of the proposals for procedures for modification of the authorisation are such that the Secretary of State may modify the authorisation in a manner that could facilitate revocation over and above the text that is at present in the authorisation.

    Let me give an example. To come back to two gas suppliers who are authorised and who decide to merge—this is the simplest example, but I could give more complicated examples—let us suppose that there is a reference under the Fair Trading Act to the Monopolies and Mergers Commission. The commission assess that reference under the Section 84 criteria of the Fair Trading Act, which have nothing to do with Clause 4 of this Bill. They decide, for reasons to do with Section 84 of the Fair Trading Act, that the merger is against the public interest as so defined. The Secretary of State is empowered under Clause 27 to make an order modifying the authorisation. The authorisation can be modified in whatever way the Monopolies and Mergers Commission recommend under their Section 84 criteria, and it is not difficult to imagine circumstances in which such a modification could give rise to a possible revocation of the authorisation as a result of that reference and that subsequent order.

    I have tried to give the Minister a fairly simple example of what might happen; but there is a much more complicated example that one could go into where under the Competition Act 1980, or the Fair Trading Act 1973, a reference is made on monopoly grounds to the Monopolies and Mergers Commission, and again the Section 84 criteria would apply. So you have a different set of criteria which would apply and the authorisation could be modified accordingly.

    I do not want to go on with other examples because I hope that I have given the noble Lord enough to chew on for the moment—if I may put it like that—to see whether he can resolve what seems to me to be an illogicality there and, really, to introduce the discussion which we are to have at a later stage about whether the authorisation, in whole or in part, should be either itself on the face of the Bill or should be referred to in greater detail on the face of the Bill.

    I gave an undertaking to the noble Lord that if he came back to me I would look carefully at what he said. If the noble Lord feels it within him not to press the amendment, I shall do my best to look with care at what he has said and I will undertake to write to him.

    Perhaps I may say that I understand from what the Minister has been good enough to say that he will consider the whole position including, as it were, the transfer of this condition from the authorisation into the statute itself, to which we on these Benches attach great importance, as I think does the noble Lord, Lord Williams, also.

    In the light of what the noble Lord has said, and also in the light of the comments of the noble Lord, Lord Diamond, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendment No. 64 not moved.]

    moved Amendment No. 65:

    Page 5, line 42, after ("State") insert ("or to Parliament").

    The noble Lord said: All this amendment seeks to do is to make a small alteration to paragraph ( a) of subsection (7) on page 5. Subsection (7) of Clause 7 states:

    "An authorisation under this section may include—
    (a) such conditions relating to the supply of gas, or requiring information to be furnished to the Director or published, as appear to the Secretary of State"—

    and after that we seek to insert the words "or to Parliament". The paragraph then continues,

    "to be requisite or expedient having regard to the duties imposed by section 4 above".

    I have already argued the whole desirability of having Parliament involved and I do not feel that I need to elaborate it. I sincerely trust that in this instance the noble Lord will see fit to accept the amendment. I beg to move.

    6.15 p.m.

    I just want to say very briefly that when we welcomed very much the original Bill very many years ago, it was thought right and proper that this great industry should be the property of the nation, so the British people became the shareholders and Parliament became the board of directors. But as time went on one became somewhat apprehensive as to whether it would be easy to question through Parliament what these great industries were doing. Very often we discovered that the words were not clear enough. Sometimes they referred to a Minister; but a Minister is not Parliament. Therefore, I believe that this simple amendment is very important.

    What it means is that if for a few years this industry is taken away from the British public and given to private individuals—whether it be returned to the British public or not—it must ultimately be the responsibility of Parliament to examine precisely what is happening; whether it be complaints, whether it be new ideas or whatever it may be. Such a massive industry, whether publicly or privately owned, must always be answerable at some stage to the British people. But that cannot be done thoroughly if it is merely left to the Secretary of State.

    If Members of this House or of another place try to ask questions, they will be told: "This matter is being dealt with by the chairman of the company and the Minister of State involved. It has nothing to do with Parliament". We have heard that argument before and I do not believe we should take that risk. That is why I wholly support this simple little amendment.

    Clause 4 is extremely important and I do not believe we should leave it that all these matters can be discussed just by the chairman of the new company and a Minister. We must make very sure that the words of the Bill make it possible for anybody to approach Parliament at any time. Therefore we should include the words "or to Parliament" because in the end Parliament should be the final deciding authority.

    We are on a point here which has to do with whether Parliament should insert conditions in an authorisation given to a public gas supplier after British Gas have their authorisation. It is a comparatively narrow point, but I agree that it is an important one.

    There are two points that I should like to offer to your Lordships in comment. First, I really do not think that this amendment would be very easy to work. It is not clear to me how it would work in practice; whether Parliament would be included in the general round of consultations provided under subsections (4) and (5) of Clause 7; whether we would be expecting either or both Houses to devote valuable time to debating at length the nitty-gritty of each condition in an authorisation. I doubt whether that is practical.

    Secondly, Parliament is in no way being by-passed. We are spending literally hours of time in this Chamber, and there was a very thorough going through of the Bill at all stages in another place, so that Parliament can lay down what the procedures ought to be before an authorisation can be given to a public gas supplier, how the public gas supplier ought to be regulated and how it should conduct itself. As I endeavoured to say on behalf of the Government earlier on this afternoon, Clause 7 has the very particular merit that at the moment Parliament is agreeing that Clause 7 shall provide that there will be full provision for public consultation. I do not think that we should add to the burden of Parliament's work by asking Parliament to insert conditions into an authorisation. That is what the amendment would do. I do not think it is right.

    I am sorry that the noble Lord has found it necessary to respond in that fashion. When discussing an earlier amendment we dealt with the circumstances under which objections could be lodged and in which consultations could take place, as though those had the slightest relevance to the supervision of Parliament. The noble Lord refers to the onerous burdens of Parliament. I can think of times and occasions when the time of this Chamber has been wasted wholesale on complete trivia as compared with matters of importance of this kind. I venture to suggest that noble Lords would not resent in any way having this burden of serious consideration placed upon them; nor would the other place, if it is anything like the other place that I used to know, resent having itself interposed between the Secretary of State and the authorisation in order that it might be successfully monitored. I do not think those horses will run.

    The noble Lord has one point. He correctly says that if you insert the words "or to Parliament" you are not at the same time inserting in the Bill the practical provisions by means of which this issue could in fact be considered separately by either House. There I think he has a point. We may have to return to the same question at the Report stage with a view to making it more explicit.

    I was rather hopeful on this occasion that the noble Lord would say, "We accept the whole principle of your amendment that Parliament ought to be involved in this and that Parliament ought to be able to insist on certain conditions if it so desired no matter who the Secretary of State might be". Secretaries of State in the department vary from time to time. They come and they go. There are shuffles and there are reshuffles. Parliament tends on the whole to remain, even though its complexion will probably change within a comparatively short time. Parliament by and large endures. Indeed, I was expecting the noble Lord to say, "Well, I agree with it and I shall see that measures are brought forward on Report to make it a more practical proposition than the mere insertion of the words contained in the amendment convey at the present time".

    The noble Lord has not seen fit to do that. In the interests of time I am not prepared to press the matter to a Division because I accept the noble Lord's criticism in regard to the practical aspect of the wording. I do, however, give him notice that we shall return to this question at the Report stage and we shall put in far more practical wording. On that basis, I ask the leave of the Committee to withdraw the amendment.

    Amendment, by leave, withdrawn.

    The noble Lord said: The purpose of Amendments Nos. 66 and 67 is to require the public gas supplier to encourage the efficient use by consumers of gas supplied through pipes, and so on. We have touched on this issue before in these deliberations. On that occasion the noble Lord, Lord Belstead, said that we would be better advised to come back to it under this clause, which we now do. I hope that as a result of our following his recommendation he will harken sympathetically to our amendments.

    The issue of the efficient use of energy is not in dispute. The Secretary of State for Energy has initiated and vigorously pursued throughout the country a campaign which has had support from all parties in order to achieve considerable improvements in the efficiency with which we use energy. I may say from my personal experience that the energy industry has been very responsive to that campaign.

