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

My Lords, precise details of the number of cancellations by prospective tourists, since the attack on Libya, are not available. At worst, the tourist industry had estimated that the number of visitors from the United States of America could be down as much as 15 per cent. this year, representing a drop in tourist spending of some 3 per cent.

Nevertheless, there are signs of an early upturn in business. The Director-General of the British Tourist Authority, who recently returned from the United States, has said that forward bookings are now "back on the right track" and that tourist inquiries of BTA offices are returning to their former levels. I can also assure your Lordships that the Government are taking all possible steps to convey the message to prospective visitors that Britain is a very safe and enjoyable destination.

My Lords, is it not ironic that an action which was described by the British and American Governments as making the world a safer place to live in has had as its first impact a sense of fear so far as American tourists are concerned? Although I realise that the Minister cannot give precise numbers, is it not the case that the tourist industry itself estimates that 30 per cent. of the American tourists expected will not come this year, which represents 30 per cent. of a quarter of all the tourists expected in Britain?

No, my Lords. I must leave the sense of irony to the noble Lord; I do not share it. I should have thought that making the world safe from terrorists was the best possible way to lay the foundation for a good international tourist business. But I must tell your Lordships that it appears that the temporary drop in the number of American tourists came primarily from those who were coming on group tours. The vast majority of American tourists coming under their own resources continue to come. Indeed, if I may quote from the Director-General of the British Tourist Authority, who is just about to retire after 40 years in the tourism business, he said:

"Consumer inquiries at BTA's five offices in the United States are returning to former levels, with the New York office alone reporting in excess of 500 inquiries a day during the past week"—

and that was last week. He went on to say:

"If there is one thing I have learned in my 40 years of promoting travel to Britain, it is never to underestimate the power of recovery of the American travel market."

My Lords, is the noble Lord not puzzled by the tenor of this Question and the inference in it? Surely it is the kidnapping and murder of American citizens, and the hijackings of American aircraft, that may have dissuaded some Americans from crossing the Atlantic. And is it not a fact that many American tourists, when they cross the Atlantic, want to visit not merely this country but other European countries? Might it not be the fact that some European countries have not responded as strongly as this country which has dissuaded American tourists from coming?

My Lords, if I may make a confession to your Lordships' House, I have often felt some puzzlement in looking at the origin of some of the Questions from the noble Lord. But I must say that we should not forget that, also, before whatever action was taken against Libya, an American family, including an 18 month-old baby, was blown out of an American plane by terrorist action. What we have to do is work together in a concerted effort to reduce the level of terrorism and to make this a world safe to travel in.

My Lords, does my noble friend the Minister agree that we must look at all possible sources for the reluctance of some Americans to visit us? May I call his attention to a remark made to me by an American who frequently visits this country and has done so over many years? What depresses him is what he finds for the first time this year—concerted anti-American propaganda, of which we have had some very marked examples in Questions in your Lordships' House in recent months?

My Lords, I should make it very clear that we welcome visitors from all countries to our shores. We welcome those who speak our language as well as those who do not. Our overriding desire is to ensure that those who come to our shores wish to come here again.

My Lords, will the Secretary of State and the House accept my apology for late entry? I came in when the noble Lord was in fact speaking. Has he had an opportunity which I have missed, to congratulate British Airways on its massive initiative in having recouped a very great deal of the lost traffic by a splendid and professional appeal to the United States, to its people and to their interest in a little free travel? If he has the opportunity to do that now in the discussion here, could he also end it on the very positive note that there are a great many American people already appearing here and that the trade, the people of Great Britain and everyone in this House welcome their presence?

My Lords, I am very glad to hear what the noble Lord has said.

My Lords, is this not a strange Question? What is it trying to say? It seems to me that it is saying, "Never stand up to a bully in case you get hurt."

My Lords, is the noble Lord aware that some Canadians are alleged to have cancelled coming to Europe for fear of Sikh terrorists blowing up Air India planes, and that the Libyan terrorists are not the only ones in this world?

My Lords, I am very grateful to the noble Lord. That surely demonstrates, once more, that an essential part of the policy of all civilised nations must be to eliminate terrorism, whence-ever it comes. Just to assure all your Lordships, may I say that for the first three months of this year, which are the only months for which we have yet published figures, the number of visits increased by 10 per cent. to 2·6 million and that visits from North America increased by 15 per cent., while spending was constant and increasing. I suspect that we shall show a drop, particularly from North America, in April and May, but I have no doubt that with many events to come we shall see a resumption of the sustained growth of this economy.

My Lords, will the noble Lord not agree that the question of terrorism may have been only a single contributory factor in the particular decisions that have been taken and that probably the pound-dollar relationship had more impact on the tourist figures? We hope that the so-called cancellations may be only postponements of decisions to visit the United Kingdom. I think they are and that many Americans may be visiting over a number of years and can easily postpone a visit and come next year.

Yes, my Lords, as well as the pound-dollar relationship, there was the dollar-deutschemark relationship and the dollar-French franc relationship. The American dollar dropped in purchasing power which initially must have affected some decisions. But we have seen in the past six months a drop in the price of oil. We are now beginning to experience a considerable reduction in the cost of transatlantic fares and I have no doubt that all these things will level out.

My Lords, while I agree with much that the noble Lord has said, may I ask him to beware of falling into the trap of rewriting history? Is it not the case that the cancellations became apparent, not after the hijackings and assassinations which he has mentioned, but after the attack on Libya?

No, my Lords; it is not for me to say what is in the mind of Americans. But I suspect that it had a great deal to do with the singling out of Americans wherever they were overseas.

My Lords, will the noble Lord the Minister agree—I think he is bound to do so—that all civilised people and all civilised nations must be totally and absolutely opposed to any form of terrorism and to any financiers of terrorists? Will he not further agree—and perhaps the United States acknowledges this in that the President of the United States has agreed to the extradition of IRA terrorists, who are financed by organisations in the United States—that we have behaved in an exemplary manner? The argument really is about this: there can be right ways, tough ways and hard ways, and there can also be wrong ways and dangerous ways, of dealing with appalling terrorists.

My Lords, that is a long way from the Question, which is specifically about Libya. But I will agree that we must deal with terrorism in the best way possible. The best way is often a firm way, but we must deal with it.

My Lords, is the Minister aware that cancellations may well have something to do with our lousy weather?

My Lords, this morning I had the great distinction and pleasure of taking the Secretary General of the People's Republic of China, Hu Yaobang, down the River Thames. I regret to inform all in your Lordships' House that it did not stop raining. That did not help the tourist industry.

My Lords, does the noble Lord the Minister recall that the Prime Minister herself went to the United States, spoke on television, and appealed to American tourists not to cancel their bookings, saying that Britain is a much safer place than New York? Was she not so concerned about the loss of revenue to the tourist industry that she went on breakfast television, noonday television and every other television network in the United States to make that appeal?

My Lords, my right honourable friend the Prime Minister gave an interview which was shown on American television and which I believe did a great deal towards reassuring American tourists. The wife of the President, Mrs. Nancy Reagan, announced that she was coming to London for the Royal Wedding. What we have seen and what the BTO is reporting now is a resumption of the former situation. I hope that the cancellations will just turn out to be an unhappy incident.

My Lords, is it not a peculiar form of priorities for the Prime Minister of this country to go on American television to appeal for the tourist industry when the Government have always said—and the noble Lord himself has constantly said—that the Government cannot intervene with regard to manufacturing industry? Considering that it requires a 3 per cent. increase in service industries to make up a 1 per cent. reduction in manufacturing industry, is it not a peculiar set of Government priorities that the Prime Minister should be heading the drive of the tourist industry—in other words, the service industries—but removing herself and the Government from any intervention in the collapse of manufacturing industry?

My Lords, I expressed a sense of puzzlement at the motives behind the original Question. I must confess to be even more puzzled at this supplementary question. If my right honourable friend the Prime Minister is asked to give an interview to be shown on American television, what could be more natural than that she should say that this country is a safe place to be, and invite American tourists to come back? We need industry, we need the service sector, we need tourism—we need everything that creates wealth and promotes jobs.

My Lords, with regard to my noble friend's sense of puzzlement, is he not surprised that the noble Lord who asked the Question is unable to link courage and fear? Is he not aware, as I am sure he is, that any time I have had to do anything particularly courageous, I have felt very considerable fear up to the point of being physically affected? If one is courageous is not the ultimate result that one's friends back one considerably more because of one's courage?

My Lords, we are now straying a very long way indeed from the Question. I think that we should let it go at that.

