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

My Lords, on 22nd July my noble friend Lord Trefgarne told the noble Baroness that a statement would be made as soon as possible. For the time being I have nothing to add to that.

My Lords, without any disrespect to the noble Lord, would he not agree that such an Answer after 13 months of delay and avoidance is really not worth while spending any further time on today, so may I therefore ask him a related question concerning Government, consumers and the nationalised industries? Can the noble Lord tell the House why it was not possible to repeat in this House a Statement on Gas and Oil Industries made in another place on Monday? While accepting that procedure in another place is the responsibility of another place, does the Minister realise that what occurred on Monday was that a Statement was made in the guise of answering an ordinary oral Question and that as a consequence this House was prevented from hearing a Statement of fundamental importance? Does the Minister or the Leader of the House feel able to comment on the matter?

My Lords, while the supplementary question put by the noble Baroness, which she has suggested I might answer as Leader of the House, is perhaps a little wide of her Question on the Order Paper, I am grateful to her for having given me notice of her intention to raise the point and giving me an opportunity to comment on it. The Government did arrange for a Written Question to be answered on Monday of this week, setting out in Hansard the announcement made in another place on the British Gas Corporation by my right honourable friend the Secretary of State for Energy. Unfortunately, this Written Question did not appear in print until Wednesday morning because the House sat too late on Monday for a full Hansard to appear on Tuesday. The fact is that the announcement was made by way of an answer to an oral Question in another place. As the noble Baroness knows, procedures in another place are of course a matter for another place, and the House will know that there is no procedure in your Lordships' House for repeating an answer to an oral Question—and indeed the need does not normally arise.

In the circumstances, I do not see what procedure the House could have used on Monday other than to repeat the Answer by way of a Written Answer. But I should like to say to the House that I do appreciate that it was deprived of an opportunity to air this very important matter, and I give an assurance to the House that I will consult my right honourable friends in another place and I very much hope that we can avoid a repetition of this difficulty.

My Lords, I am most grateful to the noble Baroness.

My Lords, does the noble Baroness recall that, when the Coal Bill was introduced in what was in fact our temporary other place, a galaxy of genial Ministers congratulated those of us who were interested in the coal industry on the fact that a new era had come; that the Bill foreshadowed a revolution in the industry, in the right direction, for once? Since then there has been a massive silence, threats of a strike and unhappy Tory Ministers perhaps being as unhappy as we, for once. Would she care to comment?

My Lords, I think that really is very wide of the question raised by the noble Baroness, Lady Burton.

My Lords, following the original Question, may I ask the noble Lord whether his attention has been drawn to the article in the Financial Times of yesterday concerning the effect on consumers of the proposed selling-off of the Gas Corporation properties and the fact that consumers will be left unprotected and may be the victims of very substantial price rises? May I ask for his assurance that in privatisation proposals protection will be provided for the consumer interests?

My Lords, I am afraid that is a little wide of the original Question which was asked by the noble Baroness, Lady Burton of Coventry, but of course everyone is aware of the most interesting articles which, as the noble Lord mentioned, appeared in the Financial Times, and of course the Government will pay careful attention to the points that were raised by the noble Lord.

My Lords, is the noble Lord aware that some of us believe that any public enterprise that has learned its trade is suddenly confronted with the problem that little pieces of it which give a profit are hived off and we have reached a new philosophy of conservatism, to socialise the losses and privatise the profits?

My Lords, the noble Lord, Lord Davies of Leek, at least might not expect me to give expositions in philosophy of any sort from this position this afternoon. We will pay attention to what the noble Lord has said, but I am afraid I have nothing further to add.

My Lords, with regard to the answer given by the noble Baroness the Leader of the House, is it not more than simply a procedural question affecting another place if an important Statement of the kind referred to is made in answer to an oral Question? Would not the noble Baroness agree that the decision to make the Statement in this form was taken by a Minister of Her Majesty's Government and therefore it is perfectly proper for a noble Lord to refer to it in this House, and does she not think that, in view of the importance of the subject that was under discussion—the selling-off of large parts of the British National Oil Corporation and the privatisation of the British Gas Corporation's interest in onshore fields—this would have merited a Statement in your Lordships' House, where it could have been questioned?

My Lords, I hope I said enough in answer to the original question asked by the noble Baroness, Lady Burton, to indicate how the situation arose. As the noble Lord, Lord Avebury, will know, the procedures in another place are a matter for another place. I have taken the point raised by both the noble Lord, Lord Avebury, and the noble Baroness, Lady Burton, and by others, and I have indicated that I will draw it to the attention of my honourable friends in another place and do my best to talk over the difficulties with them, to try to ensure that we do not have a similar situation on another occasion. I recognise the difficulty.

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

My Lords, I am not aware of a specific request in the terms which my noble friend has used, but the US Government is clear that ships allocated to the Standby Squadron will be declared to NATO and will be adequately maintained for the purpose.

My Lords, I thank my noble friend the Minister for that Answer. Can he say how long it would take for the standby ships to be made seaworthy? How long would it take for the crews to be found? From where would the crews come? Is he aware that it was 50 obsolescent American destroyers which largely helped us to win the battle of the Atlantic in the last war, although they were very antiquated?

My Lords, in the debates which followed the July Defence Review publication I mentioned that the Standby Squadron was at approxi- mately one month readiness. I can only say that we shall make sure that the Standby Squadron is suitably maintained for its purpose. Detailed studies are going on in relation to the number of ships that may come into the Standby Squadron to ensure that an adequate state of readiness is preserved.

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

My Lords, the commission takes very seriously the need to operate efficiently the services it provides. They are kept under regular review in order to ensure that any scope for improvements in efficiency is identified.

My Lords, is my noble friend aware that Her Majesty's Government have very strong support from these Benches for these very large expenditures—£l billion in the current year and £1½ billion next year—on the Youth Opportunities Programme, and any remarks are made only in an effort to make sure that these large sums are wisely, productively and constructively spent? Would my noble friend say whether he feels that enough effort is being devoted to training people for jobs in the service industries, where job opportunities are expandable? Secondly, would he say whether enough effort is being devoted to training the unskilled into higher skills, because it is in the higher skills that opportunities are now beginning to emerge and where some vacancies are still unfilled because of the lack of trained unemployed people?

My Lords, I think I can assure my noble friend that the answer is satisfactory on each of those points. The very considerable economies that have been effected have been made in the basic and old services of the Manpower Services Commission, while an expansion has taken place, and has had to take place, to deal with the special programmes, and in particular the Youth Opportunities Programme schemes which have been introduced. Her Majesty's Government are going to spend, as my noble friend said, £1½ billion in trying to ensure that every school-leaver has a six months' place of some kind.

So far as service industries training is concerned, yes, that is included in the schemes. So far as training for higher skills, and indeed training in general, is concerned, the Manpower Services Commission has recently completed a review and my right honourable friend the Secretary of State for Employment is continually ensuring that the training is applicable to tomorrow's needs rather than today's.

My Lords, will the Minister give the House an assurance that the expansion of the Youth Opportunities Programme proposed in the new initiative will in fact contain a greatly increased training component, agreeing very strongly with what the noble Lord, Lord Orr-Ewing, has said? This inevitably will be more expensive. Will the noble Viscount say that the Government will not stint the money required to make a very much better training job of the Youth Opportunities Programme than has been possible before now?

My Lords, I think I have already answered on the question of money; a very considerable sum, in not entirely easy circumstances, is being spent. With regard to the Youth Opportunities Programme being more orientated towards training needs, I believe that within the practicalities of the situation that does take place, with the one reservation that we have to be careful that we do not plan our training for jobs which we cannot see any reasonable prospect of developing.

My Lords, is the Minister aware that the CBI has recently estimated that by the end of next year there will be 1 million teenagers on the dole? Is not this an horrific figure facing the Manpower Services Commission in relation to its Youth Opportunities Programme, which at the moment caters for, I believe, some 360,000? Can the Minister assure the House that, despite forecast pressures from the Treasury for economies, his right honourable friend will stick to the pledge that all teenagers will have work or training experience?

My Lords, the statement I have already made, which was reiterated by my right honourable friend the Secretary of State for Employment in a broadcast last night, included the quite clear assertion that the Government's intentions remained to provide a six-month work or job opportunity for every school-leaver. As to the general level of unemployment, this is of course of the greatest concern to us all. We note with some degree of hope that there now at last appears to be a pick-up in volume and a beginning of a recovery of this country's industries' share of world markets, which has been sinking since 1960.

My Lords, following the very important point made by the noble Lord, Lord Orr-Ewing, with regard to apprenticeships, will the noble Viscount be prepared to consider in all seats of learning going the whole way to provide for the upper echelons of excellence in British industry? This objective could be very well enhanced if there were closer co-operation with the British trade union movement, which knows a very great deal about all these things.

My Lords, I do not think the commission has been slow in consulting the trade union movement in every area as to training needs, as well as consulting employers.

My Lords, are the Government satisfied that enough resources are going to help employers take on boys and girls as apprentices? I can tell the Minister that in rural areas we could employ a good many more school-leavers if we could get some small help towards their cost in the first two years on the farm, or some job like that.

My Lords, I think the schemes already announced—and we are straying a bit from the centre of this Question—and particularly the Youth Opportunities Programme, go as far as funds can possibly allow down the lines that my noble friend suggests.

My Lords, is the Minister aware that there is quite a lot of frustration among employers who offer vacancies under this scheme, at the length of time it takes for them and their vacancies to be vetted? For example, I believe that employers in the middle of Kent have to wait for someone from the MSC to come from Horsham in order to vet them, and in many cases it takes three months or more.

My Lords, my right honourable friend is aware of complaints of the kind the noble Lord, Lord Spens, mentions. We believe that these delays are exceptional, but steps have been taken to try to reduce them to an absolute minimum.

My Lords, will the noble Viscount give an undertaking, in order that the true extent of unemployment should be shown, and bearing in mind that the Youth Opportunities Programme is temporary, that when the figures of unemployment are issued there will be a supplementary list added to it of those engaged in temporary training under the Youth Opportunities Programme? This would give the country some idea of the extent of unemployment.

My Lords, I believe that some notes on the unemployment figures have been included on this subject, but I will certainly draw the suggestion to the attention of my right honourable friend.

Finally, my Lords, can my noble friend say whether the Manpower Services Commission and the Employment Ministry have studied closely the organisation going on in West Germany, where they have the same problems but, it seems to us, rather more effective methods of training people for the high skills so necessary in industry in the future? Perhaps he could lead a visit to West Germany so that this matter could be studied on the spot.

My Lords, I will draw that suggestion to the notice of my right honourable friend, but I am fairly sure that we have looked at the situation caused by very severe unemployment in many countries. We have looked at the steps other countries are taking to try to combat this problem.

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

My Lords, we are already doing so. We are taking part in consultations which are already under way in Geneva between interested Governments and agencies under the auspices of the International Committee of the Red Cross and the United Nations High Commissioner for Refugees.

My Lords, while thanking my noble friend for that welcome reply, may I ask whether Her Majesty's Government will make it clear to the Government of Vietnam that their oppressive régime, which has caused so many people to take to the boats and to go on the high seas, is made even worse by their tolerance of these pirates who act in such a brutal way to the distress of civilised countries?

My Lords, we appreciate the tenor of my noble friend's supplementary question and, of course, we deplore these particularly brutal attacks. We are satisfied that the other two Governments which my noble friend did not mention—that is, the Thai Government and the Malaysian Government—are very conscious of the gravity of the situation and we welcome the steps already taken by those Governments to control piracy in their own waters.

My Lords, does not this situation point to the need for a United Nations peace-keeping force with a naval arm to stop piracy not only in this case, but in similar cases? As regards the Vietnam boatmen, will the investigation at Geneva include an inquiry into the ownership of the syndicate which, as evidence before the United Nations Refugee Commission has shown, has charged £3,000 per person to go on these crowded boats which are often sunk and has bribed officials to allow them to depart? Will an inquiry be made into that?

My Lords, I was not aware of the details referred to in the question raised by the noble Lord, Lord Brockway. However, if he would like to furnish me with the relevant details, I shall most certainly bring the matter to the attention of not only the consultations in Geneva but also, of course, my right honourable and noble friends.

My Lords, is the Minister aware that the apparent appointment of the Red Cross to deal with this shameful situation seems a bit odd? Is that the appropriate organisation to deal with the matter? Is the noble Lord also aware that, apart from the shameful attacks on the Vietnamese boat people, piracy on the Nigerian coast and in the region of the Gulf has become almost a national pastime? Moreover, is he aware that it has been considered by international shipping interests, including the British Council of Shipping, and that it appears that the only remedy available would be to arm members of merchant vessels or those associated with liner companies trading in that area, so that they can deal effectively with these pirates?

