§ 8.6 p.m.
§ House again in Committee.
THE CHAIRMAN OF COMMITTEES
In calling Amendment No. 28, I should point out to the House that it is desired to move it in a different form from that set out in the Marshalled List, and it now reads:
§ "Page 8, line 8, leave out from the word ("notice") to the end of line 14 and insert the words as printed."
LORD DRUMALBYN moved, in subsection (2), to leave out all words after "of the notice" and to insert:
apply to the Sheriff for an order calling on the Board to show that the information or any part thereof specified in the notice is reasonably required by the Board for the execution of any of their functions mentioned in the last foregoing subsection, and the Board shall within twenty-one days of the issue of the order comply with the order; and unless, after hearing the parties or their representatives, the Sheriff is satisfied that all the information specified in the order is reasonably required as aforesaid he shall make an order discharging the applicant from complying with the notice to the extent specified in that order and may make such award as regards expenses as he may think fit".
§ The noble Lord said: As this Amendment has been changed, I think I should repeat the form of the Amendment as it now stands. Instead of the Amendment which appears on the Marshalled List, 1273 the Amendment I now move is to leave out all the words from "notice", in line 13, to the end of line 14 and to insert the words which appear on the Marshalled List. The effect of the change, of course, is to keep in the words, "within one month of the service of the notice". I think it is fairly obvious that some period within which action should be taken should be preserved.
§ As the noble Lord is well aware, we on this side of the Committee have been disturbed at the immense width of the powers given to the Board for obtaining information, due of course to the immense width of the powers of the Board. Quite apart from this, I think there would be a danger in the early stages after the formation of the Board for it, in the absence of anything else in particular to do, to seek a great deal of information. I agree that it wants to inform itself, but I think there has to be careful restraint exercised in the degree to which it puts people to trouble and expense. As it is, it could ask for absolutely any information concerning the Highlands and Islands, because there really is nothing at all that does not fall within the scope of the economic and social development of the Highlands and Islands. They could even ask about churches. It is not that the Board might want to do it, but certainly it concerns social development.
The noble Lord said in the Second Reading debate that the Board in its activities—and here I quote—
must not cut across the existing responsibilities of local authorities nor take over the responsibilities of other statutory bodies"—[OFFICIAL REPORT, Vol. 267 (No. 93), col. 731, June 29, 1965.]
But those activities do not relate to the information they can demand. I will tell the noble Lord why. It is because all they have to do is to murmur the mystic word "concert" and quote Section 3(1)(c). There is absolutely nothing they cannot ask, whether it is within the purview of the local authorities or statutory bodies or anything else. All they have to say is "concert", in order that they may concert, and nobody can challenge. How can anyone say what they are going to propose to the Secretary of State? How can anyone say what is within their functions of concerting in addition to their other functions of promoting, assisting or under
taking "measures to implement any proposals so approved?" How on earth is it possible to check on this? The fact is that nothing is easier than to ask for information. All of us remember the "phony" period of the war and the battle of paper that went on there—I happened to be a junior staff officer at the time—and the amount of paper one had to fill up, calling for information of all descriptions to be reported by such-and-such a date. Everybody knows what happened. Nothing is more impossible than to prove that the information is not needed, yet this clause, as it stands, enables any owner, occupier or other person on whom a notice has been served to appeal to the sheriff
within one month of the service of the notice … on the ground that the information or any part thereof specified in the notice is not reasonably required by the Board for the execution of any of their functions under this Act
and it goes on:
in relation to the land, business or undertaking".
§ It is almost impossible to prove a negative; this is well known in law. So this wording represents no real brake at all, yet I think that anyone in his senses would realise that some brake is needed. I think the least we can ask is that the Board should have to justify to the sheriff, if they are challenged on it, that they really do need the information for which they ask.