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

My Lords, the British and Spanish Governments are discussing their differences over Gibraltar in the friendly and co-operative spirit that befits two European allies and partners. Those discussions are taking place against the background of the British Government's commitment to honour the wishes of the Gibraltarians.

My Lords, I thank the noble Baroness for that reply. Is she aware, however, that circumstances have changed very dramatically over the past few years; that Spain is now a democracy and a member of the European Community? Would it not be in the interests not only of Great Britain and Spain but also of the people of Gibraltar in the longer term that sovereignty over Gibraltar should be transferred to Spain, subject to the necessary safeguards, such as a lease-back or any other arrangement that may be appropriate?

My Lords, we are fully aware of the changes and transformations that have occurred in Spain over the past few years, and not least of the importance of Spain's entry into the European Community in that context. The important point in this respect is that the process of negotiation has begun and that the climate has been improved. As King Juan Carlos himself said here in this Parliament, there remains a long way to go. It is very important to us that discussions on sovereignty at all times take place against a background of firm political commitment to the Gibraltarians.

My Lords, is my noble friend aware that relations between this country and Spain are not helped, but are indeed hindered, by linking them with a claim to override the wishes of 27,000 British subjects who, so far at any rate, have indicated that they desire to remain British? Will my noble friend advise our Spanish friends that pressing that point will do harm and not good?

My Lords, we are fully aware of the wishes of the people of Gibraltar. We fully intend to respect those wishes and I believe that the Spanish Government are fully aware of that commitment on our part.

My Lords, we have noted with great interest what the noble Baroness has said. Is she aware that on 13th May Sir Joshua Hassan said that it was his firm intention to introduce a new impetus in the near future in respect of the Brussels Agreement on Gibraltar? Will the noble Baroness tell the House what form that impetus has taken thus far?

My Lords, the Chief Minister of Gibraltar has always been fully consulted about and involved in negotiations. He himself welcomed the references made by the King of Spain during his speech to this Parliament to the progress that was being made. At present I am not in a position to inform the noble Lord of any new impetus since 13th May. I can only say that with the British presidency of the European Community coming up the incidence of meetings and contact between Spanish ministers and the British Government will, if anything, increase. Within that context, I have no doubt that more progress will be made.

My Lords, is there any reason to suppose that the inhabitants of Gibraltar, any more than the inhabitants of the Falklands, should have a veto on any decisions as to their future that may be arrived at, after negotiation, which, in the opinion of the Parliament in Westminster, are in the interests of those inhabitants, of this country itself, and indeed of the peace of the world?

My Lords, any attempt to make a comparison between Gibraltar and any other particular part of the world can be difficult and dangerous. I can only reaffirm to the noble Lord that Her Majesty's Government have guaranteed to the people of Gibraltar that their wishes will be taken into consideration in any negotiations.

My Lords—

My Lords—

My Lords, it must be one noble Lord or the other. We have heard one noble Lord from the Liberal Benches. Perhaps we may now hear my noble friend and then the noble Viscount.

My Lords, I am grateful to my noble friend the Deputy Leader of the House. Bearing in mind the provisions of the Gibraltar Act, would my noble friend not agree that it is rather more important that the people of Gibraltar should reconsider their attitude towards the Kingdom of Spain rather than the United Kingdom reconsider its attitude towards the future of Gibraltar?

My Lords, since the full opening of the frontier in February of last year there has been increased contact and co-operation between the Spanish people and the people of Gibraltar. I believe that such contact can only be good and of benefit to the ultimate outcome

My Lords, might it not be a useful step forward if Spain were to offer dual nationality to those in Gibraltar?

My Lords, it is not for me now to pre-empt the negotiations that are currently in progress. It may be that Spain would make such an offer and we would consider it at the time.

My Lords, as these negotiations are taking place in a friendly and constructive fashion, might it not be more helpful that they should be continued rather than made sour by ill-advised questions in your Lordships' House?

My Lords, I can only agree wholeheartedly with the noble and learned Lord.

My Lords—

No!

My Lords, it takes more than a trivial remark to prevent me from saying what I have to say. I am very concerned about the future of the people of Gibraltar. Therefore I ask the noble Baroness whether she is in a position to tell the House this afternoon that before any ultimate decision is made the people of Gibraltar, who have always exhibited such great loyalty to Great Britain, will be fully consulted, and that nothing will be done until such consultation has taken place?

My Lords, I believe that I have already said enough to convince the noble Lord that that will be so. We are all very concerned about the wellbeing of the people of Gibraltar.

My Lords, is the noble Baroness aware that her use of the verb to "honour" governing the noun the "wishes" of the inhabitants will be observed with the greatest interest throughout Europe? Is the noble Baroness in a position to comment further on what that phrase means in this context? How does it differ from "abide by", or "pay attention to", or "give overriding value to"?

My Lords, the British people have a reputation for honouring their agreements in the international context, and my use of those words will be applied in that particular context also.

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

My Lords, in the next Parliament we hope to introduce legislation to reform the Rent Acts in order to encourage the supply of homes for renting in the private sector. More immediately, in the current Housing and Planning Bill we are seeking to extend the assured tenancy scheme for new property so that it will cover also property that has been improved, repaired or converted. We continue to encourage local authorities to bring empty properties back into use and to give priority to people with special needs, and we provide substantial funding for housing associations.

My Lords, is the Minister aware that I greatly welcome his undertaking that the Rent Acts will be amended and also that empty accommodation will be made available to occupiers? Is the Minister aware also that, excellent though owner-occupation is in many ways, it will never solve the problems of the homeless, and that in addition to the admirable projects he has mentioned, there must be more resources made available to provide accommodation for renting?

My Lords, I am grateful for the noble Lord's welcome of the announcement I have just repeated. So far as concerns homeless families, which I understand to be the noble Lord's particular worry, finding permanent accommodation for homeless families is of course a major priority for local authorities in the few localities where homelessness is a serious problem, and it is taken into account when making HIP allocations.

New building, however, is not always the best answer. A great deal can be done to improve utilisaton of existing housing, both public and private. In some cases there are far too many empty dwellings, and that is an affront to the homeless. The Audit Commission has estimated that if authorities could improve their reletting times by around 20 per cent. an additional 20,000 dwellings could be made available for occupation.

My Lords, in considering further legislation will my noble friend bear in mind that many more premises, or parts of premises, would be let if it were not so difficult to get rid of tenants who turn out to be unsatisfactory or are unable to live happily with other occupants in the same building?

My Lords, I agree with my noble friend to the extent that our aim must be to create conditions in which landlords have the confidence to let, to improve their property and to provide more rented accommodation. Equally, the tenants must have a measure of security, and it is that balance which we need to achieve.

My Lords, is the noble Lord aware that it is utterly futile to talk about the mobility of labour unless adequate rented accommodation at reasonable rents is made available?

Yes, my Lords, I fully agree with the noble Lord.

My Lords, is my noble friend aware that it is very welcome news that the Government are to grasp this nettle of the Rent Act? Will he bear in mind, when framing the legislation, the very admirable report by His Royal Highness the Duke of Edinburgh and the admirable debate we had in this House, from which many good lessons emerged which could be incorporated in the legislation?

Yes, my Lords, I confirm to my noble friend that both the report of the inquiry into British housing chaired by His Royal Highness the Duke of Edinburgh and the recent debate on that subject, and linked subjects, are undergoing great scrutiny by my honourable friend.

My Lords, will the noble Lord accept that I agree with what the Minister said about the necessity of providing for lower paid workers? Is it not rather remarkable, however, that this year the housing associations, to which the Minister has paid great tribute, are in real terms receiving less money than last year? Moreover, as the allocation is, quite rightly, being given mostly to the inner cities, many of the local housing associations are this year in great difficulties. They do not have sufficient allocation even to keep the staffs they have built up over the years. As housing associations are a means of providing proper accommodation at a reasonable rent for lower paid people can the Minister at least consider refunding the money that has been taken away from so many housing associations so that the position can be improved?

My Lords, it is true that this year's provision for the housing associations' gross programme is the same, more or less, in cash terms as for last year. Some housing association schemes will, of course, also be funded by local authorities. The problem to which the noble Lord has drawn my attention is, I confess, new to me and I will certainly look into it.

My Lords, has the noble Lord noticed that at this very moment the Government are busy advising African nations that the best way to produce more food is to remove restricting laws which inhibit the proper working of agriculture? Is not sauce for the goose sauce for the gander?

My Lords, I am afraid I find it rather difficult to identify the relevance of that supplementary question to the Question asked by the noble Lord opposite.