    We know of the efforts made by the gas industry, which is the subject of this Bill, in promoting the efficient use of gas by its users. I can speak with considerable knowledge of the coal industry up to 1982 when I left it. Up to that point we were vigorously pursuing with consumers the stimulus of the efficient use of our product, and I have no doubt at all that that has been continued since.

    Recently a number of my colleagues and I met the chairman of the Electricity Council, Mr. Philip Jones, who made it very clear that one of the council's objectives in promoting the sale of electricity is to ensure that it is used as efficiently as possible. Nor have the oil companies been slow in this regard. A number of them have set up special subsidiaries to promote efficiency in use.

    So it seems to us that this amendment recognises and confirms a fait accompli. It puts on the public supplier of gas an obligation which up to date all energy suppliers have willingly accepted as part of their marketing campaign. When this was debated in another place I believe it was said by the Government that this would be an unfair obligation to impose on the supplier of gas in a privatised sense as it was not an obligation placed on the other industries. But there is nothing to stop that being done generally. The industries and the country at large would welcome such an obligation—such a desirable objective.

    Therefore, I very much hope that, having been kind enough to say that it would be more appropriate to raise this point at this stage, the noble Lord will be prepared to accept this amendment and indeed to welcome it as being very much in line with Government policy. I beg to move.

    I added my name to this amendment because I have seen recently such an enormous expenditure on advertising by British Gas on television and elsewhere. The public gas supplier will be in a rather difficult position if in order to maximise profits it has to say, "Use our gas, but not too much". This amendment will perhaps balance the arguments that we are making so strongly about economy in energy. It does no harm and calls to the attention of everybody that efficiency must be borne in mind all the time.

    One matter concerns me in this amendment. I fully agree with the first part and I hope that the Minister when he replies will deal with the provision,

    "conditions requiring the public gas supplier to encourage the efficient use by consumers of gas supplied through pipes, by means of advocacy, advice …".
    I welcome that and I hope that the Government might consider adding the words in the amendment moved by the noble Lord, Lord Ezra.

    Where I think I part company with him is in the very last phrase:
    "and, where economic, the provision of loans for energy efficiency investments".
    I have always thought that loans have to be paid for by somebody, and frankly I think that that person ought to be the taxpayer and not the customer of British Gas. Loans should indeed be used, perhaps with electricity, to help energy conservation; perhaps with gas; and perhaps with other forms of energy. But I do not believe that it is something that should be put on to the backs of the new British Gas plc.

    6.30 p.m.

    I support these two amendments. They are very important amendments indeed. We should remind ourselves that the House of Commons Select Committee on Energy paid great attention to energy efficiency, and it is worth reading out what was said in paragraphs 65 and 67 of its first report. Paragraph 65 stated:

    "In our earlier Report on the Development and Depletion of the United Kingdom's Gas Resources, we underlined the connection between energy efficiency and resource depletion and suggested that the 'national case for promoting energy efficiency must … be one of the determining principles in setting the statutory framework for the regulatory authority which will control the new private-sector corporation'. We were encouraged by the view expressed by the Director General of the Energy Efficiency Office that it was 'quite inconceivable' that the energy efficiency would not be 'built into' the consideration of the regulatory authority".
    In paragraph 67, the committee recommended that:
    "A general obligation be placed upon public gas suppliers to promote the efficient use of gas supplied through pipes".
    There we have it. After due and proper consideration, the Select Committee on Energy in another place came to the conclusion that energy efficiency should be a paramount consideration and ought to be written into the Bill.

    It has been said, and it will be said again, and I am going to say it now, that gas is a precious resource. It is finite and therefore it should be conserved. It can be conserved in all sorts of ways but the prime duty in relation to conservation must be with the gas supplier. British Gas has adopted a number of means of informing its customers about energy efficiency. For example, I believe that the present gas corporation will not install a central heating system unless the loft is properly insulated. Certainly it was my own experience when I had central heating installed that the corporation would not install it unless the house was properly insulated. That is what we are talking about; that is energy efficiency.

    There is nothing to say that a privatised gas corporation will do the same. It may be in its short-term interests and in the short-term interests of its shareholders to sell as much gas as it can in the shortest period of time. In that respect, I am reminded of what I call the Reading cemetery syndrome. The Reading cemetery syndrome goes something like this. There was in Reading a private cemetery owned by a private company that sold graves. It sold graves for many years—over 150 years, as a matter of fact, until suddenly there was no room left. But the cemetery had to be maintained because by law cemeteries have to be maintained. That duty was placed upon the local authority. So what happened was that the Reading cemetery company had taken all the profits out of Reading cemetery and when there were no further profits to be made the poor old public had to come in and pick up the bill for maintaining the cemetery.

    What frightens me is that the privatised gas company will use all the cheap North Sea gas, and when gas has to be produced by other means—perhaps from coal gasification, which will be an expensive process, or by importing it—then it will be handed back to the public, who will then have to pay through the nose. That is what I mean by the Reading cemetery syndrome, and I do not want that to happen in relation to gas supplies.

    As I have said, there should be a duty upon the director, upon the Government, and upon all concerned to see to it that the new privatised organisation conserves our natural and national resources to their best ability. I will not go into any further details but I support the amendment, and I sincerely hope that the Minister will accept it or will at least say how he proposes to deal with what we consider to be a very serious problem.

    This important amendment is about putting into the authorisation for British Gas a requirement that the supplier should encourage the efficient use of gas by consumers. I have to say to the noble Lord, Lord Ezra, that I realise that he has been absolutely consistent in this matter throughout the proceedings on this Bill. We come once again to a subject that the noble Lord and others have spoken about before.

    We ought to remember that British Gas already produces a good deal of information, guidance and advice on efficiency of gas use. Indeed, it has every incentive to do so. Keen competition with other fuels and with electricity ensures that. For instance, in today's smaller, more highly-insulated housing. the running cost advantages of gas are reduced and it faces intensive competition from electricity.

    Perhaps I may deal with the second half of the amendment, where it is proposed that there should be the provision of loans in order to encourage energy efficiency. I am sorry, but the Government do not agree with that suggestion. There are already many sources of loans available for home improvements. My noble friend Lord Sanderson of Bowden put his finger on the real difficulty, which is that if British Gas were to offer loans at below commercial rates, then the money would have to come from somewhere and there would probably need to be cross-subsidisation from the tariffs paid by other consumers in order to achieve that.

    I come now to the main part of the amendment, which is all the first half of the amendment. Noble Lords are not arguing in this amendment that the Bill itself should refer to energy efficiency. I assume that that is because we already have a reference to energy efficiency in Clause 4, where there is a duty laid on the Secretary of State and the director to exercise their functions in a way best calculated to promote the efficient use of gas supplied through pipes. The amendment would permit, not require, the Secretary of State to include conditions in a public gas supplier's authorisation requiring the supplier to encourage the efficient use of gas by consumers.

    I will, if I may, respond positively to that part of the amendment. I recognise the strength of feeling on that subject expressed more than once in your Lordships' House, and I am prepared on behalf of the Government to consider a condition to be imposed on British Gas, as part of its authorisation, to require it to provide information and advice to its customers about the efficient use of gas. I believe that that would be an effective means of promoting energy efficiency; that it would be consistent with the Government's overall approach that decisions on improving the way in which energy is used are best taken by consumers at the end of the day, in the light of full information about the possibilities. I would propose to bring forward an appropriate condition before Report stage. On that basis, I hope the Committee will feel that I am offering at least three-quarters of a loaf and that the noble Lord may feel able to withdraw the amendment.

    I should like to thank the noble Lord very much for that concession. Naturally we would like to look at the words very carefully; I hope that they would go a bit further than merely saying "provide information". I hope they would include the words "encourage, by various means, the efficient use of energy", and that it would not merely be a passive proposal. In the hope that it would be of a positive nature, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendment No. 67 not moved.]

    Page 6, line 12, at end insert—

    ( ) conditions requiring the public gas supplier to publish, annually, audited accounts showing separately the profits arising from sales of gas subject to maximum price regulation, which accounts shall be certified by the Director as showing the real costs and revenues ascribable to those activities of the supplier,").