§ In another place it was argued that this could be used for obstructive purposes. It was argued that as the Amendment was framed, it laid on the Board the onus of making the counter-claim and it was unreasonable to put the onus on the Board to go to the courts. This Amendment, however, does not do that. The onus rests upon the "owner, occupier or other person on whom the notice has been served", and all the Board are asked to do is to show that the information for which they ask is genuinely required. There is no real difference in the braking power, so far as the information is concerned, between the clause as it stands in the Bill as it is now and our Amendment, because in each case it is the "owner, occupier or other person" who must make application to the Board; and if the application is frivolous, they will have to pay the costs. So the brake is the same in either case.1275
§ I hope that the noble Lord will not argue—because it would be quite untrue—that this would be putting a spanner in the works, and would enable anybody who wanted to to hold up the proceedings. There is no difference, so far as the application to the court is concerned. The sole difference lies in the onus of proof, and that is the important thing here. It is only right, if the Board are challenged as to whether the information they are asking for is really needed, that they should have to show that it is. Nobody else can show it is not. I hope that the noble Lord will consider this point with an open mind, and will not on this occasion bother too much about his brief. If he will, I am sure he will realise that it is only fair that the Board should have to justify their claim that they require the information if somebody, not frivolously, and ready to pay the costs of the application, applies to the sheriff in this way. I beg to move.
Page 8, line 8, leave out from ("notice") to end of line 14 and insert the said words.—(Lord Drumalbyn.)
THE EARL OF SELKIRK
I should like to support my noble friend for the reason of logic, if nothing else. In the first paragraph it says:… specified in the notice with regard to the land, business or undertaking and with regard to such other matters relating thereto, as the Board may reasonably require .….".All our Amendment does is to say if they are challenged the Board must show that they reasonably require the information. There is a direct sense of logic between them. We have had a little argument as to what exactly is wanted. The noble Lord, Lord Hughes, is always very skilful in trying to find ingenious explanations of Acts of Parliament, which are not always in line with what is printed, but even he was in difficulty about this one, and he has not given a wholly satisfactory explanation of what is required. I do not think this appeal will ever take place—or not very often. This is to ensure that both parties will have to behave reasonably. I think the Amendment meets what the noble Lord, Lord Hughes, has constantly sought: that the Board must show it is reasonable. That is all we are asking, and for those 1276 reasons I hope the Amendment will be accepted.
§ LORD HUGHES
I was amused to find how easy it is to shed the responsibilities which are on the shoulders of a Minister merely by crossing the Floor. When the former Minister of State at the Board of Trade so light-heartedly commends to me that I should disregard my brief, I am quite certain that when he sat on these Benches he would have taken a very dim view if any of my colleagues had proffered that advice to any of his colleagues. I am not going to disregard my brief, for this reason: I had a very strong suspicion that this was one of the Amendments about which noble Lords opposite felt most strongly. There were clues to that because of the amount of time that was spent on discussion of this subject in another place. There was a further clue in that the appeal machinery which is in the Bill now arose from the discussion which took place in another place, and the machinery which is there was felt by my colleagues elsewhere to be a very reasonable way of settling it.
I spent a very long time with the officials this morning because I wanted to be quite convinced in my own mind that what they wanted me to say was the right thing to say. I know that when a man has spent a long time, whether as a draftsman or a senior civil servant, working out the best way to accomplish a particular object, he cannot lightly be persuaded that somebody else looking at the thing for a day or two has found a better way of doing it than he has found over many months of study; and, generally speaking, as noble Lords opposite who have held office know, he is right in that. It is not often that any of us can, in a short time, hit on a better way of doing it, although it is not impossible. Therefore, I did not go into this matter on the basis that what had been done in the Scottish Office must of necessity be right and that it was impossible to find a better way of doing it.
One difficulty in which I now find myself is not of my seeking, but is perhaps unavoidable. I did not know that the Amendment was not going to be moved in the form in which it was printed and, quite frankly, I do not know the extent to which leaving in the 1277 words which specify the period during which action must be taken alters the arguments in relation to this matter. The point at which the Amendment proposed to delete the proceedings might in fact have been an encouragement to delay, an obstruction, which does not now exist in the form in which the Amendment is moved. I am not quite sure on this matter and this is one aspect at which I must look. However, as the Amendment was originally drawn, the opinion of my advisers was that it was a charter for obstruction; that it would enable actions to be taken which the objectors had no intention of following through, but which were calculated to put the Board to the maximum of expense and inconvenience. That may not be the position with the Amendment in the form in which it is now moved.