My Lords, the Minister referred to the Government's intention to repeal the Rent Act, but is he not aware that the last time a Conservative government did that, in 1957, no extra houses for letting were produced at all? All that happened in taking away the protection from the tenant was to force up rents and introduce Rachmanism, which no one wants to see return. Since the Government took office there has been a loss of 820,000 properties for rent in all sectors, the waiting lists have increased from just over 1 million to 1.2 million, the homeless have increased from 53,000 to 83,000, and requests for sheltered and wheelchair accommodation now stand at a quarter of a million. Does not the Minister agree that the measures outlined in his Answer to the noble Lord, Lord Grimond, are totally inadequate to deal with the problems we now face?

No, my Lords, I do not see that at all. What I do see is the ability of your Lordships' House to identify and learn from the lessons of history. I have no doubt that we shall also do that on this occasion.

My Lords, in regard to the further steps that the Government are taking, may I ask that they do not overlook the need to increase the availability of rented accommodation for university students in urban areas, bearing in mind that many are in desperate difficulties and that some are being outrageously exploited?

My Lords, we most certainly will not overlook that. There are, of course, special housing associations to look after this problem which in certain university and polytechnic towns and cities are meeting the problem very well.

My Lords, is my noble friend aware that a councillor from the London Borough of Southwark recently admitted that over 2,000 dwellings were ready for occupation but were empty? If my noble friend is aware of that fact will he draw the attention of the housing Minister to it?

My Lords, I am grateful to my noble friend. I was not aware of the statement by the councillor and I will most certainly draw the attention of my honourable friend to the facts that my noble friend has revealed. This goes to show how important it is to have the downtime on let properties as short as possible so that more people can be housed as rapidly as possible.

My Lords, I beg leave to ask the Question standing in the name of the noble Lord, Lord Chelwood, on the Order Paper.

My Lords, netting for salmon and migratory trout is already tightly regulated in United Kingdom waters. Existing legislation provides powers further to restrict and, in appropriate circumstances, terminate commercial netting for salmon in England and Wales and, subject to minor exceptions, elsewhere in the United Kingdom.

My Lords, even at this late stage will not the Government consider increasing the weekly close time, particularly in Scotland, from only 42 hours per week?

My Lords, we are taking powers in Clause 3 of the Salmon Bill to enable weekly close times in Scotland to be increased by statutory instrument. I fully understand the reason why the noble Baroness has asked this Question, and I have to say, in responding in the way I have, that we must also consult all interested parties before we take a final decision.

My Lords, is the noble Lord aware that I greatly welcome the announcement in Committee in another place yesterday that the Government are to establish a standing advisory committee on salmon conservation under an independent chairman? That goes a long way towards meeting the wishes of those of us who argued for a national salmon policy when the Salmon Bill was being considered by your Lordships' House.

On a specific point, may I ask whether the restrictions on drift netting for salmon off North-East England, announced by the Government last November, are all in force during the current season?

My Lords, I am grateful to the noble Lord, Lord Moran, for his welcome for the announcement made in Standing Committee in another place by my right honourable friend the Minister of State that a standing advisory committee on salmon conservation is to be set up. Indeed, that was a response to opinion in another place but also very much took into account the views expressed on all sides of your Lordships' House.

I know that it is the firm intention that the restrictions on the north-east fishery should be in place during this season. I cannot guarantee that all of them are in place at this moment, but I will write to the noble Lord to give the exact state of play. However, I repeat that it is our intention that they shall be in place during this season.

My Lords, would my noble friend agree that the passing through this House of the Private Member's Bill dealing with safety at sea would be an ideal opportunity to insist that the trawlers operating in the Northumberland drift net fishery should put their numbers and their licence numbers on top of their wheelhouses so that we are able properly to police this fishery from the air?

My Lords, this is a point that was made by my noble friend during the passage of the Salmon Bill a couple of months or so ago. I am therefore familiar with it. Indeed, I am sure that the Government would wish to look with interest on the proposal if it were to form part of a Private Member's Bill.

My Lords, is the Minister aware that the traditional salmon netting round the coast of Scotland is under sufficient regulation and that to talk of ending salmon netting there would be a severe blow to the many communities which derive considerable income from it?

My Lords, I am interested to hear that view from the noble Lord, which certainly the Government will take with seriousness.

My Lords, further to the question of the noble Lord, Lord Mackie, is the noble Lord the Minister aware that the fishermen of Northumberland have netted salmon for many years and that the danger to the Atlantic salmon does not come from their activities? Will the noble Lord bear that in mind?

My Lords, we certainly made it clear during the passage of the Salmon Bill that we were bearing precisely in mind the view expressed by the noble Lord, Lord Glenamara. The noble Lord will remember that further restrictions are to be introduced so far as the north-east drift net fishery is concerned, and their effects will be reviewed after three years. I am sure that the noble Lord will agree that we must not pre-empt that review.

My Lords, have the Government taken note of the fact that Norway has recently announced conservation measures, including the banning of monofilament nets from 1988, the ending of all drift netting for salmon from 1989 and the extension of the close season by two weeks? Will this not leave this country and the Republic of Ireland in the unenviable position of being the only countries which are represented in NASCO that will not have announced radical measures to conserve Atlantic salmon stocks?

My Lords, Great Britain already controls salmon fishing very tightly and has a better record on conservation than many countries. I believe that the further measures contained in the Salmon Bill will be recognised internationally as enhancing that contribution.

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 p.m. for approximately one hour and that during this adjournment the Third Reading of the Housing (Scotland) Bill will be taken.

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

moved Amendment No. 125ZA:

had given notice of his intention to move Amendment No. 125A:

I do not need to go over all the ground again, but it will be obvious to the Committee that part of our duty in perusing a Bill at Committee stage is to raise questions as to whether the clause should stand part of the Bill so as to obtain a clearer understanding of the Bill and to see whether it requires amendment in any particular respect. Of course it is our responsibility to do that during the Committee stage.

We cannot carry out our responsibilities in the time allotted and therefore, so far as concerns these Benches, we shall not be raising questions on many of the clauses as to whether they should stand part of the Bill, as we would have done but for the restriction in time. Therefore, we shall be compelled to raise them at Report stage, and if necessary to move amemdments at a later stage, for example at Third Reading, if that proves necessary in terms of the explanations which we need but for which at present we have no time to ask.

I think perhaps I ought very briefly to say a few words in reply to the noble Lord and to the noble Lord, Lord Stoddart. The Committee ought to be aware, when the noble Lord, Lord Diamond, calls in aid the fact that this Bill was guillotined in another place, that after the guillotine was imposed the discussion on the guillotined clauses never in fact ran up to the time when the guillotine would have fallen at each successive moment. Therefore it is reasonable for me on the government side to make the point, which is a valid one, that discussion was not curtailed in the way that is being suggested, although it is true that a guillotine was imposed.

Regarding discussion being curtailed in Committee, we are grateful to noble Lords on the Benches opposite for agreement that we can finish the Bill today. As to whether there has been a full opportunity for the Committee to have a full discussion on the Bill so far, I leave it to all those who have kindly sat through the long sessions to decide that.

moved Amendment No. 133:

I have a great deal of sympathy with the speech made by the noble Lord, Lord Bruce. It is a few years ago now but I once initiated in another place a debate on the problems facing small and medium-sized businesses. As a consequence of having initiated that debate, and also being very conscious indeed of the considerable problems that face small businesses at this time, I have sympathy with the amendment. I therefore appeal to my noble friend to consider such an advisory body. With the noble Lord, Lord Bruce, I feel that small businesses have a great deal to contribute to our national well-being and to the national economy as a whole.

I believe that it is, as the noble Lord rightly said, an integral part of the philosophy of the party which I support, and of the government of the day, that the smallest businesses should receive the greatest encouragement. I therefore support the amendment.

I too, should like to support the amendment. I feel that small and medium-sized businesses play an increasingly important role in this country, a role to which I believe all parties subscribe. It is important therefore that their interests should be safeguarded as much as possible so that they may continue to help towards the regeneration of industry in Britain.

One of the safeguards that small businesses should have is for it to be ensured that under the new regime for gas their interests and possible complaints or concerns will be adequately and quickly dealt with. A separate body to do that, manned by people who are familiar with the problems of small businesses, would seem to be appropriate.

The amendment, in part, deals with what I was trying to put forward in a previous amendment. One is worried because there will be competition among various fuels and small businesses cannot change overnight from gas to electricity, and so on, as perhaps most larger companies can. One feels that it is vital that small businesses should be protected and encouraged as much as possible. The amendment goes a long towards doing that.

