asked Her Majesty's Government:

My Lords, we have no plans to do so. We have accepted the optional articles of the European convention on human rights which recognise both the right of individual petition and the compulsory jurisdiction of the European Court of Human Rights. We do not believe that becoming a party to the optional protocol would enhance the protection of individual rights in this country.

My Lords, as the United Kingdom has ratified the International Covenant on Civil and Political Rights, should we not also ratify the optional protocol, which enables the human rights committee of the United Nations to examine claims from private individuals, from wherever they may be made, that they are the victim of violation of the rights set out in the covenant? Is it not the case that several states which are party to the European convention are also party to the optional protocol? As a general principle, therefore, should not all instruments of international law be ratified by member states of the United Nations?

My Lords, I certainly understand the force of that argument. However, we believe that our acceptance of the optional articles of the European convention provides better protection than the optional protocol. Indeed, the machinery of the European convention is binding upon those who sign it, whereas the optional protocol would not be. It is of course true that other countries have made the link and ratified the optional protocol, but I cannot speak for them.

My Lords, is it not the case that the provisions of the optional protocol go beyond the convention and thus safeguard more rights? If that is so, it is difficult to understand why the Government hesitate. What have they to lose? Is there not a great deal to be gained by taking this one step further, when at least 10 of our friends and allies have decided to sign the convention? I ask what is the real reason for the Government's hesitation on the matter.

My Lords, the various themes, which are incorporated in the European convention and the international covenant are broadly very similar indeed. I hope that the noble Lord will recognise that we are prepared to consider proposals which strengthen the obligations on states contained in international human rights instruments. We will of course keep the position on the optional protocol under review. However, I must say again that we believe that our acceptance of the European convention provides better protection than the optional protocol.

My Lords, the other member nations that have signed the optional protocol will accordingly have a view of the British Government's position on the matter. What has the Minister to say to that proposition?

My Lords, I am afraid I do not have the necessary information to enable me to answer the noble Lord's question directly. However, that may be a question which would be better addressed to the nations concerned.

My Lords, surely it is extraordinary that this country, having ratified the covenant, is now apparently refusing to take steps to make it a reality and thus enable individuals to complain to the human rights committee, which is doing extremely valuable work. Why are we dragging our heels once again in this field?

My Lords, for the reasons that I have already explained to the noble and learned Lord, I do not believe that by going down the path which he suggests that we should in fact enhance what he and others would like to see so firmly enshrined.

My Lords, will the Minister be good enough to give us details of some of the countries that have already signed the protocol?

My Lords, 38 states have now ratified the optional protocol, including, Denmark, Finland, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain and Sweden. I also believe that Austria and the Federal Republic of Germany are preparing to do so.

My Lords, is there not something to be said for having one acknowledged set of human rights and one tribunal before which such cases can come and not two concurrent and potentially divergent sets, with two concurrent and potentially divergent tribunals, leading to forum shopping?

My Lords, I think that my noble and learned friend is right; the situation could lead to confusion rather than assisting those concerned.

asked Her Majesty's Government:

My Lords, on 14th January 1988 the number of unemployed claimants who have been unemployed for one year or more in the United Kingdom was nearly 1,101,000. This is of course still far too high, but it is now at its lowest level for over four years.

My Lords, will my noble friend tell the House how the figures compare with those of a year ago?

My Lords, as I indicated in my original Answer, the figures are now going downward progressively, very much as a result of government policy.

My Lords, is the Minister aware that recent research indicates that there is substantial depressive illness and even suicide among the long-term unemployed which is much more than in the general population? Should not something be done about that situation?

My Lords, I am not sure that it is right to ascribe the phenomenon which the noble Baroness mentioned as the only cause of the illness to which she refers. Naturally, we should like to bring steadily downwards the number of unemployed people, which is what we are now doing, because of course the effects of unemployment are most undesirable.

My Lords, is the Minister aware that although, as he states, figures are dropping as a result of government policy, there was a dramatic rise when the present Government took over?

My Lords, the rise was initiated by the Government of our predecessors. We had first to arrest that steadily increasing trend when we came into office.

My Lords, will my noble friend tell the House what progress the Government are making over the provision of opportunities for adult basic education for those who have been out of work for some time, and whether it has proved effective?

My Lords, we now have a whole range of training programmes to help the unemployed, including the older unemployed and those who have been unemployed for a longer period. Those training programmes include the provision of basic education where necessary.

My Lords, does the Minister agree that the employment of the long-term unemployed, many of whom are unskilled, is greatly helped by the increase in employment of skilled people who fill vacancies, of which there are now a considerable number? In other words, when skilled people obtain jobs, with any luck they are likely to carry unskilled people with them. Therefore, will the Minister consider that where unemployment is falling rapidly, as is fortunately the case in many areas, training money, which is allocated only to people who have been out of work for six months in the case of young people, or for over two years in the case of others, should be lowered to speed up the employment of skilled people and by so doing grab up the employment of the unskilled?

My Lords, I am not sure that I quite understand what the noble Baroness is saying; but, if I catch her correctly, she makes a good point. It is important for all the different categories of unemployed people to have the training that is appropriate to their needs. That is why we attach such importance to the training and the provision of training opportunities for unemployed people. That policy lies at the heart of the recent announcement.

My Lords, the Minister gave the total figures for the United Kingdom. Does he have readily available the percentage figures for England, Scotland, Northern Ireland and Wales?

My Lords, I do not have those figures in front of me. I shall happily write to the noble Lord with them.

My Lords, the Minister referred to adult basic education. Is he aware that one of the best examples of that education is that provided by the ILEA, and that no one knows what will happen to it?

My Lords, a great many other education authorities provide the type of service to which the noble Lord has referred and which I prefer to the ILEA.

My Lords, is the Minister aware that we are gravely apprehensive about the method of calculating the numbers of unemployed? Is he further aware that in the last six months of the Government of my noble friend Lord Callaghan, before the present Government took over, inflation and unemployment were coming down? That can be seen in any statistical research. Should not the Minister read that statistical research and withdraw his earlier statement?

My Lords, if the noble Lord believes that he will believe anything.

My Lords, is it the Government's view that when unemployment goes down it is due to the Government, but that when it goes up it is not due to the Government?

My Lords, I am sorry, but I did not hear the noble Lord's question. If he will put it again I shall try to answer it.

My Lords, is it the Government's view that when unemployment goes down it is due to the Government, but that when it goes up it is not due to the Government?

My Lords, unemployment was going up steadily when we came into office.

No!

My Lords, when we came into office it was necessary at once to introduce programmes to deal with that position, but because of the depth of the problem it took a little while for those programmes to take effect.

My Lords, in relation to the noble Lord's discourteous answer to my noble friend, is the Minister aware that the unemployment figure in 1978 when Labour left office was 1,278,000? That is less than half the cooked figures which the Government now produce?

My Lords, certainly in 1979— not 1978—when we came into office, unemployment was on a rising trend. The figure which the noble Lord has mentioned is perfectly correct. That was the case. Naturally, it took some time for the programmes we had to put into place then, and subsequently, to have an effect on that sharply rising trend. I want to be fair to noble Lords opposite. The sharply rising trend was not confined to the United Kingdom; it was just particularly bad here.

My Lords, would not the questions from the opposite side be slightly more impressive if the trade union movement and the Labour Party got their act together over the Ford factory in Dundee instead of losing the lot?

My Lords, as I am always accused of being unfair to noble Lords opposite, not only today but on previous occasions, I thought it better to leave that observation to be made from behind me or beside me.

My Lords, the questions have taken a distinctly political turn. I should like to ask the noble Lord a completely unbiased question. He belongs to a government who believe in business methods. All good businesses have targets. Would he tell the House what the Government consider to be the figure of unemployment at which they are aiming? What is the desirable figure of unemployment in this country today?

My Lords, the desirable target which we seek to reach is one substantially below the present level.

My Lords, as regards this euphoria about the fall in the unemployment figures which we welcome—that is the fall in the figures, not the euphoria—would the noble Lord not lose sight of the fact that in the North-East of England we still have up to 40 per cent. male unemployment?

My Lords, I am not sure whether that figure is exactly accurate. I agree that there are parts of the United Kingdom where unemployment is still far too high. That is what I said in the original Answer.

My Lords, the noble Lord says that the figure for the long-term unemployed is falling. Is it not the case that the figure for long-term unemployment among those under 25 is rising steeply?