I have doubts as to whether that is the position, but I must challenge some of the things which the noble Lord, Lord Drumalbyn, said. When he was reading the wording of the clause he read down so far, and then he said, "and it goes on to say ' in relation to the land' and so on", as if this was something which was comparatively unimportant. But because he used that phraseology he was in fact ignoring what was the complete qualification, that there is no opportunity, as he stated in his opening remarks, for the Board to seek information in relation to a piece of land, in relation to a business or an undertaking, for any of the purposes of the Board. It is specifically restricted to the purposes of the Board in relation to the piece of land, the business or the undertaking. So they cannot use any broad description that they are seeking to concert proposals for this area; they must be able to relate them to the business on which they are seeking the information. That is the first point, and it is a fundamental point upon which the noble Lord has, I am sure quite unwittingly, misled the Committee by looking at these final words much more lightly than they deserve.
The second one is the argument which the noble Lord put forward, that the Board were seeking to place the occupier or the owner of the business or undertaking in an impossible position, in that he was being compelled to prove a negative, which would always be exceedingly difficult to do. This is one of the reasons 1278 why I spent some considerable time on this matter this morning, after we had the benefit of an informal chat about this last night, when he used these words to me about the impossibility of proving a negative. We therefore went into that aspect quite fully.
I wish to suggest to your Lordships that this is not the position. Under the procedure as it is, let us see what would happen. There are discussions. The Board seek to get certain information from the owners or operators of the undertaking. They do not wish to give the information. The Board tell them why they want it. After all the discussions take place, the person from whom the information is sought remains convinced that he ought not to give this information, and he therefore refuses to do so. That being the case, the Board then serve an order or notice on him that they are seeking this information, and if he is still not disposed to give the information, he must within 21 days lodge an appeal with the sheriff against the requirement of the Board.
The noble Lord, Lord Drumalbyn, seemed to assume then that the position from that point on would be that the appellant would have to satisfy the sheriff that it was not reasonable that the Board should require this information from him, and that this would be either difficult or impossible for him to do because he was seeking to prove a negative. But I am advised that that is not in fact what would happen. After the legal formalities have been gone through, of the appellant's lawyers lodging his case and the Board's lawyers lodging their answers, a point is reached where the matter is debated before the sheriff. The sheriff is not going to act on the basis that he says to the appellant's lawyers, "Let me hear what you have to say on this matter" and when he, the appellant, has said all that is to be said, the sheriff then says, "I am sorry, but you have not persuaded me that the Board are unreasonable. The appeal is dismissed." It will not go that way at all. Both the appellant and the Board will have to state their case. The appellant states the reason why he does not think that the information should be given, and the Board state the reasons why they think that they are entitled to get the 1279 information. On the basis of what is said by both parties to the sheriff, he will then, either immediately or after consideration, arrive at his conclusion as to whether the appeal should be granted or whether it should be dismissed. As your Lordships will see, we should have exactly the same procedure in the debate before the sheriff whether it is done according to the present drafting of the Bill or in the way suggested in the Amendment.
It may be that the noble Lord will ask me why, if exactly the same procedure would be followed, I am arguing against it. I have no difficulty about its being one way or the other, once the matter gets to the sheriff; and I am quite certain that justice, both to the appellant and to the Board, will be done in regard to the way the case is dealt with in the sheriff court. But what I am advised is that the Amendment as printed (I must emphasise that it is the Amendment as printed which is the only matter to which I can talk completely at this stage) would be a charter for obstruction, and would involve the Board in the pursuit of many possible cases the only object of which would be to delay the Board in its operations and which would not necessarily be carried to a conclusion.
I greatly regret that I have not had the opportunity to look at it, because I have a fear, a suspicion, that the deletion from the Amendment of these first words may considerably alter the force of some of these things. If, in fact, the taking out of these words, or rather the leaving in the Bill of the words which formerly were to be taken out by the Amendment but which are not now taken out, helps the appellant without in any way adding to purely obstructive processes, then I should think that a great deal of force of the argument which I am putting forward against the Amendment might well be withdrawn.
