HL Deb 16 October 1975 vol 364 cc1071-80

Selective financial assistance for industry in assisted areas

7.—(1) For the purposes set out in the following provisions of this section the Secretary of State may, with the consent of the Treasury, provide financial assisitance where, in his opinion—

  1. (a) the financial assistance is likely to provide, maintain or safeguard employment in any part of the assisted areas, and
  2. (b) the undertakings for which the assistance is provided are or will be wholly or mainly in the assisted areas.

(2) The purposes mentioned in subsection (1) of this section are—

  1. (a) to promote the development or modernisation of an industry,
  2. (b) to promote the efficiency of an industry,
  3. (c) to create, expand or sustain productive capacity in an industry, or in undertakings in an industry,
  4. (d) to promote the reconstruction, reorganisation or conversion of an industry or of undertakings in an industry,
  5. (e) to encourage the growth of or the proper distribution of undertakings in, an industry,
  6. (f) to encourage arrangements for ensuring that any contraction of an industry proceeds in an orderly way.

(3) Subject to the following provisions of this section, financial assistance under this section may be given on any terms or conditions, and by any description of investment or lending or guarantee, or by making grants, and may, in particular, be—

  1. (a) investment by acquisition of loan or share capital in any company, including an acquisition effected by the Secretary of State through another company, being a company formed for the purpose of giving financial assistance under this Part of this Act,
  2. (b) investment by the acquisition of any undertaking or of any assets,
  3. (c) a loan, whether secured or unsecured and whether or not carrying interest, or interest at a commercial rate,
  4. (d) any form of insurance or guarantee to meet any contingency, and in particular to meet default on payment of a loan, or of interest on a loan, or non-fulfilment of a contract.

(4)… The Secretary of State, in giving financial assistance in the way described in subsection (3)(a) above shall not acquire any shares or stock in a company without the consent of that company.

(5) …

(6) In this section "industry", unless the context otherwise requires, includes any description of commercial activity, and references to an industry include references to any section of an industry.

(7) In this section "the assisted areas" means the development areas, the intermediate areas and Northern Ireland.

Selective financial assistance: general powers.

8.—(1) For the purposes set out in subsection (2) of the last preceding section the Secretary of State may, with the consent of the Treasury, provide financial assistance where, in his opinion—

  1. (a) the financial assistance is likely to benefit the economy of the United Kingdom, or of any part or area of the United Kingdom, and
  2. (b) it is in the national interest that the financial assistance should be provided on 1073 the scale, and in the form and manner, proposed.
  3. (c)…

(2) Financial assistance under this section may, subject to the following provisions of this section, be given in any of the ways set out in subsection (3) of the last preceding section.

(3) … The Secretary of State, in giving financial assistance in the way described in subsection (3)(a) of the last preceding section—

  1. (a) shall not acquire any shares or stock in a company without the consent of that company,
  2. (b) …

(4) …

(5) …

(6) The aggregate of—

  1. (a) the sums paid by the Secretary of State under this section, plus
  2. (b) the liabilities of the Secretary of State under any guarantees given by him under this section (exclusive of any liability in respect of interest on a principal sum so guaranteed).
less any sum received by the Secretary of State by way of repayment of loans under this section, or repayment of principal sums paid to meet a guarantee under this section, shall not at any time exceed the limit specified in subsection (7) below.

(7) The said limit shall be £150 million, but the Secretary of State may, on not more than four occasions, by order made with the consent of the Treasury increase or further increase that limit by a sum specified in the order, being a sum not exceeding £100 million.

An order under this subsection shall be contained in a statutory instrument, and such an order shall not be made unless a draft of the order has been approved by a resolution of the Commons House of Parliament.

(8) The sums which the Secretary of State pays or undertakes to pay by way of financial assistance under this section in respect of any one project shall not exceed £5 million, except so far as any excess over the said sum of £5 million has been authorised by a resolution of the Commons House of Parliament:

Provided that this subsection shall not apply where the Secretary of State is satisfied that the payment or undertaking is urgently needed at a time when it is impracticable to obtain the approval of the Commons House of Parliament; and in that case the Secretary of State shall lay a statement concerning the financial assistance before each House of Parliament.

Industrial Development Advisory Board

9.—(1) The Secretary of State shall appoint a board, which shall be called the Industrial Development Advisory Board, to advise him with respect to the exercise of his functions under sections 7 and 8 of this Act.

(2) The Board shall consist of a chairman and not less than six nor more than twelve other members.

(3) The members of the Board shall include persons who appear to the Secretary of State to have wide experience of, and to have shown capacity in, industry, banking, accounting and finance.

(4) If the Board make a recommendation with respect to any matter at the request of the Secretary of State and the Secretary of State exercises his functions under sections 7 and 8 of this Act contrary to their recommendation, he shall, if the Board so request, lay a statement as to the matter before Parliament.

