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Viscount Goschen: I do not think there is necessarily a lacuna; there is obviously a difficulty of definition. If we briefly turn our minds to Amendments Nos. 72 and 73, the government amendments which are designed to make the very suggestion the noble and learned Lord, Lord Donaldson, made at Second Reading, I particularly draw the attention of the Committee to Amendment No. 72, to add the words:

"and satisfying such other requirements as may be so specified".

It sounds like a triumph of draftsmanship to say "and other requirements". That is essentially what we are trying to do. In other words, the regulations when brought forward concerning insurance as it affects the whole of the Bill and not just klondykers could be specified by the Secretary of State to put in certain conditions with regard to the type of insurance contract that would satisfy the Secretary of State. It is clear that further work would have to be done on that to decide exactly what the qualifications would be. But the point is that the amendment recognises that there is a difficulty in the Bill as it now stands and gives the opportunity for the Secretary of State to specify additionally what sort of insurance would be acceptable.

The short answer is that we recognise the problem. We have brought forward amendments to deal with it. Further work will go on between the time the Bill receives Royal Assent and when regulations are brought forward. That will allow the Secretary of State to be more specific about what would be acceptable and what would not.

Lord Clinton-Davis: I thank the Minister, but I am still not satisfied about this because it is such a fundamental issue. The whole question of insurance was the subject of the report and a number of paragraphs in the report of very considerable importance. Then the Government produced a draft Bill. The draft Bill was the subject of consultation. This is an important matter and if the Minister wishes to reflect--

Viscount Goschen: I am listening.

Lord Clinton-Davis: Yes, the Minister is listening. It is important to reflect on what happened during the

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consultation period. These were matters which must have been deliberated upon and yet we are in a situation which does not carry us very much further.

The Minister is saying that the Secretary of State will introduce such other requirements as may be so specified. But surely we can have some idea what is current thinking about that. Is it as vague as the amendment would suggest? I do not want to embarrass the Minister by encouraging him to say something which he would prefer to keep confidential at this stage, if in fact confidentiality is justified, but the Committee is entitled to know what is the thinking in this regard. All we are being told is that the Government are going to have to clarify their thoughts about this in due course after more consultation with the industry. There are great difficulties about it. But unless the Committee, or later on the House, can feel that there is real substance in what is going into the Bill or into regulations, we are left in a very vague position.

Because the matter is of such importance I am not sure that we would be well advised to leave it as such. Maybe today, but certainly when we come to consider the Bill on Report or at a later stage, we should return to the issue. Parliament would not be doing itself a great service if we were to leave the matter in such a vague state.

I do not encourage too much correspondence on these matters. I know that the Minister is willing to write, but perhaps we need clarification before the House in one shape or another rather than correspondence between those who are attending the Committee.

Having said that, I would ask the Minister to expatiate on those points.

The Earl of Caithness: I wonder whether I might speak at this stage. Given the Government's Amendment No. 72 and given, as the noble Lord, Lord Greenway, has just mentioned, the difficulty in which the klondykers find themselves in regard to port state control and the answer that my noble friend gave that that is why other means have to be used, would the Government's proposals allow the necessary flexibility to impose a different form of requirement of insurance on certain types of shipping? In other words, the very flexibility that is upsetting the noble Lord, Lord Clinton-Davis, is the very strength of the Government's position in that it can impose some type of different insurance on the klondykers as opposed to those coming to the other end of the mainland and Shetland, the oil tankers.

Lord Greenway: Following the noble Earl, Lord Caithness, I should like to re-emphasise the practical problems one has with these klondykers. Coming from a very fractured shipping set-up, from the Soviet Union and other countries such as Bulgaria and Romania, where once things might have been organised on quite a reasonable basis but now that has all fallen apart, half the time they do not know what they are doing. They have no money to pay the crews or to pay for provisions, and it is very difficult situation. The suggestion that the noble Earl makes of possibly a different level of insurance might be something for us to look at, but the

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whole area is fraught with difficulties. That is why klondykers should be kept as a separate issue, if possible.

6.30 p.m.

Viscount Goschen: The debate on this matter is particularly helpful. It is the very difficulty of finding a definition at this stage that we all recognise. For instance, the noble Lord, Lord Clinton-Davis, takes the approach in his amendments of using the word "adequate". That does not answer anything either. It is essentially giving the Secretary of State the flexibility to impose additional controls. For example, where a number of insurance companies might turn out to have written worthless contracts, the Secretary of Sate could then, by regulation, say that the certificates provided by those companies were no longer to be considered adequate, and we could develop procedures for port state control inspectors to assess certificates. If an insurance company or other source of financial security proves defective, again we can use that in later cases.

The point is, we recognise the difficulties that exist and we are seeking to bring forward provisions that allow the Secretary of State to insist on perhaps more stringent provisions than would normally be the case. It is impossible for any one country to be the world's insurance policeman and to know every insurance company in every country--a point raised by the noble Lord, Lord Greenway. Perhaps in a number of newly-emerging countries there are so-called insurance companies about which we might not have the same confidence as we would about some others in other parts of the world. We will have this debate again when we come to the government Amendments Nos. 72 and 73.

I recognise the problem. We all are concerned to make sure that insurance means exactly that and is not a worthless piece of paper. There is no easy definition at the moment of what that might be. We can ask, for instance, for a bond if the insurance is suspect. That is another avenue. But we recognise the problem; it is one that was highlighted by the noble and learned Lord when we discussed this at Second Reading. The way we have sought to deal with it in the Bill as currently drafted is to give the Secretary of State quite flexible powers to insist that certain qualifications must be met to make the insurance valid. To that extent it is a considerable improvement in terms of the powers of the Secretary of State.

Lord Clinton-Davis: I am prepared to accept that it is an improvement on the way in which the Bill is currently drafted, but I do not accept the stricture that I am opposed to flexibility. Surely in a situation like this you can have a staged approach. Because there is currently a particular problem with klondykers which is unacceptable I would have thought that the Government's initial thoughts should be in that direction, and a widening of the process to other forms of shipping issues could be dealt with subsequently. The whole purpose is to ensure that the matter is dealt with on a continuing basis. If it is found that the way in which the Executive approaches the matter is not adequate or

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unforeseen problems arise, then the Government have taken powers under this Bill to introduce statutory instruments to deal with the matter. That is fine--

Viscount Goschen: Perhaps I may assist the noble Lord here. Klondykers are indeed our priority and the Bill allows flexibility in terms of targeting a particular group of vessels first, and that was my understanding at the drafting of the Bill. There is nothing between us on that. All I am saying is that if you try to come up with a convoluted definition of "adequate insurance" now--which would require some complexity because there are any number of different types of insurance--and enshrine it in the primary legislation, you will then have difficulties when it comes to building on experience. If there were a simple case of it coming to our attention that the policies written by a certain insurance company were not valid, we would want to have the flexibility to exclude them. That essentially is what we are trying to do, so we are including the minimum prescription in the primary legislation but giving the Secretary of State the power to insist on additional conditions under secondary legislation.

I would suggest that this, coupled with our targeting of the klondyker fleet--and there is nothing between us on that--is the effective way to go forward. I am sure that we can all read very carefully what the other side has said on this issue, but essentially what we are trying to achieve is the same. The noble Lord has defined it by "adequate", which itself does not provide a long description of the various insurance companies that we recognise and those that we do not. My approach has been to refer to insurance "subject to the conditions which the Secretary of State may impose". I think we have probably covered the ground with that intervention.

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