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

My Lords, the Government have studied the proposals of the World Disarmament Campaign submitted to the Committee on Disarmament in Geneva. In response, we drew attention to the proposals already submitted to the United Nations Secretary-General, giving United Kingdom views on the question of a comprehensive programme of disarmament.

My Lords, is the Minister aware that during the Defence debate, the noble Lord, Lord Trefgarne, stated that the Government would give careful consideration to our proposals? Is the noble Lord aware that the United Nations Special Assembly on Disarmament last year recommended the ending of all nuclear weapons and phased progress to general disarmament? Do not our proposals achieve that in a practical way? Is he aware that we now have the support of a majority on the Geneva Committee? Will the United Kingdom change their attitude and give us support there?

My Lords, the only thing that I was not aware of in that long list of supplementaries was the fact that the proposals had the support of the majority of the Geneva Committee. However, the Government consider it unrealistic to seek to achieve the ultimate goals of general and complete disarmament of all nations through one treaty. Moreover, it would be impracticable to set time scales for such a treaty in advance like the six-year limit envisaged in the WDC proposal. The proposed treaty would be unnegotiable, we feel, in several respects. For example, it mentions that United Nations inspectors in each state would have unimpeded access to all establishments and records. I cannot see any prospect of the Soviet leadership negotiating such a provision.

My Lords, is it not a fact that the Government share in the decision in the final document of the 1978 Special Assembly? Have not the Government also declared their support for the World Disarmament Campaign which is a multilateral campaign? What positive steps are the Government taking to try to work out something rather than just give airy answers?

My Lords, I am sorry if your Lordships feel that I have given an airy answer. However, positive steps are being made and our ambassador to the Committee on Disarmament has written in the May edition of Arms Control and Disarmament which is currently available in your Lordships' Library.

My Lords, will the Government reconsider their position on this matter? Will they recall that the late Lord Louis Mountbatten described the old Roman precept,

"If you desire peace, prepare for war",

as being absolute nuclear nonsense? In the light of that, will the Government look again at their position in this matter?

My Lords, like all members of the United Nations, we have accepted general and complete disarmament under strict and effective international control as the ultimate goal of arms control efforts. As the final document of the special session recognised, progress towards world disarmament will depend on the successful negotiation of a number of specific arms control measures.

My Lords, the noble Lord said that the Soviet Government could not be expected to agree to inspection. While that may very well be true, may I ask when they were last asked?

My Lords, I have no information on that particular point. However, we know that they refused even to allow international atomic agency safeguards on their civil nuclear programme.

My Lords, is the Minister aware that there are a significant number of young mothers in the country suffering painful anxiety about the future safety of their children under the threat of worldwide nuclear arms proliferation? Would he not agree that the highest priority for this or any Government is to seek to reduce this threat by the vigorous pursuit of disarmament measures such as the one under discussion?

My Lords, I also have young children. At a time when the Soviet Union continues to build up its nuclear and conventional forces, unilateral disarmament, which I think probably is the point the noble Lord is getting at, would serve only to undermine our security and weaken NATO's ability to deter aggression. It would also remove the incentive for the Soviet Union to negotiate, and indeed it would add to our own difficulties. One cannot negotiate from a position of weakness.

My Lords, I was not advocating—

My Lords, I think that the noble Lord, Lord Brockway, has got up in order to ask his last question.

I apologise, my Lords.

My Lords, is the Minister aware of the massive feeling now on this subject? Is he aware that we are thinking in our meetings not in terms of hundreds but of thousands?—3,000 in Edinburgh, 5,000 in Plymouth and a crowded guildhall at Southampton. Is he aware that this is worldwide and, with unemployment, this problem of nuclear weapons is now becoming a dominant issue in people's minds?

My Lords, the noble Lord, Lord Brockway, says this feeling is worldwide. So far as we know, I would have to correct him and to say that it is Westernwide. The authoritarian states do not have, or do not allow, pressure groups such as the noble Lord belongs to, and therefore I think we have a very one-sided view of all this.

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

My Lords, we have at present no plans to bring these licensing provisions into force, but will continue to keep the matter under review.

My Lords, while thanking the noble Lord for his reply, may I ask whether he is aware that the killing of a child by several guard dogs under training came as a great shock to a number of us? Is he also aware—I think he undoubtedly will be—that the noble Lord, Lord Gordon-Walker, and myself envisaged just such a situation when the Guard Dogs Bill went through Parliament? May I ask my noble friend whether he is also aware, as again I think he will be, that this Act has been in operation for some time, and is it not time that it was brought into effect?

My Lords, like my noble friend, I was shocked and saddened to read about the death of Michek Francis on 4th June. He was a baby and so far as we know he died as a result of an attack by Alsatian dogs. There is some doubt whether the dogs in the case were guard dogs. However, if they were guard dogs, and had a licensing system been in operation, we could not say for certain that the incident would have been prevented. However, that does not prevent the thrust of my noble friend's Question, and the answer I have to give him is that to bring in the licensing provisions of the 1975 Act would impose additional burdens on local authorities which the Government would be reluctant to impose in present circumstances.

My Lords, I do not wish to press my noble friend much further, but under this licensing provision is it not a fact that any inspections must be paid for at a rate which covers the cost for the local authority and there is no cost to the rates?

My Lords, it depends on how regulations would be drafted under the Act.

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

My Lords, I understand from those concerned that the answer to my noble friend's Question is in the negative.

My Lords, while thanking my noble and learned friend for that unwelcome reply, may I ask this: Is he aware that the Royal Commission on Taxation and the Committee on the Preparation of Legislation did suggest what is proposed in this Question, in fact in the recommendation which the Question refers to, and that parts of this year's Finance Bill do most fortunately follow the recommendation? Will my noble and learned friend therefore please encourage those whose duty it is to draft our fiscal legislation to do what is proposed, namely, to state the scope of the charges and relief wherever it is feasible to do so?

My Lords, that puts the question in a somewhat different light. Wherever it is feasible to do so I am quite sure they will do so.

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

My Lords, the present high level of interest rates in most countries reflects essentially the need to check monetary growth to curb inflation. Lower interest rates will be achieved not so much by initiatives of the kind the noble Lord has in mind, but by firm fiscal and monetary policy leading to a fall in the rate of inflation.

My Lords, I am aware of the noble Lord's doctrine about high interest rates, but I am talking about the artificial and excessive interest rates that occur, for example, in the United States at the present time. Does the noble Lord not agree that whatever short-term improvements there may be to a domestic statistic in the United States, for example, at the present time they are far outweighed by the damage done to the international trading community? Would the noble Lord also not agree that if we are interested in the stability and security of the western world it is as important to get some sensible cooperation in these monetary matters as it is in the military field?

My Lords, we are all anxious to see lower rates of interest. But I do not think that the American Administration would accept the noble Lord's description of American interest rates as being either arbitrary or excessive. He will be interested to know, as I hope he does, that in the last few weeks rates of interest in the United States have already begun to fall. In terms of the long-term health of the international community, the overriding requirement is to reduce the rates of inflation. This does from time to time entail maintaining interest rates which are higher than any of us would like to see.

My Lords, are the Government aware that almost everybody in the House will agree with what the noble Lord has said today. But I think that the Question of the noble Lord, Lord Beswick, was to draw attention to the instability of interest rates. Would the Government agree that, when American rates go up very suddenly to an unprecedented level of 20 or 21 per cent., it draws a lot of funds out of the other members of the OECD and has very undesirable effects on their domestic situation? Would it not be advisable to go back in some degree to the principles of the OECD, which are that we should try to conduct our economic policies in such a way that we damage other people's economies as little as possible? If I might ask the noble Lord one more question, would it not be a good idea to ask the Group of 10 to discuss this problem a little more often?

My Lords, I am not at all certain that the noble Lord was asking a question as much as making a long statement of policy. Of course, in principle, we all agree with international collaboration. I am sure that all countries pay regard to the effect of their policies on other people. But it would be quite wrong to regard the weakness of some of the European currencies at present as being primarily the result of funds being siphoned off to the United States, as a result of the high rates of interest prevailing there.

My Lords, may I ask the noble Lord to consider that, when he has time to read what the noble Lord on the Cross-Benches had to say, he will find that it was, indeed, a very relevant question? May I ask the noble Lord further whether I am to gather from what he has told me that the answer to my original Question is, No, sir?

My Lords, if the noble Lord is looking for a very brief reply to his question, the answer is that the Government recognise the overriding need for reducing rates of inflation worldwide. This means, from time to time, that rates of interest are seen which are higher than one would normally like to have.

My Lords, may I press the noble Lord? I asked what initiatives have been taken to try to secure agreement. Is the answer to that question, none?

My Lords, I, in fact, specifically answered the noble Lord when I said in my reply:

"Lower interest rates will be achieved not so much by initiatives of the kind the noble Lord has in mind, but by firm fiscal and monetary policy".

My Lords, it may be for the convenience of the House if I announce that dinner will be available today at the usual time. The Report stage of the British Telecommunications Bill will adjourn at approximately seven o'clock for a short period. During the adjournment, the Sheep Variable Premium (Protection of Payments) (Amendment) Order 1981 and the Committee stage of the Industrial Diseases (Notification) Bill will be taken.

At a convenient moment after 3.30 this afternoon, my noble and learned friend the Lord Chancellor will, with the leave of the House, repeat a Statement that is to be made in another place on Trooping the Colour.

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

My Lords, we on this side of the House do not seek in any way to prevent the Third Reading of this Bill. We are naturally a little sorry that the Government did not act on the basis of our recommendations. Nevertheless, the Bill itself does not raise any profound questions of social or political significance within the party context. We on this side of the House should like to thank the noble Lord for the very great efforts that he made to simplify the provisions of the Bill and to explain it so patiently to the House.

Bill read 3^a, with the amendments, and passed, and returned to the Commons.

moved Amendment No. 1:

Page 2, line 23, leave out paragraph (b).

My Lords, when we debated this question during the Committee stage of the Bill, my noble friend Lord Morris suggested, as he has again suggested today, that the powers of British Telecom which are contained in Clause 2(1)(b), (c) and (d) are unnecessary because of the existence of the power in Clause 2(1)(a) to provide telecommunication and data processing services. I think my noble friend is under a small misapprehension which I hope I can dispel.

The point is that Clause 2(1)(b), (c) and (d) are all necessary because they cover services provided by British Telecom other than telecommunications and data processing services. In the case of Clause 2(1)(b), the two businesses, posts and telecommunications, have provided certain services for each other for many years. The particular examples of which I am thinking are vehicle maintenance, procurement and research and development. Activities such as these obviously do not fall within the power set out in Clause 2(1)(a) and therefore it is necessary to include Clause 2(1)(b), and its parallel provision in Part II of the Bill in Clause 57, in order to allow these necessary and useful services to continue.

Similarly, as regards 2(1)(c) and (d), British Telecom already provides some services other than telecommunication services under the equivalent section, Section 7(1)(d), of the 1996 Post Office Act. The example I have in mind here is the procurement of hearing aids for the DHSS and also an agreement to provide emergency power supplies to hospitals. Again, these subsections allow these necessary services, which are not purely telecom or data processing services, to continue.

I hope therefore that my noble friend appreciates that the point is now clear. These paragraphs are necessary because they are not covered by the powers in Clause 2(1)(a). I would just add that all the services covered by Clause 2(1)(b), (c) and (d) will be performed by BT under specially negotiated contracts. In providing these services, BT will of course be competing with the private sector. Therefore the Post Office, the Government, local authorities and National Health Service authorities will all be able to choose whichever supplier they wish. I hope that, in the light of this detailed, if necessarily rather technical explanation, my noble friend can now agree to withdraw his amendments.