I can start on a note of agreement with those noble Lords who have spoken because the Government also agree that small businesses are crucial to this country's long-term success. As noble Lords are aware, we took a great deal of trouble to discuss our proposals for the privatisation of the gas industry with a wide range of interested parties, including a number of individual companies and of course the CBI. None of those interested parties expressed the view that there was a need for more than one body to represent consumer interests to be set up under the Gas Bill.

We are providing just that in the form of the Gas Consumers Council. The council is given the responsibility to deal with complaints from all types of customer and will naturally equip itself to deal with all the problems of those customers whether they be small businesses, domestic consumers or large industrial consumers. The type of advisory group which the noble Lord, Lord Bruce, and his friends have proposed in Amendments Nos. 133 and 143 would therefore be unnecessary.

I also suggest that it would be curious to provide, as Amendment No. 133 seeks to do, that complaints made by small businesses should be handled by a body which would not be independent of British Gas and that complaints from all other customers should be handled by the Gas Consumers Council which is an independent body. As for the suggestion contained in Amendment No. 143 that the Gas Consumers Council should establish a group within the council to concentrate on the problems of small businesses, I point out to the Committee that the Gas Consumers Council will be able to organise both itself and its staff in the way that it sees fit. If problems from small businesses prove to be a large proportion of the complaints received, no doubt the council will gear itself to deal with that problem.

It is impossible to predict the types of problems with which the new council will deal. It may be, for instance, that schools and colleges, or horticultural and agricultural groups will form the most vociferous complaints group. I suggest that it would be unwise to tie the council's hands in the way proposed by the amendment. It would be better to leave the council able to meet consumers' needs as it sees fit in the light of experience.

I am anxious to make progress and therefore I am going to follow the example given by others by being brief in my reply to the suggestions which have been made. I am also anxious to enter into the spirit of goodwill which obviously abounds within the Committee today. I paid particular attention to the contribution made by my noble friend Lord Elliott and I am prepared—this I shall do without commitment—to take this matter away again and to look at it very carefully. I know that noble Lords would wish me to go further than that, but I cannot do so at this time. I am not satisfied that the creation of yet another body is the way to achieve what I think we all seek to do, but I am prepared to take this amendment away, to examine it again and to give consideration to what has been said, before Report.

Before the noble Lord who is in charge of the amendment decides what advice he will offer to the Committee, may I suggest to the noble Lord the Minister—I am not asking for any further commitment—that, in giving further consideration to the views behind the amendment, he might consider whether it would be appropriate, when appointing members of the consumers council, that one such member should have special knowledge of and interest in small businesses.

That is a reasonable request. I shall certainly draw the attention of my noble friends and my right honourable friends to what the noble Lord, Lord Diamond, has said.

The noble Lord is at his genial best this afternoon. Without any hesitation, I accept his assurance, albeit qualified in the terms that he has qualified it, that he will look at the matter again. In token of the mutual warm regard that there is on this matter, I ask the leave of the Committee to withdraw the amendment.

moved Amendment No. 138A:

I am grateful to the noble Baroness for moving this amendment. It was probably myself who answered her most recent Question on the matter relating to the resale of electricity rather than gas. As the noble Baroness reminded us, this question has been looked at from time to time in respect not only of gas but also of electricity. Most recently, there was the report of the Director General of Fair Trading last year.

The DGFT pointed out that there was far less evidence of abuse in respect of gas than electricity, and made no recommendations about resale of gas. Our view is that the introduction of a criminal sanction is not needed, and, more importantly, would not be helpful to a tenant. In circumstances where a tenant has been overcharged, he is likely to be nervous of initiating criminal proceedings against the landlord because of the inevitable result this would have of damaging the often delicate relationship between landlord and tenant. We believe that the tenant has some incentive to take action where he has the prospect of recovering the amount he has overpaid. There would however be no such incentive in instituting criminal proceedings, and I believe therefore that a criminal penalty would be ineffective in discouraging overcharging by landlords. That is the answer to the noble Baroness's first question.

I would briefly point to the action the Government have taken in response to the director general's report in respect of electricity where there is evidence to suggest that there is a problem. As the noble Baroness said, we propose to bring in as soon as possible—I cannot, as she will be aware, go any further than that and cannot pre-empt what might be in the Queen's Speech—a consumer goods and services Bill. Once that is on the statute book, an order will be made that will require the price being charged for electricity by landlords to be clearly set out in an itemised statement. Failure to comply with this order, or the giving of a misleading statement, would give rise to a prosecution by a trading standards officer.

I can reassure the noble Baroness that if at any point there was evidence to suggest that a significant problem had emerged in relation to the resale of gas, a similar order could be made speedily. That answers the question raised by the noble Baroness that we do not at this stage propose to introduce both at once. But if a problem did arise, I can give the assurance that we could speedily do so.

I believe that the most effective way of providing protection for the consumer in the present situation is to enable him to recover the excess through civil action, as we have done in the Bill. As I have already explained, there will be available in the new consumer goods and services Bill a facility for providing additional enforcement if this becomes necessary. I hope that on the basis of what I trust have been reassuring words the noble Baroness will feel able to withdraw the amendment.

The Minister's reassurance is not totally satisfactory. While admittedly this problem, on the basis of the evidence collected by the Office of Fair Trading, is linked to electricity rather than gas, there may well be tenants using gas who are equally disadvantaged. The failure to deal with the problem of overcharging in respect of electricity may, perversely enough, encourage a spread of the problem to charging for gas. Therefore, while one is to some extent reassured by the Minister's statement that in forthcoming legislation there will be powers to make orders to deal with electricity, it appears that with regard to the present position it is only electricity that is considered to be in need of treatment and that the position on gas can remain much as it is. I think that that, too, is probably an unsatisfactory state of affairs, but it is a matter for the noble Baroness, Lady Burton of Coventry, to judge.

I also felt that there was an element of indecision in the Minister's statement when he said that the tenant might be reluctant to see criminal prosecutions brought against his landlord in case the tenancy itself were prejudiced. But he seemed to feel that if the trading standards officer received evidence of overcharging against the statement of charges to be made and subsequently initiated prosecutions that would preserve a relationship between the tenant and the landlord which would not be harmed by action by the trading standards officer compared with direct action by the tenant. I think that is a little unreal and unworldly. We do not find it particularly reassuring.

Neither did the Minister say very much about whether the creation of British Gas as a private and profit-making company has any bearing on this situation. The electricity authorities, I well know, have co-operated extensively in an attempt to eliminate this problem. Their only difficulty has been that the law does not allow them to do very much about it until such time as the Minister takes the action which he indicated may be going to be taken in his reply to the noble Baroness this afternoon. I therefore feel that there may be something to be said for providing such legislation in this Act. To that extent we on these Benches are in support of the amendment, although I shall obviously leave it to the judgment of the noble Baroness, Lady Burton, as to whether or not she feels that the assurances that she has been given go far enough.

My Lords, I should like to support the view of the noble Lord, Lord Gallacher. It seems rather unrealistic to argue that a tenant who is concerned to keep on good terms with his landlord would somehow be ready to take civil but not criminal proceedings. I think that there is no difference between the two with regard to good relations.

We are concerned that there should be adequate sanction against those who may take advantage of their situation in the resale of gas, to make sure that they will be deterred from overcharging. We feel that the present provisions in the Bill do not go far enough.

The reply was given certainly in the spirit of what seemed to be good will. However, it did not get us very far. In fact, it did not advance us one iota from what I, and I am sure the Committee, knew.

This is an amendment about which, as I have said, all the gas consumer councils and people who are subject to this overcharging feel very strongly. It seems incredible to me that the noble Lord should talk about the good relationship with the landlord being affected if this were made a criminal offence. I can assure him that good relations are at the moment severely jeopardised by people who have not the knowledge to tackle their landlords on this matter, for fear of the embarrassing position in which they will be put. They have no alternative about that at all.

The noble Lord talked about the goods and services Bill. We have heard quite a bit about this, and from information that has been coming to me we are not sure what will be in this goods and services Bill. We might well find ourselves, after the next Queen's Speech, with no goods and services Bill. I gathered from what the noble Lord said today that, if the goods and services Bill was forthcoming, I shall not say that he would hope but we might expect to find in it the question of overcharging, and so on, for electricity, but nothing at all to do with gas.