My Lords, we shall, of course, consider the most interesting suggestion put forward by the noble Lord, Lord Shinwell, in the second part of his supplementary question. However, so far as the Red Cross is concerned, I understand that the Red Cross is included in the talks in Geneva because it is that organisation which deals with the effects of the piracy rather than the piracy itself.

My Lords, will the noble Lord say in approximately what proportion of cases the Thai or Malaysian authorities have captured those responsible for these atrocities and put them on trial?

My Lords, I am afraid that I have no information on that point.

My Lords, I rise to ask the Government a question on business of which I have already given notice concerning the business on Tuesday, 27th October, on which day your Lordships will notice that we are due to consider the Commons amendments to the Companies Bill. My principal question is to ask the Chief Whip or the Leader of the House what further facilities they propose to offer your Lordships in order that these matters may be properly discussed.

When the Companies Bill started in this House, there were 62 clauses. By the time it left this House, there were 75 clauses. By the time it left the Standing Committee in another place, there were 79 clauses and, by the time it was completed, there were 126 clauses. On Report in another place, some 13 entirely new clauses were introduced and some very substantial amendments were made to clauses already incorporated in the Bill in Committee and by your Lordships' House. In total, your Lordships will be invited to consider some 242 amendments to the Companies Bill, which is due to come before your Lordships' House on Tuesday.

I am given to understand from the Vote Office that the amendments will be not available to your Lordships until tomorrow, which leaves us Saturday, Sunday and Monday to consider the implications of the various amendments that have been made. I submit that this is entirely unreasonable. The Companies Bill in this House received the detailed attention of your Lordships from all sides of the House, and I think that it is generally agreed that the Bill went out from this place a good deal better than it came in. It is for consideration as to whether consideration by your Lordships of this Bill should be postponed, because even to collate the amendments in with the Bill as it originally left the Report stage in the Commons would take an enormous amount of physical endeavour. There has been no opportunity whatever for having any consultation with outside bodies. There is a vitally important clause in the Bill concerning the right of a company to purchase its own shares. It is quite impossible to give detailed consideration to even that clause without knowing the taxation implications, and the Board of Inland Revenue only last week issued a consultative document on which it required replies within three weeks.

It is quite clear to us that it is not really right that this House should be put under such pressure without having adequate opportunity to consider all the implications of the extremely important clauses that the Government have now incorporated in the Bill in another place. I sincerely hope that we shall not receive a dusty answer from the Chief Whip on this matter. This is not a party Bill. No vast party passions are aroused by it, but it is the pride of this House that, when a Bill comes to us, we do give it detailed examination in conformity with our traditions as a revising Chamber.

Nobody wishes to obstruct the will of the Government to carry through their Bills, because to do so would raise a vital constitutional question. Nobody, for example, would dream of seeking to reject it on Third Reading. However, I submit that we have the right in this House—all of us, on all Benches—to be treated properly. I make no complaint about the Chief Whip's Office in this place, who, I must say, consistent with the stresses to which they have been put, have given me at least 48 hours' advance notice of certain matters, and, for that and for their cooperation and courtesy, I am much obliged.

What I complain about is the attitude of the Government on top. I sincerely hope that the noble Lord will be able to give further consideration to this matter, otherwise I shall have no alternative but to raise it once again when we have the Motion before your Lordships to consider the amendments coming from the Commons.

My Lords, I am most grateful to the noble Lord, Lord Bruce of Donington, not only for giving me notice that he would raise this point—albeit rather short notice, though I make no complaint about that—but also for what he said about my office. I assure him that the answer which I shall give him I shall try not to make dusty. I shall not try to belittle the difficulties that your Lordships are very often under, but I think that, on reflection, the noble Lord will agree—and I have not had a great deal of time to go into precedents—that such timetables are not unprecedented. Indeed, I never fail to be amazed at the fortitude and dignity with which your Lordships conduct your business under conditions inflicted upon them by successive Administrations. I think I am right in saying that a considerable number of these amendments that are coming back from the Commons were tabled in response to representations, not least from this House when we considered the Bill earlier this year. Of course, I shall look at what the noble Lord has said, but, in the first instance, I think it is probably better that this matter should be discussed through the usual channels.

My Lords, when a situation such as this arises, as has sometimes happened in the past, is it not possible to consider moving a Motion analogous to the Motion which the noble Lord the Chairman of Committees will shortly be moving on the private Cumbria Bill, which will enable consideration of that Bill to be carried on in the next Session? I have never understood why it is not possible to do that when a situation such as this arises at the tail-end of a Session.

My Lords, I am most grateful to the noble Viscount for that suggestion. I am absolutely certain that it is not possible. As to the exact reasons why it is not possible, I shall require a little notice. However, certainly special arrangements were made some years ago so that this could happen in respect of Private Bills—I recall this, as will the noble Viscount—but it certainly cannot happen in respect of Public Bills.

My Lords, I entirely understand the difficulties in which the noble Lord finds himself, but if the usual channels communicate about this—as, of course, they must—the House will know nothing until Tuesday because we shall not be meeting again until then. All Whips go out today and I think that the House may be in some difficulty about not knowing what will happen on Tuesday.

My Lords, that is right, but perhaps the usual channels could meet rather earlier and make sure that at least their deliberations start before the Whips go out. There have been precedents for this. As I say, I have not had a great deal of time to look them up, but I know that in 1976 over 150 amendments to the Energy and Weights and Measures Bills were brought from the Commons and agreed in one day after very late arrival. If one looks into it one will see that it has been done before. However, it is rather difficult to carry on this discussion across the Table; and perhaps I could have a word with the noble Baroness through the usual channels later.

My Lords, with the leave of the House, at a convenient moment after 3.30 this afternoon, my noble friend Lord Avon will repeat a Statement that is to be made in another place on Rate Support Grant 1980–81, High Court judgment on 21st October 1981.

My Lords, I beg to move the Motion standing in my name on the Order Paper. This is one of the usual Motions where, in the case of a Private Bill—as has just been remarked—we are able to carry the Bill over into a new Session.

My Lords, I beg to move that this Bill do now pass. Perhaps I may be allowed to remind your Lordships that this is the final stage, the second time round, of the Bill that I was given leave to introduce some two and a half years ago. On the first time round it was committed to a Select Committee of your Lordships' House, which carried out a public investigation into the facts of animal experimentation and the current law on the subject, and the Bill was reported, as amended, to the House. It survived its remaining stages unamended, was passed and sent to the other place, albeit too late to be more than formally taken up. On this second time round it has survived, unamended, a Committee stage on the Floor of the House and it is now in its final stage. If your Lordships are content it will again be sent to the other place.

I have heard it said that a distinguishing feature of your Lordships' House is the competent discharge of self-appointed tasks. If that is so, I think that Bills in this style are a good illustration of it. It was the House that took upon itself, on its own initiative, to set up the Select Committee. As to the competent discharge of its task, I should like your Lordships to hear what Europe thinks of the Bill, as amended, here. The head of the secretariat in Strasbourg, which is considering a European convention on the same subject, is now in retirement; and in retirement he has visited this country to give a series of talks on the subject. Of this Bill he has written as follows:

"Lord Halsbury's revised Bill in the United Kingdom would seem to represent a very good base for a new law. Resulting from an admirable co-ordination of the interests of Research and Animal Welfare, which is probably unique, it represents an excellent example of fruitful co-operation".

It is always nice to be paid a compliment, but I must make it clear that I do not take this compliment by any means all to myself. There is the work of the House as a whole, and of its Select Committee in particular; there are the contributions of all the witnesses who appeared before us or who wrote to us; last, but by no means least, stand the personal relations between myself and my noble friend Lord Houghton of Sowerby. We do not always see our problems in identical terms, but for a long time past we have discussed whatever disagreements we have had in a temperate and civilised manner.

When we came to this subject the scientists on one side and the animal welfarists on the other were, for the most part, not on speaking terms, and had not been for the best part of the century. We leave it with a joint committee of his friends and my friends working together to advise the Government on the provisions of some future Government Bill. What more could you desire?—and that is a direct result of the work that this House has put in on that Bill.

For my part, I regard my speech this afternoon as my swan song on this subject. I have been involved in this for a quarter of a century, and I think it is time for me to be put out to grass with pleasant memories of all those with whom I have worked and who have supported me at one time or another. Therefore, I shall strike up the strings and go ahead with some questions to the noble Lord, Lord Belstead, who answers for the Government in this field.

First let me deal with the situation at Strasbourg on which we are all waiting. Two years ago there was a change of chairman. It can be argued that this produced a hiccup which set back progress for a whole year. The chair is due to change hands again in the new year. Must we anticipate another hiccup and another year's delay? I do hope not. The next meeting at Strasbourg is forecast for January, but will it actually take place then and what will be the state of preparedness at the date of that next meeting with respect, first of all, to the pain clause, which is such a difficult and vexatious body to draft and, secondly, to any other major clauses causing difficulty—for example, the inclusion of statutory provision for the inspection and licensing of breeding colonies?

Then there are the appendices. I understand that Appendix A has been finished, but some others still have to be approached. If the drafting work on these is incomplete in January, when is it likely that the next meeting will take place? Hitherto meetings have been at six-monthly intervals, which means that we shall not see anything really from Strasbourg in the lifetime of the next Session of Parliament if there is a delay. On completion of all drafts, what delay is expected in submitting the drafts to the Council of Ministers and implementing the undertaking given by the noble Lord here that, before the convention is ratified, facilities will be given for parliamentary debate in this country?

The second main topic on which I should like the noble Lord to answer some questions deals with the Home Office advisory committee which has been sitting to consider the need for new legislation and which reported during the vacation. I am sure that your Lordships would like to know that this committee considered the work of our Select Committee so comprehensive that no further inquiry was called for. I think that is a very welcome tribute to its qualities, but the following questions arise out of it. Have the Government as yet—and I say "as yet" because I realise that the Government must have time to study the work of their own committee—any view on the apparent preference of the advisory committee for the Bill as originally drafted by myself as opposed to the amended Bill with respect to the control of licence conditions and similar matters by ministerial regulations under legislation on the one hand, or direct legislation incorporating the text of the Bill on the other hand? The original Bill left more to the discretion of the Home Secretary as the keeper of the national conscience than the amended version did and the advisory committee inclined more to the original draft. Then again, have the Government yet developed a view on the alternative versions of the pain clause in the Bill, the advisory committee's report and the draft convention as far as it has got at Strasbourg?

Then we come to the licensing schemes, of which two new ones have been proposed in the report of the advisory committee, known as Scheme A and Scheme B. May I remark here that the devising of licensing schemes can become a hobby that can be indulged without any fear that it will ever come to an end? I believe that, given goodwill, many things not totally unreasonable can be made to work more or less, but that without goodwill nothing can be made to work however reasonable it looks on paper. There is accordingly a premium to be placed on simplicity and comprehensibility, and critics of what has been proposed feel that Scheme A in the advisory committee's report is unworkable and that Scheme B adds nothing to what we have already. What does the noble Lord think?

Thirdly, there is the question of Government legislation. What is the real status of the drafting activities reported in The Observer on 27th September? If we are to believe that report, a Government Bill to be introduced in the next Session of Parliament is on the stocks. Are these really anything more than routine exercises in draftsmanship, going on in parallel with public discussion either here or in Strasbourg? Or is there really a Government Bill on the stocks? I naturally do not seek to be so naive as to ask the noble Lord, Lord Belstead, what is going to be in the Queen's Speech, but only what is going on in his Ministry, if he is disposed to tell us. Then, are the Government aware of the views expressed by Mr. von Holstein in the paper from which I was quoting earlier, when he was stressing the need for the British Government to take action? What he says is this:

"In view of the traditions of animal protection law in the United Kingdom it really seems inconceivable that a Government Bill would contain provisions inferior to the lowest common denominator of European law".

Why not then press on with a British Bill?

As the noble Lord knows, that is the view that I have taken all along. We ought to show leadership. We are the ones who have the experience. I have to confess—and I hope that the noble Lord will not think that I am being horrid—that I am a little tired of successive Governments of whatever complexion complaining of a lack of leadership in almost every field except that of Government. What does the noble Lord say to that? How would he answer Mr. von Holstein's suggestion that we should get on with it? While accepting that the noble Lord cannot anticipate what is going to be in the Queen's Speech made from the Throne, can he offer what I might call hope in good faith that there will be Government legislation before the time when the next general election is due? I do not say "before the next general election", because that is another matter altogether—but before the date when the next general election is due, which I suppose is in the spring of 1984.