My Lords, I am most grateful to my noble friend for that very full and careful explanation. It is an immense improvement on the explanation which we received at the Committee stage; certainly it clarifies my mind a great deal. Therefore I beg leave to withdraw the amendment.

moved Amendment No. 4:

Page 3, line 13, leave out ("requisite, advantageous or convenient") and insert ("expedient").

My Lords, as my noble friend Lord Morris has already said, my noble friend the Minister, Lord Trefgarne, attempted to give an explanation to my noble friend at an earlier stage about this amendment. The word "expedient" in this case could be construed as narrower than the phrase "requisite, advantageous or convenient". While the Government have no wish to narrow the powers of British Telecom, the advice we have received makes us unable to accept the addition which my noble friend seeks to make to the Bill.

I hope my noble friend will accept that the phrase which is used in this Bill, we hope satisfactorily, is common to several nationalised industry Acts which have a good track record both for clarity and for expression. The coal, the electricity and the gas industries are several examples, as well as the Post Office. All of them have similarly worded powers to those which are found in the Bill. I hope this explanation will go a little further towards satisfying my noble friend Lord Morris.

My Lords, indeed it does. I am most grateful to my noble friend. I beg leave to withdraw the amendment.

moved Amendment No. 5:

Page 6, line 2, after ("Islands") insert ("including its rural communities").

My Lords, in the mid-sixties I had the good fortune to live for a year in Canada, where the telephone is produced by the Bell Telephone Company. I can assure your Lordships that not only did they provide the telephones the people in the towns and cities and rural areas needed, but they did it more cheaply. One of the reasons they managed to do this was by not wasting a lot of money on trying to underpin things in an orderly bureaucratic fashion. The other reason was that if the communities reckoned they were not getting the service they wanted they jolly well found it themselves. The did not think they had to fall back on "Auntie" Government to provide it for them; they thought they had to get on and do it, and they negotiated hard and they found the money collectively and all sorts of things like that.

I really think the noble Lord is not allowing us to free the British people to look after themselves instead of being looked after by central Government. That is the message of this Bill. I really think we want to stop trying to cosset poor little British Telecom because the Post Office has been nationalised for centuries; and what a pity! I think we want to say: "This is a commercial operation; for heaven's sake, let us follow in the footsteps of our cousins in North America who really know the way to do things on a free enterprise basis".

As to the particular amendment, I welcome the phraseology of the Bill as it stands, though this might sound contradictory to what I have just said. Islands, as I tried to explain to your Lordships earlier, particularly in the local government Bill last year, have a special problem; they have a communication problem which involves the sea, and it is different. You can quite easily dig a trench for a telephone down the side of the road but you cannot put it under the water, to take that one example. In regard to the local government Bill we had the problem of trying to persuade the Government that we do have a special extra cost because of the sea transport situation. I will not go over that ground again. But the fact is that in Canada, about which I spoke a moment ago, they do have a very special underpinning and subsidising of all the transport to all their islands in a way that I hope to show the Government in due course, when I have a little time to do it. Therefore, I think that this amendment is misconceived. It misses the point of the Bill. It tries to put us back again in a terrible straitjacket, and it does not understand that uniquely islands require special treatment in a way that rural areas never will.

My Lords, with due respect to the noble Lord, Lord Mottistone, I wonder whether he has got it completely right. We are not talking about cosseting British Telecom. I do not like the word, but we are talking about cosseting the consumer; this is the important thing. No reference has been made, so far as I can gather, to the question of maintenance. The noble Lord, Lord Mottistone, says that in Canada it is done much cheaper. Nothing can be much cheaper than nothing. British Telecom carries out maintenance as part of its normal rental charge. What will be the position in the rural areas? If, as my noble friend Lord Glenamara has pointed out, and it cannot be denied, profitable services are to be taken away by licence from British Telecom, obviously British Telecom has to make a very important decision: Does it carry on in difficult rural areas? Many noble Lords come from rural areas; they know that telecom engineers go out in all weathers, at almost all hours, to deal with problems of maintenance, and that is included in the telephone rental charge. Nothing can be cheaper than that. British Telecom will have to take an important decision. If it is going to be denied other important revenues it has got to decide whether it carries on maintenance at its present cost.

It may be argued that the private sector will take over the maintenance. That may be, but it will be at an additional cost. No private sector is going to take over maintenance in the rural areas unless it can make a useful remuneration. I do not expect any private company to carry out maintenance work for the love of doing it. Therefore, that aspect has got to be dealt with when we are considering this amendment. An obligation must be placed upon someone to ensure that the services in the rural areas are continued. Many noble Lords come from the rural areas. I hope they will look at this, and, if mine is not the answer, perhaps they will tell me what the answer is. The only answer can be private sector charges at a profit, which will be far greater than the charges made by British Telecom at the moment.

My Lords, may I ask my noble friend about one point that rather troubles me? Living in a rural area, with some extensions to the telephone—many people are in the same boat, of course—those extensions belong to, and are rented from, the Post Office at the moment. After the passage of this Bill, the Post Office will presumably come and mend my main telephone free of charge, as they do at the moment, but will it be incumbent upon them to come and mend the extensions free of charge, as they do at the moment, or will they be able to levy a charge for doing that?

My Lords, I would have to take advice on my noble friend's question. I think the position would be that, where British Telecom are freely competing for the provision of services with the private sector, as against any undertakings they have given to my noble friend or others, on the mainframe system they would be able to levy a charge. But I will take advice about that and come back to my noble friend, if he will be so kind as to allow me that passage of time.

My Lords, I think the noble Lord, Lord Glenamara, is a marvellous addition to your Lordships' House, in that, in keeping with the traditions of the House, he is very experienced, very lucid, and extremely conservative. One of the real puzzles, I think, of political life over the last 10 years in which I have been engaged about it is the steady progression of the Labour Party towards being the party principally of the defence of the status quo. We have had time and time again in this debate, and indeed in other debates, the argument put to us which, if I may synopsise it, and the noble Lord, Lord Glenamara, put it very clearly, goes something like this: in order to provide the bread of the social service we should be allowed a monopoly on the jam to put on it. I think there is a false logic here.

The same arguments were heard most conspicuously about 15 to 20 years ago when it was suggested that the BBC monopoly should be done away with. The implication then was that if the BBC lost its monopoly all forms of the admirable Reithian tradition would be thrown out of the window and the effects would be calamitous on our broadcasting system. In fact, while we can all find things to criticise in the BBC or the ITV, or indeed in any of the media, just as they find things to criticise where we are concerned in the legislature, I think most of us agree without sentimentality that we have probably one of the finest broadcasting systems in the world, if not the finest, and that the process of competition between these two services has been to the immeasurable benefit of both. Therefore, I simply do not accept the central premise of the noble Lord's argument.

Turning away from the central premise to some of the detail, the amendment itself of course is extremely curious, since there can surely be no doubt that the term "British islands" includes the whole country, including the rural communities. It would be very odd if we had, as it were, hived them off in our description of this country as the British Islands. The duty as contained in the Bill makes it absolutely clear that British Telecom must have regard to the social, commercial and industrial needs of the British Isles. As I have already said, this necessarily includes the rural communities. British Telecom will continue to provide the public network and the prime instrument throughout the country. Even if it is more expensive to provide a prime instrument on the island of Skye than it is to provide one in, say, Belgravia, think of the number of prime instruments required in Belgravia and how perfectly delicious it is in commercial terms to have that monopoly of supply. There should not be too much difficulty for British Telecom in meeting its social and commercial obligations, given that it has been allowed to retain the prime instrument and the basic network, which is where most of the demand is. Whatever the fantasies all of us may have in respect of wonderful new processes and inventions, I believe most of us accept that over the next 10 or 20 years the bulk of the market will still be in the provision of the basic prime instrument.

The noble Lord, Lord Glenamara, has suggested that this Bill will result in an increase in charges in rural areas. This is a seductive argument and I believe that the noble Lord was being a little too sensitive when he appeared to have had his feelings rather hurt by my implication at Committee stage that the noble Lord was running around stirring up anxiety. The reason why I believe that the noble Lord opposite is being a little disingenuous is because he knows perfectly well that tariffs are affected by a wide range of factors. Pay has something to do with the tariffs that are charged by a large public sector monopoly. Staffing levels have something to do with charges. While I very much welcome the passionate concern expressed by the noble Lord, Lord Glenamara, and shown by the Labour Party for the fate of customers in rural areas, I do hope that they will bring equal pressures to bear on the public trading sector unions in these large monopoly industries, to see that they are equally sensitive to the costs which devolve on consumers in rural areas.

I can assure your Lordships' House that if British Telecom did choose to discriminate in some way against their customers in rural areas—and I cannot imagine that they would—then the Secretary of State would be able to direct British Telecom to cease doing so, because the Secretary of State has very considerable powers in Clause 6—his social override powers, if you like. Therefore, it seems to me that the duty of British Telecom to have regard to the interests of rural communities quite clearly remains. The Government are convinced that consumers of British Telecom communications will benefit from the introduction of competition. I must say that I find it obscurely insulting, as someone who spends some of his time in rural areas, to think that those who live there would be less interested in receiving the new products, technology and services than their counterparts in the towns. I should have thought that the more remote one's community was, the more likely one would be to wish it to be clocked-in to the central communications system which we all enjoy and wish to improve. I hope that what I have said will persuade the House that the noble Lord, Lord Glenamara, has raised something of a red herring—although admittedly he has dyed it blue in doing so.

My Lords, before my noble friend the Minister sits down, may I just ask him—

My Lords, I did say to my noble friend Lord Hawke, that I would come back to his point and in fact, mirabile dictu, my original answer was correct, and what I said to him was confirmed by the Box. The contracts entered into in respect of the primary network obtain, but if new services are provided by British Telecom they could levy a charge for that maintenance.

My Lords, I do not believe my noble friend quite got the point. I was asking whether there would be a charge in respect of existing ancillary services; those that are being maintained free of charge at the moment. I refer to those cases where British Telecom own the apparatus and rent it out to the subscriber. In future, after this Bill passes, will there be a charge?

My Lords, at the moment, the corporation, regardless of the passage of this Bill—and this is the point that I really want to get across—can seek Parliamentary assent to levy charges if it finds that it cannot maintain a service economically. The short answer to my noble friend is that the position changes in no way.

My Lords, will my noble friend the Minister confirm that what he said earlier in his speech indicated that where this clause mentions "British Islands" it is not, as I had assumed, the islands surrounding Britain, but the "British Isles" as I learnt about them in school, including the Republic of Ireland?

My Lords, I do not think my noble friend is right in thinking that. As one who hails from the Republic of Ireland, the phrase we use there in this context is "these islands". That has become a tactful and general geographical expression. Quite clearly "British Islands" means the United Kingdom, and the emphasis is on the provision of services to off-shore communities within the United Kingdom.

My Lords, I do not know that I can agree. I come from the same Republic and I too talk about "these islands". Is it not the case, however illogical and unjustifiable it may be, that the term "British Isles" as defined in British legislation does in fact include the 26 Counties?

My Lords, it is a confusing issue, as the noble Lord is aware, because the technical definition of the word "Scot" is an Irishman. Our history and geography and culture are pretty confused on these issues, but I do not think our legislation is.

My Lords, with the tremendous honesty that characterises him, if I may say so, the noble Lord, Lord Mottistone, let the cat out of the bag. He said that people in rural areas could look after themselves. He said that they could club together to buy the services that they wanted, and if the Post Office finds that it is no longer able to provide a telephone box on the village green, the local community can have whist drives, beetle drives and dances to raise the money for one. That illustrates the divide between us. We believe that it is right and proper for more lucrative areas to subsidise those areas which cannot pay their own way. The noble Earl, Lord Gowrie, mentioned Belgravia; I wish my noble friend Lord Lever were here because I am sure he would agree that it would be right and proper for Belgravia to subsidise Benbecula in the Hebrides.

But Belgravia does do that, my Lords.