I feel that people who are subject to this kind of over-sale by landlords should have some protection. They have none at the moment. I therefore propose to test the opinion of the Committee on this matter.

moved Amendment No. 139:

I interject only on one point. I wholly agree with the noble Lord, Lord Stoddart, on the responsibility of landlords with regard to installation. I do not think that there is any argument there. Landlords should be required to install safe appliances. However, there is the other half of the problem which the noble Lord, Lord Stoddart, raised, which concerns maintenance. I think that one ought to give a thought here to the responsibility of tenants as against landlords. Can landords always know whether appliances are being reasonably maintained by tenants? Is not a somewhat unfair responsibility being proposed in this new clause for landlords in that tenants are bound to have a better idea whether an appliance is safe and working than landlords who quite often own vast areas and vast numbers of properties? Therefore, I think that one ought to have a moment of caution with regard to the responsibility of landlords in the second half of the noble Lord's new clause—that is, the area of maintenance.

Perhaps I may just reply to that particular point because it is an important one. Indeed it is well understood. Of course tenants too have a responsibility for their own lives. That is accepted. I thought we had covered that in fact by the second section of the new clause, which reads:

"It shall be a defence for the person charged to prove that he took all reasonable steps and exercised all due diligence to avoid committing the offence."

I think that that is what we should expect of a landlord. Quite clearly he will inspect his premises and the appliances from time to time. We would expect that of him as a matter of fact, because he, rather than the tenant, owns the appliance. The landlord therefore has the responsibility. But if after having done that the tenant is then negligent and knocks the thing around, or knocks the gas stove around or takes it apart and does not put it together properly, that would be a proper defence. That is why we have put that second part in, because we understand the position of the landlord and wish to protect that position.

May I ask the noble Lord another question arising out of his original speech moving this amendment? The noble Lord used the expression "unscrupulous private landlords", and suggested that this amendment was directed against such people. Is it intended that this should apply only to private landlords? If a local authority or a housing association, or any other owner other than a private landlord, allows the equipment to get into bad order and a tragedy results, are they not covered by the clause? If so, why is the noble Lord picking solely on private landlords?

Secondly, I wonder whether the noble Lord has considered that in any event without this amendment if someone is injured because his landlord has installed or failed to maintain defective machinery of this sort, obviously under the ordinary common law he will have a right to sue for any damages he suffers. It may well be that it is more satisfactory to an injured person to recover substantial damages than to see a necessarily limited criminal penalty imposed on his landlord.

Those are two perfectly reasonable questions. The reason I referred to unscrupulous private landlords is that of course, generally speaking, local authority dwellings are unfurnished and the appliances will be provided by the tenant; therefore, the appliance belongs to him and he is responsible for its maintenance. Usually these appliances are installed in private furnished places, although I do accept the stricture of the noble Lord, Lord Boyd-Carpenter, that there are certain local authority and private housing associations which do furnish completely and install a cooker or some other appliance which may belong to them. In that sense, the noble Lord is probably right—I should not have referred only to private landlords. There are other landlords who could neglect their duty and the new clause does cover them. It does not refer to unscrupulous private landlords. I hope I have covered that particular point.

The other point the noble Lord, Lord Boyd-Carpenter, raises is that if someone is injured he would have the opportunity to go to court and claim damages. That would not be taken away by this new clause; as I understand it, he would still be able to do that. He or she could still claim damages. But, in the same way as the noble Lord believes in the nuclear deterrent, we believe that if this is a criminal offence it will be a deterrent against the purchase and installation by private landlords or by any landlord of appliances which were not safe. It will also be an incentive to them to keep those appliances safe. I do thank the noble Lord for raising these two important points and I hope I have been able to satisfy him on them.

I do not want to prolong this discussion, but I wonder why the noble Lord, Lord Stoddart of Swindon, thinks a criminal penalty—which sounds rather a powerful weapon, though presumably it would be distinctly limited in its impact—is more of a deterrent to a landlord. I am glad to know he accepts that his clause would bite on public as well as private landlords. It is much more of a deterrent to know that if someone is badly injured, for example, the damages in accordance with present levels of damages awarded by our courts would be enormous. We are talking of tens of thousands of pounds and certainly we are talking of amounts far larger than would be imposed by way of criminal penalties. I wonder whether perhaps the noble Lord does not appreciate that the real deterrent, apart from any questions of conscience, the real physical deterrent to having defective apparatus of this sort is the risk of having to pay enormous damages.

If that were so, if the criminal law were no deterrent, why are we sitting here at all? Why do we pass laws making certain things a criminal offence if we do not think they will deter people from committing offences?

As I said earlier, under the new clause the tenant would have the protection of the criminal law acting as a deterrent. Certainly I think the criminal law has a deterrent effect. If a person believes that he may be hauled before the courts and fined, I think it imposes a certain discipline on him. In fact it is additional to the point that the noble Lord makes—that if a person causes death or injury, he may be sued in the courts and may be told by the courts that he will have to pay considerable damages. In fact this is an additional protection, not an alternative.

It seems to me that this is a very important clause. As I read it, it should cover all rented accommodation, whether it be a bed-sitting room, a furnished house, or an unfurnished house not actually owned by the person inhabiting it. I think this is very important.

I am not quite certain that this amendment as it is put down is actually correct. I entirely agree with the principle, and I am looking forward to hearing what the noble Lord the Minister has to say because I think that private people have to be protected and there are very few ways in which they can be protected from faulty installations in property that they do not own. That is why I think it is so important and I look forward to hearing what the noble Lord the Minister has to say.

I hope when the noble Lord the Minister comes to reply he will be able to make clear something which I find totally unclear—and I am not a lawyer. Where a landlord who deserves to be prosecuted is prosecuted and, if necessary, is sent to prison (which is a very great deterrent, I should have thought) is it impossible for the tenant to take separate proceedings for damages in a civil court?

We have had an interesting debate on what is, I think, a very important matter. I am grateful to all noble Lords on all sides who have expressed their concern about it. As we have already explained during our debates on Clause 18 amendments, matters concerning gas safety are the responsibility of the Health and Safety Commission. They, through the Health and Safety Executive, administer the gas safety legislation which will, following the passage of this Bill, become relevant statutory provisions for the purposes of the Health and Safety at Work Act 1974.

One of the pieces of legislation which the Health and Safety Commission enforce currently is the Gas Safety (Installation and Use) Regulations 1984. Regulation 34 requires that no person shall use a gas appliance, or permit a gas appliance to be used, if at any time he knows or has reason to suspect that it is unsafe on one of five specified grounds. These include inadequate flueing, insufficient air for combusion, or escapes of gas.

This means that there is at present a responsibility on both the tenant and the landlord to ensure that any gas appliance which is used is safe, and noble Lords will note that if an offence is committed under Regulation 34 the maximum penalty is a fine not exceeding £2,000, rather than level 4 (presently £1,000) proposed by noble Lords in this amendment. It is twice as much as the amendment proposes.

I can understand the noble Lord's desire to lay the main burden of the responsibility on the landlord, but I agree with what my noble friends Lord Elliott of Morpeth and Lord Boyd-Carpenter have said, that the tenant should also have a responsibility not to use an appliance which he suspects to be unsafe, since in practice he is far more likely to be aware of such a situation than the landlord. Therefore, I believe that the current provision under the 1984 regulation is the right one. It puts an onus on both parties to check that the appliance is safe. Obviously, if the tenant informs the landlord that he thinks something is wrong then by virtue of the words "has reason to suspect" the landlord must take notice of that because he would thereby have reason to suspect.

However, should it ever be considered that a provision along the lines suggested in this amendment would be appropriate, health and safety regulations under the 1974 Act as extended by Clause 18(1) of the Bill could be made. I, too, saw the programme to which the noble Lord, Lord Stoddart of Swindon, referred regarding open flue water heaters. I would remind the noble Lord and the Committee that installation of these is no longer permitted under the gas safety regulations—I think it is Regulation 25 of the 1984 regulations—so that prevents their installation. Only room-sealed appliances should be used in bathrooms.

I would also point out to the Committee, and I hope to the public at large, that British Gas have agreed to publicise the importance of having these old water heaters properly serviced and maintained, and that they will make a free safety check on any reported to them. I hope that will help that particular situation. The provisions already in force under the regulations, which are similar to those proposed in the amendment, are satisfactory. Therefore, there is really no need for this amendment.

I would just answer quickly the point that the noble Lord, Lord Diamond, raised. There is no objection in principle, if the statute expressly permits, to both a criminal sanction and civil damages. I think civil damages would be allowed in this as well as the statutory sanction.

I thank the noble Lord for what he has said, but I am not sure that what he has told me satisfies me that the position is covered. As I understand it, the regulations under the Health and Safety at Work Act do not cover people who resell gas; they cover the people who install appliances. Therefore, the person who is liable is the installer. That is my impression of it, but does the noble Lord wish to intervene?

