§ 8.15 p.m.
§ Mr. Barry JonesI beg to move Amendment No. 40, in page 10, line 16, leave out 'may' and insert 'shall'.
The present drafting allows the Secretary of State a discretionary power to determine the financial duties of the Agency. The amendment meets a point made by Opposition Members in Committee and imposes a clear obligation on the Secretary of State to determine the Agency's financial duties.
§ Mr. Nicholas EdwardsThis point was raised in Committee by my hon. Friend the Member for Barry (Sir R. Gower). I am grateful to the Government for accepting it.
§ Amendment agreed to.
§ Mr. Nicholas EdwardsI beg to move Amendment No. 41, in page 10, line 19, at end insert:
'but it shall be the duty of the Secretary of State and the Treasury, before making a determination, to satisfy themselves that the duties to be imposed on the Agency are likely to result in an adequate return on capital employed by the Agency; but this requirement shall only apply in relation to the functions referred to in section 1(3)(b), (c) and (d) and to the powers referred to in section 1(6)(a) to (g)'.In Committee we sought to introduce a requirement that the duties to be imposed on the Agency would be likely to result in an adequate return on capital employed by the Agency. The Under-Secretary pointed out that:there are other activities, for example, environmental redevelopment and the provision of industrial estateswhere the concept of an adequate return on capital would be inappropriate and that a clause such as Clause 5(3) of the Industry Act would not be suitable. He said:However, I can go this far to meet the amendments. I can give an assurance that the Agency, in carrying out functions analogous 815 to those of the NEB, will be expected, in exactly the same way as the NEB, to obtain an adequate return on the capital employed in those duties taken together. Further, with a view to making progress and to reaching other important amendments, I can say that we shall consider between now and Report whether we can produce a satisfactory and appropriate formula which will refer to an adequate rate of return on those elements of the Agency's functions which correspond to the functions to be undertaken by the NEB. I hope that that will be acceptable."—[Official Report, Standing Committee E; 29th July 1975; c. 438–9.]We made it clear in Committee that we objected to the term "taken together", but on the strength of the Minister's assurance we withdrew our amendment. The Government have not come forward with a new formula and our amendment, therefore, seeks to fill the gap. It attempts to do no more than that which the Government attempted to do in the Industry Bill, namely, to provide that there should be a standard by which the commercial operations as opposed to the social operations of the Agency might be judged.Return on capital is about the best basis we have for judging a commercial operation. It is important that standards should be set by which the Agency's commercial operations can be judged. There is no reason why the Government should not accept in this Bill what they accepted in the Industry Bill. I therefore commend the amendment to the House.
§ Mr. Barry JonesThis time the amendment of the hon. Member for Pembroke (Mr. Edwards) is unacceptable. We have always maintained that the Agency's industrial investment functions, like those of the NEB, have to be considered together, not in isolation from each other. That is why Clause 6 of the Industry Bill refers to functions taken together.
I would remind hon. Members of a point that is often overlooked. The Agency will be a much more disparate
| Division No. 360.] | AYES | [8.21 p.m. |
| Atkins, Rt Hon H. (Spelthorne) | Goodhew, Victor | Kitson, Sir Timothy |
| Bitten, John | Gow, Ian (Eastbourne) | Knox, David |
| Boyson, Dr Rhodes (Brent) | Gower, Sir Raymond (Barry) | Lane, David |
| Butler, Adam (Bosworth) | Grimond, Rt Hon J. | Lawrence, Ivan |
| Chalker, Mrs Lynda | Grist, Ian | Luce, Richard |
| Cooke, Robert (Bristol W) | Hall, Sir John | Meyer, Sir Anthony |
| Costain, A. P. | Hamilton, Michael (Salisbury) | Miller, Hal (Bromsgrove) |
| Dean, Paul (N Somerset) | Howe, Rt Hon Sir Geoffrey | Montgomery, Fergus |
| Durant, Tony | Howells, Geraint (Cardigan) | Moore, John (Croydon C) |
| Edwards, Nicholas (Pembroke) | James, David | Morgan, Geraint |
| Fisher, Sir Nigel | Kellett-Bowman, Mrs Elaine | Neave, Airey |
§ creature than the NEB. The Agency will have a much wider range of work and responsibilities than the NEB. Of the Agency's nine functions, five have no counterparts in the Industry Bill. In this context it is questionable how necessary it is to introduce assimilation such as that sought by this amendment. We have concluded that the proper place for a requirement of this sort to be spelled out is in the guidelines to be issued to the Agency.