Of course it does, my Lords. That is our whole point—and it should continue to do so, but the noble Earl does not believe that.

My Lords, if the noble Lord will allow me, the point I was making is that Belgravia does subsidise the Isle of Skye and I am sure the noble Lord, Lord Lever, is very content that it should do so. It will continue to do so in respect of the monopoly over the primary network. All we are suggesting liberalising is the secondary apparatus, which should generate a great deal of development employment in this country, and I should have thought that the noble Lord, Lord Glenamara, would have welcomed that.

My Lords, I have listened carefully to the noble Earl's interjection, but I cannot see that it is very relevant to what I was saying. What we are saying is that it is right and proper that Belgravia should subsidise the islands in the Hebrides. The noble Earl criticised me for saying that. If I could return to remarks made by the noble Lord. Lord Mottistone, for a moment, he accused me of wanting to put the country back into a straitjacket. I hope that noble Lords have looked at what my colleagues and I are suggesting. In Clause 3 it says:

"It shall also be the duty of the Corporation, in exercising its powers, to have regard to"—

and then there are listed a number of matters, including:

"the social, industrial and commercial needs of the British Islands".

We are suggesting that we then insert:

"including its rural communities".

I should hardly have thought that such a step would be putting the country back in a straitjacket. To say that is really coming it a bit much, even from the noble Lord, Lord Mottistone.

The noble Lord, Lord Hawke, raised the important question of maintenance. The Post Office will, of course, have to charge maintenance in future. It is now included in the rental, but in future, as certain as day follows night, when this Bill becomes operative they will have to charge separate fees for maintenance.

The noble Earl, Lord Gowrie, criticised me for wanting to preserve the status quo. I think that the status quo is a highly desirable state of affairs sometimes. If I am standing on the top of a cliff and the option is to be pushed over it, then I shall want to preserve the status quo—and that is just about what this Bill proposes. The noble Lord said that the term "British Islands" included rural areas. Of course it does, but we are all agreed, I think, that they are at special risk here and we simply wish by this very innocuous amendment to underline their importance and to emphasise the need to safeguard them.

As regards tariffs, I hope that noble Lords listened to what the noble Earl, Lord Gowrie, said. He still has not told us whether or not, in the opinion of the Government, this Bill will cause tariffs to rise in rural areas. What did he do? He got off on to the old red herring about the unions and pay demands. It was a little unfortunate because in this particular industry the unions—and there are two—are probably the most responsible unions in the British Isles, so he really cannot put forward that plea in this case. Noble Lords should note that we have still not yet been told whether, as a result of this Bill, telephone bills and maintenance charges will go up in the rural areas. We say that they will and everybody who is informed about this matter and who has considered the Bill agrees that they will go up. The noble Earl, Lord Gowrie, still has not told us the Government's view.

We are still confused (are we not?) about the Minister's power to direct. The Minister may well have the power, as the noble Earl says, to direct BT if it is seen to be discriminating against rural areas—that would be very difficult to prove, but I agree that he would probably have the power to direct it in those circumstances. But what happens if BT refuses to install a PABX in a local auction mart; the one I quoted earlier? Would he have the power to direct it to do that?—of course he would not. The Minister has no power to direct in matters of that kind.

Finally, the noble Earl criticised me—and I am amazed about this—saying that I was not in favour of rural areas having up-to-date equipment. The whole of my argument is that I am in favour of them having the best equipment but they will not have it under this Bill. That is the whole point. I am sorry that the noble Earl missed it. I want them to continue to have the best equipment available in the Islands and Highlands; the remote areas; Cumbria where I was born, brought up and live; and areas like that. The whole point is that I am afraid that under this Bill they will not get that. So please; I did not say that they ought not to have it. I am sorry that the Government have taken the view which they have taken. This is a very sensible amendment and I hope that many noble Lords—for example, those who voted on the question of rural transport—will feel that they can support us in this matter.

My Lords, it is up to me to put the Question. However, if there is likely to be a Division I wonder whether the House would prefer me to make the Statement next or to put the Question? I shall take it upon myself to make the Statement.

Question!

My Lords, if that is the case then I must put the Question.

My Lords, before, from the Woolsack, I call Amendment No. 6, with the leave of the House perhaps I may now repeat a Statement being made in another place by my right honourable friend the Home Secretary. The Statement reads as follows:

"As the House is aware, on Saturday, 13th June, as Her Majesty was making Her way to the ceremony of Trooping the Colour, a man in the crowd of sightseers fired six shots of blank ammunition using an imitation revolver. A man was immediately arrested and has been charged by the police under Section 2 of the Treason Act 1842. As the matter is now sub judice, the House will realise that it would be wrong this afternoon to discuss the details of the incident itself.

"It has not been the practice, nor would it be desirable, to describe the arrangements made for the safety of Her Majesty The Queen and other members of the Royal Family, but I can assure the House that those arrangements are kept under continuing review, and have recently been re-examined. What occurred on Saturday is being carefully studied by the Commissioner of Police of the Metropolis, and full account will be taken of it in future planning arrangements. It is Her Majesty's wish that both on state and on less formal occasions she should be able to move freely among her people. Consistent with this everything will be done to keep the risks to a minimum.

"There has been concern in the past about the misuse of replica firearms. Although the law provides severe penalties for their misuse, I have asked my department, together with chief officers of police, to re-examine, as quickly as possible, what effective controls can be devised.

"I am sure that the whole House will wish to put on record its admiration for the calmness and control which Her Majesty displayed throughout".

My Lords, that concludes the Statement.

My Lords, first, I should like to express the relief of the Opposition that neither The Queen nor any of her subjects was injured as a result of the incident last Saturday. I should also like to thank the noble and learned Lord the Lord Chancellor for the Statement that he has made. The Opposition wish to applaud and support The Queen's own view that the day must never come when she is unable to move freely among the people of the United Kingdom. I know that sometimes this creates difficulties and that it may involve personal danger. But we look to the Home Office to ensure that the risks involved are kept to a minimum.

In another place the Home Secretary has reminded us that the incident is now sub judice, and therefore it would be wrong for us to go into detail. However, all of us admire The Queen. Our constitutional Monarchy is something that we treasure and we hope that it will show to the people of many other countries that we are proud of Her Majesty for her courage and for all that she stands for.

My Lords, we on these Benches should also like to express our respectful admiration for the incredible composure shown by Her Majesty at a moment which, at that time, must have seemed to be one of very real danger. I should like to ask the noble and learned Lord on the Woolsack only this question. Is it not a fact that year after year a substantial number of serious criminal offences, particularly of armed robbery, are committed by people using imitation firearms which are skilfully produced, which are advertised for sale without any restriction, and which are bought and sold without any limitation whatever? If that is so, would not the noble and learned Lord say that it is at least the intention of the Government to legislate as soon as possible to prevent this, once they are satisfied that there is a practicable way of doing so?

My Lords, I am very grateful to both noble Lords for the way in which this Statement has been received. I am sure that they were expressing the feelings of every person in this House in what they said about The Queen and the way in which she behaved on this occasion. Of course, she also showed very considerable horsemanship. It should not be forgotten that riding on horseback can lead to fatal accidents if the horse is in any way disturbed.

Responding for the moment to what the noble Lord, Lord Wigoder, has asked me, I do not know the figure for offences committed with dummy firearms. I have read in the papers of precisely this happening, and it is obviously one of the arguments which my right honourable friend will be taking into account when he looks at the review which he has said in the Statement will be undertaken. Quite obviously, in view of the words in the Statement I cannot go further this afternoon.

My Lords, I should like to associate all of us on this Bench, both present and absent, with what has been said by the noble and learned Lord the Lord Chancellor, and by the spokesmen of the two longer established Opposition parties, especially about the deportment of Her Majesty during the incident on Saturday. I should also like to put a question, which has been raised, to the noble and learned Lord in a slightly different way. Is it not now nearly time that we shifted our interest in preventing these attempts and apparent attempts away from the local protection of public figures—which events around the world in recent months and years have shown to be impossible to achieve to perfection—towards a yet stricter control not only of guns but of toy guns, replica guns, air guns or anything which can look, sound or smell like a gun?—as both democracy and Monarchy depend upon the free circulation of politicians and monarchs, and neither depends on the free possession of guns.

My Lords, obviously these are questions which we must all ask ourselves since our anxieties have been very well focussed by what happened on Saturday. I know that toy guns and the difficulty of differentiating the toy from the so-called replica are part of the problem which my right honourable friend is having considered. I have sometimes doubted the wisdom of toy guns myself. I think we perhaps sometimes underestimate the importance of child play in adult behaviour, but of course it raises a very big question. There are literally millions of objects which would fall into this category. Whether one is talking about replicas or toys there are a very large number already available in the country, and therefore if one turns off the tap now to a larger or a greater extent there would still be those objects which it would be very difficult to control. I think that that is about all I can say about that at the present stage.

My Lords, I am sure that those sitting on the Cross-Benches will want to be associated with the feelings of thankfulness that no harm came to Her Majesty the Queen on this occasion, and also to express our congratulations on her courage at this very difficult time.

My Lords, I am very grateful to the noble Baroness, whose words will again find an echo in all our hearts.

moved Amendment No. 6:

Page 6, line 35, leave out ("exclusive privilege of providing") and insert ("power to provide").

My Lords, it may assist my noble friend if I explain the purpose of subsection (4) of Clause 12, to which he has just referred and to which he drew attention when this House considered the clause in Committee. I apologise in advance that this is a detailed, rather technical matter but I shall do my best to make it clear. This subsection is no more than a definition of the phrase "services which the corporation has the exclusive privilege of providing". It does not create a new conclusive privilege; there is only one such privilege conferred by the Bill—that of running telecommunications systems. However, the corporation does have power under Clause 2 to provide telecommunications and data processing services, and of course it has a duty under Clause 3 to provide such telephone services as satisfy all reasonable demands for them. It is not an undue simplification to say that the running of systems for which the corporation is given an exclusive privilege is a means to the end of providing services. It is in the nature of things that some of these services, for example the basic public telephone service, could not be provided by anybody else unless they were to run a system, and to run a system would infringe British Telecom's exclusive privilege. These are what is meant by services which the corporation has the exclusive privilege of providing, and Clause 12(4) simply says so in order to try to make the meaning of the phrase precise.

It is necessary to be so precise because the phrase is used at several points in the Bill. These points which are picked out by my noble friend's other amendments, which we are now considering, are all ones at which British Telecom is either made subject to special powers, or is given special privileges or obligations, because it has a monopoly and is charged with a duty. It would not be appropriate for these powers, privileges and obligations to apply to British Telecom's competitive activities, and so to make this distinction the Bill refers to services which the Corporation has the exclusive privilege of providing. I hope this explanation will convince my noble friend that there is nothing sinister about Clause 12(4).

The amendments to Clauses 4, 6 and 9 have effects which my noble friend may not have intended. In each of these the intention of the Bill is to make provisions that apply only to services in which British Telecom enjoys a monopoly by virtue of its exclusive privilege to run systems. For example, Clause 6(5) allows my right honourable friend the Secretary of State to give the corporation directions when, in its provision of monopoly services, it is showing undue discrimination or preference. That is the watchdog role where monopoly is concerned. My noble friend's amendment, if read with its natural meaning, would extend that watchdog power to all services. But British Telecom's competitors would not be subject to such directions, and they would therefore enjoy a potential unfair competitive advantage over British Telecom, and I do not believe that that would be right.

The amendment to Clause 9(2), in its natural meaning, would limit the power of my right honourable friend to withdraw services from the scrutiny of the Post Office Users' National Council so that it applied only to those services that the corporation did not have power to provide. That would, therefore, nullify the provision, which I am sure is not my noble friend's intention. With that explanation of the meaning of Clause 12(4), I hope he will not press the amendment.