Lastly, I come to the topic of vandalisation. Is the noble Lord sensitive to the point that so long as Government action lags behind rather than leads public demand for new law, vandalisation is unlikely to be severely punished in the courts? This is a very real issue. I took the chair at a public lecture two weeks ago; its subject was the work of the Medicines Commission. The lecturer was the very distinguished chairman of the Medicines Commission, Sir John Butterfield. The lecturer and the chair were both drowned in noise by vandals identified as including those who vandalised the last annual general meeting of the Royal Society for the Prevention of Cruelty to Animals—the usual mindless, imbecile sloganising engaged in the suppression of free speech. I am told that these people are on public assistance and have nothing else to do except sit around and make a noise. Do your Lordships wonder therefore that I am impatient for legislation which will put such people in conflict not with a law a century old and possibly out of date, so that a protest can be held to be legitimate, but with the latest expression of law fresh from the Mother of Parliaments—the highest court in the land—and to be respected accordingly? We badly need a Government equivalent to this Bill. I beg to move.

My Lords, with the leave of the House, I should like to repeat a Statement which has been made in another place by my right honourable friend the Secretary of State for the Environment. The Statement reads:

"With permission, Mr. Speaker, I wish to make a Statement about the judgment given yesterday in the High Court in respect of my decisions last January to abate the rate support grant payable to eight London boroughs. Six of these authorities—the London boroughs of Brent, Camden, Hackney, Hounslow, Tower Hamlets and Waltham Forest—challenged my decisions on the following four grounds:

(i) that the Rate Support Grant (Principles for Multipliers Order) 1980 was ultra vires;

(ii) that I misdirected myself in law under Sections 48–50 of the Local Government, Planning and Land Act 1980;

(iii) that my decisions were decisions to which no reasonable Secretary of State could have come;

(iv) that I failed validly to exercise my discretion to abate grant under Sections 48–50 of the Local Government, Planning and Land Act 1980 on the grounds that after enactment of the powers and before reaching my decision, I failed to listen to representations from the authorities concerned.

"In respect of the first three of these grounds the court found as follows: firstly, that the Multipliers Order was not ultra vires and is therefore valid; secondly, that I did not misdirect myself in law as to the nature of my powers under Section 48–50 of the Act; thirdly, that my policy was not unreasonable, and that my decision was a decision which I was entitled to reach, subject, however, to their ruling on the fourth ground of the challenge.

"On that ground, the court rules that, although there had been extensive discussions and consultations over a period of almost a year prior to the enactment of the Act, I should have been prepared to hear any new representations after enactment before reaching my decision. The court's decision turned in particular on two late approaches made by or on behalf of the authorities, approaches which in their judgment the court referred to as having 'something of the air of legal manoeuvre'. Notwithstanding this, however, they ruled that I should have been prepared to hear those representations and that I had therefore not validly exercised my discretion. On that ground alone my decision to reduce the grant of these authorities was quashed by the court.

"The court did, however, say that it is of course open to me, after considering the authorities' representations, now fully documented, to reach any decision I consider right and which is within the terms of the 1980 Act and the Multipliers Order.

"The judgment itself runs to nearly a hundred pages of foolscap. The House will appreciate that the Government will have to study its terms carefully before deciding what their response will be. I shall keep the House informed when these decisions have been made."

My Lords, may I thank the noble Earl for repeating the Statement made by the Secretary of State in another place. I must confess that I found the Statement a very ungracious Statement bearing in mind the fact that the Secretary of State has been found guilty of unlawful conduct in a court of law. I should have thought that in the circumstances he would have come to the House with a very different Statement from the one which the noble Earl has just repeated to us.

The fact is that the Secretary of State had failed to observe the rules of natural justice in that he fettered his discretion in refusing to listen to the representations of the local authorities concerned after the passing of the Act, despite the fact that he received a plea to do so from the leader of the Association of Metropolitan Authorities last December asking him at that late hour to receive the further representation from the local authorities concerned. The Secretary of State had acted again like the political commissar which he has often been accused of being.

As the noble Earl said, it is imperative that the Secretary of State should keep an open mind on this matter, and the court suggested that he could still do what he wished to do if he set about it in the right way. But the fact of the matter is that if the money had been paid over by the Secretary of State in January it could not now be reclaimed. The wording of the Act precludes this. It would seem quite wrong for the Secretary of State to rely upon the position arising from his own illegal act to retain this money within his department, and that his immediate act on the receipt of this judgment should be to pay out the monies which he has withheld.

In any case, I would hope that this judgment would act as a deterrent to the Secretary of State from pursuing his current witch hunt with various overspending local authorities. Indeed, I would hope that he would realise, in the face of this judgment, the fallacy of his intention of proceeding in the new Session of Parliament with legislation aimed at fettering the powers of local authorities to raise whatever rate they feel necessary for the proper maintenance of local authority services within their own areas.

It is the duty of local authorities to run the services within their own areas in the way which they see fit, and in the way in which the local electors within a particular area wish a service to be carried out. I think that the proposal to fetter the power of local authorities is a most retrograde one, and one which we from this side will oppose tooth and nail when it comes to this House, if it still does after the reopening of Parliament. In the meantime, I hope that the Secretary of State will give serious consideration to what is the right and proper judicial view for him to take now in view of this judgment, and that he will decide that the monies which he has improperly withheld should be paid.

My Lords, could the noble Earl explain why this Statement is necessary at all in the first place, and, secondly, why it was necessary to couch it in terms which suggest that the Secretary of State's decision was entirely justified? Particularly on the latter point, in view of the criticism made by the Court of Appeal that he did not listen to representations made after the enactment had taken place—that is, that he relied on a decision he had reached really before the enactment was made—is it not dangerous for the Secretary of State to indicate that he will reach exactly the same decision when he has not yet considered the representations?

My Lords, first to answer to the two questions posed to me opposite regarding the judgment and regarding money, the Government are considering their response, and I can therefore not comment on either. The noble Lord, I know, would not have had time to read the full 100 pages of this judgment, and I should like just to read out a small portion of page 89. It is as follows:

"Further we are satisfied that the Secretary of State in formulating his policy:

(i) did not act unreasonably;

(ii) was entitled to adopt a broad policy, not paying attention to the detailed circumstances of individual authorities;

(iii) did act in a way consistent with the purpose of the 1980 Act when eventually enacted;

(iv) did not create a retrospective effect beyond that contemplated by the 1980 Act;

(v) acted properly in terms of discussions, negotiations, and openness to representations until 1980".

The sting is in the tail; but it is a very small tail and, for the rest, the judgment is very much in favour of everything that the Secretary of State did.

Spending by local authorities has been a platform of this Government since we came into office, and overspending by local boroughs, particularly in London, has caused a lot of the problem.

My Lords, would the noble Earl give way for a moment? Is it proper to read out a portion of a document which is too long to read in full, and a portion obviously having been selected, when the final conclusion was that the Secretary of State did act unlawfully?

My Lords, as I said, the Government are considering their response to the judgment. What I read out was in order to illustrate to the noble Lord, Lord Ponsonby, that the percentage of the judgment is not against the Secretary of State.

My Lords, may I—

My Lords, may I just go on to reply to the other noble Lord before we go any further. So far as I know, the Statement was in anticipation of the fact that it might be asked for. Had it not been made, no doubt the noble Lord would have asked for it. To the second question I have to give the same response, that the Government are considering their reply.

My Lords, I am sure the noble Earl is, as always, anxious to be fair to the House. May I ask him now to read out the passages which are critical of the conduct of the Secretary of State? Is it right, as is reported to be the case, that Lord Justice Ackner said that he,

"should have kept his mind at least ajar",

which was a very attractive expression, and that,

"he should have been, but was not, ready to hear anything new"?

Did the judgment say that? Please, let us have the whole picture.

I would willingly read all the 100 pages, my Lords. I am delighted that the noble and learned Lord has found just about the two sentences which are critical.

Not at all, my Lords; let us have both sides.

I had intended to intervene, my Lords, but the point I was going to make has been made.

My Lords, in so far as this is a matter where a Minister of the Crown has been almost savaged by a court of this land, may I ask whether the noble Earl thinks it appropriate to make it his business to inform the Home Secretary, who has a passionate and sincere interest in law and order, that even a colleague who attempts to break the law or to bring the law into disrepute is as bad as anybody else whom the Home Secretary condemns?

My Lords, I am sure that when the noble Lord has read the judgment he will wish to rephrase that question.

My Lords, when the Government make their further statement on this matter, may I ask whether they will be dealing not only with the case in point but with the whole question of relationships between central and local government? Is it not the case that over the years, one central Government after another have taken away powers from and sought to control local government, and will not the Government themselves reconsider their whole position in this matter?

My Lords, I am sure that when this matter is raised again, the noble Lord, Lord Jenkins, will raise that point. But I would stress that central Government in this case do not want to put restrictions on local government and are trying not to do so; it is only the ones who do not abide by the guidelines who get into trouble.

Were the guidelines restrictive in any way, my Lords?

My Lords, only to a very limited extent.

My Lords, I think it would be for the convenience of the House that we return to the consideration of the Laboratory Animals Protection Bill.

My Lords, in resuming the debate I should like to acknowledge with thanks the kind references that the noble Earl, Lord Halsbury, made to myself in connection with all the work that has been done by a great many people on the Bill. I am grateful to him for that and I express regret that we must impose additional burdens this afternoon on the noble Lord, Lord Belstead, who has had a very heavy ministerial load of late. We can all sympathise with a Minister who has to go from nationality to animals, from riots to the miscellaneous business of the Home Office. It is a most tiresome department to be in.

Indeed, one former Home Secretary told me, "The trouble about being Home Secretary is that when you wake up in the morning you never know what is going to be at the office". There have been some remarkable switches in the course of parliamentary business in the past through occurrences which were quite unexpected. I recall a former Leader of the House once saying, "Ten days ago I had never heard of Chief Enaharo, but he has lost me four days of parliamentary time". Undoubtedly the Home Office presents many problems to the Minister. Before I conclude, I may have a suggestion to make to relieve the Home Office of having to deal with this matter altogether, and I do not know how welcome that suggestion might be to the noble Lord, Lord Belstead.

Although we are discussing the final stage of this Bill, the real interest in the debate is in what will happen in the future, and I shall address myself to that briefly. It is however noteworthy that the Bill is about to go through your Lordships' House for the second time round, with all the additional thought and discussion that has gone into the Bill meantime. It is not an ill-thought out Bill; it is the product of six months' work on the previous Bill, introduced by the noble Earl, Lord Halsbury, in the Select Committee of this House. The noble Earl read out the comment made by a former official of the Committee of Experts at Strasbourg with his opinion of the Bill.

I would add in passing that I was disturbed to hear the noble Earl, Lord Halsbury, say that this would be his swan song on this subject. He said he had been on it for a quarter of a century and it was about time he was put out to grass. Why should he give up so soon? He knows as well as anybody that a quarter of a century is a short time to spend on reform in this field, when we have on the statute book an Act which is over 100 years old and has not been amended in any shape or form since it was enacted in 1876. We have a long way to go yet and I hope the noble Earl will have the energy and interest to continue his invaluable contributions to debate in your Lordships' House on this subject.

I am afraid I must now be a bit rough with the noble Lord, Lord Belstead. The Government do not like this Bill, and that is the first point I wish to make. Therefore, the Government do not like the report of the advisory committee, which comes down heavily in favour of the structure of the Bill. That dislike is obvious from the press statement which was released by the Home Office at the time of the belated publication of the report of the advisory committee, when they went out of their way, while thanking the advisory committee for the value of the work they had done, to say that they had not produced a report which could provide a definitive basis for future legislation. There is nothing like a vote of thanks and a smack in the eye at the same time.

After all, that advisory committee was composed of persons who were appointed to it by the Home Secretary; it was not biased in any way and it was not weighted against the Home Secretary in any way, and he had referred the matter to the advisory committee. He expressly asked them to give their opinion on the subject and, what is more, he asked them to be as quick as possible in doing so. The advisory com- mittee had the advantage of two pieces of legislation on this subject, one in the House of Commons which did not make progress, and this one in your Lordships' House which is making progress for the second time in this House. They had the advantage of reading volumious evidence given by all interested parties to the Select Committee, and more than once noble Lords have paid tribute to the work of the noble Lord, Lord Ashby, as chairman of the Select Committee. It really was a fine job of work which I doubt will ever again be repeated on this subject. It was a substitute for a Royal Commission; it was an investigation which rendered it unnecessary for the advisory committee to go over the same ground again, and this provides the Home Office with a valuable further instalment of assistance and guidance on this complex subject.

