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Lords Chamber
01 November 1994
Volume 558

House Of Lords

Tuesday, 1st November 1994.

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

Prayers—Read by the Lord Bishop of Lichfield.

Liquor Licensing Hours

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asked Her Majesty's Government:

Whether they will reform the licensing laws to bring the hours during which alcohol is allowed to be sold in large shops and supermarkets on Sundays into line with those during which those shops may open under the terms of the Sunday Trading Act 1994.

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My Lords, the Government are considering whether to consult publicly about further reforms of the liquor licensing law in England and Wales, including possible changes in the hours during which shops with off-licences may sell alcohol on Sundays.

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My Lords, I thank my noble friend for that reasonably encouraging reply. Does she agree that it is rather strange that, although supermarkets are now allowed to open at 10 o'clock on Sunday mornings, customers are not allowed to buy alcohol until midday? The customers can see what they want to buy on the shelves, which are cordoned off; but are not allowed to buy it, and the shop is not allowed to sell it to them. Does she feel that it is time that there is a change in the law? What is so magical about midday? Why is one allowed to buy a drink at five past 12 and not allowed to buy it at five to 12?

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My Lords, my noble friend points to at least one of the reasons why my department is considering the possibility of reform. But before it took any legislative steps, it would want to consult on that issue so that if we decide to go forward with any ideas, it will be on the basis of full consultation.

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My Lords, does the noble Baroness the Minister agree that the situation in Scotland is even more ridiculous? There one can sit in a pub all day but not go next door to the grocer's shop and walk out with a bottle of whisky.

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My Lords, the noble Lord is right. But one cannot buy drink in shops in Scotland before 12.30 p.m.

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My Lords, does my noble friend agree that it is an absurdity to have a different time for the sale of alcohol and for the opening of the shop in which it is sold?

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My Lords, my noble friend strengthens the argument for at least looking at this issue. One of the difficulties is that even within the retail sector some shops are restricted to six hours opening on Sunday while others are completely unrestricted. Therefore, even if the hours were harmonised with the shops, it would mean that some shops could sell beyond the six hours and others could not do so. It is a matter which needs looking at.

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My Lords, when she considers this matter, will the Minister bear in mind that responsible retailers usually appoint a person in charge of liquor who knows the law? It is usually a person of experience and strong character who is able to apply the law. Does she agree that if shops are allowed to sell liquor only between 12 o'clock and 3 o'clock, on Sundays when that person is not likely to be in attendance the retailers may feel inclined to give the job to a part-timer on that day? Does she further agree that, if the shopkeeper is allowed to sell alcohol during the whole of the six hours, it will mean that the person responsible will more likely be there in charge? That, in my opinion as an experienced retailer, is a very important consideration. Will she bear that point in mind?

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My Lords, I said that if we were to go further with this matter, there would be a period of consultation. That point would no doubt be brought out strongly during that consultation period.

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My Lords, I hope that my noble friend the Minister agrees that it is a passing strange world that we are coming to when, in a matter of a week or two, I shall be able to drive down to the Channel Tunnel, pop through it, make a short trip on the other side, buy five or even 10 cases of whisky, and make the return journey in time to offer my noble friend Lord Brabazon a glass of whisky—when he cannot walk down to his local supermarket to get any.

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Well, my Lords, he can between 12.30 and 3 o'clock. But the point is well taken. All the comments that have been made so far in this debate point to the need for consultation on this matter.

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My Lords, is the Minister aware that some of us are not too encouraged by her reply that the Home Office is "considering" whether to consult? Does she agree that there is something profoundly foolish in a situation in which an area of a supermarket is roped off until the magic hour of 12 noon? It is a wholly absurd situation. Can she indicate that the department is prepared to look into this matter with rather more energy than she has so far suggested?

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My Lords, I note the point made by the noble Lord. But unless one is to be totally unrestrictive and allow the sale of alcohol for 24 hours round the clock, then, even with reform, there will always be a period of the day on Sundays when there will be some restriction on the sale of alcohol. I suspect that when we get into consultation—if we do—there will be a voice given to the notion that selling alcohol on a Sunday for 24 hours of the day will certainly fall foul of many Members of this House and maybe of another place, too.

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My Lords, is the noble Baroness aware that in some parts of Scotland it is not a case of not being able to buy alcohol until after 12.30 in the supermarket; it is a case of not being able to buy it all day?

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My Lords, the noble Lady is right to remind me of that situation. That is the case at the moment; but through the Deregulation and Contracting Out Bill it will be possible for harmonisation between shop opening hours and the on-licensing laws which are from 12.30 to 10 p.m.

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My Lords, in the review that the department is considering undertaking, will it also take account of the even more absurd fact that in England, if one has a wine merchant's or wholesale licence, it is possible to sell wine in amounts of no fewer than a dozen bottles, and beer as long as one buys more than four gallons at one time, all day from 10 o'clock in the morning?

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My Lords, that is one more point that will no doubt be taken into account in consultation.

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My Lords, can my noble friend tell the House what legislative change would be required to bring about a change in the law? Will it need a Bill, a statutory instrument or what?

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My Lords, my understanding is that it would need a Bill. There is a technical mechanism using an order-making power under the Deregulation and Contracting Out Bill. However, as noble Lords are aware, assurances have been given that order-making powers under that Bill will not be used for anything controversial. I suspect that this topic may well be controversial.

Rwanda And Burundi: Humanitarianneeds

2.44 p.m.

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asked Her Majesty's Government:

What is their latest assessment of humanitarian needs in Rwanda and Burundi.

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My Lords, our latest assessment mission found the situation relatively stable, though still tense. The humanitarian needs in Burundi and Rwanda are best met by continuing the process of reconciliation and creating conditions for refugees and displaced persons to return to their homes.

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My Lords, will the noble Baroness agree that the work being done in Rwanda by humanitarian agencies and, indeed, the military is outstanding? Has the Minister seen reports by the humanitarian relief agencies that only 30 of the proposed 147 human rights monitors are in place and that they have only seven vehicles between them? What can be done to put that right? In relation to Burundi, can the Minister assure the House that the grave mistake made by the Security Council in not taking the pre-emptive action recommended by the Secretary-General in Rwanda will not be repeated? What is being done to ensure that the large number of human rights monitors called for by the humanitarian agencies and the UN Commissioner for Human Rights are in place?

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My Lords, certainly I give all praise to the humanitarian agencies and the military who have done so much to make life more reasonable for those who are back in Rwanda and a little less unreasonable for those who remain in the camps in Tanzania, Zaire, northern Burundi and the displaced persons' camps within Rwanda itself.

I am aware of the reports that fewer than one third of the human rights monitors are in place. I am told that the United Nations volunteers are now involved. But expertise is needed in these delicate situations and every effort is being made to find people with experience. It is not a job for well-intentioned amateurs.

Regarding the situation in relation to vehicles and other equipment, we are looking to help through various ways. We have already given £250,000 and four vehicles for the human rights monitoring in Rwanda. I am told that 18 further monitors are about to arrive, and that the European Union is looking at what further contribution it can make. In relation to Burundi, the report from the special representative indicates that we must get on with the job. We have been waiting for further proposals and are doing all we can to make sure that proper human rights monitoring exists in Burundi. I visited the country two months ago and the government are now trying to be helpful. However, they also need help from outside.

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My Lords, given the encouraging reports from the Chief of Defence Staff, who is on the spot in Rwanda at this moment, concerning the fine contribution being made by the 550 strong British military contingency—especially the field ambulance units and the Parachute Regiment—can the Minister tell us whether there is scope for increasing that form of medical relief? I understand that there is considerable need for it. Further, is the Minister able to tell us about the continuing progress of her laudable attempts to gain real help from the leaders of the neighbouring African states, to which she referred, especially President Museveni of Uganda, to bring concerted pressure on the Rwandan Patriotic Front to stop the revenge killings on the Hutus, to end the misappropriation of property and to ask the UN to bring the matter into the public arena of justice and reconciliation?

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My Lords, we are extremely proud of our Army medical relief teams, the Sappers and all others who have helped. But one of the valuable aids our Army men and women have given is to train local people so that they can hand over the way stations and small clinics to local people to run. But I agree with the right reverend Prelate that there is plenty more work to be done.

In relation to revenge killings, the numbers killed by the RPF are small compared with the numbers killed by others. I have spoken to the president and to the vice-president in Rwanda, who assure me that they are taking action against anybody who indulges in such horrendous practices. It is certainly not something supported by President Museveni of Uganda or anybody else. It is what happens in war when tempers are deeply frayed.

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My Lords, does the Minister have any information about the report by the UNHCR concerning revenge killings which is alleged to have been suppressed by the United Nations? Does she agree that it is important that these allegations should either be verified or refuted, because if they are verified, prosecutions of those responsible can be instituted by the RPF government; and if they are refuted, reassurance can be given to the refugees in the camps so they are not afraid of returning?

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My Lords, I know that the government in Rwanda have put before military courts those who were found guilty of having indulged in revenge killings. We believe that the atrocities by the RPF were not as extensive as the publicity suggested. However, the matter is being followed up by the RPF government in Rwanda and is being watched very carefully by the United Nations Secretary-General's special representative, to whom I shall be talking on Friday.

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My Lords, will the Minister accept that any package of humanitarian assistance should also factor in the needs of neighbouring countries such as Zaire and Tanzania so that an entire region will not be severely debilitated by the flood of refugees?

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My Lords, the £60 million contribution by Britain has been used already in Zaire, Tanzania and Burundi to help Rwandan refugees. We have certainly had very good value from that money through the British non-governmental organisations working in those three places.

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My Lords, bearing in mind Britain's magnificent endeavours, would it not be possible for the United Nations to be approached to ensure that the example of our country can be followed by a few others in making their contribution, even if that effort is only two-thirds of that of Great Britain?

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My Lords, that is exactly what lies behind the initiative on preventive diplomacy enunciated by my right honourable friend the Foreign Secretary at the United Nations when he spoke there last month; and, indeed, we are following it up.

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My Lords, does the Minister agree that, in addition to the admirable work of the military and of the humanitarian agencies, the work and the constant presence of the International Committee of the Red Cross in both Rwanda and Burundi deserve special commendation? Can she give an assurance that Her Majesty's Government will continue to support the work of the ICRC not only in Rwanda and Burundi but also in other parts of the world which have tended to slip from the headlines, such as Afghanistan?

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My Lords, I can give the noble Lord a complete assurance. We work not only with the ICRC but the Federation of Red Cross and Red Crescent Societies in many places throughout the world through our own British Red Cross. But they are not the only ones. Save the Children, Oxfam, CARE, Concern and many others have been involved. We can be justly proud of British non-governmental organisations and those with which they work, particularly the ICRC.

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My Lords, does the noble Baroness agree that a high priority should be given to setting up the international court which has been proposed to try those accused of the genocide in Rwanda? Does she not feel mat if those responsible were brought to justice it would be the best deterrent to anyone in other countries who might be thinking of committing similar crimes against humanity? What are the Government doing to speed up that process?

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My Lords, we are pressing the international bodies concerned and other countries to proceed with this. At the moment there is some hesitation among the Rwandese themselves about how this is to be done. But we hope to make progress very quickly.

National Lottery: Administration

2.54 p.m.

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asked Her Majesty's Government:

Whether they are satisfied that the five bodies designated to distribute proceeds of the National Lottery have in place administrative structures and procedures competent to execute that task.

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My Lords, Her Majesty's Government are satisfied that the 11 bodies selected to distribute the proceeds from the National Lottery to good causes will execute the task competently. The distributing bodies have kept my department and the other departments with lottery responsibilities closely informed about the development of their systems. The bodies will be required to have their systems certified by the National Audit Office before they will be allowed to draw down lottery money to make grants.

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My Lords, I thank the Minister for choosing that reply from among the many hundreds that she has there with her. But it is a gentle day today. Is she aware of the widespread concern about when or whether the bodies will be in full administrative order to handle the vast sums of patronage which will pass through them? I say that bearing in mind that the Charities Board has let it be known that it will not be ready for about a year, that the Sports Council is still subject to a major reorganisation and that the Millennium Commission, as we discussed last week, is in disarray after the sacking of its director general.

Perhaps I may ask the Minister two specific questions, which will be helpful to the people in the field, about science and about sport. The Minister in another place said yesterday that science projects might be major beneficiaries of the lottery funds, and that is an excellent thing. But can the noble Baroness tell us and the science world which of the distributing bodies will handle science projects, since it is not clear that any of them is specifically qualified in that area? Secondly, on sport, the Minister has announced a new policy for the Sports Council and sport whereby only a few core sports will be supported by the Sports Council. Is it the case that only a few core sports will benefit from the lottery, or will the Sports Council hand out lottery money to sports but not hand out normal money to them?

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My Lords, first, the Millennium Commission is not in disarray. Progress towards distributing funds from the lottery is proceeding very well. All the distributing bodies, with the exception of the National Lottery Charities Board, will be issuing guidance to applicants by 1st December and inviting applications from 4th January. The Charities Board is carrying out extensive consultations with the voluntary sector and will issue its guidance after that process is completed.

With regard to science projects, it would depend on the nature of the project. It may be possible for science projects to apply for funding to the Millennium Commission or, if there is a voluntary sector input, to the Charities Board. The Millennium Commission will be issuing guidance to applicants on 28th November.

The noble Lord asked about core sports. No, the Sports Council will focus its grant in aid more narrowly in future, but the National Lottery proceeds will be distributed where expenditure is connected with sport.

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My Lords, is my noble friend aware that the Arts Council and the regional arts boards have procedures in place and are raring to go and that it only remains for my noble friend to urge your Lordships and your friends and relations to buy your lottery tickets?

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My Lords, I am extremely grateful to my noble friend, who seems to have done a lot of my work for me.

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My Lords, can the noble Baroness tell us up to what value the tickets have been printed so far?

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My Lords, tickets are £1 each and there will be enough to go around.

Road Fuel Prices: Effects On Rural Areas

2.58 p.m.

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asked Her Majesty's Government:

Whether they will take fully into account, when considering any recommendations to increase the running costs of road vehicles, the effects on rural and remote areas of a general rise in the price of fuel.

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My Lords, we shall take great care in considering any recommendations, such as those of the Royal Commission on Environmental Pollution, for increases in the running costs of road vehicles. There are, though, a wide range of factors which would have to be taken into account by my right honourable friend the Chancellor of the Exchequer.

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My Lords, I am grateful to my noble friend for his reply. Does he agree that a general increase would raise the cost of living disproportionately in rural areas, where everyday life is dependent upon road vehicles, especially in Scotland and Wales, and where congestion and pollution occur infrequently? Will the Government therefore give urgent consideration to road pricing schemes, difficult though they may be, in urban areas and on congested roads where disincentives are very much needed?

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My Lords, I believe that increases of the sort which the Royal Commission is talking about would certainly have considerable implications for jobs, the economy and individuals. That would need to be the subject of detailed examination. I accept the point which my noble friend is making: that it would also possibly have greater implications for those living in rural areas. As regards road pricing and its possible effects, I can give an assurance to my noble friend that that is something which colleagues in the Department of Transport are looking into. A research programme into its possible effects, particularly on urban road pricing, has been carried out. No doubt in due course we shall be able to let my noble friend know more about that work.

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My Lords, in view of the fact that most noble Lords would always wish to obey, both in the letter and in the spirit, the Salisbury rules in connection with items included in party manifestos, will the noble Lord inform the House as to whether, at the last general election, the party opposite promised to increase the price of fuel?

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My Lords, I can assure the noble Lord opposite that in last year's Budget my right honourable friend the Chancellor of the Exchequer—I refer the noble Lord to paragraph 450 of the Red Book—gave a commitment to increase road fuel duties, and not prices, by an average of something of the order of 5 per cent. per annum. That is considerably less than what the Royal Commission is suggesting, but it is in order to help ensure that the United Kingdom meets its Rio commitment to reduce CO2 emissions to 1990 levels by the year 2000.

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My Lords, does my noble friend agree that if there were any draconian increase in petrol or fuel tax, that would not only inflict hardship on those living in rural areas, but it would be an additional cost on business which would reduce our competitive position? Does my noble friend further agree that careful consideration should be given to this matter because we must retain our competitive edge?

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My Lords, my noble friend is right and that is why I answered my noble friend Lord Campbell of Croy in the manner which I did the first time I replied. There will be considerable implications as regards jobs, the economy and individuals if we increase fuel prices by as much as the Royal Commission has suggested. In response to the noble Lord, Lord Bruce of Donington, I repeated the commitment which my right honourable friend has given to increase duties by an average of 5 per cent. a year—that matter would have to be considered each year—in order to meet our Rio commitment.

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My Lords, will the Minister not agree that there are few worse pollutants than pollution of the freedom of movement, freedom of choice and freedom itself and that the motor car is a vital freedom to so many of our people? Let us be careful before we injure it.

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My Lords, I shall be the first to agree that the motor car is a vital freedom to the individual. I believe that most of us would also agree that on occasions the numbers of motor cars—which normally mean other people's motor cars and not one's own—can be an infringement of the liberties of other people. Quite obviously there has to be a balance drawn between those two particular freedoms.

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My Lords, are the Government aware that one of the biggest difficulties in terms of the cost of motoring is the perception of motorists that it costs them only the price of the petrol to travel from A to B when in fact, because of the fixed costs associated with motoring, the real costs which they incur are far higher? Have the Government any plans to transfer some of those fixed costs such as the road tax to increase the variable cost in fuel duty so that the actual cost of motoring would not change, but that the motorist's perception of the real costs would be improved?

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My Lords, I regret to say that I do not agree with the noble Lord. I believe that most consumers are sophisticated enough to recognise all the costs, both those of petrol and of the fixed costs. I believe that most of us find those costs quite a considerable burden on our individual budgets.

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My Lords, at the moment I find the noble Lord's answers puzzling. Does he agree that if the Government use the price mechanism for fuel the increase in price must fall on those who value the object the most? The Minister is trying to be as helpful to his friends as he can; but does he not recognise that if the price is raised in the end the user will bear the burden? Does he agree that there is no way around the problem other than not to raise the price in the first place?

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My Lords, if the noble Lord is trying to suggest that my answers have been contradictory, he is wrong. I made it quite clear that my right honourable friend the Chancellor of the Exchequer has given a commitment to increase duties by something of the order of 5 per cent. per year in order to meet our Rio commitments. I believe I said at first that the sort of increase suggested by the Royal Commission is considerably greater than that and that it would have very real and much greater implications than the increases purely in duty rather than in total price, as suggested by my right honourable friend the Chancellor of the Exchequer.

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My Lords, in expressing sympathy for the original point made by my noble friend Lord Campbell of Croy, does my noble friend recognise that it is really the number of cars on the road which is the main problem? Does my noble friend agree that one way of regulating that is to use the annual road tax on cars which, since it was introduced in its present form in 1968, has fallen in real terms to less than 60 per cent. of its level at that time? Does my noble friend further agree that if the 1968 level were restored, it would mean raising the current rate from £130 to £220 which would have the benefit of not only reducing the number of cars, but of producing an extra £2 billion to the Exchequer?

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My Lords, as I believe is fairly obvious from the exchanges in this House, there are advocates of fuel duty and advocates of vehicle excise duty. My right honourable friend the Chancellor of the Exchequer will, I imagine, continue to consider both those duties and the full implications of their effects.

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My Lords, will the noble Lord indicate whether, in the light of the Royal Commission's report to which he referred frequently, and of the views expressed in this House this afternoon, the Government are contemplating issuing a strategy on the whole transport issue to which the various problems can be addressed?