My Lords, I am not happy with that explanation. Before deciding the course to adopt, may I ask my noble friend whether he thinks the answer might be to refer to the "exclusive privilege" in the heading of Clause 12, which might handle the objection to the reference elsewhere in the Bill to "exclusive privilege" and which apparently does not appear in the Bill?

My Lords, I do not like the provision where Clause 4(3) states quite clearly:

"with the provision of services which … the Corporation has the exclusive privilege of providing".

It does not enumerate the services, and I think any person could argue that that relates to all services, yet we have specifically encouraged competition in services because we know it is an area where the Post Office is rather weak. I therefore urge my noble friend to look for a solution perhaps at this point in the Bill, at Clause 4(3), because at present it does not make sense to me and I am sure it will not make sense to many people reading the Bill.

My Lords, I think both my noble friends are unhappy about something which is not in the nature of policy or in the nature of the Bill but which is primarily semantic. We are concerned to see that the common or everyday use of the word "services" can continue to function because, as I said in my opening response, there are conditions in which the running of systems, which is the exclusive privilege of British Telecom and which I think we all accept, tangents on to services; it is in the nature of things that the basic public telephone service could not be provided by anybody unless they infringed the monopoly to run a system.

We have taken care, at the risk of the ordinary pedantry of legislation, to spell out this distinction between systems and services throughout the Bill by the repetitions I have mentioned, and I think is necessary. However, if we went down the road my noble friend suggests, my advice is that there would be confusion where the use of the word (this is the semantic point) "service" in fact implied the running of a system. That principle is clear and we have tried, therefore, to clarify the language in respect of it.

I was not of course suggesting anything sinister in the use of the words "exclusive privilege" as applied to the services, my Lords. However, I believe this could be an important point because from, an observation made in Committee by my noble friend Lord Trefgarne, I understood that the Post Office had never prayed in aid the exclusive privilege point since the passing of the 1969 Act. Apparently what they do pray in aid are their property rights in the equipment—that would be the cable, junction boxes, the telephone instruments, the items which come under the terms of the schemes through which they provide the services—and it is that about which I am concerned because they have the ultimate sanction of pulling out the plug.

I think I have made the position clear, my Lords. While both my noble friends Lord Morris and Lord Orr-Ewing have made the area in which they have some disquiet clear, I am saying there is no justification for that disquiet. While we have phrased the Bill in such a way as to make that distinction between systems and services, very often the word "service" is used in a context where the running of a system is also implied. That is the problem we have had and I have outlined the way we have tried to solve it. I do not think there is any need for my noble friends' disquiet in that as we have the basic principle of the monopoly in running the system into which services can be slotted or injected, those services can be provided by British Telecom in free competition, and they can also be provided by other organisations, and that is the purpose of the liberalising passages of the Bill. I do not believe, therefore, that their anxiety is justified, but I shall read in Hansard what they have said and if I find that my use or the Bill's use of semantics is at variance with theirs, I shall table a Government amendment at a later stage. I hope with that assurance my noble friend will not press the amendment.

I am most grateful to my noble friend, my Lords, and it would be churlish of me not to thank him warmly for a much fuller explanation than was received at an earlier stage of the Bill. With that, I beg leave to withdraw the amendment.

moved Amendment No. 7:

Page 7, line 22, after second ("to") insert ("a transfer by or").

moved Amendment No. 8:

Page 7, line 23, after ("to") insert ("a transfer by or").

moved Amendment No. 9:

Page 7, line 43, leave out sub-paragraph (ii).

My Lords, as my noble friend said, this subject was raised in Committee and, as the House may be aware, my noble friend's proposal would require British Telecom or a wholly-owned subsidiary to obtain the consent of my right honourable friend the Secretary of State before it issued any shares, stocks or other interest to a nominee of British Telecom itself or to one of its wholly-owned subsidiaries. The definition of a wholly-owned subsidiary of another body corporate which we find in Section 150(4) of the Companies Act 1948 means that even if shares in a wholly-owned subsidiary of British Telecom are transferred to a nominee of that company, or to a wholly-owned subsidiary, that company remains a wholly-owned subsidiary subject to the same controls under the Bill. There is thus no need for the Secretary of State's consent to be required.

I am sure that the House will be aware that the use of nominees is a perfectly standard business practice, and certainly it cannot be ruled out that British Telecom may find it convenient to operate in this way at some stage. The Companies Acts require every company to have not less than two registered shareholders and so, in effect, it is necessary that at least one share in each wholly-owned subsidiary should be registered in the name of a nominee.

That explanation was of necessity slightly technical, but I hope that it will go some way towards enabling my noble friend Lord Morris to feel more satisfied than he did on an earlier occasion.

My Lords, I am most grateful to my noble friend for that explanation. In the light of my slight misgivings about a public corporation hiding behind the skirts of a nominee, I should like to ask whether it would be possible, not by legislation, but by executive order, for Her Majesty's Government to instruct British Telecommunications that, where it is not the de jure owner of shares in subsidiary companies, but is the beneficial owner, a statement to that effect be made? That would make it quite clear to members of the public that the beneficial owner of the shares was a public corporation.

My Lords, my noble friend has, in cricketing parlance, howled me something of a tricky and fast ball. I shall answer with a dead bat and say that if my noble friend's wishes cannot be met, I shall certainly endeavour to see what can be done. I hope he will agree that I should write to him on the last part of his query.

My Lords, I am most grateful to my noble friend for that reply, in the light of which I beg leave to withdraw the amendment.

moved Amendment No. 11:

Page 9, line 12, after ("agreement") insert ("including the obligations arising by virtue of the provisions of Article 90(l) of the Treaty of Rome").

My Lords, my noble friend Lord Morris has this afternoon added to the very lucid account which he gave at the Committee stage. I hope that he will not expect me to go further into a definitive opinion on a matter as intricate as European Economic Community competition law, and in particular all the implications of Article 90 of the Treaty of Rome. I would agree that British Telecom is bound by EEC law in the way in which it conducts its business. British Telecom must very carefully avoid illegal abuse of a dominant market position, and I can, and do, go so far as to reassure the House that both the Government and British Telecom are in regular contact with the Competition Directorate of the European Commission on this particular matter which my noble friend has raised.

However, I fear that I have a divergence of opinion with my noble friend over the need to add to Clause 6 of the Bill a specific mention of the Treaty of Rome. Clause 6(4) is a general, and indeed necessary, provision which among other things enables the Secretary of State to give directions to the corporation to secure compliance with the United Kingdom Government's international obligations. These obligations arise in many fields, including, for example, that of defence; the Treaty of Rome is one among many. If the wording proposed by my noble friend Lord Morris were to be adopted, it would elevate obligations under the Treaty of Rome above any other international obligagations. Should there ever be a conflict in the field of telecommunications between, for example, our obligations to NATO and those under the Treaty of Rome, the Secretary of State would have to give priority to the obligations to the EEC. This turn of events might be very unlikely, but should our obligations to two differing international bodies ever clash, then the Government would certainly wish to consider this particular matter on its merits, and in consultation with our partners in other countries which are affected by the point at issue. Therefore it would be wrong for the Bill to prejudge this issue.

We are very grateful to my noble friend for the clear way that he has drawn attention to the relevance of Community law to all who compete in the telecommunications market, and above all to British Telecom. I hope that the explanation that I have given is not too hypothetical. We believe that it is realistic and that my noble friend's query is a little beyond the bounds of reason at the moment.

My Lords, before the noble Lord proceeds to deal further with his amendment, I should like to say to the Minister that I found his explanation very curious. He says, "Maybe", but we are dealing with rather important legislation. As I understood it, what he said in essence was that if a particular treaty is named, it must take priority over treaties that are not named. Surely that would introduce a rather strange form of government. As we are all aware, we suffer all the time from directives from the European Communities. These directives affect us all the time, whereas treaties with NATO and other bodies do not affect us in the same way. I think that the noble Lord, Lord Morris, is on to a very important point. I do not know what he thinks, but I do not regard the explanation offered by Her Majesty's Government as very satisfactory.

My Lords, I must confess that I am now slightly more enlightened than I was. As I understand my noble friend's explanation, it seems to be based on a somewhat esoteric form of construction. My sole intention in suggesting the amendment for inclusion in the Bill was (as my noble friend suggested) in order to draw attention to the vitally important fair competition provisions of the Treaty of Rome. I thought that this was a neat and brief way to go about it. I believe that this matter is very important because of Her Majesty's Government oft-stated view that one of the primary tenets of the Bill is that the British Telecommunications Corporation should trade on a fair basis with the private sector, and indeed vice versa. However, in the light of what my noble friend has said, I beg leave to withdraw the amendment.

moved Amendment No. 13:

After Clause 8, insert the following new clause:

My Lords, I am really hopeful that for the first time—I think I have taken part in the debates on a number of amendments to successive Bills, first the Employment Bill and now this Bill, both dealt with by my noble friend, and always with elegance, courtesy and efficiency—this proposal that the Secretary of State should publish an annual account might be accepted. Surely every single major corporation produces an annual account. They have consumer councils, as POUNC does in this case, and it is a perfectly customary arrangement. I feel sure that, of all the nationalised industries, British Telecom, with a virtual monopoly, even after this Bill, would not want to be the only one which does not publish an annual account. It is of such importance to so many people in this country that I think it is right that an annual account should be published.

We shall go on later to discuss various amendments, but I notice that a brief sent to me by the Post Office Engineering Union—it is a brief which I believe the noble Lord, Lord Glenamara, has also probably had, judging from one or two of the phrases that he has used —says that they want to ensure,

"that the Secretary of State pays proper attention to the impact of his decisions on the manufacturing sector".

This is behind much of what the noble Lord, Lord Caccia, said. We want the Secretary of State to bear responsibility and to give an account of that responsibility in an annual report, and to make sure that he carries out all the consultations, not just with BT but with the industry in general and other aspects of this very important sector.

There is something else I must mention here. My noble friend dealt with the breaking up of the BBC monopoly, and I was very concerned with that in my early days in the House. I remember all the warnings; but I also remember that even when that monopoly was broken there was a cosy relationship—a very cosy, almost too cosy, relationship—between the Postmaster-General's Department and the BBC. This had grown up over 20 or 30 years, and I have no doubt that over the years the same relationship has grown up between the people responsible in the Ministry and British Telecom. Therefore, I would hope that we make sure that proper consultation is carried out before coming to decisions, not just with British Telecom but with all other people—the industry in general, and other people closely concerned with the well-being of this industry and, therefore, of course, with our exports, with our technology and with the well-being and prosperity of telecommunications.

My Lords, I should like to say that I think the idea behind this amendment is a very sensible one indeed. The Secretary of State has, after all, given himself unusually wide powers over the whole industry—British Telecom in particular, but not confined to British Telecom. I quite understand why he has done it. He is trying to achieve something that is right at the heart of what has been called the new industrial revolution, and in order to do that he has wanted to make sure that at least in reserve he has the powers to see that certain very important and new things happen. So, as I say, it is understandable.

But, from that, does it not follow that it is also understandable that Parliament would wish, once a year, just like the shareholders of any private enterprise company, to have an account from the Secretary of State as to how he has exercised his stewardship? That is all that is being asked. One would hope that the Secretary of State would be happy to go to Parliament and say, "This is what I have done", and perhaps take the opportunity to say as well, "And this is the way I am thinking about the future". So this suggestion appears to me to be eminently reasonable.

Having said that, I recognise—and I think this was behind something that the noble Lord, Lord Caccia, said—that there may be difficulties, particularly in the wording of this amendment. I think that what I, for one, want to hear (I cannot speak for the noble Lord, Lord Caccia) is an undertaking from the Government that it is their intention to come before the House once a year and offer an account of their stewardship, and to give both Houses the opportunity to make their comments. If my noble friend finds it difficult, as possibly he may, to put this into primary legislation, then speaking for myself alone, because I cannot speak for anybody else, I would be very happy to hear him give an undertaking, provided only that it is very specific. If he can do that, then it is possible that some of us will be satisfied. But I repeat that the principle that is behind the noble Lord's amendment is in my opinion an admirable one.