The report of the advisory committee has provided an interesting second opinion about the work of the Select Committee, a second opinion on the contents of the Bill. It is as valuable as a committee appointed to examine a Bill before it makes progress in the House. It is a valuable aid to your Lordships' House on a complicated subject. Well, the question is: where do we go from here? In earlier debates on the subject we used to hear that the impediment to making progress on the part of the Government to fulfil their election promise was the proceedings in the Council of Europe, that it was difficult for the British Government to proceed to advise the House as to future legislation while the convention of the Council of Europe was still under discussion: the more difficult because a British representative on the committee of experts was an official of the British Home Office, and it would ill become a Government which for the time being had the chairmanship of the committee to proceed to legislation while the experts were still engaged in a task of important relevance to what that legislation would be about.

We sympathised with that view, however impatient we were about the lack of progress. But now I see the press statement issued by the Home Office that there is a new possibility—and that is that the introduction of a Bill might depend on parliamentary time being available. This is a new one; we had not heard this before. So what the Government are really saying is that they will fulfil their pledge on this subject given at the last General Election if parliamentary time permits. There are many qualifications to failure to fulfil election pledges, but usually the lack of parliamentary time is not one of them.

The noble Earl, Lord Halsbury, asked: are we to get a Government Bill in the next Session? Here we come up against the well-known convention of Ministers being unable to anticipate what might be in the Queen's Speech. That is all rubbish. The Government have already anticipated some things that will be in the Queen's Speech. They were politically so sensitive and important that it has already been announced that they are to introduce legislation to implement certain policies upon which they have already decided. There is no absolute bar against mentioning what the Government have in mind to introduce in the next Session. I was on the Queen's Speech drafting committee more than once, I know the drill, I know how it gets there. The Government have a completely free hand—let us be honest about it—to put in the Queen's Speech what they want to put in, and to leave out what they want to leave out. So if the Government wish to reassure the House this afternoon, they are perfectly free to do so by saying that it is their intention to introduce a Bill in the next Session.

However, it might be that the uncertainties in the Council of Europe still inhibit them from making any such promise, and I could understand that if it were to prove so, though from the Government's point of view one wonders how much longer they can go on making the same excuses for not making progress.

I am wondering whether the Government's intentions are worth bothering about. Let us look at the situation for a moment in political terms. There is a by-election taking place today. Tomorrow we shall be a little wiser about the likely fortunes of the Conservative Party. I believe that if the Government do not make progress in 1982, they will not make progress in this Parliament anyhow on this subject. However, I am not at all sure that in view of what I believe to be the present political situation I care tuppence whether or not they make progress. I am coming to the conclusion that it is probably better that they should not, because I am quite convinced that the Conservative Government cannot possibly recover the confidence that they will need to return as the Government after the next general election. I believe that whoever else constitutes Her Majesty's Government after the next general election, they will be more favourably disposed than the present Government to reforms in this field. So it might be that in the interests of getting the kind of Bill that many of us want to see, or indeed in the hope of getting any Bill at all, we have to pledge our faith in the outcome of the general election.

I am sorry to be so unfriendly about this matter to Her Majesty's Government, but there comes a time when it is no good beating about the bush, and I now have to gather together very quickly friends who will be able to consider how they are to conduct the campaign for animal welfare at the next general election, and this takes time to prepare. Frankly, I believe that the interval between now and the next general election will give such a golden opportunity for the mobilisation of public opinion on this subject of animal welfare as to require Parliament to go further than the Government at present contemplate going. If that is so, delay might well come to the aid of reform.

That is merely a political assessment. I do not want to place any difficulties in the way of the Government in getting on with the job if they wish to do so. If by their own pledge they feel impelled to update the 1876 Act in this Parliament, I must not try to dissuade them. I might criticise what they try to do, but I shall not try to dissuade them. I would never encourage any Government to default on their election pledges whether they are good or bad. I think that election pledges should be fulfilled but I think it far better that political parties should make fewer of them. Far too many hostages to fortune are included in the manifestoes of political parties at general elections. They should have enough self-control to leave it to the good sense of the electors to understand that from time to time events occur which Government find unexpectedly difficult; and the idea of going forward with pledges which have been conceived at party conferences years earlier very often proves to be a dangerous nonsense. However, that is by the way.

On the prospects of getting a European convention, the opinion that we get from Brussels is that there are difficulties there which it might not be possible to overcome at the next meeting in January. Indeed, we are advised that there is a strong possibility that the resistance throughout Europe to the proposals that are under consideration by the committee of experts is so strong that it might be necessary to refer back the whole matter to the Assembly. The fact of the matter is that in the course of discussion on the draft articles of the convention it was necessary to give publicity, or at least publicity followed the exposure of proposals for discussion, and that publicity has resulted in a very strong reaction throughout many interests in the European countries. I understand that thousands of letters are being sent to the Council of Europe protesting at what is under consideration. I have no means of confirming that, though I hear it on very good authority. In those circumstances, what prospect is there of present difficulties being overcome at their next meeting in January, and will there be a prospect of this matter being referred back to the Assembly?

I hope the Minister can be candid with us about this, this being the last opportunity in this Session to be so. I hope that we do not have to return to this topic in the debate on the Queen's speech; I really do. We want to get on, if we can, towards a settlement of our problems. Meantime, I am sure the noble Lord the Minister will be glad to hear what the noble Earl, Lord Halsbury, said about the new liaison, the new form of consultation, under the chairmanship of the noble and learned Lord, Lord Cross, between the Research Defence Society and the Committee for the Reform of Animal Experimentation, of which I am chairman. We have been brought together, mutually desiring to meet together, to see how far we can overcome the problems of reconciliation of the different interests involved. That is a notable step forward.

Good heavens alive! we are doing everything for the Home Secretary except hold his hand to write this Bill. He cannot get much more help from any quarter that is worthwhile, however much he may rely on the advice he is getting from permanent officials. Where else can he go for help and advice but among those who are directly concerned on both sides of the argument? Where else can be go but to the guidelines, the examination of this subject given by the Select Committee, the study of the problem by the advisory committee and the new form of co-operation to which I have just alluded? No Home Secretary could hope for greater co-operation than that.

I come finally to an idea which I throw out for the consideration of your Lordships and, indeed, of the Minister himself. Is the Home Office the most suitable department to deal with this subject in future? Should it be taken away from the Home Office altogether; and, if so, where should it go? I remember a time when the Home Secretary, in the course of discussions on the future of the social services, was concerned to hear that some of us thought, that Ministers thought, that the subject of children should go to another department. I remember how grieved he was that almost the only emotional appeal of the Home Office might be taken away, and that it would be left with the police, crime, prisoners, riots, immigration and all the other subjects which give rise to squalid differences of opinion. However, the subject of children went; and I do not suppose he would feel that keeping the protection of laboratory animals was essential to the reputation of the Home Office.

Some people might suggest that this subject would be better suited to the Department of Health and Social Security. I would not hold that view. I think that, although it is very close to the DHSS, they have too vested an interest in it. After all, the Department of Agriculture has an interest, too—a very important one. The Department of Education and Science might appear to be a suitable department for this. After all, science is science and that is where it is supposed to be, although much of it seems to be in other departments. So some department independent of the DHSS and independent of the Department of Agriculture might well be the suitable one to deal with this subject in the future.

While that is an arguable proposition, I have been speaking for longer than I intended and so I will leave it there. I hope that the noble Lord, after his weary task of recent days, will not feel that the atmosphere has been made less congenial to him by my speech. I wish him well, notwithstanding.

My Lords, first of all I should like to pay tribute to the noble Earl, Lord Halsbury, and to my noble friend Lord Houghton. I believe they have done so much. Then, again, I must pay tribute to Lord Ashby as chairman of the Select Committee. May I say to my noble friend Lord Houghton that I think he is being a little pessimistic. I am glad he mentioned my old Ministry, agriculture. I was once involved in this argument, and I took the view that inevitably a departmental Ministry, like agriculture, with all the great veterinary services we have, is a shining example to the world, and they do not like cruelty to animals. It is as simple as that. However, I pay tribute to the work of all those who have helped in the passage of this Bill. I know that my noble friend has been at it a long time and I really pay him a sincere tribute; and the noble Earl, as well. They were sparring partners on different occasions, but I think that basically they are as one.

The Laboratory Animals Protection Bill is, I think, a Bill of great importance. No doubt there will be problems with regard to Strasbourg, but I hope they will not prevent this Bill passing into law. I think we should be pleased with the progress which has been made. I know it has involved a lot of work by many people and bodies who have shown concern over some years. The public has for much time been very concerned about conditions under which animals have been treated in laboratories. There has been a tremendous press on this over a period of time. Although we have new legislation, much depends on how the safeguards are used and on adequate inspection. I believe very strongly in the importance of inspection.

While welcoming the Bill, we say that this is not the end but the beginning of a period for further vigilance, to see how the Bill is operated to ensure the wellbeing of animals. In the last general election my own party sought more safeguards, and this Bill goes some way towards our goal. As my noble friend Lord Houghton says, there is need for international co-operation. We hope there will be speedy progress there, too. So I conclude, because I believe much has been said many times on this. The two noble Lords who have spoken today have done remarkably well. I think they have done a marvellous, positive job. Lovers of animals must be very proud of them—and I regard myself as a lover of animals, too.

My Lords, our previous discussions on this Bill, the last of which took place in Committee on 2nd April, have given us an opportunity to consider a number of the fundamental issues which arise in moving towards new legislation to control experiments on animals, and have definitely contributed to a wider understanding of the problems; and in this I certainly agree with the last words which were spoken by the noble Lord, Lord Peart. We are, therefore, indebted to the Select Committee for its work, and to its members, particularly to the noble Earl, Lord Halsbury, and the noble Lord, Lord Houghton, for the impetus that they have brought to the deliberations on the Bill—albeit, may I say, in the speeches which they have made in recent months, approaching the subject from perhaps rather different directions.

The first thing I must reiterate is that it remains the Government's intention to update the 1876 Act when parliamentary time permits; but we remain of the view that it would be preferable to await the outcome of the negotiations at Strasbourg on the Council of Europe convention. The noble Earl asked about the state of preparedness for the next meeting of the ad hoc committee. As I informed the House on 5th June in my reply to the noble Lord, Lord Houghton, the ad hoc committee of experts, under United Kingdom chairmanship, completed its consideration of the full text of the draft convention at its meeting last May. This included the articles concerning the circumstances in which procedures should be terminated because of the suffering to the animal involved; the circumstances in which an animal may be used more than once; the performance of procedures in the course of education and training, and the provision of statistical information.

Our delegation, however, formally reserved our position on the revised version of Article 8(3), otherwise supported by every other delegation, which would allow an animal to be subjected to severe and continuing pain where it was judged exceptionally necessary in the pursuit of human or animal health, or scientific problems. United Kingdom practice has not allowed such a waiver of the relevant safeguards, and we are at present considering very carefully the implications of accepting that article. We are also considering the implications of the article on which the West German delegation reserved its position. This would allow an animal which had already undergone severe or continuing pain to be subjected to a further procedure which would either dispense with anaesthesia or allow the animal to survive the procedure, or both.

Since the May meeting of the full ad hoc committee which is drafting the convention, two smaller working groups have made good progress on two important but detailed ancillary documents—the draft appendix on recommended standards of care and accommodation of animals covered by the convention (which, I think, the noble Earl asked me about) and the draft explanatory memorandum to the convention itself. It is hoped that this work will be completed at a meeting in November. It will then be possible for the full ad hoc committee, when it meets early in 1982, to have these two documents before it; and to consider also further views on the two key articles on which formal reservations have been made and which I have just mentioned. In addition, any delegations that wish to do so may make fresh observations on any other part of the draft convention.

The work of the committee at Strasbourg has therefore been proceeding according to plan. There are still the two key issues to be settled and some minor matters to be resolved. However, with the exception of these points, a draft exists which has commanded the support of most delegations, including our own. The noble Earl, Lord Halsbury, asked me about the possible effect of the change of chairmanship of the committee which will take place at the end of the year. I should like to make it clear that the United Kingdom, through the chair of the ad hoc committee, has pressed for progress and this, on the evidence of what I have said, has been achieved. It would be wrong to suppose that the chairman who will take over in 1982 will be any less assiduous.