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My Lords, no doubt my right honourable friend the Secretary of State for Transport will consider that in due course. All I can say is that my right honourable friend the Chancellor of the Exchequer will consider the implications, as far as the duties go, in the forthcoming Budget.

British Waterways Bill Hl

3.7 p.m.

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

Moved, That the Commons Message of 27th October 1994 be now considered; and that the promoters of the bill have leave to suspend any further proceedings thereon in this session in order to proceed with the bill in the next session of Parliament, notice of their intention to do so having been deposited in the Office of the Clerk of the Parliaments not later than 9 a.m. on Thursday 3rd November next;

That such bill be deposited in the Office of the Clerk of the Parliaments not later than 3 p.m. on the second sitting day in the next session with a declaration annexed, signed by the agent, stating that the bill is the same in every respect as the bill at the last stage of the proceedings thereon in this House in the present session;

That the proceedings on the bill in the next session of Parliament be pro forma in regard to every stage through which the bill has passed in the present session, and that no new fees be charged to such stages;

That the Private Business Standing Orders apply to the bill in the next session only in regard to any stage through which the bill has not passed during the present session. —(The Chairman of Committees.)

On Question, Motion agreed to, and it was ordered that a Message be sent to the Commons to acquaint them therewith.

Business Of The House

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

Moved, That Standing Order 38 (Arrangement of the Order Paper) be dispensed with tomorrow to enable any Message which may be received from the Commons relating to the Deregulation and Contracting Out Bill to be considered before the Motions standing in the names of the Lord Privy Seal and the Earl of Longford.— (Viscount Cranborne.)

On Question, Motion agreed to.

European Union (Accessions) Bill

3.9 p.m.

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My Lords, I beg to move that this Bill be now read a third time.

Moved, That the Bill be now read a third time.— (Baroness Chalker of Wallasey.)

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My Lords, this is a most welcome Bill bringing four admirable countries into the Community. Even more admirable is the fact that, according to the papers, three out of four of those countries will in fact be net contributors to the Commission and to the Union. I welcome this Bill and I hope that it will pass very quickly.

Bill read a third time.

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My Lords, I beg to move that this Bill now do pass.

Moved, That the Bill do now pass.— (Baroness Chalker of Wallasey.)

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My Lords, I believe I am correct in saying that one makes comments at this stage about whether or not one likes the Bill and wants it to pass. Although I set down no amendments at Committee or Report stages—and nor did any of my colleagues or anyone else in the House—I would not want the Minister to believe that I have changed in any sense the view which I expressed at Second Reading that this Bill is not a good Bill but a bad one in that it will extend the number of countries which belong to the European Union, Community, or whatever we are now supposed to call it.

The fact is that the European Community is already far too big. We can already see the results of the things that the European Community is doing. We already know (because Christopher Booker and Mr. North made a calculation of the costs) how much the Community costs this country and the people of this country in direct contributions, in loss of trade—or at least in me increase in our adverse trade balance—and, indeed, in increased food costs. We already know that membership of the Community has done Britain no good at all.

What is more, I believe that the larger the Community becomes, the more difficult it will be to control and the more bureaucratic it will become. Indeed, we have already seen how difficult it is for the new President of the Commission to allocate the jobs which already exist and the problems that that has caused to Sir Leon Brittan and presumably to the Government. As I have said, the larger such an institution becomes, the more bureaucratic it will become and the more difficult it will be to control. Therefore, I say again that not only am I opposed to the accession of those four countries, but I believe that the present institution of 12 nations is not serving Britain well, has served us very badly and the sooner we get out of it, the better.

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My Lords, before my noble friend comes to reply to the noble Lord, Lord Stoddart, might it be in order if I were to put a gloss on the noble Lord's question because he has stated that in his view the Community will be more difficult to control? My question to my noble friend is: does she believe that the expansion of the Community by having more member states will add power to the centre of the Community or, as Her Majesty's Government claim, will that power become more diffuse and more widely spread among all the members in future?

3.15 p.m.

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My Lords, since the original introduction of the Bill, a number of developments have occurred which have made me change my views considerably, and I regret to say that they have become more extreme than previously. Your Lordships will have noted from the Explanatory Memorandum to the Bill that:

"The Union will finance a range of expenditure programmes in the new Member States. This will require an increase in the financial perspective and the Community budget. But the increased financial perspective will continue to respect the limits on expenditure imposed by the Community's own resources ceiling".
Since those words originally came to the notice of your Lordships, there have been a number of developments in the European Community, particularly on the financial side, which have caused widespread unease not only in your Lordships' House and another place but also in the country at large. I refer to the quite disgraceful way in which the finances of the Community are dealt with by the Commission of the European Communities and in particular to some of the facts that were revealed for the first time by the publication of your Lordships' Select Committee report on fraud and mismanagement of Community resources.

The first point to note when reading those words in the Explanatory Memorandum is that the new expenditure programmes,
"will require an increase in the financial perspective and the Community budget".
However, we have been told in other explanatory memoranda dealing with the enlargement of the Community that so far as the United Kingdom is concerned there will be relief in its net contribution. The Government originally put that relief at some £300 million per annum. We now know, however, as a result of the issue of later memoranda that the benefit will be limited to £350 million spread over a period of five years. There is not very much relief in that.

The other point that your Lordships may have noted in the course of the debates that have taken place in your Lordships' House is that any reference to the Community budget anywhere in the Explanatory Memorandum or elsewhere is a complete farce because there is no control at all over the Community budget. There is certainly no control over it in the Parliament of Westminster since the expenditure levels were set at the 1992 Edinburgh conference with the inter-institutional agreement which sets the ceiling over the next five years. We already have it on the record in evidence from experts that that ceiling is, in practice, equivalent to the budget itself, except for some minor tamperings.

Therefore, when we pass this Bill on European Union accessions, we should bear in mind that in 1992, without any consultation either with another place or this House and without any frank debate on the matter, we committed ourselves to increases in expenditure over the next five years. That was done without any consultation with or assent from the British Parliament. Those are not propitious symptoms for the development on successful lines of an enlarged European Community.

There will be other occasions on which it will be possible to return with perhaps even slightly more detail—and even more embarrassment to the Government—than has been produced so far, so I shall refrain from making any further comment upon it. However, this much I warn the House—perhaps I should say that I venture to warn the House: when the House really knows of the sordid transactions that have taken place at Commission level in regard to this whole affair, the House will be appalled. Although I do not question in any way the personal integrity or endeavour of the Minister, for whom I have the utmost respect, I venture to suggest to your Lordships that the passing of this Bill today will mark an occasion which in due course this country and other countries in Europe will have cause to regret.

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My Lords, I think that it would be most unfortunate if, as a result of what has been said, a message were to go out from this House that the new members were not welcome in the Community. I wish therefore strongly to support my noble friend Lord Boyd-Carpenter in saying how glad we are that they are joining us. We believe that they will add to the strength of the Union. We believe that they will make a most valuable contribution and we look forward to their joining our company in the European Union.

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My Lords, on a simple point of information, I wonder whether my noble friend the Minister could clarify the rather peculiar phrase in the Explanatory Memorandum, "in the financial perspective". I am not quite clear what that phrase means.

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My Lords, I support the views on this matter expressed by the noble Lord, Lord Cockfield. An extraordinarily insular point of view has been expressed this afternoon by the noble Lords, Lord Bruce of Donington, Lord Pearson and Lord Stoddart. There is an old Scottish saying that, "Everybody is oot of step except oor Jock". We are at the final stage of the Bill. Other countries in Europe similar to ours have been queueing up desperately anxious to join the European Union because the whole experience so far has been that the unity and integration that it promotes have been in the interests of the citizens of Western Europe.

We have these countries forming a queue to join the European Union—not a free trade area—and yet here in your Lordships' House on the Third Reading of this important Bill there seems to be a tone that urges the view that the Union should not welcome those friendly countries, and the motivation of the speeches is that, instead of those countries joining the European Union, we in the United Kingdom should take urgent steps to withdraw from it. It is most extraordinary that we should have such unrepresentative views on the Third Reading of this important Bill.

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My Lords, with the leave of the House, I wonder whether I may correct what the noble Lord has just said about my intervention.

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Order, order!

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My Lords, it is merely that I did not seek in any way—

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Order, order!

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My Lords, I simply asked whether my noble friend thought that the addition of new members to the European Union now, and in future, would add to the power of the centre of the Union or whether it would make it more diffuse. That is a very important point.

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My Lords, perhaps I might just speak one or two sentences. I had not intended to speak today, but I would be very unhappy indeed if the two voices from the Bench immediately behind me were thought to represent the views of the Labour Party. They do not. The Labour Party is committed to this enlargement. We believe that it is in the interests not just of the Community as a whole but of the United Kingdom. Not only that, the fact that the enlargement is to take place is one of the great moments in the development of the integration of Europe. So far as concerns the Labour Party —not my noble friends sitting behind me—we welcome it.

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My Lords, I am most grateful to the noble Lord, Lord Richard, for what he has. just said. It would be easy at this final stage of the debate to get the whole matter out of perspective. Since we are talking about perspective, let me turn immedmtely to the questions asked by my noble friend Lord Willoughby de Broke and the noble Lord, Lord Bruce of Donington, and say that we have not agreed to any increase in spending by the present 12 member states beyond that which we have already agreed at the Edinburgh European Council. So the implication for the financial perspective is that the Community will finance a range of expenditure programmes in the new member states, but much of that increase will come from three of the four applicant states, as my noble friend Lord Boyd-Carpenter said.

Further, I was asked by my noble friend Lord Pearson of Rannoch about whether there would be more power to the centre the more countries that join. I happen to believe that there would be less power to the centre. Having spent the whole of this weekend looking at the need to have a more efficient Community—one which monitors its spending far better, as the noble Lord, Lord Bruce of Donington, would wish—I am convinced that the more countries which are part of this Community, the more we shall have proper subsidiarity and the proper monitoring of expenditure—something with which I fully agree.

I am most grateful to my noble friend Lord Cockfield. I agree with him: it would be very bad if the Bill were to pass from your Lordships' House giving the impression that we did not wholeheartedly welcome the enlargement of the European Union to include these four prosperous countries, with their long democratic traditions. That can but benefit not just the United Kingdom but the European Union as a whole. In turn, these countries will benefit from being part of a dynamic and prosperous European Union. I am sure that they will play a full part in shaping its future. But this enlargement is more than that.

We must begin to look to the next round of enlargement—an enlargement which will include countries of central Europe which have so long been denied the political freedoms and economic prosperity that we enjoy, as the noble Lord, Lord Thomson of Monifieth, said. That will be one of the greatest challenges to the European Union. I believe that one of the safeguards of the European Union will be a Union based on a partnership that uses the talents of all the member states to grow into a truly European Union which will help ensure stability and prosperity for all the citizens of Europe. That is why I urge that the Bill do now pass.

?

On Question, Bill passed.

Weights And Measures (Metrication)(Miscellaneous Goods) (Amendment)Order 1994

3.25 p.m.

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rose to move, That the draft order laid before the House on 19th July be approved [26th Report from the Joint Committee].

The noble Earl said: My Lords, the three instruments will implement the 1989 European Community Units of Measurement Directive in respect of authorising metric units of measurement and their use for weights and measures and price marking. As the House will be aware, the United Kingdom is already using the metric system for many purposes. The metric system has been taught in schools in the United Kingdom since 1974; and many everyday products are now sold in metric units, as anyone who visits a supermarket or DIY store will be aware.

The legislation before the House will continue that process of metrication. It will require the use of metric units from 1st October 1995 for sales of food pre-packed in variable weights such as cheese and meat, for sales of goods by length, such as fabric, or by area, such as carpet, and for sales of petrol, diesel and other liquid fuels. The legislation will also require the use of metric units from 1st January 2000 for food sold loose from bulk such as meat, poultry, cheese, fish and fresh fruit and vegetables. The legislation will, however, allow the continued use of the mile for road traffic signs, speedometers and odometers, and the pint for sales of draught beer and cider and for milk in returnable containers.

In preparing this legislation, the Department of Trade and Industry has undertaken very extensive consultations with industry, retailers, enforcement groups and consumer bodies. Over 700 organisations have been consulted. I can report that, in general, the responses have been low key and supportive of the department's proposals, although some consumer organisations would have liked to have seen full metrication with no exceptions.

Provision has been made to assist those consumers who are not familiar with the metric system. During the transition periods, those retailers who display their unit prices in metric—for example, 50p. per kilo—will have to display either the imperial equivalent of the metric unit price or a price conversion chart. After the transition periods retailers may, if they wish, continue to use the imperial system for supplementary indications of price and quality.

I should mention that the principal metrication changeover date in the legislation, 1st October 1995, is nine months later than the date—1st January 1995— required by the directive. There are a number of reasons for that, including the need to consult interested parties on the conversion chart and the fact that the legislation has turned out to be more complicated to draft than was first envisaged. A conversion date of 1st January 1995 would not give industry sufficient time to make the necessary changes.

Finally, I should stress that the legislation goes no further than the requirements of the directive and that imperial units will not disappear. There will be a change to metric only where the law presently provides for the use of imperial units of measurement in a manner contrary to the 1989 directive. But in many cases units of measurement are used through custom and practice, not because they are required by law. Thus, for example, the measurement of a cricket pitch or a racecourse is not laid down by law and I can assure the House that these and similar examples will not be affected by the legislation. I commend the draft regulation and orders to the House. I beg to move.

Moved, That the draft order laid before the House on 19th July be approved [26th Report from the Joint Committee].—(The Earl of Arran.)

3.30 p.m.

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My Lords, this is not the most important problem confronting the country today. However, it is an interesting issue and certainly one that interests me, I can trace no element of party politics; it is a matter on which reasonable people can agree to differ. I agree with the main consumer bodies and am a full "metriciser", if there is such a word. As regards British industry, the consumer and everyone else, it is sensible to go fully metric. However, I recognise the fact that other people whom I regard as being reasonable and sensible may not take that view.

The present position is a mess. I looked in my refrigerator to discover that the milk is in an imperial measure (a pint) but that the bottled water and fruit juices are in metric measures. The rationale for that is beyond me. The butter from Sainsbury's is in grammes but the cheese from Sainsbury's is in pounds and ounces. Sainsbury's sells the best ice cream in the world—it is called Ben & Jerry's—and is in an American pint unit. Even if we go fully metric, I am not clear what will happen to American units when we try to import their products.

The Minister referred to sporting matters. Football pitches are measured in yards but rugby pitches are measured in metres. I have tried to investigate various other aspects of the problem but cannot obtain definitive answers. I had completely forgotten that a cricket pitch is a chain, and so forth. Almost all Olympic athletic and swimming events are in metric. Cloth is sold in metric by length but in imperial by width. It must be pointed out that with such a mess mistakes can be made. I am certain that I am not the only person who has had the experience of measuring for curtains in yards, ordering the amount and, because I have not specified, ending up with John Lewis sending the length in metres.

The main point is that in schools our children are taught wholly metric measures. The GCSE science syllabus is metric and all the details are in metric units. Even a measurement of force called "Newton"—and no greater name exists in our history—is metric.

I wish to ask the Minister and other noble Lords who may be so committed what is the nostalgia for the lost Empire that makes everyone say that we must have imperial units? Even the so-called imperial units are not strictly British; we got them from somewhere else. The Minister said that the consumer bodies were not happy with the slow speed at which we are moving—and nor am I.

The Minister quoted from the 26th Report of the Joint Committee of both Houses which was appointed to scrutinise delegated legislation. Paragraph 2 states:
"The Committee draws the special attention of both Houses to these Instruments on the ground that they fail to implement the Directive properly".
Is the Minister saying that he agrees with that but the only way he regards them as failing is in terms of date and that his justification is that it is taking a little longer to get the whole thing together? Secondly, why cannot his department come into the last part of the 20th century and prepare for the next century by going full steam ahead in the metric direction?

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My Lords, I fought a long rear-guard action in order to obtain the derogation for the mile, the pint and the inch. Although to some extent they are preserved, this is an extremely sad day. I say to the noble Lord, Lord Peston, that we are moving in this direction not in the name of progress but purely in the name of conformity for conformity's sake. I could not let the occasion pass without deploring that fact.

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My Lords, I wish to bring to the attention of your Lordships' House the practical importance of these measures. I agree with the main thrust of the remarks made by the noble Lord, Lord Peston, in supporting the measures. However, I am at variance with him in the importance that is attached to them. Perhaps it is the difference between a practical person and an academic. As regards an academic, the importance of one set of measurements against another is numbers and letters on a piece of paper, but for a practical person it can amount to whether or not a piece of machinery fits or whether one has to have twice as many tools to work on that piece of machinery. The problem has been a yoke that has fallen heavy on British industry and commerce. This country has been subjected to feet-dragging in terms of metrication.

Having been in power for 15 years, this Government bear a heavy responsibility but previous governments are also responsible. One can go back to our entry into Europe—and we were taken in by a Conservative Government—when we thought that we could be effectively competitive with our fellow nations in the EEC, as it then was, and with no emphasis on metrication. That put a yoke on British industry and commerce in terms of their ability to compete effectively.

I wish to ask two questions. First, when will the process of metrication be complete? Some of the measures will be implemented in 1995 and more in the year 2000. However, I understand that that will not complete the process. How much longer must industry, commerce and the people of this country wait until the Government bite the bullet and say, "Yes, we will complete the process of metrication that has been going on for so many years."? Apart from the United States of America, how many countries use the imperial system? I appreciate that America uses a bastardised form of this system. One might turn the question round the other way and ask what proportion of world trade and world production of, for example, manufactured goods is in metric and what proportion is in imperial measurement? We need to know the answers to those two questions.

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My Lords, first, I should say, happily, that one cannot see the day when the metric system will rule world-wide, not least because of course there are more sensible units. The international aviation authorities are agreed that aircraft heights will be defined in feet—a good old imperial unit —and of course that distance and speed will be defined in nautical miles. Again, that is for very good reasons and the nautical mile is a much more logical unit than the kilometre, as all, except the French, are perfectly willing to admit.

Indeed, I am quite liberal minded about these matters. It seems to me that there would be some advantage if we expressed the length of a cricket pitch in the same number of metres as the number of yards we now use. That might give some of our batsmen a little longer to prepare themselves for a West Indian fast bowler, which would undoubtedly be an advantage.

I certainly believe that there will be continuing commercial pressure—not pressure from Brussels— which will over the years push us along the road of defining most units by the metric system. That is why I regard the orders as so objectionable. Why do we have to have Big Brother insisting that it must be done now, next year or in 1996? Why for once cannot we allow such matters to take their course? Why do we have to be so Big Brother-ish about it all; or rather, why do they have to be so Big Brother-ish about it?

I end by asking my noble friend one question. Can he assure me that even after the year 2000 the ordinary greengrocer with his stall in the ordinary English market will, if his customer comes to him and asks, "Can I have a pound or two pounds of potatoes?", be able to reply, "Yes, of course. I will weigh you up a pound or two pounds of potatoes"? I hope that my noble friend is able to give me that assurance. It would make me a little less unhappy about these decrees which are being brought into our law today.