My Lords, I do not believe that that is the case. But it is a detail within the statistics that I shall check.

asked Her Majesty's Government:

My Lords, with the leave of the House I shall in a few minutes make a Statement to the House on the Rover Group privatisation and the bid by British Aerospace. In the circumstances my noble friend may feel that it would not be appropriate for me to attempt a reply to his Question in advance of my Statement. Noble Lords will of course have a full opportunity to ask me questions arising out of my Statement in the usual way. I hope very much that other noble Lords will also be content to defer further consideration of this matter until then.

My Lords, I am most grateful to my noble friend for that reply. I am sure noble Lords will look forward very much to the Statement which my noble friend is about to make.

asked Her Majesty's Government:

My Lords, it is entirely for the Independent Broadcasting Authority to determine the way it discharges its responsibilities under the Broadcasting Act 1981.

My Lords, is the Minister aware that when TV-am applied for and got the franchise, it promised that it would extend regional coverage, community input and consumer affairs? None of that has been delivered. Perhaps I may ask the Minister a simple question: if the premises upon which the franchise was obtained are false, surely the Government should demand of the IBA that it fulfil its obligations under the Broadcasting Act 1981?

My Lords, under the Broadcasting Act 1981 the IBA is required to ensure that programmes broadcast by the authority maintain a high general standard, a proper balance and a wide range in their subject matter. If the authority should conclude that a particular contractor was not fulfilling his contract it would be open to the authority to take such steps as are necessary to secure compliance with the contract or to terminate the contract.

My Lords, surely the Minister is not completely quoting the Act. The IBA specified that any concession that was given must include more British material than material bought in from other countries. Now TV-am is certainly contravening the Act. I hope the Minister will accept that it may be the responsibility of the Government to see that the Act is carried out completely.

My Lords, of course I take the noble Baroness's point. But I must again repeat that it is ultimately the responsibility of the IBA to see that its contractors carry out its wishes as laid down in the contract.

My Lords, if it is the view of the Government that the IBA is failing to fulfil those obligations—and the Government are entitled to a view—what are the Government intending to do about it? If what we hear is true and there is to be an inquiry into the state of the television industry, will the Minister make sure that among the matters examined are not only the obligations of employees but also the obligations of employers to carry out their legal statutory requirements?

My Lords, one of the fundamental principles of our system of public service broadcasting is that the broadcasting authority should be free from government interference in its day-to-day affairs. I am sure noble Lords agree that it would be a sad day if this important principle were to be jeopardised.

My Lords, it may be for the convenience of the House if I announce that the Third Reading of the Copyright, Designs and Patents Bill will be adjourned at approximately 7.30 p.m. for approximately one hour and that during this adjournment the Housing Benefit (General) Amendment Regulations 1988, the Housing Benefit (Supply of Information) Regulations 1988, the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988, the Income Support (General) Amendment Regulations 1988 and the Family Credit (General) Amendment Regulations 1988 will be taken.

My Lords, with the leave of the House I shall now make a Statement on the Rover Group plc.

I informed the House on 1st March that British Aerospace had declared a serious interest in acquiring the government shareholding in Rover Group and that negotiations were being put in hand. British Aerospace asked that the negotiations should be on an exclusive basis. We agreed to this provided that the further studies it wished to carry out on Rover Group and the negotiations between British Aerospace and the Government were concluded by the end of April.

I promised to return and report the outcome of these discussions to the House at the earliest opportunity. I can do this today because British Aerospace has completed its investigations satisfactorily earlier than anticipated. The negotiations have therefore been concluded and agreement reached. The rules of the Stock Exchange require that in these circumstances an announcement is made without delay.

Today we have entered into a conditional contract with British Aerospace for the sale of the Government's shareholding in Rover Group. Before entering into the contract with British Aerospace we considered a number of confidential expressions of interest but none amounted to a specific offer. The board of Rover Group believes that this is the best possible outcome for the group. British Aerospace is strongly committed to the further development and growth of Rover Group, working with the existing Rover Group management who have made so much progress in improving the performance of the businesses.

Honda told me that it welcomed the continuity of Rover Group's management team which would be assured by British Aerospace's ownership of the company. I therefore hope that the important operational partnership between Rover Group and Honda can continue to develop satisfactorily. Without constraining British Aerospace's day-to-day management of the business, we have agreed important conditions on the agreement. British Aerospace has undertaken not to relinquish control of either Austin Rover or Land Rover within five years. This undertaking is supported by legal arrangements designed to ensure that it is not to its financial advantage so to do.

I shall now turn to the main financial terms of the agreement. During the negotiations it has been impressed on me by the board of British Aerospace that Rover Group operates in a highly competitive industry and that, notwithstanding the recovery in 1987, its current and prospective levels of profitability are insufficient to meet the interest burden on the debt built up through many years of accumulated losses.

The Government have been equally concerned that the merger of these two major British manufacturing groups should only move forward on a firm financial footing. Since 1975 when the Government became the majority owner of British Leyland the banks have been content to advance large sums on the strength of the Government's involvement.

In order that the company is in a fit state to return to the private sector it is appropriate that we should deal with this accumulated indebtedness, which no company without similar backing could be expected to maintain. Of course we would have had to undertake this exercise whatever route had been adopted for Rover Group's privatisation. The Government have therefore agreed that they will make a cash injection of £800 million into Rover Group for this purpose.

Following agreement on these steps to strengthen the Rover Group balance sheet we have been able to conclude an agreement to sell the government shareholding in Rover Group for £150 million. We have also agreed with British Aerospace and Rover Group arrangements whereby £1·1 billion of Rover Group's trading tax losses will be effectively eliminated, leaving only £500 million of these losses to be claimed against Rover Group profits in the future.

British Aerospace has also agreed that other currently available tax relief within Rover Group will only be applicable within that group

I turn now to the elimination of the Varley-Marshall-Joseph parliamentary assurances relating to Rover Group's bank debts, trade creditors and other obligations. These currently total approximately £1·6 billion. While Rover Group has been in public ownership the Government have given assurances that the obligations of the group will be met. No new obligations incurred by the Rover Group after the date of completion will benefit from the assurances. Obligations incurred between now and the completion date will cease to benefit from the assurances on completion.

The negotiations with British Aerospace have concerned only the Government's shareholding in Rover Group. British Aerospace has said that following completion of its acquisition of the Government's shares, it will make separate proposals to Rover Group's minority shareholders in due course to acquire their shares.

British Aerospace has made clear that these proposals will be fair and reasonable and will be made after consultation with the Rover Group board and its advisers. The agreement is of course subject to the approval of the British Aerospace shareholders and the completion of the normal EC procedures. I also expect to receive the advice of the Director General of Fair Trading.

I should like to explain what progress there has been on the EC implications of these plans. On 14th March we notified to the EC Commission that we proposed to deal with the necessary restructuring of Rover Group's finances. I met Commissioner Sutherland on 23rd March to explain the Government's objectives and proposals. I had a further meeting with Commissioner Sutherland yesterday.

The Commission has met today and has decided to open a formal state aid procedure. I am confident that the Commission will expedite its investigation.

The agreement should bring to a successful conclusion the privatisation initiative which began in earnest with the flotation of Jaguar in 1984. This process accelerated when Graham Day took office in May 1986. He has returned 18 Rover Group businesses to private ownership. These include the trucks and bus activities, Unipart, Istel and Jaguar Rover Australia, which are all trading profitably under their new owners.

In the hands of British Aerospace, Rover Group would have the best available chance of developing its independent role in the vehicle industry. We cannot afford to underestimate the contribution to the economy of the largest UK passenger vehicle producer with a turnover of £3 billion, exports of £1 billion, direct employment of 43,000 and indirect employment of two or three times that number in the component supply sector, as well as over 50,000 jobs in Rover Group's distribution networks.

This will strengthen Rover Group's ability to compete at home and abroad and thus benefit all those who work with and for it, as well as the economy as a whole. I commend it to the House.

My Lords, that concludes the Statement.

My Lords, the House will be grateful to the noble Lord for making this Statement. The British Aerospace shareholders will no doubt think that Christmas has come rather early this year. On our side we believe that this constitutes an abandonment of the Government's fiduciary duty to the taxpayer.

Rover has a net worth of £770 million, which is being sold for £150 million, but the Government are producing a cash injection of £800 million. In other words net assets of £770 million are being sold, or rather the Government are paying British Aerospace £650 million to take the group off their hands. In addition the Government are giving a tax holiday to Rover Group under British Aerospace ownership up to £500 million, because, as the noble Lord rightly said, those losses can be used to set off against tax in future profits of the Rover business.