The draft of the convention when it is finally agreed is not going to meet every point of view. Such an outcome is inconceivable. Nevertheless, it is a sincere attempt to strike the right balance in what would be the first international instrument in this field. In this connection, it must be borne in mind, as the noble Lord, Lord Peart, I think was bearing in mind in his speech, that a convention to which there are few, if any, signatories represents little, if no, progress at all. It is our intention to continue to give constructive support to the preparation of the convention as it stands drafted at present. I understand that the view is being expressed in some quarters that there should be a return by the committee at Strasbourg to a consideration of certain fundamental matters which were the subject of full deliberation there at the outset of the negotiations. I hope that my understanding will prove to be wrong. I believe such a course would give rise to serious difficulties. The noble Lord, Lord Houghton of Sowerby, mentioned the possibility of the convention being referred back to the Parliamentary Assembly. My understanding is that a reference back could be made only by the Committee of Ministers. Certainly, the Government have no reason to believe that the Committee of Ministers would agree to a reference back to the Parliamentary Assembly.

My Lords, in moving towards its aim to update present legislation, the Government also have the benefit of the views of the Home Secretary's advisory committee on the framework of legislation to replace the 1876 Act, which was mentioned by both the noble Earl and Lord Houghton. Their report was published early in September. It is an especially important and informed document to which we shall pay careful attention when drawing up proposals. Some 25 main recommendations have been made as a basis for a new Act. It is clear that these are the result of careful thought and are intended to take proper account of the requirements of science and industry, and of the protection of animals against avoidable suffering. While the Government consider that the report itself does not provide the definitive basis for the whole range of proposals which would be necessary for new controls, the recommendations of the committee will be most carefully studied and will be taken fully into account, although I am not able, in answer to the noble Earl's speech today, to announce conclusions which we have reached on the recommendations which have been made. However, in the expectation that the report will be of similar value to the negotiations at Strasbourg, the secretariat there has recently been asked to circulate the advisory committee's report to other delegations for their information.

My Lords, may I reply to a question which the noble Earl, Lord Halsbury, asked me. He asked whether there will be facilities for parliamentary debate before the convention is ratified, when it comes to be ratified.

My Lords, I did not ask a question. I reminded the noble Lord that he had undertaken in an earlier debate that there would be facilities.

My Lords, let me reply in any case in this way. I do not think there is anything between the noble Earl and me on this. The fact is that circumstances will dictate to the Government, to the noble Earl and to any other noble Lord interested in this, that there is bound to be debate because when the draft of the convention is agreed and the Committee of Ministers has decided to open the convention for signature and the United Kingdom have decided to sign it, it would not be possible for the United Kingdom to ratify it until we were satisfied that our legislation was in conformity with the convention's provisions. On the basis of our present expectations, ratification would require new legislation here and that would be bound to require debate in both Houses during the normal parliamentary process. Meanwhile, our debates on this Bill have been most valuable. The fact that the Bill cannot progress further in this Session does not detract from that value. The views expressed on all sides have been carefully noted by the Government and will be weighed carefully when we come to draw up our own proposals.

My Lords, may I say how important it is that the Government should act reasonably. The Government are really mainly responsible for these matters and I hope this will be taken into consideration. I know the noble Lord did well on this and I should like to pay him a tribute.

My Lords, I am grateful to the noble Lord and I take into account what the noble Lord has just said.

rose to ask Her Majesty's Government whether they will state their views on the EEC draft convention on bankruptcy and on the conclusions of the 26th Report of the European Communities Committee (H.L. 175).

My Lords, we on this side of the House should like to thank the noble and learned Lord, Lord Scarman, for having raised this Question this afternoon. We should also like to pay tribute to the conduct, under his chairmanship, of the Select Committee in dealing with this very complex subject. Of course, we entirely endorse the tribute that he has been kind enough to pay to Sir Charles Sopwith, which, in our opinion, is fully justified. We on this side of the House have said many times before that the reports that emerge from the Select Committee on the European Communities are of very high quality indeed. In fact, in my recollection over the last five or six years, I cannot remember one that has failed to receive the commendation of your Lordships and this is, indeed, no exception.

Of course, we do not yet know the reply which the noble and learned Lord, Lord Mackay, will give to the Question, and we can only speculate. I gather from the evidence given in the course of the proceedings before the Select Committee—and the noble and learned Lord, Lord Scarman, has been good enough to confirm it—that even if the convention is adopted it will apply to very few instances connected with the United Kingdom. That was the evidence given by Sir Kenneth Cork. One is, therefore, tempted to ask: If in the foreseeable future—and we have all noted the regrettable increase in the number of bankruptcies and liquidations in the United Kingdom over the past two or three years—it is not going to be of any great significance, should we support the convention at this stage?

In general, the noble and learned Lord seems to think that we should, but paragraph (15) of the report, about which he himself was good enough to inform the House, states:

"They"—

that is, the Select Committee—

"therefore recommend that, subject to the revisions which they have suggested above, work should proceed with a view to the Convention's adoption".

I am not quite sure what he means by "subject to the revisions".

I do not know what position the noble and learned Lord would be in if, for example, the Government declined—and we do not know their decision—to support the most important revisions which the Select Committee have suggested. Speaking for myself—and, obviously, I cannot speak for the noble and learned Lord—I should be tempted to say that, if the matters recommended for revision by the Select Committee were not adopted, then, on balance, I should be in favour of our not participating in the convention's adoption.

I assure your Lordships that this is not a matter of sheer cussedness. This subject raises very important questions. I shall not repeat what the noble and learned Lord has said concerning the whole question of receiverships, concerning the whole question of fiscal debts, concerning the position of husband and wife, concerning the provision of preferential debts and so on, but these are of vital importance. I wonder whether in their reply, the Government will insist, as part of their particiaption in the convention, that these matters are dealt with.

I do not want to put the Government in the position of being anti-communautaire, or of being accused of being non-European or non-EECean, whichever term may be used. But there has been a growing tendency over the past few years for the United Kingdom to be far more pliant in these matters than some of our colleagues in the Community. I want to give only one example, because it is fresh in my mind and may be fresh in your Lordships' minds.

Ever since 1975, there has been a Commission proposal for freedom to establish services throughout the EEC and, in particular, insurance other than life assurance. As I have already indicated to your Lordships, this has been filibustered in the European Parliament. I observe from the report in The Times two days ago that, in spite of the optimistic hopes prior to the Finance Ministers' meeting which was held recently in Brussels, once again there has been objection from France, Italy, Belgium and possibly one other member state. So this freedom to provide an important service in the EEC has been frustrated.

We do not seem to pay very much attention to this. We do not see any accusations in our own press that some of our colleagues are being non-communautaire or anti-communautaire over certain important matters because they decline to do certain things which were recommended a long time ago by the Commission. But the moment that we apparently do not agree with what the others want done, then a degree of opprobrium is usually put upon us. I think the time has come when that ought to come to a stop. I do hope, therefore, particularly in the light of the reservations to which the noble and learned Lord, Lord Scarman, has referred, that we shall insist upon these revisions, which are of very considerable significance indeed, as was pointed out by the Institute of Chartered Accountants in the evidence which they gave to the advisory committee under the chairmanship of Sir Kenneth Cork.

My second point is: even so, should there not be many more changes in our own laws relating to bankruptcy, receivership and so on before we embark on a convention of this kind? I do not hold any strong views about this, but there are professional views, in law and in accountancy, both ways. Some, like Sir Kenneth, are in favour of adopting the convention, subject of course to the revisions which have been made by the noble and learned Lord. Others say, "Ought we not to wait until the review of our own bankruptcy law is complete?" In this respect, I would fully support a further inquiry and further action regarding our own bankruptcy laws.

In particular, I should like to know, almost as a supplementary question to that raised by the noble and learned Lord, what action the Government propose to take on the interim report of the Insolvency Law Review Committee under the chairmanship of Sir Kenneth Cork which was presented to Parliament in July 1980 and which makes certain very important suggestions for the improvement of the whole of our pre-bankruptcy and bankruptcy proceedings. This committee was composed of some of the most distinguished accountants, academics and barristers that this country has. All we have had so far has been a consultative document which has the grace to mention the inquiry of Sir Kenneth Cork and to refer to the interim report but which then quite inexplicably ignores it completely.

We are agreed of course by now that at least the professional opinion, so far as this has been able to be ascertained, is that this consultative document on bankruptcy is a dead duck, anyway, devised by people, on the instructions of Ministers, who cannot have had the remotest concept of what they were talking about. I do therefore hope that we shall have some carefully considered observations from the Government on the interim report of the Insolvency Law Review Committee and in particular upon its very closely reasoned suggestions for the introduction of debt arrangement orders—DAOs—upon which no comment appears so far to have been made.

While agreeing with the conclusions of the noble and learned Lord, Lord Scarman, and paying tribute to all the work that he and his committee have done, standing as we do in his debt for the very clear observations he has made today, I feel that on the whole it would be far better to put our own house in order first, on an intelligible basis, and then to proceed to wider methods of integrating our procedures with those of other countries. May I even extend it further by asking this: why only the EEC? What is wrong with having a Council of Europe convention to deal with matters of this kind? Very excellent conventions are agreed at the Council of Europe. Wider pressures can be brought to bear on the various member states comprising the Council of Europe and also on those within the EEC itself, which might result in far wider and far more beneficial effects.

These remarks have been addressed to your Lordships in the absence of any knowledge of the noble and learned Lord's reply to the question asked by the noble and learned Lord, Lord Scarman. These observations therefore must be assessed as a preliminary reaction to what the noble and learned Lord might conceivably say. Therefore I must make the reservation that, if the noble and learned Lord decides to inform the noble and learned Lord, Lord Scarman, that the Government propose to follow precisely the recommendations of the Select Committee, we on this side might in those circumstances feel constrained to support him more wholeheartedly.

My Lords, first may I add a word of thanks to the noble and learned Lord, Lord Scarman, for asking this Unstarred Question. Secondly, may I thank the Select Committee of your Lordships' House, and Sir Charles Sopwith, for their report on this not only complex but perhaps rather arid subject.

I seek to raise briefly three topics. First, to me it appears to be plainly right that one should seek to ensure a single and universal bankruptcy, as the noble and learned Lord described it, so that one has co-ordinated administration of bankruptcy throughout the Community, thus avoiding conflict between the courts of two countries. Therefore I broadly support the fifteenth conclusion of the committee; namely, to recommend the convention to your Lordships' House.

I am somewhat surprised that everybody seems to think that there are so few cases where there will be assets in an English bankruptcy under a foreign jurisdiction. My experience, limited though it is, has always been that one gravely suspected that there were assets under a foreign jurisdiction, probably put there just for that reason, but one that did not know how to get at them. Even if today it is the case that it would not apply in many instances, none the less a single and universal bankruptcy must be desirable.

What I feel less certain about is whether the method of conferring jurisdiction upon one court and one court only is the right way to achieve that result. I seek to illustrate my doubts by two examples, the first premising to your Lordships that by no means everybody who is insolvent—or every company that is insolvent—is anxious to be made bankrupt, is willing to co-operate wholeheartedly with that process or has behaved in the past in such an upright and honest manner as gives him nothing to fear in that bankruptcy. There are many who are threatened with bankruptcy who will seek, however hopelessly, to stave off, or at least to postpone, the evil day, because what is of great importance in a bankruptcy is to remember that many substantive rights are controlled by the date upon which the bankruptcy commences. The question of whether you can overturn something as a fraudulent preference, the question of whether you can overturn settlements and so on, all depend upon the date on which the bankruptcy commences.

Let us first take an example of an insolvent who has a centre of administration in a country in the Community other than England, so that the courts of that country have exclusive jurisdiction over him. Now I have been dealing with that person, who trades in England—and I say "England" with respect to the noble and learned Lord, Lord Mackay of Clashfern, because of course in this country at the moment bankruptcy is not really a matter of the United Kingdom, but is done separately in each part of the United Kingdom. I have dealt with that man, thinking that he traded over here and not knowing of his various activities in the Community; not knowing that his centre of administration was in fact (or was probably) elsewhere. He has not paid me, so I try to make him bankrupt. At some late stage in those proceedings, after he has got several adjournments and perhaps after a receiving order has been made, he turns up and says, "But England is not my centre of administration, and therefore there is no jurisdiction in the courts of this country and everything that has gone before is a nullity". The receiving order may already have been made, but he says, "Well, you have no jurisdiction". Do I then fight him on that, perhaps expensively?—and I may well lose, because of course under this convention it is by no means certain where anybody's centre of administration is located. Even the fact that it is a company and that he has a registered office there is not conclusive. Alternatively, do I throw my hand in and say, "Well, you never told me that, but none the less now I believe you", and start afresh in another country, he having gained a postponement of the start of the bankruptcy by all the time that has been spent in between?

