HC Deb 28 July 1976 vol 916 cc661-795
Mr. Dafydd Wigley (Caernarvon)

I beg to move Amendment No. 225, in page 3, line 44, leave out 'repair and maintenance'.

Mr. Speaker

With this we may take the following amendments:

No. 258, in Schedule 2, page 75, leave out lines 19 to 26.

No. 247, in page 75, leave out line 20.

No. 259, in page 75, leave out lines 28 to 30.

No. 249, in page 77, line 4, leave out '£3.4 million' and insert: '£2.5 million in any city or town.'. No. 219, in page 77, line 4, at end insert 'and (d) on 21st November 1975 the number of persons employed by that company in any city or town engaged exclusively in the business of repairing, refitting, converting or maintaining ships exceeded 300, provided that the company is not a member of the same group of companies as a shipbuilding company falling within the description in paragraph 2 above'. No. 260, in page 77, line 4, at end insert 'and— (d) on 21st May 1976 the number of persons employed by that company totalled 341':

Mr. Wigley

I am not a member of the Committee which dealt with the Bill, and therefore in giving some of the background to our reasoning, Mr. Speaker, I hope that you will permit me a little latitude in explaining our feelings on the matter.

The amendment is specifically geared to cut out the nationalisation of ship repairing by removing the words "repair and maintenance" from the Bill. I accept that this was discussed to some extent in Committee, although all the arguments relative to the case for such an amendment were not deployed, and certainly the answers were not forthcoming to the points raised in Committee.

Our attitude towards nationalisation does not bear the characteristics of the attitude of Government Members, who may have a blinkered view of nationalisation, believing in nationalising everything. Our view is not, either, that of Conservative Members, who would not nationalise anything, whatever the circumstances might be.

Our attitude is that it depends very much on the industry and the circumstances. In some industries, nationalisation may have worked out quite well. I have in mind the electricity industry, and also broadcasting, where I believe the nationalised corporations are effective. But in other industries the history has been less happy.

In Wales, we have lost almost 150,000 jobs since the War in nationalised industries. Coal pits closed at a rate of knots, one every six weeks, between 1964 and 1970. The steel industry is in a state of chaos at the moment, because there have been no decisions about its future. That will have a serious effect on the employment prospects in the industry. The omnibus industry has had a disastrous record of remote control, leading to ineffective services and the closure of services. The railways have lost some 60 per cent. of the track mileage which was in existence when they were taken into public ownership.

State ownership and nationalisation, therefore, has not meant job security in these industries. It has not meant better planning and co-ordination—very often the argument put forward in its favour. It has not meant, in some of these industries, the level of higher investment that is necessary to ensure their successful future. Perhaps even more important, it has not led to these industries being run in a more democratic manner.

We have seen the replacement of distant, faceless capitalists by distant, faceless bureaucrats. We have had a centralisation of control, and no real progress towards worker control in these industries.

Our objective as a party is to see worker control, not by paying lip-service to industrial democracy but by moving to at least 51 per cent. worker control in the environment in which these industries exist.

Mr. Doug Hoyle (Nelson and Colne)

I am grateful to the hon. Member for giving way. He has referred to the basic industries, particularly in Wales—coal, steel and railways. He has referred to the number of redundancies. If these industries had not been taken into public ownership, where would they be today? Does the hon. Gentleman think that they would have any future at all under private enterprise, which had neglected them and put no investment into them? Will he agree that at least the workers now know where they stand?

Mr. Wigley

The workers in Wales know particularly well where they stand, particularly in regard to the railway industry. According to a report in the Western Mail this morning, Richard Marsh said that if it were not for the nationalist pressure in Wales, the lines would have been closed entirely.

The doubts we have about the Bill are the reasons I have outlined. The Bill is very much a parson's egg of a Bill. There are three different industries covered in one Bill, and the case is very different from industry to industry. I can recognise a certain logic in the need for long-term planning in the aircraft industry, for instance. It is possible that it is difficult to get that planning in the private sector. But that argument is not valid in the case of the ship repairing, with which the amendment deals. There is no guarantee of jobs, and the Government accept that it is not possible to give such a guarantee.

As to the ship repairing industry, there is no coherent justification for including this industry in the Bill. It is an industry that is service-based and needs quick response time and completion of orders in a highly competitive international market. Those are not the characteristics of the corporations that have been taken into public ownership since the war. The ship repairing industry needs a highly-tuned sales and marketing performance. That has not been a characteristic of nationalised industries. The ship repairing industry is not part of a fully-integrated shipbuilding industry. There is an overlap, but some parts are totally exclusive one from the other.

Mr. Neil Kinnock (Bedwellty)

I am sure that for the best possible reasons the hon. Gentleman has a wrong impression of nationalisation of the ship repairing industry. It is not that the virtuous characteristics of flexibility and market orientation are absent from nationalisation. They were absent from those industries which were nationalised. As a taxpayer the hon. Gentleman should welcome the fact that where there is virility in some companies, that will be an enormous asset under nationalisation.

Mr. Wigley

I take that point. It is a serious point. There is a possibility that the virility that exists in some companies now will be lost when they are taken into public ownership, as a result of the inevitable bureaucratic control that is a characteristic of the nationalised industries.

I cite the example of the nationalised bus industry. The people in my area have seen what happened. No doubt the same process has occurred in England and Scotland.

Mr. Michael Heseltine (Henley)

The executives of Bristol Channel Ship Repairers Limited made it clear that they would not work for the State bureaucracy.

Mr. Wigley

I do not know what the members of that company said to the hon. Members. Even if they stay in their present jobs, they will be tied down by bureaucratic controls. That is the nature of the animal with which we are dealing. It is inevitable. The Government have made no case for the nationalisation of this industry.

I have been through the reports of the Committee stage of the Bill with a toothcomb. I have yet to see the case made. I followed the arguments put forward by the hon. Member for Colne Valley (Mr, Wainwright) and the hon. Member for Glasgow, Cathcart (Mr. Taylor). Their arguments were not answered. The hon Member for Colne Valley underlined the fact that we were dealing with different, small-scale, service industries. He said there were different methods of finding work for the ship repairing and shipbuilding industries. The need to respond quickly in emergency situations was pointed out. The high export content of this industry is important. There is a need for long-term planning.

The hon. Member for Colne Valley said that this was a new departure in nationalisation and that it held out a threat. If nationalisation is moving in the direction of service industries we may well see garages and corner shops coming under the same scrutiny as the type of industry that may employ only 30 or 40 people in one location.

Overseas shipowners may well not want to use companies forming part of the United Kingdom nationalised industry when they know that features incorporated into their ships built elsewhere may be picked up at the repair stage and used by manufacturers in the United Kingdom. As a result of that we may lose business. Other equally valid points were put forward.

Mr. John Evans (Newton)

The hon. Gentleman suggested that the two industries were distinct. I hope to disprove that point later. The hon. Gentleman made the point that foreign owners may not wish to place their ships for repairs in British nationalised ship repairing companies as the owners will pick up and use the ideas incorporated in the foreign-built ships. Does not the hon. Gentleman appreciate that the majority of British ship repairing companies are already part of British shipbuilding companies such as Swan Hunter, Court Line, Vosper, Cammell Laird and Harland and Wolff? Will he recognise that point before going any further?

4.15 p.m.

Mr. Wigley

I recognise that point. An Answer I received to a Parliamentary Question yesterday showed that the turnover of the industry was £150 million. Of that sum £30 million came from overseas business. Bristol Channel Ship Repairers Ltd., the only ship repair company in Wales, accounted for about one-quarter of that export content. I contend that there is a real danger. It was expressed in Committee by a number of hon. Members.

The hon. Member for Cathcart put forward an equally valid point. There is no need for special aid for this sector in the way in which there may be a case for aid for the shipbuilding industry. Nor is there a need for restructuring, which has started, in view of changes in the world situation from 1968 onwards.

In Committee the Minister, in reply, covered a number of points. I should like to answer those points, as I do not believe that he gave satisfactory answers. Chronologically, his first reason— I do not know whether it came first in his list of priorities—was that this commitment was contained in the Labour Party manifesto. We recognise that there are some commitments in that manifesto with which some members of the Opposition agree, such as child benefit or the provision of economic planning in Wales, but these are not being honoured.

The Minister said that there was a natural affinity between ship repairing and shipbuilding. That natural affinity is not evident in the case of the 70 companies not being nationalised under the Bill. The Minister said that if there were not full cover of the nationalisation of the ship repairing industry there would be a rough and ready frontier through the heart of the ship repairing industry. Surely that rough and ready frontier exists already. A line is being drawn between the companies covered by the Bill and those that are excluded.

The Minister drew heavily from the PA consultants' report on the ship repairing industry. He said that several ship repairers existed on one estuary and that in consequence there was a tendency for them to compete against each other. That situation will continue Let us take the case of the Severn Estuary. The ship repairing company of Bristol Channel Ship Repairers will be nationalised. Jefferies of Avonmouth will not be nationalised. The firms will compete with each other. That does not change the situation.

The Minister underlined the fact that the consultants' report referred to outdated facilities. Why has not the National Enterprise Board got "stuck in" with its powers under the Industry Act? The report referred to unsatisfactory labour relations. That does not hold water when we compare the hideous labour relations in the nationalised steel industry in Llanwern with the fact that Bristol Channel Ship Repairers Limited has not lost time or production as a result of labour difficulties over the past eight years.

The Minister referred to the possibility of losses of jobs. He said that 2,000 or 3,000 jobs might be lost in the ship repairing industry by 1980 if it were not nationalised. But if those jobs are to be saved, from where is the additional business to come? Do the Government believe that they will be able to make inroads into international competition, in present circumstances, through a State corporation, to pick up 2,000 or 3,000 extra jobs?

How does that tie up with the other point that there is a need for increased productivity? Increased productivity in a frozen market situation will lead to a decrease in the number of people employed. The productivity of a company such as the Bristol Channel Ship Repairers is three times higher than that of Jefferies of Avonmouth, which is excluded from this Bill. Productivity has clearly not been an important point in deciding which companies are to be included in the schedule.

The Minister referred to the need for a coherent strategy for ship repair yards. How is it possible to arrive at a coherent strategy when the international market is volatile and on short lead time? The argument that may be valid for the shipbuilding and aircraft construction industries is not valid in the case of the ship repairing industry.

The Minister pointed to the need for a ship repairing facility on every major estuary. He said that no large ship repair- ing company located on such an estuary was omitted. In fact, major companies have been omitted. Jefferies of Avonmouth employs twice as many people as Bristol Channel Ship Repairers, yet Jefferies has been omitted from the Bill. The Minister was unable to put forward a coherent case on that point.

A case has not been made for the nationalisation of the ship repairing industry. On the contrary, an overwhelming case has been made against the exclusion of this industry from the Bill.

I should like to move on quickly to the specific case of the only ship repairing company located in Wales which is included in the Bill—Bristol Channel Ship Repairers. That company has drawn a certain amount of hostility and attention to itself because of the campaign that it has waged over recent weeks, months and even years. That company represents only 0.4 per cent. of the total labour force of the companies which are under threat of nationalisation—380 out of 91,000 employees. That company has the smallest number of employees of any of the companies mentioned. Those employees are not on one site. They are scattered among six different yards over 70 miles of coastline. Indeed, at Newport only 35 men are employed. How can we argue that these are the commanding heights of the economy that need to be taken into public ownership?

Mr. Bob Cryer (Keighley)

The hon. Gentleman said that Bristol Channel Ship Repairers Limited employed 300 people. Will he explain the difference between the figure given in the annual report for the year ended March 1975, which was 821, and for the previous year—800?

Mr. Wigley

The 800 represents a group figure. I think that the figure given in that report for ship repairing was 380. I think that the hon. Gentleman will find that that is so if he checks it.

Bristol Channel Ship Repairers Limited is not a shipbuilding company. It is situated on an estuary where there is no shipbuilding to be nationalised.

Mr. Roy Hughes (Newport)

The hon. Gentleman is dealing partly with my constituency. Following the point made by my hon. Friend the Member for Keighley (Mr. Cryer), I was wondering whether the distortion in the figures had anything to do with the recent redundancies at that company when consultations, and so on, went by the board.

Mr. Wigley

It is fair that the hon. Gentleman, who has a constituency interest in this company, should raise that matter. I acknowledge that there were redundancies of about two dozen people in that company this year. That was the result of world-wide pressures. Some would argue that it was the result of uncertainty because the Bill is going through, but that is another matter.

I move on now to the profitability of Bristol Channel Ship Repairers Limited. It is a highly profitable company but it has retained the profits to build itself up by increasing investment and facilities for the work force. Only 10 per cent. of the profits in the last financial year went in dividends. That was £122,000 out of £1.2 million profits. Indeed, the return on shares was 2 per cent. That is hardly the description of a company using its profits in a socially unacceptable way.

The company's relations with its work force is magnificent. It has not lost any production due to industrial disputes for over eight years. Over the last few years the company has undertaken far-reaching experiments in industrial democracy. That is something that other companies, whether in the private or public sector, have not done. There is one worker-director for every 50 employees, 90 per cent. of whom are shareholders within the company. About 20 per cent. of the control of the company now lies in the hands of the employees. The programme is for that to be built up to a 51 per cent. stake, which will then make it a worker-controlled company. A profit-sharing scheme for employees is also being introduced.

Mr. Hoyle

The hon. Gentleman seems to have a great deal of detailed knowledge about Bristol Channel Ship Repairers Limited. In view of his detailed knowledge, will he tell me how much has been spent on advertisements against nationalisation and on lunches and dinners at this House?

Mr. Wigley

I am sure that a considerable amount has been spent on the campaign against nationalisation, because the company honestly believes and is convinced—I accept its arguments—that the future for its employees will be bleak if it is nationalised.

The hon. Gentleman asked how much money had been spent on lunches. Perhaps he would care to tell the House that he had lunch provided by that company. Indeed, he went back a second time to find out exactly what the situation was regarding that company. [Interruption.] I missed that last point. I am sure that the hon. Gentleman was merely confirming what I said.

The hon. Gentleman raised some matters in the debate yesterday relative to this company and they should be answered. One point was that the company was against trade unions. In fact, 100 per cent. of the company's shoo floor employees are members of trade unions —the Transport and General Workers Union, the AUEW and the boilermakers union. Company policy is to encourage its employees to be members of trade unions. The majority of supervisors are also members of trade unions. Some managers—for instance, both managers at Newport—are members of trade unions.

The company invited ASTMS, the union in which the hon. Member for Nelson and Colne (Mr. Hoyle) has an interest, to send a local representative to its quarterly conference. I hope that he will go, although he failed to go to the last meeting. A similar invitation has been extended to a representative of APEX. Therefore, this company cannot be projected as being hostile to trade unionism.

Mr. Hoyle

The hon. Gentleman seems to have detailed knowledge, apart from what the company has spent on the promotion of its anti-nationalisation campaign. He is saying that the company encouraged—

Mr. Barnaby Drayson (Skipton)

Put a question.

Mr. Hoyle

If the hon. Gentleman wants to make a point, he should stand up. If he will listen, he will hear the question. I hope that he will not be so impatient. The hon. Gentleman is not often here.

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. I must remind the hon. Gentleman that the Chair takes a considerable interest in what goes on in this Chamber. I should be grateful if he would address his remarks to the Chair and not have too much cross-talk below the Gangway.

Mr. Hoyle

I shall certainly address my remarks to you, Mr. Deputy Speaker. I apologise. I am surprised to see the hon. Member for Skipton (Mr. Drayson) in this Chamber. After all, he is not often with us. If he will be patient, I shall come to the question. Of course, I am always delighted to see and exchange words with the hon. Gentleman.

The remarks made by the hon. Member for Caernarvon (Mr. Wigley) relating to the white collar staff union do not seem to be in line with what I have heard. I do not know of any invitation to ASTMS to send a representative to the company, but I am sure that it will be delighted to send someone along. I have had conversations with the white collar staff employed by Bristol Channel Ship Repairers Limited. They have said that they are afraid to join a trade union for fear of what might happen to them.

Mr. Wigley

I am sure that those fears although perhaps genuinely expressed to the hon. Gentleman, were without foundation. The invitation was given to Mr. Clive Jenkins, the general secretary of the union. The hon. Gentleman can no doubt check that with Mr. Jenkins.

I turn now to the attitude of the employees of Bristol Channel Repairers Limited towards nationalisation. They do not want nationalisation. Yesterday light play was made of the fact that there was a high turn-out in the ballot held by the company. I should have thought that hon. Members on both sides would welcome that procedure. If there is a feeling that the ballot within the company is non-representative, why do not the Government accept Amendment No. 314, which provides for a referendum of employees in all the companies to be nationalised if 10 per cent. of employees request one? That is a reasonable proposal which is fully in line with the concept of industrial democracy if that is to mean anything and is not to be a farce, a skin-thin commitment to worker control, or anything of that kind.

The employees of Bristol Channel Ship Repairers Limited are of the opinion that they are doing well without being nationalised. They feel that the company will do much better if only the Government will get off their backs. They are certain that they will lose customers if the company is nationalised.

There is good reason for their apprehension. I should like to quote from a letter from one of the company's customers, Holter-Sorensen and Company, which wrote on 18th March last year saying: with our experience with nationalised companies, we must regret to announce that, in the event of nationalisation of your firm, we shall no longer be interested in making use of your docking and repair facilities. That is the reality of the situation. About 70 per cent. of the company's business comes from overseas companies which will probably take the same attitude.

Mr. Ron Thomas (Bristol, North-West)

I seem to recall the hon. Gentleman rightly making the point that, due to all the pro-Market propaganda which went around, it was not unexpected that people should have voted in such a way. Will he direct his mind to the possibility that this vast amount of money spent by the company may have created a sense of fear amongst its employees and that that is why they voted as they did?

Mr. Wigley

That is why we have tabled an amendment which would provide for an independent referendum to be taken by, for example, the Hansard Society. That would provide the opportunity for the Government to find out the opinions of the employees. It would not interfere with the type of situation to which the hon. Gentleman refers.

4.30 p.m.

Employees have another fear, that in a nationalised situation work could be transferred from the Bristol Channel yard to yards in the nationalised industry which do not have the same facilities for drawing in work. This is a genuine fear of something which could well take place if lame duck yards are given the benefit of the hard work which Bristol Channel company has done in building up markets by its sales efforts.

Hon. Members opposite may have a point in saying that the public relations campaign which has been undertaken may prove to have been counter-productive, but that is no good reason for including the company in this Bill when all common sense suggests that the company should not be included. We know that the energy of Christopher Bailey and his associates would be far better spent looking for orders abroad than in having to fight this kind of campaign. The way of ensuring that is for the Government to leave this company out of the Bill and to let him get on with his job.

If every industrialist in the nationalised and non-nationalised sector showed as much fight as this company has shown on this issue, the situation in British industry would be very much better. There are hon. Members of all parties who have great sympathy with the situation of the Bristol Channel Company. As we know, there are hon. Members opposite who put down amendments to the same effect as ours. Hon. Members had an amendment on the Order Paper when this debate should have taken place a month or six weeks ago but they are not there now. They have been whipped out, and the hon. Members concerned have been turned into Lobby fodder of the party opposite.

The case in favour of excluding ship repairing and specifically excluding Bristol Channel Ship Repairers is overwhelming. It is known in the yards and by hon. Members opposite as well as by others outside. I hope that when the vote comes they will show by their vote what they know in their hearts.

Mr. Roy Hughes

I confess to a little admiration for the idealism of the Welsh National Party. It is perhaps symbolised in this amendment and in remarks by the hon. Member for Caernarvon (Mr. Wigley). He has said that in principle he is not against the extension of public ownership but that he very much resents the bureaucracy that goes with it. We have some common ground there. But, bearing in mind the idealism of the Welsh National Party, it is difficult for me to understand how those hon. Members have come to be caught up in this sordid campaign of the Bristol Channel Ship Repairers.

No one would wish to deny this firm the right to put its case, but it has certainly bordered on the realms of impropriety. I believe that it has been subject to certain investigations, and that has cost a fortune. If the object has been to prevent the firm being taken into public ownership. I would say that the campaign is having altogether the very opposite effect.

Mr. Heseltine

I am sure that the hon. Member realises that he speaks with the privilege that the House confers upon him. He is making extremeley serious allegations the implications of which could be construed in a way which I very much hope he does not intend. So that the headlines do not carry an impression that he would not want, I hope that he will be careful in explaining exactly what he means by those remarks.

Mr. Hughes

I do not propose to enlarge on my remarks in any way whatsoever in answer to the hon. Gentleman, but certainly hon. Members on this side of the House will be aware of the correctness of my very careful remarks.

Mr. Heseltine

On a point of order, Mr. Deputy Speaker. The hon. Member for Newport (Mr. Hughes) has used words that could be interpreted as implying that the conduct of this company was beyond the law. He said that investigations had been considered. I have asked him to make quite clear what he has in mind so that that kind of implication should not be carried in tomorrow's Press. It is extremely serious. The reputation of the company in a situation in which it has no defence should not be impugned in the House of Commons.

Mr. Deputy Speaker

Any hon. Member carries responsibility for any remark he may make in this place, or for any views he may express, subject to the rules of order. It is entirely up to the hon. Member.

Mr. Kenneth Lewis (Rutland and Stamford)

Further to that point of order Mr. Deputy Speaker. The hon. Member for Newport (Mr. Hughes) used the word "impropriety" in connection with this campaign. It is very easy for hon. Members to use such terms when a campaign is successful, but it is not a term that should be used within the privilege of the House.

Mr. Deputy Speaker

The hon. Member must be allowed to speak for himself. This is not a point of order.

Mr. Hughes

I have made my point perfectly clearly and I am sure that that will be borne out by the Official Report tomorrow morning. I want to make clear that the campaign of this company has certainly hardened the attitude of Ministers. It has certainly closed the ranks of the Parliamentary Labour Party.

I would say to those workers who have got caught up in this campaign that their proper channel is through their respective trade unions and they should not act as tame poodles of the company. It is worth reminding the House that we got rid of Spencerism in South Wales 40 years ago. The consultation and worker participation allegedly practised by this company were not exactly to the forefront when we had redundancies in this firm only months ago, as trade unionists and trade union officers who dealt with the situation in this company will very readily bear out.

I should have thought that the huge sum of money spent on this campaign would have been better given to those poor people who were made redundant and whose families have been badly affected as a result. Personally, I would not myself claim Baileys as a good employer. From listening to the hon. Member for Caernarvon one would have thought the company was the natural successor to Robert Owen in Wales, but we are nearer to the scene in South Wales and know the situation rather better, to say the least. Having made these comments on the campaign of this company, I must say I can understand the attitude of certain employees, some of them constituents of mine, who have approached me on the subject of public ownership.

Mr. Michael Grylls (Surrey, North-West)

May I put a question to the hon. Member very mildly? If he is going home one evening and is attacked by robbers, is it wrong for him to defend himself? This is precisely what this company has been doing in this campaign—defending itself against nationalisation. Is that so immoral? Is it sordid?

Mr. Hughes

I have already dealt with the campaign and I wish to get on.

This firm has operated in various forms in Newport over a long period and it is worth pointing out—and I say this against my own case—that Newport has had rather a sad experience of public ownership. It is essentially very much a steel town. We have experienced the closure of our tube works when 1,500 jobs were lost. Many products were later imported. Chaos has been created at the Llanwern works, perhaps the most modern in the country. The British Steel Corporation has nearly bankrupted our docks by taking away the iron ore trade, and it is time that the Government did something to rectify the situation there.

The misgivings of the employees of Bristol Channel Ship Repairers centre around the fact that ship repairing tends to be concentrated in the North-East of England. With nationalisation, there is a suspicion that there might be rationalisation and that the Welsh enterprise could be sacrificed. That is why I welcome Government Amendment No. 320, which provides for the decentralisation of management and decision-taking and the creation of so-called profit centres. In this sense, the Government have answered the criticisms in the amendment moved by the hon. Member for Caernarvon. Under this arrangement, there is no reason why the South Wales enterprise should not continue successfully.

Publicly-owned industries need to be far more accountable. Here I am on common ground again with the hon. Member for Caernarvon. It was over two years after nationalisation that we had a debate on the steel industry and only then because of the Iron and Steel Act and because Parliament had to authorise vast sums of money to help that vital industry.

The late Mr. Aneurin Bevan always argued for greater accountability to the House by the publicly owned industries. He was absolutely right. We do not want the same sort of practices in these new enterprises as have happened in steel in recent years. It seems as though the rival bureaucracies in the Department of Industry and the BSC argue about the industry's future while the work people are merely minions in the power game.

Work people, through their trade unions, must have a far greater say in these new industries which are to be taken into public ownership. We must not have the sham arrangement that we have had with steel. I welcome the new proposals for the mining industry and I hope that we can get that sort of proposal in other publicly owned industries.

Having made those criticisms, and despite any misgivings I may have, I remain as convinced as ever that public ownership is the right answer for the aircraft and shipbuilding industries.

4.45 p.m.

Mr. Heseltine

This debate exists on a number of levels. I am sorry that the hon. Member for Newport (Mr. Hughes) has lowered its tone in a way which I find totally regrettable. Perhaps one might try to clarify the position. Any company—any member of the British public—has the right to use its legal resources to present its case to this House and to a wider British public and to exercise any legitimate pressure that it can therefore bring to bear in furtherance of its democratic rights. That must be the basis of our democratic faith.

Bristol Channel Ship Repairers has undoubtedly done just that with a flair and a skill which has drawn attention to its case very widely. Hon. Members opposite obviously do not like the case—I do not blame them for that, because it is against their own convictions and philosophy—but it must still be attractive to them as an idea that the right of this company to put a case is fundamental.

The hon. Member for Newport—I regret that he did not find it possible to clarify what he had in mind—suggested that in some way the techniques used by that company were improper, were subject to an investigation, in some way in fringed the law, in some way misused the company's funds. Those were the implications of his remarks.

I should have thought that the only fair thing for the hon. Member to do was to repeat those remarks outside the House. We should then be able to watch the consequences, since the company would have the right to defend itself in the courts. Otherwise, anyone who challenges the views of the Labour Party is likely to find that the Labour Party's defence is to indulge in smear tactics in the House, tactics against which there is no defence.

I intervened in the hon. Member's speech to enable him to clarify what could have been—I say this at once—a perfectly legitimate expression. We all know how, speaking extempore from half-prepared notes, one can use words that do not 100 per cent. reflect what one would have said with a prepared text.

Mr. Roy Hughes

Read Hansard tomorrow morning.

Mr. Heseltine

I heard what the hon. Gentleman said, and I cannot see why it is necessary to wait for tomorrow morning. Why is it not possible for him to clarify what he meant? Then the damage need never be done. By tomorrow morning, when, in the absence of clarification, the implications and the doubts will remain, the damage will have been done.

The hon. Member is being less than fair to those who work for that company, to those who own it and to the wider public, if he does not explain precisely what he meant by his words. He must recognise that in pursuit of this debate, which is very controversial and in which deep convictions are held by all hon. Members, it does no one any good to use techniques which are perhaps less straightforward than we would expect.

Mr. Ioan Evans (Aberdare) rose

Mr. Heseltine

No—I will give way to the hon. Member for Newport.

Mr. Evans

On this point.

Hon. Members

Give way.

Mr. Heseltine

Hon. Members know that I give way as frequently as anyone in the House. I have made a direct reply to the speech of the hon. Member for Newport. I will willingly give way to him so that he can clarify the position.

Mr. Tom King (Bridgwater)

He is not going to budge.

Mr. Heseltine

It is totally regrettable that the hon. Member is going to do nothing—

Mr. Ioan Evans

On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Henley (Mr. Heseltine), who was recently found swinging the Mace, to lecture this side of the House on law and order?

Mr. Deputy Speaker

That is not a matter of order. It is an irrelevancy.

Mr. Heseltine

I am grateful for your view, Mr. Deputy Speaker, that that point of order is irrelevant—just as it would have been if I had referred to the singing of "The Red Flag" on that occasion. I have no intention, of course, of referring to the antics of those songsters—antics for which no apology has ever been made in the House.

Perhaps we can look at the case which was so eloquently—

Mr. Andrew Bowden (Brighton, Kemptown)

Would my hon. Friend comment further on the speech of the hon. Member for Newport (Mr. Hughes), which I can only regard as cheap and nasty? He said that those employees of the company who protested against the nationalisation scheme should use only their trade unions as a means of protest. That is an extraordinary view, because employees have every right to contact their Member of Parliament and other Members.

Mr. Heseltine

I am grateful to my hon. Friend. That is very much the point I had in mind. The point which follows from the eloquent speech of the hon. Member for Caernarvon (Mr. Wigley) is that one must ask oneself what the employees of the Bristol Channel Ship Repairers Ltd. are supposed to have done wrong.

Trade union members indulge, quite rightly, in political activities on the shop floor of their company and in their own private time on behalf of all political parties in this country. They may use any legitimate weapon available to communicate their views through the trade union movement to Parliament or to Parliament direct. There is no criticism of a trade union member who comes to Westminster and lobbies Members of Parliament, or who writes letters on a large scale to Members of Parliament. Similarly, there is no criticism of any manager who argues his case in the normal political way.

This being the case, why is Bristol Channel Ship Repairers Ltd. being criticised? It is not a question of what the company has done, but simply the fact that it disagrees with the Labour Party. [HON. MEMBERS: "No."] Oh, yes, that is so.

Mr. Cryer

We on this side of the House do not oppose any company putting its case. Those of us who have criticised Bristol Channel Ship Repairers do so because we object to the methods of a company employed by it—a firm called International News Service. We criticise the methods that that company employed to present the case, and we believe that the presentation strayed beyond the bounds of reasonableness.

Mr. Heseltine

I think that it is perfectly reasonable for hon. Members to look carefully at all the methods used to draw views to their attention. We must exercise that judgment all the time. There is an obvious sanction available to us: we do not need to accept the invitations made to us, or read the documents sent to us. There are a thousand different ways in which we can rebel against that technique.

If Labour Members had consistently opposed these methods, I should understand their protests, but Labour Members have not refused to look at documents sent to them. Is the hon. Member for Keighley (Mr. Cryer) seriously suggesting that Labour Members have not been involved in what I would call the gravy train of this company? Is he saying Labour Members have been immune to this process? It is within the control of every hon. Member to wield the ultimate sanction. The only reason the company asks hon. Members to be entertained is in the expectation that its representations will be accepted. They were accepted by Labour Members. But we do not have to accept them and Members of the Labour Party could say "No."

Mr. Deputy Speaker

Order. We are going very wide of the amendment. I call the House back to the point of the amendment.

Mr. Heseltine

Of course I accept your ruling Mr. Deputy Speaker, but I take it that there would be a protection for us for the remainder of the debate if this case were raised again.