My Lords, my instinct is against this amendment. I recognise the attractiveness of cosmetically appearing to keep Parliament fully in the picture, and that this ought to be the case. One recognises that one could preen oneself that one had protected the nation by getting these annual reports. But my instinct is against it because statutory annual reports of all sorts become such a formality that they often do not play an important part in explaining the picture or in a sharing of minds with others. Where there is a great difference in this matter with private industry, to which my noble friend Lord De La Warr referred, is this. Private businesses have not got Question Time every day where any Question one wants to put can be dealt with and one is kept up to date. Private businesses have no Adjournment Debates. Private businesses have not the same facilities for Ministers in charge to come and give reports, not necessarily annually but when they think they are necessary.

I recognise the purity of writing into the legislation that under statute we must have a report; but I do not know that one wants to be cosmetic on this. We do not want to put the onus on this department or on that department of making a report just because they have to do so, irrespective of whether the conditions under consideration necessitate it, particularly when we have all the other opportunities which are denied to private business to know how things are going on. For my sins, I am a chairman of companies and of a couple of public companies and we have to give half-yearly reports, which are now to be made three-monthly reports and then we have the annual report of the chairman. We know how formalised that is. I think it is right in the case of private industry because they do not have these alternative ways, nor can the shareholders question the management with the same ease as we can in Parliament. I would say that, attractive though it seems and purist though it is, in the sense of having it written into the Bill, I would not wish this amendment to be accepted. I would leave it to the good sense of Parliament to decide when it wants to know something at Question Time and on adjournment, and so on. I would leave it to the good sense of the Minister to use his judgment as to where he thinks there ought to be a sharing of minds with Parliament.

My Lords, is my noble friend wrong in referring to leaving it to the good sense of Parliament? We cannot probe into the details of nationalised industries, into their price structures, into their policies, into delays in issuing licences or into whether licences have been given. None of that is open to us to discuss in detail. Only the broad structure and capital expenditure of the nationalised industries come under the control of Parliament. It is a problem that Parliament has not yet resolved.

My Lords, my noble friend and I have been in and around Parliament for the past 30 years. He knows well there are many opportunities for him and for any other Member, on adjournment and in other ways, to find out what he wants to know. Nothing is kept from the probing of MPs if they really want to know about it. It may not be done in a formalised way as in an annual report, but there is no question but that, if any Member of Parliament wants to know anything about anything in this country, he can find out if he uses the machinery properly. Putting this in a formalised way, attractive though it may seem, is an unnecessary burden and will cause the use of a lot of paper and words which will not get us anywhere. It is up to Members of Parliament, apprised, as they are, by their constituencies as to what is wrong, to use the facilities which are open to them and not to formalise their methods. I do not know what will be the reaction of my noble friend on the Front Bench. He may want to accept it; but I still think it is unnecessary.

My Lords, before the noble Lord sits down, I think it is important that he should get the record right. The noble Lord gives the impression, which will go abroad out of this House, that you can deal with the day-to-day working of nationalised industries by asking a Question in another place. Such a Question would be stopped by the Table. It would not be allowed to go forward.

My Lords, I say to the noble Lord that the probe you can make if you have an annual report (as is proposed here) is no wider and gives no more opportunity to go into depths than if you use the facilities in this place. If you have an annual report, you are still prevented by the Table from going into the day-to-day running of the nationalised industries—and rightly so. The fact that you have an annual report will not overcome the freedom that we rightly give to the nationalised industries who have to run separately and who need freedom. There is nothing you can do arising out of an annual report that cannot be done by Questions or an Adjournment Debate or the proper use of the machinery set down in Parliament for the use of Members.

My Lords, may I support what was said by the noble Lord who has just sat down? When I was in the other place in charge of nationalised industries, coal, gas and electricity, I had a dispute with the late Lord Morrison (the then Herbert Morrison) about answering Questions there on day-to-day management. In fact I never refused to answer a single Question put to me by any Member of another place. The Table never made any trouble and I always found it of the utmost advantage both to the nationalised board and to the other place to have the fullest information given at Question Time which anyone could ask for.

My Lords, I find it unusual that I should have to disagree with my noble friend Lord Harmar-Nicholls, with whom I normally agree on almost every subject. However, I believe that he is not aware that the whole point of this amendment is that if the steward has to account then it concentrates the mind wonderfully. If one compares the other nationalised industries with British Telecom, then it is plain to see that in the case of British Telecom, unlike many other nationalised industries, the Secretary of State has considerable powers, far more so than in British Rail or the gas board or others. This is the key. It is not so much that he should account for his good stewardship and for what he has done, but, above all, for what he has not done and what he intends to do. It is essential to planning in industry because it affects directly and indirectly the private sector operation. It is this worshipping at the altar of more open government that commends this amendment to me.

My Lords, I think the fact that there has been this lively debate indicates that people are concerned about a problem which is not peculiar to this industry or to this parliamentary system, but to the whole question of relationships between large public trading sector industries and questions of public accountability and the accountability of Ministers who sponsor them but do not run them. I share many of my noble friends' innate feelings that in an ideal world we would not have started down this road of large public trading sector monopolies with sponsoring Ministers but that it would be disruptive and difficult to alter them or to change the system altogether. What we seek to do is to try to liberalise them and thereby introduce elements of organic change.

During this process it is obviously necessary that two things obtain. One is that one can scrutinise the sponsoring and responsible Minister; and I think my noble friend Lord Harmar-Nicholls was very clear, in that that is available to Parliament and that Parliament is not noticeably reticent in grilling its Minister. Whereas all Ministers, I suppose, from time to time seek refuge in the old formula about "these are matters for the day-to-day running" of the Post Office or whatever industry it is, they can seldom get away with that for very long if parliamentarians actually seek to raise the matter not only in Questions but in Adjournment Debates, Unstarred Questions or general debates in this House.

Against that general issue of principle (which I thought my noble friend Lord Harmar-Nicholls answered very well) there is an additional reassurance available to those who, like the noble Lords, Lord Caccia, Lord Morris and Lord Orr-Ewing, are concerned that there will not be enough data for us in Parliament or members of the public generally to make assessments about the performance of what is, we hope, an expanding public industry, but also an industry which will of course absorb very large sums of money.

I have quite a detailed brief, but the burden of what have to say can be put very shortly. I agree with the noble Lord, Lord Caccia, in what he seeks to achieve, but I feel that what he seeks to achieve is covered by the Bill, not simply by existing parliamentary procedures—though those put forward by my noble friend meet some of the objections that he raised—but by the publications, running and activities of the corporation. To add to the cover in the form of a statutory obligation would add to administrative and other costs which those of us on this side of the House are equally particularly keen to keep down. My noble friend Lord De La Warr left me a loophole here in his kind and tactful way by suggesting that if I could convince your Lordships that the matter was covered, it might not be the most appropriate thing to do to add to that cover by a statutory obligation.

Before going any further, I should just like to clear up one technical point. The new clause proposed by the noble Lords, Lord Caccia and Lord Orr-Ewing, refers to responsibilities of the Secretary of State, under Clauses 6, 12, 15 and 16, but, so far as I am aware, the Secretary of State has no direct responsibilities under Clause 12. I shall therefore refer only to the other three clauses mentioned.

I hope that it will be agreeable to the Liberal Benches in particular—and the noble Lord, Lord Byers, did come in briefly on the debate—if I discuss Amendment No. 39 with this amendment, which is the same general point of principle, though this does not pre-empt in any way Amendment No. 39 being moved later. Under Clauses 6, 15 and 16 the Secretary of State has a number of powers to give the corporation directions in certain circumstances.

It will reassure my noble friend if I remind them that Clause 6(13) provides that all such directions (with the only exception of national security issues) must be published in British Telecom's annual report, which the Secretary of State must lay before each House of Parliament. Moreover, any directions given by the Secretary of State to the corporation for the creation of subsidiaries or the disposal of any assets must (except in specialised circumstances of the kind I have mentioned) be laid by him before Parliament at the time the directions are given, irrespective of the fact that they will be published later in the annual report. Then again, under Clause 15, all general licences must be published, and under Clause 16 notification of an approval of a standard or a variation in or any withdrawal of a standard must also be published.

There is already provision, as the House will be aware, for the publication and/or notification to Parliament of the performance of most of the Secretary of State's responsibilities under these clauses. Those that are not specifically provided for are in Clause 6. My right honourable friend's discussion of the research and development programme, his approval for their capital investment programme and his ability to request information of the corporation, would all be covered in the annual report. As I have already said, the annual report has to be laid before Parliament. The capital programme, which is of great concern to Parliament at the moment, is inevitably also published in the annual Public Expenditure White Paper.

Moving to new Clause 39, the new clause proposed by the noble Lords, Lord Lloyd and Lord Winstanley, that suggests that the Secretary of State's annual report should refer specifically to the exercise of his powers in respect of finance, innovation and export. Now again in this case, the exercise of his financial powers will be covered twofold: once by the annual report laid before Parliament, and by the Public Expenditure White Paper. I am not sure which power noble Lords are referring to as regards "innovation" and "export", but I can only assume that they must mean the powers under Clauses 6(9) and 15, to which I have already referred.

In sum, my Lords, I believe that all the statutory obligations laid by the Bill on the Secretary of State to publish or notify Parliament of his actions provide an adequate check on the exercise of his powers, and the nub of my objection to an annual report—which is an admirable principle in the private sector, as we have acknowledged—is that it would simply repeat information of which Parliament had been notified in most cases twice over already. If we add that notification to the ordinary powers of ordinary Members of Parliament and ordinary Members of your Lordships' House, which my noble friend Lord Harmar-Nicholls clearly delineated, we would be piling Ossa on Pelion to go for a statutory annual report in the way that has been proposed.

I hope, therefore, that the statutory objection will be the objection that is laid at my door rather than any doubt on my part or obfuscation by me as to this accountability and this possibility for scrutiny not being of the first importance, not only to the parliamentary system but also to the healthy development of this corporation.

My Lords, I am grateful to the Minister for that reply and clear account of the various ways in which the Secretary of State will—as he already is—be brought to account to Parliament. I should like to study carefully what he said. If necessary, I shall return to this at a later stage.

At this stage I would only say to the noble Lord, Lord Harmar-Nicholls, that I entirely sympathise with all that he has to say about the undesirability of the proliferation of more paper work. We are all drowned by that already. Admitedly, by question and answer we often can get the information which is needed, but, as has already been said by the noble Lord, Lord Morris, there is a difference here, in that the Secretary of State is being given far wider powers under this Bill than otherwise has happened in other cases quoted.

Secondly, the procedures under the Bill are going to be of vital interest not only to the corporation itself but of course to the whole supporting industry. It was with those considerations in mind that I had thought it might be of general use and interest to Parliament, to industry and to the consumer that there should be an opportunity once a year, quite apart from the annual report of the British Telecommunications Corporation—that is a different thing—to learn once a year how the Secretary of State had dealt with his responsibilities. Perhaps I may take up the words of the noble Earl, Lord Dc La Warr, in suggesting that something more is demanded than all the individual bits and pieces that have gone before Parliament during the year in the way described by the noble Earl, Lord Gowrie, even including some indication of the way in which he intends to develop the considerable powers that he has under this Bill and the procedures he wishes to follow. Perhaps the noble Earl would also give some consideration to this aspect. Subject to that, I beg leave to withdraw the amendment.

moved Amendment No. 15:

After Clause 9, insert the following new clause:

My Lords, these amendments would place a formal obligation on my right honourable friend the Home Secretary to consult interested parties at regular intervals. I am grateful to my noble friend, in the interests of getting on with the Report stage, in that he recommended that we should also look now at his new clause, Amendment No. 35A. My brief argues that the same substantive issues are covered by Amendment No. 36 in the names of the noble Lords, Lord Lloyd of Kilgerran and Lord Winstanley. I notice the noble Lord, Lord Byers, nodding at that, and perhaps I may therefore speak to that as well.

