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Lord Wyatt of Weeford: My Lords, I agree with everything that the noble Lord, Lord Lester, said. I believe that his amendment is far too modest. Aggrieved people should go to Europe where there are strict rules on the matter: compensation is not only for a year but covers the loss of the business and the future profits that would have been made. I advise all those concerned to go to Europe where the Government will get a horrible caning, and serve them right.

Lord Gisborough: My Lords, I fully support that idea. I also support the noble Lord's amendment. I put forward an amendment in Committee which unfortunately was not accepted. As well as those who make pistols, there are those who make targets, gun cases, sights, holsters, gun cabinets, ranges, and so on. They, too, have to be looked after.

I wish to read a paragraph from two letters. One person says,

"We are in government owned property and are now unable to pay the rent. We cannot sell off much of the machinery because of its specialised nature and we cannot move out of the secure premises because we are storing firearms and component parts until they have to be surrendered".

Another letter states:

"As soon as the Bill comes into force I will lose my business at a stroke as it involves full bore hand gun equipment. I have been in the gun trade for 16 years and have no possibility of modifying my business to the .22 part of the trade. This will die anyway, whether

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it is legislated against or not. With my business I will also lose my house as it is collateral for the business overdraft. I feel at the age of 50 I will never work again. I always thought that small businesses like mine were the backbone of Britain".

Earl Peel: My Lords, I too support the amendment so far as it goes. There is no need to rehearse the arguments on compensation. We had a thorough look at the issue in Committee. In declaring an interest, I repeat briefly that I am president of the Gun Trade Association.

I say again how moved and surprised I was to hear the very strong feelings expressed at a meeting I attended of the Gun Trade Association shortly before the Bill came before your Lordships' House. Feelings are immensely strong. People have paid their taxes and rates but suddenly find that their businesses--many of them generations old--will be wiped out at the stroke of one Bill.

As the noble Lord rightly said, we have an obligation to do something. I think his amendment mean, but I understand the reasons, which he explained carefully. I should have thought that a five-year period would have been more satisfactory and more in keeping with compensation of this type. However, I agree that there are difficulties. The noble Lord gave examples where precedents have been set. I do not think that there is any doubt about that.

The noble Lord said that he thought one year would be sufficient time--I hope that I understood him correctly--for businesses to find other activities. I believe that the noble Lord is being extremely optimistic. I fear that most businesses will go because of the way the Bill is designed. Cost alone, I suspect, will prohibit businesses being able to trade in a successful and meaningful way. I do not believe that a year is sufficient time.

The noble Lord, Lord Lester of Herne Hill, was asked specifically by the noble Lord, Lord Stoddart, whether his amendment covered manufacturers. I believe that the reply was yes. My information is that the amendment would cover makers of pistols but not necessarily makers of parts, ammunition or cases. They may be a relatively small part of the compensation package; nonetheless they are important. Any guidance that the noble Lord can give on that point would be greatly appreciated. I support his amendment although I believe that it is far too narrow for the purposes for which it is designed.

6.30 p.m.

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Lester of Herne Hill, is a very skilled advocate. He did not spare the House any part of his argument for the amendment. It is also fair to say that, given its purpose, the amendment is modest. It could be described as providing, as he described it, relatively parsimonious compensation to licensed gun dealers.

I have practical objections to the amendment and objections of principle. My practical objection comes from my lifetime's experience of running a small business. I should certainly have had huge difficulty in my business in defining the after-tax profits of one part

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of it. If I were, for example, in the business of handguns and rifles, I should have great difficulty in saying what part of my profits came from handguns as opposed to rifles. It is a matter of allocation of overheads. That is always a question of dispute between accountants. Most small businesses simply do not have the kind of functional accounts that would be necessary in order to make that calculation. So I very much doubt whether the amendment would work in that sense. However, that is a relatively minor criticism and one that could be corrected.