I move now to the case against including the ship repairing industry in the context of this nationalisation measure. We have all come to the House today with certain knowledge of how the votes will be cast. The result will be wholly predictable at the end of the day. To that extent, this is not a debate at all We do not believe that there is any prospect whatever of any argument being produced from this side of the House that will influence the Labour Party in any way. Labour Members believe in public ownership. They will look at any complex industrial problem, and every research team they put up to investigate it comes up with the answer of nationalisation.

Mr. John Evans

The hon. Member makes the comment that there is no real debate on this matter. He has been on his feet for 10 minutes, yet he has not talked about the ship repairing industry at all. It might help the debate if he were to do so.

Mr. Heseltine

I am moving to precisely that subject. The important point is that in the debate this afternoon no one expects that a change of mind will result from the argument deployed by the hon. Member for Caernarvon, or any other arguments that could be conceivably deployed by other hon. Members against including ship repairing. I do not expect the Labour Party to accept that. The only additional tactics that could be adopted to further the debate would be to look at the case histories of individual companies or individual estuaries and give a theoretical denunciation of the practical realities of nationalisation in order to counter what has been said.

There is a whole myriad and range of problems facing every industry and every company in this country. It is the essence of the managerial concept that one is continually problem-solving. When one range of problems has been solved, others will take its place. The important question is whether the problems of today will be better solved by nationalisation.

There are a considerable number of companies involved in ship repairing which are short of work, in common with many other industries. Nationalisation will not produce one extra job or find one extra ship in need of repair. It will not divert to British estuaries one single ship which needs work done on it.

Then there is the question of the possibility of providing investment funds. This Government must have come to understand that money for public expenditure has run out. We saw this in last week's announcement by the Chancellor. The nationalisation investment programme was reduced by £150 million on capital account. To suggest that this is the way to raise money for investors in our yards is quite unrealistic.

The forward forecasts for the nationalisation budgets of these two corporations do not foresee any increase in capital expenditure. There is no evidence to suggest that capital expenditure will increase under nationalisation—indeed, the evidence is that it might well be reduced.

5.0 p.m.

Mr. Ron Thomas

We debated this matter in Committee. The White Paper is very vague, talking about "may" and "likely to be" and so on. Therefore, to say that there are specific figures in the White Paper on capital investment in these industries is quite wrong.

Mr. Heseltine

The hon. Member wants to go on believing that sort of thing. It is a political imperative for him to tell his constituents that nationalisation will solve their problems by producing jobs and investments. I hope that he will remember what I have said when the harsh truth dawns and when none of these things has happened because the money has run out.

The difficulty is that the Government Front Bench says the same thing. It has to take actions which result from having said so, but still the lesson does not get home to Labour Back Benchers. Last week the public expenditure programmes of the nationalised industries were cut. But still Labour Members think that there is a pool of money which can be drawn upon next year or the year after. The realities are quite different. The cash has run out.

Every time the Chancellor comes to the House and says he will increase public expenditure, for whatever purpose, including the investment programmes of the nationalised industries, there will be a consequent decline in public confidence. It will be necessary to increase interest rates, which will further prejudice employment in the private sector as well as having already reduced it in the public sector. That is the harsh reality which underlies this legislation. It is therefore unrealistic to suggest that nationalisation offers further investment opportunities.

Labour Back Benchers suggest that nationalisation will prevent unemployment in these industries. To be fair to the Prime Minister and the Secretary of State for Industry, that is not what the small print says. The reality has been put on the record by the responsible Ministers. Of course unemployment will rise, particularly in the areas where these industries are concentrated. Labour Members might like to give their forecasts of what they think unemployment will be in the North-East and on Clyde-side by the end of the year.

Mr. Ron Thomas

What would it be if the hon. Gentleman's policies were accepted?

Mr. Heseltine

It is the Government's policy to nationalise these industries in the belief that that will avoid unemployment. It will not. The sooner that Labour Members realise that, the sooner they might realise that we should be talking about how to get jobs into these industries, not how to change their ownership. The mere spending of £300 million of taxpayers' money is destroying jobs. It is time that Labour Members realised that and stopped deluding themselves and the employees in the industries.

Nationalisation will divert the nation's attention from the realities of these industries. It stops the dialogue about what we should be doing to help them. It is convenient for Labour Members to indulge in this diversion because it is easier to try to pretend that there is a cosy soft option when in reality as a nation we have run out of resources with which to pay for that option.

My right hon. and hon. Friends will vote for the amendment with the total conviction that our arguments have been victorious throughout the debate. We shall do so with another certainty. It is that if by any chance we are unsuccessful in this debate, and should the legislalation reach the statute book, we intend, on returning to power, that the Bristol Channel Ship Repairers and the other ship repairing companies are returned to the private sector as rapidly as we can do it.

Mr. Kaufman

The hon. Member for Caernarvon (Mr. Wigley) introduced his amendment in the moderate and agreeable way that we expect of him and his colleagues. I do not criticise him for moving it or for the way in which he did so. He has spoken out of conviction, and I hope that by the time I have concluded my remarks he will feel that his convictions are not as soundly based as he at first thought.

First, I shall deal with the subject of ship repairing in general before coming on to the individual case. Perhaps I should make one preliminary remark. For reasons which I fully understand and which I do not criticise in any way, he has based his remarks upon one individual company. He has said that it is unnecessary to include ship repairing in Wales in the Bill. But before he casts his vote on this amendment he should consider another ship repair company which has implications for Welsh workers and, what is more, Welsh workers who live a good deal nearer to the hon. Member in Caernarvon than do the workers represented by my hon. Friend the Member for Newport (Mr. Hughes) and others of my hon. Friends including my right hon. Friend the Prime Minister.

Has the hon. Gentleman considered what is likely to be the fate of the workers in Western Shiprepairers on Merseyside if the Bill does not embrace ship repairing? Although the total number of workers in that company is roughly the equivalent of the number of workers in the group for which he is speaking today, and although I agree that by no means are all those workers Welsh, he should consider the repercussions of unemployment on Merseyside. That is one of the reasons why the Government took the view they took about the Shotton situation and why they are so anxious to retain the maximum amount of work for the Hawker Siddeley factory in East Flint.

Mr. Gwynfor Evans (Carmarthen)

The Minister of State speaks of his fears about possible unemployment on Merseyside if the Bill is amended. Does he fear the same thing, for instance, in Avonmouth and in Bristol, where there is a firm not included in the Bill? Is there likely to be unemployment in that firm as a result of its not being nationalised? Why is it necessary to include Bristol Channel Ship Repairers and not to include a firm twice the size on the same estuary?

Mr. Kaufman

I shall of course be coming to these matters in due course. Unlike the Opposition Front Bench, which simply regards any dialogue between us with cynicism, the hon. Member for Carmarthen (Mr. Evans) will know from our contacts that I endeavour to discuss with him, not always on the basis of agreement, but certainly on the basis of mutual respect. I shall respond to him again on that basis.

Mr. Heseltine

Get on with it.

Mr. Kaufman

I will not be told by the Conservative Party how to arrange my speech. At least I do not seek to create effects in this House by throwing the caber or something of that kind. My hon. Friends bitterly resented the hon. Member for Henley (Mr. Heseltine) having the nerve to lecture my hon. Friend the Member for Newport, with reference to some of the workers involved in the company, on respect for parliamentary institutions.

As for ship repairing in general, I remind the House that we have a specific commitment to nationalise in both our 1974 election manifestos. That is distinct from the commitment applying to shipbuilding. Whereas some hon. Members may feel that we are not carrying out all our manifesto commitments, I hope that they will not criticise us when we do carry them out. In fact, we have carried out a great many.

The ship repairing commitment arose from the report of the joint Labour Party /CSEU/TUC Working Party which was published in 1973 when the Labour Party was in opposition. The joint working party recommended that the proposed corporation should acquire control of all significant companies in the ship building, ship repair and marine engineering industries. That recommendation was endorsed by the 1973 annual conference of all three bodies.

The PA Management Consultants Limited report on the industry, which was commissioned by the previous Conservative Government, identified a number of problems that the industry is facing. It identified a number of "obstacles to growth": the development of an already strong industry on the Continent … the existence in many cases of several ship repairers within one estuary and the consequent tendency for the individual companes to compete against each other instead of concentrating upon meeting overseas competition … outdated facilities of many repairers which will become even more unsuitable in the longer term as the average size and type of vessel changes … unsatisfactory labour relations and their impact upon international competitveness. When the hon. Member for Caernarvon understandably refers to what he regards as the satisfactory labour relations record of Bristol Channel Ship Repairers Limited, it is significant that that company chooses a term of years within which to measure its good labour relations. I am sure that the hon. Gentleman will know that between 1967 and 1969 the company had a strike that lasted for two whole years. Those are the labour relations traditions of Bristol Channel Ship Repairers Limited.

The hon. Member also referred to financial assistance. Assistance is likely to be needed to finance essential involvement as sufficient funds are unlikely to be forthcoming from the private sector. In the past 10 years employment in ship repairing, as I have already pointed out, has halved. Without moderisation the industry is likely to decline further.

Mr. Neville Trotter (Tynemouth) rose

Mr. Kaufman

If the hon. Gentleman will forgive me, I shall not give way. I do not want to take too long with my remarks. No doubt he will have an opportunity of speaking after I have concluded.

Most of the jobs at present provided by the industry are in assisted areas, including Merseyside as well as South Wales. The major aim, therefore, of taking into public ownership the larger ship repairing companies—the hon. Gentleman may say that Bristol Channel Ship Repairers Limited is not one of the larger companies, but, on the other hand, he has said that it is responsible for a quarter of all the exports of the ship repairing industry—is substantially to improve investment and productivity in the industry. Taking into public ownership the larger companies mostly situated on the main estuaries will enable the corporation to produce a coherent strategy for the ship repairing yards as a whole.

There has been some criticism of the scope of public ownership in the ship repairing industry. The hon. Gentleman took up that point. Some hon. Members have argued that individual companies should be exempted from nationalisation on the grounds that they are small, while other hon. Members have pressed for the inclusion of other even smaller ship repairing companies. I think it will be helpful for me to explain the effect of the Government's proposals as detailed in Schedule 2.

As the PA report pointed out, the most significant ship repairing units are those which are located on the major estuaries in Great Britain—for example, the Tyne, the Mersey, the Thames, the Bristol Channel, the Humber or the lower Clyde. What the Bill seeks to achieve is to bring into public ownership all the large ship repairing companies mostly located on the main estuaries. For these reasons it would be a great mistake if the amendments to delete ship repair were carried. I urge the House to reject them.

5.15 p.m.

As I have said, the public ownership proposals set out in the Bill embrace all the large ship repairing groups on major estuaries in Great Britain—for example, the Tyne, the Humber, the Mersey and, by no means least, the Bristol Channel. We believe it right for the purposes of giving British Shipbuilders an adequate industrial base for planning a better future for the ship repairing industry for the large estuarial companies to come into public ownership. The definitions in Schedule 2 were drawn up to achieve this result. The fact that some companies are not in shipbuilding groups is not a relevant consideration. I remind the House that our manifesto commitment to nationalisation refers to ship repair as well as shipbuilding.

In terms of the number of dry docks operated, Bristol Channel Ship Repairers Limited is the second most significant company in the list in the Bill. It operates eight dry docks along the South Wales coast. Its annual turnover in the period relevant to the definition was over £1 million above the cut-off. In terms of turnover, several other listed companies are smaller.

Mr. Albert Roberts (Normanton)

I believe in "one in, all in" when dealing with nationalisation. I point out to my hon. Friend that on nationalising the mines we gave licences to small mines that allowed the owners to work under the private enterprise system provided that they employed no more than 30 people. Has my hon. Friend given consideration to that point? I believe it is an important matter that should be considered in terms of the main areas of ship repairing. However, there are places where repairing is nothing more than a scratching shed. If it is possible, to give some relief, it should be done.

Mr. Kaufman

My hon. Friend has long experience of the mining industry and understandably draws upon it in considering these matters. We have considered a number of proposals for this company and we have arrived at the one that has been put before the House. One of the reasons for coming forward with the proposal is that we do not believe—I know of my hon. Friend's long advocacy for public ownership of the coal-mining industry and that he will accept what I am about to say—that nationalisation should merely consist of taking over losses and loss-makers.

One of the reasons for us wanting to take over a successful company such as Bristol Channel Ship Repairers Limited —nobody has said that it is not successful—is that we want to incorporate the strength of successful companies within ship repairing companies and British Shipbuilders. We aim to do so on the basis of considerable decentralisation.

Much propaganda has been issued by Bristol Channel Ship Repairers Limited —indeed, it was referred to by the hon. Member for Caernarvon. That was aimed at the Bill as it was published, but my hon. Friends will know that the Government have come a long way in improving the Bill since it was published. We have two important amendments that I trust will be carried by the House, one that will require decentralisaion as a duty for British Shipbuilders. I shall read the words in the amendment to my hon. Friends to show how decentralisation is to be achieved. It requires the British Shipbuilding Corporation and British Aerospace to take account of the desirability of promoting the largest degree of decentralisation of management consistent with the proper discharge of its functions, and whatever steps are necessary in order effectively to promote industrial democracy in its undertakings and the undertakings of its wholly owned subsidiaries. Indeed, we have gone even further than that.

Mr. Heseltine


Mr. Kaufman

It would have been better if the hon. Gentleman had replied to my letter. I invited him to have discussions on industrial democracy. Maybe he could have improved upon my proposals. I wrote to him inviting him to take part but unlike the Liberal Party and the SNP, who responded, the hon. Gentleman did not even answer the letter. The hon. Gentleman has no right to talk about industrial democracy in the Bill.

I draw the attention of the House to Amendment No. 320 which requires that British Shipbuilders should seek the largest degree, consistent with the propel discharge of its functions, of decentralisation of management and decision-taking to separate profit centres in the shipbuilding and ship-repairing areas of Great Britain, in particular of Scotland and Wales and, without prejudice to the generality of the foregoing, in relation to sales, pricing, production, the formulation and implementation of investment programmes, manpower planning and management, industrial relations and responsibility for financial performance". The corporation will have to report to the Secretary of State who will have to report to Parliament within six months of vesting on how this has been carried out.

Much needless anxiety has been created in the Bristol Channel Ship Repairers Limited's South Wales yards by the management's anti-nationalisation propaganda, including the claim that nationalisation will result in the closure of yards. I repeat emphatically that the Government have no proposals for closing any of these yards. I can see no reason, given the past profitability of the company, why the future corporation should not seek to build on existing strengths and to extend the benefits derived from the South Wales experience to the rest of the ship repair industry.

The hon. Member for Caernarvon said that the company wanted to get the Government off its back. In the publicity material prepared for the firm by International News Services, there is the statement: We are independent and we have always provided for our own financing. But the hon. Member will know that Bristol Channel Ship Repairers Limited has come to the Government for £20 million of financial aid in connection with a dry dock that it wishes to build at Port Talbot. The hon. Member for Caernarvon will know about this because he wrote to me supporting the case that was made at the time. I replied on 20th February that this would be considered by the Organising Committee.

In the document prepared for Bristol Channel Ship Repairers Limited there is a coloured photograph of an iron ore unloading berth in Port Talbot harbour under which it says that with co-operation a dry dock could be at Port Talbot within nine months. By "with co-operation", the company means £20 million of Government assistance.

Mr. Wigley

Can the Minister confirm that no sum of this magnitude has been paid to the company and that it has received no more than the normal provisions in any development area? If the Port Talbot scheme went ahead, it would provide 1,000 much-needed jobs. Is it not regrettable that the scheme has not been given the go-ahead?

Mr. Kaufman

Naturally a scheme of this kind, which would cost £40 million, of which the firm wants the Government to pay half, would provide employment and be very valuable, though whether it is economically viable is a matter to be considered.

We said that it should be considered by the Organising Committee, but the firm seems reluctant to talk to the committee and therefore there has been virtually no movement and a leading figure within C. H. Bailey has said that the Government have passed the buck to the Organising Committee.

The hon. Member for Caernarvon said that the company could not be depicted as being hostile to trade unions. I am not jeering at the hon. Member, but it is necessary that I should draw the attention of the House to a report in today's South Wales Echo which reads: An Industrial Tribunal has ruled that there was a 'real possibility' of victimisation against 13 men who claimed they were made redundant by a South Wales company because they were in favour of nationalistation. The Tribunal decided the men were unfairly dismissed by the Cardiff-based Bristol Channel Shiprepairers. The company has been running a long, costly campaign against the Government's nationalisation plans for shipbuilding. The comments on victimisation are made in the findings of the Industrial Tribunal following the dismissal of a number of men from the company in June last year. In his report the Tribunal Chairman Mr. Patrick Webster said that the company had failed to convince them that one of the men —Mr. T. O. O'Keefe, treated as a test case at the Tribunal—had been dismissed because there was no work for him and also failed to satisfy them that the man had not been victimised. Mr. Webster said 'all members were left in a state of very real doubt as the real cause of dismissal and we finding ourselves in the position of believing that there is a real possibility that the dismissal was due to victimisation.' The row over victimisation began at the company which is headed by South Welsh Nationalist Mr. Chris Bailey following his campaign in the Press with full page advertisements calling for halts to nationalisation plans for shipbuilding yards. The firm admitted spending more than £100,000 on the campaign last year and almost immediately afterwards 80 men received redundancy notices in South Wales. A slump in the world shipping market was given as the reason. Eventually 30 men lost their jobs. Mr. John Cooke, a legal advisor the Transport and General Workers Union, who fought the dismissals at the Tribunal held this year, commented today 'the redundancies carried out by the firm have been estimated to save the firm around £120,000 in a 12-month period. It seems to us that Mr. Bailey recouped the anti-nationalisation cause at the expense of workers.' After hearing the Tribunal's unanimous decision that the men were unfairly dismissed Mr. Cooke said 'it is our contention from the start that workers were sacked primarily because of their pro-nationalisation views which were in line with official union and Labour Party manifesto policies. The best tonic for Mr. Bailey and others now will be the successful passing of the shipbuilding nationalisation Bill. Bailey's claim that the men were made redundant because of their work records but it seems strange that these men were all prominent Labour Party members and supporters of socialist principles. They were simply weeded out because of their views'. Mr. Cooke said a meeting of the men involved in the Tribunal's decision would take place on Monday next week to sort out details of redundancy payments and compensation to be paid by the firm. In his concluding remarks Mr. Webster"— the Chairman of the tribunal— said Mr. O'Keefe alleged, in detail, that looming large among the reasons why he was chosen (for dismissal) were his pro-nationalisation views and activities. Since we are not satisfied that these expressed views and activities were not the cause we find he was unfairly dismissed'. 5.30 p.m.

That is Bristol Channel Ship Repairers Limited, 1975–76, waging its campaign against nationalisation, and Bristol Channel Ship Repairers has been found unfairly to have dismissed workers who were pro-nationalisation.

I very much hope that all hon. Members who have been taken in by the glossy propaganda of Bristol Channel Ship Repairers will see what lies below that glossy surface when they cast their votes on both this amendment and the amendments to be discussed tomorrow. I say to hon. Members of Plaid Cymru, whom I have come personally to respect, and to respect as a group, that I know that they would not wish to be associated with that kind of activity. They are good trade unionists and good supporters of justice. I very much hope that they will reconsider their association with this company and this amendment, after we have seen the way in which Welsh workers have been treated by the company.

Mr. Heseltine

Obviously the report from which the hon. Gentleman has quoted is not available to anyone else in the House. However, as it has arrived at a partciularly interesting moment, I should like to ask why it is that not one of the workers who stayed on showed any sort of interest or sympathy in this argument.

Mr. Kaufman

If that is the best that the hon. Gentleman can do, he would have done better to retain his seat.

Mr. Heseltine

Can the hon. Gentleman answer the question?

Mr. Kaufman

As the House knows, I have endeavoured to visit Bristol Channel Ship Repairers in order to meet the workers and have meaningful discussions with them about the Government's proposals. The company has so far failed to facilitate my visit. After the report in the newspaper to which I have referred, I can well understand why the company does not want a Minister there to tell the workers about the Government's case.

Mr. Richard Wainwright (Colne Valley)

The whole House will be very grateful to Plaid Cymru Members for bringing to the Floor of the House a debate on the whole question of nationalising ship repairing. Not one company in particular but the whole sphere of ship repairing is now to be discussed on the Floor of the House after a debate in Standing Committee on 15th January which the Government refused to make a meaningful debate. Plaid Cymru is performing a very valuable service in that respect.

The striking thing about the inclusion of ship repairing in the Bill is that it marks a watershed in the operation of nationalisation by a Labour Government, because the inclusion of ship repairing is a deliberate attempt to nationalise very small units in our mixed economy. It is the first time that separate units of groups with as few as 35 workers are deliberately to be nationalised.

This trade of repairing is essentially, by its nature, carried on in small units on a highly competitive basis, offering service at any hour of the day or night, which is completely in line with the operations of small businesses in any number of trades throughout the country. Until now we have always understood, certainly in the wool industry of Yorkshire, which is also carried on in small units, that it has not hitherto been part of the Labour Party's plans—or so the Labour Party has told the voters—to nationalise these small-scale industries which are carried on in a competitive spirit under managements that know their individual people.

Mr. Cryer

In the directors' report for Bristol Channel Ship Repairers Limited for the period 31st March 1973 to 29th March 1974, it is stated that The average number of persons employed (including temporaries) in the United Kingdom by the Company, including shiprepairing and engineering, during the period was approximately 850 (1973, 821). Does the hon. Gentleman accept that this is a company employing about 850 people?

Mr. Wainwright

That is in no way germane to my argument. The units of operation in distinct places are all small, involving numbers varying from about 35 to about 100. These are units which have never before come under the guillotine of nationalisation. In that sense we are at a watershed in the operation of I abour nationalisation plans. Therefore, all who are involved in small-scale enterprise under highly local management are under notice that they are now under threat of nationalisation. As regards the interjec- tion of the hon. Member for Keighley (Mr. Cryer), I adhere to my point that in ship repairing, to be affected by this Bill, there are not more than 350 employees at most in all the different operational units of the particular company concerned.

However, my remarks are not in relation simply to Bristol Channel Ship Repairers. They relate also to the whole ship repairing industry.

Mr. Kinnock

Will the hon. Gentleman give way?

Mr. Wainwright

Time is very short under the timetable that has been imposed by the Government.

I turn to the meaningless guarantees —so-called guarantees—that have been offered by the Government about profit centres. I have some personal experience from my previous professional work of what can happen in these matters. I am very familiar with the assurances that are given in a takeover situation to people who have either sentiment or even a more genuine feeling for some particular unit that is being taken over. They are told in the most lavish and bland way—although I have never come across people in business who can be quite as bland as the Minister of State—that their particular unit will continue to be a profit-centre and to have a local board of directors who can continue to sit around the old walnut table in front of the familiar candlesticks. But what happens? Because these small units that have been give certain temporary assurances are a thorn in the flesh of bureaucratic management, every effort is made to extinguish them, because that is the way in which the promises can be ignored.

Mr. Kinnock


Mr. Wainwright

One gets out of one's promise by extinguishing them. How will these small units of ship repairing be extinguished in order to let the Government out of the letter of their promise? The central bureaucracy of British Shipbuilders will divert work away from the small units that have been given this promise, in Wales and in Scotland, so that gradually the results of these profit-centres will be less and less impressive. When these small centres have eventually been driven into a state of contrived un- profitability, they will be given the axe. Nobody is better at sacking people in the most ruthless way than our nationalised industries.

In conclusion, we understand the determination of, at any rate, a handful of Labour Members to carry out even the embarrassing parts of their manifesto. Let them bring the National Enterprise Board into the field of ship repairing if they must stick to their manifesto, but do not create a complete precedent for nationalisation by taking over units almost of the corner shop size which, hitherto, have been immune from this kind of attack.

Mr. Donald Anderson (Swansea, East)

The hon. Member for Colne Valley (Mr. Wainwright) argued that small is beautiful. He clearly had not heard the speech of the Minister who set out the turnover and total capacity of Bristol Channel Ship Repairers, for example, nor did the hon. Gentleman take on board the point that if the application for the new dry dock facilities at Port Talbot were to go ahead that would increase the company's capacity very substantially indeed. The hon. Gentleman finally argued that no one is better at sacking people than the nationalised industries. He did not appear to listen to what was said about the expertise of Bristol Channel Ship Repairers in sacking people, which has been demonstrated by the tribunal finding today.

This has been a long running issue made more dramatic by the advertising campaign on behalf of Bristol Channel Ship Repairers. That campaign has been characterised by considerable panache and a buccaneering spirit. Indeed, one feels that the campaign itself has been the object rather than the end result of keeping Bristol Channel Ship Repairers out of the clutches of public ownership. I consider that the campaign has been wholly counter-productive which has led to the setting of the company's virility against the Government's virility. Inevitably, in that situation, the Government will succeed. It has prevented a cool appraisal of the case for nationalisation and the position of that company in the new post-reorganisation structure. In short, the company has influenced people without making friends.

I personally accept that Bristol Channel Ship Repairers should in some way be brought under the umbrella of public ownership. I would have preferred to have a less formal relationship leaving the strategic oversight of the company in the hands of the Government while still retaining the flexibility and initiative which has characterised the company.

Mr. Kinnock

Having shared those same feelings, may I draw my hon. Friend's attention to Amendment No. 15, which, hopefully, we shall reach later, which provides that precise flexibility, as well as the retention of identity, plus the advantage of meaningful industrial democracy in the company. I hope that that will reassure my hon. Friends.

Mr. Anderson

I accept that there has been a considerable advance by the Government in both those fields mentioned by my hon. Friend and that many of my own apprehensions have been settled. But at an earlier stage I would have preferred some form of equity participation by the Welsh Development Agency. That was not to be and the possibility for it is now long past.

The issue has been portrayed in very black and white terms. We are told that this is a small company which will ultimately be swallowed up by a vast bureaucratic machine.

Mr. John Evans

Would my hon. Friend accept that this is the heart of the matter? Certainly the fears of the workers which have been so skilfully and ruthlessly played upon by the management are genuine. They are that the Bristol Channel Ship Repairers will be closed down and the work sent to Tyne-side and Merseyside in the development areas. Will my hon. Friend accept that in spite of the nonsense talked by the hon. Member for Colne Valley (Mr. Wainwright), the Government have no power whatever to direct any ship anywhere? Would he agree that if a ship owner does not like a British ship repair yard he is quite at liberty to send his ship to another company in any part of the world? The Government have no powers in this respect and are not proposing to take any powers.

5.45 p.m.

Mr. Anderson

I fully accept that Indeed, because I have a constituency interest with roughly 90 constituents employed by the company, I would certainly not support this Bill if I thought that it would jeopardise their jobs. I accept that there has been a very successful campaign of stirring up the fears of the work force along the lines that my hon. Friend the Member for Newton (Mr. Evans) has mentioned.

The company has certainly a very impressive record. It took over the Swansea Dry Dock in my constituency about three and a half years ago, built it up, and today it is a thriving concern. But I think that some of its achievements have been vastly over-stated. What abort the labour relations record, for example, when it came to the real test? In a redundancy crisis situation about which one has heard from the Minister today we should ask what the reaction of the company has been. Indeed, redundancies were declared in July of last year without proper consultation with the union and the chairman himself selected the people who were concerned and determined their number. That is hardly the model of consultation which is suggested in the glossy brochures.

The company claims that it has no interest in assistance from public funds, yet we have been told about the application for funds for the Port Talbot scheme. I personally have a major concern about what the job prospects of South Wales will be as a result of this nationalisation measure.

I have mentioned that I have 89 constituents employed by this company and their own job fears have been encouraged by the strident propaganda issued on behalf of the company. One of the brochures states: The history of nationalisation is a history of closures. My own view is that the men involved are concerned about job security and are not concerned with ideology or who is to be the boss. They are more concerned about whether they will get their pay packet at the end of the day. The question that they and I ask is, how will the employment prospects of South Wales be affected by the Bill? Of course, there cannot be an absolute guarantee about job maintenance whether the Bristol Channel Company stays as it is or whether it comes into public ownership. However, to a large extent, I am reassured by the assurances of the Minister and the Lord President.

I am convinced also that the best guarantee for the continuance of the company at least its present level is the political muscle of South Wales MPs. That has been demonstrated by the fight over the South Wales ports. We shall certainly be ready to act if there is any diversion of orders from the traditional customers in South Wales to other and larger yards. I am also reassured by the fact that under the new structure formidable financial resources of the corporation will be available. I am glad that the Bristol Channel estuary will be organised as a separate profit centre and I welcome the decentralisation which is the feature of it.

Welsh Nationalist MPs have claimed that this decentralisation comes as a result of their own pressure. They may not have noticed the concession which was made in Committee in January of this year. I wonder what they will be able to show at the end of the day when the debate is over and the company is nationalised?

The claim that foreign business will go elsewhere if the company is nationalised has also been made. I think that is nonsense. Foreign business men are concerned with the quality of service rather than whether the business is in private or public hands. Finally, the company has claimed that it is patriotic and that it is concerned with jobs and the well-being of its employees. When this Bill is law, that claim can be put to the test. Will it then abandon South Wales, as seems to be apparent in its latest brochure "Specialists for Hire", or will it remain in South Wales and put its expertise at the service of the nation and strive for the success in order to ensure the jobs of its employees? What is the company's commitment to its present labour force? We shall see after nationalisation.

Mr. Trotter

The future of the ship repairing industry depends not on who owns it but on its efficiency. When deciding who will be best at securing jobs in the industry in future, we have only to look at the record of the existing public industries.

The ship repairing industry is a completely different industry from the shipbuilding industry. In my constituency there is a repairer who repairs 300 ships a year. Next door, there is a very large building yard which builds only six ships a year. The only similarity between the two industries is that they are both concerned with ships. To equate the two is like equating a garage that repairs cars with a factory that constructs them.

We are talking of small units. I can think of nothing that is less likely to have its efficiency improved by the bureaucracy which is always present in nationalised industries than these small units dependent upon speed, flexibility and personal contact between management and owners. They will suffer under the dead hand of nationalisation.

The ship repairing industry is international. There are no captive customers. Anyone who wants to buy gas has to go to the British Gas Board. Anyone who wants a ship repairer can go to Amsterdam or Blohm and Voss in Hamburg if he does not like the service he gets in this country. The myth has been put about that the Bill is the salvation of jobs in the ship repairing industry. Mr. Henry Wilkinson, a union leader at State-owned Greenwells, referring to the closure of that yard and the Government's failure to take action to prevent it, said a few weeks ago: I have no doubt in my mind that if private enterprise had tried to perpetrate some of the evils that the present Government have done on some members employed in this industry probably the whole river would be out on strike. That is the sort of attitude we get with public ownership. The sole reason for the inclusion of this small, personal industry in the nationalisation Bill is dogma. The Minister of State said that he had no plans to close yards. The truth is that the Government have no plans of any sort for the industry.