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My Lords, if on 1st November 1944 we had told British servicemen fighting hard and bravely in France, Belgium, Holland or Italy to liberate those countries from the German occupiers that 50 years hence the former occupiers and former occupied would gang up together to make it illegal for British people living in Britain to use their traditional measurements in transactions involving only themselves—that is, transactions which do not affect people living on the other side of the Channel—they would have thought that we were stark staring mad. If we had gone on to explain that that command would be mitigated slightly by certain extremely gracious minor concessions on the part of the Continentals, who would condescendingly allow us to sell for a few years longer lemonade and milk in a bottle by the pint, but not ginger beer, ginger ale, tonic water or milk in a carton; and subsequently to sell cider but not perry by the pint; and that yards could be used for road measurements but not for the measurement of timber, they would have thought that we were crazier still.

The alleged justifications for this are apparently considerations of economics, public health, public safety or administration. But no public health or safety considerations apply, and if there are any economic or administrative disadvantages in sticking to the present system, the merits or demerits of which need not concern us now, they disadvantage nobody but ourselves.

After all, we are not talking about tinned food, bottled food or drink or packaged food such as biscuits which we export to the Continent. Naturally, harmonisation on metric lines is entirely justifiable in those cases. We are talking about goods sold within the United Kingdom to United Kingdom subjects. At least 99.99 per cent. of Brussels sprouts sold loose here are not sold to Belgians but to the British. So what has happened to the much vaunted principle of subsidiarity which was held out to us as one of the few worthwhile aspects of the Maastricht Treaty?

I have three specific questions for the noble Earl, Lord Arran. Once the regulations are agreed to, will it be illegal for a small builder to quote a householder in writing for putting up a couple of three foot shelves rather than a couple of 0.9144 metre shelves? Secondly, will it be illegal for someone selling his house to advertise a 40 foot garden or, for example, that his main bedroom measures 16 by 12? Thirdly, supplementary imperial measurements can, by gracious permission of the EC Commission, be listed, provided that the lettering used is not higher than the metric lettering used. How many extra inspectors will be needed to monitor that? What would be the maximum fine or term of imprisonment which could be imposed upon the transgressors?

The regulations will cost British businesses between £32 million and £33 million. Those are not my figures; they are government figures. That is reason enough for opposing them. But the most powerful reason for doing so is that the doctrine of subsidiarity, which we were promised would come into effect the moment that the Maastricht Treaty was ratified, has either been deliberately ignored in this instance or shown up as a hollow sham.

3.45 p.m.

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My Lords, perhaps I may raise a specific point which was mentioned also by my noble friend Lord Tebbit. I ask the Minister whether the word "mile" in Schedule 3B of the Units of Measurement Regulations 1994 includes the nautical mile? Will he assure me that nothing in the regulations will prohibit or prevent the continued use of the nautical mile?

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My Lords, I agree with everything which the noble Lords, Lord Tebbit and Lord Monson, and other noble Lords have said about these orders. I should like to know what will happen after the year 2000 if a retailer in a market sells a couple of pounds of potatoes rather than however many grams that may be. Will the retailer be hauled before the courts? If so, will he be fined, will he be liable to a fine and imprisonment, or just imprisonment or just a fine?

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My Lords, I wonder whether my noble friend, when he comes to reply, could confirm what the total compliance costs of these three regulations are spread over the years, I think, 1993 to 1999 and how many individual trading entities they concern in this country.

I notice that the noble Lord, Lord Monson, advanced the figure of some £33 million, but my calculations, from these somewhat coy statistics with which we have been supplied in the compliance costs assessment, seem to come to rather more than that.

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My Lords, I am grateful for the way in which the Minister explained the orders to the House. He referred to consultation and I believe that he said that he had consulted over 700 organisations. Can he tell the House how many replies he received?

The noble Lord, Lord Peston, thought that he might be a "metriciser". I am not sure how Hansard will report that, but perhaps it should be that he is a metricator.

The noble Lord, Lord Tebbit, referred to the US and the aviation industry. Is he aware that the US ton is different from the imperial ton, and the US gallon and the imperial gallon are different? Can he be sure that there is no scope for confusion or even disaster?

The orders purport to be concerned with the implementation of metrication as required by an EC directive. In fact, government policy appears to be to retain imperial measurement for as long as possible. I am sure that many noble Lords and older members of the electorate will be very supportive of that action.

The noble Lord, Lord Peston, referred to the difficulties with education and our children. Schedule 1 to the Weights and Measures Act 1985 buried certain obscure units such as the rood. But the Units of Measurement Regulations 1994 currently before the House resurrect the rood as a "supplementary indication". Presumably, the rood is a very useful unit of measurement. Perhaps the Minister could indicate to the House the size of the rood. For example, is it the size of the Dispatch Box, the size of the Table or the size of the whole Chamber? The noble Earl's department will have consulted widely with trade associations and organisations which have requested the reintroduction of the rood. Can the Minister tell the House which trade associations requested its reintroduction?

The noble Lord, Lord Peston, referred to milk. I believe he said that the standard carton is 568 millilitres. That is a very peculiar amount; indeed, it is a few tablespoonsful more than half a litre. The need for that becomes much clearer when one looks at the supplementary indication. I say that because the supplementary indication for 568 millilitres is one pint. So, in fact, we are no nearer to metrication.

The noble Baroness, Lady Oppenheim-Barnes, claims the credit, as she would have it, for retaining the mile, the inch and so on as regards roads. I am afraid that I cannot support her claim, as Schedule 3B of the Units of Measurement Regulations allows the inch, foot, yard and mile to be continued. Nowadays, we travel across the Channel a great deal, and we have no trouble using kilometres on the Continent. But let us consider the continental driver on this side of the Channel. He sees a sign showing, "London —57 miles". We may feel that that is no problem. However, how would we feel if we went to the other side of the Channel and saw a sign saying, "Paris—60 leagues"? That is the same sort of difficulty as a continental driver would have.

The noble Lord, Lord Monson, thought that there would be no safety considerations, but we are retaining dual heights as regards bridge height limits, and that is a very serious safety consideration. When a lorry driver comes along he has to check whether his lorry can go under the bridge. He has to look at two heights, not one. Of course, the continental driver will only be familiar with his height in metres.

There is another difficulty as regards speedometers. When we drive on the Continent we have to have a dual scale so that we can see how fast we are travelling. But if we used kilometres in the UK, we would have just one very clear scale. Further, as regards an odometer in kilometres, one-tenth of a kilometre is 100 metres, whereas one-tenth of a mile is 176 metres.

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176 yards!

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My Lords, these imperial units are very familiar and very popular, but they are not suited to modern times. Metric calculations are much easier. For example, 1,000 litres of water weighs 1,000 kilos, which is the same as one tonne, which is exactly one cubic metre. There is one welcome exception to metrication in the orders. It is found in Schedule 3B. I refer to the pint of "draught beer or cider". There is no difficulty with metrication. It is not the metric units, or the use of them; it is the prolonging of the agony of using dual units and measurements and supplementary indications.

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My Lords, it is quite difficult to know where to start on this particular order because; your Lordships have very clearly demonstrated that there are very emotive and, indeed, passionate feelings: right across the House. The noble Lord, Lord Peston, quite rightly believes it not to be a party political matter. That is certainly not the set of circumstances which applies this afternoon. We were delighted to learn about the contents of the noble Lord's fridge. I must admit that it all sounded somewhat confusing.

The noble Lord, Lord Peston, asked one question in particular; namely, whether or not we were fulfilling the requirements of the directive in the orders. Except for the date of 1st January 1995, we are meeting the deadlines in the directive. We are substituting 1st October 1995 in response to representations from retailers. As I have already said, they feel that they need more time so that such changes can be properly introduced. As regards other aspects of implementation, the instruments before the House make the necessary amendments to our national legislation on weights, measures and prices.

However, perhaps I may say in general—

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My Lords, I am sorry to interrupt the noble Earl, but what he said is enormously important for the record. Is he saying that, other than the date, we are fully implementing the directive in the orders?

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Yes, my Lords; mat is the case. Lord Peston: My Lords, I am much obliged.

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My Lords, as I was saying, in general, the United Kingdom has already converted to the use of metric for industrial use and the sale of many common groceries. Moreover, we have taught the system in our schools now for 20 years. But, as your Lordships have clearly demonstrated, there is the difficulty of knowing what to do; for example, how quickly to do it, whether to do it immediately or whether to take time. However, the Government have decided to introduce such changes gradually and at minimum disruption to both business and the consumer.

It is also important to note that there is perhaps something of a generation gap involved. For example, it is quite difficult for the elderly to appreciate fully the complications of the metrication system. Therefore, I believe that the gradual process has definitely been more beneficial. We now hope to complete the process, again at minimum disruption to all concerned, while retaining the pint of beer in the pub and the pint of milk on the doorstep, as well as the mile and the yard.

Perhaps I may now respond to some of your Lordships' questions. I hope that noble Lords will forgive me if I do not answer all the detailed, technical questions this afternoon. I believe that the noble Lord, Lord Monkswell, asked which countries, other than the United Kingdom and Ireland, continue to operate the imperial system. So far as I am aware, the only countries where imperial is the principal system of measurement are the United States, Barbados, the Bahamas, Jamaica, The Gambia, Western Samoa and Sierra Leone. One noble Lord asked whether, after the year 2000, a retailer could be prosecuted and fined. After the year 2000, a retailer could be prosecuted and fined, but he could not be imprisoned.

The noble Lord, Lord Monson, asked whether the directive was in conflict with the doctrine on subsidiarity. Indeed, if he did not say that, he certainly implied it. The objective of the directive is to remove barriers to trade which arise from the differences between national laws on units of measurement. That can be achieved only by legislation at Community level to remove those differences. It follows that the directive is compatible with the principle of subsidiarity.

I have to say again—and I note that my noble friend Lord Tebbit is not now in his place—that the purpose of the present changes is to complete the move towards a full adoption of the metric system for trading purposes. Some noble Lords asked: why do it now? In the 1972 White Paper, the Government explained that the country could not drift towards metrication; there could well be too much chaos. An orderly staged transition would have to be the most appropriate.

I think your Lordships will agree that the noble Earl, Lord Attlee, is extremely well versed and has taken a great deal of trouble over this order. I hope that I have made clear to him some of the feelings the Government have on this matter. He asked about the rood. He will be pleased to hear it is now an abolished unit. Its length is certainly larger than the Dispatch Box from which I speak at the moment: it is some 1,210 square yards. I can assure the noble Earl that it has been abolished for at least 10 years and is now part of a comprehensive list of non-authorised units.

I am aware that I have not answered all your Lordships' questions. Some of them are somewhat technical but I will very carefully read Hansard and I assure noble Lords that they will receive answers to their questions in the next few days. I beg to move.

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My Lords, before the noble Earl sits down, can he answer the simple question: will the nautical mile continue indefinitely or not?

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My Lords, I am not absolutely certain about the answer to that question. I hope my noble friend will regard that as a somewhat technical question to which I do not have the answer with me. I hope therefore my noble friend will allow me to write to him.

On Question, Motion agreed to.

Weights And Measures Act 1985(Metrication) (Amendment) Order 1994

4.1 p.m.

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My Lords, I beg to move.

Moved, That the draft order laid before the House on 19th July be approved [26th Report from the Joint Committee].—(The Earl of Arran.)

On Question, Motion agreed to.

Units Of Measurement Regulations 1994

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My Lords, I beg to move.

Moved, That the draft regulations laid before the House on 19th July be approved [26th Report from the Joint Committee].—(The Earl of Arran.)

On Question, Motion agreed to.

Conditional Fees

4.2 p.m.

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rose to ask Her Majesty's Government:

What safeguards they will add to the draft Conditional Fee Order and Regulations in the light of the concerns raised by the Lord Justice Steyn, the Chairman of the Lord Chancellor's Advisory Committee on Legal Education and Conduct, in his letter to the Lord Chancellor of 26th May 1994 and further identified in the press notice of 9th June 1994.

The noble and learned Lord said: My Lords, it shows great powers of discernment by the Government Whips that when altering the date for this debate they chose 1st November—All Saints Day! For once (although I hope it is not the first occasion) I am clearly on the side of the angels. As I shall explain in a little detail in a moment, the stimulus for this debate arises out of the acute concern expressed on more than one occasion publicly by the Lord Chancellor's own Advisory Committee on Legal Education and Conduct.

Those concerns were also voiced by the Bar on the occasion of its annual conference at the end of September in the opening words of a detailed and well reasoned paper given by a senior QC. He said this:

"Conditional fees are bad news for individual litigants. They are good news for lawyers. They are therefore a bad idea".

Referring to the scheme as now proposed by my noble and learned friend the Lord Chancellor, he said:

"Superficially this appears to have some charm. So that is why it could seem popular. But when you see how it works out in practice only the lawyer benefits—and the litigant —the poor innocent man who has fallen off the Clapham omnibus—cannot win".

Further, in an article shortly to be published by Professor Zander, Professor of Law at the London School of Economics and a solicitor, the opening paragraph reads as follows,

"The idea that a winning litigant would have to pay most or even all the damages to his lawyer seems preposterous. But that would be the effect of conditional fees which the Government is about to introduce as a grand new way of financing litigation. For most clients conditional fees will just be a con".

The concerns which I am about to outline I know are shared by my noble and learned friend the Lord Chief Justice. An unrelated but happy feature of this debate is that we will hear the maiden speech of my noble and learned and great friend Lord Nicholls. He had an outstanding academic career. It was then followed by a very impressive practice at the Chancery Bar. Then he demonstrated—in a forensic sense of course—what a fast worker he was. He became a judge of the Chancery Division in 1943—

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My Lords, I should say 1983. I beg noble Lords' pardon. That shows what a slow worker I am. Inside those 11 years he graduated up from a judge of the High Court of the Chancery Division to the Court of Appeal, to Vice-Chancellor, and now to a Lord of Appeal in Ordinary. Just to emphasise his celerity, I think it is only a few days ago that he was introduced and here he is about to make a maiden speech and to demonstrate that he will add lustre to your Lordships' debates.

Section 58 of the Courts and Legal Services Act 1990 made, for the first time, an agreement to enter into speculative litigation enforceable. A conditional fee agreement is a species of contingency fee which permits lawyers to take cases on a no-win, no-pay basis. In the event of the litigation being successful, a term which is not easy to define—that is, "successful"—the lawyer is entitled to his normal fees plus a mark up or "up-lift"—to use that odd term which sounds more relevant to a foundation garment.

Prior to the passing of the 1990 Act, conditional fees were unenforceable because they were considered to be contrary to public policy. The rule was imposed by the law with two principal aims: first, to prevent exploitation of litigants; and, secondly, to promote the interests of justice. By allowing the lawyer to have a personal financial interest or stake in the outcome of the case, it was thought that this might lead to improper practices by the lawyer and undermine the integrity of the administration of justice. Section 58 was enacted in the teeth of opposition from seven Law Lords, the Master of the Rolls, the former Lord Chancellor, the noble and learned Lord, Lord Hailsham, and the former Attorney-General, the noble and learned Lord, Lord Rawlinson of Ewell. Although I believe that the Government in thus altering the law rendered a considerable disservice to the administration of justice, that is water under the bridge. However, the proposal in 1990 was to limit the up-lift to but a small percentage of the solicitors' proper costs. The Government's White Paper reporting the reactions to this proposal as originating in the Government's Green Paper, recorded that whereas there was some support for legalising speculative actions, it was again stressed that their use would be minimal.

Section 58, to which I have referred, requires the conditional fee agreement, inter alia, to comply,
"with such requirements (if any) as may be prescribed by the Lord Chancellor".
Section 58(5) provides that,
"Any such order shall prescribe the maximum permitted percentage for each description of specified proceedings".
Section 119 defines "prescribed" as meaning "prescribed by regulations" and Section 120 (3) provides,
"Any such regulations … may contain such incidental, supplemental … provisions or savings as the person making the regulations … considers expedient".
Those are very wide powers indeed. In 1991, the year following the enactment, my noble and learned friend the Lord Chancellor issued a consultative paper in which it was proposed to set the maximum up-lift permitted under a conditional fee agreement at 10 per cent. The Lord Chancellor's advisory committee agreed that this maximum up-lift appeared to be about the right figure. However, in May 1993 the Lord Chancellor raised the maximum permitted up-lift to 20 per cent. That apparently did not satisfy those solicitors who might be interested in this new species of speculative litigation because in August 1993 the Lord Chancellor announced—I stress this—without further consultation with his advisory committee that he intended to set the maximum permitted up-lift at 100 per cent.

The Lord Chancellor's advisory committee was so concerned that the practical implications of the decision of the noble and learned Lord the Lord Chancellor should be understood that it issued a press notice, dated 3rd November 1993, stating in terms that the committee was not persuaded that:
"the startling implications of the 100 per cent. permitted uplift had been fully appreciated".
This was, indeed, an entirely different ball game. The committee considered that either the permitted level should be reconsidered or additional safeguards should be introduced.

The committee pointed out that the permitted 100 per cent. up-lift would apply to personal injury litigation, in which the plaintiffs are often vulnerable people of limited means. I would add that, unlike commercial clients, who would, I suspect, be the majority of the clients of the noble Lord, Lord Hacking, the typical personal injury victim is relatively unsophisticated in both his knowledge of legal matters and the capacity to bargain over fees. I agree with the observations of Professor Zander in his article that most personal injury litigation is straightforward. A recent article entitled Re-thinking Contingency Fees by Professors Brickman, O'Connell and Michael Horowitz, published by the Manhattan Institute in Washington, quoted Judge Grady as saying that:
"the vast majority of personal injury cases involve no uncertainty and the lawyer is going to be paid something".
If your Lordships needed further confirmation of that fact, it is to be found in the premium payable by a plaintiff for a policy of insurance, recently negotiated by the Law Society, against his liability for paying the defendant's costs in the event of the action failing. This is to be less than £100. From inquiries which I have caused to be made, it would be surprising to find that the plaintiff's costs of an action fought for some two days in the county court involving two or three witnesses on each side, including expert evidence but with agreed medical reports, would amount to less than £10,000. It follows that if the insurers are to break even, ignoring the administrative costs of such a policy, 100 actions would have to be won for every action lost. That indicates their contemplation of the size of the risk in this type of litigation.

In the press notice the advisory committee points out that it is common for a plaintiff's costs to reach an amount equal to half or even more of the damages recovered. Accordingly, it points out that if the 100 per cent. permitted up-lift comes into force, the plaintiff may have to pay the solicitors an additional sum equal to the whole of the damages awarded to him. If there is a finding of contributory negligence, the damages are reduced accordingly and the risk of losing everything to his advising lawyer is that much greater.

The committee pointed out that:
"one way of eliminating some of the most glaring injustices would be to restrict the up-lift to a limited part of the damages"
in other words, to cap the proportion of damages which the successful plaintiff has to sacrifice to his lawyer, for instance 20 per cent.

In April this year the noble and learned Lord the Lord Chancellor sent to his advisory committee the draft conditional fee order and regulations, which provided, inter alia, for the 100 per cent. up-lift. On 26th May the chairman of the committee, Lord Justice Steyn, a highly respected judge of the Court of Appeal, wrote a lengthy letter to the noble and learned Lord the Lord Chancellor saying that it was the committee's formal advice that the scheme should not be implemented until satisfactory provision had been made to deal with the following key issues of concern.

In respect of up-lift, the committee was concerned that the regulations leave lawyers completely free to choose the up-lift they require of the client within the maximum permitted up-lift of 100 per cent. This will result in many clients finding the lawyer's fee taking a disproportionate amount of the sums recovered. The regulations should provide that the amount of the up-lift should not exceed a set proportion of the sums recovered. To require the litigant to pay any significant sum out of his damages detracts from the fundamental principle of English law that the courts strive to put a wronged person back into the position that he would have been in had he not been wronged.