There will be no tax revenue to the Government from the future Rover business under whatever ownership it may be until those accumulated tax losses have been worked off. Will the noble Lord answer the following questions? On what terms will the £800 million cash injection be made? Why could it not be made to the existing Rover Group without a sale to British Aerospace?

What assurances are there for the workforce? We hear that there are assurances to the management but what assurances are there to the workforce? What belief can we have after the large losses that according to the press British Aerospace is going to announce, or may indeed have announced, that this will be a group which has financial viability and that we shall not see the same repetition of collapse that we have seen under previous Conservative Governments such as the collapse of Rolls-Royce?

What happened to the Rover corporate plan? Just at the point when Mr. Day said that Rover Group was turning a corner, that it was making profits and that it had a bright future, it is sent to the knacker's yard. We believe that this is an act of desperation.

The Government have no faith in Rover's future. We have and we wish that the Government would abort the deal straight away.

My Lords, we on these Benches also wish to thank the Secretary of State for making the Statement in the House this afternoon. We have also frequently been critical of the Government for selling the family silver. We are even more critical of them for giving away the family silver, even if on this occasion it is somewhat tarnished.

There can be no question but that this step will incur a very heavy loss indeed for the taxpayer, as the noble Lord, Lord Williams of Elvel, has already made clear. The Government believe in the free market. They tell us in this Statement in a rather curious paragraph that they have considered a number of "confidential expressions of interest". We should like to know more about those. I suppose we shall be told that they are confidential and that therefore we cannot know about them.

But was it really not possible at least to attempt to make a better deal than handing Rover over at such enormous loss to British Aerospace? If the Government believe in their own policies of getting the best possible deal that they can in any transaction, it seems extraordinary that this should have been confined to a deal with British Aerospace and that nobody else effectively has come in. Indeed nobody else was able to come in because British Aerospace made the condition, or rather was offered the condition, of a deal provided it settled at the end of April. That seems the most extraordinary way to do business if there is something to be sold.

So we are deeply concerned about this. We are also somewhat concerned about the outcome of the formal investigation that is going on with the EC. Surely this is a very heavy subsidy to industry? What will the EC be likely to say about that as regards its competition policy?

My Lords, I am grateful to the noble Lord, Lord Williams, although I confess that I found it rather difficult to follow him. He started by saying that Father Christmas had come to British Aerospace and concluded by saying that the deal would undermine its whole future. I believe that this is a well-balanced deal.

The noble Lord drew attention to what the net worth of the Rover Group may or may not be. I am sure that it is a matter of public record that over the past five years the performance of the Rover Group has been an aggregate loss of £1·1 billion. That is an unfortunate record and one which I have no doubt will be improved under new management. The results of last year were a vast improvement on the previous year. However, those results showed a considerable loss after interest and tax.

The noble Lord asked what assurances we will give to the workforce. The assurances which may be given by anyone to the workforce are precisely those which can be given to the management. They last for as long as the products produced are those which customers want. There are no assurances beyond that. Indeed, the whole sorry history of Rover from 1976 onwards is demonstrated by that.

The noble Lord also asked what the terms of the grant of £800 million are. The terms are such as to ensure that we are not giving the Rover Group a £500 million tax holiday. We are asking it to extinguish some £1·1 billion of existing tax losses which it will not be claiming. In other words, the tax losses are being reduced from £1·6 million to £500 million. Due to the sorry past record, the losses were that heavy. By that one act, the taxpayer will be saved some £400 million in tax revenue in the future. It also ensures that should the company endeavour to dispose of any of the businesses over the first five years, the net proceeds of the sale will be repayable to the Government.

I am grateful to the noble Baroness, Lady Seear, for her comments. She says that the agreement is a heavy loss to the taxpayer. It is in fact doing no more than recognising the existing position. It is an unfortunate but perhaps happy accident of the past that the Varley Marshall undertakings were such that the banks carried on giving credit to the Rover Group, secure in the knowledge that ultimately the Government would meet the bill. What we are doing today is meeting that bill, which was incurred over the last few years. We are putting right the overdrafts which exist. We have to do that in order to put the firm back into the private sector. Perhaps that is not a heavy toll for the taxpayer. However, it was a toll which was incurred over past years.

The noble Baroness asked why we dealt with confidential expressions of interest. Can Members of your Lordships' House have forgotten that just two years ago there was an expression of interest by the Ford Motor Company and that six weeks later the Rover Group had lost over 2 per cent., of its market share in the United Kingdom, reducing its share of the market from 18 per cent. to 16 per cent.? It never recovered from that loss. Today its market share is 15.8 per cent. The lost annual sales were £250 million.

British Aerospace was the first company which said that it was anxious to acquire the Rover Group. In looking at the approaches that were made, I have to take into account the future of not only the 43,000 people working in the Rover Group but also the 51,000 people who work in the distributors' network. That was the reason that I told the House that we were going through a period of exclusivity. I also said—it was repeated by my noble and learned friend the Chancellor of the Duchy—that if anyone made an offer we would consider the offer before finally accepting the British Aerospace offer. No such offer ever came.

We are today starting the procedure in Brussels. It may well be that the agreement will have an effect on competiton policy. However, I believe that it is simply a recognition of reality, because the losses have long existed, as have the debts. In any event, they would have had to be paid off one day. I hope that as the months go by we shall negotiate successfully through the tortuous and difficult procedure involved. However, I should like to discuss that with Commissioner Sutherland. I hope one day to return to your Lordships' House and say that we have been successful.

My Lords, I have one question of fact. Will the noble Lord reply to my question as regards the terms under which the cash injection will be made? I understand that there will be a £1·1 billion write-off in accounting terms of tax losses. Will the cash injection be repayable in any form or will it be in the form of simple grant?

My Lords, it is both. It is in the form of a simple grant by way of a security which is repayable only if businesses are disposed of during the period and/or tax losses over and above £500 million are claimed. If so, it is repayable to the extent of the benefit achieved by the company.

My Lords, my noble friend has given details of the number of jobs involved directly which will continue as a result of this operation. However, can he tell the House how many jobs in component manufacturers are also involved and will continue?

My Lords, the estimates I have indicate that there are something between 90,000 and 120,000 jobs involved in the component supply industry for the Rover Group.

My Lords, I should like to thank the Secretary of State for the Statement and his subsequent amplification of it. In principle, I and my colleagues in the SDP repeat our earlier welcome to the proposed acquisition of the Rover Group by British Aerospace.

If a sale is to take place—and the Government have long made clear their intentions—then will the House not agree, as Bill Jordan of the engineering workers' union said on the day of the earlier announcement, that it would be difficult to imagine a more suitable purchaser? Does the Secretary of State agree that the suggestions by the press and financial analysts that there are no synergies or industrial logic in the deal missed the key point that the general commitment by British Aerospace to manufacturing excellence, technological innovation and research and development is what makes it the best placed purchaser of Rover, both to build on its recent success and to strengthen British manufacturing industry as a whole?

Is the Secretary of State not concerned, after the comments of other noble Lords and notwithstanding the desirability of the deal from the point of view of public interest, that British Aerospace has been offered too favourable an agreement to take on the undoubted risks of the acquisition? Has the noble Lord, with his advisers, studied the precedents in the United States, whereby the US Government, in consideration for the financial support—

Reading!

given to the Chrysler Corporation, took warrants in shares of the company that ensured that in the event of the company's ultimate success, the Government stood to gain some benefit from that success? Does the noble Lord not think that a similar arrangement, which is also used in the United States when the federal authorities rescue failing banks, would have given the UK taxpayer some potential return from the investment over the past 13 years? In addition—

No!

could this not have presented an opportunity to give a similar interest to the employees of Rover and a consequential incentive after a number of difficult and hard years to maintain a productive and tranquil atmosphere of industrial relations?

My Lords, I am grateful to the noble Viscount for his support of the arrangement. I assure noble Lords that the policy of the Government has been to achieve the return of the Rover Group to the private sector. We have considered many ways in which that could be accomplished. It seems to us that this is the best way and that the reward of the Government will be the continuation of component suppliers and distributors, as well as a healthy future for Austin Rover Group as an independent British producer of quality cars.