Mr. Tom King

The amendment seeks to delete ship repairing from the scope of the Bill. In all the arguments we have had about nationalisation of the aircraft and shipbuilding industries, any impartial observer would say that the case for nationalising ship repairing has always been the weakest part of the Govern- ment's case. As my hon. Friend the Member for Tynemouth (Mr. Trotter) said, it is an entirely different industry. The hon. Member for Caernarvon (Mr. Wigley) cited flexibility and the need to give customer service. The survival of this industry will depend not on Government money but on the number of customers it has, not just in this country but all over the world, who think that the industry does a good job promptly and efficiently at a reasonable price. We believe that that flexibility and competitiveness of service will be handicapped under nationalisation.

If hon. Members who take an interest in the Government's amendment on decentralisation, on which we shall be voting, think that it adds up to a row of beans they are even more gullible than I imagined them to be. All it means is that if the corporation comes back within three months and says that it cannot run the industry on those lines and will have to run it in the way it wants to, that is the end of its statutory obligation under the agreement.

In Committee we got to know the Minister of State. He has a great habit of producing rabbits out of hats in the most surprising way. Today the Minister produced an unconfirmed statement when he most needed it. It was supposed to come from the South Wales Echo, of which I understand there is no copy in the House. We wonder how that is. Is it just a supreme coincidence that this statement was produced at the crucial moment when the Minister of State happened to require it in an awkward debate before any hon. Member has had an opportunity to check it? The Minister has tried to pull one rabbit too many out of the hat, and we shall not be conned.

Mr. Wigley

This debate has caused a lot of rabbits to be brought out of a lot of hats. The hon. Member for Newport (Mr. Hughes), who has constituency responsibilities, referred to the safeguards in the amendments against work being transferred from South Wales to other areas. I do not share his views. When South Wales has a big order book and there is no work elsewhere, the political reality is that that work will be moved.

The Minister referred to unemployment on Merseyside. I agree that if one of the companies went to the wall there would be a possibility of unemployment. The fundamental question is from where the work will come or from where it will be transferred. How will more international work be attracted to Merseyside—or do the Government have a magic wand which will create work?

The Minister referred to the Bristol Channel area from which he said came one-quarter of the exports that have been achieved by the United Kingdom. That is a reflection of the efficiency of Bristol Channel Ship Repairers and its performance in attracting work, although it has a smaller work force than has any other company we have discussed.

In the three minutes that remain to me I shall concentrate on the rabbit that came out of the hat at the end. It so happens that I have in my hand a copy of the proceedings of the industrial tribunal which was signed, not this week, but on 26th May, and which has been held back deliberately to be released today for political reasons. The Minister has perpetrated an offence against the House of which he should be ashamed. The Minister read quotations, supposedly from the report, reported in the South Wales Echo, but he included words which were trade union comment on the case. The onus of proof in this case was on the company. The case was not political. The case put forward by the Transport and General Workers' Union was of inadequate consultation, not political dismissal. That was not the impression the Minister gave a moment ago. The report stated that because insufficient evidence had been brought forward, the tribunal had to go on the side of the employees, but that it was possible that a full case had not been submitted. The company within a few hours of the hearing said that it would go to a higher court and appeal against the decision.

The Minister said that all the employees in the case were Labour Party members, but I have been told on good authority than one was a strong supporter of the Conservative Party. The test case employee had had two warnings about the performance of his work before he was dismissed. It will be interesting to see what the higher court makes of this.

It is easy to pull rabbits out of the hat at the last moment to swing opinion on the Floor of the House and to demoralise hon. Members who have no opportunity to reply. When the substance is considered, we see that a very different picture is presented and that the company had nothing proved against it.

Mr. Roy Hughes rose

Mr. Wigley

No, I shall not give way. The redundancies that occurred this year were agreed by the unions concerned, in line with the Employment Protection Act. There was no question of unfair dismissal.

The case is overwhelming that the company should not be nationalised and no case has been made out for the ship repairing industry to be included in the Bill. If it is included, many people will suffer, many jobs will be lost and areas such as Cardiff will lose their economic base. I put it to the House—

It being Six o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to Orders [20th July and yesterday], to put forthwith the Question already proposed front the Chair.

Question put, That the amendment be made;—

The Committee divided: Ayes 296, Noes 302.

Division No. 293.] AYES [6.0 p.m.
Adley, Robert Biffen, John Buck, Antony
Aitken, Jonathan Biggs-Davison, John Budgen, Nick
Alison, Michael Blaker, Peter Bulmer, Esmond
Amery, Rt Hon Julian Body, Richard Burden, F. A.
Arnold, Tom Boscawen, Hon Robert Butler, Adam (Bosworth)
Atkins, Rt Hon H. (Spelthorne) Bottomley, Peter Carlisle, Mark
Awdry, Daniel Bowden, A. (Brighton, Kemptown) Chalker, Mrs Lynda
Bain, Mrs Margaret Boyson, Dr Rhodes (Brent) Channon, Paul
Baker, Kenneth Bradford, Rev Robert Churchill, W. S.
Banks, Robert Braine, Sir Bernard Clark, Alan (Plymouth, Sutton)
Beith, A. J. Brittan, Leon Clark, William (Croydon S)
Bell, Ronald Brocklebank-Fowler, C. Clarke, Kenneth (Rushcliffe)
Bennett, Sir Frederic (Torbay) Brotherton, Michael Clegg, Waiter
Bennet, Dr Reginald (Fareham) Brown, Sir Edward (Bath) Cockcroft, John
Benyon, W. Bryan, Sir Paul Cooke, Robert (Bristol W)
Berry, Hon Anthony Buchanan-Smith, Alick Cope, John
Cordle, John H. Johnson Smith, G. (E Grinstead) Rathbone, Tim
Cormack. Patrick Johnston, Russell (Inverness) Rawlinson, Rt Hon Sir Peter
Corrie. John Jones, Arthur (Daventry) Rees, Peter (Dover & Deal)
Costain, A. P. Jopling, Michael Rees-Davies, W. R.
Crawford, Douglas Joseph, Rt Hon Sir Keith Renton, Rt Hon Sir D. (Hunts)
Critchley, Julian Kaberry, Sir Donald Renton, Tim (Mid-Sussex)
Crouch, David Kellett-Bowman, Mrs Elaine Rhys Williams, Sir Brandon
Crowder, F. P. Kershaw, Anthony Ridley, Hon Nicholas
Davies, Rt Hon J. (Knutsford) Kilfedder, James Ridsdale, Julian
Dean, Paul (N Somerset) Kimball, Marcus Rifkind, Malcolm
Dodsworth, Geoffrey King, Evelyn (South Dorset) Roberts, Michael (Cardiff NW)
Douglas-Hamilton, Lord James King, Tom (Bridgwater) Roberts, Wyn (Conway)
Drayson, Burnaby Kirk, Sir Peter Rodgers, Sir John (Sevenoaks)
du Cann, Rt Hon Edward Kitson, Sir Timothy Ross, Stephen (Isle of Wight)
Dunlop, John Knox, David Ross, William (Londonderry)
Durant, Tony Lamont, Norman Rossi, Hugh (Hornsey)
Dykes, Hugh Lane, David Rost, Peter (SE Derbyshire)
Eden, Rt Hon Sir John Langford-Holt, Sir John Royle, Sir Anthony
Edwards, Nicholas (Pembroke) Latham, Michael (Melton) Sainsbury, Tim
Elliott, Sir William Lawrence, Ivan St. John-Stevas, Norman
Emery, Peter Lawson, Nigel Scott, Nicholas
Evans, Gwynfor (Carmarthen) Le Marchant, Spencer Scott-Hopkins, James
Ewing, Mrs Winifred (Moray) Lester, Jim (Beeston) Shaw, Giles (Pudsey)
Eyre, Reginald Lewis, Kenneth (Rutland) Shaw, Michael (Scarborough)
Fairgrieve, Russell Lloyd, Ian Shelton, William (Streatham)
Farr, John Loveridge, John Shepherd, Colin
Fell, Anthony Luce. Richard Shersby, Michael
Finsberg, Geoffrey MacCormick, Iain Silvester, Fred
Fletcher, Alex (Edinburgh N) McCrindle, Robert Sims, Roger
Fletcher-Cooke, Charles McCusker, H. Sinclair, Sir Roger
Forman, Nigel Macfarlane, Neil Skeet, T. H. H.
Fowler, Norman (Sutton C'f'd) MacGregor, John Smith, Cyril (Rochdale)
Fox, Marcus Macmillan, Rt Hon M. (Farnham) Smith, Dudley (Warwick)
Fraser, Rt Hon H. (Stafford & St) McNair-Wilson, M. (Newbury) Speed, Keith
Freud, Clement McNair-Wilson, P. (New Forest) Spence, John
Fry, Peter Madel, David Spicer, Jim (W Dorset)
Galbraith, Hon T. G. D. Marshall, Michael (Arundel) Spicer, Michael (S Worcester)
Gardiner, George (Reigate) Marten, Neil Sproat, Iain
Gardner. Edward (S Fylde) Mates, Michael Stainton, Keith
Gilmour, Sir John (East Fife) Mather, Carol Stanbrook, Ivor
Glyn, Dr Alan Maude, Angus Stanley, John
Godber, Rt Hon Joseph Maudling, Rt Hon Reginald Steel, David (Roxburgh)
Goodhart, Philip Mawby, Ray Steen, Anthony (Wavertree)
Goodhew, Victor Maxwell-Hyslop, Robin Stewart, Donald (Western Isles)
Goodlad, Alastair Mayhew, Patrick Stewart, Ian (Hitchin)
Gorst, John Meyer, Sir Anthony Stokes, John
Gow, Ian (Eastbourne) Miller, Hal (Bromsgrove) Stradling Thomas, J.
Gower, Sir Raymond (Barry) Mills, Peter Tapsell, Peter
Grant, Anthony (Harrow C) Miscampbell, Norman Taylor, R. (Croydon NW)
Gray, Hamish Mitchell, David (Basingstoke) Taylor, Teddy (Cathcart)
Griffiths, Eldon Moate, Roger Tebbit, Norman
Grimond, Rt Hon J. Molyneaux, James Temple-Morris, Peter
Grist, Ian Monro, Hector Thatcher, Rt Hon Margaret
Grylls, Michael Montgomery, Fergus Thompson, George
Hall, Sir John Moore, John (Croydon C) Thorpe, Rt Hon Jeremy (N Devon)
Hall-Davis, A. G. F. More, Jasper (Ludlow) Townsend, Cyril D.
Hamilton, Michael (Salisbury) Morgan, Geraint Trotter, Neville
Hampson, Dr Keith Morgan-Giles, Rear-Admiral Tugendhat, Christopher
Hannam, John Morris, Michael (Northampton S) van Straubenzee, W. R.
Harrison, Col Sir Harwood (Eye) Morrison, Charles (Devizes) Vaughan, Dr Gerard
Harvie Anderson, Rt Hon Miss Morrison, Hon Peter (Chester) Viggers, Peter
Hastings, Stephen Mudd, David Wainwright, Richard (Colne V)
Havers, Sir Michael Neave, Airey Wakenham, John
Hawkins, Paul Nelson, Anthony Walder, David (Clitheroe)
Hayhoe, Barney Neubert, Michael Walker, Rt Hon P. (Worcester)
Heath, Rt Hon Edward Newton, Tony Walker-Smith, Rt Hon Sir Derek
Heseltine, Michael Normanton, Tom Wall, Patrick
Hicks, Robert Nott, John Walters, Dennis
Higgins, Terence L. Onslow, Cranley Warren, Kenneth
Holland, Philip Oppenheim. Mrs Sally Watt, Hamish
Hooson, Emlyn Osborn, John Weatherill, Bernard
Hordern, Peter Page, John (Harrow West) Wells, John
Howe, Rt Hon Sir Geoffrey Page, Rt Hon R. Graham (Crosby) Whitelaw, Rt Hon William
Howell, David (Guildford) Pardoe, John Wiggin, Jerry
Howell, Ralph (North Norfolk) Parkinson, Cecil Wigley, Dafydd
Howells, Geraint (Cardigan) Penhaligon, David Wilson, Gordon (Dundee E)
Hunt, David (Wirral) Percival, Ian Winterton, Nicholas
Hunt, John (Bromley) Peyton, Rt Hon John Wood, Rt Hon Richard
Hurd, Douglas Pink, R. Bonner Young, Sir G. (Ealing, Acton)
Hutchison, Michael Clark Powell, Rt Hon J. Enoch Younger, Hon George
Irving, Charles (Cheltenham) James, David Price, David (Eastleigh) Prior, Rt Hon James TELLERS FOR THE AYES:
Jenkin, Rt Hon P. (Wanst'd & W'df'd) Pym, Rt Hon Francis Mr. Andrew Welsh and
Jessel, Toby Raison, Timothy Mr. D. E. Thomas.
Abse, Leo Ennals, David Lyons, Edward (Bradford W)
Allaun, Frank Evans, Fred (Caerphilly) Mabon, Dr J. Dickson
Anderson, Donald Evans, Ioan (Aberdare) McCartney, Hugh
Archer, Peter Evans, John (Newton) McDonald, Dr Oonagh
Armstrong, Ernest Ewing, Harry (Stirling) MacFarquhar, Roderick
Ashley, Jack Faulds, Andrew McGuire, Michael (Ince)
Ashton, Joe Fernyhough, Rt Hon E. MacKenzie, Gregor
Atkins, Ronald (Preston N) Fitch, Alan (Wigan) Mackintosh, John P.
Atkinson, Norman Fitt, Gerard (Belfast W) Maclennan, Robert
Bagier, Gordon A. T. Flannery, Martin McMillan, Tom (Glasgow C)
Barnetl, Guy (Greenwich) Fletcher, L. R. (Ilkeston) McNamara, Kevin
Barnett, Rt Hon Joel (Heywood) Fletcher, Ted (Darlington) Madden, Max
Bates, Alf Foot, Rt Hon Michael Magee, Bryan
Bean, R. E. Ford, Ben Mahon, Simon
Benn, Rt Hon Anthony Wedgwood Forrester, John Mallalleu, J. P. W.
Bennett, Andrew (Stockport N) Fowler, Gerald (The Wrekin) Marks, Kenneth
Bidwell, Sydney Fraser, John (Lambeth, N'w'd) Marquand, David
Bishop, E. S. Freeson, Reginald Marshall, Dr Edmund (Goole)
Blenkinsop, Arthur Garrett, John (Norwich S) Marshall, Jim (Leicester S)
Boardman, H. Garrett, W. E. (Wallsend) Mason, Rt Hon Roy
Booth, Rt Hon Albert George, Bruce Maynard, Miss Joan
Boothroyd, Miss Betty Gilbert, Dr John Meacher, Michael
Bottomley, Rt Hon Arthur Ginsburg, David Mellish, Rt Hon Robert
Boyden, James (Bish Auck) Golding, John Mendelson, John
Bradley, Tom Gould, Bryan Mikardo, Ian
Bray, Dr Jeremy Gourlay, Harry Millan, Bruce
Brown, Hugh D. (Provan) Graham, Ted Miller, Dr M. S. (E Kilbride)
Brown, Robert C. (Newcastle W) Grant, George (Morpeth) Miller, Mrs Millie (Ilford N)
Brown, Ronald (Hackney S) Grant, John (Islington C) Mitchell, R. C. (Solon, lichen)
Buchan, Norman Grocott, Bruce Moonman, Eric
Buchanan, Richard Hamilton, James (Bothwell) Morris, Alfred (Wythenshawe)
Butler, Mrs Joyce (Wood Green) Hamilton, W. W. (Central Fife) Morris, Charles R. (Openshaw)
Callaghan, Rt Hon J. (Cardiff SE) Hardy, Peter Morris, Rt Hon J. (Aberavon)
Callaghan, Jim (Middleton & P) Harper, Joseph Moyle, Roland
Campbell, Ian Harrison, Walter (Wakefield) Mulley, Rt Hon Frederick
Canavan, Dennis Hart, Rt Hon Judith Murray, Rt Hon Ronald King
Cant, R. B. Hattersley, Rt Hon Roy Newens, Stanley
Carmichael, Neil Hatton, Frank Noble, Mike
Carter-Jones, Lewis Hayman, Mrs Helene Oakes, Gordon
Cartwright, John Healey, Rt Hon Denis Ogden, Eric
Castle, Rt Hon Barbara Heller, Eric S. O'Halloran, Michael
Clemitson, Ivor Hooley, Frank Orbach, Maurice
Cocks, Michael (Bristol S) Horam, John Orme, Rt Hon Stanley
Cohen, Stanley Howell, Rt Hon Denis (B'ham, Sm H) Ovenden, John
Coleman, Donald Hoyle, Doug (Nelson) Owen, Dr David
Colquhoun, Ms Maureen Huckfield, Les Padley, Walter
Concannon, J. D. Hughes, Rt Hon C. (Anglesey) Palmer, Arthur
Conlan, Bernard Hughes, Mark (Durham) Park, George
Cook, Robin F. (Edin C) Hughes, Robert (Aberdeen N) Parker, John
Corbett, Robin Hughes, Roy (Newport) Parry, Robert
Cox, Thomas (Tooting) Irvine, Rt Hon Sir A. (Edge Hill) Pavitt, Laurie
Craigen, J. M. (Maryhill) Irving, Rt Hon S. (Dartford) Peart, Rt Hon Fred
Crawshaw, Richard Jackson, Colin (Brighouse) Pendry, Tom
Cronin, John Jackson, Miss Margaret (Lincoln) Perry, Ernest
Crosland, Rt Hon Anthonv Janner, Greville Phipps, Dr Colin
Crowther, Stan (Rotherham) Jay, Rt Hon Douglas Prentice, Rt Hon Reg
Cryer, Bob Jenkins, Hugh (Putney) Prescott, John
Cunningham, G. (Islington S) Jenkins, Rt Hon Roy (Stechford) Price, C (Lewisham W)
Cunningham, Dr J. (Whiteh) John, Brynmor Price, William (Rugby)
Dalyell, Tam Johnson, James (Hull West) Radice, Giles
Davidson, Arthur Johnson, Walter (Derby S) Rees, Rt Hon Merlyn (Leeds S)
Davies, Bryan (Enfield N) Jones, Barry (East Flint) Richardson, Miss Jo
Davis, Denzil (Llanelli) Jones, Dan (Burnley) Roberts, Albert (Normanton)
Davies, Ifor (Gower) Judd, Frank Roberts, Gwilym (Cannock)
Davis, Clinton (Hackney C) Kaufman, Gerald Robinson, Geoffrey
Deakins, Eric Kelley, Richard Roderick, Caerwyn
Dean, Joseph (Leeds West) Kerr, Russell Rodgers, George (Chorley)
de Freitas, Rt Hon Sir Geoffrey Kilroy-Silk, Robert Rodgers, William (Stockton)
Dell, Rt Hon Edmund Kinnock, Neil Rooker, J. W.
Dempsey, James Lambie, David Roper, John
Doig, Peter Lamborn, Harry Rose, Paul B.
Dormand, J. D. Lamond, James Ross, Rt Hon W. (Kilmarnock)
Douglas-Mann, Bruce Latham, Arthur (Paddington) Rowlands, Ted
Duffy, A. E. P. Leadbitter, Ted Sandelson, Neville
Dunn, James A. Lee, John Sedgemore, Brian
Dunnett, Jack Lestor, Miss Joan (Eton & Slough) Selby, Harry
Dunwoody, Mrs Gwyneth Lever, Rt Hon Harold Shaw, Arnold (Ilford South)
Eadie, Alex Lewis, Ron (Carlisle) Sheldon, Robert (Ashton-u-Lyne)
Edge, Geoff Lipton, Marcus Shore, Rt Hon Peter
Edwards, Robert (Wolv SE) Litterick, Tom Short, Rt Hon E. (Newcastle C)
Ellis, John (Brigg & Scun) Lomas, Kenneth Short, Mrs Renée (Wolv NE)
Ellis, Tom (Wrexham) Loyden, Eddie Silkin, Rt Hon John (Deptford)
English, Michael Luard, Evan Silkin, Rt Hon S. C. (Dulwich)
Sillars, James Tierney, Sydney Whitehead, Phillip
Silverman, Julius Tinn, James Whitlock, William
Skinner, Dennis Tomlinson, John Willey, Rt Hon Frederick
Small, William Torney, Tom Williams, Alan (Swansea W)
Smith, John (N Lanarkshire) Tuck, Raphael Williams, Alan Lee (Hornch'ch)
Spearing, Nigel Urwin, T. W. Williams, Rt Hon Shirley (Hertford)
Spriggs, Leslie Varley, Rt Hon Eric G. Williams, Sir Thomas
Stallard, A. W. Wainwright, Edwin (Dearne V) Wilson, Alexander (Hamilton)
Stewart, Rt Hon M. (Fulham) Walden, Brian (B'ham, L'dyw'd) Wilson, Rt Hon (Huyton)
Stott, Roger Walker, Harold (Doncaster) Wilson, William (Coventry SE)
Strang, Gavin Walker, Terry (Kingswood) Wise, Mrs Audrey
Strauss, Rt Hon G. R. Ward, Michael Woodall, Alec
Summerskill, Hon Dr Shirley Watkins, David Woof, Robert
Swain, Thomas Watkinson, John Wrigglesworth, Ian
Taylor, Mrs Ann (Bolton W) Weetch, Ken Young, David (Bolton E)
Thomas, Jeffrey (Abertillery) Weitzman, David
Thomas, Mike (Newcastle E) Wellbeloved, James TELLERS FOR THE NOES:
Thomas, Ron (Bristol NW) White, Frank R. (Bury) Mr. David Stoddart and
Thorne, Stan (Preston South) White, James (Pollok) Mr. Peter Snape.

Question accordingly negatived.

6.15 p.m.

Mr. Tom King

I beg to move Amendment No. 268, in page 4, leave out lines 12 to 35.

Mr. Deputy Speaker

With this amendment we may take the following amendments;

No. 270, in page 4, leave out lines 15 to 19.

No. 316, in page 4, line 19, after 'order', insert 'but which in any case shall not include ship-owning'.

Government Amendment No. 4.

Amendment No. 265, in page 4, line 26, leave out 'to carry on such activities'.

Amendment No. 266, in page 4, line 30, leave out 'carry on any such activities'.

Government Amendment No. 8.

Mr. King

This group of amendments is intended to restrict the range of activities in which the new corporations can indulge. I hope that we shall have a more serious debate on these topics and not experience the amazing behaviour of the Minister of State in the previous debate; he made a clear attempt to mislead the House on an important matter. He may find that that effort proves counter-productive on a future occasion.

The amendments are mainly to Clause 2(5) which lays down that the Secretary of State by order may prescribe other activities in which the corporations may take part. Our concern over the widening of activities of the corporations was discussed in Committee, and obviously there are different views on both sides of the House, but the question no Labour Member has been able to answer is how one can be consistent in the view that there should be a fixed frontier between the public and private sectors, if at the same time one allows the power of the corporations to spread into yet further related activities. The tendency will be for more and more activities to fall within the scope of the corporations, for reasons which I shall give. This will result once again in the enlargement of the public sector.

The importance of this consideration is real—not just for the future but foi the present. There are a large number of companies in related activities whose efforts are important to our export, and indeed generally. Some very important companies are involved in related areas in the aircraft and shipbuilding industries—for example, the companies involved in avionics which make outstanding contributions to exports. Those companies are not solely dependent on the British Government or on Ministry of Defence orders, but they have substantial export orders and many are recognised as world leaders in their products. I presume that it is as much in the interests of Labour Members as of us all that such companies should continue to thrive. Many of them will have plants in Labour constituencies. We are anxious to ensure that those exports should continue and that employment opportunities should be maintained and, if possible, increased. Presumably we all wish those companies well.

However, it is not good enough merely to wish them well without ensuring that we provide a climate in which it is possible for them to thrive. The risk of leaving such vague and loose powers as are contained in subsection (5), giving the Secretary of State power to allow the corporations to undertake activities of a wider kind, represents a threat to those other companies. The difficulties are not just theoretical, potential problems that might arise; they can have an immediate impact. We have all heard the pleas of the Prime Minister and the Chancellor of the Exchequer constantly urging companies to invest. Therefore, if there is to be a substantial amount of investment in a new range of equipment, companies are entitled to have some security. They are entitled to feel that their assets will not be sequestrated or confiscated by Act of Parliament, with inadequate compensation, and that having funded developments, they will not then find themselves in competition with a State-subsidised body or an expanded public corporation.

The nation has had answers to some of these questions in the famous Marathon case. The Government faced the need to provide employment in the John Brown yard, and, indeed there was an acute and appalling unemployment prospect on Clydeside. Marathon said very fairly that it was interested in coming to Britain for the purpose of various types of construction which I shall not go into, but it said that it was not prepared to come if it was likely to be nationalised. It had read the Labour Party conference agenda, or the approved resolutions, and knew that nationalisation was part of the Labour Party programme. Mr. Danny McGarvey played a leading role in persuading the Labour Shadow Cabinet, as it then was, that an undertaking should be given to Marathon that if Labour got inti power and the nationalisation proposals went through, Marathon would be excluded. The simple truth, recognised by Mr. McGarvey in his conversation with Mr. Wayne Harbin of Marathon, was that a company threatened with nationalisation would not come here. What is true of Marathon is true of other companies as well.

The snag in the Bill is that it is not as if people are likely to be compensated to anything like an adequate extent for valuable assets. Any company could be in breach of its statutory responsibilities to its shareholders if it made an investment in the knowledge that it could be threatened later with nationalisation. With the Aircraft and Shipbuilding Industries Bill there was evidence that for a company having assets of £10 million perhaps only £4 million would be paid by way of compensation. In that situation, no board of directors could say, if it made an investment at a time when there was a possible risk of nationalisation, that it was confident on past evidence that its funds would not be lost or confiscated.

We have dealt with the compensation arguments in an earlier debate. One of the problems that the Government will inherit is that there is now no confidence that there will not be confiscation or confiscatory terms in future nationalisation. One might be asked if this is really a valid fear. Is there really any evidence to support it? Is it, perhaps, the case that this is the sort of clause that draftsmen invariably put into a Bill of this sort? Is it possible to say that it does not really mean anything, and that the Secretary of State will never prescribe by statutory instrument that other activities shall be carried on'?

In asking these questions, I suppose that companies might look at what is happening in British Leyland. They might well wonder what is the present situation there. There are possibilities which have been discussed, and are being discussed, that British Leyland may use the public funds, which have been made available to it under an Act passed by this House and by orders passed by this House, in order to begin the production of components. These are obviously commercial decisions for British Leyland to take, but I do not think that it is in the national interest for British Leyland to do this, cutting off valuable orders placed with existing component suppliers in this country, and thereby causing unemployment in other areas, That would seem to be quite pointless, and not the sort of exercise which hon. Members on either side of the House would regard as involving the proper use of public money.

There is a very real temptation to do this, and the temptation is especially great in a declining industry. In an expanding industry, a corporation has more than enough to do in coping with its existing activities. It might need to recruit additional labour to cope with its expanding order book. The problem becomes much more difficult in a declining industry, because the corporation, or the organising committee, whatever the title may be, is then faced with very real problems. It has an order book, and forecasts of the levels of work and of prospects. It may feel that it has not enough orders to keep all the employees fully employed. That is a difficult situation.

The most difficult and most regrettable situation, as all hon. Members know, is that in which a decision has to be taken to reduce employment. This means that some people must lose their jobs. Therefore, every management does everything it can to avoid such a situation. In such circumstances, it will look around for opportunities to expand its activities. It may have 200,000 employees and insufficient work for them to do. It may then go to the Secretary of State and ask to be permitted to make certain other products, and to move into certain other fields of activity.

In that case, what we have is the State sector expanding and expanding. I recognise that this prospect may not upset some Government Members, but it happens to be totally inconsistent with the pledge of the Leader of the Labour Party that he believes in a fixed frontier between the public and private sectors. If this frontier is to be fixed, it is not possible for such a body to expand into wider and wider activities.

One amendment of particular relevance is to the effect that, whatever activities the Secretary of State may have prescribed, they shall not include ship-owning. My hon. Friend the Member for Havant and Waterloo (Mr. Lloyd), who has particular experience in this industry, may have a few words to say about this.

Hon. Members will recognise that there appears to be a facile argument that somehow the problems of British shipbuilding may be solved if only British shipowning can be brought to heel and made subservient to British shipbuilding. The argument is that in that way all the problems of providing work in the shipyards could be successfully tackled.

I hope that hon. Members will realise —and that the Government will confirm that they appreciate—the very real hazards in this argument.

There is an amendment in the name of the right hon. Member for Sunderland, North (Mr. Willey) about co-ordinating the policies. I think the Under-Secretary of State has on occasion remarked on the difference between co-ordination and coercion. I hope that that distinction will be very closely recognised, and that we shall not slip over the line. In the case of electricity boards, for instance, the Government can exercise some coercion, perhaps, in relation to where plant purchases are placed. The hon. Member for Bristol, North-East (Mr. Palmer) is familiar with this. It is more of an internal family matter, if I may so put it, than anything else.

The shipowning industry is a very important one for this country. It is not an industry which can be seen to be at work in hon. Members' constituencies, and, because there is no obvious factory employing 2,000 or 3,000 workers in a particular constituency, many of us are inclined to forget what a significant part shipowning plays in the British industrial effort. Its earnings for this country are very considerable. It exists not in a British market but in a totally international market.

Obviously, every hon. Member hopes that British shipowners will give very favourable consideration to placing orders in British yards, but there is a great difference between encouraging this and applying any degree of compulsion. It is very dangerous to compel people to buy from yards which they may not think are the yards best suited for producing the particular type of ship or product they require. Shipowning companies have to compete on the world market in terms of rates and performance, and if they are not able to buy in the most appropriate area the most appropriate product for their needs—in the way that every other shipowner of any size is able to do —their performance will obviously be handicapped. This is an undesirable extension of a related activity. Whatever happens to the other activities, we feel that shipowning should not be included.

6.30 p.m.

The question of diversification is important to the Government. We discussed it frequently in Committee. There is a difficult point. The corporations cannot be totally hog-tied to the most minute definition in the Bill. These powers enable the corporation to move across a much wider field. I hope I have explained why a fear exists. I hope that the Government appreciate that.