The regulation reads as follows:

"No person shall use a gas appliance or permit a gas appliance to be used".

That covers not only the user but the person, who could be the installer or the landlord, who permits a gas appliance to be used.

In the light of that explanation, I shall certainly have to look at what the noble Lord has said. If the regulation has the meaning that the noble Lord says, then it may very well cover the position I have in mind. We all agree that it is right that the position should be covered. The best thing I can do with this is to take it back, have another look at it, and particularly Regulation 84 under the Health and Safety at Work Act, and if I find that the position has not been covered then we reserve the right to come back to this at Report stage. I beg leave to withdraw the amendment.

I raise this point shortly. Clause 45 provides for bodies corporate and others being guilty of offences. I want to be assured that the clause is not too draconian, as it might seem to be on casual reading. Subsection (1) of Clause 45 talks about a body corporate being guilty of an offence, and if that is attributable to neglect on the part of a director or similar officer then that officer, as well as the body corporate, shall be guilty of that offence. That is fine and straightforward.

When we come to subsection (2), it says:

"Where the affairs of body corporate are managed by its members",

which is not a very clear picture to me, then the same rule applies,

"in relation to the acts and defaults of a member";

and a member can be prosecuted,

"in connection with his functions of management as if he were a director of the body corporate."

I am always a little hesitant about these clauses which pretend that somebody is not what he is and deems him to be doing something else, and gives him a different title, and then proceeds to put him in gaol. I am really asking for an explanation or reassurance, and perhaps for an example and precedent, that we are not being too tough under the provisions of Clause 45(2) on people who are not directors but are in fact only members.

There is a precedent in the sense that subsection (2) provides that subsection (1) shall apply to the members of a body corporate responsible for the management of its affairs as if they were directors. We find that in the case of a nationalised industry such as British Gas.

I should have said (only I am anxious to save time) that of course one is familiar with this in a nationalised industry, We are talking about privatising this industry, and what I am asking therefore is for a precedent in a privatised industry, in the private sector of the economy, of people being treated in this way.

I should like to look at this again. The precedent that I have is the Gas Act 1972, Sections 43(4) and 44(5). It may be that those two precedents suffer from the criticism which the noble Lord is levelling at me. I have given the noble Lord some information in reply to his question. If I might have a further look at it possibly I might write to him.

I too am a little puzzled about the wording of this clause. A "body corporate" is essentially an inanimate object. It may have a legal personality, but it can act only through its officers or through its servants. If we are to make a distinction between the body corporate itself and the individuals who are responsible for acting on its behalf and indeed for activating the company, we are getting into rather complicated grounds to which the provisions of the normal Companies Acts might well apply.

The noble Lord will recall that under the Companies Acts the occasions on which a director or an officer can have an action brought against him are clearly specified. I would hope that in this case, which will apply presumably to British Gas plc, the occasions on which an officer or director of the company can be prosecuted, where they are not already covered by the provisions of the Companies Acts and similar Acts, could be rather more closely specified than as put in this general form. The inquiry is quite a friendly one and if the noble Lord can help to elucidate the position a little that would help.

I am a little surprised that the noble Lord, Lord Bruce, has intervened in that way because I understood that the noble Lord, Lord Diamond, was satisfied with subsection (1). But once again perhaps I can read what the noble Lord, Lord Bruce, has said and if there is anything which we feel we need to add I shall write to the noble Lord, Lord Bruce.

I am sorry that my answers to the noble Lord, Lord Diamond, were not satisfactory. They were not satisfactory. The noble Lord was quite right to say what he said to me. The key to this is that the system of regulation has to apply to the existing British Gas Corporation until vesting day, that is why we have to cover the British Gas Corporation as we know it now. That is why subsection (2) is necessary and that is why the answers I gave are correct, although I did not explain why they were correct.

moved amendment No. 144ZA:

Page 49, line 3, at beginning insert ("Subject to subsection (1A) below").

Eleven dollars.

but it has been descending towards 10 dollars a barrel. I gather from my very knowledgeable friend Lord Ezra that it is at the moment about eleven dollars a barrel.

A report was issued by the United States Department of Energy at the end of April, quoted in The Times, which gave a warning that cheap oil was unlikely to last much beyond the end of this year and that prices will gradually move back to between 25 and 32 dollars a barrel by the mid-1990s. It also feared that the price could go as low as 10 dollars a barrel. It is quite conceivable, as it is now eleven dollars, that the Chancellor might be tempted, as a result of the pressures that are upon him, to try to float the sale of these shares at a time when the market was immensely depressed because of the dollar price per barrel.

I hope the Minister will not say that this is a very imprecise form of measurement. It may be slightly imprecise, and if the Minister prefers a formula which gives greater precision nobody would be better pleased than I would. But it is as an amateur that I use the language, which is the common language in the market at the moment, of talking about the dollar price of crude oil. That is a sufficient indicator. So what I am suggesting is that we must have a minimum of 15 dollars in relation to anybody's estimates of the extent to which the price will improve in the not too distant future. In particular, we must have some measure of stability in the price. Therefore, I have suggested a period of eight weeks throughout which the price has on every day been about this minimum.

Again, the Government may say that they do not like eight weeks, that they would prefer six weeks or 12 weeks, or some other formula to determine a stable price. The formula does not matter. What we are concerned with is getting a good price, and, if possible, the best price, for the sale of our national assets. I think this is a very important aspect to bear in mind. We know that the Chancellor is under enormous pressures, and I think therefore that there ought to be inserted in the Bill a provision to encourage him to take a longer view and to withstand being pushed around by those who are pressing him to get cash at whatever cost in the long term to the nation. I beg to move.

This is a very odd amendment indeed. It is a matter on which one can speculate as to the motives that lie behind it. But taking it first of all, as courtesy demands, at its face value, it is a very odd proposal indeed. Of course, the price of oil at any one time certainly would be a factor in the view which the market would take of the sale of the gas industry. But the noble Lord, Lord Diamond, knows perfectly well that it will be only one factor and that the price which the Government would feel able to seek would depend not merely upon the price of oil but on a whole variety of other factors—the general state of the market, the general state of confidence or lack of confidence in the economy and the competing claims of other considerable financial transactions such as the large takeover activities that are taking place. There will be a whole variety of factors of which this is only one.

There might well be a situation in which all the factors, bar the price of oil, pointed to this being the right moment to go ahead with the transfer. But if you carried this into law, the Government would have to sit by, watching the price of oil daily and see that opportunity go. The whole thing, with respect, would be a very great nonsense, and I suspect that no one knows that better than the noble Lord, Lord Diamond.

As I see it, this is simply an attempt to delay the denationalisation of the industry. The noble Lord, Lord Diamond, and his noble friends have made it perfectly clear that they oppose this denationalisation. They are entitled to their view just as some of us 30-odd years ago were entitled to our view that the industry should not be nationalised. But the Second Reading and earlier Committee proceedings of this Bill and the proceedings in the other place have taken place and the general principle has been accepted by Parliament that denationalisation is to go forward. Therefore, to try to hamper by one limited piece of legislation such as this those who have to handle the actual marketing of the industry I really think goes against the whole way in which we try to conduct our public affairs in this country.

I appreciate, as I am sure the Committee appreciates, that one of the most difficult problems that the Government have to face in any denationalisation project is the price which they are going to ask for the shares. I would be the last man to say that in previous rounds the Government have always been right. In one or two cases their decisions, at any rate, have been very questionable. I think that one must accept that the Government want to get the highest price they reasonably can consistent with the whole of the considerable operation of marketing the shares going ahead. It is a difficult enough task, particularly when, as the Government know, if the price that they ask for and get seems to public opinion to be too low they will be very much criticised. There will be all sorts of remarks about selling the family silver and other clichés to which we have become almost drearily accustomed in the last year or two.

But the Government have to take the responsibility of setting the price and the Government therefore have to take the responsibility, once Parliament has decided on denationalisation, as to the timing of the marketing operation. I suggest to the Committee that it would be quite ludicrous to take just one factor—perhaps not even the most important one—that could affect the price obtainable, and tie everything by law to that. I hope that the Committee will not treat this amendment very seriously.

I am marginally more in sympathy with the noble Lord, Lord Diamond, on this amendment than is my noble friend Lord Boyd-Carpenter; but I must say, not much. In particular, I could not agree more with the noble Lord, Lord Diamond, in his proposition that the formula suggested is imprecise. There is not one price for oil; there is a whole series of prices for oil and it is very much open to question which particular price might be appropriate if one were to espouse his basic concept at any given moment. I very much agree with what my noble friend Lord Boyd-Carpenter had to say about the other factors which could have a much more significant impact on the price that the Government obtain for this asset when it comes to putting it into the private sector.