As another example, let us take an organisation which has no centre of administration within the Community but trades in several of the Community countries. Obviously—and perhaps more important in practice—local law in each of those countries will vary as to matters such as, for example, the liability of directors if the company has fraudulently preferred the bank so as to get them out of their guarantees. As the convention stands at the moment and as I understand it, it would be open to the directors of those countries to take advice from lawyers, decide on which country they would be most likely to get away scot-free and present their own petition in bankruptcy, or a winding-up petition in the country of their choice.

Those seem to me to be serious disadvantages—one can think of others—which flow from dealing with this matter by means of exclusive jurisdiction. I venture to suggest that perhaps a better way of doing it is this. To allow, as at present, any country which has, by its own law, jurisdiction over a man or a company, to render him insolvent, to make the appropriate order, whether it be a winding-up or a receiving order, unless of course, there is in existence and known to him an existing order in another country—and then to make administrative arrangements by which the bankruptcy could be transferred, either to the country of his centre of administration, or the most appropriate country, so that it was not left to the petitioning creditor to try to find the right country to bring it in and the proceedings were not rendered a nullity if one got that wrong. The man remained a bankrupt, the bankruptcy was, by an appropriate means, transferred to the central country. I do not believe that it would be beyond the wit of man to amend the convention to achieve that result.

The second topic I wish to raise is the matter that is always being adverted to; namely, that this convention only deals with procedure and not with substantive law and inevitably, of course, the two always overlap. Thus, we get the point made by Sir Kenneth Cork; that is, it does not deal with receivership. We also get this extraordinarily difficult position of dealing with the fact that in different countries, different debts are preferential and take precedence.

What surely is needed in these matters is a common substantive law. After all, the purpose, for example, of preferential debts is that it is thought that some things must come first—the wages of employees and so on—and it should not be beyond the wit of the Community to agree as to what ranks as preferential. Therefore, I would urge the Government, if they are taking steps towards ratifying this convention, hopefully—if I may use that dreadful word—amended in the way suggested by the Select Committee, that they also press upon the other members of the Community that it should be only a first step towards amendment and consolidation of the substantive law.

I then come to my third topic, which perhaps does not arise directly out of this report; but if there is to be an amendment of the substantive law, there is, I suggest, one very important point to be taken into account. At present in this country, by means of the floating charge, or the fact that banks always take securities, it is almost invariably the case that when a company or a man becomes insolvent, subject to a few preferential debts, all his assets go to the bank which has financed his operations, leaving little or nothing to the general body of creditors, because the bank has its debenture or its security. To me—and I think to many others—that has never seemed to be either fair or right. The ordinary trader deals with a company or with a man who seems totally solvent, and in practice—whatever the technical law may say—that trader will have no means of knowing whether the man is solvent or the current state of his business. The only reason that he appears solvent is because he has had the support of the bank. The bank has its way of knowing the true position, and indeed of controlling the question of whether he continues trading and, if so, in what manner. Therefore, one asks the rhetorical question: Why should the bank, which has had all those advantages and is in the controlling position and has, by providing funds, enabled him to appear to be a solvent and reputable company or person, get all the assets and the supplier who has given credit not do so?

Of course, that is a big question, and not one that I would expect the Government to answer one way or another today, but one which I urge upon the Government ought to be considered in connection with the reform of the substantive law. On that issue, I venture to differ from the noble Lord, Lord Bruce of Donington. It seems to me that it would be elaborate in the extreme to seek to reform our own substantive law and then go off to the Community and say, "Now let us consolidate it", because they might want to go off in the exact opposite way to which we had gone. But I say that if we are going to have a common law of administration we also need to have a common law of substance on insolvency, and, if we are going to do that, we need to get our own ideas clear as to what the law should be and that may merit some investigation. I would ask the Government if they could consider whether or not that is something on which they should take the first step.

My Lords, I should like to begin by conveying most cordial thanks on behalf of Her Majesty's Government to the noble and learned Lord, Lord Scarman, who in the midst of a great variety of other burdens has come today to present this report to the House, and of course for the work which he did himself in connection with its preparation. I should also like to thank most cordially all those Members of your Lordships' House who took part in the deliberations of the committee and all those who assisted in the way that the noble and learned Lord, Lord Scarman, described. It is right that I should also especially endorse what the noble and learned Lord had to say about Sir Charles Sopwith, who in the course of a long and very distinguished career in the public service has put us all in his debt to an extent which it is really quite impossible to quantify. I should also like to thank your Lordships who have taken part in this debate today. The comments which your Lordships have made will certainly be taken into account in some of what I am going to say and, perhaps more important, in what is to follow from that.

Before the United Kingdom joined the Community in 1973 the six original members had already decided that the complexities of bankruptcy (in the broadest sense) would unduly delay the ratification of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial matters—commonly known as the Judgments Convention and had set up a separate working party. The working party in 1970 produced the first draft bankruptcy convention which is intended to supplement the Judgments Convention.

My Lords, even if it were the case that only a few cases in practice would in the foreseeable future be covered by the convention—and the noble Viscount, Lord Bledisloe, has suggested the contrary—this convention is important as part of the structural framework which is required for the enforcement of obligations throughout the Community, and that is a very important aspect of the Community itself.

In July 1973 the then Government appointed an advisory committee under the chairmanship of Sir Kenneth Cork, who, as we have heard, gave evidence before your Lordships' committee, to consider the terms of the draft convention and to recommend such modifications as they considered necessary. After wide consultation and long deliberation, the advisory committee reported in August 1976. In the meantime, the original working party produced another draft in 1975.

I should like to take this opportunity to thank the members of the advisory committee for their hard work and for the excellence of their report. The United Kingdom members on the committee of experts sought amendments recommended in the advisory committee's report, and the present text, as the noble and learned Lord has said, owes very much to their work. One member of the advisory committee, Professor Anton of the Scottish Law Commission, produced a very helpful note of reservation which carried the analysis further and considered that the convention, as it was then drafted, contained fundamental weaknesses which would, if implemented, impose barriers to the future reforms of bankruptcy systems. Negotiations between the existing members had by that time, however, reached such an advanced stage that it was felt that the better course would be to continue with them at working party level. In the event these negotiations brought out some of the problems which Professor Anton had highlighted, particularly in respect of preferential claims and sub-estates, to which I shall return.

Although attempts were made to harmonise the insolvency laws throughout the Community, it was realised that this would be a lengthy task, and instead the working party decided to prepare a convention that would make bankruptcies within the Community more effective by providing the means whereby potential conflicts between the laws and the courts of contracting states should be resolved.

As the noble and learned Lord has said, the convention covers all bankruptcy proceedings against natural persons and company winding-up proceedings, and it also covers analogous proceedings. In the United Kingdom it would cover all insolvency proceedings pronounced by the courts, and will include creditors' voluntary winding-up of companies even though no court is involved, but not members' voluntary winding-up or receiverships. Direct insurance companies are specifically excluded at present from the scope of the convention pending agreement on a draft directive on the winding-up of direct insurance undertakings.

The convention has attempted to achieve its objectives by providing that there will generally be only one bankruptcy against a particular debtor throughout the Community at any one time and that jurisdiction in each case will be channelled to the courts of the contracting state which opened the bankruptcy. That, of course, would not prevent another bankruptcy being opened against an individual who got into difficulties a second time.

The convention gives the liquidator—or trustee—virtually exclusive authority to administer the bankruptcy wherever assets are situated in the Community. In order to assist the liquidator to administer the estate the convention has attempted to harmonise the effect of the bankruptcy on the debtor and third parties by providing that the liquidator will be governed by the bankruptcy code of the state in which the bankruptcy is opened.

So far as creditors are concerned, the convention provides an easier and less expensive way for them to present their claims in a foreign bankruptcy. So far as secured and preferential creditors are concerned, as we have already heard the convention has attempted to give equal treatment to each class of creditor under a set of rules which are undoubtedly complex and are a compromise solution agreed to so far in order to allow the matter to proceed.

The Government's position on the convention is broadly in accord with the views of the Select Committee of your Lordships' House. We consider it is desirable that the gap in the recognition and enforcement of bankruptcy judgments left by the Judgments Convention should be filled, and in principle the draft bankruptcy convention forms the basis of an acceptable solution. We must ensure, however, that in attempting to make the administration of Community bankruptcies easier we do not create a minefield of complex legislation.

There are areas where we still have reservations which will have to be resolved before the final draft is available for signature. I will not attempt to deal in detail with these reservations, but it may be helpful if at this stage I deal with the committee's conclusions broadly.

One aspect which has not been fully resolved is the relationship between the convention and the remainder of private international law. Some of the problems in this field, the Government believe, can be dealt with by redrafting, but there are several areas which are very fundamental. For example, the convention sets out rules for matters of procedure and for the effects of the bankruptcy, bit it gives no guidance on matters of status or substantive law, even though in some of its provisions it assumes that guidance has been given.

Much attention has been focused in the debate on the proposals for the payment of preferential debts, not only fiscal but also ordinary civil and commercial debts. Certainly, so far as the fiscal and quasi-fiscal authorities are concerned, the convention allows them far greater rights to recover their debts than are at present applicable in the United Kingdom. It is difficult to see the justification for the extent of this partiality when the concept of allowing revenue debts out of the assets situated in a state other than its own is contrary to our private international law rules.

It must be recognised, however, that by requiring the surplus assets to be transferred from the sub-estates to the state where the bankruptcy has been opened the convention has introduced the idea of a pool of assets into a multi-state bankruptcy, which is a concept at present unknown and is the reason why competing interests race to be first to realise assets. Before we reject the convention's proposals on this matter we must be satisfied that the United Kingdom is not thereby placed at a disadvantage.

The convention's propoasls so far as civil and commercial preferential debts are concerned appear to be over-generous in that they allow certain creditors, notably employees, to claim preferentially against the assets in any contracting state, even though they have no connection either physically or contractually with that state. The alternative system suggested by the advisory committee, which restricts these preferential claims to their own state or the state where the bankruptcy is opened, was proposed by the United Kingdom representatives, but so far has not been accepted by the other delegates.

In the absence of harmonisation, as Professor Anton in the note to which I referred pointed out, there is unfortunately no simple system which can deal with the problems caused by the continental method of dealing with preferential debts. Each state has an order of preference for debts, whether they are what we consider normal preferential debts, such as wages, rates, taxes et cetera, or the costs and expenses of the bankruptcy which we pay in a set order of priority in advance of preferential debts. The position is made even more complicated because the order of priority, and the amount allowed preferentially is different in some contracting states. Your Lordships will see that the system proposed by the advisory committee and recommended by the Select Committee will require extensive modification—even possibly a sub-estate system—to deal with the differences and to ensure that each state pays its correct share of the preferential debts. Therefore, your Lordships will see that the Government very much share the point of view which the noble and learned Lord, Lord Scarman, drew particularly to our attention in his first point.

There is another matter, not arising directly out of the report of your Lordships' committee, which I should like to mention at this stage. The Law Commission have drawn attention to the fact that the convention does not cater adequately for variations between the currencies of the contracting states and will create problems so far as the scheme of sub-estates is concerned. It may well be that one basic monetary unit will have to be employed to ensure equality of treatment for creditors and to offset the subsequent effect of exchange fluctuations. This seems to us a very important point and we are greatly indebted to the Law Commission for their work in this area.

The second point that the noble and learned Lord, Lord Scarman, raised, was in connection with spouses. The concern which he expressed about the repercussions a bankruptcy has on the bankrupt's spouse is one shared by Her Majesty's Government, which is why the convention expressly provides that if the law of the state in which the bankruptcy has been opened presumes that the property of the spouse has been acquired with the funds of the bankrupt, that presumption shall not apply to property situated in contracting states whose law does not include such a presumption. Article I of Uniform Law goes further and provides that all modes of proof shall be admissible to refute a presumption that the property has been acquired by the funds of the bankrupt.

If, instead of the bankruptcy law, the law of the matrimonial régime is followed, this will enable spouses to know what effect a subsequent bankruptcy will have on the transaction, but it may create problems for a liquidator when the bankrupt and spouse have lived in different states during their marriage. That was also a point to which the committee drew attention. It could be argued that before deciding to move his centre of administration to another state a person will take into account the possible effect of such a move on antecedent transactions. Recent developments in family law may present further difficulties in forthcoming negotiations.