I trust that the Government will encourage inward investment in this country. I understand that they seek to do that. I know that a few members of the Government mumble about multinational companies. However, the majority of the Labour Party and the Conservative Party recognise the contribution that overseas investment has made to the economies of Scotland and Northern Ireland. Confidence, freedom from unfair Government interference, and freedom from the fear of acquisition or confiscation of assets is important to inward and domestic investment. When we speak to members of British companies about investing overseas they mention the countries to which they would not go because the political risks and risks of confiscation are too great. I have heard from presidents of overseas corporations that they are starting to wonder whether some of the same considerations apply to this country as apply to some of the less reliable overseas territories. I trust that we shall discourage them from that view. I believe that the majority of Government supporters do not have an obsessive compulsion with multinational companies and recognise that they make a real contribution.

Mr. Kinnock rose

Mr. King

I am sorry that I omitted to mention Wales, for the benefit of the hon. Member for Bedwellty (Mr. Kinnock). However, I am sure that he recognises my point. We do not need to stray far from the Hoover factory and the contributions made by such companies. I shall try to give reassurance and persuade those involved of my belief that common sense will prevail.

However, I think that my reassurances are not enough when we are faced with instruments such as this, Acts of Parliament containing confiscatory terms of compensation, or lack of compensation, and giving power to Secretaries of State to give directions and make orders and instructions widening the spread of companies involved. We are now considering one such action of the Government.

Mr. F. A. Burden (Gillingham)

In the circumstances it would be interesting to contemplate, if firms such as Chrysler or Ford were not here, whether other companies would seriously consider coming to this country to open plants in view of the attitude of the Labour Party to that kind of organisation.

Mr. King

That is a valid point. I do not know whether the Government welcome inward investment.

I do not know whether the hon. Member for Bedwellty has spoken to the people working in these industries. It is one matter to speak to the people who are already here. They must live with the situation. They have vast investments in assets here. I do not know whether he has spoken to people who are considering investing here and discussed the considerations going through their minds. Those considerations are not strange. Investors know that the Labour Party is in favour of a massive extension of public ownership of some sections of industry. Such people know that if they come here their companies may be nationalised. They want to know how they would be repaid if the nationalisation affected them. They may say "We might be prepared to take the risk. Nationalisation would be disruptive, but we would take the risk if we knew that we would be compensated."

The damage is much wider than the effects on the industries involved. When the Labour Party NEC and its home affairs study group produce proposals, a blanket disincentive effect becomes apparent when people read them. Hon. Gentlemen would be surprised at how widely read are the policy proposals. I bitterly regret the damage done from the moment the policy proposals are made. People go through a terrible, turgid stage with the threat of approval of the proposals in Parliament.

This Bill will do damage enough. That is why it is crucial that we make clear that the extent of its influence is strictly limited. Otherwise the damage done as a result of this legislation will affect a wider range of investment and employment than anyone would wish. For that reason I shall press the amendment to a vote.

The Under-Secretary of State, Department of Industry (Mr. Les Huckfield)

I beg leave to speak on these amendments and also on Government Amendments Nos. 4 and 8. Amendment No. 4 seeks to insert a subsection in Clause 2, which reads: '(5A) The power to make an order under subsection (5) above includes power to vary or revoke any such order previously made, and no order shall be made under that subsection unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.'. Amendment No. 8 seeks to delete Clause 2(8).

It may be for the convenience of the House if I indicate the Government's attitude to those amendments. I also wish to give as many hon. Members as possible time to speak. As usual, I should prefer to reply to the points made in debate later, with the permission of the House.

I wondered whether the hon. Member for Bridgwater (Mr. King) was talking about the correct set of amendments. Most of the amendments to which he referred seemed to come within the group which starts with Amendment No. 250, which I hope will be moved later by my right hon. Friend the Member for Sunderland, North (Mr. Willey).

The two Government amendments, and the related block of amendments, simply effect a reordering of the subsections in Clause 2. The two amendments to which I refer seek to substitute subsection (5A) for the provisions of subsection (8). In other words, the two amendments are purely drafting amendments. If the hon. Member for Bridgwater thinks that he may make all that he has said out of purely drafting amendments I shudder to think what he will say on Amendment No. 250.

Mr. Russell Kerr (Feltham and Heston)

We have heard the all-purpose speech of the hon. Member for Bridgwater (Mr. King) before.

Mr. Huckfield

The members of the Committee heard the hon. Gentleman's speech before. We know that it is an all-purpose speech.

I want to let the House know where the Government stand. The hon. Gentleman seeks to put as many restrictions on the nationalised corporations as he can before they are given a chance to get down to business. That is the purpose of the hon. Gentleman's amendment. The hon. Gentleman knows that in the past, when the duties of nationalised industries have needed to be changed, it has been necessary to introduce a Bill containing the proposed legislation. He also knows that delay may be damaging.

We seek to introduce a procedure the purpose of which is to allow the duties of these corporations to be adjusted more expeditiously. Although that adjustment may be swift, we still wish to subject it to the approval of Parliament. That is what this amendment is all about. The proposals are that any new or alternative activities that the corporation will be required to carry on may be prescribed. Further, my right hon. Friend the Secretary of State may prescribe the objectives to be pursued and, apart from that, may lay down conditions subject to which any activities are to be carried on or objectives pursued. That is all that the clause and the amendments are about.

Looking at what the hon. Gentleman is seeking to do—that is his political point of view, and I understand what he is trying to do—the House should be left in no doubt that the end result, if the amendments are carried, will be that these two corporations will be severely hamstrung and shackled from the day that they start.

The hon. Gentleman is seeking to shackle the assets not merely of a private company, but of the nation, because those assets will be in public ownership. It will be the nation's economic resources on which he proposes to put restrictions.

The hon. Gentleman also knows that a company in the private sector can change its memorandum and articles of association at a general meeting. We simply propose to give the two corporations the same kind of commercial freedom. The kind of commercial freedom that is good enough for companies in the private sector ought to be allowed to corporations in the public sector. That is what the amendments are all about.

Mr. Burden rose

Mr. Huckfield

The hon. Gentleman will have his chance to catch your eye later, Mr. Deputy Speaker.

I hope that my hon. Friends will agree to support the Government amendments and to reject the Opposition amendments. We should allow these corporations the measure of commercial freedom which all nationalised industries ought to have.

Mr. Tom King

Referring to the difficulty about a very narrow restraint on corporations—I understand that difficuty—how will the hon. Gentleman deal with the problem of companies which might be considering investment, either coming from overseas or generated from this country, which are concerned about finding themselves in competition or taken out by an expanded public sector? How will the Department of Industry deal with that issue?

Mr. Huckfield

The matter gets worse, We had that debate last night. We spent about three hours having precisely that kind of debate on the fair trading activities of the corporation. I introduced a new clause, which the House and the hon. Gentleman accepted last night, which covered precisely that point. Further, it was reported in the newspapers this morning, if the hon. Gentleman did not understand what I said, that the chairmen of the organising committees that will become the boards of the two corporations will want to make a formal declaration of fair trading practice as soon as possible. The hon. Gentleman knows what it is about, because he was present for the debate last night.

Mr. Tom King

I do not know whether the hon. Gentleman is unintentionally or deliberately trying to avoid the point. It has nothing to do with fair trading. None of those companies can plead the Fair Trading Act, because they will be nationalised under an Act of Parliament. I appreciate that the Minister has only recently joined the Department of Industry, but this is a real problem. Hon. Members on both sides of the House are worried about the investment, which is a matter of real concern to the companies involved.

If the hon. Gentleman is unable to answer the question, I should prefer that he did not try to talk about anything else and that the matter be left for later consideration. However, if he can comment now, I shall be grateful.

Mr. Huckfield

I do not want to keep jumping up and down. I want to give my hon. Friends an opportunity to make their contributions. The hon. Gentleman cannot be as naïve as that. We recognise precisely what he is trying to do. The hon. Gentleman is seeking to apply restrictions that would have the effect of narrowing the activities of the corporations and ensuring that, from the start, they were channelled in very narrow directions. Commercial operations in the private sector are allowed a degree of commercial freedom. I believe that the public sector and these two corporations ought to have commercial freedom as well.

6.45 p.m.

Mr. John Farr (Harborough)

I support the amendments moved by my hon. Friend the Member for Bridgwater (Mr. King). As I was not on the Standing Committee which considered the Bill, I shall ask the House to rise above the level of low inter-party political battle and to look at the matter from the point of view of a firm in my constituency which is grievously troubled by the Bill and its implications.

I refer to a company that is a specialist supplier to Rolls-Royce and the aerospace industry. As a Conservative Member, I object to the Bill as a whole, but, in particular, to the part that we wish to have removed. What concerns me and the firm to which I have referred is the bit in page 4, lines 12 and 13 onwards, which refers to "activities … in addition" being undertaken by a corporation by order made by statutory instrument". That is causing grave concern to many firms which are specialist suppliers to the aircraft industry. I object to the use of a Statutory Instrument for this purpose, which I think is an obnoxious way of proceeding. Most disconcerting and disturbing to many firms are the words "activities … in addition".

I ask the Minister, when he replies, to try to answer the point, which I shall put briefly, in an attempt to satisfy not only the firm in my constituency, but many others throughout the country which are worried about the implications of "activities … in addition".

The example that I have in mind relates to the firm in my constituency which specialises in the narrow area of providing parts for jet engines. My hon. Friend the Member for Bridgwater talked about the capital cost of equipment and of the investment in industries which are sub-contractors to the aerospace industry. The bill that the firm in my constituency has to meet to provide one of its sophisticated machines is £130,000 a time. Obviously, if there is any likelihood of a discontinuance of its business at its present level, it will think more than once before it reinvests to keep its machines up to the top line and in line with modern technological progress, as is necessary in its sophisticated area.

Mr. Huckfield

Perhaps I can help the hon. Gentleman. So far, all he has said leads me to conclude that all he wants to talk about is Rolls-Royce and jet machines. I hope that he will accept from me, having spent some time dealing with this Bill, that neither Rolls-Royce nor jet engines are mentioned in it.

Mr. Farr

I do not think that what the Minister said is of much consequence. The Bill poses a threat to the whole aerospace industry and the many hundreds of specialist firms which supply it in many different ways.

The example that I wish to give to the House relates to a company called Cannon and Stokes Ltd., of Leicester, which specialises in providing nozzle guide vanes for jet engines. The firm makes this specialist product for a number of engines—in particular the RB211 and the Rolls-Royce Spey, Avon, Tyne and Conway and also the Rolls-Royce/Turbomeca Adour and the Rolls-Royce/ MTU/Fiat RB199. Cannon and Stokes is a specialist manufacturer of this nozzle guide vane, which fits in a gas-turbine engine downstream of the combustion chamber. These components are of very high quality precision-cast nickel alloys and they have to be machined by very advanced technological methods. A number of very sophisticated procedures have to be carried out in this plant, which employs about 1,000 people in Leicester.

Some of this firm's machine units can cost as much as £130,000 each. Very few of them cost less than £30,000 to purchase. This company is a specialist supplier and in this field has the largest facility for nozzle guide vane manufacture in one concentration in the whole of Europe. It has contracts with the main United States of America manufacturing companies and all the European companies, and in other fields. What particularly concerns the company is the implied threat in this Bill under the term "other activities", to which I have referred, because, as the company says, there are implications in the State takeover of the aerospace industry as it is.

The worry is that the impact of the State takeover could well lessen the degree of specialist sub-contracting done by large companies in an attempt to justify the costs of overheads and other associated research and development charges. Probably the Minister is aware that most countries with a jet engine manufacturing capacity have a number of specialist subcontractors and that in the USA all the big engine manufacturers use specialist sub-contractors to get maximum advantage from high technological capabilities and specialist skills.

I ask the Minister when he replies to the debate to give an assurance not only to Cannon and Stokes Limited but to the many other specialist sub-contractors in the British engineering industry who are fearful that because of the woolly wording of this totally objectionable clause it may well be possible for the State aerospace industry, later, to move into their fields to justify some other expenditure without regard to the cost involved. I assure the Minister that if he can make a suitable statement he will not only satisfy my concern but will satisfy the anxiety of employees in many hundreds of firms throughout the country.

Mr. Arthur Palmer (Bristol, North-East)

I wish to speak on matters raised by the hon. Member for Bridgwater (Mr. King) in moving the amendment he proposes to this Bill, not because I have so far followed this measure in any great detail but because of my general interest in the working and structure of nationalised industries. It can be said that the experience of nationalisation in this country, in public corporation form, which now goes back a fair way, to before the last war, is that one of the difficulties—the weaknesses, one might say—of the process of parliamentary democracy in operating by statute is that the terms of the statute tend to place the activities of the undertaking in a legislative straitjacket, so that without a new statute it is extremely difficult to make any change.

Life is such that nothing stands still. Things always change and evolve. The private sector of industry is evolving quite naturally all the time to meet changing circumstances, and the public sector must equally be involved in change to meet changing circumstances. If a statute freezes the structure and method of operation, and the interests, of an industry at the particular time of its nationalisation we are giving very grave cause for concern for the future. The Bill as drafted, quite rightly in the light of the experience not only of Labour Governments but, I should have thought, of Conservative Governments, provides that it should be fairly easy, subject to constitutional safeguards, for changes to take place in the organisation and structure, and in opportunities for obtaining new business in nationalised industries, as is normally the case, quite naturally, with joint stock companies. I can see nothing objectionable in that.

Mr. John Cope (Gloucestershire, South) rose

Mr. Palmer

If the hon. Gentleman will allow me, I shall not give way for a moment, as I wish to make another point; after that I shall give way. There is another reason why I believe it is important. In what he said the hon. Member for Bridgwater did not seem to take into account the question why there should be this provision in the statute. It is to ensure that the Minister does not interfere in matters in which he has no authority to interfere. If ever a set of Ministers interfered with the day-to-day work of the nationalised industries, particularly the fuel industry at the time of the fuel crisis, it was Conservative Ministers. They were always interfering.

I sometimes talk to chairmen of nationalised industries. If one talks to them privately one finds that they all complain bitterly about the way in which Conservative Ministers interfered. I do not know whether or not they were bought luncheons, but this sort of thing is sometimes known as the "lunchtime directions". They are told, "The Government do not want to make this the subject of an Order, or to bring it out publicly, but if you can adjust your policy it will help a great deal." That was done constantly by Conservative Ministers. I see their difficulty. They wanted changes made, but apart from issuing a general directive in the national interest, which is a clumsy method. they had no statutory power. Therefore they did it by way of the so-called "lunchtime direction".

It is very important for the effective operation of nationalised industries that the powers of all concerned should be strictly and carefully defined in the statute, and if a Minister is to have extra powers so that the activities of a corporation can be broadened—and normally this will be at the request of the corporation—those powers should be defined. In my judgment this would do away with much of the need for the behind-the scenes guidance that can come from Ministers to nationalised industries. This would give a greater sense of security to those who have to run these industries.

Mr. Cope

I am grateful to the hon. Gentleman for giving way. I entirely agree with him on his last point—that the statute should be rigid in its terms. The amendment seeks to take out ways in which the statute would be capable of being varied by the Department, so really the hon. Gentleman is not arguing against the amendment.

The point that I wish to put to the hon. Gentleman arises from his mention of experience. Can he give us from his experience past examples of nationalised industries that have wanted fundamentally to change their activities—which is what this amendment is about—as opposed to wanting to change their organisation, which is not the subject of this amendment?

7.0 p.m.

Mr. Palmer

It is difficult to answer that question off the cuff, but I know from experience that on several occasions the nationalised electricity supply industry or the boards or the CEGB have wished to undertake some marginal manufacturing activity which they thought would be in their interests and which a private company could do if it were within its articles of association—and they have been limited by statute.

I do not want to get out of order, but I would use this industry as an example It has been said to me by one Chairman of the Electricity Council that he would like to do one or two things which he thought were in the interests of his industry but that he could not do so without asking for legislation and that there was no parliamentary time available.

That is the issue. Therefore, the powers in the Bill to give greater flexibility for the Minister to follow up the changing needs of an industry by simple legislative methods of this kind are very sound. Presumably the Opposition hope to get back to power. I hope that they will not, but one must take account of that constitutional possibility. If they do, they will find that these powers will be just as useful to them, since on past experience they have interfered behind the scenes more than most.

Mr. Teddy Taylor (Glasgow, Cathcart)

The Minister's reply was astonishing. He suggested that my hon. Friend the Member for Bridgwater (Mr. King) was not on the mark. Although both you and I, Mr. Deputy Speaker, have been up all night debating a tragic decision by the House of Commons on licensing in Scotland, having listened carefully I am afraid that the Minister is the one who has got it all wrong.

First of all, the Minister said that we are concerned here only with the freedom of State industries to do what they want. That is not what the clause or the amendments are about. Clause 2 is about the duties of the corporations—things which the Minister tells them to do after consultation, but not necessarily with agreement. I hope that the Minister will accept that he was completely wrong on that matter.

The matter is far more dangerous than that. It is Clause 3 which deals with the activities and powers of the corporations —the things that they can do. I was astonished that, reading from what appeared to be a prepared brief, the Minister should have made this mistake. Either the civil servants have been up far too late and have got it wrong or the Minister has attempted, inadvertently, to mislead the House.

I hope that the Minister will interrupt me if I am wrong. This clause has nothing to do with commercial freedom. It deals with the Secretary of State's power to prescribe activities.

The Minister is not even looking. He is hiding his head in shame. Is it true or not that under this clause, far from the corporations being free, the Minister will be able to instruct British Aerospace, for instance, to start producing aero-engines? He said that this clause was not about jet engines or Rolls-Royce.

Mr. Burden

Which is nonsense.

Mr. Taylor

I challenge the Minister. Could he not issue an order that British Aerospace, from 1st January next year, must produce aero-engines? He has not interrupted me. Again, he is hiding his head in shame. He is not even looking to his officials to see whether they can say why he has misled the House.

Mrs. Elaine Kellett-Bowman (Lancaster)

He does not even have a PPS.

Mr. Taylor

No, he does not even have a PPS to run along and ask the officials. Was the Minister quite blatantly but inadvertently misleading the House when he said that this was a matter of freedom and that jet engines were not involved?

He is steadying himself to rise. Perhaps he is going to say something. No —he has thought better of it.

In the absence of any intervention by the Minister, I must assume that he accepts what I said—that he was blatantly but inadvertently misleading the House and the country. Again, he has not budged. He is just looking blankly into space, showing that he would rather not be here listening to what is being said.

Ah—the PPS has arrived. We shall now see messages flying along to the officials to the effect: "Why did you give me duff gen on which to answer the debate?"

The Minister was also wrong in saying that the issue was that a nationalised corporation should have some of the powers of a company. He said, "Why should the nationalised industries not have the same powers as capitalists?"

Mr. Russell Kerr

Absolutely right.

Mr. Taylor

It is not absolutely right: it is absolutely wrong. If the Minister had some officials who knew a little company law, he would have been told that this was not the case.

In a private company, a general body of shareholders can attend the general meeting and ask for the articles of association to be changed. If I were a major shareholder in a rubber company, which, unfortunately, I am not, and I thought that the day of rubber was over and that the company should produce aeroengines, I could go to the general meeting and say so. We, the shareholders, could say that the articles of association should be changed so that the objects of the Taylor (Indonesia) Rubber Company would cover the production of rubber in Indonesia and aero-engines in Glasgow.

There is one vital difference. Whereas under the clause if the Minister tells a corporation what to do it has to do it, the articles of association of a company are more like Clause 3 powers—things that it can do if it wants to. The directors of my rubber company can be told to change the articles of association but we, as shareholders, cannot tell them what to do then. Shareholders do not have the powers of instruction that Ministers will have. So the Minister is absolutely wrong on this.

Again the Minister is not listening. Instead, he is talking to the Chief Whip, who is no doubt telling him all about the long sitting last night and the unfortunate decision that the House took on Scottish licensing. The Minister should be trying to find out why he gave such "duff gen" to the House on a simple but vital matter.

Why has the Minister got it so wrong?

Mr. Russell Kerr

He has not.

Mr. Taylor

Of course he has.

Mr. Russell Kerr

He has not.

Mr. Taylor

If the hon. Member wishes to defend the Minister on these two points, I hope that he will intervene and say so.

Does the Minister accept that we are talking about duties and not about freedoms? Does he accept that these duties are imposed by the Secretary of State, and are not things that the corporation can choose to do? Does he accept that it is wrong to say that what is being sought is the same basis as a private company? Although the articles of association can be altered, directors cannot be directed to do certain things.

I have not been challenged and I have not been interrupted, except by the hon. Member for Feltham and Heston (Mr. Kerr), who always makes rumbling noises throughout our debates.

What is the precedent? As hon. Members are aware, there are major problems facing us economically. On top of that, we have dangers from this wretched Common Market, because their laws take precedence over ours.

Mr. Russell Kerr

Now the hon. Member is talking sense.

Mr. Taylor

It is high time we looked at the effect of the Common Market on our economy. All the promises that were made to us about the advantages of it were wrong. The basic problem is that Common Market law takes precedence over British law.

In the same way, directions given by the Secretary of State to the corporations take precedence over the basic duties that are laid down in Clause 2 (1) and (2). My understanding is that the duties prescribed by the Secretary of State under subsection (5) take precedence over the basic duties laid down. So, we have our jet engine situation. If the Secretary of State orders British Aerospace to start producing jet engines, that order takes precedence over the basic duties that we have laid down in the Bill. Obviously, we are very worried about this, and industry is worried as well.

If I were a rich American entrepreneur and investor, with $200 million in my pocket, I would decide that it would be better not to come to Britain and invest, because I might find that British industry starts producing things that I am already producing and that I do not want. That would lead to unfair competition, and there is no real protection in the Bill against unfair competition from State corporations.

The Minister may claim that this is just scaremongering. Why is it, then, that we have 165,000 unemployed in Scotland? Why is it that the oil industry is going wrong? Only a genius could make a financial disaster of the oil industry, yet that is what is happening. Why are men being put out of work on oil platform sites? The answer to all these questions is that the threat of nationalisation has led to a lack of investment. As long as the Government waste money, and Socialism is extended, this sort of thing will continue. My hon. Friend the Member for Bridgwater is absolutely right, and the Minister is wrong.

Why are things going so wrong for industry? What is happening to investment? Why are American firms not coming here any more? Part of the reason is this dreadful Common Market, but we cannot discuss that now. The one thing we should get is the expansion of the oil industry, but that is not happening, because of the uncertainty that exists.

The Minister may tell us that there is no need to worry, because the Secretary of State is a reasonable man. That may be true, but he will not always be there. How do we know that some nutcase from the Labour Party's home affairs committee will not take over, or that the Secretary of State for Energy will not be transferred back to the Department of Industry and start taking over these powers? We have no guarantees at all. We are not talking about investment for a week or two. We are not talking about a petro-chemical factory that will list for a month, or a year; we are talking about investment and factories that will need to last 20 or 30 years. But we shall have no guarantee as long as these powers exist without limit.

There is nothing to stop the Secretary of State asking the corporation to start making jet engines, machine tools or even motor cars. The Labour Party can achieve full nationalisation of all the means of production, distribution and control with this one little subsection of this one little clause in this one little Bill.

This Bill is really three nationalisation Bills in one. Clause 2(2) gives the Government power to extend State ownership into every activity. It does not merely give the Minister power to do so; it gives him power to instruct the corporation to do so. Suppose that my hon. Friend the Member for Gillingham (Mr. Burden) decided that the House of Lords needed strengthening, and went there. If, because of his talents, he was made Chairman of the Aircraft Industry Board, he would find that even though he was appointed under a Conservative Government, a Labour Secretary of State could instruct him to start producing aircraft engines, to start building hospitals, or to start doing anything at all. My hon. Friend, or my noble Friend as he would be then, would have no option but to do what the Government told him.

This is not about freedom; it is about duties. It is about the things that the Secretary of State can tell the State corporations to do. The Minister knows that I am right when I say that he has totally misled the House.

7.15 p.m.

Mr. Ron Thomas

I have been listening to the hon. Member for Glasgow, Cathcart (Mr. Taylor) very intently. Can he explain why it is quite legitimate for Hawker Siddeley to diversify into all kinds of fields of engineering but quite wrong for BAC to exploit some of the wonderful technological spin-offs from tht production of aircraft or aero-engines?

Mr. Taylor

Clause 2 gives a duty that is very wide. If it were a case of the State boards diversifying into similar or related fields, that would be fair enough, but there is nothing at all in this subsection to prevent the Secretary of State from instructing the aircraft industry to diversify not just into related fields but into anything at all. It could be instructed to run hotels in the Highlands, or to start growing bananas on Clydeside. The powers are unlimited.

Nationalisation eats up more and more resources and scares away private industry and investment. We must reject this subsection, go back to 100 per cent. Tory policies, and get rid of this nonsensical obsession of extending Socialism everywhere, which pervades the Labour Party all the time and even creeps into the Tory Party sometimes.

Mr. R. C. Mitchell (Southampton, Itchen)

Obviously the hon. Member for Glasgow, Cathcart (Mr. Taylor) is still suffering from his major defeat on licensing last night. I suggest that he uses the Common Market machinery and goes to the European Court of Justice. Maybe it could help him. Last night I said that an efficient nationalised industry should have no fears about competition from the private sector. This sentiment was applauded not only by my Front Bench, but by the hon. Member for Glasgow, Cathcart. Why is it that today he feels that private industry should fear competition from the public sector?

If British Shipbuilders and British Aerospace feel that they could do subsidiary work efficiently and in the interests of the country, why should they not do so? If we want to improve the efficiency of these corporations, why should we prevent them from competing with private industry, and why should private industry be afraid of such competition? The Opposition are great upholders of competition, so why should they shackle private industry and prevent it from competing fairly with public industry? What are they afraid of? Do they not believe in fair competition?

Mr. Cope

The hon. Member talks about fair competition, but does he not realise that the clause that we inserted in the Bill last night does not concern any duty undertaken by either of the corporations under Clause 2?

Mr. Mitchell

The Conservatives never cease to amaze me. They always try to claim in some way that publicly-owned industry is the sector which acts unfairly. One could give many examples of where privately-owned industry treats nationalised industries unfairly, and if the hon. Member wants an example let him just look at Post Office telecommunications.

The hon. Member for Bridgwater (Mr. King) made certain remarks about shipowners. He said that it would be impossible to force British owners to buy their vessels from British yards; the Government should try, however, to encourage that as much as possible. The sad fact today is that in many cases, because of the tax situation and other factors, there is a positive incentive for British owners to have their ships built abroad. I hope that the Government will look into that.

I should like to know what are the rules in Japan. I suspect that Japanese shipowners are subject to certain rules about buying their ships from Japanese yards. The Government should put as much pressure as possible on to British owners to have their vessels built in British yards.

Mr. Burden

I was not a member of the Standing Committee examining the Bill, but I completely agree with my hon. Friend the Member for Bridgwater (Mr. King), and I was greatly surprised that the Under-Secretary should tell my hon. Friend the Member for Harborough (Mr. Farr) that there was no fear for the company in his constituency. The hon. Gentleman implied that there would be no question of British Aerospace participating in the development and construction of jet engines. However, if the Secretary of State decided that it should he could instruct it to embark upon such activities, or, for that matter, upon any other activity that he might suggest.

I am sure that many Labour Members below the Gangway who are out-and-out nationalisers would welcome that approach. It will provide the bones of the skeleton upon which they can put the full flesh of nationalisation. Labour Members do not seem to understand that when such a situation arises firms in the areas of private industry threatened by an extension of nationalisation are reluctant to invest and, above all, investment by multinational companies in this country is threatened.

Many Left-wingers would like to extend nationalisation until it controls the whole of British industry. They have stated that categorically, and the public are aware of their intentions. I am convinced that their attitude frightens away overseas companies which might otherwise want to establish businesses in this country.

What concerns me is that suddenly on the Labour Benches there is again this great campaign and crusade for more nationalisation. For some time now the words "public ownership" have fallen by the wayside. They became very unpopular because the ordinary people of this country knew full well not only that they had no control over such industries, and many of them are discredited in the eyes of the public. For example, the public had no control over the 35 per cent. increase in the prices of nationalised industries between March 1974 and March 1975. That figure was given to me by the Financial Secretary to the Treasury last Friday, in a Written Answer.

Now we are told there will be more nationalisation. In addition to the industries in the Bill, public money will be spent in opening up ancillary organisations and businesses, but without any increase in public accountability.

Mr. Martin Flannery (Sheffield, Hillsborough)

The hon. Member has raised a very important point. I am sure that he is aware that we use the expression "public ownership" as widely as we can and we try to improve it and to increase public accountability, although that is a difficult job. Is the hon. Gentleman suggesting that by some strange alchemy the public have some control and accountability over private industry? Is he aware that the much-vaunted private industry of which he speaks receives at least £3 million of public money a day in order to keep it going? At the moment there is a strike of capital in which these companies have thousands of millions of pounds in the banks which they refuse, at the behest of the CBI, to invest. While refusing to invest they talk about patriotism.

Mr. Burden

The hon. Gentleman is quite wrong. We in this House, as representatives of the electorate, cannot question the day-to-day activities of the nationalised industries that involves such things as fare increases or other price increases. In a private company shareholders have the right to attend an annual meeting, to ask questions and to insist upon proper replies. The hon. Member asked about investment in private industry. I believe that Governments—and I include my own on one occasion—have done wrong to pour public money into private industry. That does not make private industry competitive.

If the nationalised corporations in the Bill have activities forced upon them by the Minister they cannot be described as independent bodies. Always the threat of that will hang over them, even if they consider that the duties imposed upon them by the Minister—perhaps he will be a Left-wing Minister—are contrary to the best interests of the corporation they manage. But having entered into such an activity they will almost automatically, whatever the cost may be, order all their supplies from the component firm that they have set up, for that is what the Minister will require.

7.30 p.m.

What about the other industries, firms and companies that have been supplying components to the nationalised industry, often for a considerable time? Unless they can find new customers in different industries they will probably be forced to close down. I remind Labour Members that some of the industries so affected may be in areas that they represent. I have stated the facts. If we impose these problems upon private industry the sector will withhold investment. That will make it impossible for them to compete in this country. Many of them, not merely because they fear nationalisation but the threat of competition from a company controlled within a nationalised corporation, will not invest and, therefore, will also not be competitive in overseas markets. The effect of that situation could be considerable right across the board.

It has been said that the Government should find some means of ensuring that British shipowners buy their ships in British yards. But that will not make them competitive in world markets. The only reasons for British ship owners buying ships abroad is because they are of better quality—that also unfortunately now applies to a wide range of goods—cheaper, or on quicker delivery dates. When we consider high cost capital goods such as ships that cost many millions of pounds, against which companies have to borrow, many at high interest rates, such matters become extremely important.