But I think the noble Lord will agree with me that this is a legal point and, as I am not a lawyer, I am not really in a position to say whether it fundamentally alters the argument or not. The one thing which I am quite convinced of is that I am not prepared to accept an Amendment the purpose of which would be to further the interests of those who wish to obstruct the Board rather than of those who wish to help the Board.
§ 8.30 p.m.
§ LORD DRUMALBYN
This illustrates in an interesting way both the advantages and disadvantages of these agreeable informal discussions. I pointed out to the noble Lord my side of the question, and at the same time he told me that he thought that my Amendment was a charter for obstruction. Therefore. I had a look at the matter to see why he should think that to be the case. I then found—and I much regret this—that I had wrongly drafted this Amendment and excluded a line which I had intended to include. I see his position on this, and I very much welcome the attitude which he has taken and his willingness to have another look at it. I am advised legally that, other things being equal, it is better to put a thing positively than negatively. That was why I drafted my Amendment in this way, so that I hope the noble Lord will look at it from that point of view. I am sorry to have made such a long interruption.
§ LORD HUGHES
I thank the noble Lord. What he has said is extremely helpful. The best I can do in these circumstances is to invite the noble Lord to withdraw the Amendment on the basis that I may look again at the new situation which has been created by the tabling of the Amendment in this slightly different form. I do not want him to take more out of this than I can reasonably put into it. As to some of the things I have undertaken to have a look at, there is a fair chance they are workable, and I can probably accept them because they are not points which have already been considered at great length and rejected in another place. If we are discovering—as we have on one case, if not two cases—a completely new approach to a matter, then if it is workable we are justified in putting it into the Bill. But this is not approaching a problem which has not been thoroughly ventilated in another place, and what is in the Bill is a result of that very considerable ventilation.
I readily accept the proposition that when an individual is having to fight a public body, and when the interests of that public body can be as well served at the end of the day by wording the Bill so that every possible advantage is given to the individual in presenting his case, rather than to the public body, then 1281 that is the better way to do it. I hope that Governments will always seek to do things in that way. But we must never allow the interests of the individual, one person or one undertaking, to override, by being awkward, the public interests. I must be certain in looking at this that I am not opening the door to those who are being obstructive—although I accept that there is no intention of obstruction in this Amendment, and that the alteration made in the Amendment, at the last moment, is an endeavour to protect the interests of the individual without impairing the interests of the community at large. I hope that the noble Lord will now feel able to withdraw his Amendment. I have spoken to those who advise me, on the basis that I want to have all the answers some time to-morrow to all the undertakings which I have already given. I should therefore be in a position, before going off on Thursday, to contact the noble Lords concerned as to whether or not an Amendment on the lines proposed can be accepted. We can either agree with them to put down a Government Amendment, or invite the noble Lord concerned to put his Amendment down in that form. I want to be in a position to do that before going North again on Thursday.
It depends on when we finish whether I am able to do that in relation to the whole Bill, but if we make reasonable progress from now on I might well be able to do it in relation to every one. As to this Amendment, I should require my colleagues to look at it, even as a matter of priority compared to some other perhaps less important undertakings, because this is a point in the Bill on which there are legitimately grave doubts. If we can reach agreement on a form of wording which is acceptable to my advisers as being workable, we shall have gone a long way to allay fears that have been expressed, even though, as I believe, without any real foundation. But it is better to remove the fears than to have to wait perhaps six months or a year in order to be able to prove that such fears are without foundation.
§ LORD DRUMALBYN
I am sure the noble Lord is right. The only matter on which he is a little optimistic is that one would prove it in six months or so. Once one gave ground for a feeling that 1282 the fears were justified, it would take a lot longer than that period of time to eradicate it.
§ LORD HUGHES
If things went the way the noble Lord anticipated, we should be able to prove it very quickly. He envisaged that the Board would be spending the first months doing the sort of things that would result in a flood of appeals to the sheriff.