The floating charge matter is one which the Government certainly have very much in mind. The emphasis that Sir Kenneth Cork would like to see on rehabilitation is, in our view, a very important matter, and it is very intimately connected with the problem of preferential debts and is, therefore, a matter which will certainly be kept much in mind.

As regards the matters raised by the noble Viscount, Lord Bledisloe, I certainly believe that the difficulties which he mentioned in connection with the date of the effective bankruptcy are very important questions. I suspect that some help might be obtained from the terms of Article 13, but certainly what he has said today will be kept very much in mind in the negotiations which follow.

I have endeavoured to summarise the principal matters on which we feel reservations about the present draft. There are less important areas of reservation: for instance, whether the duties placed on the liquidator to advertise so extensively are too onerous, or whether the rules to prevent the conflict of recognition of duplicate bankruptcies are impractical, but none of them is considered sufficiently important to make the convention unworkable.

There is one other matter that I should like to mention; it is one as regards which we agree strongly with the committee. It is that the question of the validity of clauses of reservation of title—the so-called Romalpa clauses—should not he dealt with in the bankruptcy convention, but should be dealt with in a comprehensive directive which would deal with the law relating to these matters, not only in connection with bankruptcy but generally. Some work has already been done in this connection.

I hope that your Lordships will not feel that, in attempting to summarise, the Government will not take into account all the observations that have been made on this particular draft. Adoption of a convention of this kind would, as Professor Anton has pointed out, inevitably restrict our freedom to change our substantive bankruptcy law. Your Lordships will be aware that the Scottish Law Commission has carried out a very detailed review of the Scottish bankruptcy law and their work on that, I think, is completed. The Insolvency Law Review Committee, under Sir Kenneth Cork, is doing the same for the law of England, and the Government have made clear that further work on the Government's view of this matter is deferred pending the report coming from Sir Kenneth Cork. Similar work in revision of their own bankruptcy law is, we understand, going on in Germany and some other states. In the course of negotiations on this directive we shall, of course, bear this factor—the effect of the directive on our own law and the changes required—very much in mind.

This convention as it stands is not intended to harmonise bankruptcy law but would appear to require a number of changes in the existing law of the United Kingdom. Rules equivalent to the convention will have to be applied for the three jurisdictions within the United Kingdom. The United Kingdom will no longer have jurisdiction to declare a person bankrupt if his centre of administration is in another contracting state and the laws of that state allow him to be declared bankrupt. The courts will be unable to wind up a foreign company if its centre of administration, pre- sumed to be its registered office, is situated in another contracting state.

We shall need provisions to recognise bankruptcies opened in other contracting states and to enable their liquidators to operate throughout the United Kingdom under the terms of their own bankruptcy law. The concept of acts of bankruptcy will have to be altered and the Insolvency Law Review Committee have already proposed in their interim report that acts of bankruptcy should be abolished and in future the basic grounds for a creditor's petition should be the non-payment of a debt. It will be necessary to amend partnership law because a partnership in England and Wales, unlike a Scottish partnership, is not a legal entity and its partners cannot under the convention be made bankrupt automatically.

The draft convention in Article 82 contemplates that new member states would be able to sign the convention although it does not envisage that non-member states would sign it. However, as the noble and learned Lord, Lord Scarman, has pointed out, this initiative may well be of importance in a much wider field than the Community. Indeed, the Council of Europe—if I may revert to a matter raised by the noble Lord, Lord Bruce of Donington—is, I understand, considering this matter. Obviously the more co-operation that one can have internationally in this field the less chance there is of the kind of difficulty to which the noble Viscount, Lord Bledisloe, referred of assets disappearing into some distant land where creditors cannot get at them.

I should like to sum up the position. I would respectfully suggest that this has been an extremely timely debate as the Government have been asked to lodge their observations on the draft convention by 15th November. During the forthcoming negotiations in the Council working group the Government will take full account of the views expressed by your Lordships today as well as those expressed by the committee in their report, for all of which, as I say, we are extremely grateful. I hope that the result of these negotiations will be that a satisfactory convention will emerge and, therefore, it is not necessary today to face the question of what would happen if that was not possible.

Finally, the noble Lord, Lord Bruce of Donington, referred to difficulties, for example, in relation to the insurance directive. I think I can assure him that this Government are very conscious of the need to press United Kingdom interests in the Community, and have done so with great vigour since taking office. Perhaps the most outstanding example is that of my right honourable friend the Prime Minister in her successful efforts in the budget matter.

rose to ask Her Majesty's Government whether in the interests of democracy they will take action to stop the distribution of literature to the public, to schools and to colleges where such literature is extremist, a threat to authority and an invitation to public disorder.

My Lords, I must make clear first of all that from these Benches we share concern at extremist activities in all aspects of our industrial, political and social life. Having said that, there are a few issues which arise from the actual words of the Question tabled by the noble Lord, Lord Gridley. First of all, what is extremism? What is a threat to authority? And how in a democracy are we going to deal with these matters?

We must not confuse this with the expression of views with which we may disagree, we may even dislike, or may even abhor. Our democracy allows persons to question the existing establishment. May I say in passing that there are plenty of bodies which can, and do, defend aspects of the existing establishment. But it is not an offence against our democracy to question aspects of the establishment. There must be a free interplay of ideas, and what is challenging today is often accepted tomorrow. There are living examples in your Lordships' House of persons whose views were regarded with abhorrence some years ago but who are now respected Members of this noble House.

I think there will be general agreement among your Lordships that, whatever else we do, we must not interfere with questions of academic freedom. That does not mean that we permit licence. Academic freedom is essential in a democratic society. Also the number of pressure and interest groups on all issues in this country runs into many hundreds. These also are part of our democratic process. Your Lordships know only too well what some of the work of the pressure groups and interest groups can do, and be very helpful in our deliberations.

I and my colleagues are concerned with extremism, but I must say both from the right as well as from the left. Reference has been made to one particular organisation. I would say to the noble Lord, Lord Gridley, there are others on the left which he might have mentioned, as well. There are also a large number of organisations on the right, to which he has made no reference. The National Front, split into four groups, a short while ago; the British Movement; the League of St. George. I could go on and give another list, and I shall refer to one or two of their activities later on. I recognise that schools have increasingly become targets for extremist activity and recruitment. I recognise some of the agitation to which the noble Lord, Lord Gridley, has referred. I recognise the incitement there is in some cases to disrupt classes. But he has not referred to the National Front.

My Lords, might I just intervene? I have so many documents here and I could have referred to all of those things, but the debate would have gone on too long and I gave just a few examples.

My Lords, I wish to refer to the National Front because this body frequently distributes scurrilous racist literature at schools, and also endeavours to get at the youth at football grounds. It is to the credit of the football clubs that they took action to resist this, and I think credit should be given to the football clubs. The British Movement, one of the four bodies which has grown up from the National Front break up, has also been stepping up activities and recruiting at schools, and also endeavouring to do the same among football crowds.

The noble Lord referred to a Question that he put down earlier in the year. Another Question on a similar theme was put down on 8th April by the noble Baroness, Lady Elliot of Harwood. The noble Baroness, Lady Young, on behalf of the Government, in reply said something somewhat on the same lines as the comment made in reply to Lord Gridley's Question. The noble Baroness said at column 529 of the Official Report:

"… local education authorities and head teachers are aware that it is an offence to publish or distribute written matter which is threatening, abusive, insulting or likely to stir up hatred against any racial group in Great Britain. Where a teacher or local education authority has reason to believe that the material offends against that provision, they should report the matter to the police."

With that observation on behalf of the Government, and the previous observations to which the noble Lord, Lord Gridley, referred, we on these Benches would completely concur. I shall be very surprised if the noble Lord, Lord Belstead, does not echo similar views when he replies to this debate.

The law must, of course, be applied where appropriate and necessary, but what we must be careful not to do is to make martyrs or to give publicity to really insignificant groups, and we can do that if we are not careful. We must be vigilant, but there must also be the exercise of some tolerance, with the full right of persons to put forward minority views and opinions so long as they do not transgress the law in the points mentioned by the noble Baroness in her reply.

As I think noble Lords will appreciate, I have been concerned with aspects of certain activities. Some of us have kept ourselves informed of the activities of all extremist bodies, both right and left. But what I have never sought to do is to prevent persons with whose views I disagree from putting those views, so long as they act within the law, and so long as they do it through their own organisations and not through someone else's.

We must be extremely careful not to act contrary to the democracy which we seek to protect and to nurture. A democratic society and democratic institutions, we all know, are prone to extremist exploitation because of their very nature that they are democratic. But too many of us are quiescent and apathetic, and as individuals with all our various organisations, whether they be political, social, trade union, all types of bodies and societies, we should expose extremist activities and utterances whilst at the same time encouraging the fullest expression of diverging views and opinions so long as they are within the law. In whatever groups with which we are associated, the majority must get off their seats and sec to it that the majority control. In too many cases the majority leave matters to the minority, and that is why we face some of the problems we do from extremist bodies.

What we must not do is to stop the proper and legitimate distribution of political literature which is within the law, even at schools. I joined a youth organisation of a political party when I was 15, and of course people stay on at ordinary schools now until 16 or more. We must do nothing to prevent the distribution of proper literature, so long as it is within the law, and let us remember that there are many young people who want to know the answers to problems when they appreciate that they may be leaving school and facing a year or two or more of unemployment. Therefore, proper and legitimate literature must not be interfered with.

The democratic process and the discussion of politics should be encouraged throughout the education system, and in this connection I would refer to an agreement to which I was a party, along with John Pardoe from the Liberal Party, John Selwyn Gummer from the Conservative Party and Dr. Bernard Crick of the Hansard Society, a few years ago and a document drawn up saying exactly how political education should be encouraged in our schools. I should like to see the Government take that on board again because we do not want to stop legitimate discussion; we want to see that it is encouraged in the correct and proper way, which is what that joint statement at that time endeavoured to do.

My Lords, I am wondering whether the noble Lord, Lord Gridley, for whom I have considerable respect, is frightening himself into fits about what he calls "this problem" and is suffering from a very large dose of paranoia.

My Lords, I am sorry that the noble Baroness thinks I am suffering from paranoia. I thought I had made a balanced speech about the flammatory stuff which is being distributed in schools but which has nothing to do with legitimate politics. That is the first point I wish to emphasise. We face an awful danger. I have been chairman of the board of governors of a school and I have seen what has been happening. I value the future of our country and I have no objection whatever to anybody sending any pamphlets to schools if the material is constructive, but I suggest to the noble Baroness that part of the trouble from which her party is suffering just now is due to the work done by the people I described, who have penetrated deep into our society, into our schools and elsewhere, so that what is threatened is parliamentary democracy and the future of our country.

My Lords, my noble friend Lord Gridley, with his customary clarity and thoughtfulness, has asked a Question of major importance. However, I suggest we must be very careful in these times of racial and other kinds of troubles, not only in this country but internationally, to measure our words very carefully.

I have a daughter who has taught for three years in a comprehensive school in a fairly poor part of Nottingham where, so far as I am aware, there have been no major problems of the kind we are discussing. It is my belief that in the majority of schools there are not problems of this magnitude. I am not suggesting there are no problems; there are, of truancy, race relations, rudeness and general indiscipline. I suggest too—because we really must face the facts—that this is not confined entirely to the state schools. It is an unpleasant fact that in some of the independent schools today standards of discipline and behaviour are in some cases seriously breaking down, so we must get the problem into perspective.

Some noble Lords may have seen the programme on television last night about the social services in Nottingham. I thought it was very interesting because it instanced in particular a girl aged eight who has been put in care, by a very human and sensible social worker, into a family who will, hopefully, mend some of the damage caused to her through a broken home. One hopes too that the girl's proper parents, so to speak, will in time mend their differences and the girl will be returned to them, though according to the contents of the programme, at present that seems unlikely. I mention that because it is just that sort of child, one who appears to be good-natured and intelligent, who presents a case of someone who, if wrongly handled, could become involved in just the kind of problems which my noble friend mentions in his Question; in an indirect manner perhaps, but it is just the kind of problem we face.

I agreed with a great deal of what the noble Lord, Lord Underhill, said on the subject, which is not primarily a party political matter. We all abhor extremism, whether it is the National Front, one of the most evil of all organisations, the Socialist Workers Party, or any party which is trying to exacerbate race relations for unreasonable purposes. We all have views about race relations and we differ not only across parties but to a certain extent within parties, but that is not primarily the subject of the Question now before the House, though it is obviously very germane to it.