In answer to me the Prime Miinster stated that there would have to be rationalisation in the shipbuilding industry. That can only mean that there must be cutbacks in the industry to try to make it viable. In other words, some people must lose their jobs. If ship owners are not competitive because they cannot obtain ships from our own yards on favour able terms, they cannot compete in the cost of the freight or passengers they have to carry. If that situation comes about, it will be the Government alone who will be ordering the ships from the yards. For what purpose and with whose money will that be done? What will they do with the ships when they have bought them? No matter what may be said to the contrary, in the final issue only orders for ships will keep the yards open and the men employed.

Mr. Frederick Willey (Sunderland, North)

I shall intervene briefly. I hope that it does not sound arrogant, but I wish to contribute a little common sense to the debate. It has been an infantile debate so far. Probably this is the only country in the world where this debate could have taken place. We are dealing with the nationalisation of the shipbuilding, ship repairing and aircraft industries. I am sure that no other country would have seen such a debate on these industries.

I am not too enthusiastic about the provision in the Bill but it happens to be in its present form—namely, providing for a statutory instrument—because of the sort of debate that we have held. Any other country engaged in nationalising these industries would have said "Make a go of it and exercise your judgment on behalf of the industries".

That is what we must do. We talk about commercial judgment and managerial judgment. It does not make any difference whether the industry has been nationalised or is private; that judgment must be exercised.

In Committee we had repeated reference to Greenwell's, a yard that has been closed. We have also had discussions about Bristol Channel Ship Repairers Limited, which has an interest in Green-well's. There happens to be in that yard another interest which is concerned with using it for non-ship repair activities. I do not know whether hon. Gentlemen will say that my constituency must be inflicted with unemployment, when we can employ the people in the yard.

That is the issue. It is as simple as that. We have dry dock facilities which can be put to other purposes. I am concerned about my constituents having a chance to work. I do not want any rigidity or inflexibility which would prevent them from having that chance. I do not say that the yard will be put to non-repair purposes, but it is a matter that has to be considered. I do not intend to have the yard precluded from that sort of use.

The hon. Member for Gillingham (Mr. Burden) knows nothing about shipbuilding or ship repairing. I tell him that it is important that such undertakings should have an association with a shipping line. That is one of the greatest assets that a shipbuilding or ship repairing organisation can possess.

Mr. Burden

With great respect to the right hon. Gentleman, he is deliberately misquoting me or suffering from a delusion. I said that British shipowners have to buy ships where they can buy them at prices that are competitive. That is because they have to run them against other countries' ships. Unless they can buy them at competitive rates they will not be able to run them at competitive rates.

Mr. Willey

I must tell the hon. Gentleman that he is talking nonsense. One of the strengths of the Sunderland yards—namely, Austin and Pickersgill Ltd. and Sunderland Shipbuilders Ltd.—is that they have an association and relationship with shipping lines. Austin & Pickersgill Ltd. is associated with Overseas Freighters and Sunderland Shipbuilders is associated with Court Line. We do not want this naive Court Line. We do not want this naive and infantile talk. We know full well why such associations are important—namely, because the shipping lines can determine the timing of their orders. That is important for continuity of work. Time and time again orders have been placed in the Sunderland yards because there has been an identity of interest between the builders and the shipping lines.

I now turn to an essential factor that has had a detrimental effect on the British shipbuilding industry. This is why the industry has fallen behind the shipbuilding industries of other countries. By its nature, it is a cyclical industry. That means that it must diversify. Let us bear in mind that the Japanese yards are part of huge complexes. It is an enormous advantage for a cyclical industry to have diversification. Many other countries have learnt that it is vital to have a measure of diversification. With that background it is possible to be more ambitious. This is where the British yards have lost out. It is possible to be more ambitious on the upswing if it is known that if there is a return swing it is possible to engage in other work.

The other factor that should be borne in mind is that, in common with other countries, we need a sense of responsibility between firms, whether or not they are nationalised, and their work people. If we get that sense of responsibility we shall get a much more effective industrial policy. Let us have our large industries having a full sense of responsibility. For example, let the British Steel Corporation take full responsibility for its employees. In the North-East the National Coal Board was responsible for scores of thousands of miners being paid off without having to take any responsibility. There were no discussions about redundancy but there should have been discussions about jobs. The board should have had a feeling of responsibility, which means diversification. Unless we tackle our industrial problems in this way, we shall continue to lose out to other industries which have done so. We can see how the industry is run in Japan and West Germany.

We ought to be saying that we appreciate the serious difficulties facing the shipbuilding and ship repairing industries. Things have gone so badly in this cycle that no one in the industry believes that there is any alternative to a State takeover. Let us now get down to the basic problem and see that the industries have the tools to tackle the difficult situation facing them.

Mr. Ian Lloyd

If I attempted to follow the right hon. Member for Sunderland, North (Mr. Willey) too closely, I should run a grave risk of being regarded as naive and infantile. Though I have often discussed these matters with the right hon. Member, I cannot accept his analysis of what my hon. Friend the Member for Gillingham (Mr. Burden) said as naïve or infantile.

In declaring my interest as group economic adviser to a major British shipping company, I can tell the right hon. Member for Sunderland, North that when British ship owners consider where to buy and build ships, many considerations other than the important one of the desirability of building in British yards are taken into account.

Listening to my hon. Friend the Member for Bridgwater (Mr. King) moving the amendment. I realised that was receiving what could be described as launching aid. Following his usual trenchant and vigorous defence of the industry, I also received launching aid from other hon. Friends until I worried that there might be a danger of my missing the tide. Fortunately that has not happened and I shall be as brief as I can.

The Under-Secretary said that nationalised industries were dealing with the nation's assets while privately-owned shipbuilding companies did not control the nation's assets. What an extraordinary statement! If we aggregated the capital of the British shipbuilding and ship owning industries and analysed the shareholdings, sub-dividing them among the insurance and pension funds involved, we should discover that the industry is owned by the whole nation.

We object to the fact that nationalisation may take place virtually by statutory instrument. It would be bad enough if we were proposing to nationalise the shipping industry, with its vast turnover and overseas assets, and proposing surreptitiously to allow it to nationalise the shipbuilding industry, which is about one-tenth of the size of the shipping industry.

But we are allowing a very small tail at least the possibility of wagging a very big dog. The Government want to be able, by Statutory Instrument, to use their interest in shipbuilding and the corporation to nationalise shipping. We object to surreptitious nationalisation.

There is now a crucial dividing line between the public and private sectors in this country. If the Government choose to extend it, let them come formally, officially and publicly to the House to do so. It is crucial that nothing should be done surreptitiously or by chance. It should be done in the most overt possible way.

The Government may ask why the corporation should be restricted. Let us discuss its options. It may liquidate and stop building until the market recovers and then perhaps diversify. Another option is to build for speculative demand—a concept viewed with horror by hon. Members opposite. Quincy in the United States and Götaverken in Sweden are building for speculative demand and have established ship operating companies to take care of this momentary speculation.

Finally, the corporation could operate ships and, in the longer term, could reorganise and restructure the industry.

7.45 p.m.

The OECD has given specific advice to the Government that there is a structural crisis in the industry and that Western Europe will not escape unless it restructures the industries which will involve a substantial reduction in capacity. The Government apparently do not accept this conclusion.

We are told that there is a possibility that the shipbuilding corporation might build for speculative demand. This involves creating additional shipping capacity and builders entering a sphere of demand judgment made by ship operators.

The corporation may do this. We can all deplore its judgment. Ship owning and operating is a very different matter from shipbuilding and is carried on in a very different commercial environment. Such diversification could involve a major diversion of capital, which is already scarce in the shipbuilding industry, as well as a major diversion of managerial skills.

There has been criticism from both sides of the House about the management of the industry. Are the managers now so richly endowed with enterpreneurial and managerial skills that they can take on the running as well as the building of ships? I doubt it.

Some hon. Members may say that there is little likelihood of this happening. I say that we should learn from the lesson of Maritime Fruit Carriers and what can happen when a major yard such as Swan Hunter believes that its interests depend on buying out a major customer in order to keep the yard alive.

I wonder how long it will be before that consortium, whether nationalised or not, will come here saying that it made an error of judgment, entered a market that was heavily over-subscribed, where all the signals were red and all the instruments read "change ", but that they did not see the red and chose to ignore the signals. If the Bill goes through unaltered, we shall be institutionalising within the system the capacity to resist market symbols.

If there is an institutionalised attempt to resist market signals, one thing is certain—it will be a commercial disaster and the bailing out will rebound on to the backs of the British taxpayer.

Only this morning we had presented to us the NEDO report which points out that most of the profits made by nationalised industries, about which Ministers have been boasting, would actually be extravagant losses if inflation accounting techniques had been applied to them.

I am arguing as strongly as I can that there must be no surreptitious nationalisation. The reputation of the technique is damaged enough already. If, for political reasons, the Government wish to extend the technique, there is only one legitimate way of doing it and that is to bring a Bill before the House.

Mr. Les Huckfield

The hon. Member for Havant and Waterloo (Mr. Lloyd) does not do himself justice. The clause and the Government amendments go very much along the lines that he has been advocating.

The hon. Member wants to see freedom for nationalised industries to respond to pressures of the market. The clause and the amendments enable the Secretary of State to amend the duties of the corporation so that it can respond to the market.

The hon. Gentleman says that he does not want anything done in a covert or secretive way. That is precisely what the clause and these amendments do not allow. The amendments insist that if changes are to be made in the duties of the two corporations, my right hon. Friend will have to come before the House under the affirmative order procedure. In other words, in relation to precisely the kind of things that the hon. Gentleman has been saying he fears, he can find a great deal of reassurance in the clause.

Mr. Ron Thomas

I know that my hon. Friend the Under-Secretary joined the Committee on the Bill rather late in the day. However, in our discussions on this matter the Minister of State was faced with two opposing forces. Many of us, including myself, wanted to give a large freedom to the corporations to diversify. On the other hand, the Tories wanted to keep them in a straitjacket. The clause seems to fall in the middle.

Mr. Huckfield

My hon. Friend has been considering the Bill for a long time and obviously knows it better than I do. However, he makes exactly the point that I was about to make. My right hon. Friend the Member for Sunderland, North (Mr. Willey) and my hon. Friends the Member for Bristol, North-East (Mr. Palmer) and the Member for Southampton, lichen (Mr. Mitchell) have been making this kind of point. They want to see these corporations having the flexibility to respond to new activities and having the power to diversify. The clause en, ables my right hon. Friend to amend the corporations' duties, with the approval of the House, so that they can do that.

Mr. Cope

Will the hon. Gentleman give way?

Mr. Huckfield

Perhaps I may make my own speech. The hon. Gentleman has had his chance of catching the eye of the Chair.

These are powers which were contained in the Iron and Steel Act 1975, which governs the activities of British Steel. They are powers which were also in Section 2(1) of the Iron and Steel Act 1967. Most important of all, however—I hope that the hon. Member for Glasgow, Cathcart (Mr. Taylor) will listen carefully to this—is that in relation to such activities and duties as these, this kind of freedom is precisely that which was conferred on Rolls-Royce 1971 by the Conservative Government. When the Conservative Government took Rolls-Royce into public ownership, they created a structure which enables the memoranda and articles of Rolls-Royce 1971 to be altered by the shareholders—now the National Enterprise Board—without coming to the House for approval—in other words, precisely the kind of thing that the hon. Gentleman was attacking previously. That is precisely what was intended by the Conservative Party when it took Rolls-Royce 1971 into public ownership.

Mr. Teddy Taylor

Does not the hon. Gentleman accept that altering the articles of association of a company alters what the directors can do if they so desire, whereas under the amendment the Minister is taking powers to instruct the nationalised corporations on what they must do, and not what they may do?

Mr. Huckfield

I am continually at a loss to understand the hon. Gentleman's comments or their relevance to the debate —especially when we had that tour de force of the Ceylonese tea plantations and the usual things to which we have become accustomed. He knows that the Secretary of State has powers under the clause to alter the duties of the corporations, just as shareholders may alter the duties of a private company. We seek to give my right hon. Friend the power to change the duties of the corporations in the same way that shareholders can change the duties and objects of a private company.

Mr. Teddy Taylor

There are no duties on a company.

Mr. Huckfield

The hon. Gentleman always chunters on, and we get used to that. However, I hope that he will recognise that what I have said follows the precedent set by his party when Rolls-Royce 1971 was taken into public ownership.

The hon. Member for Harborough (Mr. Farr) talked about a company in his constituency as though it were a very small concern which would be at the mercy of this monolithic, bureaucratic corporation structure that he said we are about to set up. Perhaps the firm has not told him that it happens to be part of the Associated Engineering Group, which last year had a turnover of some £208 million. That hardly sounds the sort of tiny creature that would be at the mercy of the two corporations that the Bill will create.

The hon. Gentleman and his hon. Friends seek to distort the objectives of the clause. Under the clause there is not a general, all-pervasive duty to diversify and do everything else concerning these two industries. That is precisely not what is intended. As my hon. Friend the Member for Bristol, North-East made very clear, the duties imposed by the clause are very specific. My right hon. Friend's powers are very specific, as will be the activities of the corporations and their duties to be laid down by my right hon. Friend.

What we seek to do is to enable my right hon. Friend to confer upon the corporations the freedom to enter new fields on fair terms. I only wish that when Opposition Members were in Government and introduced legislation, the kind of changes that they sought to introduce had been subject to the parliamentary approval and parliamentary acquiescence that my right hon. Friend will have to secure before these duties are amended.

I stress to hon. Members, particularly the hon. Member for Havant and Waterloo, that it is right that my right hon. Friend can alter the duties of the corporations under this clause. However, hon. Members should also bear in mind that before my right hon. Friend has the power to do that, he must come to the House. Therefore, while it is true that we want to enable the corporations to have some commercial flexibility to respond to new activities or to changes in the economy, as my right hon. Friend the Member for Sunderland, North said, it is also true that we want to maintain and to keep parliamentary approval.

Having said that, I hope that my right hon. and hon. Friends will accept Amendments Nos. 4 and 8 and that they will reject the Opposition amendments as having no intention other than to make sure that the corporations will be nobbled, shackled and hamstrung in a very restrictive way even before they start to operate.

Mr. Ian Lloyd

The hon. Gentleman has more or less implied that it is the Government's wish that there should be parliamentary approval. Does he regard the extension into a major sector of another industry as normal commercial freedom? Before nationalising an industry, all Governments since the war have thought it necessary to bring a major Bill before Parliament. Why should it now be sufficient to do this by Statutory Instrument?

Mr. Huckfield

I get a little tired of rehearsing the same arguments to the hon. Gentleman. When his own party nationalised Rolls-Royce, it enabled Rolls-Royce to change its memoranda and its articles without coming to the House for legislation.

Mr. Tom King

I congratulate the Under-Secretary on his reply to the last intervention by my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd), because it was the first time that he has not started to reply by saying that he was at a loss to understand something As we listened to his two speeches, my hon. Friends and I came to the conclusion that he did not understand anything about our amenments. The way in which he began was a Freudian slip.

The point that I was trying to make in my opening speech is the point that the Under-Secretary has totally failed to understand. The right hon. Member for Sunderland, North (Mr. Willey) was not present when I spoke earlier, but he referred to this as an infantile debate. I was not aware that he heard the opening speeches, and that was not my impression of the other speeches.

The question that I should like one Labour Member to answer, if Labour Members do not wish us to press the amendment, is how one can genuinely believe in a fixed frontier between the public and the private sector and yet include powers in a Bill such as this allowing for the continual advance of that frontier and the continual encroachment into the private sector and enlargement of the public sector without there being any formal and considered approach to this problem. The inevitable result will be pressures arising from loss of jobs, from worries about employment and the fact that the public sector will spread yet wider into related activities in industry.

8.0 p.m.

I hope that the Secretary of State will take this on board. Perhaps the Under-Secretary of State will talk to him because, with respect, he did not seem to understand the point that I was making. The Minister must know that there are potential investors who are concerned about the threats of nationalisation. He and his Department should do all they can, in the present circumstances, to encourage inward investment in this country. That was the policy which the previous Conservative Government followed and I hope that he and his Department are following it as well.

The fact that nationalisation can be accompanied by quite inadequate terms of compensation for assets acquired is a deterrent to the potential investment in this country. We are concerned to see a successful economy in this country, but unless any sort of power, with yet further enlargement of the public sector, is properly constrained we shall not see the increase in investment that we all want to see. For this reason, I hope that my right hon. and hon. Friends will support the amendment in the Lobby.

Question put, That the amendment be made:—

The House divided: Ayes 279, Noes 315.

Division No. 294. AYES [8.00 p.m.
Adley, Robert Gardiner, George (Reigate) Madel, David
Aitken, Jonathan Gardner, Edward (S Fylde) Marshall, Michael (Arundel)
Alison, Michael Gilmour, Sir John (East Fife) Marten, Neil
Amery, Rt Hon Julian Glyn, Dr Alan Mates, Michael
Arnold, Tom Godber, Rt Hon Joseph Mather, Carol
Atkins, Rt Hon H. (Spelthorne) Goodhart, Philip Maude, Angus
Awdry, Daniel Goodhew, Victor Maudling, Rt Hon Reginald
Baker, Kenneth Goodlad, Alastair Mawby, Ray
Banks, Robert Gorst, John Maxwell-Hyslop, Robin
Beith, A. J. Gow, Ian (Eastbourne) Mayhew, Patrick
Bell, Ronald Gower, Sir Raymond (Barry) Meyer, Sir Anthony
Bennett, Sir Frederic (Torbay) Grant, Anthony (Harrow C) Miller, Hal (Bromsgrove)
Bennett, Dr Reginald (Fareham) Gray, Hamish Mills, Peter
Berry, Hon Anthony Griffiths, Eldon Miscampbell, Norman
Biffen, John Grimond, Rt Hon J. Mitchell, David (Basingstoke)
Biggs-Davison, John Grist, Ian Moate, Roger
Blaker, Peter Grylls, Michael Molyneaux, James
Body, Richard Hall, Sir John Monro, Hector
Boscawen, Hon Robert Hall-Davis, A. G. F. Montgomery, Fergus
Bottomley, Peter Hamilton, Michael (Salisbury) Moore, John (Croydon C)
Bowden, A. (Brighton, Kemptown) Hampson, Dr Keith More, Jasper (Ludlow)
Boyson, Dr Rhodes (Brent) Hannam, John Morgan, Geraint
Bradford, Rev Robert Harrison, Col Sir Harwood (Eye) Morgan-Giles, Rear-Admiral
Braine, Sir Bernard Harvie Anderson, Rt Hon Miss Morris, Michael (Northampton S)
Brittan, Leon Hastings, Stephen Morrison, Charles (Devizes)
Brocklebank-Fowler, C. Havers, Sir Michael Morrison, Hon Peter (Chester)
Brotherton, Michael Hawkins, Paul Mudd, David
Brown, Sir Edward (Bath) Hayhoe, Barney Neave, Airey
Bryan, Sir Paul Heath, Rt Hon Edward Nelson, Anthony
Buchanan-Smith, Alick Heseltine, Michael Neubert, Michael
Buck, Antony Hicks, Robert Newton, Tony
Budgen, Nick Higgins, Terence L. Normanton, Tom
Bulmer, Esmond Holland, Philip Nott. John
Burden, F. A. Hooson, Emlyn Onslow, Cranley
Butler, Adam (Bosworth) Hordern, Peter Oppenheim, Mrs Sally
Carlisle, Mark Howe, Rt Hon Sir Geoffrey Osborn, John
Chalker, Mrs Lynda Howell, David (Guildford) Page, John (Harrow West)
Channon, Paul Howell, Ralph (North Norflok) Page, Rt Hon R. Graham (Crosby)
Churchill, W. S. Howells, Geraint (Cardigan) Pardoe, John
Clark, Alan (Plymouth, Sutton) Hunt, David (Wirral) Parkinson, Cecil
Clark, William (Croydon S) Hunt, John (Bromley) Penhaligon, David
Clarke, Kenneth (Rushcliffe) Hurd, Douglas Percival, Ian
Clegg, Walter Hutchison, Michael Clark Pink, R. Bonner
Cockcrott, John Irving, Charles (Cheltenham) Price, David (Eastleigh)
Cooke, Robert (Bristol W) James, David Prior, Rt Hon James
Cope, John Jenkin, Rt Hon P. (Wanst'd & W'df'd) Pym, Rt Hon Francis
Cordle, John H. Jessel, Toby Raison, Timothy
Cormack, Patrick Johnson Smith, G. (E Grinstead) Rathbone, Tim
Corrie, John Johnston, Russell (Inverness) Rawlinson, Rt Hon Sir Peter
Costain, A. P. Jones, Arthur (Daventry) Rees, Peter (Dover & Deal)
Critchley. Julian Jopling, Michael Renton, Rt Hon Sir D. (Hunts)
Crouch, David Joseph, Rt Hon Sir Keith Renton, Tim (Mid-Sussex)
Crowder, F. P. Kaberry, Sir Donald Rhys Williams, Sir Brandon
Davies, Rt Hon J. (Knutsford) Kellett-Bowman, Mrs Elaina Ridley, Hon Nicholas
Dean, Paul (N Somerset) Kershaw, Anthony Ridsdale, Julian
Dodsworth, Geoffrey Kimball, Marcus Rifkind, Malcolm
Douglas-Hamilton, Lord James King, Evelyn (South Dorset) Roberts, Michael (Cardiff NW)
Drayson, Burnaby King, Tom (Bridgwater) Roberts, Wyn (Conway)
du Cann, Rt Hon Edward Kirk, Sir Peter Rodgers, Sir John (Sevenoaks)
Dunlop, John Kitson, Sir Timothy Ross, Stephen (Isle of Wight)
Durant, Tony Knight, Mrs Jill Ross, William (Londonderry)
Dykes, Hugh Knox, David Rossi, Hugh (Hornsey)
Eden, Rt Hon Sir John Lamont, Norman Rost, Peter (SE Derbyshire)
Edwards, Nicholas (Pembroke) Lane, David Royle, Sir Anthony
Elliott, Sir William Langford-Holt, Sir John Sainsbury, Tim
Emery, Peter Latham, Michael (Melton) St. John-Stevas, Norman
Eyre, Reginald Lawrence, Ivan Scott, Nicholas
Fairgrieve, Russell Lawson, Nigel Scott-Hopkins, James
Farr, John Le Marchant, Spencer Shaw, Giles (Pudsey)
Fell, Anthony Lewis, Kenneth (Rutland) Shaw, Michael (Scarborough)
Finsberg, Geoffrey Lloyd, Ian Shelton, William (Streatham)
Fletcher, Alex (Edinburgh N) Loveridge, John Shepherd, Colin
Fletcher-Cooke, Charles Luce, Richard Shersby, Michael
Forman, Nigel McCrindle, Robert Silvester, Fred
Fowler, Norman (Sutton C'f'd) McCusker, H. Sims, Roger
Fox, Marcus Macfarlane, Neil Sinclair, Sir Roger
Fraser, Rt Hon H. (Stafford & St) MacGregor, John Skeet, T. H. H.
Freud, Clement Macmillan, Rt Hon M. (Farnham) Smith, Dudley (Warwick)
Fry, Peter McNair-Wilson, M. (Newbury) Speed, Keith
Galbraith, Hon T. G. D. McNair-Wilson, P. (New Forest) Spence, John
Spicer, Jim (W Dorset) Temple-Morris, Peter Walters, Dennis
Spicer, Michael (S Worcester) Thatcher, Rr Hon Margaret Warren, Kenneth
Sproat, Iain Townsend, Cyril D. Weatherill, Bernard
Stainton, Keith Trotter, Neville Wells, John
Stanbrook, Ivor Tugendhat, Christopher Whitelaw, Rt Hon William
Stanley, John van Straubenzee, W. R. Wiggin, Jerry
Steel, David (Roxburgh) Vaughan, Dr Gerard Winterton, Nicholas
Steen, Anthony (Wavertree) Viggers, Peter Wood, Rt Hon Richard
Stewart, Ian (Hitchin) Wainwright, Richard (Colne V) Young, Sir G. (Ealing, Acton)
Stokes, John Wakenham, John Younger, Hon George
Stradling Thomas, J. Walder, David (Clitheroe)
Tapsell, Peter Walker, Rt Hon P. (Worcester) TELLERS FOR THE AYES:
Taylor, R. (Croydon NW) Walker-Smith, Rt Hon Sir Derek Mr. W. Benyon and
Taylor, Teddy (Cathcart) Wall, Patrick Mr. Jim Lester.
Tebbit, Norman
Abse, Leo Dean, Joseph (Leeds West) Irving, Rt Hon S. (Dartford)
Allaun, Frank de Freitas, Rt Hon Sir Geoffrey Jackson, Colin (Brighouse)
Anderson, Donald Dell, Rt Hon Edmund Jackson, Miss Margaret (Lincoln)
Archer, Peter Dempsey, James Janner, Greville
Armstrong, Ernest Doig, Peter Jay, Rt Hon Douglas
Ashley, Jack Dormand, J. D. Jenkins, Hugh (Putney)
Ashton, Joe Douglas-Mann, Bruce Jenkins, Rt Hon Roy (Stechford)
Atkins, Ronald (Preston N) Duffy, A. E. P. John, Brynmor
Atkinson, Norman Dunn, James A. Johnson, James (Hull West)
Bagier, Gordon A. T. Dunnett, Jack Johnson, Walter (Derby S)
Bain, Mrs Margaret Dunwoody, Mrs Gwyneth Jones, Barry (East Flint)
Barnett, Guy (Greenwich) Eadie, Alex Jones, Dan (Burnley)
Barnett, Rt Hon Joel (Heywood) Edge, Geoff Judd, Frank
Bates, Alf Edwards, Robert (Wolv SE) Kaufman, Gerald
Bean, R. E. Ellis, John (Brigg & Scun) Kelley, Richard
Benn, Rt Hon Anthony Wedgwood Ellis, Tom (Wrexham) Kerr, Russell
Bennett, Andrew (Stockport N) English, Michael Kilroy-Silk, Robert
Bidwell, Sydney Ennals, David Kinnock, Neil
Bishop, E. S. Evans, Fred (Caerphilly) Lambie, David
Blenkinsop, Arthur Evans, Gwynfor (Carmarthen) Lamborn, Harry
Boardman, H. Evans, Ioan (Aberdare) Lamond, James
Booth, Rt Hon Albert Evans, John (Newton) Latham, Arthur (Paddington)
Boothroyd, Miss Betty Ewing, Harry (Stirling) Leadbitter, Ted
Bottomley, Rt Hon Arthur Ewing, Mrs Winifred (Moray) Lee, John
Boyden, James (Bish Auck) Faulds, Andrew Lestor, Miss Joan (Eton & Slough)
Bradley, Tom Fernyhough, Rt Hon E. Lever, Rt Hon Harold
Bray, Dr Jeremy Fitch, Alan (Wigan) Lewis, Ron (Carlisle)
Brown, Hugh D. (Provan) Flannery, Martin Lipton, Marcus
Brown, Robert C. (Newcastle W) Fletcher, L. R. (Ilkeston) Litterick, Tom
Brown, Ronald (Hackney S) Fletcher, Ted (Darlington) Lomas, Kenneth
Buchan, Norman Foot, Rt Hon Michael Loyden, Eddie
Buchanan, Richard Ford, Ben Luard, Evan
Butler, Mrs Joyce (Wood Green) Forrester, John Lyons, Edward (Bradford W)
Callaghan, Rt Hon J. (Cardiff SE) Fowler, Gerald (The Wrekin) Mabon, Dr J. Dickson
Callaghan, Jim (Middleton & P) Fraser, John (Lambeth, N'w'd) McCartney, Hugh
Campbell, Ian Freeson, Reginald MacCormick, Iain
Canavan, Dennis Garrett, John (Norwich S) McDonald, Dr Oonagh
Cant, R. B. Garrett, W. E. (Wallsend) MacFarquhar, Roderick
Carmichael, Neil George, Bruce McGuire, Michael (Ince)
Carter-Jones, Lewis Gilbert, Dr John Mackenzie, Gregor
Cartwright, John Ginsburg, David Mackintosh, John P.
Castle, Rt Hon Barbara Golding, John Maclennan, Robert
Clemitson, Ivor Gould, Bryan McMillan, Tom (Glasgow C)
Cocks, Michael (Bristol S) Gourlay, Harry McNamara, Kevin
Cohen, Stanley Graham, Ted Madden, Max
Coleman, Donald Grant, George (Morpeth) Magee, Bryan
Colquhoun, Ms Maureen Grant, John (Islington C) Mahon, Simon
Concannon, J. D. Grocott, Bruce Mallalleu, J. P. W.
Conlan, Bernard Hamilton, W. W. (Central Fife) Marks, Kenneth
Cook, Robin F. (Edin C) Hardy, Peter Marquand, David
Corbett, Robin Harrison, Walter (Wakefield) Marshall, Dr Edmund (Goole)
Cox, Thomas (Tooting) Hart, Rt Hon Judith Marshall, Jim (Leicester S)
Craigen, J. M. (Maryhill) Hattersley, Rt Hon Roy Mason, Rt Hon Roy
Crawford, Douglas Hatton, Frank Maynard, Miss Joan
Crawshaw, Richard Hayman, Mrs Helene Meacher, Michael
Cronin, John Healey, Rt Hon Denis Mellish, Rt Hon Robert
Crosland, Rt Hon Anthony Heffer, Eric S. Mendelson, John
Crowther, Stan (Rotherham) Hooley, Frank Mikardo, Ian
Cryer, Bob Horam, John Millan, Bruce
Cunningham, G. (Islington S) Howell, Rt Hon Denis (B'ham, Sm H) Miller, Dr M. S. (E Kilbride)
Cunningham, Dr J. (Whiteh) Hoyle, Doug (Nelson) Miller, Mrs Millie (Ilford N)
Dalyell, Tam Huckfield, Les Mitchell, R. C. (Soton, Itchen)
Davidson, Arthur Hughes, Rt Hon C. (Anglesey) Moonman, Eric
Davies., Bryan (Enfield N) Hughes, Mark (Durham) Morris, Alfred (Wythenshawe)
Davies, Denzil (Llanelli) Hughes, Robert (Aberdeen N) Morris, Charles R. (Openshaw)
Davies, Ifor (Gower) Hughes, Roy (Newport) Morris, Rt Hon J. (Aberavon)
Davis, Clinton (Hackney C) Hunter, Adam Moyle, Roland
Deakins, Eric Irvine, Rt Hon Sir A. (Edge Hill) Mulley, Rt Hon Frederick
Murray, Rt Hon Ronald King Sandelson, Neville Tuck, Raphael
Newens, Stanley Sedgemore, Brian Urwin, T. W.
Noble, Mike Selby, Harry Varley, Rt Hon Eric G.
Oakes, Gordon Shaw, Arnold (Ilford South) Wainwright, Edwin (Dearne V)
Ogden, Eric Sheldon, Robert (Ashton-u-Lyne) Walden, Brian (B'ham, L'dyw'd)
O'Halloran, Michael Shore, Rt Hon Peter Walker, Harold (Doncaster)
Orbach, Maurice Short, Rt Hon E. (Newcastle C) Walker, Terry (Kingswood)
Orme, Rt Hon Stanley Short, Mrs Renée (Wolv NE) Ward, Michael
Ovenden, John Silkin, Rt Hon John (Deptford) Watkins, David
Owen, Dr David Silkin, Rt Hon S. C. (Dulwich) Watkinson, John
Padley, Walter Sillars, James Watt, Hamish
Palmer, Arthur Silverman, Julius Weetch, Ken
Park, George Skinner, Dennis Weitzman, David
Parker, John Small, William Wellbeloved, James
Parry, Robert Smith, John (N Lanarkshire) Welsh, Andrew
Pavitt, Laurie Snape, Peter White, Frank R. (Bury)
Peart, Rt Hon Fred Spearing, Nigel White, James (Pollok)
Pendry, Tom Spriggs, Leslie Whitehead, Phillip
Perry, Ernest Stallard, A. W. Whitlock, William
Phipps, Dr Colin Stewart, Donald (Western Isles) Wigley, Dafydd
Prentice, Rt Hon Reg Stewart, Rt Hon M. (Fulham) Willey, Rt Hon Frederick
Prescott, John Stoddart, David Williams, Alan (Swansea W)
Price, C (Lewisham W) Stott, Roger Williams, Alan Lee (Hornch'ch)
Price, William (Rugby) Strang, Gavin Williams, Rt Hon Shirley (Hertford)
Radice, Giles Strauss, Rt Hon G. R. Williams, Sir Thomas
Rees, Rt Hon Merlyn (Leeds S) Summerskill, Hon Dr Shirley Wilson, Alexander (Hamilton)
Reid, George Swain, Thomas Wilson, Gordon (Dundee E)
Richardson, Miss Jo Taylor, Mrs Ann (Bolton W) Wilson, Rt Hon (Huyton)
Roberts, Albert (Normanton) Thomas, Dafydd (Merioneth) Wilson, William (Coventry SE)
Roberts, Gwilym (Cannock) Thomas, Jeffrey (Abertillery) Wise, Mrs Audrey
Robinson, Geoffrey Thomas, Mike (Newcastle E) Woodall, Alec
Roderick, Caerwyn Thomas, Ron (Bristol NW) Woof, Robert
Rodgers, George (Chorley) Thompson, George Wrigglesworth, Ian
Rodgers, William (Stockton) Thorne, Stan (Preston South) Young, David (Bolton E)
Rooker, J. W. Tierney, Sydney
Roper, John Tinn, James TELLERS FOR THE NOES:
Rose, Paul B. Tomlinson, John Mr. Joseph Harper and
Ross, Rt Hon W. (Kilmarnock) Torney, Tom Mr. James Hamilton.
Rowlands, Ted

Question accordingly negatived.