Apart from that, I have myself always felt that the return to the Exchequer should not be the overriding consideration in these operations. Personally I have always thought—and I still think—that the overriding consideration should be the enhancement of choice to the consumer and the provision of enhanced competition. I very much regret, as I have said before, that the Government have chosen to avoid that opportunity in the context of this particular legislation. Having done so, I think that, as my noble friend Lord Boyd-Carpenter has said, there are obviously all sorts of considerations which should determine the precise timing and the price that the Government are likely to get.

The only reason that I have some slight sympathy with the noble Lord's amendment is that I increasingly wonder whether the Government are going to find the climate for the disposal of this particular asset to be particularly alluring this autumn. We are seeing gas prices sliding in pursuit of oil prices. I have said on many occasions that I have a nasty suspicion that any widow or orphan who entrusted his or her savings to the tender mercies of Sir Denis Rooke to look after them as the guardian of an investor in a private sector corporation might have cause to regret that choice. I certainly think that the background could well be less than ideal; less ideal than it otherwise would have been, in any case, given these other considerations, by the time this autumn comes along.

Having said that, I would submit to the Committee that this particular amendment can hardly be the most appropriate way to try to ensure that the Government get their timing right. In fact, I think it could be quite easy to imagine that there could not be a much worse way of tying the Government's hands as to the precise timing of this disposal.

I should like to get up and support the noble Lord, Lord Diamond—

Surprise, surprise!

I am glad that it is not a surprise to the noble Lord, particularly since he was speculating about the motive behind the amendment. The motive behind the amendment is quite clear. In fact, the noble Lord, Lord Diamond, spelled it out and there is no reason to disbelieve him when he says that the motive behind this amendment is to protect the taxpayer, to protect the owners of the existing organisation, which it seems to me is an entirely laudable thing to do. Bearing in mind the experience with British Telecom, where millionaires were made overnight at the expense of the taxpayer, it seems to me that the noble Lord, Lord Diamond, should be commended for his efforts to ensure that we do not have another British Telecom situation thrust upon us because of the oil price.

I do not want to speak for too long, but the oil price is indeed important. It is important because the British Gas contracts with third parties are, as I understand it, tied to the oil price. Therefore, the lower the oil price, the lower the assets in the gasfields of the British Gas Corporation and the lower the value of the British Gas Corporation's own assets. That is bound, in turn, to affect the view of people who wish to invest in the new privatised British Gas.

Although I agree with the noble Lords, Lord Boyd-Carpenter and Lord Bruce-Gardyne, that it is only one element which investors take into account, it could now be a very large element because the pressure on oil prices, and the lowering of oil prices, not only reduces the perceived assets, the value of the gas assets of the gas corporation, but has an effect on perception as to the future gas price and, therefore, the profits that can be made from gas, particularly since there is now—and we have heard a lot about competition from electricity—the very acute competitive pressure from the electricity industry on gas prices.

Only last week the chairman of the Electricity Council stated that any lowering of the gas prices later this year would be matched by the electricity industry. The price war is now on. Is this the most propitious time, when there could be a price war in the autumn, to launch the sale of British Gas, when the reason for that price war is the depressed price of oil? It seems to me that the noble Lord, Lord Diamond, has been perfectly logical and has acted logically in putting down this amendment, in order to draw the attention of the Committee to the problems which exist and to try to protect the taxpayer.

We are serious people in this committee and we have a care, I hope, for the assets of the people. They belong to all the people at the moment and we ought to have a care for them. We are all taxpayers and, though we in this Committee have no financial role, we are nevertheless known for protecting people and for looking after the overall and best interests of the country. Therefore, it seems to me that the noble Lord, Lord Diamond, has drawn our attention to an important matter.

According to the newspapers, the sale is already under way. The Observer last Sunday stated:

"Countdown begins for gas privatisation: Telecom hype for British Gas",

while in The Times this morning there is an article headed "British Gas Warms Up". It is all very nice to have these articles from journalists, but our job here is to see that when the Bill leaves this House it is the sort of Bill which will be good for the country. Therefore, I support the noble Lord, Lord Diamond, in his amendment and I am glad that he put it down to enable us to have this discussion.

I should like to support my colleague, my noble friend Lord Diamond. I accept all that has been said by the noble Lords, Lord Boyd-Carpenter and Lord Bruce-Gardyne, that this is not a perfect formula, but it gives us the opportunity of inviting the Minister to say what are the considerations which will influence him in the timing of taking British Gas to the market.

I accept that the price of oil is not an overwhelming factor. There are other factors—the competition of other issues in the market at the moment; the weight of issues that are overhanging the market; the state of the market in general and the fact that it is substantially a "bear" market at the moment, particularly in the energy sector. So this might not be the best time to sell this important national asset. I always like to think that in looking at this matter the House of Lords should constitute itself as a kind of board of directors of the national assets, or custodians of the national assets, and consider whether this is the right time to dispose of assets of the company. Undoubtedly, this is not the right time.

The record of the Government in disposing of state industries has not been a good one. If you look at the post-mortems which usually occur in the Public Accounts Committee in another place, you will see the record of prices that have been set for the disposal of national assets. That indicates that the Government have not been very successful or wise in terms of the national interest in the disposal of these assets. Amersham was a case in point, as was British Telecom, where the taxpayer did not get value for the assets which were then sold in the market.

What we are inviting the Minister to tell us today are the considerations, and what kind of remit he will give to the distinguished merchant bank which is handling this quotation. Will it have to sell at the best possible price at the best possible time, or dispose of the asset in order that the Treasury will get sufficient money to pay for tax concessions before the next general election? If it is the latter, it is bad stewardship in safeguarding the national assets.

I notice that people are calculating the kind of price that might be realised for the disposal of British Gas, as though I billion here or there were of no account. It may fetch £5 billion or even £6 billion—as though £1 billion does not matter in terms of disposing of a great national asset. So I invite the Minister, in the light of this amendment, to tell us a little more about how best we are going to realise the maximum advantage in disposing of British Gas.

There is always a right time and a wrong time to dispose of an asset, to float a company or whatever. I suppose that one could go on arguing this all evening. After all, it could be that if this Bill had passed into an Act at the beginning of this year the stock market would have been considered at the wrong level. Much to the surprise of many people, in the first three months of this year there was the most enormous hype—I think that word was used by the noble Lord, Lord Stoddart of Swindon—in the general price of the market. I am all for listening to the Minister to find out exactly what considerations are taken into account when a flotation of this size comes to the market, but to tie the hands of the Government and to say that under this amendment one has to wait until these conditions are fulfilled is going totally in the wrong direction.

It is very interesting to note that a very large company is coming to the market. Before one makes general statements about the price of shares, one ought to see what the relative prices of the British Petroleum Company and Shell Transport and Trading have been over the past few months. I have not noticed that there has been a significant downturn in the prices of these major companies in the oilfields. They are affected by the state of the oil market but they are big enough to withstand the ups and downs in the oilfields, which is not possible in the smaller companies. We should look at that when we are considering how free a hand the Government should have to float this large company on the market.

We have had an interesting discussion on this amendment and I must say straight away to noble Lords opposite that the only matter about which I can probably agree with them is that the Government are indeed concerned to get a good price for the sale of the British Gas Corporation. I am sure that the noble Lord, Lord Diamond, has seen the report published recently by the stockbrokers Wood Mackenzie which throws some light on this aspect—the effect of lower oil prices on British Gas.

I am sorry to intervene so soon but I could not help hearing what the noble Lord said. The Government expect "to get a good price". What I expected the noble Lord to say is that the Government will get the best price. That is what it is all about.

I am quite happy to rephrase my original remark. The Government are concerned to get the best price. Having said that, it is nearly impossible to get absolutely the best price, as the noble Lord will be aware.

I was mentioning the report by the stockbrokers Wood Mackenzie which throws some light on this amendment and on the impact of the oil price on the valuation of British Gas. The report makes clear that the effect of lower oil prices on British Gas' business is highly complex. It concludes however that,

"profits, over a period, should not be under undue risk",

and that,

"investors wishing to have an energy flavour to their portfolio … might find this company an attractive way to achieve such an exposure".

It is clear then that while the effect of lower oil prices is far from straightforward, there is no need for the excessive caution which this amendment seeks to impose. The noble Lord, Lord Diamond, said that the general perception was that oil prices would rise next year and thereafter as well. All I can say to the noble Lord is that this will surely be reflected in the market's assessment of British Gas even if it is sold, as expected, later this year.