I have only a matter of minutes ago given my noble friend notice of a question I wish to ask. Will he pay heed to Section 70 of the Race Relations Act 1976, which lays down penalties for incitement to racial hatred? I hope—my noble friend will no doubt be able to confirm this—that covers the racial hatred which is inherent in the more extreme pamphlets to which my noble friend Lord Gridley referred. I refer, of course, to the evil outpourings not only of some of the extreme Left, but also, as the noble Lord, Lord Underhill, fairly and properly pointed out, of the extreme Right—the National Front, who have probably done more damage than almost any other organisation in this country.

I have been to some of the third world countries, some of the old Commonwealth countries and some of the new ones, Jamaica for example, and I believe the majority of Jamaicans in this country are law-abiding citizens. However, there is—we must face this—a minority who are troublemakers, and it is only right, whether in Brixton or elsewhere, that the police, if those people are convicted of extremely serious offences, should lay down the hardest arm of the law. But of course that must be done, and seen to be done, in all sections of society.

Where Section 70 of the Race Relations Act and any other Acts of Parliament are contravened the remedy very often lies in the hands of the magistrates' courts; and I declare an interest here because my wife is a magistrate, though not in the area where these troubles are of great significance. But one knows that they take place in many parts of the country.

I should like very briefly to instance one town, Southall. I do not want to sift over old ashes of the very tragic recent occurrences in Southall, but I have been to Southall a number of times. It is a town where the ethnic (if that is the right word) community have settled over a number of years and have caused very little trouble—far less trouble than in some other areas where in some cases they have been the instigators of trouble. We must face that fact. But in Southall the recent disturbances have been proved beyond any doubt very much to have been formented by the National Front, and I think that this is the kind of point that we ought to have in mind.

I entirely agree with my noble friend that children are very vulnerable. It is essential that they are protected as much as possible from extremism. But even if they do not obtain some of this surreptitious literature at schools, they are able to obtain it from other sources. It can be brought by a big brother from college, or they can obtain it from some other source, and I believe that the real problem underlying this question is how the law is to be seen to act.

It might well be that Parliament will have to look into this question very much more carefully. If necessary, there might have to be some strengthening of the Race Relations Act 1976, in particular Section 70. But we really come into problems of free speech and freedom of action and distribution. In this country we have laid down laws of libel and slander, and it is to be hoped that where there is evidence of literature of a libellous nature being hawked around (for want of a better expression) the law will come down in a very hard manner on those responsible.

Finally, I consider that this Question has been a most necessary one to ask. This is an important subject and one to which the Government must constantly apply their minds. In election campaigns we are now seeing all kinds of fringe political parties, some of them quite harmless, others with distinct racial connotations. Of course anybody should be free to stand. We are not living in Romania or Czechoslovakia—both countries which I have visited—and we must be extremely careful here to tread the very thin tightrope involving free speech, even if the free speech is not of quite the same quality as some of your Lordships will recall from the famous television programme of yore when the noble Lord, Lord Boothby, Mr. Michael Foot, and others took part in controversial, but always practical and helpful, discussions. Today, we are in danger of getting things out of proportion, but in this connection I should like to repeat my plea to my noble friend to study Section 70 of the Race Relations Act to see whether it needs to be looked at further, and, if necessary, tightened up, not from only one aspect, but from every aspect.

My Lords, the Question that my noble friend Lord Gridley has asked this evening has given those of your Lordships who have spoken in this short debate the opportunity to raise matters of the utmost seriousness. Everyone who wishes to maintain and promote the values and freedoms of our democratic society must view with distaste and concern the efforts of anyone who seeks to undermine our values, not least among the young people of this country.

First, there are two important and related general considerations which I should like to emphasise. The first of these follows from the fact that we have in this country a traditional freedom for people publicly to express themselves, however wrongheaded or ob ectionable any of us may find what they say, provided that in doing so they do not break the law. I note that in his Question my noble friend asks that any action which is taken should be in the interests of democracy. I am sure that he will agree that, in responding to words and actions which cause concern, in some cases deep concern, we must be careful not to be led, perhaps inadvertently, into encroaching upon democratic freedoms in our attempts to defend them. Of course, that is not to say that we should let extreme and divisive opinions and propaganda pass without comment; and nor do we. The Government condemn the activities and views of extremist organisations.

But the need to preserve the freedoms of our society brings me to the second consideration that I have in mind. It is that the power to take action which may bring the criminal law to bear on people because of their words or deeds, and the responsibility for taking that action, must rest solely with the law enforcement authorities. It is for the police, in consultation as necessary with the Director of Public Prosecutions, to decide whether or not charges should be brought in any particular cases and, if they are, what the charges ought to be. It is then for the courts to determine whether an offence has been committed and, if it has, to impose the appropriate penalty, within the limits laid down by Parliament.

The nature of the criminal law in relation to the distribution of offensive literature depends really upon the circumstances of distribution. The provisions which are most likely to be in point are Sections 5 and 5A of the Public Order Act 1936. As your Lordships may recall, the Government are currently reviewing that Act and related legislation, on which my right honourable friends the Home Secretary and the Secretary of State for Scotland published a Green Paper in April last year. But particularly in the context of the Question of my noble friend Lord Gridley this evening it is worth recalling that in the Green Paper the Government saw every reason for retaining Section 5 of the 1936 Act. As amended, Section 5 provides that any person who in a public place, or at any public meeting, uses words or behaviour, or distributes or displays material, which is threatening, abusive or insulting with intent to cause a breach of the peace, or whereby a breach of the peace is likely to be occasioned, is guilty of an offence. The offence, which carries a power of arrest without warrant, attracts maximum penalties of 6 months' imprisonment or a fine of £1,000, or both, and is, I am sure, firmly enforced by the police.

The other provision to which I have just referred, Section 5A of the 1936 Act, is a reflection of Parliament's concern about the problem of racialism. This is the provision about which my noble friend Lord Auckland spoke. My noble friend referred to it, quite rightly, by reference to the Race Relations Act 1976, which indeed inserted this section back into the 1936 Act. My Lords, racialism, with its divisive effect on society and its serious, and often insidious, implications for the maintenance of public order, is a danger which particularly threatens a democracy. Literature which incites racial hatred has accordingly been thought by Parliament to warrant the specific statutory control of Section 5A.

Under that section, which also applies to spoken words, it is an offence to publish or distribute written matter which is threatening, abusive or insulting and likely, in all the circumstances, to stir up hatred against any racial group in Great Britain. Although I feel that many of your Lordships know these two sections far better than I do, may I emphasise, since it is a point which is sometimes misunderstood, that this offence applies equally to literature which incites hatred against white people as to literature which incites hatred against any of our ethnic minorities.

It is sometimes suggested that this provision, Section 5A, is a major infringement of freedom of expression. But the object of the provision is to catch only literature which is so extreme that it carries with it the seeds of racial violence, which is a stringent test. There is a further safeguard in that a prosecution cannot be brought under Section 5A unless it is with the consent of the Attorney General. On the other hand, it is also sometimes suggested that the offence is drawn too narrowly, and permits the circulation of seriously damaging racialist literature. I think, if I may say so, that my noble friend Lord Auckland was absolutely right to say that Parliament may well need to consider whether the balance is right here; and may I reply to my noble friend this evening simply by saying that in the course of our review of public order legislation proponents of both points of view have had full opportunity to put their arguments to the Government.

The Question asked by my noble friend Lord Gridley, about the distribution of literature in educational institutions, is, of course, a matter which is subject to the general law. My noble friend, in his speech, gave examples of some highly-offensive and inflammatory material; and I agree with my noble friend that it would be wrong to underestimate the extent of the distribution of such material, on both the extreme Left and the extreme Right, or the influence which the material may have, particularly if it is associated with other manifestations of extremism and intolerance. But, of course, I think it is also important, as the noble Lord, Lord Underhill, put to us, not to over-react and to run the risk of thereby giving a false importance to events which could properly be consigned to oblivion, those responsible for them so receiving the very publicity that they are constantly seeking.

My noble friend mentioned the distribution of Soviet literature. I trust that the teaching profession sees through the propaganda content of Soviet and Eastern bloc literature. But I must emphasise that it is the responsibility of local education authorities, and of schools, to deal with political and extremist activities on school premises. Internally, if a pupil distributes extremist literature or engages in political activities on school premises, it is open to the headteacher to confiscate the literature or prohibit the activity. As to the criminal law, I am sure that local education authorities and headteachers are well aware of the offence of incitement to racial hatred, and where there is reason to believe that material falls within the provision I should like to make it clear that it should be reported to the police. The noble Lord, Lord Underhill, said he knew I was going to say that, and I have.

Similarly, if the behaviour of people outside a school is causing, or seems likely to cause, a breach of the peace, it is open to the headteacher to seek the assistance of the police. I know that chief officers of police are very happy to provide advice, both on particular problems and generally in these areas, to those responsible for our educational institutions. I also understand that in recent years local education authorities and major teacher organisations have issued advice to schools on ways to deal with the distribution of extremist leaflets within or immediately outside school premises. I think it is vital to recognise and acknowledge the importance of professional judgment among teacher and local authority representatives, and that the overwhelming majority of them exercise their professional judgment wisely in these matters.

But, my Lords, the problems that there are with the distribution of extremist literature in schools should not, I think, be seen totally in isolation from other attempts to create disaffection and violence. I think my noble friend was quite right to make the point that, although he decided some months ago to have this debate, it was before the major disturbances during the summer.

In a speech on the civil disturbances made in another place on 16th July, my right honourable friend the Home Secretary made clear that the Government have a responsibility to promote the conditions in which violence should not flourish but should be rejected. This responsibility is simple to state but is complex to carry out, as many of your Lordships would be the first to tell me. We have, I admit quite openly, in particular to take account of the fact that it can be most difficult of achievement with young people, particlarly those suffering from disadvantages in inner city areas, including serious and extended unemployment. There is there a reservoir of frustration which some would attempt to tap for their own, sometimes violent, ends.

Within the Government, responsibility for some of the measures which may be taken to minimise that frustration and to try to overcome at any rate some of the problems of urban decay and deprivation rests, of course, with a number of my right honourable friends. Your Lordships will be aware, for example, of the continuing action which my right honourable friend the Secretary of State for the Environment is taking with regard to Merseyside. In addition, authorities and agencies apart from central Government, not least the local authorities and voluntary organisations, have a vital part to play in this respect.

But on the broad front of the responsibilities of my right honourable friend the Home Secretary, if I might end by referring to my right honourable friend's own department, there is, as I have said, this review of public order legislation going on at the present time. My right honourable friend will report the Government's conclusions on this review to Parliament in due course, set in the overall perspective of what new measures generally may be required the better to maintain order and deal with disorder. As your Lordships may imagine, this review has in part extended to the problems of extremist racialist activity, including the distribution of racialist literature.

Your Lordships probably will also be aware that in February this year my right honourable friend the Home Secretary announced the institution of a study, to be conducted by Home Office officials, of the incidence of racial attacks and the activities of racialist organisations alleged to be responsible for attacks. One area included in the study is alleged recruitment and racialist activities by extremist groups in schools and other educational establishments. The work on this study is now well advanced, and my right honourable friend will report the findings to Parliament as soon as possible.

Added to those two studies, there is, of course, the report of the noble and learned Lord, Lord Scarman, of his inquiry into the disorders in Brixton in April this year, with special reference to the problem of policing areas where the community is multiracial. I understand that the noble and learned Lord hopes to present his report soon to my right honourable friend. It would be wrong to anticipate the report at this stage, but I know that my right honourable friend the Home Secretary will give the Government's response to the report to Parliament in an appropriate and timely manner.

My Lords, I hope your Lordships did not mind my ending by speaking generally about these inquiries and reviews. I have done so because I feel that they relate to and should help to promote a range of policies and activities involving many people and organisations, linked, among other things, with the subject my noble friend Lord Gridley raised this afternoon. And, as the conduct of the racial attacks study illustrates, the local authorities, with their responsibilities for education, planning and other local services, have a crucial part to play. Also communities themselves have an opportunity and a responsibility to make an invaluable contribution. In the Government's view, the common objective surely must be to sustain and develop mutual tolerance and understanding, which will wither the roots of extremist threats to authority and public disorder, whether those appear in the literature which is the subject of my noble friend's Unstarred Question today or in any other form.