§ LORD DRUMALBYN
The noble Lord is entitled to make that observation. We on this side are very grateful for the way in which he has dealt with the matter. I do not want to delay the Committee in any way at present. The noble Lord has shown himself a hard taskmaster, so far as those in the Officials Box are concerned. We are grateful for the efforts he and they will be making in order to meet the points we have made. With those observations, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
LORD DRUMALBYN moved to add to the clause:
( ) For the avoidance of doubt, for the purposes of the foregoing subsection the expression reasonable cause ' shall include the fact that the information required in the notice could be furnished only at excessive cost to the owner or occupier, as the case may be.
The noble Lord said: This Amendment deals with the cost of providing information. The noble Lord quoted certain examples of the sort of information which would be demanded. On the whole, the cases he quoted were in regard to information of two kinds: first of all, information to support some kind of application for aid or grant or assistance, or where grant or assistance is involved. The point about costs is that it is precedented for those who require information actually to be in a position to meet costs. It so happened that yesterday we were dealing with a Bill stemming from an Act which was originally called the Monopolies Restrictive Practices (Inquiry and Control) Act. In Section 8(4) there appears the following:
The Commission may pay to any person attending under this section to give evidence"—
that is not important—
or producing documents thereunder, and to any person who, whether in pursuance of a requirement under this section or not, furnishes
estimates, returns or information to the Commission for the purposes of any such investigation as is referred to in the preceding provisions of this section, such sums in respect of his expenses as they think fit.
The point here is quite clear. In that case the Commission does not expect a great deal of expenditure to be incurred by a body which ultimately shows that it is not in breach of the Act in any way and is not conducting itself in a manner contrary to the public interest. It does not expect such a body to bear the whole cost of finding the information which is required. So I think there is a good precedent for limiting to a considerable extent the amount of cost burden that can be laid upon any particular owner or occupier who is called upon for information. That is why in this Amendment we say:
For the avoidance of doubt, for the purposes of the foregoing subsection the expression reasonable cause ' shall include the fact that the information required in the notice could be furnished only at excessive cost to the owner or occupier, as the case may be.
This is one way of dealing with the problem—challenging the need to provide the information, on the ground that it is going to cause excessive cost.
§ Another way of dealing with the matter where excessive cost was going to be caused would be to accept estimates. But if you were to accept estimates, I suggest you would then have to qualify "recklessly" in line 26, so as to make it clear that supplying an estimate which you honestly believed to be substantially correct was not supplying information recklessly but was a reasonable attempt to meet the request for information. But, as was pointed out in another place, it may well be that the information requested is not readily available. It may require measurements which the Board could probably do much more easily than the proprietor, if it comes to that, and the proprietor might well say, "You come and get the information. You are welcome." I should like to know what the noble Lord's reaction to such a reply would be, but, quite clearly, as the Bill stands it would be in breach of the requirement.
§ So to a certain extent this is a probing Amendment. It is designed to ensure that excessive burdens, so far as the cost in time and money of collecting the in 1284 formation is concerned, will not be imposed by the Board, and that the Board will be open to reasonable argument as to whether exact information at immense cost should be provided, or whether a reasonable estimate should be given. I hope that the noble Lord will be able to satisfy us that in this respect, as in others, the Board will act reasonably and will not expect other people to do their job for them, because that is really what this would amount to if the cost of the information for which they were asking was excessive. T beg to move.
Page 8, line 29, at end insert the said subsection.—(Lord Drumalbyn.)
§ 8.44 p.m.
§ LORD HUGHES
I think I shall be able to satisfy the noble Lord in the answers which I propose to give to his questions in putting forward this Amendment. Of course, I accept that it is perfectly reasonable that the Board, for the purposes of their operations, even although at the end of the day the undertaking itself may be a direct beneficiary of what they propose to do, should not, for that reason alone, be able to require the individual firm, company or undertaking to be put to excessive cost in supplying information in a detailed form, if, as was suggested by the noble Lord, a reasonably close estimate would serve the same purpose. I also accept that the Board would not be entitled, if they could not be satisfied by an estimate easily ascertained, to require the informant to go to excessive cost in providing the information. Having said that, I do not think that the method proposed is either necessary or desirable. I do not think it is desirable, because it would enable an applicant, if he felt so inclined, at the expiry of the period of three months, in an appeal to the sheriff, or, if the alternative procedure was adopted, in reply to an action raised by the Board with the sheriff—
§ LORD DRUMALBYN
May I correct the noble Lord right away? That was not the alternative suggested in our Amendment. In each case the actions are brought by the applicant. The only difference—and I again repeat this—is as to the onus of proof.