Perhaps I could also just mention the purpose of Clause 49 in which this amendment is placed. Clause 49 is the fundamental provision for vesting British Gas's undertaking in a successor company on a transfer date to be fixed by the Secretary of State. The transfer date is not of course the date of flotation. It is reasonable to assume that the transfer date will be some weeks ahead of any proposed flotation date to allow the new company to establish itself and to trail the proposed sale of shares. The noble Lord, Lord Stoddart, was quoting from the newspapers, including The Times—I am very pleased to hear that he is allowed to quote from The Times newspaper—in saying that that process has already started. That is obviously a matter for the journalists and not for me. To the extent that oil prices may be relevant to the sale—and we believe they are of only limited relevance—it is the flotation date which matters rather than the vesting day or the transfer date.

My noble friends Lord Boyd-Carpenter and Lord Bruce-Gardyne quite rightly said that a number of other factors would have to be taken into consideration. I can confirm what they have said. The flotation will proceed only if the Government are satisfied that a fair price can be obtained against the background of prevailing market circumstances.

The noble Lord, Lord Taylor of Gryfe, asked me to throw further light on that, and this I will do. The most important consideration will be the company's value to investors at any particular point in time and they will judge this against the profitability of other companies and the overall state of the market. The Government will of course consider most carefully the timing of the proposed sale but oil prices are only one of many factors against which a decision on timing will be made. I am afraid to say therefore that I cannot really—

I apologise for interrupting my noble friend but he made a rather important statement just now and I want to make sure that it is clear. He said that the Government would choose the flotation date on the basis that a fair price could be obtained against the prevailing market conditions, or words to that effect. Does he mean that a fair price could be obtained in the estimation of the Government in general terms, or the price that could be obtained would be a fair one given the conditions in the market place? There is a distinction there.

I said,

"a fair price can be obtained against the background of prevailing market circumstances".

That is what I said.

I therefore feel that this matter of the oil price is not of the relevance which the noble Lord's amendment gives it. It would fetter the discretion of my right honourable friend the Secretary of State in deciding the best time to make the vesting order. Therefore, I cannot accept it.

Is the noble Lord saying, as the noble Lord, Lord Bruce-Gardyne, was trying to elicit from him, that the Government's prime concern will be to estimate a fair price in relation to any given set of market conditions? Does that mean that they are relatively indifferent to the market conditions and that all they will seek to ensure is that they will get a fair price in relation to those conditions?

I think that that is what I said.

"The most important consideration will be the company's value to investors at any particular point in time and they will judge this against … the overall state of the market".

Obviously, we will attempt to get the very best price that is possible at the time of the sale.

That, I believe, is the issue upon which we appear to be divided. We are saying that this sale should take place in favourable market conditions—by "market" I do not refer only to the price of oil, although I agree that that is very important—not at a level which is judged by the Government to be fair in respect of any market conditions. There appears to be a fundamental difference between us. If the noble Lord is right in his preliminary assertion, which was amended after the intervention of the noble Lord, Lord Stoddart, that the Government would be aiming to get the best price, they must surely be seeking to dispose of these assets in the best market conditions. Is that what the noble Lord really means?

I do not really believe that the market works like that. Who is to judge when the best market conditions will take place? We might have just missed them for all I know. I do not feel—

I would sit down quickly if I were you.

I am not going to take my noble friend's advice at this point but I shall fairly speedily sit down. The Government will seek a fair price in the light of all the circumstances and these will include market conditions.

The noble Lord has put me in a terrible difficulty. I do not quite understand what we are doing now. What the noble Lord seems to be saying is that the Government will go ahead and dispose of the assets at the best price they can get bearing in mind the market conditions as they stand at the point of sale. I am right? That is what he is saying, is it not? But where does the value of the asset come in? The value of British Gas must be so many thousands of millions of pounds. I believe it is about £16 billion. At what point do they say, "Thus far and no farther down"?

Does the noble Lord understand what I am getting at? If I had a car to sell, or if I had a house to sell, with a market value of £50,000, how far down might I be prepared to go to sell that property? Would the figure be £50,000, £40,000, £30,000 or £10,000? In other words, bearing in mind the market position at the time of the sale, to what extent are the Government prepared to devalue the undertaking they are selling?

The noble Lord has answered his own question, when he said the house that he used as an example had a market value of £50,000. That is the price at which we would attempt to sell the house—£50,000. The noble Lord should not confuse the asset value, which we will come to in a later amendment, with the market value of the company.

I will not pursue that point because we would be here all night.

I anticipated that at the outcome of this discussion we would be more discontented than we were at the beginning, and that is the case. If I may say so pace the noble Lord who keeps challenging my motives, I wish that he would stop doing so because I do not challege his. I am talking about the noble Lord, Lord Boyd-Carpenter. The noble Lord is perfectly free to get up and support the Government over every single amendment, because he no doubt feels that way as a good Tory and wants to support the Government. That is fine, but he need not challenge my motives every time that he does so.

I am trying to see to it that the Exchequer gets as much as it reasonably can out of the sale. That is our duty in this Committee. The arguments that have been put against the amendment by noble Lords who have spoken on the other side have mainly been that that is a consideration but it is not the only consideration. Of course it is not. There are all sorts of other considerations, such as the condition of the market. I invite the noble Lord, Lord Boyd-Carpenter, to follow up the logic of his statement and put down an amendment saying what the condition of the market must be before the Government shall sell.

The noble Lord would find that a little difficult to do. I found it impossibly difficult to put down any form of words that would be intelligible in the statute and define the condition of the market—although I hope of course that any trustee selling an asset on behalf of the beneficiary would have general regard to the condition of the market. So I am limited to putting down amendments that are intelligible and that refer to an important condition—a very important condition.

I have already said that 15 dollars a barrel is not as precise a definition as I would like, but it is general parlance and everybody knows what is meant. Every day the papers tell one that the price has gone up by £1 a barrel or has gone down by £1 a barrel. What they mean is a particular Kuwaiti quotation, but it does not matter because everybody knows what is meant. At the moment, the price is depressed.

The report did not say quite that which the Minister thought it did. The report to which I referred from the United States Department of Energy, which cannot claim to be supporting this side of the Committee or the other side, gave a warning that cheap oil is unlikely to last much beyond the end of this year. Cheap oil means oil at 10 or 11 dollars a barrel. It stated also that prices will gradually move back up, to between 25 and 32 dollars a barrel, which is a very different figure, by the mid-1990s. That is not quite what the noble Lord said and it does not support his argument about selling next year; one can wait a little longer to see how the market is moving.

The amendment is a fair attempt to protect the Chancellor against the pressures under which he exists. When we pressed the Minister to tell us what the Government are saying, he read out a form of words that was an insult to the intelligence of the Committee. It said precisely nothing—absolutely nothing. I took very careful note of what was said the first time. If the Minister will forgive me, I have regard to the brief that he read out and not to the trimming that he attempted to put on it off his own bat. What the Government will do is that stated in the brief, and it means absolutely nothing. I am not surprised that one of his noble friends invited him to sit down as quickly as possible.

We have had no assistance whatsoever offered to us in protecting the public purse on the sale of this asset. We are asked not to restrict the discretion of the Chancellor—the man who has disposed of assets with such brilliance hitherto, especially on the last occasion, which was British Telecom! He disposed of that with such brilliance that anybody with a spare dollar in his pockets on the New York Stock Exchange could make money by selling the stock the same day. I am not a little Englander. I am known to be a full European and a most enthusiastic one. I believe in neighbours, but I see no reason why British assets should be sold for the benefit of speculative New Yorkers on the New York Stock Exchange who can clear their account in one day and make a very nice profit. Millions were made in the one day, never mind in the first week.

Such is the brilliance of the Chancellor with whose discretion I am invited not to interfere. We would all of us be guilty of total negligence in this Committee if we did not seek to limit the discretion of a person who has behaved in that way with British assets, especially contemplating the present situation—a situation in which, as everybody knows, the market has moved down; a situation in which oil is depressed, as everybody also knows; a situation in which one has a huge amount of stock to float onto the market. The only way in which one is going to float it is by giving such a discount that one can be assured of getting it underwritten. The price has already dropped in general estimation. The value of the flotation of the company has already dropped since this measure was first put forward, and since the Government first introduced this Bill in another place, by something like £2 billion.

I hope that I have established, first, what are my motives; secondly, why I believe that a limitation on the discretion of the Chancellor is necessary; finally, why I believe that this is the best possible option available to those of us who have the responsibility of drafting amendments and for putting them down for discussion. In those circumstances I do not propose to budge one inch.