My Lords, I should like to thank my noble friend for his Statement. However, we are conjoined in the parable about looking gift horses in the mouth. Is it not a fact that British Aerospace is currently losing a king's ransom on every component that it makes for the Airbus project? Is it not apparent that, even on these golden, give away terms, the needs of Austin Rover for capital injections in the future, coupled with the cost of British Aerospace's civil aircraft programme, will leave horrendous burdens on the balance sheet of that business?

Can my noble friend assure us that the commitment that British Aerospace should not be allowed for five years to pass on Rover to another perhaps better endowed purchaser such as Ford or General Motors will not be written in tablets of stone so that at least British Aerospace in due course may be able to make a handsome turn? Failing that, what is the likelihood of the European Commission finding that the deal which he has structured is not acceptable in terms of European competition policy?

Finally, failing all those, has he had a word with our right honourable friend the Secretary of State for Defence about the possible requirements of British Aerospace for very large and profitable defence orders in the future if Austin Rover is to be sustained in the style to which it has become accustomed?

My Lords, I am grateful to my noble friend. When I left industry and came to this present life of mine I vowed that I would leave behind making judgments on commercial matters. I should like to remind the House that it was the board of British Aerospace which approached the Government first. It is the board of British Aerospace which has investigated the future of Rover. It is the board of British Aerospace which judged it prudent and sensible to proceed with this purchase. My noble friend must have his own opinions, but in this matter it is surely the commercial judgment of British Aerospace that is appropriate. I do not contemplate—nor I suspect does the board—that British Aerospace will run into difficulties in the future. If that were to happen the Government would listen to anyone at that time. If there were a better course and a better way of dealing with Rover, we would have considered it seriously.

My Lords, will the noble Lord answer the question asked by my noble friend Lord Williams of Elvel? In previous privatisations, whether or not one agreed with them, the private sector ended up with the real assets of the business and the Exchequer ended up with some cash. In this one, as the noble Lord has described it, the private sector appears to me at least to end up with the business but the Exchequer is out of pocket to the tune of £650 million. That is exactly what the Minister has said. Will he confirm that that is the case?

Yes, my Lords, I am happy to confirm that the Varley-Marshall assurances of some £1·6 billion will disappear, hopefully within a year; that the stream of losses from Rover which the taxpayer has patiently borne, amounting to £1·1 billion over the past five years, will cease to be a burden on the taxpayer; and that Rover will look forward to a good future. That is the case. It is true that the Government will inject £800 million to pay off the existing debts of the company, liabilities of government which exist today. The Government will receive some £150 million for the shareholding.

My Lords, is the Secretary of State aware that, considering the worst and the best that might have happened, his Statement at least gives a new chance to the management, the workforce, the suppliers and the dealers, without future explicit risk to the taxpayer? Will he say whether output of cars per man year has improved since nationalisation? Is there scope for further improvement and, among other possible results, for a larger share of the market?

My Lords, I am grateful to my noble friend. Since 1979 output per man has doubled in the Rover Group. It is now up to European standards. Its objective is to beat European standards and to compete with the rest of the world. In looking at this proposed sale in the round, I hope that all noble Lords, particularly noble Lords opposite, will listen at least to the views expressed by the workforce, the distributors and all who work in Rover, and be cautious about the ways they judge the outcome of this deal.

My Lords, the Government have agreed that they will make a cash injection of £800 million into the Rover Group to pay off the banks. On the next page of the Statement the noble Lord refers to the elimination of the Varley-Marshall assurances. He said:

"These currently total approximately £1·6 billion".

Does he hope that British Aerospace will be able to pay those off and thereby release the Government? Or will the Government remain liable for the £1·6 billion?

My Lords, half or so of the £1·6 billion assurances will be paid off when the £800 million which the Government pay discharges the bank debts. The remainder will be paid off in the course of time as trade creditors and other obligations are paid. What will happen—probably after the end of the year—is that the Varley-Marshall-Joseph assurances will have been eliminated and will be part of the normal trading obligations of the Rover Group as a subsidiary of British Aerospace should this matter proceed.

My Lords, if my noble friend and the Government are satisfied that this is a good deal under all the circumstances for the company and for the workforce, will he give a complete assurance that he will not allow any interpretation by the European Commission to sink it?

My Lords, the procedure started today. The matter will take some months and I very much hope that we shall reach agreement. It would be foolhardy to say what you anticipate doing on the very day you start.

My Lords, perhaps I may ask the noble Lord about a rather different matter. Does he recollect that when Cable and Wireless was privatised legislation was required? That was a publicly owned company. In this case, apparently there is to be no legislation. And there was certainly no electoral mandate. Are the Government quite sure that they have the legal right to sell off the business without parliamentary approval?

My Lords, Austin Rover was once British Leyland and is a public company. It is still a public company. There are some 60,000 to 80,000 outside shareholders. The last two elections gave us the basis of our mandate for this action.

My Lords, is there a net benefit or a net detriment to the British taxpayer overall? I do not believe the noble Lord has answered that question in terms in which I, at least, can understand. Perhaps he will do so. My other question relates to the European Commission. If, after it has made an investigation, the Commission decides that this deal is against the rules of competition, what will the Government do then? Will they drop this proposal? If it is declared illegal, will they pursue the proposal irrespective of its legality under European law?

My Lords, at present the Varley-Marshall assurances total some £1·6 billion for a net cost of £650 million, which, as I said, is the £800 million that we shall be putting into the company less the £150 million that we shall accept as the proceeds of sale of the shares. We shall be extinguishing that £1·6 billion liability. That demonstrates the benefit to government.

As regards the noble Lord's second point, if I have had one principle in my life it is not worrying about hypothetical situations. Preparing for them, yes. Should that situation unfortunately arise, I will then come to your Lordships' House.

My Lords, can the noble Lord say in which of the two previous manifestoes this subject was referred to so that we can understand whether the Government have a mandate for what is proposed?

My Lords, I hardly think that the process of privatisation was a closely guarded secret in our manifesto of 1979 or at the time of the two subsequent elections.

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Copyright, Designs and Patents Bill, is content to place her prerogative and interests so far as they are affected by the Bill at the disposal of Parliament for the purposes of the Bill.

moved Amendment No. 1:

My Lords, we are grateful to the Government for their response to the amendment moved by my noble friend. I shall speak to the same group of amendments as did the noble Lord, Lord Beaverbrook. If I may say so, it seems to us that the response goes only half way. We were looking for a protection under the main copyright part of the Bill. In his amendment the noble Lord has offered us a protection under the moral rights section of the Bill.

There are disadvantages in the moral rights concept that we have pointed out on a number of occasions in Committee and at the Report stage of the Bill. The greatest disadvantage seems to be the necessity for the holder of moral right having to assert that right as opposed to having it automatically without any assertion. In the case which was referred to by the noble Lord and which we are discussing under Amendment No 1, it seems to us weaker to put this assurance—the new clause suggested by Amendment No. 86—into the moral rights section of the Bill than into the copyright section of the Bill, as we first wished.

I should like to make two small points on the government amendments. In Amendment No. 1 one comes across the expression "derogatory treatment", which seems to replace the expression "unjustified modification" which appears in Clause 75. I am not and do not pretend to be a lawyer. I do not understand quite why the Government have sought to change the words "unjustified modification", which seem to us to be perfectly comprehensible, to the expression "derogatory treatment", which has a slightly different connotation. "Treatment" presumably covers modification but the word "unjustified" does not necessarily mean derogatory. I should be grateful if the noble Lord when he comes to reply would explain the Government's reasoning and tell us why they have used that new expression which at least one of my noble and learned friends on the Front Bench was unable to explain to me when I showed it to him a few minutes ago.

My second small point concerns Amendment No. 86, which covers the new clause to which the noble Lord referred. In the new subsection (2)(a), which refers to:

"section 31 (incidental inclusion of work in an artistic work, film, broadcast or cable programme)",

I do not see any reference to inclusion incidentally of such a work in a work of compilation.

The Government responded to points that I raised in Committee about collage. There are other works of compilation which may well be included in artistic works—and the noble Lord may be able to assure me of that—but they may well be outside the definitions that he has used in Amendment No. 86 for subsection (2)(a) of the proposed new clause.

I do not wish to carp about government concessions. I believe that the Government have moved in the right direction. However, despite the fact that some of my noble friends do not agree with me on this matter, I still feel that the director of a film and the commissioner of a work have rights which should properly he expressed in an economic interest rather than in moral rights. Nevertheless, for the moment, pending the passage of the Bill in another place and subject to the clarifications which I requested from the noble Lord, we are happy not to challenge these amendments.