§ LORD HUGHES
I am sorry, but I put that the wrong way. The onus is on the applicant to raise his action. But the point is that by the Amendment as it stands he would not be obliged to take this action until the end of the three months' period which is laid down. He is given three months in which to furnish this information, and if the individual or the company did not wish to give the information they might spend three months finding all sorts of reasons why it should not be furnished, and they might raise this question of excessive cost only when it was decided to go to the sheriff on the matter. Frankly, if a person is objecting on the ground that it would be too costly to do so, I should have thought that was a matter which would be raised quite early on in the proceedings.
I am reluctant, only because of the criticisms that are made that there are too many interventions from the Secretary of State to the Board, to suggest doing too many things by administrative action, but, frankly, this is the sort of thing which would best be taken care of by administrative action. I think it is quite proper for the Secretary of State to give guidance to the Board. In matters of this kind he would expect them to have regard to the expense to which an individual was being put, and he would regard it as a proper exercise of their powers under Clause 9(1)(d) that they should agree to pay him for the cost of extracting the information. It is rather difficult to put that in the Bill, because if you did that you might find that nobody would give any information unless he had a payment for it; and it is not the primary purpose of the Bill that we should provide anybody with an easy way of getting an income by selling information to the Board, whether it was costing him anything to find it or not. But it is reasonable that the Board should reimburse an individual for what has been described as excessive cost.
It is not usual, I am informed, in these cases to attempt to define what "without reasonable cause" means. It is a phrase which is very frequently used and it covers a very wide range. In my own Department, for instance, in connection with the payment of applications for agricultural grants, the illness of the recipient or the accidental destruction of records has been accepted as a reason- 1286 able cause. But we have never defined an illness or the accidental destruction of records as being among the things which can be described as "reasonable cause". Any attempt to do this within the Bill suffers from the same defects as I have previously objected to; that as soon as you seek to put a definition on one particular aspect of a power or on a cause for objection, then, by implication, you limit the range by directing attention to that particular aspect. You tend to narrow it to that and the things which are very much like it, and that is not 'our intention. The intention is that "without reasonable cause" should be interpreted as a reasonable man would do it.
Frankly, if the only argument against the provision of information between the required informant and the Board is the question of the cost of doing so, and the possible appellant makes it perfectly clear that he does not think that it is reasonable that he should have to pay this cost and if need be will appeal to the sheriff on this ground, then I am quite certain that the Board would not fall down on that aspect, particularly when they have power to pay his costs in this matter.
§ 8.50 p.m.
VISCOUNT COLVILLE OF CULROSS
I wonder whether the noble Lord could tell me this. My noble friend Lord Drumalbyn has framed his Amendment to refer to subsection (3) of Clause 11, which is the penal part of the clause, and what the noble Lord, Lord Hughes, has just said leads me to think that a ground for an application to the sheriff, under either the present subsection (2) or any substitution therefor, might be that the information was not reasonably required, on the grounds that it would be too expensive. Would the noble Lord think that that would be within the terms of an application under subsection (2) to the sheriff? If not, might it not be possible to amend the Bill, if he is going to look at this whole matter again, in such a way that it might be included there, rather than in relation to subsection (3)?
§ LORD HUGHES
But, as I understand it, as the Bill now stands, it could be part of the ground of objection to giving the information: that, because of excessive cost, it was not reasonable for the Board to require him to give the information. 1287 If this were the only difference, then it would be quite easily resolved between the Board and the applicant. After all, it must relate to circumstances. I mean that a sum of £5 might be excessive in relation to a crofter with an income of £300 a year, whereas £50 might not be excessive in another connection altogether. The Board would be reasonable in this matter; and, if they were satisfied that this was the only point, then I am quite certain that they would say, "If it in fact costs you more than £20 to take out this information, we will pay any costs which you can satisfy us you have incurred in getting it. "Alternatively, they may say, It is going to cost £500 to take out this information. You can give us a reasonable estimate within the next two weeks. This will serve our purpose just as well, and we will accept it."