    The noble Lord said: I realise that this is putting in a very, very short form what is a fairly complicated issue, but we shall be very happy indeed if the Minister feels able to continue on this excellent course which he has started of undertaking to consider before Report stage which parts, if not the whole, of a proposal of this kind he is prepared to put before the House when we come to consider matters on Report.

    What I had better do first is to distinguish what the proposal is here from the existing condition in the proposed authorisation. Putting the essence of it shortly—and not quoting because there is no part which I can quote shortly—the proposed condition provides that there shall be a separate statement of the profit arising out of the gas business, on the assumption that the gas supplier has other businesses in addition to purely that of the supply of gas.

    That is all right as far as it goes, but it does not go far enough. We are proposing here that there shall be shown separately the profits arising from sales of gas subject to maximum price regulation. That is the part that matters. Where you have a private monopoly, where you have a vast number of people who are compelled to take gas from this one source only, we are suggesting that it is right that the public should know what profit is being made on that activity. It is not sufficient that the public should know what profit is being made on the total gas supply activity of the public supplier. He will supply a lot of contract customers who take vast quantities at prices negotiated and agreed in contract form. That is where the individual can look after himself up to a point; and the large business can negotiate and will be helped in a variety of ways which we shall be coming to later on, to know what, as it were, the going price, the market price, is.

    We are talking here about those people—16-odd million of them—who have no alternative whatever but to go to the one shop for the article they must have, namely, the supply of gas which, as we know, is subject to a maximum price regulation.

    Therefore, we attach great importance to this provision. That the accounts should be audited is a normal provision which I do not suppose causes the Government any problems at all. That they should show separately the profit is, as I have explained, a necessary condition and that the account should be certified by the director as showing the real costs and revenues ascribable to those activities is not a belt and braces issue; it is two people doing their respective complementary parts of a whole job. The auditor's job is quite distinguishable from that of a director who is in touch daily with the industry, is aware of a whole host of activities going on which together constitute supplying gas to customers who are subject to a maximum price regulation. The director alone will be able to satisfy himself completely as to the real cost and revenues ascribable. The auditor will be dealing with an entirely different aspect and setting out what is a fair and reasonable statement at the end of the day.

    So these two complement one another and are a necessary addition to one another in order to have, at the end of the day, a wholly reliable statement showing what has been the outcome of the consumption of gas by a vast number of people, who, as I say, can only go to that one shop to buy what they urgently need. I beg to move.

    We on this side would like to support the amendment that has been moved by the noble Lord, Lord Diamond. When the successor company takes over—and the successor company will be the company to whom the authorisation is issued—it will be an ordinary limited company, a "plc". Therefore, the obligation placed upon it under the Companies Act (Sections 227 and 229 of the Companies Acts have been referred to) is merely to produce those accounts together with the notes on them that are at the moment contained in pages 28, 29, 30 and 31 of the accounts, together with the auditor's certificate. These are indeed the accounts for which any "plc" is responsible simply under the provisions of the Companies Acts: a profit and loss account, a balance sheet, a consolidation taking place where there are subsidiaries and, of course, a statement of the flow of funds; sources and application of funds accompanied by an auditors' report. I shall not, for the moment, deal with the whole basis of accounting because that will probably form the subject of a separate amendment and will need very careful consideration.

    I now turn to the accounts that have been published by the Gas Corporation as a corporation responsible to Parliament and the public. No formal discipline was laid upon them to produce the accounts and the supplementary information contained with the accounts that they have in fact produced over these many years. But they have produced an enormous amount of data which an ordinary public limited company, an ordinary plc, is under no obligation to produce. I refer, for example, to the performance ratios set out on page 24 of the accounts for 1984–85. These give the financial performance ratios, ratios based on therms sold, ratios based on employees and ratios based on domestic tariffs. Those are just some of the particulars that have been given.

    In addition to the notes on the accounts, to which the professional accountants are normally constrained by reason of their adherence to a standard accounting practice, a series of other statistics are also provided. All of these are of considerable importance, including a 10-year financial summary on page 50, a summary of the profit and loss account for the past 10 years, the cost structure over the past 10 years, a summary of capital and cash reserves over the 10 years and, on page 52, statistics for the industry 1975–76 to 1984–85.

    All of those items have been provided to the public by the corporation precisely because it was conscious of its responsibility as a public corporation to the nation as a whole, as distinct from the normal confinement of the interests of an ordinary plc to its shareholders and to its requirements under statute. We are most anxious that this valuable statistical material shall not be lost and that it will continue on the same basis after the corporation is privatised, on the basis that even though its responsibility is to its shareholders the public nevertheless retains an interest in this privatised monopoly.

    The amendment moved by the noble Lord, Lord Diamond, goes some way towards this and there will be later amendments which specify it in greater detail. In that sense, if the noble Lord, Lord Diamond, will forgive me, this is, in a way, a paving amendment to later, far more detailed amendments which I shall venture to lay before the Committee. Quite clearly it is not sufficient that these matters are just left within the authorisation itself; they go right to the roots of it.

    Perhaps I may use this opportunity, since we are talking about accounts, to point out that, oddly enough, we are discussing the position of the British Gas Corporation, and the desirability or otherwise of it being privatised, with only the accounts for 1984–85 in front of us. The accounts for 1985–86 are already available in draft and in the same way that the noble Lord presented us with a provisional or proposed authorisation he could have presented the Committee with a copy of the draft accounts, subject to audit, so that we could consider the affairs of the corporation on a much more up-to-date basis. However, for some obscure reason the accounts will not become available until 22nd or 29th July, so the Printed Paper Office informed me today.

    In the meantime, it would be useful to know why the Government have not circulated the report already made by Wood Mackenzie which incorporates the results as they see them up to 1985–86. These are matters to which, as a matter of courtesy, we hoped the noble Lord would have given some attention so that the Committee could consider the whole affairs of the corporation under the new successor company in a far more modern context. It should have been possible to produce the accounts in draft, at any rate, for the Committee and, indeed, for another place.

    To return to the amendments proposed by the noble Lord, Lord Diamond, we consider that there should be a positive response—unless, of course, the Government are in return to be provided with sums that they can dole out as tax concessions before the general election and are prepared to let the matter rest as it is. I trust that that is not the case and I therefore hope that the Government will consent to this amendment being incorporated into the Bill.

    We have listened to some criticism from the noble Lord, Lord Bruce of Donington, which was not justified had he looked in detail at the proceedings of Standing Committee F. On 17th March this year that Committee gave very detailed consideration to this amendment and in his reply my right honourable friend Mr. Alick Buchanan-Smith said in referring to this precise point, if I may quote it to the Committee as it is very relevant:

    "Therefore, given the way in which the provisions of the long-term gas purchasers' contracts have developed over the past 20 years, there is a particular difficulty in the apportionment and proper identification of the costs which relate on the one hand to maintaining peak supply needs and on the other those which relate to meeting the base load."—[Official Report, Commons, Standing Committee F, 17/3/86; col. 132.]
    There is a difficulty here. This is a very serious problem, to which my honourable friend has referred. I do not believe that, even given the Wood Mackenzie report, it is going to be possible to go very much further than that because, of course, the tariff and the non-tariff contracts pass through the same pipe.

    I fully understand the concern of the noble Lord, Lord Diamond, that information should be produced about the parts of the business rather than gas supply as a whole and specifically that a distinction be made between tariff customers and contract customers. However, any requirement to publish audited profit figures relating to sales of particular categories of gas must be compatible with the nature of the business.

    As explained in another place in response to a similar amendment moved there by the chairman of the Select Committee on Energy, the nature of the gas supply business means that it is not possible to associate in a rigorous way specific costs with individual sectors of the market. My noble friend Lord Sandys has just reminded us of that. Not only do tariff and non-tariff sales have the same pipes, but the same emergency, gas purchasing and general services. There are serious technical difficulties in apportioning those costs which relate to meeting peak supply in the middle of the winter when the supply system is running flat out and those which relate to meeting demand at normal times. That is a significant factor because tariff customers have a higher relative demand in the winter than industry. Indeed, interruptible contracts to industry, where the gas supply can be temporarily stopped during the peak demand period, have a key role to play in balancing supply and demand.