The second area of concern was controlling excessive up-lift. The committee indicated that the use of the taxation system to control excessive uplifts was likely to prove unwieldy and perhaps impractical.

In relation to information to clients, the committee considered that the draft regulations alone are not adequate to ensure that clients have sufficient knowledge of the issues when considering the conditional fee agreements. Lawyers should be required to explain at least some of the matters covered by the draft in specified terms and to take all reasonable care to ensure that clients understand them.

In relation to the Bar, the committee felt that conditional fee schemes would create new circumstances in the relationship between the lay client, the litigator and the advocate. Provision is needed for regulating these relationships before the scheme is introduced.

In relation to unmeritorious actions, although the courts have powers to strike out frivolous or vexatious claims and there are professional rules against abuses of the court's process, the committee considered that nevertheless problems developing in this area could involve defendants in considerable unjustified expense. There should be a rule prohibiting lawyers from undertaking, on a conditional fee basis, a case which they believe has no reasonable prospect of success. My noble and learned friend is, of course, aware that such a rule exists in Scotland.

The committee also considered that the existence of a conditional fee agreement should be disclosed to the opposing party and to the court, in the same way as a party in receipt of legal aid must make a disclosure. That will enable the position to be properly monitored, which is vital to ensure that the scheme does not give rise to abuses. Without such provision it is difficult to see how any effective monitoring can be carried out.

Once more, the committee was so concerned that it issued a press notice publicising the letter.

My Unstarred Question was erroneously treated by the Lord Chancellor's Department as a Parliamentary Question requiring a Written Answer. That was conveniently provided as long ago as 25th July in the following terms:
"The Lord Chancellor: There has been extensive consultation on the draft order and regulations and I have considered all the responses which have been put to me. I believe that the safeguards which are provided in the order and regulations are satisfactory. However, I am considering a provision requiring all conditional fee agreements to state whether or not there is to be a limit on the amount of any up-lift by reference to the damages awarded".
By letter of the same date the noble and learned Lord the Lord Chancellor replied to Lord Justice Steyn's letter of 26th May, in substance to the same effect although at somewhat greater length. However, in regard to the proposition that the amount of the up-lift should not exceed a set proportion of the sums recovered, he made the point that he did not have power to make such provisions in the regulations. That is a brand new point which I and a number of my colleagues with whom I have informally discussed the matter have the greatest difficulty in following in view of the wide terms of Section 58(1) (c) and Section 120, which I have already quoted. However, if the Lord Chancellor does not have the requisite power then I respectfully suggest that he obtains it. After all, four years have gone by since the Act was passed and a little extra delay in ensuring that the very real concerns expressed by his own advisory committee will be time well spent.

I do not wish my contribution to this debate to be wholly negative. I join with the Bar Council in suggesting that further consideration be given to the introduction of a contingency legal aid fund, which would overcome all the dangers of the conditional fee system as currently proposed. If a case is lost the lawyer is still paid. If the case is won, the plaintiff pays 10 per cent. or 15 per cent. into the fund. That system has been advocated by Justice on two occasions and has been successfully implemented in Hong Kong over the past 10 years. Clearly it needs an injection of capital to prime the pump, as has been done in Hong Kong, such capital being treated as a loan to be paid back with interest—in the case of Hong Kong in a three-year period.

In a recent address to the London Commercial and Common Law Bar Association, my noble and learned friend the Lord Chancellor referred to the idea as having been canvassed three years ago when he perceived that there was general antipathy towards the idea of making winners pay. That, however, is exactly what happens under the conditional fee system, but in circumstances in which, as pointed out by Professor Zander, the lawyer with a financial stake in the outcome of the litigation has a concern to win the case which may distort the advice he gives and may even tempt him into unethical conduct.

In previous debates we have all joined in criticism of the American system where the lawyer gets a percentage of the sum recovered. Since the American courts, generally speaking, do not allow the lawyer to take more than 40 per cent. of the fruits of the litigation, the American litigant will on occasions be better protected than his English counterpart, since there will be cases where the double fee system results in the whole or virtually the whole of the proceeds going not to the injured party but to his lawyer. I urge my noble and learned friend the Lord Chancellor to think again.

4.20 p.m.

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My Lords, the noble and learned Lord, Lord Ackner, claimed that he was on the side of the angels. I must say that I think this afternoon he is on the side of the angels, although that does not stop him from having stolen a great deal of my thunder, such as it is. But that will enable me to shorten my speech so that we shall not have to wait very long for the maiden speech of the noble and learned Lord, Lord Marshall of Birkenhead, to which we greatly look forward.

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Nicholls!

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My Lords, Lord Nicholls of Birkenhead, I hope that he will forgive me. I personally am strongly against the conditional fee scheme in principle. My noble and learned friend the Lord Chancellor already knows my views on it. I understand that he considers that the scheme will help to overcome the enormous cost of legal aid. But I seriously doubt whether it will do so.

It is a fact that there are various causes of the high cost of legal aid, and other steps than the conditional fee scheme should be taken in any event. Perhaps I may mention an example that we had recently when my noble and learned friend was questioned in your Lordships' House about the notorious case of a Dr. Hashim from Iraq, which cost the taxpayer £4.1 million, for one case. I think that the time has come; for us to declare that foreigners and anyone living abroad, who have large resources abroad but have taken the precaution of extracting any of their wealth from this country, should not be eligible for legal aid. That is one positive step which could be taken quickly and easily.

I doubt whether this conditional fee scheme would in any event save much money on legal aid, unless a practice were to arise whereby those who apply for legal aid—whether to launch proceedings or to defend them, shall we say, with a counterclaim—are told that they should enter into a conditional fee agreement instead of being granted legal aid. If such a practice were to arise, it would be disgraceful. It would not only deprive people of the fundamental rights to obtain justice in the way that they have always done in England and Wales in our courts; it would force them into speculative litigation, of which there is already too much. That is well known.

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My Lords, I am sorry to interrupt my noble friend. Perhaps he ought to address himself to paragraph 17 of Schedule 19 to the Courts and Legal Services Act 1990 where there are express provisions against the folly of which my noble and learned friend rightly urges us.

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My Lords, I am relieved to hear that that is so. I had forgotten it, but nevertheless one would need to be careful about the practice that would arise behind the scenes. That is the point I was getting at.

I am not the originator of this concept, but it seems to me that conditional fees are contingency fees under another name, whatever safeguards are introduced.

Another problem about the conditional fee scheme is that it works well only when there has been a substantial award of damages. I must confess that I was rather shocked and did not know about the correspondence to which the noble and learned Lord, Lord Ackner, referred and in which my noble and learned friend the Lord Chancellor has given an up-lift to the up-lift from 10 per cent. to 30 per cent. and then 100 per cent., whereas in the United States the maximum up-lift allowed is 40 per cent. in any circumstances.

Various practical problems would be certain to arise and I doubt whether they can easily be overcome. Perhaps I may give one example. It often happens that in running down cases of personal injuries after motor accidents, both parties are held to blame in different degrees. The court then apportions damages on a percentage basis and the order for costs tends to follow the apportionment. What is to be the outcome of the conditional fee agreement in those circumstances?

It is not only in cases where there are such damages that the problem will arise, because we know from the draft order which my noble and learned friend the Lord Chancellor has put forward that there will be many other types of agreement, including cases arising under European law. What will happen when the court decides that there should be no damages awarded but that there should be, shall we say, an injunction or a declaration, or both? How will the solicitor for the successful party be rewarded for his efforts?

However, my main objection to the conditional fee scheme is that it would cause an increase in speculative litigation. It would do so in a way which, until Section 58 of the Courts and Legal Services Act 1990 made it possible, was contrary to the principles, the ethos, the etiquette and the tradition of the Bar in England and Wales. Although in Scotland conditional fee agreements have been permissible for quite a long time, I understand that there the scheme has fallen into disuse. It has been tried from time to time, even in recent years, but broadly—and I am open to correction by my noble and learned friend, who knows more about it—I understand that in recent years it has been found to be generally unacceptable.

Here in England and Wales the Bar Council is against it, even though it would cause a great increase in work for the Bar, as the noble and learned Lord, Lord Ackner, said. The Lord Chancellor's Advisory Committee is obviously worried about it. I need not repeat the correspondence to which the noble and learned Lord, Lord Ackner, referred. The committee's anxiety, both in the chairman's letter of 26th May and the statement of 9th June, is reflected in the suggestions that it made, particularly with regard to up-lift.

There are so many questions so far unanswered. In my opinion a tremendous amount of work in depth would have to be done before this scheme could be acceptable to either House of Parliament. Thank goodness that my noble and learned friend has yet to ask Parliament to approve his draft order and the regulations which would follow. I hope that, after considering what has been said in this debate, he will decide to drop the scheme. If he were to do so, in my opinion his reputation would soar and he would earn the gratitude of the Bench and Bar of England and Wales.

4.30 p.m.

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My Lords, I am greatly fortified by the very kind remarks made by the noble and learned Lord, Lord Ackner. It is still with considerable trepidation that I rise. I do so with two pieces of advice that I received for this occasion ringing in my ears. The first was that I should keep my speech short—advice that cannot be repeated too frequently for all lawyers. The second piece of advice that I received was that I should speak on a subject about which I care.

I care about the state of the law. I care that the legal system should in practice as well as in jurisprudential theory give a remedy to all who are legally wronged. I am concerned that financial might should not oust legal right. For some few years until recently I was the head of one of the three divisions of the High Court. That division—the Chancery Division—comprises 17 High Court judges. They are all exceptionally able people and they are all highly motivated. But, as vice-chancellor, I became ever more concerned about the sheer cost, the prohibitive expense, of bringing and conducting proceedings in front of those excellent people. I could not afford to be involved in proceedings in the High Court; nor could most individuals who are not legally aided.

How does this situation come about? What has gone wrong? I suggest that there can be only one answer to those questions. Although the law itself has developed as society has changed, the legal system still lags behind. The system contains many checks and balances—some excellent and some essential, but some now operate as a brake on progress. Procedures and provisions that were necessary and valuable as safeguards in a less sophisticated and non-technological society I believe now in some instances, overall, do more harm than good.

In those circumstances where do we go? I apprehend that everything that I have said is now widely recognised. It is also widely recognised that there is no simple solution. There is no single solution. Before your Lordships' House this afternoon is a Question concerning one particular proposed item of reform of legal procedure. On this occasion I am subject to the constraint that I must not be provocative—as if I ever would be. So I confine myself to just one observation of a very generalised nature.

Proposals for the reform of the legal system arouse strong feelings on both sides. That leads to misunderstandings, which hamper rather than help. I venture to suggest to those who support proposals for law reform that they should recognise that the strength of the feelings of those who oppose particular reforms is no more than a measure of the depth of their concern that the legal system should function properly. They are concerned that well intentioned proposals for reform should not damage but, rather, improve. Conversely, I venture to suggest to those who oppose particular reforms that they should recognise that to every proposal for a reform of the legal system some objection can be raised. I apprehend that there is no proposed reform that could be made without some risk. If we wait for a proposal which will be universally welcomed, to which there are no appendant risks and which has no possible ground for objection, we shall wait for reform truly for ever.

In those circumstances of course reforms must be thought through; of course there must be consultation; of course we must all have the humility to learn from the experience of other countries. But there must come a time in the process when a proposal—I do not allude indirectly to the matter that your Lordships are considering this afternoon—that on its face would improve access to justice should be favourably received unless there are truly compelling reasons why that should not be so. Only if some such approach is adopted will we sooner rather than later bring about the necessary changes for the advantage of those for whom the legal system exists at all.

4.38 p.m.

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My Lords, it is a particular pleasure for me, on behalf of the whole House, to congratulate the noble and learned Lord, Lord Nicholls of Birkenhead, on his maiden speech. It was not provocative. It was well understood and appreciated. It is no surprise to me that it was so clear and concise. As a fellow Bencher of the Middle Temple, I, like many others, have long admired his great contribution to the administration of justice. We are, above all, a legislative assembly. We always value the contributions of noble and learned Lords. I hope that our latest noble and learned Lord will make many contributions. I know that they will all be most welcome.

I have re-read the debate which took place on 5th February 1990 on the Courts and Legal Services Bill. I had no doubt then and I have no doubt now that, whether you call contingency fees "conditional fees" or vice versa, the Government's step may well turn out to be a step in the wrong direction. But that is quite apart from the effect on legal aid, whether it is an alternative to legal aid or a means of curbing the cost. I do not intend to repeat earlier arguments. But in my view no one has successfully challenged the view which was so clearly expressed by the noble and learned Lord, Lord Donaldson of Lymington, when he said,
"I have regretfully come to the conclusion that this measure is not in the interests of the client as a consumer. Furthermore, it is wholly contrary to the interests of the proper and efficient administration of justice".—[Official Report, 5/2/90; col. 546.]
My specific concern in that debate was that so much depended on orders made by the Lord Chancellor of the day. I questioned his powers to act by orders or regulations on such important issues. If your Lordships' Delegated Powers Scrutiny Committee had been in existence at that time, I have little doubt that it would have drawn attention to the wide and unclear powers in the primary legislation and the implication of delegated powers that would have significant impact on something as fundamental as the administration of justice.

The draft Conditional Fee Order and Regulations do nothing to allay my anxieties, which mirror those expressed by the noble and learned Lord, Lord Ackner. I do not believe that a satisfactory response has yet been given to all the issues raised by Lord Justice Steyn in his letter of 26th May. I therefore warmly support all that the noble and learned Lord, Lord Ackner, said and I invite my noble and learned friend the Lord Chancellor to do what was suggested and think again.

4.41 p.m.

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My Lords, I have great difficulty in speaking on this subject at all. It is highly complex and I am certain that before very long there will be a great many forms and types of conditional agreements. As a layman, it is impossible to form any judgment on these proposals until one has seen a series of specimen agreements together with the safeguards that will apply to protect the client. None of those is available and until they are it is impossible to form a balanced judgment or, indeed, to know whether the scheme is even workable.

One thing that emerges is that it appears to be the purpose of the scheme that a lawyer can double his fees on the basis that he takes the risk that his costs will be borne by himself. From that time forward the whole conditions change. The lawyer is no longer fighting the case for his client; he is fighting the case for his client and for his own pocket. His independence has gone. He becomes a quite different animal from the normal lawyer with whom one is in contact. His advocacy, his opinions and his advice are open to doubt. The lawyer abandons one of the basic principles upon which the legal profession was founded.

My purpose this evening is to speak to only one item; that is, the need, if conditional agreements ever come into force, for the contents of those agreements to be disclosed to the court, to the opposing parties and to the public. The advisory committee of the noble and learned Lord the Lord Chancellor raised queries in relation to disclosure. On 25th July the noble and learned Lord the Lord Chancellor wrote in reply to Lord Justice Steyn:
"I did not consider it necessary or appropriate to require solicitors to register the existence of conditional fee agreements with the courts or to require them to notify the opposing party. I took the view that the existence of such an agreement was a private matter between the solicitor and his client".
I sincerely hope that the noble and learned Lord the Lord Chancellor will be able to revise that view if the regulations ever come into force.

Between 1976 and 1979 the Royal Commission paid a great deal of attention to what it believed were the principles and behaviour which should govern a lawyer in good practice. In an early chapter it made this comment:
"we attach importance to the need for independence in the legal profession and the attitude of mind and outlook it involves. It has been emphasised, in one form or another, in the submissions of a very large number of witnesses".
There are ample supporting views for those principles, In the Cardozo lecture given in 1958 in New York by Lord Shawcross the following comment appears:
"The importance of detachment, of not being identified with the client's case is really of very great significance. It is, indeed, an essential aspect of the advocate's independence. Lord Eldon well expressed the position when he said of Counsel, 'he lends his exertions to all, himself to none'".
There is yet another compelling authority. In a much quoted passage from Lord Erskine's address in the Paine case it was said:
"I will for ever, at all hazards, assert the dignity, independence and integrity of the English Bar, without which impartial justice, the most valuable part of the English Constitution, can have no existence".
Both Lord Eldon and Lord Erskine in time took the office of Lord Chancellor and in that capacity both sat upon the Woolsack.

My view therefore is this. If a lawyer is allowed to discard one of the basic principles of his profession, then the fact that he has done so must be disclosed to the courts, to the opposing parties and to the public at large. It is quite inappropriate that it should be concealed in some squalid agreement between the lawyer and his client. If the Government are willing to allow professional standards to be lowered without disclosure, it will bring the profession of the law into disrepute. Worse than that, it will cause the public to look askance at a government who allow professional standards to be lowered without disclosure in this cavalier way. The quotation from Lord Erskine shows that the doctrine of independence was set well over 200 years ago. Ever since that time it has been precious to the legal profession and to the public at large.

So far I have spent time only on the principle. But there are certain practical issues which will make exposure of the agreements essential. First, the noble and learned Lord the Lord Chancellor proposed that in due course there should be a monitoring exercise, perhaps two years from now, to see whether the system is working. It is quite impossible for a proper monitoring exercise to be carried out unless there is unrestricted access to the conditional agreements which have been entered into so that a fair conclusion can be drawn.

The second point is probably the most convincing of all that I have mentioned today. It is that these agreements place all the cards in the hands of the lawyer. He has the strongest possible negotiating position against his own client and, sometimes intentionally and sometimes not, it is quite certain that an agreement will be entered into between the lawyer and his client which will be extremely harsh upon the client. I feel therefore that the greatest deterrent that can be applied is to make it quite certain that these agreements are exposed so that the content can be examined and they can be subject to public criticism.

My final point is a minor one and it has already been made. Legal aid has to be disclosed. I cannot see any possible reason why these conditional agreements should not be exposed in the same way.

4.50 p.m.

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My Lords, the House always listens with the greatest respect to the noble and learned Lord, Lord Ackner, both because of his devotion to the cause of justice, and because of the doggedness with which he pursues what he considers to be the eternal verities.

It is perhaps appropriate today that he should have started his speech by announcing himself on the side of the angels. The noble and learned Lord asks my noble and learned friend the Lord Chancellor to think again and to add safeguards to the draft Conditional Fee Order and Regulations. For myself, I hope that my noble and learned friend will now be able to tell the House that at long last, four years after the passage of the Courts and Legal Services Act, he expects to be able to lay the necessary order and regulations before Parliament in the new Session, in substantially the form of the present draft. We should then have in place what I consider to be one of the most important and desirable provisions of the Courts and Legal Services Act.

The great merit of legalising conditional fees in personal injury cases is that it will enable many more injured claimants than before to have access to the justice system, including many who at no time in the past would have been entitled to legal aid, including, it would appear from his balanced and deeply philosophical maiden speech, the noble and learned Lord, Lord Nicholls.

Litigation can be an utterly destructive process for those who indulge in it. That is particularly because of the fear of unknown payments which may have to be made at an unknown future date. It must not be forgotten that neither the cost nor the outcome of litigation, in however clear-cut a case, can really be forecast with anything approaching certainty. It is for this reason that I would forecast that conditional fees will be warmly welcomed by many who need the help of the law, including many who at no time in the past would have been entitled to legal aid.

I would also offer the House my personal opinion that in some cases conditional fee arrangements will be found to be the preferred options of litigants who might have sought and obtained legal aid. I make no apology for seeing conditional fees, to this extent, as a desirable substitute for legal aid.