(5) Any reference in this section to the Secretary of State's functions under sections 7 and 8 of this Act includes a reference to his functions under section 3 of the Industry Act 1975.")—(Lord Elton.)

Lord BESWICK

My Lords, when I turn over the pages of the Amendment I cannot forbear from saying that never was so much done by so few.

Schedule 5 [Appeal Committees]:

Lord BESWICK

My Lords, Amendments Nos. 64, 65 and 66 can be taken together. They are all minor Amendments which have been requested by the Council on Tribunals to make it clear that the Secretary of State's power to make regulations by Statutory Instrument applies to the procedure for or in connection with a reference to the advisory committee and not to the consideration of a case. I beg to move.

Amendments moved—

Page 46, line 37, leave out ("by statutory instrument").

Page 46, line 38, leave out ("consideration of references by") and insert ("procedure for or in connection with references to").

Page 46, line 43, at end insert— ("(2A) Regulations under this paragraph shall be made by statutory instrument.")—(Lord Beswick.)

Schedule 6 [Minor and consequential amendments of Industry Act 1972]:

Lord ABERDARE

My Lords, I beg to move Amendment No. 67.

Amendment moved— Page 47, line 9, leave out paragraphs 2 to 4.—(Lord Aberdare.)

Schedule 7 [Repeals]:

Lord LOVELL-DAVIS

My Lords, Amendment No. 68 is a drafting Amendment which is designed to clarify the reference to repeals to the Industry Act 1972 and to bring this reference into line with others in the Schedule. It is intended to show that the repeal will affect the words in subsection (4) of Section 7 of the 1972 Act from the start of that subsection to the word "and", and will also affect the whole of subsection (5). I beg to move.

Amendment moved— Page 47, line 32, after ("7") insert (", in subsection").—(Lord Lovell-Davis.)

In the Title:

Lord CAMPBELL of CROY

My Lords, Amendment No. 69 is a consequential Amendment made necessary as a result of Amendments which the House has made. I beg to move.

Amendment moved— Line 13, leave out ("trade unions") and insert ("employee representatives").—(Lord Campbell of Croy.)

6.24 p.m.

Lord BESWICK

My Lords, I beg to move that this Bill do now pass. When we started dealing with this Bill in our House, I said that not since the 1945–50 Parliament had one Bill been so clouded with unnecessary controversy, and I hoped that in this House we could lift that cloud somewhat and show more clearly that the Bill was not designed to hit or hurt anybody, but to provide an effective instrument to regenerate British industry. I am not absolutely sure to what extent our 40 hours of discussion have helped to lift that cloud. However, may I pay tribute to the courteous and constructive way in which the noble Lord, Lord Aberdare, and his team on the Opposition Benches have made the discussions possible. They have had a very considerable burden to carry.

To the noble Earl, Lord Balfour, who, perched on his top Bench, has very often carried on a one-man fight, we are particularly indebted for the way in which he has endeavoured to show us how the Bill could be improved. May I also say how grateful I am to my colleagues, the noble Lord, Lord Lovell-Davis, and the noble Lord, Lord Melchett. I could not have had better support than I have had from them, and I am sure that the whole House is grateful to them for the helpful part which they have played. So we have tried.

Any change—indeed, any progress—arouses criticism, but what is interesting in this case is that criticism has come from both the Right and the Left. To some this Bill has seemed the arrival of a Socialist State. To others it has appeared to be a retreat from progress towards the promised Socialist land. I hope that we have done something to show that much of the criticism from the two extreme wings has been under-informed.

May I particularly thank your Lordships for the help which has been given in improving Part II of the Bill. The noble Lord, Lord Elton, has played a prominent part. This is a Part of considerable technical difficulty. The questions put to me and to my colleagues and fielded back, I may say, to our advisers have required us to consider the details of this Part with especial care and have brought to light a number of shortcomings. May I say to the noble Lord, Lord Elton, who made the point during the course of discussing one Amendment, that I regret that on Third Reading it has been necessary to move a number of Amendments to this Part of the Bill, but it goes some way to show the value of this House as a Revising Chamber.

I will not say much about the basic policy underlying the Bill. In the current economic climate, against a background of low investment in manufacturing industry and high unemployment, the need for the Bill has become more and more evident as the months have passed. I believe it is increasingly recognised that Britain must undergo a second industrial revolution, not one overriden by human conflict, but a revolution of re-equipment and an industrial understanding between workers of all grades which can lead to the fullest use of that equipment.

I have said already that we have spent over 40 hours discussing this Bill. During Committee and Report stages, some 180 Amendments were made, of which 51 were tabled by noble Lords from the Benches opposite. A number of the Amendments were on identical points. Indeed, there were 19 consequential Amendments to the one moved by the noble Lord, Lord Rochester. I should like to make the point that of those 180 Amendments up to Report stage only 51 were tabled by noble Lords opposite. If there are criticisms—as I believe there have been from some of my friends in another place—about the way this Bill has been savaged by noble Lords, and I shall say a little about that, the fact is that the majority of the Amendments have arisen because the Bill was inadequate when it reached us. It shows credit to noble Lords on all sides that they have contrived to put right so many of the shortcomings that arose, I believe, because the Bill was not properly considered in another place.