    British Gas's long-term gas purchase contracts contain a range of provisions as to time of supply and have developed over the past 20 years to reflect changing market circumstances. As a result, there is no simple relationship between a particular kind of demand and costs. Allocating the cost of meeting specific demands can therefore be done in any one of a variety of ways. The choice would materially affect the accounts.

    The objective accuracy of separate profit figures for the price-regulated sector of the market is not sufficient for the authorisation to require audited published accounts. The aim behind the amendment, though understandable, is simply not in line with the realities of the business. Although this is the position as regards full audited accounts, the director will be able to exercise his own judgment in this area. I should point out to the noble Lord, Lord Bruce, that Condition 2 of the authorisation already goes further than the Companies Act requirements.

    7 p.m.

    The noble Lord says "very little"; but it does nevertheless. The noble Lord paid tribute to the extent of the information published by British Gas in its annual report—and I join him in congratulating them on the standards of their financial reporting—but I am sure he will agree that these accounts do not include the information that is called for under the amendment. This, of course, as I have explained, is because they could not be produced on a fully reliable basis.

    The noble Lord also asked about the current accounts of British Gas—the accounts for the year that has just finished—and of course they will be published in the normal manner when they have been finalised. As regards the Wood Mackenzie report, I am most surprised that the noble Lord has not managed to find a copy of it. If other noble Lords would like the report to be made available, I shall do my best to ensure that copies are put in the Library of the House. However, I must point out that it is a report that has been produced by an independent firm of stockbrokers and it is really not within my gift to be able to arrange that. However, I shall certainly do my best.

    From the start the director will be able to use his powers to call for all the necessary information covering the tariff market. He will therefore have access to information about the possible bases on which costs and revenue can be related to the price-regulated sector of the market. The Bill also gives the director discretion to publish information that he considers appropriate, and, of course, there are procedures set out in the Bill which enable the authorisation to be modified. On this basis I believe that the regulatory arrangements set out in the Bill and draft authorisation fully deal with the important need to ensure that proper accounts are drawn up and published.

    As I said a moment or two ago, a similar amendment was proposed in another place by the chairman of the Select Committee on Energy. Having heard the argument put forward on that occasion by the Minister, he withdrew the amendment, and I hope that, after the explanation that I have given to your Lordships this evening, the noble Lord, Lord Diamond, may feel able to do the same.

    We on these Benches, for our part, cannot recommend to the noble Lord that he withdraw his amendment, though that decision obviously lies within his own discretion. I have listened very carefully to the observations that have been furnished to the noble Lord, and with which he has acquainted us, on the accounting aspects of this matter. The kindest way of describing his account of the impossibility of action is to use the words immortalised by the noble Lord, Lord Weinstock (for a moment I had almost forgotten the name of the managing director of GEC), who described an accountancy explanation from the Government Benches on another occasion as being "gobbledygook".

    The fact of the matter, of course, is that from the accountancy standpoint, with the degree of approximation which is inevitable in all accounting assessments where one endeavours to arrive at a true and fair view, it is possible within a reasonable tolerance to ascertain and publish the information required by the amendment of the noble Lord. Both the noble Lord and I are practising accountants and we would not put down amendments of this kind frivolously, knowing that such information was impossible to ascertain. Of course it is possible. If the noble Lord's department finds any difficulty then we shall be happy to oblige, but, of course, to emulate one of our well-known stores, we never knowingly undercharge for our advice in such matters.

    This raises a question of some importance. Despite the prompting that the noble Lord could undoubtedly obtain if he required, he was able to give me no comfort on the other observations that I made about the information published in the existing corporation's accounts. He was able to give no comfort about even that minimum amount of information which I willingly agree is not the information that the noble Lord requires but which is vital for our purposes. He was unable to give me that assurance that even that minimum would in fact be maintained in the future. In short, I am afraid that his answer is thoroughly unsatisfactory and if the noble Lord, Lord Diamond, proposes to carry his amendment to a Division, we shall feel compelled to give him our support on this occasion.

    I should like to thank the noble Lord, the Minister, for the very full and courteous way in which he dealt with the amendment. In particular I want to thank him for agreeing with my main point, or at all events for not disagreeing with my main point. That main point related to the change of circumstances and the creation of a private monopoly where all the customers have to go to one shop; and he did not for one moment deny my main proposition that it would be helpful (albeit he says that it would be very difficult) if the public could know the results of those operations and what the price formula, the various encouragements to efficiency and so on and so forth all added up to in terms of the bills that 16½ million customers had to pay. So I hope that we are on common ground on the first point; namely, that if it were possible to do this calculation it would be very helpful in the changed circumstances. One did not need it before; one does need it now—or rather will need it in the future, assuming that privatisation takes place, which is the course that we are all compelled to contemplate. So far as concerns that point, I am delighted with the response of the Government.

    I am very grateful to the noble Lord the Minister for making it clear that no less a person than the chairman of the Select Committee on Energy also thought that it was right to move an amendment of this kind in another place. As a result of the examination by that all-party Select Committee, he too came to the conclusion that this was a desirable objective. So we are all on common ground. It was an all-party committee, so I do not inquire as to which party the chairman belonged though I imagine that, as the other House is constructed, in the normal course of events, it would be a chairman from the Government side, namely, a Conservative. However, that point does not arise. Thus, the importance of the principle of the amendment is confirmed by what has occurred in another place and by the lack of contradiction by the Government.

    What then do the Government say is too difficult? The Government are right in saying that is is particularly difficult for the auditor. They are right about that. It is a difficult matter for the auditor to certify. But I have two clear solutions for that difficulty. First of all, will the Government say that if we put in another amendment, leaving out the audit and merely putting in the certification by the director, they will accept it? There is nothing in what the noble Lord the Minister has said to indicate that they would do so. He did not say that if the audit were left out, we were all on common ground. I hope I am wrong, but for the moment I am assuming that he would not give me a better answer if the audit requirement were omitted.

    However, as every auditor and indeed every businessman and shareholder knows, the audit requirement is not a compulsion to certify that everything is correct; it is a compulsion to certify what is found. If the auditor does not find that he can give the full, normal certificate, he limits his certificate to the things that he can find as fact and he adjusts his certificate to what he knows, or believes, is the correct statement of affairs.

    If this were a part of the authorisation—and it is only authorisation that we are asking for at this stage and not incorporation in statute—there would be no difficulty in an auditor saying, "I certify so-and-so, but please see Notes 1 to 10 on so-and-so. These are conditions or further explanations". There is no ultimate difficulty, although there is a modicum of difficulty about the auditor.

    The noble Lord then goes on to repeat what was apparently said in another place about the impossibility of allocating the cost properly as between what we are asking for and the rest. That does not convince me at all, I am awfully sorry. I was a practising accountant for a third of a century, running my own practice. (I am permitted to say that because I left long ago.) Time and time again one is asked to do what everyone does in the normal way of life. One has to think of a fair division and express the thought not in words but in figures. It is a different language. but that is all.

    It is ridiculous to say that nobody can form a fair view of what is relevant to one activity and what is relevant to another. That cannot be said. It is possible to say that there is more than one view and that there cannot be a completely precise view. But one can turn that fair view into figures, and that happens every day of the week.

    Although the figures may be such as to require an auditor to limit his certificate, nevertheless they would be extremely valuable, extremely helpful and adequate for the purpose. One is not seeking to know whether there is a profit of a halfpenny more or less out of supplying tariff customers: one is seeking a general view of whether an excessive profit has been made. If a reasonable profit has been made within, I imagine, quite a large margin, it would not matter. We are not asking for a precise ½ per cent. or 1 per cent.: we are asking for a good indication.

    The Minister's brief, like another one that has already been referred to, may be headed with a large "Resist". If he has nothing further to say, I certainly want to test the feeling of the Committee.