My Lords, I should like to thank the Government for what is probably a very good compromise on this question of copyright ownership by the commissioner of a photograph. It gives the photographer the right to receive a financial benefit from owning the copyright but allows the person who commissioned the photograph the control over its other reproduction. I think that the balance is right and thank the Government for this series of amendments.

My Lords, perhaps I may express briefly my gratitude to the noble Lord for his explanation of Clause 1 together with Amendment No. 1 and for speaking to the other nine amendments. At this late stage of the Bill I shall confine myself to remarking that some progress has been made and considerable concessions have been made by the Government. I shall leave the matter there. It shows once again that a great deal of work has been done by the officials behind the Front Bench. We are very grateful for the work that they have done at very short notice in order to bring forward so many amendments for our consideration.

My Lords, I am grateful to the noble Lord, Lord Lloyd of Kilgerran, for his observations. I should also like to draw to your Lordships' attention the very considerable amount of work that has been done by my officials since the last stage of the Bill and indeed throughout all its stages as it has gone through your Lordships' House. Perhaps I may say to the noble Lord, Lord Williams, that there is no need for the person enjoying the new moral right to assert it. The assertion relates only to the paternity right in Clause 72.

On the question raised by the noble Lord, Lord Williams, about the expression "derogatory treatment", this indeed replaces the expression "unjustified modification", and does so in order to accord more closely with the wording of the Berne Convention. I shall be in a position to explain this more fully in a later debate in our discussion today. Perhaps at that stage the noble Lord will be able to hear what I have to say.

Finally, the noble Lord, Lord Williams, asked me whether a work of compilation such as a collage would be included. So far as it is an artistic work, it already falls within subsection (2)(a) of the new clause. This will certainly include a collage. We are not aware of any relevant types of thing which are not artistic works that ought to fall within the exception in subsection (2). I hope that those answers are helpful to the noble Lord.

moved Amendment No. 2:

My Lords, I am grateful to the Minister. His recollection of events is absolutely accurate. We tabled an amendment to this effect and the noble Lord was kind enough to say that the Government found some merit in it. I am sure that the drafting of the government amendment is sharper than our own. We are very happy not to oppose this amendment.

moved Amendment No. 3:

My Lords, I thank the Government for the very hard work that I know they have done. I believe that this definition is now right and I hope that it will be agreeable to your Lordships. I have left in an amendment about reprographic copying and photographs, but in view of what the Minister has said it is obvious that I shall not need to move it. I thank the noble Lord and other Members of the House who have co-operated in putting forward my arguments on this amendment that have not been as concise as they might.

My Lords, at an earlier stage I put down an amendment which sought to define a photographer. I did not take part in the debate on the amendment of the noble Lord which put in the new definition of photograph. However, I considered carefully his revised version today and again read the debate that took place on that occasion. I regret to say that I do not share the enthusiasm of the noble Lord, Lord Brain. In my opinion the version in the Bill at present is not acceptable, although, if anything, it is slightly more so than the new version proposed by the Minister.

I have four short points to make. First, on our understanding of "photograph", the definition seems quite suitable with regard to positive colour photography. Negative colour is almost never used commercially. However, when black and white photography is used, a negative is made and that presumably is the "recording of light … on any medium". From the negative a black and white print is produced and in the new version that is the image that is made from the recording of light. However, the definition of photograph refers to the recording of light and not to the image that is produced from it. Therefore it seems to me that an ordinary black and white photograph is not covered by the definition.

Secondly, if I take a drawing, a diagram or a map and transmit it by fax (facsimile) to a recipient, that drawing is reproduced by a recording of light. I do not know the technicalities, but it is a recording of light and therefore would seem to be under the definition of "photograph", which I do not believe it is meant to be.

Thirdly, if a photograph is transmitted by radio—which is the way photographs are normally sent from foreign countries or other parts of this country to a newspaper editor's desk in Fleet Street—a different technique is used and no light is involved in such a transmission. It would therefore seem to me that the print which appears on the picture editor's desk and which has arrived by radio—which is what he is buying; not the photograph which is still in Calcutta or wherever it may be—has not been produced in the way defined.

Finally, I want to make this point once again, because more and more, as I mentioned at an earlier stage, photographs are obtained from a video tape. That is becoming increasingly commonly done, as with all the photographs of the Belfast riots lately where a still is taken from a video tape. As I read it, that is specifically included by the words "not a part of the film", and therefore such pictures are not technically photographs although they are certainly treated as such in the newspaper business.

My proposal to include a definition of "photographer" in the Bill was thought to be unnecessary because we all know what a photographer is, though it can be argued about. In the case of a photograph it seems to me that we all know what is meant by "photograph" in the ordinary way and there is no need for a definition. It is only when unusual techniques involving something close to photographs are used that we have to define it. That is how it should be done in this case.

My Lords, it would be helpful if the Minister could explain why the points that the noble Lord has just raised are not covered by the phrase "or other radiation"?

My Lords, we have had a great deal of difficulty with the definition of "photograph", as the noble Lord said in his introduction. Many of us are guided in this rather technical area by the noble Lord, Lord Brain, who has been kind enough to send me copies of correspondence he has had with the Government. I am also guided by my noble friend Lord Kilbracken. Therefore I have no particular points of substance.

I have one or two what I would call nit-picking points about the amendment. Do I understand that the amendment could cover a photograph which is not developed but is transmitted by computer? I think my noble friend raised the matter of transmittal of photographs and more and more photographs are transmitted by computer. Does the definition as proposed cover transparencies? Does the amendment as proposed cover stills from a film? Probably it does because it is part of a film, or possibly it does not because it is part of a video. I wonder whether the noble Lord can help us on that.

My Lords, I am a little disturbed by one matter which my noble friend beside me has just told me. I asked him whether this provision would make it in order for a music teacher in a school to make photocopies of copyright music for teaching purposes. He tells me no, because it merely means that he is not making a photograph. But will the noble Lord make that clear?

My Lords, I think it is probably as well that we do not have a fourth reading in your Lordships' House because no doubt we could extend matters so that it was as long as some earlier stages of the Bill. The short answer to the noble Lord, Lord Kilbracken, is that transmission of a drawing by the fax process may well be a photograph, but does that matter? As I have already said, it would not be original and would not enjoy copyright On the other hand, if a photograph is transmitted by radio the item received may not be a photograph, but that does not alter the character of what was sent, which will remain a photograph and will continue to be protected by copyright.

A black and white photograph is a copy made from a negative in which copyright subsists. Any copy of the black and white print will be an indirect copy of the copyright negative and so could be an infringement. Clause 16(3)(b) ensures that both direct copying from the negative and indirect copying from a print could constitute infringement.

The noble Lord, Lord Williams, made a point about photographs being taken from a video recording. The relevant point is that a photograph taken in this way is not an original work. It does not therefore merit its own copyright as a photograph. The act of taking the photograph may however infringe the copyright in the film if taken without authorisation. Continuing on with the noble Lord's point, the transmission of photographs of part of films will not alter the character of what is sent, which will thus continue to enjoy whatever copyright it is entitled to.

I did not quite understand the point that the noble Lord, Lord Somers, made, but I shall read what he has said in the Official Report to see whether there is anything to which I should like to respond in writing. I commend the amendment to the House.

My Lords, before the noble Lord sits down will he explain—

Order, this is Third Reading.

Could the noble Lord explain, how a print—

Order!

My Lords, before the noble Lord sits down, I am asking him how it is possible for a negative to be a copy of a print when by definition what is black in a negative is white in a print and vice versa?

A reverse copy.

The shape is the same!

My Lords, we cannot go on backwards and forward on these matters at this stage. We have thrashed out the definition of a "photograph" pretty thoroughly over the last three months. I think we have arrived at the best solution. I commend the amendment to the House.

moved Amendment No. 4:

Page 3, leave out lines 29 to 33 and insert—

("(a) the person responsible for the contents of the broadcast who makes the arrangements necessary for its transmission, and

(b) the person who transmits the broadcast, if he has responsibility to any extent for its contents.")

moved Amendment No. 5:

Page 4, leave out lines 13 to 19.

My Lords, I should like to thank the noble Lord, Lord Mottistone, for reminding me of an amendment that I had withdrawn. During my work over the past few days I had not noticed that the Government had decided to raise the matter and that I had withdrawn my amendment on that basis. I shall be interested to hear what the Minister has to say.