However, noble Lords opposite found it necessary to divide the House on 11 occasions on matters which the Government regard as central provisions of the legislation. If I was given to such language, I suppose I should call some of them wrecking Amendments. At Committee stage, the power of the National Enterprise Board to establish industrial undertakings was removed, together with the function of extending public ownership into profitable areas of manufacturing industry. Moreover, the possibility of paying compensation by the normal process of paying in Government stock was cut out. At Report stage, the powers proposed for the National Enterprise Board were further curtailed. The National Enterprise Board's function of promoting industrial democracy in undertakings it controls was watered down. All this was contrary to an explicit commitment given in the Government's White Paper.

With regard to planning agreements, the provision permitting the Government to give increased certainty about financial assistance for any project identified in the agreement was amended to make it mandatory on the Government to give such increased certainty. Then we had the legions opposite mobilised by the noble Lord the Chief Whip opposite, to whom I would pay a tribute, if he were here, for the very skilful way in which he appears to have been able to mobilise voting power when it was needed, and they have changed the provisions relating to the disclosure of information.

There is no greater advocate of this Revising Chamber than myself, and I pay tribute to the work which it has done on Parts of the Bill. However, the changes made to this legislation as a consequence of these Divisions have not resulted, to put it mildly, in an improved Bill. It certainly has not brought it more into line with our Election pledges; nor equally, if not more important, has it improved the efficiency of the instrument which impartial observers believe to be necessary. No doubt the other place will have the opportunity to reflect on the changes made when the Bill eventually finds itself on the Statute Book. I am sure that it will be improved again to bring it nearer to that which we first brought to the House, and I hope and believe that it will play its part in the regeneration of British industry. I beg to move.

Lord ABERDARE

My Lords, I should like to respond to what the noble Lord has said. He certainly started his speech with words of sweet reasonableness, although towards the end he began to get more Party political. But may I first thank him and the noble Lords, Lord Lovell-Davis and Lord Melchett, for their patience in the course of over 40 hours of discussions that we have had. I believe the fact that so many Government Amendments have appeared at Third Reading justifies the amount of time we have taken over this Bill. It would have been a great mistake to rush it through, rather than wait to take the Third Reading now.

The fact of the matter is that we disliked this Bill intensely when it arrived in this House, and we have done our best to try to amend it in a way which we believe to be right. We have removed from it a number of features that we thought were objectionable although, as the noble Lord has foreshadowed all along, the Government will undoubtedly do their utmost to reverse these in another place. But I rather regret the fact that the noble Lord and others, in the course of discussions on this Bill, have accused us of being dogmatic, of degutting the Bill or of savaging it. This is not at all what we have been trying to do. We have indeed been reflecting the views of a great many experienced people who are at present running the private sector of British industry, and we have been trying to help the Government to see a way in which they can restore the confidence of the private sector of British industry in their plans for a National Enterprise Board and for the disclosure of information. If the Government are serious in their wish to encourage the private sector of industry, it is absolutely essential that they should regain the confidence of that sector.

I hope the Government will not take our Amendments as merely being factious or dogmatic and that they will consider carefully their scope. I hope that some, at least, will be acceptable, which could go a long way towards restoring that essential confidence which any Government needs from industry. With regard to the noble Lord's comments on the numbers who took part in the Divisions and carried some of the Amendments against the Government's advice, I would merely point out to the noble Lord that they represented the strength of conviction on the part of noble Lords who voted. In one instance, certainly, that comes to mind, we did not win a Division because the noble Lord opposite had the better of the argument, and I hope that this position will continue to obtain in this House; that when noble Lords opposite have good arguments they can win Divisions. Finally, I, too, should like to thank my noble friends who have been such a tower of strength in putting the Opposition's case—my noble friends Lord Campbell of Croy and Lord Elton, and also, particularly, my noble friends Lord Drumalbyn and Lord Balfour, who have played such a prominent part in these proceedings.

The Earl of BALFOUR

My Lords, I should just like to record for once in your Lordships' House my thanks to the noble Lord, Lord Beswick, for his letters and communications, and for the very kind remarks he has made. I should also like to thank my own Front Bench. I am sure it would be the wish of all your Lordships, and I know it would certainly be the wish of the noble Lord, Lord Beswick, to record our thanks to the staff of your Lordships' House, who are always so helpful in any approach that is ever made by any of us. It was not my intention to be destructive in regard to this Bill, but it was my intention to try to find as many as possible of the faults which could be questioned when the Bill becomes an Act. That was the entire object of my exercise in your Lordships' House and I thank all noble Lords for their tremendous help.

On Question, Bill passed, and returned to the Commons.

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