Lord Justice Steyn's letter to my noble and learned friend makes the point that it is not possible or desirable to attempt to anticipate every problem that might arise when the conditional fee scheme is introduced. I agree, and I focus on the word "desirable", because I believe that the advisory committee would have my noble and learned friend go beyond what is desirable, and even, in the case of the compulsory cap, beyond what would be proper and in the interests of justice.

The advisory committee proposes that conditional fee agreements should go into much greater detail than the draft regulations would require and that a more user-friendly arrangement than the taxation of costs should be available to litigants who believe that they were persuaded by their lawyers to enter into unfair conditional fee agreements. The same might be said of all special arrangements as regards costs which can at this time legitimately be entered into between solicitors and their clients. I believe that the draft regulations, combined with existing and much strengthened powers of the courts and the professional bodies, are sufficient to deal with any problems which may arise. I would suggest, in any event, that if there is any change to be made, it should not be made now, in isolation, in relation to conditional fee agreements.

To those who do not believe in conditional fee agreements at all, I would make the point, which has been made before, that lawyers are not to be treated as so unethical and immoral that they will use conditional fee agreements as a means of manipulating their clients to their own advantage. We require of lawyers that they be people of integrity. They should need no reminding that they have no other personal interest in litigation than the furtherance of their clients' interests for fair reward, consistent always with the interests of justice.

Other noble Lords will have received a briefing paper from the Law Society. I find myself in a very large measure of agreement with it. The paper warmly welcomes the introduction of conditional fees and in general finds that the proposals of Lord Justice Steyn's committee are either unnecessary or unlikely to make conditional fee arrangements more effective. I quote from the briefing paper:
"The Law Society's view is that the safeguards proposed by the Lord Chancellor in the draft order and regulations together with existing professional rules of barristers and solicitors are sufficient to meet the concerns raised by the Advisory Committee".
The briefing paper continues:
"The Law Society's approach is that conditional fees should be widely available to clients as an alternative"—
and I stress the word "alternative"—
"to the existing methods of funding".
It states:
"The introduction of conditional fees, subject to a maximum success fee of 100 per cent., should enable the great majority of those with meritorious cases to pursue them without being deterred by fear of legal costs. At the same time, the fact that they will be unpaid for their work if the case is lost will ensure that there is no incentive for lawyers to take unmeritorious cases".
The Law Society agrees with my noble and learned friend that success fees should be limited to a maximum 100 per cent. up-lift, and not to some considerably lower percentage. This will generally result in lawyers not taking on cases under conditional fee arrangements where there is judged to be a less than fifty-fifty likelihood of success. That seems to me to be about right.

My noble friend Lord Renton contrasted this 100 per cent. with what he considered the equivalent 40 per cent. which would be the up-lift under the American system. I would point out to my noble friend that he was not comparing like with like. The 100 per cent. is a 100 per cent. up-lift of the fees which the lawyers will receive. The 40 per cent. is the cut of the cake which lawyers take in America.

I come to the point where the advisory committee's recommendation appears to me to be unfortunate.

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My Lords, perhaps the noble Lord will allow me to intervene. It was I who made the point that, when one considers the proportion of the fruits of litigation that can be achieved by the lawyer in America, where the conditional fee or the contingent fee operates as a proportion of the proceeds of success, it is limited, generally speaking, to 40 per cent. Under the conditional fee arrangement here, the percentage of the proceeds of the litigation is without limit, with the result that the successful litigant under the conditional fee can end up achieving nothing and the lawyer the whole of the proceeds of the successful action; whereas in America, with all its defects, the plaintiff will not end up with nothing—he will receive at least 60 per cent.

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My Lords, the noble and learned Lord is of course correct in how he puts it. I was merely seeking to correct a wrong impression which I believe had been made by my noble friend Lord Renton. I shall shortly come to the point which the noble and learned Lord has now repeated.

The advisory committee recommends that regulations should provide that the amount of the up-lift should not exceed a set proportion of the sums recovered. The intention is to reduce the danger of the up-lift giving to lawyers a disproportionate share of sums recovered in litigation. I believe that Section 58 of the Courts and Legal Services Act would not permit any such regulation. In any event, we have again and again in this Chamber deplored the system whereby the fruits of litigation are directly shared between the lawyer and the client on a percentage basis. If one follows the road of a cap on the amount which a lawyer may receive in terms of up-lifted fee, one reaches the point where the plaintiff's lawyer in effect acquires a personal interest not just in the success of his client's litigation but in the actual amount of damages recovered. It is this cap proposed by the advisory committee which in my opinion would introduce a speculative element akin to the sharing of damages allowed by so many American jurisdictions.

The Law Society goes a long way down the road proposed by Lord Justice Steyn's advisory committee in that they favour the idea that regulations should include a provision as a statement in writing in the conditional fees agreement whether or not a cap is to be applied. Although it may in theory be desirable for lawyers to assist in the recovery of relatively small awards of damages, we should also bear in mind that to encourage the capping of the up-lift is to risk creating situations where the sum at issue in litigation is dwarfed by the lawyer's fees incurred in the litigation. I do not believe that that is something which is required in the interests of justice.

My concluding point is that it would be wrong for regulations to impose any limit on up-lift, as proposed by Lord Justice Steyn's committee. On the other hand, I do not believe that it would be necessarily right to encourage the voluntary capping of up-lift in all circumstances. My suggestion would be that capping might be tolerated, but should not be actively encouraged by the implication which would be drawn from specific reference in the regulations.

The noble and learned Lord, Lord Ackner, set great store by an unpublished article shortly to appear under the name of Professor Zander, in which Professor Zander said that it was preposterous that the client should pay all damages to the lawyer. At first sight that may seem a seductive thought, but already today there are cases where damages are swallowed up by lawyer's costs and the successful litigant gains nothing from them. I have in mind a case where the plaintiff is suing an impecunious defendant. To pursue the point of the cap, however one does it, is to encourage lawyers to encourage their clients to continue with litigation in circumstances where forbearance or an early settlement would have been the better way ahead.

5.5 p.m.

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My Lords, having recently undergone major surgery for the first time in my life, I am not sure that I have the consent of my doctors to make this intervention in this debate. I hope therefore that I shall not appear abrupt, but for once it is in my interests, as well as those of your Lordships, that I speak briefly.

I wanted to participate in this debate because I believe that I have a practical contribution to make. I have now been in the practice of law for over 30 years, the first 13 of which were at the English Bar and the past 17 was and is as a solicitor of the Supreme Court. I hold currently a practising certificate from the Law Society. Perhaps also of interest in this debate is that since 1975 I have been a member of the Bar of the State of New York and, from my two-and-a-half years of practice in New York, have some experience of the United States contingency fee system.

Although we have already enacted the contingency fee system in the Courts and Legal Services Act, I believe that we should examine this system as proposed by my noble and learned friend, and as criticised by the noble and learned Lord, Lord Ackner, and others, in the frame of access to justice. Indeed, in this regard the concerns that have been so forcefully expressed in your Lordships' House, and apparently at the recent Bar Council Annual Meeting, have not so much been over the safeguards of the conditional fee system, but over the scheme as a whole.

My noble friend Lord Coleraine drew attention to some of the facts. Perhaps I may also do so with a few statistics. In the early 1980s about 70 per cent. of the families in England were eligible for legal aid. By the end of the 1980s that figure went down to about 50 per cent. Also the level of legal aid contribution is often now such that many more families cannot afford legal aid. Therefore we have this ever widening gap between those who are too poor to fund their cases privately but who are too rich for the legal aid system.

There is also the "costs order" factor, to which my noble friend, Lord Coleraine, drew attention. This presents a quite serious deterrent for the private litigant, who faces the prospect, if he loses the litigation, of paying not only the high cost of his own legal fees but also the high cost of the legal fees of his opponent. This is exacerbated by the almost blind poker system of the payment into court. Perhaps the noble and learned Lord, Lord Nicholls, had that in mind when he referred in his notable maiden speech to the dangers of the legal system lagging behind.

On these issues I speak with real practical experience. I am currently conducting two cases, not for commercial clients—a clientele with which the noble and learned Lord, Lord Ackner, brands me—but two cases of personal injury. In one case, my client was injured in the Clapham rail disaster and, in the other, my client was seriously injured in the Purley train disaster. In both those cases, access to justice, certainly through my firm, would not have been possible but for my firm's decision not to issue any invoices until the final adjudication. If your Lordships are concerned about the slowness of my conduct of litigation, I am happy to say that in the case concerning the Clapham train disaster we are now in the area of the taxation of costs, the case having completed its journey through the courts.

Therefore, it is against this background that we should be looking at the Lord Chancellor's proposals for introducing the conditional fee system as pursuant to the powers that are vested in him under Section 58 of the Courts and Legal Services Act. In doing so, I suggest first that congratulations should be extended to the noble and learned Lord. Although my noble friend Lord Coleraine was clearly in favour of the proposals, I am sorry that I am the first noble Lord to extend congratulations in this debate to the noble and learned Lord the Lord Chancellor on offering this significant increase in access to justice.

Secondly, we should ask: what would be the effect of implementing the additional conditions proposed by the advisory committee? There are two answers. First, there will be delay. Second, there would be a less attractive (and hence less usable) conditional fee system. Those of your Lordships who have read the correspondence will have noted in the third paragraph of Lord Justice Steyn's letter of 26th May that there is an interesting attack on the level of the percentage of up-lift. I also find it quite extraordinary that the argument should be advanced that the scheme should not be brought into place until the Bar has got its regulations in place. The Bar has had four years to get its regulations in place.

Like many others outside the Chamber, I believe that the noble and learned Lord has got it right. There is to be an agreement in writing with a full explanation and consent of the client on the operation of the system. This is in relation to legal aid and costs. Perhaps I may draw the attention of the noble Lord, Lord Benson, to the fact that the Law Society has drawn up a draft agreement for those who may enter into a conditional fee arrangement with their lawyers. It is not a "squalid agreement"— those were the words of the noble Lord—but an agreement that has been led by the Law Society.

I am aware of the "incentive" argument and that it is not thought to be a good thing for that to be applied to lawyers although it is applied everywhere else in our society. I find that somewhat baffling. Financial or performance incentives are increasingly being applied on my side of the profession and have always existed at the Bar. It is a good thing for a barrister to win cases— not just in the interests of his clients but for the further development of his practice.

In conclusion, perhaps I may refer to the United States experience. The contingency fee system has provided access to justice for millions of Americans who would otherwise not have it. It is carried out on an open basis with the full knowledge and consent of the client. It is not used as an extortionate process nor one of blackmail. Let nobody say from this side of the Atlantic that professional integrity is any less important for the American legal profession than it is for our own. It is on that basis that I give wholehearted support to the noble and learned Lord. After four years, let's get on with it!

5.13 p.m.

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My Lords, from these Benches, I should like to add my congratulations to those proffered to the noble and learned Lord, Lord Nicholls of Birkenhead, on his maiden speech, which I found fascinating. I thought that all the professional lawyers among us benefited from his reminder to us of the incipient conservatism in the profession's approach to legal reform. The noble and learned Lord was right to make that point. Because litigation is now so expensive, it is right that we should tackle this as an immediate problem. Perhaps one of the answers to the problem lies in the committee of his noble and learned friend Lord Woolf which is considering simplifying litigation.

The basic problem which faced the noble and learned Lord the Lord Chancellor, and which faces the House now, was graphically put to me by a solicitor colleague who does not necessarily agree with everything that I shall say hereafter. She said:
"This is more a consumers' than a lawyers' issue. At present lawyers often cannot be afforded—one needs to be pretty wealthy, or to be eligible for legal aid. I believe that if people like me can't afford people like me, then the system needs changing".
The real questions at issue are whether the system should be changed in this way and, if it is to be changed in this way, what essential safeguards we require.

I am sure that my experience is common to all who have practised as a solicitor or a barrister. The great fear of the potential litigant who has a 50:50 chance of success in his case—the lawyer has to explain that chance very carefully to his client—is of having to pay the opponent's costs if he loses. I am sure that we have all had that experience. It is a problem that has been exercising me recently because I know of a community that has been advised by no fewer than two distinguished Silks that it has a 50:50 chance of success in a judicial review case in which it is opposed by a very large and well-provided-for authority. That community is fearful of taking the case forward although it has a considerable chance of success.

It was therefore with astonishment that I read in the briefing on conditional fees by the Law Society—the noble and learned Lord, Lord Ackner, has already referred to this —that:
"Conditional fees should overcome clients' fears of having to pay their own solicitor's costs in the event of losing a case, but they do nothing in themselves to overcome the fear of having to pay the opponent's fees".
The briefing then states that a policy will be taken out,
"as soon as the lawyer takes on the case. The premium is expected to be less than £100".
That is absolutely astonishing. It is totally different from my experience of advising clients for over 40 years. That immediately raised in my mind the fear that is expressed by Lord Justice Steyn in his letter to the Lord Chancellor. I am not referring to one of the four main points but to the paragraph which states:
"The Committee wishes me to draw a further issue to your attention. The opportunity to litigate under a conditional fee agreement may tempt some people to bring wholly unmeritorious actions in the hope that defendants will settle them simply to avoid the trouble and further expense of going to court".
The letter continued on that theme.

I entirely agree with the noble Lord, Lord Coleraine, that lawyers should be regarded primarily as ethical people. Although most are ethical people, we should not blind ourselves to the fact that there are exceptions and that those exceptions will certainly embark upon totally speculative litigation, as has been the case in the United States. I have many friends in the United States—some are distinguished lawyers over there—and I can say that without exception they are all great admirers of our legal system. Most of them have warned me off any suggestion that we should follow the American example.

I think that the Lord Chancellor's approach to this is wrong, but I can appreciate his problem. Far fewer people now qualify for legal aid than was the case 10 or 20 years ago. The Law Society has exercised great pressure on the question of the conditional fee system.

However, I should like to refer to the matter that was raised by the noble Lord, Lord Peyton, in his own inimitable way on the sixth day of Committee consideration of the Courts and Legal Services Bill when he asked:
"How many of us are really convinced that it would be right to make three distinct moves in the direction of the American system, and what gains would result from our doing so?",
He then came to the third question, with which we are concerned here:
"we are for the first time giving the advocate a pecuniary interest in the outcome of the case".—[Official Report, 5/2/90; col. 538.]
The noble and learned Lord the Lord Chancellor tried to answer this point but was interrupted so many times by other noble Lords that he did not deal with it in his final speech. This is the point that exercises the minds of most people who are concerned with the issue.

One knows very well that in the United States the system has so developed that there is a body of totally speculative litigators. Not only do ambulances hover in the neighbourhood of accidents but litigation clerks are also on the spot very soon thereafter. If the Law Society is able to get an insurance policy for less than £100 a case, it suggests that most of these cases will settle. Why? They will settle because of the fear of the cost to the defendant. I believe that we are opening; a very dangerous door.

However, as the noble and learned Lord, Lord Ackner, said, that is water under the bridge. But it does not remove the requirement for adequate safeguards if we are to go down that road. The problem that has been raised by the noble and learned Lord, Lord Ackner, today is whether the safeguards are sufficient. I do not repeat his arguments, with which I entirely agree, save to say that the noble and learned Lord the Lord Chancellor is apparently of the view that he does not have power to introduce the second safeguard to which he adverts in his letter. I am bound to say that he has obtained many powers from this House and from Parliament. If he does not have the power in the Act — and I believe that he has—within the terms of Section 58, for heaven's sake, he should seek it. I do not believe that there would be any impediment either in this House or the other place in obtaining the power.

I express a general concern. I hope that I have pointed out my basic viewpoint. I can see the pressures, but I do not believe that the safeguards are sufficient.

5.23 p.m.

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My Lords, from these Benches perhaps I may add my voice to the congratulations that have already been expressed to the noble and learned Lord, Lord Nicholls, on his maiden speech. Although in the tradition of this House it was commendably brief, it gave some insight into his experience, wisdom and, in the light of what he had to say, his tact. That makes clear that his contributions in this Chamber in the years to come will be looked forward to with relish.

The noble and learned Lord, Lord Ackner, has raised in this debate a number of matters which are of concern to all of us in this House and beyond who want to see the growing proportion of our population who cannot afford to pay for litigation for themselves, but who do not now qualify for legal aid, provided with a real alternative means of access to justice. Some of us—and I confess I am one—dislike the idea of conditional fees. When the Government first raised the question of the introduction of a no win, no fee system in its Green Paper of 1989 some of us feared that such a scheme, without adequate safeguards and monitoring, could be a means by which ambulance-chasing, mushrooming awards of damages and sharp practice in the conduct of litigation—which rightly or wrongly are seen as features of such a system in other jurisdictions—might find their way into our legal practice here.

A number of noble Lords tonight have voiced those fears again. I shall try not to do so. Parliament has considered those fears. They were expressed graphically on all sides of the House, and indeed by noble and learned Lords, but the principle has been accepted. The Government will have their way. Whatever our reservations, we on these Benches are anxious to see that the scheme, which will undoubtedly be introduced, contains the necessary safeguards both to prevent the abuses which some of us fear and to ensure that the scheme is of real and not illusory value to the general public. A system of no win, no fee sounds mightily attractive to somebody with a genuine grievance but no money and no legal aid. If the reality is a scheme in which a win results in little or no damages because the lawyer takes the lot, it will be seen as a sham, and dissatisfaction with the lawyers and the legal system will rightly increase.

We have anxiously waited to see what safeguards the noble and learned Lord the Lord Chancellor has felt it right to incorporate. Since 1990 he has spent a great deal of time and care in consultation about the form which the conditional fee order and regulation should take. Clearly, his task has been a difficult one. He has not rushed the scheme into operation and has tried to meet a number of the concerns that have been expressed to him. For all of those things, we for our part are grateful to him. But, as he now knows, there remain a number of important areas of concern that are not fully met. Some of them have been expressed to him most powerfully by his own advisory committee. It is worth pausing to note that that committee was set up by the 1990 Act which established the conditional fee scheme. It is independent of Parliament and the legal profession, with a majority of non-lawyers sitting on it. The setting up of that committee under the Act was a powerful factor in reassuring those who were concerned about a number of aspects of that Act. It reassured them that the Lord Chancellor would receive, and hopefully act upon, the very best independent advice in implementing the provisions of that Act.

Where that Committee expresses serious reservations, as it has done, about aspects of the proposed scheme, I hope that even at this stage, on reflection, the Lord Chancellor will feel it right to take further steps to meet those concerns. Without I hope repeating what has already been said, we on these Benches share those concerns and ask the noble and learned Lord to look again at them. We remain deeply concerned about the 100 per cent. up-lift—double fees, as I believe the noble and learned Lord, Lord Ackner, rightly called them— which lawyers will be permitted to charge. That figure has been accepted by the Lord Chancellor as a maximum. Our worry is that there is nothing to prevent it becoming the norm, and indeed we fear that that is likely to be the case. To say, as the noble and learned Lord the Lord Chancellor did, in his letter to the chairman of the advisory committee of 25th July this year, that the client is free to refuse to enter into the agreement if he or she dislikes the terms, gives no effective protection to a lay client who is usually wholly unfamiliar with litigation and is relying on the lawyer's skill and experience. It is wholly unsatisfactory in terms of affording protection to the public from unfairness or exploitation.