Amendment made: No. line 24, at end insert— '(5A) The power to make an order under subsection (5) above includes power to vary or revoke any such order previously made, and no order shall be made under that subsection unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.'.—[Mr. Varley.]

The Secretary of State for Industry (Mr. Eric G. Varley)

I beg to move Amendment No. 5, in page 4, line 36, leave out from 'Act' to 'in' in line 38 and insert 'it shall be the duty of each Corporation to promote industrial democracy in a strong and organic form'.

Mr. Deputy Speaker (Bryant Godman Irvine)

With this we may take the following amendments:

(a), after 'democracy', insert 'in which adequate powers of decision-making are shared by the Corporations and their subsidiaries with members of the relevant workforces'. (b), at end, insert 'on the basis of one employee, one vote'. Government Amendment No. 6, in page 4, line 39, at end insert— '(7A) It shall be the duty of each Corporation to enter within 3 months of the relevant vesting date into consultation with the relevant trade unions as to the methods which it should adopt for the purpose of carrying out its duty under subsection (7) above'. (a), at end insert 'and to come to a conclusion about the appropriate form of industrial democracy in each relevant case within one year of the relevant vesting date.' (b), at end add 'and within twelve months of the relevant vesting day each Corporation shall make a report on the consultations to the Secretary of State who shall lay before each House of Parliament a copy thereof and may, after doing so and after considering the report and consulting the Corporation concerned and the relevant trade unions, give the Corporation such directives as he considers appropriate.'. (c), leave out 'the relevant trade unions' and insert 'its employees'

(d), at end insert '(7B) It shall further be the duty of each Corporation at the time of entering into consultation pursuant to the foregoing subsection, to consult with those parts of the concerned work force which are not represented by any relevant trade union'. No. 213, in page 4, line 39, at end insert: '(7B) This section shall be construed as imposing on each Corporation a liability enforceable by proceedings before a court to create joint management and employees consultative machinery.'. No. 305, in Clause 3, page 6, line 11, after 'may', insert: 'after consultations with the relevant trade unions concerned and'. Government Amendment No. 15, in Clause 5, page 7, line 35, leave out from 'organised' to 'and' in line 39 and insert: ',taking account of the desirability of promoting the largest degree of decentralisation of management consistent with the proper discharge of its functions, and what steps are necessary in order effectively to promote industrial democracy in its undertakings and the undertakings of its wholly owned subsidiaries'. (a), after 'functions', insert: 'and taking account of the functions already exercised at yard and factory levels'. (b), after 'functions', insert: 'and in particular trading through subsidiary companies'. (c), after 'functions', insert: 'including forward planning, manpower, market potential, research and development, exports and imports, and diversification'. No. 271, in page 8, line 3, leave out 'any relevant trade union' and insert: 'such organisations including relevant trade unions as appear to it to represent substantial proportions of the persons or of any class of persons in the employment of the Corporation or any of its wholly owned subsidiaries'. No. 315, in page 8, line 3, at end insert: '(4) Each Corporation shall be required to vest the control of one or more of its subsidiaries in the employees of that subsidiary as an application of the principle of workers' control'. No. 226, in page 8, line 16, leave out: greatest efficiency in the management' and insert: 'largest degree of decentralisation of management and the most effective measures to promote industrial democracy consistent with the most effecient organisation'. No. 256, in Clause 6, page 8, line 21, leave out 'any relevant trade union' and insert 'its employees'.

No. 257, in page 8, line 22, leave out 'any such trade union' and insert 'its employees'.

No. 272, in page 8, line 25, at end insert— '(1A) It shall further be the duty of each Corporation to seek consultations with other organisations not being relevant trade unions, as appear to it to represent substantial proportions of the persons or of any class of persons in the employment of the Corporation or any of its wholly owned subsidiaries in respect of the establishment and maintenance of machinery for the purposes specified in paragraphs (c) and (d) in subsection (2) below'. No. 277, in page 8, line 29, at end insert: who are members of the trade union engaged in such negotiations'. No. 273, in page 8, line 43, at end insert— '(4) Nothing in this section or in section 5 above shall be construed as prohibiting either Corporation or any wholly owned subsidiary of either Corporation from seeking consultation by such means and in such manner as it thinks fit with any individual employee or groups of such employees on any of the matters in respect of which it is by this section and by section 5 above required to seek consultation with relevant trade unions'. No. 211, in Clause 7, page 9, line 1, after 'Corporation', insert: 'after consulting any relevant trade union,'. No. 212, in page 9, line 8, at end insert: '(bb) employment of persons;'. No. 319, in Clause 54, page 71, line 23, leave out from 'union' to end of line 32 and insert: 'affiliated to the Confederation of Shipbuilding and Engineering Unions'. We may also discuss Government Amendments Nos. 7, 317, 318, 319, 320 and 321, 16, 322, 17, 323, 18, 36 and 37.

8.15 p.m.

Mr. Varley

It will be convenient if I confine my remarks to the Government amendments. If the House gives me leave to speak again, I can refer to the other amendments that are taken in the group, to which other hon. Members will speak.

The other amendments are most sensibly considered if we look first at those amendments that seek to prescribe specific ways of developing industrial democracy and decentralisation, and then turn to those amendments that affect the organisations that will take part in consultations on industrial democracy, organisation and machinery for settling terms and conditions of employment under Clauses 2, 5 and 6.

This group of very important amendments that we are putting forward fulfils two major Government commitments made in Committee, relating to industrial democracy and decentralisation. They are grouped because, for reasons of drafting convenience, the very important requirement on decentralisation comes within the same amendment as one of the several industrial democracy points. There are, nevertheless, two distinct and highly significant initiatives being taken by the Government in this group of amendments.

To deal first with industrial democracy, these amendments are designed to strengthen the industrial democracy provisions in the Bill. We have made clear that this is a subject to which we attach the highest importance, and we have brought forward these changes after wide-ranging consultations. They are intended to create a favourable environment in which industrial democracy may grow and flourish. But it must develop organically to reflect the views and wishes of those who work in each industry, and for this reason we want to avoid any requirement for it to take a particular form. The possible forms of industrial democracy are many and varied, but for our amendments to choose between them and attempt to impose a particular structure would be contrary to the very idea of industrial democracy, because we should be imposing our ideas on those in the industry.

We have strengthened the formula in the original Bill by imposing a duty on both corporations to promote industrial democracy in a strong and organic form. As my hon. Friend explained in Committee, this could give rise to legal problems if the courts were required to adjudicate on industrial democracy. Amendment No. 6, therefore, provides that no duty of either corporation shall be enforceable by proceedings before a court of law. The provision applies to the whole clause, because we wished to follow the precedent of the Iron and Steel Act 1949 as revived by the Iron and Steel Act 1967.

But our amendments are a great deal more than the expression of our hopes. Although we are not imposing a structure, we are introducing procedures to see that progress is made within a reasonable period and that some kind of action is taken. We are therefore requiring each corporation to consult relevant trade unions within three months about the methods of promoting industrial democracy, which is the purpose of Amendment No. 6. Each corporation also has a duty to take into account industrial democracy in designing its organisation. That will ensure that action is taken, and we shall be able to see just what progress is being made, because Amendments Nos. 36 and 37 require the corporations to report on this annually.

Two other amendments in this group should also help to promote industrial democracy by involving relevant trade unions more closely in the industry. Amendments Nos. 211 and 212 provide that unions are to be consulted before each corporation formulates its corporate plan which must include the subject of most concern to the unions—employment. We have also strengthened the wording in Clause 6, which requires the corporations to consult relevant trade unions about the machinery for settling terms and conditions of employment.

Although our Amendment No. 15 on decentralisation is, for drafting reasons, inseparable from those on industrial democracy, both reflect our concern to improve the quality of decisions taken by the industries. An important way of doing that is to see that those in the industry are involved in its development, and our amendments on industrial democracy should help to achieve this.

Mr. Ronald Bell (Beaconsfield)

Before the right hon. Member leaves that point will he tell the House what is meant by "organic growth of industrial democracy"? That is a strange phrase. It must mean something.

Mr. Varley

I agree that it is a difficult concept to understand, and the hon. and learned Gentleman is right to draw attention to it. Neither he nor I had the pleasure of attending the 58 sittings of the Committee. In that term we are trying to avoid setting down a precise formula for industrial democracy. It is better that discussions take place within the two corporations, so that industrial democracy grows from the bottom. It expresses the will of those on both sides of the industry. It would be wrong for the Government to try to impose their view. That is all that we are expressing in that amendment.

But we also believe that decisions should be taken as close as possible to the point of production, so far as that is consistent with the other objectives of public ownership. For that reason we are introducing a requirement on the corporations that in formulating their organisational structure they should promote the largest degree of decentralisation consistent with the proper discharge of their functions.

We emphasised in Committee the importance that we attach to decentralisation, and we consider that this amendment will ensure that decentralisation is given due weight. Both organising committees have clearly stated their intention to decentralise to the greatest possible extent, and to have only small head office organisations, with as little bureaucracy as possible. That is in line with the views of all of us, on both sides of the House; in line with the views of the workers in the two industries; and in line with the interests of the efficient and enterprising management of the industries.

The special circumstances of the shipbuilding industry, with its particular structure and importance in the regional context, has led the Government to table additional amendments covering British Shipbuilders. Our substantive proposal is in Amendment No. 320. It provides for British Shipbuilders to seek the largest degree, consistent with the proper discharge of its functions, of decentralisation of management and decision-taking to separate profit centres in the shipbuilding and ship repairing areas of Great Britain and in particular, of Scotland and Wales and without prejudice to the generality of the foregoing in relation to sales, pricing, production, the formulation and implementation of investment programmes, manpower planning and management, industrial relations and responsibility for financial performance.

In tabling this amendment the Government recognise the special needs of the industries that will come into public ownership under British Shipbuilders, the vital importance of these industries to the regions in which they are concentrated and the aspirations of Scotland and Wales and the regions in England for decentralisation of decision-making to as great an extent as possible.

The organising committee for British Shipbuilders has publicly confirmed that it will decentralise as much as possible. The Committee has made an excellent start to its task of preparing for vesting and has visited all the yards and works in the industry—with one exception—to meet people at all levels to hear their views.

Mr. R. C. Mitchell

I hope that my right hon. Friend will not think me frivolous, but in view of the importance of exports in various sections of the shipbuilding industry, should not such organisations be allowed to retain their own name alongside that of British Shipbuilders? For example, should not Vosper Thornycroft be allowed to retain its name and to include it in British Shipbuilders, because its name is so well known throughout the world?

Mr. Varley

I do not regard that suggestion as frivolous. It is a worthy suggestion, and I know that it is under consideration by the Organising Committee of British Shipbuilders. I am advised that events are almost certain to happen in the way in which my hon. Friend suggests.

I was saying that the Organising Committee has made an excellent start. It already has views on the extent to which it will seek to decentralise to separate profit centres, although it is not yet in a position to put forward firm proposals on the structure of the organisation.

Mr. Robert Adley (Christchurch and Lymington)

Following the suggestion made by the hon. Member for Southampton, Itchen (Mr. Mitchell), should not these companies be allowed not only to retain their names but to retain their total independence of decision-making?

Mr. Varley

That does not follow, and the hon. Gentleman knows it. The Government have reviewed with the organising committee, in fulfilment of the undertaking given by my right hon. Friend the Lord President of the Council in the House of Commons on 29th June, their own amendment on decentralisation and the amendments tabled by the Scottish National Party. I know that the hon. Member for Dundee, East (Mr. Wilson) will be speaking to those amendments, and perhaps I can reserve my comments on that until we have heard his remarks.

The new amendment which has now been agreed with the Organising Committee makes it quite clear that British Shipbuilders will seek to decentralise real powers of management and decision taking to separate profit centres in the shipbuilding and ship repairing areas. The management of these profit centres will have responsibility for their financial performance and will have the necessary authority to fulfil that responsbility. But British Shipbuilders will of course have overall responsibility.

There must be flexibility in the provisions of the Bill to allow for differences between industries—shipbuilding, ship repair and engine building—and to permit British Shipbuilders to establish an initial organisational structure to meet these differences and to adapt its structure from time to time to meet changing circumstances in the shipbuilding and ship repairing areas of Great Britain and in particular of Scotland and Wales. There may be companies, either separate or grouped together or in divisions. The first report will have to be will be for British Shipbuilders to consider which of these best meets the particular circumstances.

8.30 p.m.

In reporting to me its conclusions on organisation, British Shipbuilders will also be required to report on the actions it will take to implement these conclusions. The first report will have to be made within six months after vesting. The reports will be laid before Parliament.

I see these amendments paving the way for the revitalisation of the industry. British Shipbuilders will meet the need for a coherent overall strategy in terms of providing essential planning, funds for investment, taking the lead on introducing industrial democracy, co-ordinating research and marketing, introducing new designs and so on. It is the policy of the organising committee that within this framework the individual profit centres will have real powers and responsibility for the efficiency, success and profit of their operations. This is the best way to insure against possible adverse effects of over-centralisation on regional economies. Any rigid form of regional organisation structure which might interpose an unnecessary intermediary body between the small central corporation and the most efficient form of local profit centre is more likely to do harm than good to the region concerned.

These are important amendments, and we believe that we have gone a great deal of the way to meet some of the suggestions that were made in Committee and to implement Government assurances. We believe that this is the right way to proceed, and we hope that the House will support the amendments.

Mr. Tom King

I still do not understand the wording of the amendments. It is a pity that the Secretary of State could not give a satisfactory reply to the question asked of him by my hon. and learned Friend the Member for Beaconsfield (Mr. Bell.) A committee is now determining exactly what the phrase "industrial democracy" means, and I hope that its members will seek to avoid the Government's prejudiced terms of reference. There is no definition of "industrial democracy" set out in previous Bills. The phrase is still undefined and we do not know what it means.

We certainly have no idea of the meaning of the word "organic" in this context. However, whatever it means, it is so vague that it must be a good thing The Government are obviously proceeding on the basis that the phrase means all things to all men—in other words, everybody can read what he likes into it. Since it concerns democracy, it must be a good thing. But at the end of all this we still do not understand what is meant by these amendments.

The right hon. Gentleman the Secretary of State for Industry said that we had discussed this matter in Committee. He went on to say that the Government had sought to put these duties into legislation. I am not quite sure whether we achieve much by adding them in this legislative form. I know that the Government have gone as far as they can by the wording of the Act—

Mr. A. P. Costain (Folkestone and Hythe)

What happens if this so-called democracy is not achieved?

Mr. King

My hon. Friend, in his usual percipient way, has anticipated a point that I was about to make, not only on this aspect but in relation to decentralisation as well.

A study of the Bill will show that there are duties and responsibilities, but they are all very carefully qualified, because the Secretary of State has some intelligent advisers who have warned him that if unquantifiable and quite undefinable matters are put in, there must be qualifications which allow even for the non-performance of what cannot be quantified. Therefore, we have total protection in this form.

But there is one respect in which we take exception to the proposals which have been put forward. I am sorry to introduce this rather sharp note into the otherwise totally cynical atmosphere which suffuses the House at the moment concerning the real merit of the Government's amendments. In their approach to this problem the Government have once again made it a duty of the corporation to consult, but have limited this entirely to relevant trade unions.

It is a well-known fact that a considerable number of people working in these industries do not belong to trade unions. Therefore, once again there are first-class and second-class citizens. Any member of a relevant trade union is regarded as a first-class citizen, entitled to consultation, but anyone who is not a member of a trade union is not consulted, and his views are not taken into account. This is a fundamental point. We believe that all employees should be entitled to consultation. We believe that the interests of all employees should be considered. Therefore, we have what we believe is an amendment of fundamental importance, namely, to change "the relevant trade unions" into "its employees". This would ensure that there are not large numbers of employees of both corporations who are not consulted at all. In this situation we feel it is only proper that the amendment should be made.

Mr. Michael McNair-Wilson

Will my hon. Friend agree that to use the term "industrial democracy" and to deny it to a large group of those who are working in industry is simply to make an absolute nonsense of the word "democracy"?

Mr. King

The terms of reference for the Bullock Committee fell into the same trap. It was also meant to be considering the problems of industrial democracy. This is entirely relevant to the terms of reference proposed by the TUC It is quite an unjustifiable attitude for the Government to take.

Even at this late stage, I hope that the Government will fully recognise the interests of all employees. I hope that there will not be very substantial groups of people, equally important to the per-formation of the corporations, who are denied the right of consultation. I look forward to hearing the Secretary of State recognising that point, even at this late hour.

Looking at the second strange collection of words, one wonders whether they mean anything at all or whether this is something devised in order to get the Bill through the Report stage in the House of Commons. Some rather awkward and tiresome points have been brought up by one or two Labour Members, but surely these words are a little remote from the reality of political power.

We now have the great decentralisation amendments—these much-heralded parts of the great package deal by which votes can be not bought but encouraged. Perhaps I might be a little provocative at this moment. Votes can be encouraged at a particular time in order to get the Government over a particular hurdle. We know that there has been meeting after meeting held by the Minister of State in trying to present an agreed case and to persuade people that their interests and the interests of their area can be met. Now we see in legislative form what these amendments add up to.

I do not know how many hon. Members have read the amendments. What do they mean? They say that the Corporation shall take into account the desirability of promoting the largest degree of decentralisation of management consistent with the proper discharge of its functions. That is the qualification. The corporation may say that it can discharge its functions only in a centralised way. In saying that, it will have fulfilled its duty under that qualification. Amendment No. 320 is the main flag-bearer of the decentralisation proposal. We are told that The corporation shall, forthwith after vesting date, undertake a review of the affairs of the Corporation and its wholly-owned subsidiaries". The Bill speaks about how they may be efficiently organised and says that there shall be the largest degree of decentralisation consistent with the proper discharge of the corporation's functions. It must make a report to the Secretary of State on its conclusions. When those conclusions are returned it may say that the proper way for it to discharge its functions is to operate in a more centralised way than hon. Members may have discussed in Committee. However, it will still have carried out the requirements of the Bill.

Let us look at what is likely to happen. I should like to take the Secretary of State through the items involved that may affect the running of the corporation. We shall see how well decentralisation will stand up to that scrutiny. First, let us consider the people employed in the yards. The Minister suggested that there would be different rates in different yards. Does he suggest that employees in different yards would accept lower wage rates if their firms were members of the British Shipbuilders Corporation and if they knew that higher wages were paid in other yards?

If there are different merit scales or bonuses it is inevitable that there will be understandable pressures from shop stewards and union representatives on the lower-paid yards. If the firms are members of the British Shipbuilders Corporation they will ask why workers do not receive the same rates of pay. As a result, centralised wage negotiations will take place. There will be a central fixing of terms of employment.

What will happen about procurement? What will happen about the purchases of materials when the Corporation asks for statistics and evidence of prices paid for bought-in components? What will happen when it discovers that one yard is paying more for its components than other yards? Will that not inevitably lead to central purchasing? There will be a central purchasing department.

What about training? Will training be operated individually yard by yard, large and small? Alternatively, will someone say that it might be more sensible if there were a British shipbuilding training centre in which to conduct training courses for all employees? That matter will also be centralised. None of those steps will be taken vindictively or improperly. All that will follow from the discharge of the duties of the members of the British Shipbuilding Corporation and the British Aerospace Corporation. All that will happen within the legal requirements of the amendments moved by the Secretary of State.

What will happen about matters such as health and safety, which are the responsibility of corporation companies? Will not someone say that there should be centralised employment, personnel, and health and safety officers? People may say that the Corporation has responsibilities under the Act and that it must ensure that they are fulfilled in all the yards.

There is one more item. What will happen on the marketing side? Are we to have individual sales directors for individual yards flying round the world to different customers spending large amounts on travel? Anyone involved in industry knows how expensive overseas travel is with the increases in air fares.

8.45 p.m.

The corporation will say "Look at the selling costs. It is ludicrous to have somebody from Vospers, somebody from Yarrows, and somebody from Swan Hunter"—if those companies keep their names—"going to see the same customers. This is a waste of time and money. We should have one chap going round." The next thing will be a centralised marketing organisation.

When some of the Secretary of State's hon. Friends rush to him and say "That is not what you said on Report. We thought we should have decentralisation.", he will then turn to British Shipbuilders for an explanation. The corporation will then turn to him and say, "Our selling costs last year were £100,000. We find that if we can get a measure of co-ordination, we can save £50,000 on our selling costs."

The Secretary of State will then be obliged to agree, and his officials will be obliged to advise him that British Shipbuilders is acting correctly within the proper discharge of its functions in having a centralised marketing operation.

When we look at the reality of running a business, we realise that these amendments, which talk about decentralisation and attempt to be all things to all men, just will not work. I am sure that you, Mr. Deputy Speaker, would call me to order if I were to offer a bet across the Floor of the House. However, having covered four specific areas, if they are not all centralised under the corporation within three years after the Bill becomes law, I shall gladly pay my share of any bet. It is inevitable that centralisation will take place.

We deplore the whole concept of nationalisation. If the industries are to be nationalised, we should prefer decentralisation, but we do not believe that that will happen. Centralisation will inevitably flow from nationalisation.

Mr. Varley

The hon. Gentleman has made the important statement that the Conservative Party is now in favour of the decentralisation of public corporations. If so, will he tell me whether this is a recent view? It will be within the recollection of the House that in 1972 the then Conservative Government brought in the Gas Bill to establish the British Gas Corporation which abolished all the statutory regional organisations, including the statutory regions for Wales and Scotland. I remember it well. The hon. Gentleman has probably made instant policy, because he has told us that the Conservative Party has abandoned the policy that it was following in 1972.

Mr. King

I should not presume to quote the Prime Minister's words of yesterday, but I suggest that the Secretary of State is a little too young to live in the past. The right hon. Gentleman is not comparing like with like in any respect. We are dealing with independent, free-standing commercial operations.

Mr. John Evans

The hon. Gentleman has touched on an extremely important aspect concerning decentralisation. The House will not expect me to deal with the four points he has made but I will take two. First, concerning training on Tyneside, when the yards were individually owned, before the Geddes Report, there was no such thing as training in the yards. People got no training at all. But when Swan Hunter took over they set about introducing a first-class excellent training school at which apprentices in the Swan Hunter group on Tyneside were trained. They were not brought from Teeside which had its own training centre. Secondly, on wage rates in the Swan Hunter group, the hon. Gentleman will appreciate that there were different wage rates within that group but there was no outrageous pressure from the trade unions to operate at the highest wages within the organisation.

Mr. King

I stand by what I said on wage rates and I shall be very interested to see what happens. The hon. Gentleman has his view and I have mine. My forecast is that throughout the corporation within a short period of time the level of the best will have been reached by everybody. We should like to have seen the independence of the yards preserved. We consider that if decentralisation can be achieved in this field it is desirable but we consider that the Government's amendments are pious in content and likely to prove singularly ineffective. We bitterly deplore the continuing preferential treatment particularly for the relevant trade unions. This is a matter which we shall particularly seek to press later in a Division.

Mr. Frederick Willey

I wish to thank my right hon. Friend the Secretary of State for the amendments that he has put down. I particularly express my appreciation and that of many of my colleagues for the Minister's response to the points that we made on industrial democracy and decentralisation, which were major matters raised from the Government side in Committee. We certainly appreciate the steps that have been taken. On industrial democracy, I believe that one of the reasons why this country is lagging behind other industrial competitors is that we have a Front Bench spokesman who can say that he does not know what industrial democracy means.

Mr. Tom King

That is right.

Mr. Willey

In West Germany, for instance, no responsible politician would say that he did not know what industrial democracy meant, or that he did not know its importance to industrial competitiveness. We have a Committee sitting on this matter now. This reflects on this country. There is no commission in West Germany to determine what industrial democracy is. All our competitors are well ahead of us on matters like industrial democracy and participation. Industrial competition is very strong, and it is about time that we recognised it. It is recognised by the importance of the amendments now before us, in that they provide procedures for progress.

We have to be very much alive to the importance of industrial democracy to British industry. Here we have an opportunity, at any rate, to get going now, without waiting for the report of the Bullock Committee.

Mr. Norman Tebbit (Chingford)

I much appreciate what the right hon. Gentleman has said, but, as a responsible politician about to cast his vote, will he say what he thinks industrial democracy means in the context of this Bill?

Mr. Willey

I have a very clear concept of what it means in the context of the Bill, but I have not the time to tell hon. Gentlemen opposite—[Interruption.]—because this is not something that can be disposed of in generalities. It will be understood and appreciated at the point of managerial decision. I say no more than that it is because we regard this as a great joke, as something to be resisted at all costs, that we have not achieved the productivity that other countries have. Therefore, if we are to take over responsibility—still speaking only of shipbuilding and ship repair—for industries facing very intense competition, we had better get the same industrial participation and democracy as our competitors have.

Unlike the hon. Member for Bridgwater (Mr. King) I have always argued for decentralisation. This is not peculiar to nationalised industries. There are other corporations of this size. I complained earlier about the infantile discussion that we often have of issues like this. We must consider the problem and the best solution. We have a lot of experience in shipbuilding. Geddes has been mentioned. In Sunderland, a few years ago, we had eight yards. We now have two. We did not follow Geddes. This raises real difficulties in terms of decentralisation. We must face this problem and do the best we can.

The question whether famous names should be preserved with decentralisation is not an easy problem. Famous names have gone from Sunderland—not through the actions of public enterprise but by private enterprise. JLs was a famous shipbuilders. It is difficult to know how important this problem is. We have two of the most famous yards in the country —Austin & Pickersgill and Sunderland Shipbuilders.

Because I argued for them in Committee, I welcome the words that are now being put into the Bill—the reference to …decentralisation of management and decison-taking to separate profit centres. I am being parochial, but I have argued that performance must be related to the position in Austin & Pickersgill and that if Sunderland Shipbuilders remain separate, it must relate to that company too. Perhaps it should also relate to Swan Hunter.

If one is to take a realistic view of an industry that is being taken into public ownership, this is the best way of doing it. One then faces problems. One knows what the risks are. The profit centres must be decentralised and management made as autonomous as possible. Industrial democracy goes very much with decentralisation.

Neither of these matters is easy to work out. We cannot do so here. That is why I declined to give a definition of industrial democracy and would equally decline to define decentralisation.

With the support of the Committee, I got another new principle introduced in the Bill—that we should lay down guidelines on nationalisation; that British Shipbuilders, and the Secretary of State in giving directions, should have regard to regional policy and unemployment. We should say to British Shipbuilders "We shall monitor what you achieve. You must have discussions and agree with the trade unions a pattern of industrial democracy. You must also work out a decentralised structure. Forget about the Tories and the Gas Bill: we are taking an entirely different approach."

Particularly with shipbuilding and ship repairing, this is a vital approach. Initiative and resources at the effective local level of management are absolutely essential if these industries are to compete.

Mr. Deputy Speaker

Order. May I appeal to hon. Members for brevity of speeches. Many hon. Members still wish to speak and I want to try to accommodate as many as possible.

9.0 p.m.

Mr. Adley

This is one of the main and most important stages of the Report stage of this Bill. No one would deny that industrial democracy and decentralisation are separate subjects. Therefore it is not easy to make one short and concise speech on both of them. What bothers many of us on these Benches is that this Bill will be an Act of Parliament soon and there really should be a legal definition of industrial democracy before that happens.

In my constituency I have been trying, in discussions with trade unionists, to find out their views on industrial democracy. Recently I discussed this with five shop stewards. I was forcing the conversation on to the subject of industrial democracy when one of them asked me whether I minded if we talked about something else. They said they would prefer to discuss immigration!

In the discussion we had on industrial democracy one thing became clear—industrial demoracy means something very different to many British trade unionists from what it means to trade unionists in West Germany and the United States. Many British trade unionists want the power without the responsibility. They want to take part in decisions but they are unwilling to accept any responsibility for the aftermath of the decisions to which they have been a party. This is a dangerous situation, and one which this Bill will promote.