My Lords, I believe that my noble friend Lord Mottistone does not really intend the complete omission of Clause 7(2)(a) from the Bill without any replacement. That would cause an ordinary telephone conference service to be a cable programme service, which is obviously not right. What my noble friend seeks is an indication of why the Government have done nothing about the matters which he mentions and what perhaps they intend to do about them in another place.

The noble Lord, Lord Lloyd of Kilgerran, moved an amendment as long ago as 30th November, on the very first day in Committee, to deal with what appeared to be a problem with electronic mailboxes. He withdrew that amendment upon my undertaking that we would have a further look at the question and come back with an amendment of our own if that proved to be necessary. We looked at the question and came to the conclusion that nothing was necessary, which is why there has been no amendment on the point in my name.

The reason for that conclusion is this. As most of your Lordships will know, an electronic mailbox system consists of a central collection of secure electronic data stores and peripheral terminals. A message can be sent to any of the central stores from any of the terminals, but the message can be sent from the store only to the terminal dedicated to that store. We accept that whether this falls within Clause 7(2)(a) or not is not entirely clear, but in our view this does not matter, because such a system does not seem to fall within the definition of cable programme service in Clause 7(1) at all.

The messages are not sent from the central store for reception at two or more places or for presentation to the public. This is so even when the same message is sent simultaneously to several stores for reception by a number of terminals. Each message sent from each store is distinct from, although identical to, the others, and is capable of reception at only one place.

I think that my noble friend also mentioned what are known as expert systems—electronic databases which both transmit information and receive it for adding to the database for future transmission. Here the question is much more difficult. It is related to the point made by the noble Lord, Lord Williams of Elvel, in our stand part debate on 30th November, about the reference in Clause 7(2)(a) to "an essential feature". His comment, reported in Hansard at col. 869, was:

"It is rare that you would have at the moment a cable service which is either entirely one, interactive, or entirely the other".

My response was that I thought that it was better that we considered that further as it is a complicated field.

I must say that nothing has happened in the past four months to suggest that I was wrong in that last remark. We have considered it further, not only internally but also in consultation with industrial and commercial interests, and we think that we now know the answer. Unfortunately, we were not ready with an answer in time for Report, and because no one else raised the matter at that stage it was pushed to the back of the queue. I am afraid that this is something which must now be dealt with in another place.

We think that the position is this. An expert system may be used actively or passively. As long as it is used passively, it ought to be a cable programme service, because it is then indistinguishable from an orthodox cable service carrying feature films, or a dial-a-disc service on the telephone. However, when used actively, or interactively as it is usually called, it ought not to be a cable programme service, because the passage of information back and forth between two terminals is indistinguishable from a telephone conversation or a video link.

We think that Clause 7(1)(a) as it stands has the result that the whole of a service which can be used both actively and passively will be excluded from being a cable programme service, because it is an essential feature that there may be sent, from each place of reception, material for reception by the person providing the service or others. That is not right. We need to say, I think, that the exception is of the whole service if the interactive element is an essential feature of the whole service, but that where the interactive element is an essential feature of only part of the service the exception is of only that part. As I say, this a very complicated field, and although we think that we have now found our way to the gate we were not able to do so in time to put down an amendment in your Lordships' House.

I hope that in the light of that explanation my noble friend will feel able to withdraw his amendment.

My Lords, I am grateful to my noble friend for going into such tremendous detail in respect of this complicated problem. I apologise for the fact that we did not notice the need to table an amendment at Report in order to take the matter a step further. To that extent it is our fault rather than his.

I am grateful to him for realising that something must be done and for undertaking to take the issue through to the passage of the Bill in another place. I beg leave to withdraw the amendment.

moved Amendment No. 6:

moved Amendment No. 7:

Page 6, line 36, leave out ("and") and insert ("but").

moved Amendment No. 8:

Page 8, line 24, leave out ("in that context") and insert ("and copies").

My Lords, I am grateful to the noble Lord for taking up an amendment which I tabled earlier in these proceedings. From Clause 17 onwards we enter into the rights of a copyright owner and acts which are restricted by copyright. That is a very technical field. I am grateful to the Minister. The drafting by his officials is a great improvement on the original drafting with which I was involved.

moved Amendment No. 9:

Page 8, line 43, at end insert ("or

(c) any holding or loan by a prescribed library or archive or information service of any work which has already been put into circulation by or on behalf of the copyright owner.")

My Lords, the Marshalled List should read,

"any holding or loan".

not,

"any holding of loan",

should it not?

My Lords, I was reading from my original document. The noble Lord is quite right. The amendment should state,

"any holding or loan".

My Lords, I support the intention behind the amendment. It is obviously necessary that libraries should be able to have these documents. However, I question whether the amendment is wholly necessary and also whether paragraphs (a) and (b) are strictly necessary when the clause states:

"References in this Part to the issue to the public of copies of a work are … to the act of first putting those copies into circulation".

This amendment deals with the situation after that act. Therefore, I should have thought, reading it very strictly, it is unnecessary. However, I support the intention behind it.

My Lords, the amendment standing in the name of the noble Lord, Lord Lloyd, is I believe, based on a misunderstanding of the provisions of Clause 18. The intent of the amendment, as I see it, is to ensure that the copyright owner may not use copyright to control the normal activities of a library in holding or lending books, periodicals and other copyright material which have been put into public circulation.

Clause 18 does not give the copyright owner the power to control library activities in such a way. Only the copyright owner, or those acting with his consent, may first put copies into circulation but thereafter those copies may be circulated without the constraints of copyright, as paragraph (a) of subsection (2) makes clear. The only exception to this is those works covered by the new rental right set out in subsection (3). But the introduction of a rental right does not change the position with regard to free lending. I believe that that covers the noble Lord's point on licensing. Libraries, and indeed anyone else, are quite at liberty to hold copies of copyright material which have been issued to the public and lend them freely to others without any risk of copyright infringement.

Of course, it is possible for copyright owners, when putting copies into circulation, to impose contractual obligations on those to whom they sell the copies. For example, it has long been a standard condition attaching to the sale of a book that it is not re-sold, hired or lent except in its original binding. But that has nothing to do with copyright. If a copyright owner will only sell a copy to a library on the condition it is not lent out, the library must of course abide by that condition or purchase a copy already in circulation where there is no contractual obligation. An amendment along the lines proposed by the noble Lord, Lord Lloyd, would not alter the position. Contractual obligations placed on purchasers of copies of copyright works, whether they be libraries or not, are not questions of copyright law.

I hope the noble Lord can withdraw his amendment given my assurance that the Bill as drafted gives copyright owners no powers over the subsequent holding or lending of copies once they have been put into circulation.

My Lords, I am grateful to the noble Lord for that very full answer. I shall consult my advisers in relation to the matter to see if it should be pursued in another place.

Having regard to the observations of the noble Lord, Lord Morton of Shuna, about what is unnecessary, I should like to say this in relation to the Bill as a whole. Copyright is a very simple matter; in essence the theme is quite simple. The great difficulty is the application of it. There are so many and varied applications. In a Bill on copyright, one attempts to deal with every possible solution. I was brought up—and I was only reminded of it today—on a report by a committee over which the noble Lord, Lord Renton, sat in which he advised that Bills should be in more general terms and should not try to deal with every application as we have been attempting in this Bill. After that peroration, I beg leave to withdraw the amendment.

moved Amendment No. 10:

My Lords, I have some difficulty in following the submission of the noble Viscount. It seems to me that the proposed amendment, far from removing an injustice, creates injustices. Certainly it is not necessary.

The amendment makes record company activity an infringement of copyright as against the publisher. Again it is in my view unnecessary because the rights of the publishers to remuneration follow the existing mechanical royalties agreement and any others which might replace it.

Record companies and publishers of course have very different interests in this matter. Record companies are keen to protect their business in order to ensure that rental does not undermine the retail sale. On the other hand, publishers seek to gain commercial advantages from rental. What appears to be ignored by the amendment is that the sale by a record company to a rental business is no different from the sale to a retailer and will entitle the music publishers to a mechanical royalty in any event. Music publishers will also receive a royalty based upon the prices charged for the rental business. Therefore, it seems to me that it is unnecessary to provide a rental royalty for the publishers, as that would make the collection and negotiation system for rental unduly complicated. The publishers' interests will be adequately catered for within the forum of internal industry agreements.