We suggest to the noble and learned Lord that safeguards could be introduced with relatively little difficulty. The regulations and the profession's guidance to its members taken together should, we feel, oblige a solicitor to make clear to the client in writing, and in ordinary everyday language, exactly what the client is letting himself in for. He should understand from that agreement what a conditional fee agreement means and what he will have to pay under the agreement if he wins, if he loses, or if he draws; in other words, if the case is settled. He should also understand what he stands to receive after he has paid the lawyer, and also what happens if either party wishes to withdraw from the agreement. Those are simple, straightforward matters that should be clearly explained as part of the regulations and professional guidance given to everybody who embarks on such a scheme. Those matters are set out clearly in Annex A to the letter of the chairman of the advisory committee to the Lord Chancellor of 26th May. I would have thought that they could easily be incorporated, and should be.

In his letter of 25th July to the chairman, the noble and learned Lord the Lord Chancellor recognised the need for a requirement to be added to the existing draft regulations that the agreement should state whether or not a limit would apply to the amount of up-lift by reference to the amount of damages received. That is a step in the right direction, but it does not go far enough.

If there is no such limit, in some cases, particularly small claims, the scheme will, I fear, bring the legal profession into disrepute. The case will be won; the damages paid; and the lawyer, not the client, will pocket them. We welcome the proposed amendment to the draft regulations if it really is as far as the noble and learned Lord the Lord Chancellor feels able to go. But if he can go no further in amending the regulations, I would ask him to reconsider, in the light of his proposed amendment—as far as it goes—whether that does not merely underline the need for a separate review mechanism to control and correct both excessive up-lifts and failures to limit uplifts by reference to the amount of damages in certain cases.

The proposed use of taxation for that purpose will, it is true, permit individual cases to be examined where there is a dispute, but it will not provide an overall picture. A simple, speedy, practical review procedure, regulated by the professional bodies, would, I suspect, be cheaper, quicker, more effective, and, additionally, be able to issue general guidelines to practitioners when the need becomes apparent. Surely that suggestion by the advisory committee is one which the noble and learned Lord could reconsider.

There are other aspects of the proposed scheme at which I would ask the noble and learned Lord to look again and to try to give some reassurance. The most important is the question of monitoring the scheme when it begins to operate. If only a small proportion of conditional fee agreements are ever notified, as I believe the noble and learned Lord currently proposes, it will be impossible accurately to establish the level of uplift which becomes the norm; the extent to which the scheme produces difficulties which fall short of having to go to taxation; and the extent of dissatisfaction with the scheme.

The registration and monitoring of all conditional fee agreements through the professional bodies, at any rate during the initial stages of the scheme, would not, I should have thought, be difficult, and would ensure proper monitoring of its operations. It is surely only then that the range of cases to which a conditional fee scheme is to apply can be judged satisfactorily. If the scheme, on the limited basis which is proposed, is successful, it may be right to extend it. If difficulties arise, as I anticipate they may—for example, in the area of insolvency—changes to the existing regulations may be needed. In respect of each area of practice to which the scheme is currently intended to apply, separate codes of practice are likely to be needed, and indeed may need to be revised in the light of experience. If only a sample of solicitors and agreements is to be monitored, how does the noble and learned Lord feel that that monitoring can be done satisfactorily?

We on these Benches remain concerned too about the safeguards for the protection of those on the receiving end of conditional fee litigation—the defendants. A great deal of further information will be needed about the operation of the insurance scheme which has been negotiated, apparently by the Law Society, to protect successful defendants when costs orders are made. The noble and learned Lord may be able to help us. Is that insurance to be compulsory, or is it to be an optional extra for the client? If the latter, how are the numbers who choose to take out such insurance to be monitored under his present proposals?

It is said that the Law Society has negotiated a premium which is likely to be less than £100, but for how long I wonder. If there are claims, as seems to be inevitable, that premium is likely to rise. If the scheme is not compulsory, fewer clients may chose to take out such insurance and therefore more meritorious defendants are likely to be left whistling for their costs.

Perhaps I may echo what was said by the noble Lord, Lord Benson. Just as a defendant is entitled to know that the plaintiff who brings an action against him is legally aided, so a defendant is surely entitled to know that a plaintiff is bringing his action under a conditional fee agreement with a solicitor. The implication for costs may be considerable. The plaintiff himself perhaps needs also to know that his opponent is covered by the insurance of the Law Society's proposed scheme. I ask the noble and learned Lord to reconsider his present view on that matter—that it is a private matter between solicitor and client—because it seems to us that public: interest clearly requires that that is not so, that the matter is in the public domain.

I hope that the noble and learned Lord will, despite what has been said by the noble Lord, Lord Hacking, be reluctant also to bring the scheme into operation until the Bar has finalised its advice to its practitioners. If only half the profession has received the guidance of its professional body, and half has not, the practical difficulties of knowing what is and what is not permitted under the Bar's rules of conduct, and the very much more difficult question of whether or not a contractual relationship arises between a barrister and a lay client, remain fraught with difficulties and are likely to create unsatisfactory results.

Those matters go to the independence of the legal profession, as the noble Lord, Lord Benson, said. The scheme requires major changes to existing rules of conduct, and until they are in place the scheme, I hope the noble and learned Lord will feel, should not begin to operate.

The regulations and guidance, as presently drafted, clearly need further improvement. The scheme, I accept, was designed and intended to help people who, for the most part, are members of the public in trouble, with limited means who are anxious to seek advice and help from the legal profession. To offer them no effective protection from uplifts which are too high in the circumstances of their case, or which will effectively absorb the whole, or virtually the whole, of any damages which they may win, by saying, in effect, caveat emptor—take it or leave it—is to leave the layman at the mercy of professionals, with effectively no redress if the professional proves greedy or unscrupulous, as, sadly, has occasionally been the case.

A proper review body for the scheme and a careful monitoring are the essentials which are lacking and very worrying in the present proposal. I know that the noble and learned Lord is anxious to make the scheme as good as it can be before letting the lawyers loose on the public. He has heard criticisms and suggestions from all sides of the House, including those from noble and learned Lords. I hope that he feels, having heard what has been said tonight, that it would be right for him to look again at the advice of his own committee and incorporate its suggestions for the safeguards which are required before he eventually brings the scheme into operation.

5.39 p.m.

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My Lords, I should like to begin not in a formal way, but by sincerely congratulating my noble and learned friend Lord Nicholls of Birkenhead on his excellent maiden speech. I shall take to heart all that he said and should like to proceed in the spirit which he enjoined on us. He comes to the House, as your Lordships have already heard, after a distinguished career. I am sure that he is very welcome here. We look forward to hearing his speeches, not just in relation to cases of which the House disposes in its appellate capacity, but on matters of the kind we are discussing this evening.

I am grateful to my noble and learned friend Lord Ackner for raising this Unstarred Question and giving me an opportunity to hear the basis on which some of the expressed views rest. That is always helpful in considering what should be done. I have the utmost respect for the views of the advisory committee. I am glad to hear tonight the clear acknowledgment that these views are independent and worthy of respect.

One of the fundamental characteristics of the conditional fee agreement, as distinct from any kind of contingency fee, is that it is available either to plaintiffs or to defendants. The contingency fee taking a portion of damages works only if there is a claim of some kind for damages or for a monetary award. This scheme is intended to operate on both sides of the litigation. That is a fundamental aspect of it and the provisions of Section 58 were put forward on that basis.

I am well aware of the risk that in some cases costs may swallow up a disproportionate part of damages. Under our present legal aid scheme that may well be true because a successful litigant with legal aid, in so far as he does not recover the costs which he has expended under legal aid, cannot recover the costs from the other side. They are recovered by the Legal Aid Board from the damages awarded or the money is retained as a result of success in the case.

I know of cases in which, under the present system, the costs can be a high proportion if not the whole of the damages in question. Therefore, this is not a new phenomenon suddenly to arise as a result of conditional fees; this is a possibility under our present arrangements. Of course, the legal profession as a whole and individual practitioners are anxious to ensure that that does not happen.

Like the noble Lord, Lord Benson, I believe that the standards of integrity, dignity and independence of the legal profession are very high and the scheme ought to be predicated upon that basis. I do not for a moment accept the view that by entering into a conditional fee agreement a member of the profession reduces his professional standards. With great respect to the noble Lord, Lord Benson, that is a serious misapprehension. I hope that all those who enter into such agreements will be of the highest professional calibre.

I have not seen it demonstrated that under the existing statutory provision I have power to do more than fix a maximum uplift. The history of this matter has been narrated and I shall not repeat it. I did not reach 100 per cent. at one bound; I was persuaded that the correct logic leads to 100 per cent. as the maximum uplift that may be allowed in any case. I do not believe it right that that should be anything like the norm.

The insurance policy that the Law Society has negotiated contains stringent conditions. It does not apply to all actions that are covered by the present regulations and it does not follow that the average probability of success can be judged by that premium, as my noble and learned friend Lord Ackner seemed to suggest. It applies only to part of the subject matter that I am proposing in the regulations.

As I have already signalled, I believe that it is right that the client and the lawyer should have an opportunity to consider whether a cap of some kind is appropriate in the individual's case. I propose that the draft regulations should require that in express terms. The lawyer and the client should discuss that issue and decide whether, in the circumstances of the particular case, a certain cap should be applied and what that cap should be.

It is not easy to suggest a particular cap as being justified by way of general regulation, even if I had the power to do so. After all, in the case of a quadriplegic, for example, a cap might allow a huge uplift but in smaller cases it might not. I regard as very important the principle which underlies Section 58: that it is related to the work done. The work that the lawyer does should be the basis on which he or she is paid and not the amount of damages.

The second point that I wish to make is that in the particular case the issue will be open and I shall require that the lawyer and the client discuss the question of whether or not in the circumstances there should be a cap. Thirdly, I am content to seek the best possible monitoring system for the scheme when it comes into operation. My officials are in discussions with the Law Society about the nature of the monitoring arrangements.

As regards recording the case for the court and the opposition, it has been suggested that because in the legal aid case there is a requirement of disclosure that must follow here. One of the principal reasons why disclosure is required in the legal aid case is the fact that a client who is legally aided can affect the award of costs against that client which the other side can obtain. The Legal Aid Act contains a statutory protection for the legally-assisted client against a finding of costs on the other side, at least against the implementation of such a finding. It is extremely relevant to the circumstances of the defendant to know that the other side is legally aided. There is a statutory effect on the costs regime. Many of your Lordships will know that, while the further extension of legal aid has great attractions, those who are unassisted and face legally-aided clients have a slightly different view of the matter. I am sure that many noble Lords who are interested in these issues have received correspondence from unassisted persons who regard such a protection as extremely unjust.

As regards conditional fees, that does not apply because it is expressly provided that the conditional fee arrangement makes no difference to the award of costs from the other side. In other words, any uplift is not to affect the costs award. Therefore, I do not see that the opponent has the same interest in the conditional fee agreement on the plaintiff's side as he has in the legally-aided case.

Perhaps I may cite the example given by my noble friend Lord Hacking. I know nothing about the financial status of his client but at present the kind of arrangement that he had went forward without disclosure to the other side. Obviously, the costs which the defendant could have had awarded if the case had been unsuccessful for my noble friend's client would be affected by the financial position of the client. That happens in every case. Of course, there are circumstances in which the court may be invited to inquire into the financial circumstances of the plaintiff with a view in some cases to making an order for security for costs. Therefore, at the moment I see no basis on which this information can properly be required by the other side in the litigation.

This is a difficult area and, as the noble Baroness, Lady Mallalieu, said, I have not rushed at this by any means. I have tried to consider carefully the submissions made to me. I have been asked to think again. Well, that is the business that I am in all the time. I certainly propose to take account of all that has been said this evening. I must say that some of what has been said is against the principle now enshrined in the statute. I am sure that your Lordships would think it right for me to proceed on the basis that that is the law enacted by both Houses of Parliament. But, subject to that, I shall certainly consider carefully all that has been said.

The consultation process has been going on for some time. I have had some very recent reflections on some aspects of the technical provisions in the rules, which in any event I should wish to consider, and it may be that I shall wish to amend the rules to give effect to that.

Therefore, I shall review all my thoughts in the light of the circumstances disclosed in the debate this evening and all your Lordships' views. I have expressed the views that I presently hold on these matters and, in particular, that I do not regard the idea of a cap as appropriate. However, I believe that it is right to direct the attention of clients to that question and make it clear that that is required as a condition before an agreement could be valid.

Finally, something has been said about the United States, ambulance-chasers and so on. There are a great number of lawyers in the United States and I believe that the professional standards there are high. But we have a different system and I wish to provide a structure which is based on and suitable for our system.

It is worth noting also that there is not just one lawyer available to a client. The legal profession has shown, particularly in relation to conveyancing, that when competition is opened up and there is freedom with regard to fees, the costs can be reduced remarkably. These agreements will be open to solicitors who wish to take them up and I should expect a good deal of competition among solicitors in that regard.

The noble Baroness referred to the work of the Bar Council in that connection. I believe that that is coming reasonably near to fruition. My impression is that the relationship between counsel and client will not be affected by the arrangements and that the arrangement will be between the member of the Bar and solicitor/client. But I certainly expect that those matters will be taken further, along with others, before the final form of the regulations are put before your Lordships for approval.

I certainly do not intend to delay much longer. The issues have been made very clear as a result of the discussions that have taken place over the past few years. Therefore, I hope to fulfil the requirement which my noble friend Lord Hacking made of me and I shall endeavour to come forward with my final thoughts in the reasonably near future.

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My Lords, before my noble and learned friend sits down, perhaps I may say that he gave reasons, although they might be disputed, as to why the agreement should not be vouchsafed to the other party. However, he did not deal with the argument that the agreements should be vouchsafed to the court. As I understand it, it was argued that that would be an aid both to the monitoring system and to obviate objectionable practices. My noble and learned friend merely reiterated, which begs the question, mat the agreement shall be private.

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My Lords, my noble and learned friend Lord Simon of Glaisdale said that, the agreement being private, that begs the question. The effect of the agreement is only as between solicitor and client in a case where it is a solicitor in question. It is certainly possible that the best form of monitoring may include giving the document to the court. Personally, I have not found it easy to generalise a situation in which the court receives from parties documents which are not available to the other side. On the whole—there are exceptions which have been enlarged recently in quite difficult circumstances—our legal system proceeds on the basis that what the judge has, all the parties before him will have also.

I agree that a monitoring system is required and, as I said, I am in discussion as to precisely what that should be and whether it should be effected through the profession or otherwise. It may be that some registration with the court is a proper aspect of that.

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My Lords, before my noble and learned friend sits down again, I wonder whether he would be so good as to deal with the matter which I raised and to which my noble friend Lord Hacking referred; namely, the effect, if any, of the conditional fee scheme upon the overall cost of legal aid, bearing in mind the provision in paragraph 19 of Schedule 17 to the 1990 Act which provides that nobody shall be deprived of legal aid or deterred from it by means of a reference to the conditional fee scheme.

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My Lords, I have never suggested that conditional fee arrangements are with a view to restricting legal aid. I made that: plain in the debate to which my noble friend Lord Rippon of Hexham referred earlier. In my view, the conditional fee arrangement is for dealing with those people who are, for whatever reason, outside the legal aid limits. It is precisely for those people that I believe that that is a useful system.

Obviously I am in the situation where the availability of legal aid is a matter which depends on the taxpayer and what the taxpayer is able to afford for that particular purpose. As my noble friend will know, the amount spent on legal aid has never been higher. No cuts have yet occurred in the amounts actually expended. But: notwithstanding that, there are still a great many people who have legitimate claims, as my noble and learned friend Lord Nicholls of Birkenhead said, who would not find it possible to proceed under present circumstances but for whom that might be an option which could be considered. That option is more geared to the individual case than any contingency legal aid fund could be.

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My Lords, before my noble and learned friend sits down, I wonder whether he will be kind enough to help me in relation to two matters. The first is the suggestion that he lacks power to cap the proportion of damages payable under the conditional fee agreement out of the sums which are recovered. I should like his assistance as to wherein lies that lack of power, because Section 58 says in terms that a conditional fee agreement means an agreement which,

"complies with such requirements (if any) as may be prescribed by the Lord Chancellor".
If one then proceeds to Section 119, the definition section, "prescribed" is defined as meaning:
"prescribed by regulations under this Act".
If one then finally turns to Section 120, which deals with regulations, it states:
"Any such regulations or order may contain such incidental, supplemental or transitional provisions or savings as the person making the regulations … considers expedient".
I and others do not see where my noble and learned friend lacks the power to impose the capping, assuming that he wished to do so.

I turn now to my second question which I put to my noble and learned friend now so that I will not disturb him yet again when he desires to sit down. I should like to know why my noble and learned friend is reluctant to comply with the suggestion of his own committee in regard to unmeritorious claims by providing that there should be a rule that it is necessary for the lawyer to be satisfied that there is a reasonable cause of action before entering into a conditional fee. I say that because that is exactly where the burden lies in Scotland. According to Lord Fleming, it imposes a special or higher duty in a conditional fee case upon solicitors and counsel than in the ordinary case. If it is good enough for Scotland, as we were told conditional fees were, that seems a very sensible pattern to follow. Perhaps my noble and learned friend could answer my two questions.

6 p.m.

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My Lords, in narrating the statutory provisions in his formulation of the question to me just now, I believe that my noble and learned friend did not make reference to the specific right to regulate the fee uplift. I regard that as the leading provision. I do not believe that to modify it would be appropriate under the incidental powers to which my noble and learned friend later referred. I have in mind the fact that, when the section was put together, it was on the basis that it would be available both to plaintiffs and defendants, because one of the objections put to the contingency fee arrangement was that it was only available to plaintiffs who claim an award of damages.

So far as concerns the second point of my noble and learned friend, I must say that I regard it as quite obvious that a lawyer has the responsibility not to take proceedings when he believes that there is no proper basis for them. Indeed, I would regard that as a general obligation on the lawyer. I find it quite difficult—and I have had a little experience of the Scottish system—to formulate a basis upon which the state of mind of the lawyer can be satisfactorily examined. That is really what it amounts to. I believe that the risk of costs, and the like, is sufficient for the purpose.

Under the statutory provisions, the courts here have a very wide discretion as to costs. I believe that that is perfectly adequate to deal with the matter. I personally believe that to add such a requirement would suggest an imputation on the general standards of the legal profession which, up until now, I have not felt would be justified. However, I am certainly willing to consider that, along with all the other matters which have been raised this evening, when considering finally what draft I shall put before your Lordships and the other place for approval.

Sand Eels And Drift Net Fishing

6.3 p.m.

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rose to ask Her Majesty's Government:

What they intend to do about unregulated fishing for sand eels by foreign nations; and whether they will reconsider their decision to support the North-East coast drift net fishing.

The noble Earl said: My Lords, the Question is divided into two parts, but there is a close connection between the two which I shall endeavour to explain. Indiscriminate harvesting and industrial fishing of sand eels has many knock-on effects. The Salmon and Trout Association first heard about it in 1991, when Danish boats began to catch large numbers of sand eels in waters off north-east Scotland. That was mostly in May and June which is when salmon and sea trout smolts migrate to sea. Basically, the catches are concentrated on "Wee Bankie" off the Firth of Forth and Mar Bank off Aberdeen. Salmonoid smolts' main diet is sand eels and, therefore, it might not be unreasonable to suggest a link in the decline of salmon catches and the increased sand eel catch.

The Scottish Office of Agriculture and Fish Department (SOAFD) at Pitlochry was approached in 1991 by the Salmon and Trout Association, but it stubbornly refused to give any credence to the industrial fishing link and salmon catches. As a result, the Salmon and Trout Association commissioned Dr. Geoffrey Tingley of the Marine Resources Assessment Group (MRAG) to do some research. That was on the west coast of Scotland because of the limited budget available. The MRAG report in 1992 showed a definite link between sand eel abundance and salmon catches. Meanwhile the sea bird population collapse off Shetland and pressure from the Royal Society for the Protection of Birds forced the suspension of the Shetland sand eel fishery as well as restrictions of the west-coast sand eel fishery. A subsequent consultative exercise by the Scottish Office resulted in continued suspension of the Shetland fishery and a limited quota for the west coast.