I am certainly in complete agreement that effective consultation will be indispensable to the Government in achieving their policies in the sphere of which the Bill forms a part. I think my noble friend is aware that the Department of Industry already has a consultative committee on which sit representatives of all the interests which are listed in his amendments. As well as consulting through this representative body, the Department is in regular contact with a great many individuals and organisations which are concerned about telecommunications. From time to time it has more formally invited the submission of users' views, as is happening in the consultations arising in connection with Professor Beesley's report. The value of this approach to consultation lies in its flexibility and in the fact that it can occur as and when it is necessary. Therefore I do confess that I have some difficulty with these amendments in that they do provide a rather less flexible system by imposing a formal and statutory requirement to consult interested parties at these regular intervals.

Of course, there is a place for a consultative group, as I have said already, which already exists. Our philosophy is that the strength and value of the work of such a group owes a great deal to the fact that it is there to respond to a need rather than to a statutory imposition which could, I think, be regarded as a burden but more relevantly perhaps, it would effectively mean that the existing flexible procedures would inevitably, in order to avoid duplication, have to be abandoned if this statutory road were chosen.

Also in respect of my noble friend's new clause, if I am reading it aright, I am myself doubtful as to whether it would be right to set out in a statute a requirement that certain bodies must act in accordance with certain policies if you do not at the same time also set out in the statute what those policies are. You would get muddled law there. Either the Government's policies are embodied in law, in which case, of course, the corporation and other bodies have to obey them, or the Secretary of State has to use his powers of persuasion to see that his policies are implemented. It does not seem to me to be very compatible with our legal system to enshrine in statute quite the open-ended requirement that my noble friend's new clause seeks to do.

But while I have that technical objection, as it were, I believe that I can put my noble friend's mind at rest in relation to policy, in relation to our determination to ensure that the corporation carries out Government policies. I can remind him that the Secretary of State has a number of powers in the Bill to give the corporation directions of both a general and a specific nature, which can be used to bring it back on course if it is thought to be straying. I refer to Clause 6(3) and (5), Clause 16(2), Clause 6(6) and Clause 15(2). On many occasions, I have said that I consider most of these powers in this Bill to be reserve powers and the Secretary of State does not expect to have to use them frequently. But they are, of course, there and, therefore, the corporation does not need a further statutory method to see that it is carrying out Government policies.

I hope that what I have said has reassured the House that we are not in any way seeking to prevent consultation. One would not want that, and development of the industry would be quite impossible, so long as a large part of it was in the public sector, without such consultation. In view of that reassurance and that indication that the Government are susceptible of common sense, I hope that my noble friend will be able to withdraw his amendment.

My Lords, I am most grateful to my noble friend. He did not mention Amendment No. 35A and the new clause in which I mentioned "without delay" and "with reasons". There are many ways of "belling the cat", and one of the ways about which Government departments are very wise is an unconscionable delay in giving decisions. Delays in competitive industry are very expensive, if you are using your own money, paying heavy interest and waiting for some "pay-back". Can my noble friend assure us that there will not be unconscionable delay, and that when licences are rejected by the Secretary of State the person applying will, at least, be given some explanation that will allow him to direct his attentions to modifying the apparatus that he is developing, and then to resubmit it for inspection purposes to see whether he can market it? Could my noble friend deal with those points and, if I am reasonably satisfied—and I am sure that I shall be, because my noble friend is very co-operative in these areas—I shall then beg leave to withdraw the amendment. Perhaps he could deal with those points first.

My Lords, I take my noble friend's point about the necessity not to hold decisions too long, and I do not think that anybody has a very glorious record in the public trading sector on this front. But it is important that the right decision is made; and we have also been debating the need for consultation. What I have to rest on is that various noble Lords have pointed out that the Bill gives the Secretary of State wide powers.

Some have expressed certain doubts about these, but even if those doubts are well- founded—and I have tried to show that, in most cases, I do not think they are—there is, at least, the "upside", the benefit side, of the wide powers of the Secretary of State; that if something is taking too long or is interfering with policy, with the development of the corporation, with the interests of the taxpayer, with the public sector borrowing requirement or whatever, you have this fellow to grill, to interrogate and to throw coconuts at, if need be, and can urge that he gets along with it. Therefore, I should have thought that those wide enabling powers are something of a guarantee that decisions are taken with all due expediency.

If we enshrine in statute that they have to be taken with expediency, however worthy that is and however much we all approve it, we shall then probably have to take out of the statute anything that could contribute to delay which might also be worthy, in the way of consultation or whatever. Otherwise, the law will be in a muddle and will be bad law. But I recognize how damaging economically it can be for important decisions to be postponed. Of course, British Telecom will have a very considerable degree of independence in its operating decisions, and it is certainly aware of the perils of delay. If, for some reason, it appears to be dragging its feet, then, as I said in the previous debate, we have methods of getting at the Secretary of State in order to get him to see that it gets a move on.

My Lords, I beg leave to withdraw the amendment.

moved Amendment No. 16:

Page 14, line 20, leave out from second ("Act") to end of line 21 and insert ("includes a reference to a transfer under subsection (6)").

moved Amendment No. 18:

Page 16, line 13, leave out ("received or") and

My Lords, first, I owe my noble friend apologies for not getting in touch with him. He and the whole House know that we have had more than enough time and opportunity to be in touch with each other, both formally and informally, since the last stage. I shall also have to apologise to my noble friend for the fair length of my reply to his very relevant and well-constructed amendments. But I hope that what I have to say will provide even greater clarity in the perception or reception of what we are discussing today.

The House will appreciate that my noble friend is motivated by a tremendous desire to improve the drafting of this Bill, but I am afraid that these amendments do not achieve what he hopes. If I may briefly recapitulate on the amendments, they are to exempt from the monopoly communication by visible light, where the communication which is being transmitted by this light is capable of being received and analysed by the human eye. I shall come to analysis in a minute. I know that my noble friend will agree that this is common sense and that it would be absolutely absurd if the use of a telescope or binoculars were to infringe the monopoly. The present wording which we find in the Bill achieves, we believe, the end we seek. For this reason we believe that the amendments are unnecessary.

The first amendment, Amendment No. 18, seeks to remove the reference to the eye receiving the things conveyed. There is a very subtle though not insignificant difference between receiving a message and perceiving it. I am given to understand that perceiving implies understanding. This goes beyond receiving, which is much more passive. A message may be received but it may not necessarily be perceived. Perhaps I could give an example. For instance, if a message in morse code were to be sent by heliograph, this would be received as a series of dots and dashes but the letters and words being conveyed would not necessarily be perceived or understood unless the recipient had his morse code book with him. If Amendment No. 18 were made, it would, we believe, narrow the exemption which is taken directly from the 1969 Act. I am quite sure that my noble friend does not intend this.

Turning to Amendment No. 19, the concern which we believe is in my noble friend's mind is that the use of optical aids such as spectacles or binoculars might infringe the monopoly. May I take this opportunity of assuring the House categorically that the present drafting does not have this effect. The exemption in Clause 13(1)(a) is cast in terms of whether the things conveyed are capable of being received or perceived by the unaided eye, not whether they actually are perceived or received. Thus, the fact that I might need a telescope to perceive a message from a distant heliograph does not result in my infringing the monopoly. The message would be capable of being perceived by the unaided eye of an observer closer to the source of light. So there is no infringement.

The words "without more" are intended to catch the use of both sophisticated and complicated apparatus that, for example, by slowing down the modulations of a very rapidly changing light beam or converting the wavelength of an infra-red beam renders the message intelligible to the unaided eye. The message would not be capable of being received by the eye, no matter how close the observer was to the source unless one had this complicated and sophisticated apparatus which could be used to aid the eye.

Amendment No. 19 would result in the use of such apparatus being within the exemption, despite the fact that it is manifestly equivalent to similar systems using other parts of the electro-magnetic spectrum and thus should be treated accordingly.

I am certain that my noble friend does not intend to include equipment within the exemption. Therefore I hope he will be sufficiently reassured and satisfied by the lengthy and detailed explanation which perforce I have had to give.

My Lords, I am most grateful to my noble friend. That the explanation was indeed esoteric in no way made it less fascinating. I am entirely satisfied with the explanation, though before withdrawing the amendment I would point out that this subsection is a very good example of Parliament legislating for inventions which have not yet been invented. As a practice, I find this a little disturbing. Notwithstanding that, I beg leave to withdraw the amendment.

moved Amendments Nos. 20 to 23:

Page 17, line 30, leave out ("person") and insert ("business")

Page 17, line 21, leave out ("person") and insert ("business")

Page 17, line 23, leave out ("person") and insert ("business")

Page 17, line 24, leave out ("person") and insert ("business").

My Lords, one of the pleasures of preparation for this particular Bill was that one went around the industry and received very interesting and enlightening briefings and also a preview of many exciting new products. I made every effort to "mug-up" some technical knowledge in a fast developing sphere. I reckon that probably I got to O-level, but not to A-level or to PhD, as evidenced by my noble friend's question; so I hope that he will allow me the indulgence that he was kind enough to suggest. I will have his point looked at and will write to him. If he is not satisfied and/or if he wishes to engage the House in the fact that he is not satisfied, perhaps we could return to it at a later stage.

My Lords, perhaps I may make a quick attempt to dissuade my noble friend from retabling this amendment, whatever happens. Perhaps I might make the point that if this amendment were carried as at present drafted, the individual would be excluded from an exception to the monopoly. A business or a body of persons only would be included as an exception to the monopoly. There is a slight flaw in the drafting.

My Lords, I admit to the fact that I had to find some way of doing it without frightening my noble friend that I was going to cut something vital out of the Bill. It occurred to me that perhaps my noble friend Lord Morris would like to do his own maintenance and pass the necessary examinations! In a way these exemptions apply to business. However, having said that very briefly, I thank my noble friend and I understand of course, that like myself he is not as expert in this area as we should like to be and I look forward to receiving a letter from him, I hope reasonably soon. With that, I beg leave to withdraw Amendments Nos. 20 to 23.

moved Amendment No. 24:

Page 18, line 2, leave out ("with") and insert ("which includes").

My Lords, we are very grateful to my noble friend Lord Mottistone for moving his amendments so clearly and for being so helpful in giving us all the references to the comments of my noble friend the Minister, Lord Trefgarne, at an earlier stage in the Bill. I have listened carefully to what my noble friend has said, hoping that it ties up with what was said and is more or less parallel with what was said at an earlier stage. I hope that he and the House agree that the first amendment sought by my noble friend would oblige my right honourable friend the Secretary of State to consult with other bodies than British Telecom when making decisions on the licensing of any systems or apparatus, and also when approving standards or apparatus for connection to the public network.

Of course we would sympathise with my noble friend wishing to make the process of licensing and approval as open as possible. I hope he and the House would agree that in practice this system of obligatory consultation will often create various difficulties, and indeed will create unnecessary delay in many cases. The department has already established broadly based consultative machinery which has played a very important part, and will continue to do so, in giving advice; it will continue to remain in existence after the enactment of this Bill.

I would assure the House, and would very firmly assure my noble friend, that this machinery of consultation will be used whenever the Secretary of State plans to use his power in a way which would break new ground or would set an important precedent. But in one or two matters—for instance, approval of standards—we require to see that matters will be routine, and therefore it would be wasteful to be obliged to go through a general consultative process for each and every one of these routine matters on each occasion when they were to be considered. This is especially true since the British Standards Institution already has a consensus procedure which ensures that standards are normally fully acceptable to those affected by them before they are ever submitted for approval by the Secretary of State.