    I should like to pick up two points that the noble Lord makes. He says that it may be possible to produce unaudited accounts, or that sort of thing. I hoped I had made it clear that the choice of bases would materially affect the accounts. The figures could be quite a long way different; it is not just a question of a halfpenny or a penny, to which the noble Lord referred. I believe that it is better to leave things as they are, with the power of the director to call for all the necessary information about the tariff market, and handle things that way.

    I am awfully sorry; that is just no good. If what the noble Lord says is right, all that the director can call for is information that will not produce the answer for which we are asking. That will be no help whatsoever to the director or the customer at large. I am sorry; this is a reasonable request. It is put upon us by the fact that the Government have decided to make a private monopoly of the supply of gas to those 16½ million tariff customers. That is the change. It is the Government's desire that there should be that change. It is our desire that there should be the minimum protection of knowing whether out of that activity an excessive profit is being made.

    Let me ask the noble Lord one question. Why should it be more important after the supply becomes a privatised monopoly, as he describes it, to know the difference between the tariff and the contract customer? Why, then, at the present time should it be possible for the contract customer to subsidise the tariff customer, or the other way round? I cannot see the difference.

    Yes; because the noble Lord is not addressing himself to the question to which I am addressing my mind. I am not at the moment concerned with cross-subsidisation. We shall come to that on a later amendment. We are not asking at the moment about whether the contract customer pays through the nose. Will the ordinary man in the street, who will have to buy his goods at the one shop, be taken to town? Will an excessive profit be made out of that one activity? We shall know the answer, and those 16½ million consumers will be protected, only if we know the final tally. There will be all sorts of protections en route, but it is the final tally and the profit and loss account that matter, as every noble Lord on that side of the Committee knows. It is the final figure that will count here, and I am bound to ask the Committee to support the amendment.

    7.15 p.m.

    On Question, Whether the said amendment (No. 68) shall be agreed to?

    Their Lordships divided: Contents, 65; Not-Contents, 111.



    Airedale, L.Kilmarnock, L.
    Attlee, E.Lawrence, L.
    Bacon, B.Llewelyn-Davies of Hastoe, B.
    Brockway, L.Lockwood, B.
    Brooks of Tremorfa, L.McCarthy, L.
    Bruce of Donington, L.McNair, L.
    Burton of Coventry, B.Mar, C.
    Carmichael of Kelvingrove, L.Mayhew, L.
    Cledwyn of Penrhos, L.Molloy, L.
    Crawshaw of Aintree, L. [Teller.]Monson, L.
    Morton of Shuna, L.
    David, B.Nicol, B.
    Dean of Beswick, L.Oram, L.
    Diamond, L.Phillips, B.
    Donoughue, L.Ponsonby of Shulbrede, L.
    Elwyn-Jones, L.Rhodes, L.
    Elystan-Morgan, L.Ritchie of Dundee, L.
    Ennals, L.Rochester, L.
    Ewart-Biggs, B.Simon, V.
    Ezra, L.Stedman, B. [Teller.]
    Gallacher, L.Stewart of Fulham, L.
    Glenamara, L.Stoddart of Swindon, L.
    Gregson, L.Taylor of Blackburn, L.
    Grey, E.Taylor of Gryfe, L.
    Grimond, L.Taylor of Mansfield, L.
    Hanworth, V.Turner of Camden, B.
    Hatch of Lusby, L.Underhill, L.
    Hirshfield, L.Vernon, L.
    Houghton of Sowerby, L.Walston, L.
    Hunt, L.White, B.
    Jeger, B.Williams of Elvel, L.
    John-Mackie, L.Willis, L.
    Kilbracken, L.Wilson of Langside, L.


    Allenby of Megiddo, V.Bessborough, E.
    Allerton, L.Bolton, L.
    Arran, E.Brabazon of Tara, L.
    Auckland, L.Brougham and Vaux, L.
    Bauer, L.Bruce-Gardyne, L.
    Belhaven and Stenton, L.Butterworth, L.
    Belstead, L.Buxton of Alsa, L.

    Caccia, L.McFadzean, L.
    Caithness, E.Mancroft, L.
    Cameron of Lochbroom, L.Margadale, L.
    Campbell of Alloway, L.Massereene and Ferrard, V.
    Campbell of Croy, L.Maude of Stratford-upon-Avon, L.
    Chelmer, L.
    Coleraine, L.Merrivale, L.
    Constantine of Stanmore, L.Mersey, V.
    Cork and Orrery, E.Middleton, L.
    Cowley, L.Montgomery of Alamein, V.
    Craigavon, V.Morris, L.
    Craigmyle, L.Mottistone, L.
    Cullen of Ashbourne, L.Munster, E.
    Davidson, V.Norfolk, D.
    Denham, L. [Teller.]Norrie, L.
    Drumalbyn, L.Onslow, E.
    Dulverton, L.Orkney, E.
    Ellenborough, L.Pender, L.
    Elliot of Harwood, B.Peyton of Yeovil, L.
    Elliott of Morpeth, L.Plummer of St Marylebone, L.
    Elton, L.
    Faithfull, B.Rankeillour, L.
    Ferrers, E.Redesdale, L.
    Fraser of Kilmorack, L.Reigate, L.
    Gainford, L.Renton, L.
    Gardner of Parkes, B.Rochdale, V.
    Glanusk, L.Romney, E.
    Glenarthur, L.St. Aldwyn, E.
    Gray, L.Sanderson of Bowden, L.
    Gray of Contin, L.Sandford, L.
    Hailsham of Saint Marylebone, L.Sandys, L.
    Savile, L.
    Harmar-Nicholls, L.Skelmersdale, L.
    Harris of High Cross, L.Stockton, E.
    Harvington, L.Stodart of Leaston, L.
    Henderson of Brompton, L.Strathclyde, L.
    Hives, L.Swinfen, L.
    Hooper, B.Thorneycroft, L.
    Hylton-Foster, B.Trenchard, V.
    Inglewood, L.Trumpington, B.
    Kimball, L.Ullswater, V.
    Kinloss, Ly.Vaux of Harrowden, L.
    Kitchener, E.Vickers, B.
    Lane-Fox, B.Vivian, L.
    Layton, L.Ward of Witley, V.
    Lindsey and Abingdon, E.Whitelaw, V.
    Long, V. [Teller.]Windlesham, L.
    Lothian, M.Wise, L.
    Lucas of Chilworth, L.Wolfson, L.
    McAlpine of West Green, L.Zouche of Haryngworth, L.

    Resolved in the negative, and amendment disagreed to accordingly.

    7.25 p.m.

    We have reached, I believe, a suitable moment to adjourn the Committee stage. In moving that the House do now resume, I suggest that we do not return to the Committee stage of the Gas Bill until 8.30 p.m. I beg to move that the House do now resume.

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

    House resumed.

    Protection Of Military Remains Bill

    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.—( Lord Sandford.)

    On Question, Motion agreed to.

    House in Committee accordingly.

    [The LORD HAYTER in the chair.]

    Clause 1 [ Application of Act]:

    Page 1, line 1, leave out from beginning to end of line 34 on page 2 and insert—

    ("(1) This Act applies to any aircraft which has crashed (whether before or after the passing of this Act) while in military service.

    (2) Subject to the following provisions of this section, the Secretary of State may by order made by statutory instrument—

  • (a) designate as a vessel to which this Act applies any vessel which appears to him to have sunk or been stranded (whether before or after the passing of this Act) while in military service;
  • (b) designate as a controlled site any area (whether in the United Kingdom, in United Kingdom waters or in international waters) which appears to him to contain a place comprising the remains of, or of a substantial part of, an aircraft to which this Act applies or a vessel which has so sunk or been stranded;
  • and the power of the Secretary of State to designate a vessel as a vessel to which this Act applies shall be exercisable irrespective of whether the situation of the remains of the vessel is known.