I would hope that if and when industrial democracy really reaches this country it will bring about a change of attitude on the part of both unions and management. Unions particularly should recognise the vital importance of profits in industry. It is important to work towards making a company profitable so that everyone can share the fruits of those profits. [Interruption.] If hon. Members wish to interrupt me I shall gladly give way.

Mr. Deputy Speaker

The hon. Member must just ignore it. That is all.

Mr. Adley

That is very sound advice, particularly when it is related to the contents of the comments coming from across the Floor of the House. I shall ignore them.

Many of us would like to see the elimination of the phrase "both sides of industry", yet that is most unlikely to be achieved by these amendments. Some of these amendments were born in a frantic few hours, or even less, of discussion between the Lord President of the Council, the Secretary of State and the leaders of the Scottish National Party, which culminated in the speech made so uncharacteristically and read so carefully by the Lord President on 29th June. He told the House, in effect, that he had hacked a deal to keep the Scottish National. Party out of the Lobby; but his words at 9 p.m. that night seemed to have evaporated by 9 o'clock the next morning, if we are to believe what the Scottish National Party has been saying in the past few days. That will surprise nobody. The Lord President's words that night were worked out very carefully, with the connivance of the Secretary of State, and they were intended to mean that the Government would transfer jobs from profitable yards in England to unprofitable yards in Scotland. I think it is extremely unfair to impose this situation on successful yards such as Vosper-Thorneycroft Ltd. in Southampton and Portsmouth which are efficient and effective and have done nothing whatsoever—save being lumbered with a Labour Government—to deserve the unenviable treatment they will receive if the spirit of the agreement between the Lord President, the Secretary of State and the Scottish National Party is carried through.

I suspect that the amendments will lead inevitably to a power struggle between different shipyards in the fight for orders, that commercial considerations will go out of the window and that ultimately the yards which can rustle up the most industrial muscle, probably with the greatest degree of militancy, will get the orders. That is a wholly unsatisfactory way in which to contemplate the future of the British shipbuilding industry.

The hon. Member for Southampton, Itchen (Mr. Mitchell) intervened briefly earlier today and yesterday as well. Just now he was asking for the retention of the name Vosper Thornycroft. From what he said yesterday it is clear that in his heart he knows that the Bill will have a severely damaging effect on the jobs of his constituents. He said yesterday: One thing which I fear from the setting up of the British Shipbuilding Corporation is that the Bill may allow Ministers to try to put pressure on the corporation to do things which are not commercially correct. It is right that ships should be built where they can be built most efficiently and not where there is high unemployment, or because some particular area fits in with someone's regional policy. If the shipbuilding industry is to survive, it must be efficient, and it can be efficent only if it is not interfered with from the outside."—[Official Report, 27th July 1976; Vol. 916, c. 336.] When the hon. Member talks about the interference of Ministers he means not just the inevitable interference surrounding the transfer of jobs, but the interference of Labour Ministers over orders from Brazil, Chile and South Africa which would mean jobs for British shipyard workers. The Vosper Thornycroft customers will be the first to suffer from this political interference which the hon. Member rightly deplored yesterday.

The boilermaker barons of the Tyne, the Clyde and the Wear will deprive the efficient, profitable and vital yards of Hampshire of their work and the shipyard workers of their jobs with inevitable damage to the local economy. I have no doubt that in due course the electors of Southampton will know what to do at the next General Election.

My hon. Friend the Member for Bridgwater (Mr. King) suggested that it might be improper to seek to challenge the views of hon. Members by suggesting a bet, but I would not mind betting 1p for every job plus or minus—the results to go to charity—that one year from the day when the Bill gets a Third Reading there will be fewer, and not more, people actively employed in building ships in Southampton and Portsmouth.

Industrial democracy, like race relations, cannot be imposed by Government legislation. It must grow from seeds planted by those who believe in it. One can impose industrial democracy in a totally Communist oriented society where the organisation concerned can be shielded from international competition. Alternatively, industrial democracy can grow in a free enterprise unit with profit-sharing the obvious motive which can be understood both by management and unions. But these amendments will not achieve any of the Government's intentions, and like the Bill, they are wholly irrelevant to the problems of the shipbuilding industry.

Mr. Deputy Speaker (Sir Myer Galpern)

I ask again for brevity. There are still many hon. Members who wish to speak in the debate. Mr. Lambie.

Mr. David Lambie (Central Ayrshire)

As a Member who took part in most of the 58 sittings in Committee, I submitted amendments on industrial democracy and devolution of power. I also supported major amendments on those issues put forward by some of my hon. Friends. I am glad that the Government have tabled amendments on Report that take into account the points of view of my right hon. and hon. Friends in Committee.

On the first of the 58 Committee sittings it was my opinion that we should introduce statutory controls over British Aerospace and British Shipbuilders. During the debates in Committee I took the view that there should be statutory controls on industrial democracy and devolution of power, but during consultations with trade union colleagues at shop steward level, and with management of shipyards and aircraft factories, I changed my mind. I now realise that the solution offered by the Government and introduced in the amendments is the correct one.

Industrial democracy must come from the bottom. If it comes from the top, a situation arises similar to the industrial democracy concept within the British Steel Corporation. The idea of the industrial democracy that Sir Monty Finniston applied within the British Steel Corporation is not the type of industrial democracy that we shall get within British Aerospace and British Shipbuilding. That is why I support the Government tonight, and why I am glad now that I withdrew my amendments in Committee.

We have heard much about a deal that was made by the Lord President and Scottish National Members, but those of us from Scotland know that there was no deal. We know that we put the fear of death into Members of the Scottish National Party. We know that the meeting that took place on the Monday in the famous hotel in Edinburgh with members of the trade union movement, including shop stewards and the STUC, put the fear of death into the Scottish National Members.

Mr. Gordon Wilson (Dundee, East)

Does the hon. Gentleman realise that at the meeting of shop stewards in an hotel at Edinburgh that he has described, there was much more interest in gaining our support to save their jobs in a political sense than in our votes on the nationalisation measures?

Mr. Lambie

The hon. Gentleman knows that he is only trying to cover up a major retreat. The shop stewards and the members of the STUC were not asking for an emergency meeting on the morning of the vote except for the purpose of getting Scottish National Members to support the Government or to abstain. Luckily for the Government and the shipbuilding and aircraft workers in Scotland, the Scottish National Members did abstain.

Mr. Teddy Taylor

Tell us about Hunterston.

Mr. Lambie

The hon. Gentleman spoke enough about the drinking laws last night. Perhaps he is still feeling the after-effects. I remind him that we are now discussing serious matters. After all that he had to say last night, let him keep quiet now.

I was pointing out that the decision of the Scottish National Party was a narrow one. If reports are correct its Members took the decision to abstain by six votes to five. In spite of that decision, five Scottish National Members voted on the first Division. There were two Divisions, and on the first one the minority five voted along with the Tories, because, in effect, they are also Tories. They are Tories in disguise, here to sabotage the Socialist policies of a Labour Government. They will vote against the Government tomorrow night, because they know that we shall not be defeated. They hope to be able to say that they have achieved industrial democracy and a decentralisation of power for workers in the shipbuilding and aircraft industries in Scotland

9.15 p.m.

We should remind Scottish workers that if the crucial vote in the SNP had gone the other way, the Bill would have been lost and, we should have had a General Election, with the Tories returned to power to carry out policies that would have hammered the working class in Scotland and England.

Throughout our debates in Committee I spoke up for the firm of Scottish Aviation, in my constituency.

Mr. George Younger (Ayr)

The firm is in my constituency.

Mr. Lambie

The hon. Member for Ayr (Mr. Younger) is correct. The firm is in his constituency, but most of the workers are in my constituency. During the last two or three months the hon. Member's presence has been sadly lacking in the negotiations with the workers and management of Scottish Aviation. I hope that tomorrow night, the hon. Member for Ayr—who is one of the decent Tories, certainly compared to the Tories in the SNP—will vote in the interests not of the Tory Party but of the workers in Scottish Aviation.

The Secretary of State spelled out the future of Scottish Aviation last month when he said: Lord Beswick, the Chairman of the Organising Committee, has had considerable discussion with the work force at all levels in Scottish Aviation. They expressed the strong view that they would like to maintain the separate identity of Scottish Aviation. Lord Beswick informs me that it is the Organising Committee's intention to maintain the separate identity of Scottish Aviation, with a high degree of local autonomy as a separate profit centre within British Aerospace."—[Official Report, 29th June 1976; Vol. 914, c. 237.] That statement was in reply to one of my amendments suggesting that Scottish Aviation should be given a separate identity within British Aerospace.

I was challenged and attacked in Committee by the hon. Member for Dundee, East (Mr. Wilson) for selling Scottish workers down the river. The SNP had tabled an amendment to set up a Scottish Aerospace Board, independent of British Aerospace. We know that Scottish Aviation represents under 5 per cent. of the British aerospace industry. It would have been nonsense to set up a Scottish Aerospace Board representing 5 per cent. of the aerospace industry and to put the other 95 per cent. of it under a board covering England and Wales. The Secretary of State recognised that. We now have the solution that I have been wanting. I put clearly on record that it is the solution that has been demanded by the work force and the management in Scottish Aviation.

The idea of SNP Members, of setting up a separate Scottish Aerospace Board, has been rejected by the Government. I am glad about that. Although SNP Members will try to make that out to be a victory, because they now accept it, the House will notice that they have no amendments dealing with Scottish Aviation. We have convinced them of the justice of the case that I have put forward and the case that is now accepted by my right hon. Friend the Secretary of State for Scotland.

Speaking on behalf of the aircraft workers in Scotland, I am happy with the present situation. I am happy with the Government's policy on industrial democracy and on the devolution of power. I am glad that the present Labour Government will win the vote tomorrow night. I hope that SNP Members vote against us, because we shall then see them along with their friends in the Tory Party—the party that they should never have left.

Mr. Gordon Wilson

There speaks a frightened man. It is not for nothing that he is known as "Lost deposit Lambie" in Central Ayrshire. After a speech of such considerable buffoonery as he has just produced, it is not surprising that other hon. Members will realise that that is so. When it comes to him putting his Socialist principles to the test on Monday, will he be voting for or against the Government's cuts in public expenditure? Just as he has backtracked on decentralisation and independence, we shall see how he votes then.

Mr. Lambie

It is a simple question that is easily answered. Since becoming a Member of Parliament in 1970, I have always voted against Governments, Tory or Labour, on the issue of public expenditure cuts. I have been consistent—as I am sometimes told by the Whips.

Mr. Wilson

We shall see what the hon. Gentleman does on Monday in relation to that. If it is a question of the Government's life and his continued existence in this Parliament being at stake, I am sure where his vote will go.

I should like to deal with the amendment on industrial democracy. Unlike some hon. Members, I accept that industrial democracy is essential for the improvement of labour relations. I accept that workers in an industry have a right to take part in decision making. I do not think it necessary to go very much further than that at this stage because, as hon. Members will know, I argued on these matters very strongly in Committee.

However, what do Labour Members find has been altered when they look at the Government's amendment? Instead of getting a vague promise of industrial democracy, we are now to be given a vague promise of an industrial democracy in a strong and organic form. That is an amendment that I once described as a manure amendment. As it has been growing from the bottom, I have not changed my view.

Our amendment, which I hope will be voted upon later tonight if the Government find it impossible to accept it, tries to give some advice to British Shipbuilders and British Aerospace when they decide these questions. The amendment is not intended to lay down fixed and arbitrary rules which they must follow, but it defines industrial democracy in terms with which I hope all hon. Members would agree—that is, that adequate powers of decision making are shared by the corporations and their subsidiaries and representatives of the relevant work forces.

That definition is one to which the Government themselves might find it difficut to object. It does not lay down a fixed and stratified form of industrial democracy which must be adopted by the shipbuilding corporation or the aerospace corporation. It allows for growth and flexibility by laying down the principle that industrial democracy must include decision sharing democracy must include must have the right to take part in decision making. It is within that context that industrial democracy must develop.

Mr. Eddie Loyden (Liverpool, Garston)

Would the hon. Gentleman like to develop his argument and say in which areas the decision making will take place, because so often when people refer to "industrial democracy" they mean the right of workers to choose whether they will use a red-handled screwdriver or a black-handled screwdriver? Is he saying that industrial democracy should be extended to cover such questions as the policy and direction of a company as well as the question of markets and the extent of the distribution and profits of the company?

Mr. Wilson

I went into this question in great detail in Committee and I put down an amendment which sought to define the different areas of responsibility for the workers in the corporations or the boards structure who might be involved. I also introduced amendments relating to profit sharing. The criticism from the Government was that they were too rigid and that they wanted to build up industrial domocracy in organic form, that is, growing from something within each individual subsidiary and each corporation.

I had a meeting to discuss this with the Minister of State and the then Under-Secretary of State. They put to me forcibly that they must allow for flexibility. I accepted that argument. What I am therefore trying to do is, first, to strengthen the Government amendment in relation to industrial democracy by extending it to decision making. Secondly, I share an amendment with the right hon. Member for Sunderland, North (Mr. Willey) which seeks to bring in a time limit in order that there can be a report back from the corporations in relation to these matters. I hope that the Government will take into account the views of the right hon. Member for Sunderland, North and myself and my hon. Friends. If the Government cannot accept this very reasonable amendment I hope that at least it can be put to the test in a vote later.

Mr. Esmond Bulmer (Kidderminster)

Has the hon. Gentleman spoken to any of the representatives of the work force concerned and can he say whether they wish to be involved in the initial policy making when so many of the decisions will be very painful?

Mr. Wilson

The hon. Gentleman says that the decisions will be painful. Certainly we in the Scottish National Party have given our support to the work forces. We want to make these decisions less painful and to keep the Scottish shipbuilding yards and Scottish aviation in full production.

I have discussed these matters with members of the work force of my own shipyard, I went down and canvassed them at a workers' meeting in relation to the various proposals that I had in mind and I discussed these matters with them. The trade unions want to ensure that their own position is not sabotaged in relation to industrial democracy. Members of the work force share that interest too.

The second question relates to decentralisation and Scottish control and to the debates which took place a month ago in respect of referrel to the Select Committee. On record in HANSARD is a pledge by the Lord President that the Government would look at amendments which are tabled by Members of the Scottish National Party, as well as their own amendments, in relation to decentralisation. The right hon. Gentleman specifically referred to a recognised Scottish entity within the industry,"—[Official Report, 29th June 1976; Vol. 914, c. 325.] 9.30 p.m.

Our reaction to the amendments which have been tabled by the Government has been one of disappointment. The amendments represent a reasonable answer to decentralisation. The SNP had lodged amendments to deal with decentralisation but the Government, rather like Don Quixote, were tilting at windmills, and they tilted at the wrong windmill. They arrived at decentralisation, but all they could do in the context of a Scottish entity in shipbuilding terms was to use this vague phrase which occurs in the amendment— with special reference to Scotland and Wales". It is hardly surprising that the right hon. Member for Sunderland, North tabled an amendment to cut out the reference to Scotland and Wales, although he was very say this evening in dealing with it.

Mr. Adley

What on earth convinced the hon. Gentleman that the Lord President of the Council would do what he said he would do?

Mr. Wilson

We were prepared to enter into negotiations with the Government on an honourable basis in relation to jobs. I know that many hon. Members would rather take their standpoint from party ideology than discuss jobs, but the question of jobs in Scotland is paramount to the SNP.

It was said that our vote saved the Government, but it did not. Had we voted with the members of Plaid Cymru a month ago, there would have been a tied vote, and in accordance with the traditions of the House, the Government would have won because a member of the Conservative Party was absent, as happened on the first vote in May. Whenever there is a crucial vote a member of the Conservative Party is absent, to avoid any question of the Government's being defeated and the calling of an early General Election for which the Conservative Party is not ready.

The amendments before us today have been presented as much because of the representations which I and my hon. Friends have made as for any other reason. I join the hon. Member for Bridgwater (Mr. King) in his analysis of the amendments. They are to be welcomed in so far as they tend to decentralise certain important areas of action to given units. The important areas are substantial, as they have to be, because the natural process with all organisations is for power to flow towards the centre, particularly when the purse strings are held at the centre. If there is one special weakness in the decentralisation content of the amendments, it is that the approval of the investment plans is in the hands of British Shipbuilders. In terms of the amendments, overall control is still to be left with British Shipbuilders.

The only way out of the mess is for the Government to set up a Scottish shipbuilding corporation, no doubt coordinating and liaising with British Shipbuilders, whereby the decentralisation procedures go to the individual yards. If an intermediate body is interposed, British Shipbuilders at the top has control of the purse strings and there is no control at the yards.

The Government are in an illogical mess. I have told the Government that this vague promise to Scotland and Wales will not do. The only hope for the Scottish shipyards is Scottish control—or at any rate decentralisation—and, above all, funds from Scottish oil resources to keep jobs going during the critical period ahead of the industry.

Mr. Ron Thomas

Amongst the batch of amendments are five which have been tabled by some of my hon. Friends and myself. They are Amendment No. 305, Amendment (c) to Government Amendment No. 15, and Amendments Nos. 211, 212 and 329. Before speaking to those amendments I should welcome your advice, Mr. Speaker. We want to vote on Amendment No. 329 and I hope that by mentioning that now I have made the position clear and that we shall have that opportunity.

Mr. Speaker

I have to advise the hon. Member that after 11 o'clock I shall put only Government Amendments. Much depends on the order of amendments and the way in which the debate goes.

Mr. Thomas

I welcome the Government's amendment on industrial democracy and the consequential amendments which follow from it and which place a duty on the corporations to develop a strong and organic growth of industrial democracy. I welcome that because it is precisely along the lines of the amendment that we moved in Committee.

I have been involved with workers in Bristol aircraft factories and I have discussed industrial democracy with them. The lack of understanding of hon. Members opposite flows more than anything else from their remoteness from the workers and trade unions in the industries. The trade unions and the TUC have produced documents, reports and ideas of what industrial democracy is all about.

It is impossible for the Government or any outside agency to try to impose any kind of blueprint for industrial democracy. But it is right for the Government to create the environment in which it can develop. I can assure the Minister that the trade unions will not be reticent in coming forward with proposals for the type of industrial democracy that they want to see. But I am worried whether we can push managements to accept the ideas that will emerge from the trade union side.

If I were asked quickly to define industrial democracy I would say that it is a real sense of involvement by work people in the decisions which affect their working lives. That is not a difficult task. If the hon. Member for Dundee, East (Mr. Wilson) talked to shop stewards in the industry he would find that industrial democracy does not operate at present.

The hon. Member for Christchurch and Lymington (Mr. Adley) is living in cloud-cuckoo-land. He has only to read the well-known court inquiries into the Ford dispute, when management turned to the trade union members who complained of lack of consultation and said that they did not understand the complaint because they always told workers what they were going to do. That is the extent of industrial democracy in industry today. Hon. Members opposite jealously guard such decisions as their prerogative. They say that workers should have nothing to do with management decisions on matters such as capital investment and pricing policy. They say that such decisions are the prerogative of the management.

We want to change that situation. At present management is prepared to invite shop stewards to talk about the canteen tea or the state of the toilets, but very little more.

I ask the Government seriously to consider accepting Amendment (c) to Government Amendment No. 15 That deals with forward planning, manpower, marketing, research and development, exports and imports and all the rest of it. We must have in mind the massive increase in the number of finished and semi-finished manufactured goods. Industry, especially the aerospace industry, must have the right to diversify and to take advantage of technological spin-off. That is a crucial consideration.

I turn to Amendment No. 329, which seeks to ensure that a "relevant trade union" should be a trade union affiliated to the Confederation of Shipbuilding and Engineering Unions. Whenever the Government—Tory or Labour—want any dirty work carried out, whenever they want to police workers and to bring in a prices and incomes policy, they call on the TUC and the recognised trade unions. They do not call on the sweetheart organisations represented by the Tories. Whenever they want to sort out the imbalances in the capitalist system, they call not on those sweetheart organisations but on the trade unions. Again, whenever they want people to serve on hospital boards and organisations of that kind, they go to the trades councils that consist of trade unions affiliated to the TUC rather than to the sweetheart organisations.

In the aerospace industry there has been a pernicious growth of these sweetheart associations which try to pretend that they are trade unions in some form or other but which have the full backing of employers. I must tell the Minister that if any of those sweetheart organisations are recognised in these industries, we shall be in for a period of industrial conflict that we shall all regret.

The only way to deal with the situation is to provide that a "relevant trade union" shall be a body that is affiliated to the confederation. The procedures governing collective bargaining, disputes and many other areas of trade union activity have been built up between the shipbuilding and aerospace industries and the Confederation of Shipbuilding and Engineering Unions.

Mr. Stan Thorne (Preston, South)

Is my hon. Friend aware that in my area the representatives of 12,000 to 15,000 aircraft workers have already signified to me in writing that if there is any attempt on the part of the new Aerospace Board to call them together to meet the sweetheart associations, they will flatly refuse to do so? They recognise the Confederation of Shipbuilding and Engineering Unions as the appropriate body to conduct negotiations with the Aerospace Board.

9.45 p.m.

Mr. Thomas

I thank my hon. Friend for that intervention. There is certainly the same kind of feeling in the Bristol aircraft factories.

The Conservative Front Bench spokesman could talk only about first-class and second-class citizens. But when the Government want dirty work done, when they want to control workers, they turn to the trade unions—the so-called first-class and second-class citizens.

Time and time again Conservative Members have insisted in debates in this Chamber that there are far too many trade unions, but when it suits them they support the sweet head associations, under the domination of the employers, whose main function is to undermine real and collective bargaining, which we all on both sides of the House ought to be supporting.

Mr. Edward Gardner (South Fylde)

The hon. Member for Central Ayrshire (Mr. Lambie) was bold enough to try to define industrial democracy. He said that it must come from the workers. That seems to me to mean that if the workers, by a majority, want something, they must have it. But it must also mean that if, by a majority, they do not want it, it should be avoided.

I think it would be agreed by most people outside the House and by most right hon. and hon. Members in the House, that the majority of people in this country have never voted for and never would vote for more nationalisation. In talking of industrial democracy, when we narrow it down, to what most British workers want, I feel that The Times of 13th January 1975 summed it up when it pointed out that most British workers are against nationalisation. It was referring to the result of an Opinion Research Centre survey of attitudes in industry, which indicated that 67 per cent. of workers in British industry were against any attempt to nationalise the industries for which they worked.

In my constituency I have two divisions of the British Aircraft Corporation. I cannot accept, and I have not accepted, that these workers are so blind to their own interests and to the interests of the country that they are welcoming nationalisation in the way described by the hon. Member for Preston, South (Mr. Thorne).

Last Saturday morning I had the privilege of meeting representatives of the trade unions, including shop stewards, from the British Aircraft Corporation. One of them was a supporter of the hon. Member for Preston, South—a strong Labour supporter who believed in nationalisation—

Mr. Hoyle

What was his name?

Mr. Gardner

He said that the majority of the people who work for the British Aircraft Corporation do not want nationalisation of their industry.

Mr. Thorne rose

Mr. Gardner

I shall not give way. I want to go on and tell the House that the treasurer of a local branch of ASTMS has authorised me to give his name. He is Mr. Andrew Ridley, the treasurer of No. 834 Branch of ASTMS. He told me that his members were so outraged by what the Government are doing in nationalising the aircraft industry that they were now talking about strike action.

I am reporting this matter accurately. I received the impression that nationalisation was regarded by those people as an indication of failure—a stigma that they resented. They felt that the Bill showed that the Government's better acquaintance with the realities of economics had done nothing to correct their prejudices, although it appeared to have enlarged their knowledge.

The Bill, which is supported by prejudiced people, has nothing to do with industrial democracy. The majority of the workers of the British Aircraft Corporation see only the dark prospect of unemployment coming from the provisions of the Bill. Until now the British Aircraft Corporation has been one of the most successful and prosperous aircraft industries in the world, envied by Europe and admired by America.

If the Bill is supposed to be a model of industrial democracy, I assure the House that the majority of the workers at BAC want nothing to do with it.

Mr. Richard Wainwright

I should like to commend the amendment in the name of the hon. Member for Dundee, East (Mr. Wilson), on which we shall shortly be voting, and which he moved in a robust manner. He gave no ground before the churlish attacks by Government supporters occupying sedentary positions.

The Liberal amendment is in much the same spirit as the amendment of the Scottish National Party. It makes it clear that if there is to be any talk about industrial democracy it must be on the basis of one employee, one vote. We are not talking about "trade union-ocracy" or "confederationocracy". We are talking about democracy for the employee.

There was some debate in Standing Committee in January on an extraordinary form of words. I refer to the expression "strong and organic". This evening an answer was given to a question that has troubled me for years. I often wondered why thoughtful Socialist long ago developed a contempt for the Tribune Group. In centres such as the Tyneside Socialist Centre the Tribune Group has for long been a dirty expression. The Government have chosen to insert this extraordinary form of words into this appeasement legislation but which the Bill says cannot be enforced in the courts. Therefore, this is not legislation. It is just a pious declaration. The form of words industrial democracy in a strong and organic form sidesteps all the crucial issues of industrial power in the world today. It is a contemptible con trick to try to suggest to a few innocent people that the Left wing of the Labour Party in this House is putting up a tremendous stand on matters of great principle. The words "strong and organic" which the Government have so cravenly adopted—but which they have castrated by including in the Bill a statement that they cannot be enforced in the courts—are typical of the preacher who marks his sermon "Argument weak here; shout like hell". I apologise if that reference should give offence to you, Mr. Speaker. I am sure that those words are never found on your sermon notes.

The Left wing does not know what it means when it talks about industrial democracy. It argues, under a fine form of words, in favour of trade union monopoly rule. It qualifies that argument with this extraordinary, meaningless expression, "strong and organic". The Government have abdicated their responsibilities. They say, We do not know what the phrase means. Heaven forbid that we should tell the two corporations what to do. They must allow it to grow." That is the ultimate abdication. I repeat that to suggest that we should put in a statute that, having passed these words, if we do, we should declare that they shall certainly not be capable of enforcement by the courts, is an essay in the ludicrous.

Mr. Tebbit

The hon. Gentleman will no doubt realise that it also means that nobody could go to the court and get it to decide what "industrial democracy" means as the Government clearly and confessedly do not know what it means.

Mr. Wainwright

Of course. This concept, to have any meaning, must be based on the principle that it is about one- employee one-vote, regardless whether he or she belongs to an organisation or what that organisation is. On that basis, it seems that the court will be able to enforce a provision that each centre of these two corporations should have its own powerful workplace council democratically elected by the workers. At the top, for controlling purposes, assuming that there might be 12 members on the board of each corporation, five of the 12 should be elected by the workers, again on the basis of one-employee one-vote.

Mr. Ron Thomas

Why not seven?

Mr. Wainwright

Because the taxpayers' money, although out of appallingly small incomes, will have purchased the assets which are being administered. It would be a betrayal to say to a majority of the workers "Here are hundreds of millions of pounds. You now have majority control over what you do with that money." That would be a betrayal if, as Labour Members perversely want, we were to hand over control not to the workers but to the representatives of certain powerful trade unions. That is a form of appeasement of industrial power which I am sure Parliament would never tolerate.

Mr. Hoyle

The hon. Gentleman talks about powerful trade unions. I should like to know where the Liberal Party stands in relation to the bogus staff associations which have grown up in the shipbuilding and aircraft industries.

Mr. Wainwright

Our view is that they are bogus, but it is up to the workers to decide whether they want to remain in them. I think that they are foolish to remain in them. However, this must be a matter for the workers themselves. If the Members of the Tribune Group could command some respect among the work force, they might be able to convince workers that these sweetheart associations are no good. But as long as they go on seeking to put pious words into statutes which are then declared to be unenforceable by the courts, they will be the laughing stock of their Socialist friends.

The amendment in the name of the Scottish National Party seems eminently sensible. It embodies the true spirit of democracy—one-person one-vote. My right hon. and hon. Friends and I will fully support that amendment tonight.

10.0 p.m.

Mr. Varley

I Know that the House is anxious to come to a decision on the amendments. Therefore, it may be convenient for me now, with the leave of the House, to comment on the debate.

The Government amendments fulfil commitments made in Committee relating to industrial democracy and decentralisation. I am pleased that my hon. Friends have said that the amendments have gone a long way to fulfilling our commitments.

I am disappointed at the attitude of the official Opposition to these amendments. The hon. Member for Bridgwater (Mr. King) made some disparaging remarks about industrial democracy.

Mr. Tom King


Mr. Varley

The hon. Gentleman pretended not to know what it meant. Those who have had some industrial experience know precisely what it means. The hon. Gentleman says that we should tell him. It really means that we have to identify those who work in industry with the decision-taking in their industries. If we are to make any progress on the basis of getting to the boundary of the possibility of improving our performance in international industrial competitiveness and on the basis of getting workers involved in decision-making at the plant, that is what industrial democracy means; not a set and rigid formula that can be laid down by statute, but giving opportunities for those who work in industry to participate in decision-taking. I am sure the hon. Gentleman understands that.

An interesting proposition came from the hon. Member for Bridgwater. He said that the Conservative Party is very much in favour of the decentralisation of State corporations.

Mr. Tom King


Mr. Varley

He may be hedging a bit now but I well remember the legislation setting up the Gas Corporation, because I was leading for the Opposition when the then Conservative Government got rid of the Gas Council and the area and statutory boards. That made sense in the context of the new gas industry, but the Conservative Government abolished the Scottish statutory board and the Welsh statutory board. Now they have changed their policy on that, and I am very disappointed that they take that view.

The Scottish National Party has again said that we have not met commitments we have given. I have in my hand a copy of the Glasgow Herald of Saturday last, which refers to all kinds of comments on the matter. The Secretary of the Clyde Confederation of Shipbuilding and Engineering Unions is reported as saying, in relation to our amendment: This is what we have been arguing for. We want a regional identity to cover control over our own manufacturing planning. The amendment seems to give us that without the establishment of a completely separate shipbuilding industry called for by the SNP". So the Scottish trade unions understand our amendment and welcome it. It is most significant to realise that this is the first decentralisation amendment that any Government have ever inserted into a nationalised industry Bill going through this House.

The only other matter to which I need refer concerns the amendment moved by my hon. Friend the Member for Bristol, North-West (Mr. Thomas)—Amendment No. 329. I know that it does not come up for vote tonight because is is really related to Clause 54 of the Bill; but in my view my hon. Friend made a very good case in referring to what he called "bogus" staff associations that were coming into being within the aircraft industry. He got some support from the hon. Member for Colne Valley (Mr. Wainwright) who recognised that these associations were bogus.