Consultation would take place if the approval were to include special or unusual conditions, but we would not expect this to be the case very often, and indeed the need to consult bodies other than British Telecom is unlikely to be very frequent. Of course, there will be other situations, mainly in the area of licensing, where individual interests will be at stake and where it would not be right to expose applications to wide scrutiny. But the present wording of Clauses 15 and 16 does not in any way prevent the Secretary of State from seeking advice from parties who will be interested wherever this is necessary. I do once again assure the House that this will be done through machinery which is already set up and is already working very well. The Government have already agreed, after discussion in another place, to a statutory obligation to consult British Telecom only, because it is evident that as the network provider they must have a say on the connection of apparatus to public circuits. These particular considerations really could not apply to any individual interest groups or the special situations suggested by my noble friend Lord Mottistone.

My Lords, I am most grateful to my noble friend. Before I go on, he said there is already provision within Clause 15 for outside consultation, but he did not, as is normally the case, draw my attention to just where that provision might be. Is he able to do that for me?

My Lords, it may be that I can help my noble friend Lord Mottistone on this amendment. In Section 9 of the Wireless Telegraphy Act there is a consultative duty on the Postmaster-General, now the Secretary of State, to consult with those people who are affected by decisions in that particular field. I am afraid my noble friend Lord Mottistone is really flying in the face of reality. In truth, in dealing with Governments, more particularly than with persons, unfortunately the reality of consultations happens only when it suits Governments, and not individuals. In this instance of the Wireless Telegraphy Act, although there is there a duty to consult parties who are interested and affected by a Government department decision, this does not necessarily come about. I have a Question down on this subject for answer tomorrow; the radio regulative department of the Home Office manifestly, as far as I can understand, have been trying as hard as they can to avoid consultation. It is extremely difficult, even where there is the formal means for consultation within a Bill, to ensure that Government departments do consult people when it suits the people who should be consulted, rather than the other way round.

My Lords, may I take the first point and reply to my noble friend Lord Mottistone. I am advised, as indeed I hope I had said, that there is no specific provision in Clauses 15 and 16 to oblige the Secretary of State to consult, but, on the other hand, there is nothing specifically to prevent him consulting with whomsoever he chooses. I think that would go some way towards disposing of the question which was raised by my noble friend Lord Morris as to forcing the Secretary of State to consult various bodies. I think it might also be relevant to the question asked by the noble Baroness, Lady Phillips, at an earlier stage, in that if we put in one body there would be at least a hundred, possibly a thousand, who would also fit into that category at some special time, who would require to be consulted, or might feel that they should be consulted. I hope we can take it that the wording of Clauses 15 and 16 is permissive and will not do anything to impinge on proper and valid consultation, where relevant, by the Secretary of State with interested bodies who feel they have a relevant case to put to him.

My Lords, I thank my noble friend Lord Lyell, and indeed my noble friend Lord Morris, for clarifying the issue and indeed giving point to the underlying submissions which gave rise to my amendment at this stage and at Committee stage. This is not a satisfactory situation; and neither is it satisfactory that there is something in the Bill that provides for consultation because, as my noble friend Lord Morris has said, even that is not all that helpful. I believe that what my shipping friends have to do is to wait until this Bill is enacted and then, as quick as may be, put in a request for coast stations for a group of shipping companies, as has been suggested, and see what happens.

In the event that they get a dusty answer from the Secretary of State, they will be quite within their rights, in view of what my noble friend has said, to ask, "Who have you consulted and why have you rejected us"? In the Post Office they have somehow managed to brush aside this sort of thing in a grand way in the past; let us hope that they will not be able to do so in future. With that comment, I beg leave to withdraw the amendment.

moved Amendment No. 25:

Page 18, line 9, leave out ("running of any such telecommunications system") and insert ("supply and maintenance of apparatus to be connected to a system run by the Corporation").

My Lords, I am puzzled by the vigorous opposition of the noble Lord, Lord Glenamara in carrying the point underlying his amendment and particularly in blaming Her Majesty's Government for the Beesley Report. I find it rather analogous to shooting the harbinger of bad news. In so far as the Government might take up Beesley's points, or any of them, I should have thought that that was the time to oppose Her Majesty's Government. However, Her Majesty's Government have not in its entirety, and above all in its detail, endorsed the whole of Beesley and, in their desperate attempt to oppose, I do not really believe that it is absolutely fair that Her Majesty's loyal Opposition should attack the Government for something which, at present, is nothing other than an hypothesis.

My Lords, I have no intention of going through the criticisms that I made in Committee about the details of Beesley, but I should like to ask one or two questions. Was the Government's attitude based on Beesley? If so, surely the account which has been given by my noble friend about the inadequate survey and the limited time, must be important factors despite any views that may be expressed by the noble Lord, Lord Morris, or any other noble Lord. If the Government's view was based on Beesley, then I must again ask: is it not strange that this report—if it was so important to the Government's view—was not available to the other place until it had completely passed the Bill? If the Government's attitude is not based on Beesley, then I should like to ask the Minister on what information did the Government base their decision which is in accordance with what Beesley has recommended? If the Government had any other sources on which to take their decision, why then did we have the Beesley inquiry, report and survey?

Those are important questions. If it should transpire that the Government's decision was mainly based on Beesley, then surely the inadequate survey seems to suggest, despite what noble Lords say about this side of the House, that the Government are following a clear example of doctrinaire policy in this matter in their endeavour to get the utmost so-called endorsing views in order to back up their case. Although we are not discussing it now, another matter that will be reflected if the Government decide to go ahead is their proposal to close down the 250 or so showrooms of British Gas. It is the same sort of doctrinaire policy which has come up time and time again. I should like to know quite clearly whether the Government's policy was based on Beesley and, if not, why did we have Beesley? If it was not based on Beesley, on what was it based?

My Lords, I am very happy to save time and take up the challenge of the noble Lord, Lord Underhill, directly. The Government's policies were not based on Beesley; they were based on doctrine. It is the clear doctrine of the Government to try to liberalise British Telecommunication's monopoly and, indeed, wherever possible and at responsible speed, to try to privatise the public sector trading monopolies wherever they can.

The Government have made a start on these policies in a number of fields, including this one, and we intend to continue with this policy. If that is doctrinaire, all I can say is that it is a doctrine that was put squarely to the public and to the electorate at the time of the last election and would, in my view, be likely to be followed by additional manifesto commitments come the time of the next election.

The Government consider that relaxation of this monopoly, and indeed, other monopolies, at the Government's initiative and in pursuance of the Government's policy, should primarily be carried out by the Secretary of State, who is answerable to Parliament just as Parliament is answerable to the electorate. Therefore, I think that that is a clear answer about the underlying motivations of the Government.

In a moment I shall have something to say about the Beesley Report itself, though I must say that I enjoyed the skill with which the noble Lord, Lord Glenamara, tried to praise Professor Beesley, the man, while divorcing himself altogether from any praise of Professor Beesley's conclusions. I do not think that it would be any secret to say that as life unfolds and works out, Professor Beesley's conclusions are likely to wish the Government to go at a greater speed than, in fact, the Government may be able to go. Therefore, I think that the conclusions reached by the noble Lord, Lord Glenamara, are very extraordinary.

Of course, the Government are not looking to Professor Beesley for confirmation of what is a clear policy decision, but they are having consultations and they are using Professor Beesley's admirable report as a document for debate and discussion. That debate and discussion is taking place now and since, as many noble Lords have recognised, this is a Bill with wide enabling powers, of course the Government in their use of these powers can make use not only of Professor Beesley's conclusions, but also of the conclusions of the debate on the report, including conclusions made to us by the noble Lord, Lord Glenamara.

Therefore, behind this amendment is not a debate about whether Professor Beesley had enough time or whether the remit given to him was the appropriate one; there is a clear policy difference between the noble Lord, Lord Glenamara, and ourselves as to the principle of this matter. He has made his position very clear; I hope that I can make our position very clear. But let us not pretend that these amendments are anything other than amendments of principle, or wrecking amendments in our parliamentary slang. If they were to be accepted, the power to license the running of systems would no longer exist and all telecommunication systems, other than those falling within the exemptions of Clause 13, could be run only by British Telecom, unless it happened to wish to delegate this task through some contractual arrangement. The régime therefore being proposed under the noble Lord's amendments would, in fact, be much less liberal than the Post Office Act 1969, the so-called Stonehouse Act. That would be regressive indeed.

The amendment also appears to me to be designed to take away the Secretary of State's powers to license additional networks, as well as the many classes of value-added network services which are dependent on systems connected to the network, and also to take away the freedom of network use. The amendments would strengthen the corporation's monopoly over the running of telecommunications systems, and severely curtail the Secretary of State's power to accomplish his liberalisation policy. Therefore, the amendments are designed to make it impossible to introduce competition in the provision of the network and in the provision of most important kinds of services to third parties using the public network.

Turning from these wide issues of principle which are clearly before the House, the noble Lord, Lord Glenamara, asked me one or two specific points. He asked me about international resale issues and competitive transmission services. The recommendations in Professor Beesley's report—and these are subsidiary to his main conclusions—were mentioned because the report considered that there were implications in these areas in relation to the uses of the network. As I said, subsequent to publication of the report, a public debate is taking place and the Government are not bound by the report other than agreeing with the central premises of the report which are close to the Government's own policy.

For the second time today the noble Lord, Lord Glenamara, claimed that domestic charges would rise if the Bill was implemented or if the implications of the Beesley Report were to be accepted. It is true that Professor Beesley's calculations are based on British Telecom's own figures. He shows that even if the total prospective loss of revenue to the corporation by 1984–85, due to complete liberalisation of network use, was to be made up by an increase in domestic rentals (as the noble Lord fears) on the worst assumptions rentals would need to increase by no more than about £6.40 or about 10 per cent. or 11 per cent. of what rentals could by that time be expected to be in any case, unless we can continue to contain inflation. It is inflation and pay and wage factors which are at the heart of increases in price to the consumer, rather than policy of this general kind.

I endorse what the noble Lord said earlier about the responsibility of the unions involved in this field. Nevertheless, unions make no secret that part of their duty to their membership is to keep pace with increases in the cost of living; and so long as unions successfully keep pace with increases in the cost of living, those increases will continue apace and so will the job losses attendant on them. Those are broad issues with which we are wrestling, as the previous Government had to wrestle with them, over all sectors of the economy. But it is entirely misleading to think that it is policy of this kind which is liable to be the main upward push on increases in costs rather than the inflationary and other factors that I have mentioned.

I think that we have also barely begun to appreciate the very great range of possible services that can be brought directly to homes and businesses throughout the entire telephone network. If the experience of America is anything to go by, the corporation will raise considerable revenue from the providers of these services; and, indeed, despite the noble Lord's accusations that providers of third party services have been "cream-skimming", as he put it, in America AT and T has continued to improve its financial position and—and this is of very great interest to me, primarily as an employment Minister—AT and T has continued to take on more labour.

It is astonishing to me that the Opposition, which understandably draw our attention to the great concern that we all have about high and rising levels of unemployment, are opposed to policies which are specifically designed to generate more wealth, more activity and more employment in this economy. Our analysis is that more jobs will be created in the new service industries themselves as well as in the industries that supply the hardware and software that would be needed. I am grateful at least to the noble Lord, Lord Glenamara, in that, as I said earlier, with his great experience and skill he has no difficulty in putting clear choices before the House. This is a straight policy issue between him and ourselves, and my own view would be that the House would have to make up its mind accordingly on the merits.

My Lords, the noble Earl was perfectly honest when he said that this was a matter of doctrine so far as he was concerned, and now we know. This is what we have been saying for a long time; that this is being done for purely doctrinal, theological Tory reasons.

Hear, hear!