    (3) The Secretary of State shall not designate a vessel as a vessel to which this Act applies unless it appears to him—

  • (a) that the vessel sank or was stranded on or after 4th August 1914; and
  • (b) in the case of a vessel which sank or was stranded while in service with, or while being used for the purposes of, any of the armed forces of a country or territory outside the United Kingdom, that remains of the vessel are in United Kingdom waters.
  • (4) The Secretary of State shall not designate any area as a controlled site in respect of any remains of an aircraft or vessel which has crashed, sunk or been stranded unless it appears to him—

  • (a) that those remains are on or in the sea bed or are in, or in the immediate vicinity of, the place where they were left by the crash, sinking or stranding;
  • (b) that less than two hundred years have elapsed since the crash, sinking or stranding;
  • (c) that the owners and occupiers of such land in the United Kingdom as is to be designated as, or as part of, that site do not object to the terms of the designating order which affect them; and
  • (d) where the aircraft or vessel crashed, sank or was stranded while in service with, or while being used for the purposes of, any of the armed forces of a country or territory outside the United Kingdom, that the remains are in the United Kingdom or in United Kingdom waters.
  • (5) An area designated as a controlled site shall not extend further around any place appearing to the Secretary of State to comprise remains of an aircraft or vessel which has crashed, sunk or been stranded while in military service than appears to him appropriate for the purpose of protecting or preserving those remains or on account of the difficulty of identifying that place;").

    The noble Lord said: In moving this amendment, I hope that it may be for the convenience of the Committee if I speak at the same time to Amendments Nos. 6, 7, 8, 9, 12, 13, 14, 15, 17, 18, 21, 22, 23, 24, 26, 27, 28, 29, 30, 31 and 32, all of which are related and consequential.

    I wonder whether I may interrupt my noble friend while he is dealing with the grouping of the amendments. It may also give him an opportunity to catch his breath. I suggest to the Committee that in following my noble friend's suggestion about the grouping, we note that manuscript Amendment No. 1A and Amendments Nos. 2, 3, 4 and 5 are amendments to my noble friend's amendment, Amendment No. 1. Under the strict procedure, it is necessary, as soon as my noble friend has spoken to Amendment No. 1 and the group associated with it, for the Chairman to call the first of the amendments to Amendment No. 1. That will be Amendment No. 1A. I suggest that, after my noble friend Lord Onslow has spoken—I guess, briefly—to his amendment, Amendment No. 1A, we should have a general debate on all the amendments that are linked with my noble friend's amendment, Amendment No. 1, although it is specifically Amendment No. 1A that will have been put to us. I hope that this will be for the convenience of the Committee.

    That sounds to me an entirely proper way to proceed although I am of course in the hands of the Committee. Returning to the amendment that I moved, the purpose of the amendment and those that go with it is to require military vessels to be individually designated for protection under the Bill rather than being automatically protected as a class. The Bill as originally drafted makes it an offence to interfere with all aircraft and vessels that crashed, sank or were stranded while in the service of the armed forces unless they have been removed from the protection of the Bill by the issue of a licence. This kind of blanket protection is essential in the case of those military aircraft that were lost without trace in the Second World War and the remains of which have still not been found. In some cases we have no idea whether they lie on the seabed or are buried in British or foreign soil. Since their location and, in the case of foreign military aircraft, their identity is not known, they cannot be individually designated for protection.

    There are similar arguments for having blanket protection for military vessels. No one knows the exact location of many of the vessels we would wish the Bill to cover. But if we are protecting military vessels as a class we must define the category of vessel to which the Bill is to apply. This would have to be done in a way that can readily be interpreted, and that draws a clear line between those vessels that are covered by the Bill and those that are not. The difficulty is that during the two world wars many merchant ships and fishing vessels were used for military purposes. Whether a particular merchant vessel would be covered by the Clause 1 definition of
    "in service as [a] vessel of the naval, military, or air forces"
    is a matter of legal interpretation and would depend upon the terms on which that vessel had been placed at the disposal of those forces. This information is not for the most part readily available. In some cases it may no longer exist. My department would find it extremely difficult, and often impossible, to advise divers—amateur or professional—exactly which wrecks were protected by the Act. I am sure that noble Lords would agree that it would be regrettable if the enjoyment of thousands of amateur divers was spoilt by the burden of this uncertainty.

    Since we wish to remove any uncertainty about the identity of the vessels covered by the Bill, we feel that the Bill should apply only to those vessels which have been designated by name or other description in an order made by statutory instrument. I am sure that this change will be generally welcomed by the diving world. I hope that noble Lords will therefore feel able to agree to this amendment and those that follow it. I beg to move.

    There is a manuscript amendment, Amendment No. 1A, as an amendment to this Amendment No. 1.

    moved, as an amendment to Amendment No. 1, Amendment No. 1A:

    In subsection (2), in paragraph (b) leave out ("or in international waters").

    The noble Earl said: This amendment is designed to cover the very real worries of the diving profession who feel that if the Act is passed it will be an offence for anybody on a UK ship, or any United Kingdom citizen working for a foreign company, to be involved in diving on a controlled site. It is arguable that this could be put up as a restraint on trade under the European Community's law. It certainly has produced in, for instance, Amendment No. 6, some rather divine wording to an Act. That says, more or less, that the Secretary of State shall not say that an English person may not dive on a foreign ship in the Pacific.

    Earlier on there is something which is so completely sublime that it deserves a certain amount of comment. In subsection (4) of the new amendment, as proposed by my noble friend Lord Trefgarne, it says:

    "The Secretary of State shall not designate any area as a controlled site in respect of any remains of an aircraft … which has crashed … unless it appears to him—
    (b) that less than two hundred years have elapsed since the crash".

    I was totally ignorant of the fact that Saumarez commanded Sunderland aircraft, that St. Vincent had Sea Vixens, that Nelson had Nimrods, or that Wellington's supply lines were covered by Liberators of coastal command. I understand the feeling behind this Bill. I think that it is very serious and reasonable. But we surely cannot put into legislation something that is so gloriously funny as that. It brings this into the realms of pure fantasy. I could not resist calling the attention of noble Lords to that.

    The much more serious part is the effect of legislating that English people cannot do things in international waters which foreigners can. I know that my noble friend has been trying to organise a general licence for British diving companies. We hope that that general licence will encourage a legally enforceable international convention upon diving for wrecks on the seabed in international waters. However, if we do not have a proper and really advanced form of general licence by Report stage, which is agreed between the Ministry of Defence, my noble friend, and the diving professions, we shall put ourselves into a very serious dilemma.

    Even if we have an agreed general licence, we still come up against the position where a sailor from Hartlepool gets himself a job on a Liberian-registered diving ship, and all the other crew are of other nationalities. If that man is present as a donkey wynch man—or whatever they have on vessels, I am not well up on the detailed technicalities of the merchant marine—and that vessel is involved in diving on a controlled site (which is perfectly legal for them to do under the laws of Liberia or Liechtenstein or wherever it may be) he is in danger of being prosecuted under the criminal law of this country.

    I am in great sympathy with what my noble friends Lord Sandford and Lord Trefgarne are doing. But unless the amendment of my noble friend Lord Trefgarne is amended to exclude international waters, we are in danger of making fools of ourselves. I am a great fan of this Government and I do not want them to make fools of themselves. They do not normally. On this occasion they could be verging on that unless they take some of the action that I propose. I beg to move.

    If the Government are in danger of making fools of themselves it is not part of my brief tonight to intervene. However, I think that the Minister needs to deal with this matter head on. We are talking about the consequences of the Bill that those with whom the noble Lord has had conversations have said will follow if the amendment remains unamended. Those who are carrying on a profession in this country are subject to our laws. If in future they are to be at a disadvantage in comparison with those with whom they compete in that profession internationally, under their laws, we surely do not legislate to put our people and our business at a disadvantage. If the Minister accepts that that is the effect of the Bill and the amendments he will surely want to get this right. That might mean satisfying the interests of those outside who say that they have got it wrong, as well as changing the form of the Bill.

    I have received advice broadly along similar lines. The offshore diving contractors are concerned at what, perhaps needlessly, they see as being detrimental or damaging to their business. If that is the case, and if we are in effect encouraging—by neglecting our own interests—the interests of foreign owners, then the Minister will need to spend a little time on this. He was quite open in what he said were the intentions. The night is young. There are many interesting debates ahead of us. At this stage we ought to spend a little more time on this. I am certainly far from satisfied. We are not talking about pressing issues to votes. We are talking about the urgent need for the Minister to get it right for the Report stage. I very much hope that the Minister will spend some time doing just that.