My Lords, I find myself in agreement with the noble Lord, Lord Lloyd of Kilgerran, and therefore I am sorry to have to disappoint my noble friend. As my noble friend explained, these amendments are concerned with the rental right which your Lordships will recall was introduced into the Bill on Report. This new right is only conferred by the Bill on the owners of copyright in sound recordings, films and computer programs and not other copyright owners. The intent of the amendments in the name of my noble friend is to extend some of the benefits of the new right to other copyright owners, specifically the owners of copyright in musical works and associated lyrics incorporated in sound recordings and films.

As I explained when moving the amendments to introduce the rental right, we deliberately restricted the class of copyright owners who would be entitled to the right. If someone wants to hire out a record or film he should not have to obtain the permission of, and make separate payments to, more than a single category of rights owners. We believe it would be cumbersome and bureaucratic for the person hiring out a video to need a licence from all the owners of the many copyright works included in the video, as well as from the owner of the copyright of the film.

It is true that composers and lyricists provide an essential ingredient to a sound recording or film and on that basis should be entitled to a share of the profit made from its exploitation. At present if a record company wants to record a particular piece of music it must negotiate with the composer for a licence. In negotiations over what is a reasonable fee for such a licence, both sides will take account of the value that the recording to be made will have in the market-place. If the only outlet is sale, only the potential sales market need be considered. But if under the provisions of the Bill exploitation through rental becomes significant, there seems no reason why the composer cannot negotiate for a slice of that cake as well.

My noble friend is concerned that without a specific right composers and other authors will have no power to extract contractual payment from the record and film producers. To that end he proposes a right which the composers and authors may exercise against them. At least I believe that is the intent. The amendment to Clause 18 speaks of a restricted act for the owner of a sound recording or film to hire it out, when I suspect that it is the owner of copyright in the sound recording or film that is intended.

I do not believe that we need these additional rights to safeguard the position of composers and authors. I am, however, prepared to consider whether we should introduce a provision requiring the tribunal when assessing the rental royalty to take account of payment made to the copyright owners of musical and literary works.

There is of course an analogous provision in Clause 124. The copyright owner in the musical or literary work in giving permission for his work to be recorded can reasonably expect a payment related to the benefit to the recording company through sale. If there is also a benefit through rental he can withhold his permission until he obtains a reasonable share of rental proceeds. The fact that he has no rental right is immaterial—he has no "sale right", if I can use that expression, but that causes no difficulties. An amendment along the lines I have indicated will remove any doubt that it is reasonable for music copyright owners to look for a share of the rental market in negotiations over licensing in the same way as they now do in respect of sales.

I hope with that explanation that my noble friend feels able to withdraw his amendments.

My Lords, I am grateful to my noble friend for his agreement to look at one point.

I appreciate that he has not had long to consider the letter I wrote to him with formal advice but I am glad that further consideration will be given, and in the light of that I am happy to beg leave to withdraw the amendment.

moved Amendment No. 12:

After Clause 24, insert the following new clause:

My Lords, the noble Lord is correct that he has not found a government amendment similar to his own among those tabled in my name. As he said, he tabled an identical amendment on Report and at that time I indicated that we would give serious consideration to the question of a provision to deal with anti-spoiler devices. We are not yet in a position to bring forward our own proposals but I hope that we shall be able to produce something in another place.

We have looked at this proposal. It has not been left or put on the back-burner but, as with all these helpful ideas that have been suggested by your Lordships over the past few months, there are often some broader implications that need to be considered in depth. That can often take rather longer than expected.

I hope that, with my assurances that the matter has not been forgotten and that the Government are favourably inclined to the principle underlying the amendment, the noble Lord will feel able to withdraw his amendment.

My Lords, I thank the Minister and at this late stage in the Bill I do not propose to raise any constitutional questions about matters put forward in this House being dealt with here and not left to the other place. However, in the circumstances and with the assurances given I agree that the matter should be left to the other place, and I beg leave to withdraw my amendment.

moved Amendment No. 13:

Page 10, line 30, leave out subsection (1) and insert—

("(1) Where the copyright in a literary, dramatic or musical work is infringed by a performance at a place of public entertainment, any person who gave permission for that place to be used for the performance is also liable for the infringement unless when he gave permission he believed on reasonable grounds that the performance would not infringe copyright.")

moved Amendment No. 14:

Page 10, line 44, leave out ("also infringe the copyright") and insert ("are also liable for the infringement").

moved Amendment No. 15:

moved Amendment No. 16:

moved Amendment No. 17:

Page 12, line 20, leave out ("research or")

My Lords, may I presume to congratulate the noble Earl on the strategy that he has employed? The substance of Amendment No. 18 appeals to me and I would have supported it if it were possible to do so in any way in accordance with our procedures.

My Lords, we have had a good deal of debate on this matter, as the noble Earl quite rightly pointed out. On our side we have looked at the suggestion that the noble Earl made at Report stage about a possible general licensing scheme. Our advisers find considerable difficulty with this kind of scheme. If the Government are minded to consider further what the noble Earl has to say I believe that we on our side would find difficulty in going along with it.

My Lords, my noble friend Lord Stockton and the noble Lord, Lord Williams, have reminded us of the debate we had at Report stage on the question of copying for commercial research. I explained the reasons for the Government's change of view on the question but did offer to consider, without commitment, any further evidence that my noble friend could bring to bear on the question.

Following our debate, my noble friend sent a draft licence for photocopying in industry to my noble friend, the Secretary of State. Copies were also sent to others of your Lordships and other interested parties in industry and the library community. We are currently looking at these proposals and look forward to hearing the comments of others. As I indicated at Report stage, nothing said to date has convinced us that industry would not be unduly burdened by the introduction of licensing in respect of copying that is presently allowed. It is too soon to come to a final view as to whether these new proposals will remove our concerns. Our early view is that they represent a step in the right direction, but I would not wish to give my noble friend great cause for optimism. The early signs from the user side are far from favourable.

I do not propose to deal with the amendments in the name of my noble friend in any greater depth since he indicated to me privately that they were probing amendments to discover how far we have got with our consideration. I could not accept these particular amendments, for drafting reasons if not for any other. I trust that what I have said will satisfy my noble friend as to the state of play. Even if he finds the news discouraging perhaps he can withdraw these two amendments.

My Lords, I thank the noble Lord the Minister for his discouraging remarks; and I beg leave to withdraw the amendment.

moved Amendment No. 19:

After Clause 29, insert the following new clause:

My Lords, I think that we understand the purpose of the amendment, and we are sympathetic to that purpose. However, I wonder whether it may not be better covered and perhaps improved by inserting an expression such as "part of the work" in Clause 29. Clause 29 appears to allow fair dealing for the purposes of research or private study. I assume that the noble Viscount has in mind research or private study, not abstracts produced for purposes other than research or private study?

My Lords, there is a problem here. Abstracts are used by scientists and engineers working for employers to find out what has been done in the field in which they are working so as not to have to repeat the work in order to know where they can start. It may not be private study in that sense but for use in their work.

My Lords, I imagined that to be research or private study. Perhaps there is a definition with which I am unfamiliar that is not covered by the expression "research or private study". It is not that I am unsympathetic to this, but I am endeavouring to define the terms of the discussion. If what I say is true, the amendment may be unnecessary. On the other hand, if what I say is not true and the noble Viscount has purposes other than research or private study in mind that need to be included in the fair dealing exemption, then one must be sympathetic because that would be a genuine point.

My Lords, I support the amendment. Having had to deal with abstracts over more decades than I care to remember, I think that clarification is necessary.

I am not sure whether I understand the submission of the noble Lord, Lord Williams of Elvel. The amendment deals with a practical matter involved with abstracts disseminated for scientific or technical information other than mere research or mere private study. The purpose of a great many of these abstracts is to help people in industry at all stages to get on and develop and do their work. The amendment has my support.

My Lords, with the leave of the House—

My Lords, I remind my noble friend that he has spoken twice already. Perhaps he can cover any other point when he winds up the debate.

This is a further variation of amendments tabled by my noble friend Lord Caldecote both in Committee and on Report. It would allow authorised persons to republish scientific and technical abstracts first published in periodicals along with the articles they summarise. Authorisation would be carried out by the Secretary of State, and the intention would be that he would only designate responsible persons such as the Institute of Electrical Engineers, which presently operates an abstracting service of this kind. With due respect to the learned societies that provide such services, I am not attracted by the amendment. It would put authorised societies in the position of being able to republish, and charge for the use of, someone else's work without payment.