Sadly, however, industrial fishing is firmly on the European agenda. A European Union Commission in November 1992 concluded that a multi-species review was required before longer-term resource management could be tackled. Danish and Scandinavian boats continue to destroy the sand eels in the North Sea: 60,000 tonnes in 1992; 105,000 tonnes in 1993; and 130,000 tonnes in 1994. Again, these are mostly taken in May and June and recently a new fishing ground, Smith Bank off the Moray Firth, has been developed.

We must be insane to continue to exploit the sand eel which is right at the base of the food chain, in ever increasing and uncontrolled quantities, in the absence of any information on the stock of some fish or the impact on the salmonoids, sea birds and white fish which rely on the sand eel for their life.

My concern is shared by the Salmon and Trout Association, the North Atlantic Salmon Conservation Organisation, Atlantic Salmon Trust, the RSPB, the National Federation of Fishermen's Organisations, as well as officials in SOAFD at Aberdeen. It is suggested there is no scientific evidence to support that sand eels have any effect on the stock of fish and birds that they support. The death of 100,000 sea birds earlier this year is apparently not—and I repeat the word "not"— scientific evidence.

I argue that there is no evidence that it is not having an effect and that therefore we should apply the cautionary principle. I have four questions for my noble friend the Minister. First, will he clarify the future position on indiscriminate fishing; secondly, will he undertake full consultation with interested organisations; thirdly, will he authorise appropriate research into the sand eel fishery off the Scottish east coast; and, finally, will he consult with fellow EC Fisheries Ministers with a view to phasing out, or, at the very least, imposing quotas on this disastrously dangerous fishery? I gave my noble friend notice of one further question. I asked him whether he could find out how many tonnes of fish there were—and, if so, what they were—on the 10,000-tonne Russian factory ship which has just gone aground off the Shetlands.

I now turn to the north-east driftnet fishery. We have had two debates during the past two years on the problem, plus many questions. Her Majesty's Government have already accepted the principle that this driftnet fishery, which exploits mixed stocks, should be phased out. In his reply to my speech in the debate of December 9th 1993, my noble friend informed us that the Ministers concerned—that is, those in the Ministry of Agriculture, Fisheries and Food and the Secretary of State for Scotland—took the view that, in order to avoid hardship, it should be done gradually by reducing the number of driftnet licences as licence holders left the fishery.

My noble friend the Minister also expressed the view that Her Majesty's Government would find it acceptable that the run down of that fishery might be further accelerated by financial arrangements from sources outside the budget of Her Majesty's Government to induce licence holders to give up their licences. The example he gave on that occasion was that of a private buy-out. In view of the fact that the recent European Union legislation banning the drift netting of tuna and salmon makes provision for compensation for driftnetsmen deprived of their livelihood, do Her Majesty's Government welcome the opportunity to remove hardship to the licence holders by making use of European compensation funds so that this netting operation, which damages English and Scottish salmon fisheries, might be much more rapidly run down? I would remind your Lordships that at least one of the Scottish fisheries affected, the River Dee, has recorded very serious losses of multi-seawinter salmon which government scientists at Freshwater Fisheries Laboratories in Pitlochry have now recognised with grave concern.

I expect my noble friend's answer to this question might be that Her Majesty's Government conducted a thorough review of the north-east coast fishery, published in 1991, which showed no threat to stocks. Nevertheless in the interests of good fishery management, a decision was taken to phase out the fishery without causing undue hardship to the licence holders. More than 23 per cent. of licence holders have now given up, a considerably faster rate of attrition than had been hoped.

However, my answer to this would be that the report was largely based on scientific work carried out in 1987, more than seven years ago. The situation with salmon stocks has changed significantly and the report is seriously out of date. Will my noble friend not accept this fact and take the advice proffered by the National Rivers Authority to the recent House of Lords Select Committee that it would like to see the phase-out of all interceptory salmon fisheries within the European Union speeded up?

It is true that numbers of licence holders have given up, but the catch by netsmen doubled in 1993, and despite further reduction in the number of net licence holders in 1994, the catch remained stable at around 40,000 salmon. This emphasises the point that the current 30 year phase-out is simply not achieving any reduction in interceptory netting of salmon.

It is pertinent to note here that the NRA discussion paper of October this year confirms that 80 per cent. of the salmon and 50 per cent. of the sea trout taken in this fishery,

"were destined for Scottish rivers",

and then, almost beyond belief, deducts 80 per cent. of the drift net catch from all the calculations on the basis that these fish are Scottish and consequently do not cost the NRA anything, or very little.

I am sure the Atlantic Salmon Trust will have something to say about this. It simply does not seem to be understood that the salmon is an international fish and that these are United Kingdom stocks which are being plundered. Will Her Majesty's Government respond to this new situation instead of trotting out the tired arguments of the past five years? And further, will Her Majesty's Government adopt the European Union Bill which calls for the phasing-out of drift netting throughout the European Union within five years, with compensation for netsmen? If not, why not?

6.13 p.m.

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My Lords, I am still surprised that the Government continue to allow the operations of the north-east drift net fishery. I rise therefore to support the noble Earl, Lord Kimberley, when he asks whether they will reconsider their decision to support the north-east coast drift net fishing. I am obliged to the noble Earl for once more giving us the opportunity to raise this question on the Floor of the House.

The operations of the north-east drift net fishery are certainly indiscriminate. It really is an indiscriminate fishing method. It is a bad management practice and it must be most embarrassing both to the Government and to the National Rivers Authority because of the embarrassments they receive at the North Atlantic Salmon Conservation meetings. It must be a constant irritant to the Ministry of Agriculture, Fisheries and Food and to the National Rivers Authority that all the salmon conservation organisations constantly apply pressure for a halt to this practice and also press for a ban on the use of nylon monofilament gill nets. This method is indiscriminate. These nets not only take salmon and sea trout and all types of fish but also seals and porpoises. When a net breaks it lingers in the sea still trapping everything in the sea as well as birds such as gannets and other diving birds. They become "ghost nets", catching for years. The old hemp nets used to dissolve but these nets last forever.

This practice also constitutes bad management of a resource. The National Rivers Authority must be acutely aware of that. Thousands of salmon are taken south of the River Esk—the only salmon river in Yorkshire—and it is likely that of those taken, a majority could have been heading for the River Esk, therefore denying that river the return of many of its spawning stock. Indeed the Esk is undoubtedly suffering because of the north-east drift-netters. The National Rivers Authority must be aware that it cannot carry out its statutory duty to "maintain, improve and develop" fisheries, including particularly the River Esk, while this continues.

What of the embarrassments to Her Majesty's Government? Britain (and probably still Ireland) is the one country among all the Atlantic salmon countries which still allows this indiscriminate fishing practice of drift netting with nylon monofilament gill nets. Internationally Britain is looked upon as a disgrace in its attitude to salmon conservation. We are isolated and impotent at North Atlantic Salmon Conservation meetings. The North Atlantic Salmon Conservation Organisation, alongside the Atlantic Salmon Trust, the Salmon & Trout Association and the Anglers Co-operative Association, have constantly condemned the Government's stance on this issue. The answer of course from Her Majesty's Government has been that they have agreed to phase it out. On the basis of their policy that will take 30 years. But the truth of the matter of course is that this is a political matter.

The Minister, the noble Earl, Lord Howe, said on 11th October 1994:
"One of the unfortunate consequences of a ban would be the gratuitous damage to employment in areas where employment opportunities are often poor".—[Official Report, 11/10/94; col. 817.]
What a cheek it is for a Government who have created areas of vast industrial devastation and have declared scores of thousands of men redundant and unemployed to say that. By God, that is bare faced cheek! The employment problem is minuscule compared with the steel plant and colliery closures in the industrial heartland of our country. This matter involves perhaps a few over a hundred part-time fishermen. Why not, therefore, buy out these drift-netters, the licence holders, part-time fishermen, who are only at work when the salmon are running?

Major drift netting operations off the Faroes and Greenland have already been bought out. Britain is stubbornly standing alone and at what cost? Has consideration been given to paying the drift-netters a redundancy payment? It seems so little to pay to save such a lot of international embarrassment. Do not the Government accept that the overall regional economic benefit to North-East England and East Scotland from increasing the runs of salmon into rivers outweighs the commercial value of the north-east drift nets? Bearing in mind that the National Rivers Authority in its evidence to your Lordships' Select Committee supported the view that it should now be phased out more rapidly, and that the European Commission and the Parliament have recommended the ending of salmon drift netting, why is it that the Government do not heed these national, European and indeed international representations and decide speedily to phase out this north-east drift net fishery?

6.19 p.m.

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My Lords, the noble Earl, Lord Kimberley, has brought a most interesting Question to your Lordships' House tonight. It is interesting because not only does it ask about salmon; your Lordships might think when you see me appearing on these Benches that salmon is all I ever talk about, but it is a big subject and requires a great deal of input. But on this occasion, the Question which the noble Earl, Lord Kimberley, has brought before your Lordships is about the very ecology of our coastline and the threat to the food chain which supports all the major fish species round our coasts. That is not only the salmon; it is also other forms of fish such as white fish—cod, for instance.

Why do we not see the great catches of cod that we used to see when I was a boy and when the noble Earl was a boy? The answer is that, apart from fishing them out, we have starved them out by destroying their food supplies. We have destroyed their food supplies in a number of ways. But the most sure way of doing so is by attacking the very fishes which are at the base of the food chain, which are the sand eel, the pout and the capelin. Those fishes which never appear on our tables and which we never fished for in the old days as a food for man, but which have now become a source of supply for food for farmed trout in Denmark, for farmed salmon in various parts of the European Union, for pet food, for cosmetics—for lipstick and things like that —and for oil for firing power stations. There are power stations in Denmark which are being run on squashed sand eels.

Do we think it right that this important ingredient, which used to be available as the basis for the whole food chain of the North Sea and all round our coasts, should be used not to provide food for the fishes which we have traditionally fished over the years but as a form of industrial raw material, which is what it is now becoming? It is insulting to the beleaguered fishing industry. Coastal netsmen in Scotland are beleaguered people. I would happily support them as genuine fishermen who have employed their methods over the years and have done no harm to the fishes which they catch for our table. To produce and subsidise with government money—money which has come out of our pockets —a large factory to destroy the ecology of the North Sea and the ecology of our coastline is insulting to those fishermen.

The noble Earl has given us lots of figures which show the very large quantities of fish which are being taken, and sand eels in particular. Last year, off the coast of Fife alone, some 90,000 tonnes of these little fish were landed. They are tiny fish. A whole lot together would not amount to more than the fingers of my hand, the little ones smaller than my little finger and big ones like my middle finger, and not much bigger. If one can imagine the number of these little fish, which are not very long, which make up a pound, a tonne, or 90,000 tonnes. How many thousands and thousands of fish have been destroyed as a result of this fishery?

The fish are very easy to catch because their defence mechanism—to give an example with which your Lordships are probably familiar—is similar to that of the starling. The starling flies around in a large flock so as to be able to confuse its predators when they attack because of the mass of birds there are to choose from. These fish swim about in shoals to protect themselves in the same way. Methods are now being used which exploit their very defence mechanism to catch them more efficiently. They are literally being hoovered out of the sea in some instances. It is rather like taking a machine gun to the plains of the Serengeti and attacking the wildebeest and zebras with the machine gun and saying that that is sport. The method of fishing which is being employed is not a reasonable one. It is destructive.

The figures which have already been given to us show how from 1982 Shetland, which used to yield 50,000 tonnes of sand eels, declined by 1988 to a mere 5,000 tonnes. That is the kind of destruction that can be imposed upon a stock of fish in six years.

In my view the greatest danger to the salmon is the destruction of their food supplies. They survive, if at all, because of their opportunistic methods of feeding. They do not eat only one species of fish. But the trouble is that in this case the people who are catching so-called commercial fish do not catch only one type of fish, either. They go for anything that they can catch to put through their factories. That is a very grave danger, not only to the salmon but also to the seabirds—the puffins and guillemots. There is evidence that such damage is taking place. The Scottish Office itself admits that deaths of seabirds such as guillemots were as high as 50,000 early this year. If the Scottish Office admits to having discovered 50,000 dead birds lying around, how many more have sunk to the bottom and been eaten by lobsters, and so forth?

We also know that in Shetland, where the fish on which they feed have been destroyed, puffins, guillemots and other birds which rely on sand eels have begun to fail to breed and to produce young at all. From 1984 to 1987 puffins and terns failed to produce any young in the Shetlands. Therefore, it is a serious matter for the whole ecology. It is destroying our bird life; it is denying us the quality of fish which we used to have around our coasts; it is threatening the stocks of migratory fish such as salmon and sea trout. It is most harmful.

It is thoroughly reprehensible that our money should be being used to encourage this fishery by foreign fishermen and for Danish fishermen to come in to use our money, our land and our traditional fisheries to destroy the basis of our fish stocks along our coasts. That is most reprehensible. I hope that the Government will see what damage is being done not only to the fish stocks themselves but to the confidence of all those connected with fisheries in this country.

As to the drift net fishery off the north east coast of England, I would have preferred it if the noble Earl had worded his Question slightly differently and not asked the Government to reconsider their decision but rather to reinforce their decision to phase out the fishery as soon as possible. I should like to see it reinforced, not reconsidered. That might be done by using the means which I have already suggested in your Lordships' House by persuading some of those who want to continue fishing—perhaps the younger fishermen—to fish inshore by one of the methods which is acceptable. As the noble Lord, Lord Mason, has already drawn to our attention, the nets which they use are in themselves a menace and a danger not only to fish but to other forms of life in the sea.

I hope that the Government will take note of the Question which the noble Earl asked, will give us a helpful answer and will understand that in their hands lies the protection of the basis of all our fisheries, whether they be migratory fish or white fish. I hope that the Government will seriously reconsider—if they can reconsider anything—giving a subsidy for the building of the processing factory in Scotland. I hope that they will also reconsider their position with regard to the possible cessation of the fishery for what is known as commercial fish, particularly sand eels, capelin and pout.

6.30 p.m.

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My Lords, while I cannot support fish factories, I am afraid that I cannot agree with the view expressed by the noble Earl, Lord Kimberley, that Her Majesty's Government should speed up, by one means or another, the gradual phasing out of the north-east salmon drift net fishery. The socio-economic hardship to the fishing communities along the Northumbrian and Yorkshire coasts, who have fished in this manner for more than 300 years, resulting from an early closure of this fishery would be severe.

The consequences of such a course of action becomes even more unpalatable if one considers that those employed in this fishery would be made scapegoats for the reluctance of the riparian interests to face up to what is surely the principal cause of the reduction in their catches.

The noble Earl said in his speech only last December in your Lordships' House that the average annual catch by the north-east coast drift-netters over the past 20 years totalled some 58,000 salmon and grilse and 50,000 large sea trout. To this, the noble Earl said that some 30 per cent. must be added for unrecorded catches and a further 35 per cent. for damaged fish that subsequently die from their injuries. The real grand average annual total catch of those drift-netters was calculated to be a little under 200,000 fish.

In the same debate, the noble Lord, Lord Kimball, referred to the grey seal around the Scottish coast being restricted in 1964 to a population of 24,000, whereas according to the Sea Mammal Research Unit in Cambridge the count has now risen to 86,000. That is an increase in the seal population of 62,000 over a period of 30 years. According to the Cornish Seal Sanctuary, an adult seal consumes about 15½ pounds of fish a day, or two-and-a-half tonnes per year. This equates, if described in units of 10 lbs, to 35 million more fish being eaten by seals off our coasts per year than was the case in 1964. In other words, an additional 156,000 tonnes of fish are now being consumed by these predators.

Of course, these additional seals are not going to have dined entirely on salmon and sea trout. However, I would again refer to the speech of the noble Lord, Lord Kimball, when he referred to the Marine Research Unit in Aberdeen, who shot and collected a selection of seals at sea in 1973. The unit found that 80 per cent. of their stomach content was made up of salmon. This means that probably an additional 28 million salmon or sea trout which would have been reaching our rivers up until 1964 are now being taken out of our waters by the seal. Even if the figures are inaccurate, even highly inaccurate, they are so far removed from the 200,000 annual fish catch of the north-east salmon drift-netters as surely to make their activities look an irrelevance.

Does the Minister agree that the time has come for the riparians to work together with the National Federation of Fishermen's Organisations and their Scottish counterparts and Her Majesty's Government to educate the public into accepting that the seal does have to be culled in a humane and controlled manner?

6.35 p.m.

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My Lords, first, I must apologise to your Lordships for the fact that I failed to put my name down to speak on the Question today as I did not think that I would be able to be present. I should also like to apologise to my noble friend the Minister and your Lordships because I shall have to leave early since I have an unavoidable commitment. I must also declare an interest, in that I am a Tweed proprietor and a Tweed Commissioner, the river most clearly affected by the north-east drift net fishery.

I am very grateful to my noble friend Lord Kimberley for raising this matter yet again and we will all wait with interest to hear the Minister's response. This is the third occasion in as many years that the subject has been raised in your Lordships' House. I wish to add my firm support to my noble friend Lord Kimberley, and the noble Lord, Lord Mason, in their comments about the futility of the continuing north-east drift net fishery. All salmon organisations condemn the Government and I can only trust that the Government will have a change of heart.

Much has happened in the last two years: the announcement of the intention to phase out the drift nets over 30 years; the closing down of the Faroese and Greenland drift net fishery; and now the recent vote in the European Parliament in favour of the European Commission's proposal to ban drift netting for tuna and salmon.

There has been much movement internationally, but how much has there been in this country and by this Government? I would be most interested to hear my noble friend's response to the European Union's provision for compensation for driftsmen. If I may, I will quote from the Minister's comments last year in this House, when he stated:
"It is of course open to those who see a benefit from a faster phase-out to negotiate a private buy-out with the netsmen themselves, as has been done elsewhere … there is nothing to stop a driftnetsman from accepting payment in return for not renewing his licence. But I would say … that these are matters for private agreement and private capital and not for British taxpayers".— [Official Report, 9/12/93; col. 1106.]
If the Minister feels that it is not a matter for the British taxpayer, does he agree that it is a sensible use of European funds and merits encouragement by the Government?

Much was made in recent debates, and rightly so, of the value of the rod-caught salmon to local communities in the rural areas of Scotland and north-east England. Will the Minister agree, therefore, that this European initiative offers the perfect opportunity, as my noble friend Lord Kimberley said, to bring this about while safeguarding the interests of the north-east drift netsmen? The Government have for many years been isolated internationally in their support for drift netting of salmon and I hope that the time may now have come for this to change.

6.39 p.m.

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My Lords, it is strange for me as very much a city person to be involved in this debate with many people who, I know, are experts. Noble Lords may remember that we have had this debate a number of times before. I took part in them and I felt that we did not need to go over the problems because everyone seemed to accept that the idea of phasing out the north-east fisheries would be the answer.

In view of this forthcoming debate, I began to look back at some of the earlier debates. I received briefings from various groups of people, and I am not so sure as I once was that phasing out the north-east fishery drift nets is the simple and easy answer that it appears to be.