    Let me begin by welcoming the main purpose of my noble friend's group of amendments; namely, the avoidance of doubt by drawing up a list of the vessels which will be subject to this Bill. That must be an advantage. I am sorry for my noble friend, and to some extent for all of us, that it has taken some 30 or so amendments to do it.

    On the question of the list of vessels, I ask my noble friend, when we get round to dealing with his amendment as opposed to the amendments to it, whether he would be ready to confirm that the Association of Off-Shore Diving Contractors will be among those consulted about the compilation of the lists. After the first lists have been produced, will the Secretary of State be open to requests for changes to be made to them? There are a number of criteria which lead to their compilation and they may lead to requests for the lists to be amended. I would like to hear from my noble friend about the mechanisms for that.

    The second matter about which we want to be clear is the length of time it will take to compile the lists. It is obviously important that the Bill, even if enacted, should not be brought into force until the lists are ready. If the lists will not be ready within two months of the enactment of the Bill, then Clause 10(2) will need amendment at the next stage. Perhaps my noble friend will give us some indication on that point. Either the lists are ready now or they will be ready in a few weeks' time. Alternatively, Clause 10(2) will need to be looked at to see whether a further lapse of time is needed.

    I now turn to Amendment No. 1A of my noble friend Lord Onslow, which deals with the situation in international waters; namely, that we can only take steps to protect remains in ships lying in international waters by constraining our own British vessels, and if we do that excessively it will only be to the advantage of salvage and diving ships of other nations. My noble friend has sought to deal with that situation with the concept of an advance general licence, which is in my view the right way to deal with it.

    I shall speak at some length on the Motion, That Clause 4 shall stand part, in order to give the Committee an indication of where we have reached in the matter. However, I must agree with my noble friend Lord Onslow that unless the development of the concept of an advance general licence and the associated code of practice is fairly well developed—almost to the point of being ready for publication by the next stage—we shall have to think seriously about having the dimension of international waters in the Bill at all.

    As my noble friend has said, the danger is that we shall give the impression by having it in the Bill that the jurisdiction of Her Majesty's Government extends beyond the range of what is actually practical. We do not want to give anyone the impression that we can safeguard human remains in ships in international waters when in fact all that we can do is call off British ships and leave the salvage open to other countries to dive on. Therefore, that point needs looking at very carefully. I hope that my noble friend will not feel it necessary to press Amendment No. 1A. However, we shall have to see how we progress with the advance general licence by the time we reach the Report stage.

    Apart from that, I personally welcome very much the amendments which my noble friend has tabled and I should like to take the opportunity of thanking him for tabling them before the Recess and enabling us all to have a good look at them—something which does not always happen.

    I do not think that the noble Lord should move it formally, but he should speak to it. I should have thought that it would be for the convenience of the Committee to have all these issues aired at the beginning.

    7.45 p.m.

    moved, as an amendment to Amendment No. 1, Amendment No. 2:

    Leave out lines 18 to 20.

    The noble Lord said: I beg to move Amendment No. 2. I should like to apologise for not having been here for the Second Reading debate, but I was in hospital. Had I been here, I confess that I would have suggested that the Bill was unnecessary. However, by saying that I do not mean any disrespect to the proposer and mover, and I suspect that most of the Bill's objects can be obtained or are already being obtained. However, I do not intend to pursue the matter.

    My amendment is to omit lines 18 to 20 on page 1 of the noble Lord's amendment. As it reads at present, the Secretary of State can designate a vessel even though he has no idea where it is. In my view, the Bill should be kept as simple and as clear as possible. I do not believe that it is necessary to give the Secretary of State these rather Alice-In-Wonderland powers to designate a vessel when he has no idea where it is. It could greatly complicate the operation of the Bill and I cannot see that it gives any advantages. Therefore, in the interests of clarity and common sense I suggest that those lines be struck out. I beg to move.

    I think I am replying to at least two amendments, but I shall do my best. Perhaps I may deal first with the amendment of my noble friend Lord Onslow. As I understand it, what lay at the heart of my noble friend's anxiety was the problem about British subjects employed, for example, by foreign companies, who might find themselves in difficulties as a result of the Bill.

    I am advised that it is by no means unknown for British subjects working for foreign firms to be faced with this dilemma. Indeed, it could also happen to a British subject working for a British company if, for example, he is ordered to salvage a designated wreck without the protection of a licence. I agree that that is unfortunate, but it does not, in the Government's view, justify a special provision in the Bill. As I hope your Lordships will agree, it could seriously undermine the effectiveness of the Act if British subjects could escape its restrictions by operating from a foreign vessel.

    My noble friend Lord Sandford asked me, I think in the context of my own amendment, about progress on the licence. I understand that discussions are continuing. I should certainly hope that agreement could be reached by the time we come to the next stage of the Bill, and I hope that my noble friend will be satisfied to hear that.

    I hesitate to interrupt my noble friend, but he has not quite taken on board how seriously some of us—especially those in the diving community—regard the difficulty of separating British firms from foreign firms. I think we would all rather that a British firm went and dived with a general licence on to HMS "Trinidad", for instance, which sank in international waters somewhere in the Antarctic but I believe is within the range of modern diving equipment which, as my noble friend knows, has advanced enormously. If we do not get the general licensing law, it will be impossible to separate British companies from foreign companies. I am sorry to pursue the matter.

    I understand my noble friend's anxiety. Let me remind him of what I think I have said to him on more than one occasion at the various meetings we have had, and I have certainly said it to those who have come to see me to express their views or reservations on this matter. The purpose of the Bill is to protect the sanctity of the war graves. It is therefore in our interests to ensure that British firms conduct this work under the protection of a licence which we shall therefore hasten to issue in appropriate cases. It will clearly be in our interests to ensure that a British firm has a licence to operate and does so in accordance with the provisions of the licence rather than allowing haphazard access by foreign firms, which might otherwise be the case.

    We cannot stop haphazard access by foreign firms. What happens is that we prosecute the Hartlepool docker for working for the foreign firm that is doing it.

    I do not think that my noble friend has quite understood what I was saying. The way we stop haphazard access by foreign firms is to hasten to license British firms.

    May I turn now to the amendment moved by the noble Lord, Lord Grimond. I am replying to it at this moment. Strictly speaking, he has not yet, I think, formally moved the amendment, but I hope that your Lordships will agree that it would be appropriate for me to reply nonetheless.

    I understand the noble Lord's reasons for proposing this amendment. There would of course be less uncertainty for fishermen, sports divers and others, if we designated only those vessels whose exact location was known. But there are many war graves whose position is unrecorded and is still unknown. I am thinking of vessels which were torpedoed during the war and sank immediately with loss of life before their position could be reported. These are graves which should be protected by the Bill. They could be designated only by name.

    If we must wait until the remains are located before we can designate them for protection, it could often be too late. If the vessel is discovered by salvors who are not prepared to respect the sanctity of any human remains in it, there will be nothing to stop them ripping it apart. By the time the find was reported it would be too late to prevent the desecration.

    To understand how the designation of vessels by name only would affect the ordinary diver who came across an unidentified wreck one must look at Clause 2, which sets out the offences. The Government amendment to Clause 2(1)(b) would make it an offence for a person to interfere with a designated vessel if he believed or had reasonable grounds for suspecting that the vessel was in military service when it sank.

    If a diver discovers an unidentified wreck which he has no reason to believe is a military one, he would not commit an offence if he interfered with it. In some cases of course he would be able to see that it is a military vessel. He may not know whether it is a designated one, but he is on notice that if it is and he interferes with it he will be committing an offence.

    We do not think it unreasonable to expect divers not to interfere with an unidentified military vessel unless they believe on reasonable grounds that it is not a designated one; otherwise there could be no protection for war graves in unknown locations. I hope that the noble Lord will agree that this is a reasonable approach and will feel able to withdraw his amendment.