I think that a much more acceptable approach was taken in my noble friend's amendment on Report. On that approach, republication of abstracts would be allowed without payment only if licences were not available from the copyright owner under a licensing scheme. This has the merit of freeing abstracting services from the need to get individual consents from owners of rights in the large number of source periodicals which they cover. But it also allows the rights owners to get appropriate royalties by setting up licensing schemes if they wish. This seems to achieve the right balance, and the Government intend to bring an amendment forward to this effect in another place. I hope that my noble friend can withdraw his amendment in the light of my remarks.

My Lords, I am grateful to the Minister for what he has said. We thought that we were helping him by simplifying the problem as he was unable to accept the amendments that were moved at an earlier stage. With the Minister's assurance than an amendment will be moved in another place, I beg leave to withdraw the amendment.

moved Amendment No. 20:

After Clause 30, insert the following new clause:

My Lords, the House will be aware that we on these Benches at many stages of the Bill have insisted that a public interest defence should be included. Indeed, we were reproved by the noble and learned Lord, Lord Denning, for our insistence in Committee. The noble and learned Lord pointed out that the courts were perfectly able to deal with the situation and that therefore we as amateurs should stop intervening in such matters.

My Lords, as I recall he did not refer to me as an amateur.

My Lords, I am sure that no one would refer to the noble Lord as an amateur. However, we feel, with considerable strength, that there should be some general public interest defence enshrined in the statute. If I had known that the noble Lord, Lord Lloyd of Kilgerran, was to table the amendment—I think he did so only recently, this morning—I should perhaps have considered adding our names to it, because, as I have already said, we feel strongly about it. I support the noble Lord's argument about the Government's Amendment No. 124.

We should like to see Amendment No. 124 with the words "or otherwise" left out. In our view that omission would be tantamount to accepting the amendment which we put forward in Committee, making public interest a full defence against infringement of copyright. However, having said that, if the Government insist upon including those words, we shall support a reasoned definition of "public interest" as a second-best measure, if I may put it that way, and accordingly support the noble Lord, Lord Lloyd of Kilgerran. It is a matter about which we felt strongly during the earlier stages of the Bill's proceedings and we still do. Indeed, my colleagues in another place will continue to feel strongly about the matter. I hope very much that the Government, having moved perhaps half an inch, or even several inches, may decide to move just a couple of inches further to meet what I think are legitimate concerns on these Benches.

My Lords, with leave I shall also speak to Amendment No. 124, which is tabled in my name. There has been much pressure on us, both in this Chamber and outside, to include in the Bill an express exception from copyright on public interest grounds. I have already explained both in Committee and on Report why we think that it would not be right to attempt to codify the existing case law on the point, and I do not propose to repeat that now, save to say that the amendment in the name of the noble Lord, Lord Lloyd of Kilgerran, shows exactly why codification would be unwise. Who is to say whether the circumstances listed in his amendment will remain the only matters in respect of which the courts, were they to retain a free hand, would be willing to accept that a defence of public interest should be available? I think that the new clause proposed by the noble Lord would be a great mistake.

However, we are persuaded that something should be said, and this I now propose to do by way of Amendment No. 124. It acknowledges the continuing effect of case law without attempting to codify it, thus leaving the law on this matter where it always has been, in the hands of the courts. It is not limited to public interest, although that is singled out for special mention, because other reasons sometimes emerge for denying the enforcement of copyright. The decision of this House in its judicial capacity in BL v. Armstrong is a case in point. My amendment may not go as far as some noble Lords would wish, but it is as far as we think that we should go. I hope that it will in due course satisfy your Lordships.

My Lords, I should like to ask the noble Lord before he concludes his remarks whether he will agree that, as has been put to him both by the Opposition Front Bench and by my noble friend, Amendment No. 20 covers very nearly all the major issues of disquiet which have been expressed in the House. Will he further agree—perhaps he will not—that the amendment which he has tabled still gives cause for serious disquiet as far as many of us in the House are concerned as to whether it really addresses the issues which have previously been put to him?

My Lords, I should like to express some sympathy for the Minister on that point. I think that there is a danger—

My Lords, is it in order for anyone to speak after the Minister at this stage of the proceedings? I think not under the new rules.

My Lords, normally it is customary on Third Reading and also at Report stage for the Minister to have the last word. However, with the leave of the House, I think I can deal quickly with the point raised by the noble Lord, Lord Harris of Greenwich. I believe that the key words in what he said are "very nearly". Throughout the Bill's proceedings it has been a matter of coming to a compromise position, which is very often a fine line between two sets of different interests. I cannot recall whether the noble Lord, Lord Harris of Greenwich, was present during our deliberations in Committee when the noble and learned Lord, Lord Denning, told us that he felt that any mention of "public interest" was unnecessary because the courts were quite able to resolve the matter. On the other hand, the noble Lord, Lord Williams of Elvel, among others, felt that it was indeed necessary to insert such a clause.

The Government have moved to try to find a balance between conflicting interests not only in this matter but in many other parts of the Bill. I believe that we have reached the right point in this matter; inevitably it will not suit everyone and there will be differences of opinion even among Peers on the same side of the House. However, at this stage I feel that we have the balance right. I hope that what I have said goes some way towards satisfying the noble Lord, Lord Harris of Greenwich.

My Lords, not only should the Minister be satisfying the noble Lord, Lord Harris of Greenwich, but as regards Amendment No. 20 I also have to be satisfied as to what procedures I should take having regard to what he said.

During the Bill's proceedings I have paid great attention to this important matter. When I presented the amendment to the House I was very brief. I did not go into the law involved, which I am sure would have satisfied the noble and learned Lord, Lord Denning; namely, that unless there was a clear statutory provision included in the Bill there would be a difficulty here. My amendment is directed to try to elaborate what the term "public interest" means in the context of today. The Minister's answer was, "Well, this might all alter in years to come; it may be different things. There may be no abuse of authority in the future and no neglect in the performance of official duty or other misconduct". He was in fact saying that there were other matters of public concern which I had not included and that those which I had mentioned would not be satisfactory.

Therefore, unless I can obtain from the Minister some suggestion that the amendment which he has tabled, Amendment No. 124, might be modified so as not to be worded in quite such broad terms, especially in regard to the words "public interest" and also "or otherwise", I cannot withdraw my amendment. However, if he can give some assurance in that connection and in effect withdraw his amendment, with an undertaking that he will represent it in a somewhat different form, I shall be clearer about the view which I ought to take. At present I am not satisfied with what he has said. Therefore, in those circumstances, I think I ought to take the opinion of the House.

moved Amendment No. 21:

Page 15, line 19, leave out ("thereby").

moved Amendment No. 22:

My Lords, I am concerned about the second part of the amendment of the noble Lord, Lord Lloyd of Kilgerran. If a library is to make one copy which then goes out into circulation and is subsequently destroyed, is the library then permitted to make one more copy which goes out into circulation, disappears or is destroyed and one more copy after that? I feel that this is the thin end of what could be quite a large wedge. Perhaps I may ask my noble friend whether he has had any further thoughts on that.

My Lords, if I may say so, this amendment was tabled very late and relates, at least in part, to matters which have not previously been debated during the long and arduous passage of this Bill through your Lordships' House. In these circumstances it may not greatly surprise the noble Lord, Lord Lloyd of Kilgerran, to learn that I do not approach these amendments with great sympathy.

Clauses 38 to 43 provide a regime for copying in libraries which meets the needs of students and the operational requirements of libraries and archives, while safeguarding the interests of copyright owners. Clauses 38 and 39 will enable the student to obtain copies. Clause 41 allows libraries to make copies for supply to other libraries. The new exception in Clause 42 goes most, if not all the way to meeting the perceived need expressed in paragraph (b) of the amendment. It will allow libraries to preserve material they hold so that copies, rather than originals, may be made for general day-to-day use in the library. Clause 43 provides for copying of unpublished works.

As for educational establishments, the various provisions in Clauses 32 to 36 provide further exceptions to copyright, all aimed at assisting the education process; and there are the provisions about licence schemes in Clauses 128 to 132. Photocopying is done under licence in schools in England and Wales and I understand that a pilot scheme has been set up for universities. It seems to me that there is very little copying which students and educationists might reasonably wish to do which cannot be done, either under licence or under the terms of the various exceptions that I have mentioned.

What we have to guard against is the notion that the operation of libraries or education is a cause which justifies overriding copyright owners' legitimate interests in all cases and at all times. I believe the package in the Bill has shifted the balance from the position in the 1956 Act towards educational interests and has made some small but useful improvements for libraries. I do not think we should go further. I hope that the noble Lord will be able to withdraw his amendment.