We have to consider this very carefully. We thought that we had covered the situation adequately within the Employment Protection Bill. We need to consider it further to see whether difficulties have arisen. My right hon. Friend the Secretary of State for Employment is here, and has heard what my hon. Friend had to say. I shall be consulting him tomorrow morning to see whether any help can be given in relation to Amendment No. 329 to overcome the difficulties that have been so well described.

Mr. Tom King

Is it the Secretary of State's view that any association that is not affiliated to the TUC is bogus? What is his attitude to the Shipbuilding and Allied Industries Management Accosiation, which I understand has a membership of 60 per cent. of the managers within the shipbuilding industry?

Mr. Varley

I am not saying that all staff associations are bogus, but over the past few days I have heard horrifying stories of the way in which organisations have been established, within the aircraft industry in particular, which would undermine genuine trade union organisations, Again, I believe that the Conservative Party is being schizenophrenic. It knows that when it was in government it would have no truck with such organisations. When the Conservative Government of the day had to consult with the trade union movemen they did not go to bogus organisations or staff associations. They organised their representation from the TUC and affiliated organisations, and they were right to do so. When the right hon. Member for Sidcup (Mr. Heath) had his long and detailed discussions about union affairs, he did so through the TUC. That was perfectly proper.

My right hon. Friend and I want to establish, over the next few hours, exactly how serious the situation is. If it is serious and if it will undermine what I think is an understandable arrangement among all parties, we need to do something about it.

I hope that Scottish National Party Members will not press their amendment, because we have gone a great deal of the way to meet the anxieties that they expressed when we last debated this matter, I think in May. The amendment

incorporates in statute a principle of decentralisation which has never been tried before.

Mr. Gordon Wilson

I do not know whether the Secretary of State was listening to what I said, but I said that the Division would be in relation to Amendment (a) to Amendment No. 5. I said that although the main amendment on decentralisation is totally inadequate, some of the concepts within it are welcome, certainly in a Scottish context. But the Division will take place in relation to industrial democracy and the strengthening of the reporting back provisions. It is on that question that we should like an answer.

Mr. Varley

Everyone on the Opposition side seems to be trying to court the SNP. We have gone a long way to meet the genuine anxiety expressed about this matter and I think that we have done so. As for reporting back the progress of industrial democracy, we have laid a duty on British Shipbuilders to report every 12 months on progress and within six months after vesting. I hope that SNP Members will not persist with their amendment.

Amendment proposed to the proposed amendment, (a), after 'democracy', insert: 'in which adequate powers of decision-making are shared by the Corporations and their subsidiaries with members of the relevant work-forces '.—[Mr. Gordon Wilson.]

Question put, That the amendment to the proposed amendment be made:—

The House divided: Ayes 26. Noes 302.

Division No. 295.] AYES [10.08 p.m.
Beith, A. J. Kilfedder, James Thomas, Dafydd (Merioneth)
Crawford, Douglas MacCormick, Iain Thompson, George
Evans, Gwynfor (Carmarthen) Mawby, Ray Watt, Hamish
Eiving, Mrs Winifred (Moray) Mudd, David Welsh, Andrew
Freud, Clement Pardoe, John Wigley, Dafydd
Grimond, Rt Hon J. Penhaligon, David Wilson, Gordon (Dundee E)
Hawkins, Paul Ross, Stephen (Isle of Wight)
Hooson, Emlyn Smith, Cyril (Rochdale) TELLERS FOR THE AYES:
Howells, Geraint (Cardigan) Steel, David (Roxburgh) Mrs. Margaret Bain and
Johnston, Russell (Inverness) Stewart, Donald (Western Isles) Mr. Richard Wainwright.
Abse, Leo Barnett, Guy (Greenwich) Boothroyd, Miss Betty
Allaun, Frank Bates, Alf Bottomley, Rt Hon Arthur
Anderson, Donald Bean, R. E. Boyden, James (Bish Auck)
Archer, Peter Benn, Rt Hon Anthony Wedgwood Bradley, Tom
Armstrong, Ernest Bennett, Andrew (Stockport N) Bray, Dr Jeremy
Ashley, Jack Bidwell, Sydney Brown, Hugh D. (Provan)
Ashton, Joe Bishop, E. S. Brown, Robert C. (Newcastle W)
Atkins, Ronald (Preston N) Blenkinsop, Arthur Brown, Ronald (Hackney S)
Atkinson, Norman Boardman, H. Buchan, Norman
Bagier, Gordon A. T. Booth, Rt Hon Albert Buchanan, Richard
Butler, Mrs Joyce (Wood Green) Hattersley, Rt Hon Roy Ogden, Eric
Callaghan, Rt Hon J. (Cardiff SE) Hatton, Frank O'Halloran, Michael
Callaghan, Jim (Middleton & P) Hayman, Mrs Helena Orbach, Maurice
Campbell, Ian Heifer, Eric S. Orme, Rt Hon Stanley
Canavan, Dennis Hooley, Frank Ovenden, John
Cant, R. B. Horam, John Owen, Dr David
Carmichael, Neil Howell, Rt Hon Denis (B'ham, Sm H) Padley, Walter
Carter-Jones, Lewis Hoyle, Doug (Nelson) Palmer, Arthur
Cartwright, John Huckfield, Les Park, George
Castle, Rt Hon Barbara Hughes, Rt Hon C. (Anglesey) Parker, John
Clemitson, Ivor Hughes, Mark (Durham) Parry, Robert
Cocks, Michael (Bristol S) Hughes, Robert (Aberdeen N) Pavitt, Laurie
Cohen, Stanley Hughes, Roy (Newport) Peart, Rt Hon Fred
Coleman, Donald Hunter, Adam Pendry, Tom
Colquhoun, Ms Maureen Irvine, Rt Hon Sir A. (Edge Hill) Perry, Ernest
Concannon, J. D. Irving, Rt Hon S. (Dartford) Phipps, Dr Colin
Conlan, Bernard Jackson, Colin (Brighouse) Prentice, Rt Hon Reg
Cook, Robin F. (Edin C) Jackson, Miss Margaret (Lincoln) Prescott, John
Corbett, Robin Janner, Greville Price, C (Lewisham W)
Cox, Thomas (Tooting) Jay, Rt Hon Douglas Price, William (Rugby)
Craigen, J. M. (Maryhill) Jenkins, Hugh (Putney) Radice, Giles
Crawshaw, Richard Jenkins, Rt Hon Roy (Stechford) Rees, Rt Hon Merlyn (Leeds S)
Cronin, John John, Brynmor Reid, George
Crosland, Rt Hon Anthony Johnson, James (Hull West) Richardson, Miss Jo
Crowther, Stan (Rotherham) Johnson, Walter (Derby S) Roberts, Albert (Normanton)
Cryer, Bob Jones, Barry (East Flint) Roberts, Gwilym (Cannock)
Cunningham, G. (Islington S) Jones, Dan (Burnley) Robinson, Geoffrey
Cunningham, Dr J. (Whiteh) Judd, Frank Roderick, Caerwyn
Dalyell, Tam Kaufman, Gerald Rodgers, George (Chorley)
Davidson, Arthur Kelley, Richard Rodgers, William (Stockton)
Davies, Bryan (Enfield N) Kerr, Russell Rooker, J. W.
Davis, Denzil (Llanelli) Kilroy-Silk, Robert Roper, John
Davies, Ifor (Gower) Kinnock, Neil Rose, Paul B.
Davis, Clinton (Hackney C) Lambie, David Ross, Rt Hon W. (Kilmarnock)
Deakins, Eric Lamborn, Harry Rowlands, Ted
Dean, Joseph (Leeds West) Lamond, James Sandelson, Neville
de Freitas, Rt Hon Sir Geoffrey Latham, Arthur (Paddington) Sedgemore, Brian
Dell, Rt Hon Edmund Leadbitter, Ted Selby, Harry
Dempsey, James Lee, John Shaw, Arnold (Ilford South)
Doig, Peter Lestor, Miss Joan (Eton & Slough) Shore, Rt Hon Peter
Dormand, J. D. Lever, Rt Hon Harold Short, Rt Hon E. (Newcastle C)
Douglas-Mann, Bruce Lewis, Ron (Carlisle) Short, Mrs Renee (Wolv NE)
Duffy, A. E. P. Lipton, Marcus Silkin, Rt Hon John (Deptford)
Dunn, James A. Litterick, Tom Silkin, Rt Hon S. C. (Dulwich)
Dunnett, Jack Lomas, Kenneth Sillars, James
Dunwoody, Mrs Gwyneth Loyden, Eddie Silverman, Julius
Eadie, Alex Luard, Evan Skinner, Dennis
Edge, Geoff Lyons, Edward (Bradford W) Small, William
Edwards, Robert (Wolv SE) Mabon, Dr J. Dickson Smith, John (N Lanarkshire)
Ellis, John (Brigg & Scun) McCartney, Hugh Snape, Peter
Ellis, Tom (Wrexham) McDonald, Dr Oonagh Spearing, Nigel
English, Michael MacFarquhar, Roderick Spriggs, Leslie
Ennals, David McGuire, Michael (Ince) Stallard, A. W.
Evans, Fred (Caerphilly) MacKenzie, Gregor Stewart, Rt Hon M. (Fulham)
Evans, Ioan (Aberdare) Mackintosh, John P. Stoddart, David
Evans, John (Newton) Maclennan, Robert Stott, Roger
Ewing, Harry (Stirling) McMillan, Tom (Glasgow C) Strang, Gavin
Faulds, Andrew McNamara, Kevin Strauss, Rt Hon G. R.
Fernyhough, Rt Hon E. Madden, Max Summerskill, Hon Dr Shirley
Fitch, Alan (Wigan) Magee, Bryan Swain, Thomas
Fitt, Gerard (Belfast W) Marion. Simon Taylor, Mrs Ann (Bolton W)
Flannery, Martin Mallalleu, J. P. W. Thomas, Jeffrey (Abertillery)
Fletcher, L. R. (Ilkeston) Marks, Kenneth Thomas, Mike (Newcastle E)
Fletcher, Ted (Darlington) Marquand, David Thomas, Ron (Bristol NW)
Foot, Rt Hon Michael Marshall, Dr Edmund (Goole) Thorne, Stan (Preston South)
Ford, Ben Marshall, Jim (Leicester S) Tierney, Sydney
Forrester, John Mason, Rt Hon Roy Tinn, James
Fowler, Gerald (The Wrekin) Maynard, Miss Joan Tomlinson, John
Fraser, John (Lambeth, N'w'd) Meacher, Michael Tomney, Frank
Freeson, Reginald Mellish, Rt Hon Robert Torney, Tom
Garrett, John (Norwich S) Mendelson, John Tuck, Raphael
Garrett, W. E. (Wallsend) Mikardo, Ian Urwin, T. W.
George, Bruce Millan, Bruce Varley, Rt Hon Eric G.
Gilbert, Dr John Miller, Dr M. S. (E Kilbride) Wainwright, Edwin (Dearne V)
Ginsburg, David Miller, Mrs Millie (Ilford N) Walden, Brian (B'ham, L'dyw'd)
Golding, John Mitchell, R. C. (Solon, Itchen) Walker, Harold (Doncaster)
Gould, Bryan Moonman, Eric Walker, Terry (Kingswood)
Gourlay, Harry Morris, Alfred (Wylhenshawe) Ward, Michael
Grant, George (Morpeth) Morris, Charles R. (Openshaw) Watkins, David
Grant, John (Islington C) Morris, Rt Hon J. (Aberavon) Watkinson, John
Grocott, Bruce Moyle, Roland Weetch, Ken
Hamilton, James (Bothwell) Mulley, Rt Hon Frederick Weitzman, David
Hamilton, W. W. (Central Fife) Murray, Rt Hon Ronald King Wellbeloved, James
Hardy, Peter Newens, Stanley White, Frank R. (Bury)
Harrison, Walter (Wakefield) Noble, Mike White, James (Pollok)
Hart. Rt Hon Judith Oakes, Gordon Whitehead, Phillip
Whitlock, William Wilson, Alexander (Hamilton) Wrigglesworth, Ian
Willey, Rt Hon Frederick Wilson, Rt Hon Sir Harold (Huyton) Young, David (Bolton E)
Williams, Alan (Swansea W) Wilson, William (Coventry SE)
Williams, Alan Lee (Hornch'ch) Wise, Mrs Audrey TELLERS FOR THE NOES:
Williams, Rt Hon Shirley (Hertford) Woodall, Alec Mr. Ted Graham and
Williams, Sir Thomas Woof, Robert Mr. Joseph Harper.

Question accordingly negatived.

Proposed amendment agreed to.

Amendment proposed: No. 6, in page 4, line 39, at end insert: '(7A) It shall be the duty of each Corporation to enter within 3 months of the relevant vesting date into consultation with the relevant trade unions as to the methods which it should adopt for the purpose of carrying out its duty under subsection (7) above'.—[Mr. Varley.]

Amendment proposed to the proposed amendment: (c) leave out 'the relevant trade unions' and insert 'its employees'.—[Mr. Toni King.]

Question put, That the amendment to the proposed amendment be made:—

The House divided: Ayes 294, Noes 303.

Division No. 296.] AYES [10.26 p.m.
Adley, Robert Douglas-Hamilton, Lord James Hooson, Emlyn
Aitken, Jonathan Drayson, Burnaby Hordern, Peter
Alison, Michael du Cann, Rt Hon Edward Howe, Rt Hon Sir Geoffrey
Amery, Rt Hon Julian Dunlop, John Howell, David (Guildford)
Arnold, Tom Durant, Tony Howell, Ralph (North Norflok)
Atkins, Rt Hon H. (Spelthorne) Dykes, Hugh Howells, Geraint (Cardigan)
Awdry, Daniel Eden, Rt Hon Sir John Hunt, David (Wirral)
Bain, Mrs Margaret Edwards, Nicholas (Pembroke) Hunt, John (Bromley)
Baker, Kenneth Elliott, Sir William Hurd, Douglas
Banks, Robert Emery, Peter Hutchison, Michael Clark
Beith, A. J. Evans, Gwynfor (Carmarthen) Irving, Charles (Cheltenham)
Bell, Ronald Ewing, Mrs Winifred (Moray) James, David
Bennett, Sir Frederic (Torbay) Eyre, Reginald Jenkin, Rt Hon P. (Wanst'd & W'df'd)
Bennett, Dr Reginald (Fareham) Fairgrieve, Russell Jessel, Toby
Benyon, W. Farr, John Johnson Smith, G. (E Grinstead)
Berry, Hon Anthony Fell, Anthony Johnston, Russell (Inverness)
Bitten, John Finsberg, Geoffrey Jones, Arthur (Daventry)
Biggs-Davison, John Fletcher, Alex (Edinburgh N) Jopling, Michael
Blaker, Peter Fletcher-Cooke, Charles Joseph, Rt Hon Sir Keith
Body, Richard Forman, Nigel Kaberry, Sir Donald
Boscawen, Hon Robert Fowler, Norman (Sutton C'f'd) Kellelt-Bowman, Mrs Elaine
Botlomley, Peter Fox, Marcus Kershaw, Anthony
Bowden, A. (Brighton, Kemptown) Fraser, Rt Hon H. (Stafford a St) Kilfedder, James
Boyson, Dr Rhodes (Brent) Freud, Clement Kimball, Marcus
Bradford, Rev Robert Fry, Peter King, Evelyn (South Dorset)
Braine, Sir Bernard Galbrailh, Hon T. Q. D. King, Tom (Bridgwater)
Brittan, Leon Gardiner, George (Reigate) Kirk, Sir Peter
Brocklebank-Fowler, C. Gardner, Edward (S Fylde) Kitson, Sir Timothy
Brotherton, Michael Gilmour, Sir John (East Fife) Knight, Mrs Jill
Brown, Sir Edward (Bath) Glyn, Dr Alan Knox, David
Rryan, Sir Paul Godber, Rt Hon Joseph Lamont, Norman
Buchanan-Smith, Alick Goodhart, Philip Lane, David
Buck, Antony Goodhew, Victor Langford-Holt, Sir John
Budgen, Nick Goodlad, Alastair Latham, Michael (Mellon)
Bulmer, Esmond Gorst, John Lawrence, Ivan
Burden, F. A. Gow, Ian (Eastbourne) Lawson, Nigel
Butler, Adam (Bosworth) Gower, Sir Raymond (Barry) Le Marchant, Spencer
Carlisle, Mark Grant, Anthony (Harrow C) Lester, Jim (Beeston)
Chalker, Mrs Lynda Gray, Hamish Lewis, Kenneth (Rutland)
Channon, Paul Griffiths, Eldon Lloyd, Ian
Churchill, W. S. Grimond, Rt Hon J. Loveridge, John
Clark, Alan (Plymouth, Sutton) Grist, Ian Luce, Richard
Clark, William (Croydon S) Grylls, Michael MacCormick, Iain
Clarke, Kenneth (Rushcliffe) Hall, Sir John McCrindle, Robert
Clegg, Walter Hall-Davis, A. G. F. McCusker, H.
Cockcroft, John Hamilton, Michael (Salisbury) Macfarlane, Neil
Cooke, Robert (Bristol W) Hampson, Dr Keith MacGregor, John
Cope, John Hannam, John Macmillan, Rt Hon M. (Farnham)
Cormack, Patrick Harrison, Col Sir Harwood (Eye) McNair-Wilson, M. (Newbury)
Corrie, John Harvie Anderson, Rt Hon Miss McNair-Wilson, P. (New Forest)
Costaln, A. P. Hastings, Stephen Madel, David
Craig, Rt Hon W. (Belfast E) Havers, Sir Michael Marshall, Michael (Arundel)
Crawford, Douglas Hawkins, Paul Marten, Neil
Critchley, Julian Hayhoe, Barney Mates, Michael
Crouch, David Heath, Rt Hon Edward Maude, Angus
Crowder, F. P. Heseltine, Michael Maudling, Rt Hon Reginald
Davies, Rt Hon J. (Knutsford) Hicks, Robert Mawby, Ray
Dean, Paul (N Somerset) Higgins, Terence L. Maxwell-Hyslop, Robin
Dodsworth, Geoffrey Holland, Philip Mayhew, Patrick
Meyer, Sir Anthony Renton, Rt Hon Sir D. (Hunts) Stokes, John
Miller, Hal (Bromsgrove) Renton, Tim (Mid-Sussex) Stradling Thomas, J.
Mills, Peter Rhys Williams, Sir Brandon Tapsell, Peter
Miscampbell, Norman Ridley, Hon Nicholas Taylor, R. (Croydon NW)
Mitchell, David (Basingstoke) Ridsdale, Julian Taylor, Teddy (Cathcart)
Moate, Roger Rifkind, Malcolm Tebbit, Norman
Molyneaux, James Roberts, Wyn (Conway) Temple-Morris, Peter
Monro, Hector Rodgers, Sir John (Sevenoaks) Thatcher, Rt Hon Margaret
Montgomery, Fergus Ross, Stephen (Isle of Wight) Thomas, Dafydd (Merioneth)
Moore, John (Croydon C) Ross, William (Londonderry) Thompson, George
More, Jasper (Ludlow) Rossi, Hugh (Hornsey) Townsend, Cyril D.
Morgan, Geraint Rost, Peter (SE Derbyshire) Trotter, Neville
Morgan-Giles, Rear-Admiral Royle, Sir Anthony Tugendhat, Christopher
Morris, Michael (Northampton S) Sainsbury, Tim van Straubenzee, W. R.
Morrison, Charles (Devizes) St. John-Stevas, Norman Vaughan, Dr Gerard
Morrison, Hon Peter (Chester) Scott, Nicholas Viggers, Peter
Mudd, David Scott-Hopkins, James Wainwright, Richard (Colne V)
Neave, Alrey Shaw, Giles (Pudsey) Wakenham, John
Nelson, Anthony Shaw, Michael (Scarborough) Walder, David (Clitheroe)
Neubert, Michael Shelton, William (Streatham) Walker, Rt Hon P. (Worcester)
Newton, Tony Shepherd, Colin Walker-Smith, Rt Hon Sir Derek
Normanton, Tom Shersby, Michael Wall, Patrick
Nott, John Silvester, Fred Walters, Dennis
Onslow, Cranley Sims, Roger Warren, Kenneth
Oppenheim, Mrs Sally Sinclair, Sir George Watt, Hamish
Osborn, John Skeet, T. H. H. Weatherill, Bernard
Page, John (Harrow West) Smith, Cyril (Rochdale) Wells, John
Page, Rt Hon R. Graham (Crosby) Smith, Dudley (Warwick) Welsh, Andrew
Pardoe, John Speed, Keith Whitelaw, Rt Hon William
Parkinson, Cecil Spence, John Wiggin, Jerry
Penhaligon, David Spicer, Jim (W Dorset) Wigley, Dafydd
Percival, Ian Spicer, Michael (S Worcester) Wilson, Gordon (Dundee E)
Pink, R. Bonner Sproat, Iain Winterton, Nicholas
Powell, Rt Hon J. Enoch Stainton, Keith Wood, Rt Hon Richard
Price, David (Eastlelgh) Stanbrook, Ivor Young, Sir G. (Ealing, Acton)
Prior, Rt Hon James Stanley, John Younger, Hon George
Pym, Rt Hon Francis Steel, David (Roxburgh)
Raison, Timothy Steen, Anthony (Wavertree) TELLERS FOR THE AYES:
Rathbone, Tim Stewart, Donald (Western Isles) Mr. Carol Mather and
Rawlinson, Rt Hon Sir Peter Stewart, Ian (Hitchin) Mr. Michael Roberts.
Rees, Peler (Dover & Deal)
Abse, Leo Cocks, Michael (Bristol S) Evans, Ioan (Aberdare)
Allaun, Frank Cohen, Stanley Evans, John (Newton)
Anderson, Donald Coleman, Donald Ewing, Harry (Stirling)
Archer, Peter Colquhoun, Ms Maureen Faulds, Andrew
Armstrong, Ernest Concannon, J. D. Fernyhough, Rt Hon E.
Ashley, Jack Conlan, Bernard Fitch. Alan (Wigan)
Ashton, Joe Cook, Robin F. (Edin C) Fitt, Gerard (Belfast W)
Atkins, Ronald (Preston N) Corbett, Robin Flannery, Martin
Atkinson, Norman Cox, Thomas (Tooting) Fletcher, L. R. (Ilkeston)
Bagier, Gordon A. T. Craigen, J. M. (Maryhill) Fletcher, Ted (Darlington)
Barnett, Guy (Greenwich) Crawshaw, Richard Foot, Rt Hon Michael
Barnett, Rt Hon Joel (Heywood) Crostand, Rt Hon Anthony Ford, Ben
Bates, All Crowther, Stan (Rotherham) Forrester, John
Bean, R. E. Cryer, Bob Fowler, Gerald (The Wrekin)
Benn, Rt Hon Anthony Wedgwood Cunningham, G. (Islington S) Fraser, John (Lambeth, N'w'd)
Bennett, Andrew (Stockport N) Cunningham, Dr J. (Whiteh) Freeson, Reginald
Bidwell, Sydney Dalyell, Tam Garrett, John (Norwich S)
Bishop, E. S. Davidson, Arthur Garrett, W. E. (Wallsend)
Blenkinsop, Arthur Davies, Bryan (Enfield N) George, Bruce
Boardman, H. Davis, Denzil (Llanelli) Gilbert, Dr John
Booth, Rt Hon Albert Davies, Ifor (Gower) Ginsburg, David
Boothroyd, Miss Betty Davis, Clinton (Hackney C) Golding, John
Bottomley, Rt Hon Arthur Deakins, Eric Gould, Bryan
Boyden, James (Bish Auck) Dean, Joseph (Leeds West) Gourlay, Harry
Bradley, Tom de Freltas, Rt Hon Sir Geoffrey Grant, George (Morpeth)
Bray, Dr Jeremy Dell, Rt Hon Edmund Grant, John (Islington C)
Brown, Hugh D. (provan) Dempsey, James Grocott, Bruce
Brown, Robert C. (Newcastle W) Doig, Peter Hamilton, James (Bothwell)
Brown, Ronald (Hackney S) Dormand, J. D. Hamilton, W. W. (Central Fife)
Buchan, Norman Douglas-Mann, Bruce Hardy, Peter
Buchanan, Richard Duffy, A. E. P. Harrison, Walter (Wakefield)
Butler, Mrs Joyce (Wood Green) Dunn, James A. Hart, Rt Hon Judith
Callaghan, Rt Hon J. (Cardiff SE) Dunnett, Jack Hattersley, Rt Hon Roy
Callaghan, Jim (Middleton & P) Dunwoody, Mrs Gwyneth Hatton, Frank
Campbell, Ian Eadie, Alex Hayman, Mrs Helens
Canavan, Dennis Edge, Geoff Healey, Rt Hon Denis
Cant, R. B. Edwards, Robert (Wolv SE) Heffer, Eric S.
Carmichael, Neil Ellis, John (Brigg & Scun) Hooley, Frank
Carter-Jones, Lewis Ellis, Tom (Wrexham) Horam, John
Cartwright, John English, Michael Howell, Rt Hon Denis (B'ham,Sm H)
Castle, Rt Hon Barbara Ennals, David Hoyle, Doug (Nelson)
Clemitson, Ivor Evans, Fred (Caerphilly) Huckfield, Les
Hushes, Rt Hon C. (Anglesey) Hellish, Rt Hon Robert Sillars, James
Hughes, Mark (Durham) Mendelson, John Silverman, Julius
Hughes, Robert (Aberdeen N) Mikardo, Ian Skinner, Dennis
Hughes, Roy (Newport) Millan, Bruce Small, William
Hunter, Adam Miller, Dr M. S. (E Kilbride) Smith, John (N Lanarkshire)
Irvine, Rt Hon Sir A. (Edge Hill) Miller, Mrs Millie (Ilford N) Snape, Peter
Irving, Rt Hon S. (Dartlord) Mitchell, R. C. (Soton, Itchen) Spearing, Nigel
Jackson, Colin (Brighouse) Moonman, Eric Spriggs, Leslie
Jackson, Miss Margaret (Lincoln) Morris, Alfred (Wythenshawe) Stallard, A. W.
Janner, Greville Morris, Charles R. (Openshaw) Stewart, Rt Hon M. (Fulham)
Jay, Rt Hon Douglas Morris, Rt Hon J. (Aberavon) Stoddart, David
Jenkins, Hugh (Putney) Moyle, Roland Stott, Roger
Jenkins, Rt Hon Roy (Stechford) Mulley, Rt Hon Frederick Strang, Gavin
John, Brynmor Murray, Rt Hon Ronald King Strauss, Rt Hon G. R.
Johnson, James (Hull West) Newens, Stanley Summerskill, Hon Dr Shirley
Johnson, Walter (Derby S) Noble, Mike Swain, Thomas
Jones, Barry (East Flint) Oakes, Gordon Taylor, Mrs Ann (Bolton W)
Jones, Dan (Burnley) Ogden, Eric Thomas, Jeffrey (Abertillery)
Judd, Frank O'Halloran, Michael Thomas, Mike (Newcastle E)
Kaufman, Gerald Orbach, Maurice Thomas, Ron (Bristol NW)
Kelley, Richard Orme, Rt Hon Stanley Thorne, Stan (Preston South)
Kerr, Russell Ovenden, John Tierney, Sydney
Kilroy-Silk, Robert Owen, Dr David Tinn, James
Kinnock, Neil Padley, Walter Tomlinson, John
Lambie, David Palmer, Arthur Tomney, Frank
Lamborn, Harry Park, George Torney, Tom
Lamond, James Parker, John Tuck, Raphael
Latham, Arthur (Paddington) Parry, Robert Urwin, T. W,
Leadbitter, Ted Pavitt, Laurie Varley, Rt Hon Eric G.
Lee, John Peart, Rt Hon Fred Wainwright, Edwin (Dearne V)
Lestor, Miss Joan (Eton & Slough) Pendry, Tom Walden, Brian (B'ham, L'dyw'd)
Lever, Rt Hon Harold Perry, Ernest Walker, Harold (Doncaster)
Lewis, Arthur (Newham, N) Phipps, Dr Colin Walker, Terry (Kingswood)
Lewis, Ron (Carlisle) Prentice, Rt Hon Reg Ward, Michael
Lipton, Marcus Prescott, John Watkins, David
Litterick, Tom Price, C (Lewisham W) Watkinson, John
Lomas, Kenneth Price, William (Rugby) Weetch, Ken
Loyden, Eddie Radice, Giles Weizman, David
Luard, Evan Rees, Rt Hon Merlyn (Leeds S) Wellbeloved, James
Lyons, Edward (Bradford W) Richardson, Miss Jo White, Frank R. (Bury)
Mabon, Dr J. Dickson Roberts, Albert (Normanton) White, James (Pollok)
McCartney, Hugh Roberts, Gwilym (Cannock) Whitehead, Phillip
McDonald, Dr Oonagh Robinson, Geoffrey Whitlock, William
MacFarquhar, Roderick Roderick, Caerwyn Willey, Rt Hon Frederick
McGuire, Michael (Ince) Rodgers, George (Chorley) Williams, Alan (Swansea W)
MacKenzie, Gregor Rodgers, William (Stockton) Williams, Alan Lee (Hornch'ch)
Mackintosh, John P. Rooker, J. W. Williams, Rt Hon Shirley (Hertford)
Maclennan, Robert Roper, John Williams, Sir Thomas
McMillan, Tom (Glasgow C) Rose, Paul B. Wilson, Alexander (Hamilton)
McNamara, Kevin Ross, Rt Hon W. (Kilmarnock) Wilson, Rt Hon (Huyton)
Madden, Max Rowlands, Ted Wilson, William (Coventry SE)
Magee, Bryan Sandelson, Neville Wise, Mrs Audrey
Mahon, Simon Sedgemore, Brian Woodall, Alec
Mallalieu, J. P. W. Selby, Harry Woof, Robert
Marks, Kenneth Shaw, Arnold (Ilford South) Wrigglesworth, Ian
Marquand, David Sheldon, Robert (Ashton-u-Lyne) Young, David (Bolton E)
Marshall, Dr Edmund (Goole) Shore, Rt Hon Peter
Marshall, Jim (Leicester S) Short, Rt Hon E. (Newcastle C) TELLERS FOR THE NOES:
Mason, Rt Hon Roy Short, Mrs Renee (Wolv NE) Mr, Ted Graham and
Maynard, Miss Joan Silkin, Rt Hon John (Deptford) Mr. Joseph Harper.
Meacher, Michael Silkin, Rt Hon S. C. (Dulwich)

Question accordingly negatived.

Proposed amendment agreed to.

Amendments made: No. 7, in page 4, line 39, at end insert: '(7B) Nothing in this section shall be construed as imposing upon either Corporation, directly or indirectly, any form of duty or liability enforceable by proceedings before any court'.

No. 8, in page 4, line 40, leave out subsection (8).—[Mr. Hack field.]

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