    This is a Committee stage and I assume that I am able to make more than one contribution. I listened carefully to what the Minister said to the noble Earl, Lord Onslow. He was saying that when we see the advance licence it will be in such a form as to put the British company in the same position as a foreign company. The rights and responsibilities which have to be accepted by the British company before they are as free as a foreign company to dive on a designated ship in international waters will be minimal, but will be so unconstrained that in effect they will be on a par. If that is the case, I am reasonably reassured.

    My concern is partly at the irksomeness of British companies having to do something that a foreign company has not got to do. This is a matter of consultation and there has to be give and take; and if the interests outside the Committee tell us that it is reasonable and that they are just as capable of being as quick off the mark, and by using their intelligence in more ways than one are able to do something and will not be inhibited from doing what they are legally entitled to do according to the licence, that would go a long way.

    I am sure that the Minister does not need to be told by anyone here that besides protecting the sanctity of those who lost their lives, the designation of a war grave and the feelings of the bereaved, what we are talking about is a commercial undertaking as well. What the Minister said satisfies me, and it also satisfied me in respect of the points made by the noble Lord, Lord Grimond. I can well understand a situation arising where, in order to provide some kind of restraint, and knowing the cargo in the vessel or the nature of the contents but not the direct location, one needs to have the kind of general designation without being specific. I personally am satisfied from what the Minister has said on those amendments.

    I shall certainly withdraw my amendment to the amendment that the noble Lord moved. I think that my noble friend understands clearly that I find a certain amount of nonsense going on in this Bill, and I shall be happy to come back at Report stage if it is not sorted out.

    Amendment to the amendment, by leave, withdrawn.

    I am slightly intimidated by what the noble Lord, Lord Sandford, has said, in case I have not moved my amendment. If I have moved it, I should now like to withdraw it.

    Amendment to the amendment, by leave, withdrawn.

    Line 20, at end insert—

    ("(2A) Before making any such order the Secretary of State shall consult the relevant local authority and the owner of the land or sea-bed.").

    The noble Lord said: I beg to move Amendment No. 3, with which I think it is convenient to take Amendment No. 5. If the Committee would first look at Amendment No. 5, that proposes to leave out subsection (4)( c) of Clause 1. That subsection enforces on the Secretary of State the need to have the agreement of the owners or occupiers of any land before he can designate it as a controlled site. That is to say, the owner or occupier of land has a complete veto, as I understand it. If he does not agree, then the site cannot be designated.

    I do not see any good reason why the owner or occupier should have an absolute veto. I appreciate that he ought to be consulted, but why he should have a veto I am not certain. Secondly, I am not clear who are the owners or occupiers, or about the definition of "land". In Orkney and Shetland the udal landowners own the bed of the sea down to low watermark, and all around Britain the bed of the sea within British waters is either owned by the Commissioners of Crown Lands or by the Crown itself, or by the udallers.

    As the Minister will know the Commissioners of Crown Lands are different from the Crown, and I should like to know whether he intends that they count as owners of land, and if so whether they are entitled to be consulted and indeed to veto any proposals to declare a site in their case below high watermark everywhere except Orkney and Shetland.

    All that is needed is that there should be consultation. I believe that there should be consultation not only with the owners or occupiers but, more particularly, with the local authorities. As is well known, it is the "Royal Oak" which has created a good deal of the anxiety which led to this Bill. It is the Island authority, or their predecessors the county authority of Orkney, who have been concerned with the "Royal Oak". It is the fishermen, and to some extent divers and tourists, who are interested in what happens to wrecks of this sort, and it is the local authorities who should be in a position to represent the views of the fishermen and indeed of the tourist industry in their area.

    I should have thought that both the designation of vessels or aircraft, or the designation of sites, should involve some contact with local authorities. I believe that the Minister rather fancies notification. In any case they should be made aware of what is happening and be given an opportunity to represent their own case and that of the people affected. We should clear up whether it is intended that the people who control the seabed count as owners or occupiers. I daresay there may be a small point in connection with common lands and common grazings. I take it that in the case of the owner-occupier that would be the Grazings Committee. But I do not know whether the Government have taken into account the possible difficulties of dealing with the situation on common land where a good many aircraft crash.

    I therefore beg to move the first of the amendments which stand in my name. I am fully aware that they will need redrafting. I hold no copyright in the profession of drafting. But I think the purpose is clear: it is to bring in the local authorities, to get rid of the absolute veto which owners and occupiers have under the Bill at present, and to make it quite clear who is an owner-occupier and what is the status of people, udallers and the commissioners of crown lands who claim an ownership of the bed of the sea. I beg to move.

    8 p.m.

    This amendment, taken in conjunction with Amendment No. 5, is more restrictive than the current provisions in some ways but less restrictive in others. It would require us to consult a local authority before designating a vessel or a controlled site. I presume the noble Lord intends such consultation only where the wreck lies within a local authority's boundary. As he is no doubt aware, this would exclude most areas within territorial waters. This is no great imposition, but we do not believe it to be necessary unless the controlled site is on land controlled by the local authority. Clause 1(4)(c) as it stands would require such consultation in the latter case. I understand that the noble Lord has it in mind that the local authority would protect the interests of sports divers and fishermen. The noble Lord referred to this just now. We are already consulting the organisations which represent sports divers and fishermen. I am sure that this is the best way to deal with the legitimate concerns of both these groups. To consult separately with local authorities, I believe, would only confuse matters and add unnecessarily to their burden.

    The amendment would also require us to consult the owners of the seabed. Most of the seabed in United Kingdom waters is owned by the Crown. We would consult the Crown Estates Commissioners about any areas of seabed we would wish to designate under this Bill. Any problems relating to private rights are, I believe, best resolved through this channel. So far as international waters are concerned, it would be our policy to consult the Foreign Office before designating a controlled site.

    These amendments would in other ways make the Bill less restrictive than at present. In the Bill as drafted the Secretary of State must satisfy himself that owners and occupiers do not object to the terms of an order designating a controlled site. If the noble Lord's amendment were accepted the Secretary of State, having consulted the owner, could proceed to designate the site even if the owner objected. We are not particularly keen to be given this power. When the remains of military aircraft are discovered on private land we rely heavily upon the co-operation of the landowner. This co-operation may be jeopardised if designation orders could be made against his wishes. Owners may become reluctant to allow us on to their land to inspect crash sites. I am sure the noble Lord would not wish to place us in that difficulty.

    I am not entirely clear on the position on common land, to which the noble Lord referred. Perhaps I could take some advice on that and write to the noble Lord. But I hope in the light of the difficulties that I have described the noble Lord will feel able to withdraw his amendment.

    Arising from my noble friend's reply, will he please inform the Committee whether the Foreign Office will consult people over designation in international waters over ownership, and with whom they will consult?

    That is not quite what I said. I said that my department would consult the Foreign Office in that situation.

    I must confess that I am not wholly satisfied with the noble Lord's reply. I am not sure that the Government have taken on board the position of fishermen who may be considerably affected by the orders made. I am not sure that I am convinced that owners would have an absolute veto, without apparently giving any reason. But these are matters to which we might return. In the meantime, I beg leave to withdraw my amendment.

    Amendment to the amendment, by leave, withdrawn.

    moved, as an amendment to Amendment No. 1, Amendment No. 4:

    In subsection (4), leave out paragraph (a).

    The noble Lord said: This amendment proposes to leave out Clause 1(4)( a) of the noble Lord's own amendment. It seems to me that this paragraph is one of those constantly written into Bills which are for the prevention of lunacy in Ministers! It is a difficult question as to how far one is to presume the possibility of lunacy in Ministers. Personally, I am suspicious of all Ministers and am inclined to think that they may go mad. But I think that this paragraph is unnecessary. I am sure that no Minister would designate a controlled site after the remains had been removed from it. I cannot believe that even the wildest Minister would designate the Imperial War Museum, for example, as a controlled site. Therefore, unless one imagines that Ministers are liable to go totally round the bend, in the interests of brevity we might omit paragraph ( a) of subsection (4). I beg to move.