Hear, hear! The Minister is confirming it. So there is no assessment in depth of policy alternatives. As I said in our last debate, they simply look at their problem and then they apply their Tory commandments: the efficacy of the market place; down with the unions; public enterprise is bad; private enterprise is good. Whether they are appropriate or not, they apply these dogmas to every problem that comes along. That is the whole basis of this Government: apply their theology to every single problem. So now we know.

The noble Earl said that this was a wrecking amendment. It is no such thing. I pointed out that the amendment would enable the Secretary of State, as the Bill proposes, to open attachments to terminals to competition, but what it would do would be to preserve the integrity of a national system to which those attachments were attached. That is our only concern, to preserve that. I thank the noble Earl very much, and I hope everybody, including the press, will take note that Beesley's proposals, according to him, will cause residential telephone rentals, quarterly rentals, to rise by £6. That was his estimate, so you can be quite sure it will be £26.

My Lords, would the noble Lord allow me? I should like to make what I said absolutely clear. By £6.40 between now and 1984–1985. That is not a very substantial rise in annual terms.

My Lords, if the noble Earl was living on a retirement pension, as many telephone subscribers are, he would know how big a rise £6 was. Anyhow we are told, admitted by the Government, that these proposals if implemented will add £6 to the quarterly rental. So let us all get that quite clear. The noble Earl said that we are against the generation of wealth—"This would not generate any more wealth". Well his proposal will certainly generate some more wealth, but it will generate it for the investing public and not for the ordinary telephone subscribers.

As the noble Earl said, this is a clear divide between the two sides. We on this side wish to preserve the integrity of the national telecommunications system. On that side they wish their Tory dogma to prevail. That is the issue in this Division. I hope my noble friends will carry the amendment to the Lobby.

moved Amendment No. 26:

My Lords, I am certain that no noble Lord wishes to make this debate into a party dogfight. However, I must refer to the justification that the noble Earl has put forward for the entire principles of the Bill, according to Conservative doctrine, for which he says there is a mandate. Incidentally, I become very perturbed about mandates, because sometimes there might be only three words hidden in an election manifesto and it is then claimed that one has a mandate. During the Division I went to my case and took out a copy of the Conservative manifesto. I cannot see anything in the manifesto about British Telecom; I cannot see anything in it about the Post Office; I cannot see anything in it about following the principle that Beesley has put forward and the Government have accepted—not a word!

The only references to public industries concern aerospace, shipbuilding, the National Freight Corporation, and the public bus services. What I do see is the following statement:

"We want to see those industries that remain nationalised running more successfully and we will therefore interfere less with their management and set them a clearer financial discipline in which to work".

Hear, hear!

There is nothing in what I have read out that justifies the "Hear, hears" from the Government Benches, since in the Bill there is clear interference with the whole of Telecom, and when we come to deal with another amendment we shall see what is happening to the question of financial discipline. As my noble friend has pointed out, and as has been mentioned in the letter from the Plessey management, the question, of funding is linked very closely with the question of British Telecom development.

My noble friend read out a letter from the director of Telecom. In another note that it issued, Telecom added:

"British Telecom will remain Plessey's biggest customer for many years. Much of our product development will depend on BT ordering programmes which in turn depend on BT funding".

In a later amendment we shall have to return to that reference to dependence on BT funding.

The amendment which my noble friend has moved says that the Secretary of State shall not do these things,

"unless he is satisfied that he will not thereby adversely affect the prospects of the British telecommunications manufacturing sector".

I am sure the Government will be prepared to accept that attitude. Otherwise, it means that they are prepared adversely to affect British Telecommunications' manufacturing ability. When I saw this amendment down, I remembered that in Section 99 of the Local Government Act 1980, which dealt with the disposal of land owned by public bodies, the Government deliberately put in a proviso which made it quite clear that no land belonging to the public bodies should be disposed of unless the Government were satisfied that there would be no serious detriment to the performance of their functions or the carrying on of their undertakings. So this amendment is seeking to put into this Bill the same sort of proviso as the Government put into their own Local Government Bill, for it is saying that action will not be taken which adversely affects British Telecom. Therefore, there seems to be no reason why the Government should not accept that principle.

My Lords, I am sure I am not alone in getting exceptionally weary of noble Lords opposite continually blaming the Government, or considering that the Government are responsible, for creating unemployment or for the insolvency of businesses. It just flies totally in the face of reality. Notwithstanding that, one of the more objectionable parts of this amendment, as I see it, is the phrase "the British telecommunications manufacturing sector". I wonder whether the noble Lord, Lord Glenamara, could possibly define for me—it would be a great help—what he means by "the British telecommunications manufacturing sector". As far as I am concerned, any company that generates jobs, which in turn generate funds in this country, is to that extent a British company. That is the thing that matters. The owners of the company, be they British shareholders or any other shareholders, I believe to be of no importance whatsoever.

My Lords, I feel that the noble Lord, Lord Morris, has earned himself a great distinction today. He is probably the only man in this country who really believes that the present Government have not set about deliberately creating unemployment. But I want to say that while there are issues that might divide either side of your Lordships' House with regard to public ownership and private enterprise, I would have thought that this amendment would appeal to the noble Earl, because whatever system either side of this House wants to adopt, what both want to see, I feel sure, is that British industry gains from it. I am so pleased that the noble Earl nods his head, because if that is so I cannot see how he can resist this amendment, which proposes that, irrespective of whether it is carried on by British Telecom or whether British private entrepreneurs come in, there will be a safety valve, the safety valve being that the Secretary of State shall have power and authority, and shall exercise it, to see that nothing happens that damages, not British private enterprise, not British public ownership, but Great Britain and its people. That is the issue, and that is what I hope will not divide us tonight.

In this particular aspect I see something that can unite us, and what can unite us is this: if we accept this amendment, not only shall we be assisting and aiding and safeguarding British Telecom, but perhaps it might well be that we shall be making a contribution towards reducing unemployment in this country, or at least preventing an increase in unemployment. May I put this to the noble Earl? If instead of British Telecom this Bill was about another publicly-owned sector—the Royal Air Force, the British Navy or the British Army—would they be prepared to go into the Lobbies on the basis of that public sector, of that publicly-owned endeavour, and vote against this amendment? The matter now lies solely and absolutely on the conscience of every noble Lord in this House.

My Lords, it was indeed the case when we debated the previous amendment that there was a clear divide—a divide of doctrine, if you like—between the two principal parties in your Lordships' House. We had made it clear that we should seek to liberalise the public sector where we could, and that this Bill was designed, indeed, to preserve the integrity of the network (as the noble Lord, Lord Glenamara, put it) but to allow companies to compete in providing the services which could integrate with the national network. That is a clear policy issue, if you like, between us. Therefore, our argument could rest on political or, if your Lordships prefer the word, doctrinal or even theological grounds. In fact, when I was being brought up, a little theology was not thought to be such a disastrous thing from time to time.

But here, as I think the noble Lord, Lord Molloy, reminded us—and I certainly agree with him—we are not on very different ground. We are all concerned for the welfare of the British telecommunications manufacturing industry, and of the very many people who depend on it for their livelihood. Indeed, as employment Minister, I have a very special interest, as I said earlier to the noble Lord, Lord Glenamara, in seeing some of these new industries which can slot into the network getting off the ground so that more wealth is generated and more jobs are created—and that, of course, is the source of employment. At heart, employment is conditioned by customers and by demand.

I am quite sure that our native manufacturers have a bright future before them in this field, and I do not think that I need prove my credentials to the House with yet another account of the prospects for growth in information, technology and telecommunications industries, or the Government's commitment to them. I am also with noble Lords opposite in believing that there is a danger to our industry while a transition takes place from monopoly to greater competition, though I would hasten to say that a primal monopoly in this field is still being retained. We should not allow our doctrinal or theological differences to obscure the fact that what we are talking about is the liberalisation of the vehicles that travel on the road, rather than the liberalisation of so to speak, the road itself.

I am therefore in considerable sympathy with the spirit behind the amendment, as well as the way in which the noble Lord, Lord Glenamara, moved it and the way in which other noble Lords have supported it. The reason I resist it is that the amendment is not necessary. It is, in jargon, as it were, tautological, because my right honourable friend the Secretary of State has said that the liberalisation of subscriber apparatus will be phased over a three-year period in order to give industry time to prepare for the new market conditions. I have every confidence that British industry will be able to react to the new market conditions; and were it not able to react—were it so uncompetitive in cost terms, in wage terms, in poor management or in restrictive labour practices, or in an inability to attract investment—then I do not see why the consumer or the customer should be burdened with an incompetent domestic industry and not allowed in some way to be able to utilise new goods and services in this field.

My Lords, will the noble Earl allow me to interrupt him?

My Lords, I will give way, but I did not want to give way at that sentence because I wanted to go on to say that it is much too gloomy to say that there is no prospect for our native industry; that the Government—wisely, in my view—are protecting our native industry during the changeover period, and that they have interpreted this changeover period pretty generously.

My Lords, I am grateful to the noble Earl. Surely he must understand that when one talks about a British publicly-owned industry, whether it be British Telecom or the National Coal Board or the Steel Corporation, there is massive support from private endeavour. Very many private industry endeavours depend on their parent, the publicly-owned industry. Their competition and their earnestness is as decent and sincere as anyone else's within the private or publicly-owned sector. Therefore, I beg the noble Earl to bear that in mind as well.

My Lords, certainly I agree with the noble Lord. Nothing that I suggested went on the old private/public sector divide. I am conscious in my job of the contribution of the coal industry to the export of mining equipment. This is an admirable industry and it has responded very well and is providing some of the most advanced equipment in the world. There is no division between us. We say that a wise parent protects the child as it grows up but that it would be a foolish parent that sought to protect the child once it had become an adult. The Government have also to take into account other interests. In only the last amendment the noble Lord, Lord Glenamara, was urging us to pay more attention to the interests of the consumers. Thinking protectionism, apart from the damage it would do to a still very flourishing and successful exporting country, would not be in the interests of consumers ultimately.

Our belief is that our job in Government is to try to create a climate in which enterprise and industry can flourish as free as possible from the intervention of the state; and I include in that rubric the public sector trading industries as well. Obviously the service industries cannot be covered by that; but I do not think that the NUM or the NCB want any more intervention from us than they can possibly get away with. The liberalisation of Telecoms is part of this process and I see nothing in the amendment or, I hope, in my response to it, which divides us; but if I were to advise my noble friends on this side to accept it, we would be writing two contradictory pieces of simultaneous identical advice into the Bill and we would also be calling into considerable question the sincerity of the interim protection period that the Bill already provides for. Therefore, I hope that, in the light of what I have said and in the length I have taken to find agreements between us, noble Lords will not press their amendment.

My Lords, I am disappointed in what the noble Earl has said or, at least, in the conclusion that he reached and not so much in what he said, especially on one of his last points. It is beyond my comprehension how we are seeking to write something contradictory into the Bill. If noble Lords have read it they will know that this is what we propose to insert:

"The Secretary of State shall not grant a licence under paragraph (a) or issue a direction to the Corporation under subsection (2) unless he is satisfied that he will not thereby adversely affect the prospects of the British telecommunications manufacturing sector".

I cannot imagine anything more reasonable than that. I do not understand why the Minister cannot accept that.

However, time is getting on and I do not propose to push this to a Division. I hope that I am around in 10 years' time and that the noble Earl is around, too. I doubt whether this Chamber will be now that it has abandoned its role as a revising Chamber on this Bill. If we are, it will be interesting to see what has happened to the telecommunications industry as a result of this Bill; but before then, no doubt, there will be a long period of Labour rule when the matter will have been put right again. I beg leave to withdraw the amendment.

My Lords, I hope that this may be a convenient moment to move that further consideration of this Bill on Report be adjourned.

rose to move that the order laid before the House on 21st May be approved.