The Question consists of two parts. I feel that on the first part there would be fairly general agreement that unregulated fishing for sand eels, particularly by foreign nationals, is undesirable. A number of noble Lords have mentioned the factory that it is proposed to build, probably at Grangemouth, to produce something like 100,000 tonnes per year of cattle feed. I understand that a company called Biomar Dansk is likely to build it. It will be built by means of a grant from the Scottish Office and a grant from an organisation in Scotland that used to be called "Locate". I understand that permission for the development has already been given.

As I said earlier, I am wary of accepting too readily the arguments of highly committed people on most topics. But when it appears that such a company has the freedom to take an unlimited tonnage of sand eels in a catch—100,000 tonnes has been mentioned—we have to look very carefully at the issues. I am on the same side of the argument as the Royal Society for the Protection of Birds in many ways, but frequently they tend to go over the top in their defence of bird life. I get very worried about it. I am also worried about the composition of the National Rivers Authority. I understand that it is very largely composed of riparian owners who obviously have a vested interest in what I believe may be the over-easy solution of closing down the drift nets in the north-east.

There is always a balance to be struck in these matters. I shall be pleased if the Minister could tell the House whether the report of the factory to be built for producing animal feed is true. What is the reasoning behind the decision? It seems that considerable costs will be involved.

The job creation prospects for Grangemouth may very well have exerted quite an influence on the proposal that the factory should be located there. I am sure that such a consideration weighs heavily with the Scottish Office. However, it must be balanced by the possible damage to other fishing stocks in the Firth of Forth. I understand that the fishermen are extremely concerned about the industrial fishing, which seems to be uncontrolled.

The second part of the Question raised by the noble Earl has been raised many times in this House. I have taken part in a number of debates on this issue and thought that we had reached some kind of conclusion. I understand that north-east coast drift net fishing is seasonal and controlled by the Salmon Act 1986. It should also be noted that that type of fishing has a history of around 300 years. It is almost always a family business, passed on from one generation to the next.

The more that I read and hear about the subject, the more confused I become. Looking at the Scottish position, drift net fishing was stopped in 1962. That should be a period long enough to allow for an assessment of the effect of the ban on river salmon. According to the Official Report of 26th November 1991, in a reply to a Question about Scottish rivers from the noble Lord, Lord Mackie of Benshie, the Minister of State said that the net loss to Scottish fisheries was 6 per cent. As was said at the time by my noble friend Lord Gallacher when he replied to a similar debate on 5th November 1992:
"That seems rather low in the light of what has been said … this evening"—[Official Report, 5/11/92; col. 1588.]
about the benefits of stopping drift net fishing.

Another point raised with me by fishermen was the issue of the illegal fishing which results when legal fishing is prohibited. Illegal fishing entails very heavy policing costs. I understand that the north-east fishermen are on the spot. They know the wiles and habits of the poachers. They can quickly bring to the notice: of the authorities any illegal fishing. I understand that the licence fee of the north-east fishermen meets about half the cost of policing that is required in the North Sea.

I am told that by contrast in Scotland there is a great deal of illegal fishing, perhaps by the very same people who earlier were stopped from fishing. In Scottish coastal waters it is quite a serious problem. Can the Minister confirm or otherwise; that the illegal fishing has been controlled? The ordinary fishery cruisers are not able to carry out such patrols and I ask the Minister whether he can confirm that naval minesweepers and helicopters have been used in trying to catch illegal fishing. That is the story that I have been told by fishermen. The fishing should be controlled. It has been suggested that traditional coastal communities were able to reduce the amount of work required by the fisheries cruisers when they were there because they were on the spot and knew the ways in which the poachers were likely to behave.

I await the reply from the Minister. I am genuinely concerned about this matter. I was very grateful to the noble Lord, Lord Amherst, for putting another point of view. The MAFF has never been happy about the total abolition of trawling for salmon by traditional small trawlers—they are not big; 30ft long—with fairly limited length nets.

With all the experience that we now have of stopping the Scottish drift net fishing, I should be interested if the Minister could tell us what will happen to the north east? Will there be a total phasing out of this kind of fishing? Have the Government any idea of buying out the fisheries that are already there or can they suggest some other solution?

6.47 p.m.

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My Lords, this has been a most interesting debate. I am grateful to my noble friend Lord Kimberley and other noble Lords who have spoken. The issues that have been raised are important. Noble Lords' views on them clearly are deeply held.

My noble friend's Question covers the two distinct issues of the industrial sand eel fishery and the north east of England salmon drift net fishery. It is certainly true that vessels prosecuting the sand eel fishery take large catches each year, as my noble friend indicated. I am assured that the fishing activity off the Fife and Lothian coasts has fallen from its peak last year and that the more traditional grounds in the eastern North Sea are again being fished more actively.

Despite that undoubtedly high level of fishing activity, the latest advice from fishery scientists is that sand eel stocks are increasing and now stand at high levels. However, I do not wish anyone in your Lordships' House or outside it to believe that the Government are complacent about the levels or the practice of industrial fishing. Complacency would be foolhardy, given the importance of sand eels and other industrial species in the food chain.

Contrary to the assertion in my noble friend's Question, industrial fishing by foreign vessels is not unregulated. Controls on fishing activity, including industrial fishing, are set within the common fisheries policy. In the North Sea, for example, there is a limit of 10 per cent. by-catch of the main human consumption species; there is a ban on industrial fishing vessels processing their catch on board so that the true catch composition cannot be masked; there are restrictions on net mesh size which may be used, and some areas off the north-east coast of the United Kingdom and the western coast of Denmark are closed to fishing at certain times.

We enforce these fisheries regulations thoroughly. British Sea Fisheries Officers regularly board industrial fishing vessels in the UK sector of the North Sea to ensure that they are keeping to CFP regulations. The clear evidence is that they are. Last year, for example, the Scottish Fisheries Protection Agency alone made over 500 boardings of such vessels, of which 430 boardings were of Danish vessels. All those vessels were found to be operating well within current by-catch limits.

At the same time, the UK has been encouraging the development of more effective monitoring and control measures for industrial fisheries within the CFP. We believe that the growth of industrial fishing should be limited until a better scientific understanding of its effect on other fisheries and on the wider marine eco-system is achieved. To that end, the UK took the lead in the December 1993 Fisheries Council in securing agreement that the Commission should establish a working group of marine ecologists and fisheries biologists to study the implications for the marine eco-system of fishing in general and industrial fishing in particular. We understand that the Commission now has that report. We look forward to receiving it and taking the argument forward in Brussels once more.

Our cautious approach to the sand eel fishery in the North Sea is reflected in the management arrangements we have applied in our own waters. As noble Lords will know, there are two small sand eel stocks within Scottish inshore waters. One is at Shetland and the other around the Western Isles. The Shetland fishery has been closed since 1991 and I am pleased to report to the House that the stock has now recovered quite strongly after a period of poor recruitment. At the same time access to the other fishery at the Western Isles has been strictly curtailed so that only vessels which have traditionally taken part in the fishery have access to it. I am advised that in 1993 fishing mortality here represents about 1 per cent. of the stock. That stands comparison with a natural mortality of this stock of about 20 per cent. each year. It is important to remember that fishing is not the sole cause of mortality in the sea. Natural mortality is frequently greater; and natural mortality levels in the sea tend to be very high indeed.

I repeat that we are not complacent. Despite the increases in stock size which fisheries scientists have detected and despite the fact that no causal link has yet been identified between industrial fish populations and fluctuations in numbers of other species, we continue to keep a careful eye on the situation. If adverse links were proven or subject to strong suspicion we would most certainly take speedy action. I would remind your Lordships that it was during our presidency of the Community in 1992 that the duty to have regard to the wider effects of the marine eco-system was written into the basic common fishery policy regulations. We expect that precept to be followed.

The noble Viscount, Lord Thurso, told us of his concern that encouragement may be offered to fishing vessels to take increased quantities of industrial species as a result of the new factory at Grangemouth. The new factory will not be a primary processor of industrial fish. Instead it will import semi-processed fish meal and fish oil from Denmark. It will then further process that material into fish feed intended for the salmon fish farming industry.

The opening of the plant will simply mean that secondary processing of fish meal for eventual use in the UK market and elsewhere will take place in Scotland rather than overseas. That move benefits the UK economy through the creation of new jobs, as the noble Lord, Lord Carmichael, said, and through the value added element of the processing process coming to Scotland.

I emphasise that there will be no direct landings of fish at the Grangemouth plant. There will thus be no encouragement to the UK fleet to participate in industrial fishing as a result of the establishment of that plant. The outlet for industrial fish catches will remain the fish meal factory at Shetland or competitor plants in Denmark. It is not attractive for British vessels to steam those great distances to discharge their catches. We believe therefore that there is little chance of increased participation by our fleet in the North Sea industrial fishery. I would emphasise also that the factory will bring employment to the east coast of Scotland, and that is surely to be welcomed.

My noble friend Lord Kimberley raised the question of the seabird deaths which occurred earlier this year on a large scale and questioned the role that industrial fishing played in that incident. It is believed that large numbers of seabirds die at sea each year during the harsh winter months but that under normal conditions their bodies are not washed up onto our beaches. There is a natural cycle of seabird mortality which is aggravated by severe weather. Weather conditions in the early months of this year were unusually severe on the east coast, with predominantly strong easterly winds. Those severe and persistent winds resulted in increased turbidity which could have made it much more difficult than usual for diving seabirds to locate their prey. Such weather conditions are also known to affect the behaviour of fish. Sprat shoals, for example, on which seabirds are heavily dependent in winter become dispersed in stormy weather. Sand eel emergence in winter is also highly variable for they are burrowing creatures and their reaction to the weather may well have been to go deeper. In those circumstances the sad probability is that the birds just could not locate their food before hypothermia or starvation set in.

Your Lordships may like to know of two separate scientific examinations of the relationship between seabirds and fish. A study group of the International Council for the Exploration of the Sea indicated last year that there was unlikely to be much competition between seabirds and the sand eel fishery. The North Sea Quality Status Report 1993 reported that time-series data for many seabirds go back to the beginning of the century and show large increases in the population of several species. It added that changes have also been observed in the at-sea distribution of seabirds that appear to be related to changes in the abundance and distribution of their prey and that there is no evidence that those changes have been caused by the industrial fisheries.

Sand eel fishing is sometimes blamed for the fact that in some years seabird colonies had failed to breed. Following incidents in the late 1980s the Scottish Office contributed to a study to examine any links between seabird breeding failures and levels of sand eel fishing in the Shetland area. The report concluded that, while sand eel stocks have certainly reduced in the late 1980s, that was due to unknown external factors—possibly hydrographic—and that the controls applied to the fishery in 1991 had prevented fishing activity from exacerbating the situation. As I have already said, that fishery remains closed. Industrial fishing does not seem to have been either the main or the only culprit in those incidents. They appear to have been natural events.

My noble friend began his speech by referring to the alleged link between sand eels and the population of salmon. Perhaps I could refer to the report commissioned by the Salmon and Trout Association in 1992 into the west of Scotland sand eel fishery and its impact on the abundance of salmonoids and other migratory fish. The report found no evidence that salmonoid catches were being affected by any by-catch of smolts in the sand eel fishery, though the research seemed to find a link between post smolt survival and the abundance of first and second year sand eels. However, the data in the report make it impossible to say whether that may be due to a direct causal link or to a common causal factor.

I should perhaps add that that uncertainty is likely to be academic since the effects of the fishery on the abundance of small sand eels are so small as to be virtually undetectable in relation to salmonoid catches. This is because predation is most likely to occur in the period April to June. Careful analysis of sand eel catch data shows that during this period less than 1 per cent. of the total population of first year sand eels is taken in the fishery.

Exploitation of second year sand eels is certainly somewhat higher and in the past some 5 or 10 per cent. have been caught in the fishery. However, even these figures are fairly minor if one is trying to explain a major decrease in smolt survival. Furthermore, the level of fishing activity has been falling in recent years, and scientists estimated that in total only 1 per cent. of the west of Scotland sand eel stocks was caught in 1993.

Research continues into the biology of sand eels. But work so far done suggests that changes in abundance of first year fish are due to difference in the survival of larvae from year to year. That is certainly what has been found in other sand eel stocks, and indeed is found generally in marine fish stocks. The likelihood is that these changes in abundance are caused by environmental factors rather than by the very limited fishery which takes place against the stocks.

The noble Viscount, Lord Thurso, referred to the over-fishing of cod. We must recognise that there is no proven link between current levels of industrial fishing and population numbers of predator species, including, incidentally, seabirds, despite a number of scientific studies. The noble Viscount also mentioned that fish oil is burnt in certain Danish power stations. Our understanding is that the Danish Government have not allowed any new contracts for the use of fish oil as a power station fuel since 1990. Current contracts may, we understand, be honoured until 1996.

My noble friend Lord Kimberley asked how many tonnes of fish were aboard the klondiker that went aground off the Shetland Islands during the past few days. The Lerwick Harbour Trust has reported that the vessel had around 240 tonnes of fish on board at the time of the accident. That is, of course, fish for human consumption.

I shall now turn to the second point in my noble friend's Question. The north east coast salmon drift nets fishery has been the subject of debate in your Lordships' House on two occasions during the past two years, the last occasion being 9th December 1993. Those debates were very full and much of the argument put forward this evening covers familiar ground. Nevertheless, I am grateful to my noble friend for initiating this debate as it is only right that these matters are regularly reviewed both by your Lordships' House and by Ministers.

I am sure your Lordships will be well aware from those previous debates that the salmon drift net fishery off the north east coast of England was considered in great detail in a report of a review of salmon net fisheries which the then Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland jointly presented to Parliament in October 1991. The report noted that the review did not produce evidence that the drift net fishery posed an immediate threat to stocks and thus any justification for depriving licence holders of their licences at a stroke. It did, however, note that the fishery exploits several salmon and sea trout stocks; and that the dependence of the fishery on this multiplicity of stocks made the task of conservation and management more difficult.

The report concluded that it would aid and improve the management of individual stocks if drift netting for salmon and sea trout were to come to an end. It was for this reason that Ministers decided that it should be phased out. But they took the view that in order to avoid hardship this should be done gradually by reducing the number of drift net licences as licence holders left the fishery. My noble friend Lord Kimberley suggested that the Government's report on the salmon net fisheries was based on information dating from 1987. The review on which the report was based includes data from as recent a year as 1990, and we have continued to monitor the situation since then.

Measures to implement the phase-out on the basis envisaged in the report were introduced by the National Rivers Authority at the beginning of 1993. As a result of these new measures the number of licences issued fell by almost 13 per cent. in 1993 compared with 1992. There was a further 8 per cent. reduction this year, giving a total reduction since 1992 of about 20 per cent., which is a slightly lower figure than that quoted by my noble friend. The number of licences now stands at 114, against 142 in 1992.

My noble friend asked whether the Government will reconsider their decision to support the north east coast drift net fishery. I am not sure that the netsmen concerned would share my noble friend's view that the Government's decision to bring this fishery to an end constituted support for it. Indeed, I am sure that they would not. That is not to say that we have ruled out further action to restrict exploitation in this fishery. My noble friend will doubtless know that we have been asked by representatives of salmon angling and conservation interests to introduce further restrictions on the fishery. We are considering their request. We are also considering what, if anything, further needs to be done to protect spring run and multi-sea-winter fish in the light of the Salmon Advisory Committee's recent report on the run timing of salmon. One of the recommendations of the report was that consideration be given to further control of exploitation in both commercial and recreational fisheries.

More generally, we have always made it clear that if further action is required in order to conserve stocks, we shall not hesitate to take it. To this end we will continue to monitor the phase-out, looking at the state of stocks, the levels of catches, licence numbers and fishing efforts, and the connections between them. As I said in an earlier debate, it is open to those who see a benefit from a more rapid phase-out of the fishery to negotiate a private buy-out with the netsmen themselves, as has been done elsewhere. Indeed, I understand that a meeting has recently taken place between representatives of a private interest and the netsmen to explore the scope for a buy-out. It remains to be seen whether anything conies of this.

My noble friend Lord Kimberley asked about the possibility of European Union funding for a buy-out. As far as I am aware, there is no provision for European Union funds to be used for that purpose. I will, however, look at that matter. If that were to be proposed we would of course consider it. However, my noble friend does not need me to tell him that even European Union money is ultimately funded by the British taxpayer.

The noble Lord, Lord Mason of Barnsley, suggested that Britain and Ireland are the only countries using drift nets. As I made clear in last year's debate, drift nets are more widely used than the noble Lord suggested. Although temporarily bought out in Greenland, the drift netting method is not actually prohibited there. Drift netting for salmon is practised in France and is widely used in the Baltic.

My noble friend Lord Kimberley also asked about the Government's view on the European Union drift net proposal and he mentioned too the NRA's support for the European Union proposal on drift netting. The Commission's proposal is not restricted to the use of drift nets for catching salmon and sea trout. It is principally directed at the use of this method for high sea migratory species such as tuna. We do not believe that the Commission has made a case for its proposal. The use of drift nets for catching salmon and sea trout in UK waters is strictly regulated and has been so for many years. To phase them out within three years cannot in our view be justified on the basis of a threat to stocks and such action would impose considerable hardship on the netsmen concerned.

In its memorandum to the House of Lords European Communities Committee the NRA said that, purely on the basis of better fisheries management, it would welcome the speeding up of the phase-out of drift nets which exploit mixed stock fisheries within the European Union. However, it also acknowledged that the Government may wish to take account of other issues such as avoiding undue hardship, and indeed that is what we have done.

The noble Lord, Lord Carmichael, referred to the importance of salmon fishing to the Scottish economy. We are well aware of the importance of salmon fishing to the economy north of the Border. However, scientists estimate that if the north-east coast net fisheries had not operated, the average increase in rod and net catches in Scottish east and north-east coast rivers would have been less than 7 per cent. The increase in rod catches would be likely to be less than that. The effect on individual rivers will of course vary. The benefit to those in southern Scotland would be greater but in some rivers further north it would be much less.

The noble Lord, Lord Mason, referred to so-called ghost drift nets; that is to say, drift nets continuing to fish after they have broken free and been lost. I know that this is a problem in some areas of the world, but in the North Sea the strong tides and turbid conditions ensure that such nets are soon knocked to the sea bed, where they fill with debris and cease fishing.

The noble Lord, Lord Amherst, raised the issue of seals. I know that there is anxiety among many fishermen that increasing numbers of seals present a threat to fishing activities. Some have argued for localised culls to reduce the pressure of predation on local fishing. The Government review their policy on seals each year using scientific advice and data from the Natural Environment Research Council (NERC). In the light of the latest review carried out in February, the Government have no plans to authorise a cull.

The Government are continuing to fund an extensive programme of research on seal numbers, diet and interaction with the fisheries. We know that there are many influences on commercially exploited fish stocks. Predation by seals is only one factor and it is difficult to estimate the precise effect of their varied diet on particular species of fish. The Government have a major commitment to continuing research on diet and the behaviour of seals.

Let me finally assure your Lordships that we attach great importance to the maintenance of our salmon stocks. We have a long history of regulating our salmon fisheries, both commercial and recreational. We have adapted the regulation and management of those fisheries over the years to reflect changing circumstances and we shall continue to do so in order to ensure that salmon continue to run in our rivers.

Drug Trafficking Bill Hl

Returned from the Commons agreed to.

Law Of Property (Miscellaneous Provisions) Bill Hl

Returned from the Commons agreed to with a privilege amendment; the amendment considered and agreed to.

House adjourned at thirteen minutes past seven o'clock.