§ I reaffirm our assurance that in exercising its industrial investment duties the Agency will be expected to achieve an adequate return on capital on those duties taken together. This will be unequivocably required of the Agency in the operation of the guidelines to be issued to it.
§ Mr. Nicholas EdwardsWe think it extremely important that proper financial disciplines should be imposed, particularly on those parts of the Agency's functions where it is operating in the commercial sphere. The Secretary of State said that there was a wide range of functions that were not in that sphere. It is precisely the functions that are in it that we identify. We identify the same functions where the disciplines were imposed in the Industry Bill.
At a time when public expenditure is a key matter, it is vital to have such disciplines. We also seek them as a protection against unfair competition with the private sector. There should be publication of the criteria laid down so that the House may judge the proceedings.
For all these reasons, we think that this is a matter of importance, and I shall, therefore, ask my right hon. and hon. Friends to support the amendment in the Division Lobby.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 45, Noes 79.
| Neubert, Michael | Roberts, Wyn (Conway) | Weatherill, Bernard |
| Osborn, John | Silvester, Fred | Winterton, Nicholas |
| Page, Rt Hon R. Graham (Crosby) | Sims, Roger | |
| Pardoe, John | Stanbrook, Ivor | TELLERS FOR THE AYES |
| Rathbone, Tim | Viggers, Peter | Mr. Anthony Berry and |
| Mr. Michael Roberts. |
| NOES | ||
| Abse, Leo | Henderson, Douglas | Roderick, Caerwyn |
| Anderson, Donald | Hughes, Rt Hon C. (Anglesey) | Rodgers, George (Chorley) |
| Atkins, Ronald (Preston N) | Hughes, Roy (Newport) | Rooker, J. W. |
| Atkinson, Norman | Hunter, Adam | Ross, Rt Hon W. (Kilmarnock) |
| Barnett, Rt Hon Joel (Heywood) | Jackson, Miss Margaret (Lincoln) | Sandelson, Neville |
| Bates, Alf | John, Brynmor | Shaw, Arnold (Ilford South) |
| Bidwell, Sydney | Jones, Alec (Rhondda) | Skinner, Dennis |
| Carmichael, Neil | Jones, Barry (East Flint) | Small, William |
| Clemitson, Ivor | Kinnock, Neil | Spriggs, Leslie |
| Cocks, Michael (Bristol S) | Lamond, James | Stallard, A. W. |
| Coleman, Donald | Latham, Arthur (Paddington) | Stoddart, David |
| Dalyell, Tam | Loyden, Eddie | Strang, Gavin |
| Deakins, Eric | McCartney, Hugh | Taylor, Mrs Ann (Bolton W) |
| Dormand, J. D. | MacCormick, Iain | Thomas, Dafydd (Merioneth) |
| Duffy, A. E. P. | McElhone, Frank | Thomas, Jeffrey (Abertillery) |
| Eadie, Alex | Mackenzie, Gregor | Thomas, Ron (Bristol NW) |
| Edge, Geoff | Madden, Max | Thorne, Stan (Preston South) |
| Edwards, Robert (Wolv SE) | Marks, Kenneth | Walker, Terry (Kingswood) |
| Evans, Fred (Caerphilly) | Marshall, Dr Edmund (Goole) | Ward, Michael |
| Evans, Gwynfor (Carmarthen) | Mellish, Rt Hon Robert | Watt, Hamish |
| Evans, Ioan (Aberdare) | Millan, Bruce | Wigley, Dafydd |
| Faulds, Andrew | Morris, Rt Hon J. (Aberavon) | Wise, Mrs Audrey |
| Fernyhough, Rt Hon E. | Newens, Stanley | Young, David (Bolton E) |
| Flannery, Martin | Noble, Mike | |
| George, Bruce | Padley, Walter | TELLERS FOR THE NOES: |
| Grant, George (Morpeth) | Peart, Rt Hon Fred | Mr. Joseph Harper and |
| Grant, John (Islington C) | Perry, Ernest | Mr. Tom Pendry. |
| Harrison, Walter (Wakefield) | Radice, Giles |
§ Question accordingly negatived.