Much more seriously, as the noble Lord acknowledged, we are talking about a spectrum. He used the words of Justice Oliver Wendell Holmes: there is no general proposition to be made. So clearly it is proper, in terms of public policy, for some types of loss of business to be compensated for and some not. The noble Lord gave the examples of the fishing industry and the rendering industry affected by BSE. But for every one example on that side, there are hundreds, indeed thousands of examples on other sides. Every time there is a change in health and safety regulations, the businesses of manufacturers or dealers in some products which become unacceptable in health and safety terms are affected. Every time there is environmental legislation, manufacturers or dealers in products or equipment no longer deemed acceptable lose business, again without compensation. Every time there is a change in, for example, the food or drug regulations and the drug safety or food safety administration outlaws a particular product and says that it should no longer be placed on the market, somebody--a manufacturer, dealer or retailer--loses business. If we were to have compensation in all such cases, we should never make any changes in health and safety or environmental protection. We simply could not afford it. I gladly give way to the noble Lord, Lord Gisborough.

Lord Gisborough: My Lords, I am sure that the noble Lord knows the difference between affecting prices--I am a farmer and I am affected when sheep prices go down--and destroying a business completely.

Lord McIntosh of Haringey: My Lords, I know exactly how it is. But if the noble Countess, Lady Mar, wins her case and organophosphates are banned, are we seriously saying that the manufacturers of organophosphate sheep dips should be compensated for the loss of their business? Surely not.

Lord Gisborough: My Lords, they are in chemicals. They will make the next type of sheep dip.

Lord McIntosh of Haringey: My Lords, people can change their businesses. Those who deal in handguns can deal in rifles. I am sorry, but I find this special pleading unacceptable. There is no special difference between handgun dealers and the hundreds and thousands of businesses that have to suffer changes in regulatory policy and in legislation both in this country and in Europe. If we were to compensate in all those cases, we should never make any change at all. These

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amendments, just like that passed earlier, now Clause 16, are deeply unacceptable. I ask my noble friends to oppose them.

Lord Pearson of Rannoch: My Lords, in rising to support this amendment, I wonder if I might suggest to the noble Lord, Lord McIntosh of Haringey, that he invests in a copy of the book, The Castle of Lies, by Mr. Christopher Booker and Mr. Richard North, where he will see literally hundreds of examples of businesses that have been sent to the wall by over-regulation, too much bureaucracy and knee-jerk legislation.

Lord McIntosh of Haringey: My Lords, I find it very difficult to take this. Here are spokesmen for a party which has accepted the closing down of businesses all over the country and the decline in this country's manufacturing industry and is not in the least concerned about those who lose their jobs; at the same time they are prepared to be concerned with the interests of 650 dealers. I find it quite unacceptable that people who spend the rest of their time opposing the European Community, namely, the noble Lords, Lord Monson and Lord Pearson, should now be relying on the European Court of Human Rights to defend their arguments.

Lord Pearson of Rannoch: My Lords, if the noble Lord had had a little patience, he would have heard me move on to condemn the destruction of those businesses as chronicled in The Castle of Lies.

As I say, I support the amendment. I agree with all noble Lords who spoke, including the mover, the noble Lord, Lord Lester of Herne Hill, that it is far too parsimonious.

I take a different view about the European Convention on Human Rights and the European Court of Human Rights. Personally, I am ashamed that the British Parliament has to rely on what the European Court of Human Rights might or might not decide. Personally I think that we should not have to go anywhere near it. I am further ashamed to hear that this amendment, which many of us will be forced to accept this evening will be six or nine times meaner to these wretched people than what would have happened in Australia. I support the amendment; but I do so in the hope that we may be able to return to it at a later stage and make it more generous.

Finally, I do not want to nit-pick with the wording of the amendment, but what happens if a small business has just started up and does not have three years' financial accounts to be averaged to produce this measly average of one year of after-tax profits of the business? That may be a technical difficulty to which we may also need to return at Third Reading. But in the meantime, with great reluctance and with considerable shame, I feel bound to support the amendment.

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