I am not just doing that "off the cuff"—although, if I had not abandoned my brief, I might not have said that—because, having argued the thing, I will now tell you what my advisers wanted me to say. It is not visualised that the Board will require any owner, occupier or other person on whom a notice has been served to furnish information which can be obtained only at excessive cost to the person concerned. If a person feels that information is difficult to procure, or is likely to incur him in excessive outlays, the Board could reasonably be expected to listen to his pleas and to modify their plans accordingly. Alternatively, they might agree to use their powers under Clause 9(1)(d) to pay him for the cost of extracting the information. That really fits in very well with what the noble Lord, Lord Drumalbyn, asked.
While I think it would be going too far, and would be too difficult, to put this sort of thing into the Bill, I can see no difficulty—nor do I think that the Board would regard it as an undue restriction of their activities—in including administrative guidance along these lines among the things which the Secretary of State would place before the Board when they came into existence. And, I know from past experience, when I have accepted assurances from the noble Lord, Lord Craigton, that the best way of dealing with a matter of this kind is by administrative action. Because of the 1288 informality which attaches to proceeding in this way it can be done far more effectively than by trying to find a form of words for the Bill through which a cart and horses cannot be driven.
§ LORD DRUMALBYN
Again, I am grateful to the noble Lord. I would commend to him what my noble friend Lord Colville of Culross has said. The noble Lord is himself quite right in saying that the real objection to this is that you will not know whether an objection on these grounds is going to be made until the period for giving the information has expired. But, of course, my noble friend's suggestion would get over that, quite apart from the fact that this is in the criminal part of the clause, because it would enable somebody immediately, or as soon as he had made his estimates, to apply to the courts on the ground that finding the information would cost too much. I think it is worth looking at that, because, although what the noble Lord says is perfectly right—that it is best, if possible, to deal with this difficulty by administrative means—differences of opinion are bound to arise, and it is probably just as well to provide for those in favour of one side as it is to provide for those in favour of the other.
I think this has been a useful discussion, if I may say so, and I am very grateful for the assurances which the noble Lord has given. Of course, we always like to see assurances of this kind written into the Bill where that is at all possible. I would again commend to him the terms of the Monopolies and Restrictive Practices Act, Section 8, as a possible way of dealing with this matter. I should have thought that there are not very great dangers in being specific about it. It might well reassure people and, by reassuring them, make the Bill that much more acceptable. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn
§ On Question, Whether Clause 11 shall stand part of the Bill?
THE DUKE OF ATHOLL
Much as I dislike the whole of Clause 11, and although I think it will have the opposite effect to that which the Government intend, and will make any new industry contemplating going into the Highland 1289 area think very hard and long about doing so, I do feel that, if the noble Lord can see his way to accepting an Amendment on the lines suggested by my noble friend Lord Drumalbyn, we shall have made some progress. Therefore, I do not think there is any point in pursuing this matter any further at this moment, but rather that we should wait for the next stage and see what materialises.
§ LORD DRUMALBYN
May I raise one point on this, arising out of what the noble Lord has said? Throughout, in arguing this matter, the noble Lord has been directing the attention of the Committee to the kind of case where the Board asks a particular individual, and that individual only, for information. Of course, as I read the clause, it is perfectly possible for the Board to ask for a return from everybody concerned;n a certain kind of business—all crofters, or something of that sort. It seems to me that, provided that it is for the purposes of their functions, the Board can ask for returns—a kind of census of production, or whatever it may be, in certain sectors. I am not really sure that the noble Lord understands how people have read this clause. Quite frankly, we do not know what is in the mind of the Government as to the way in which they think it will be carried out. It could mean asking for information from particular individuals, or it could mean a kind of minor census. Or, of course, it may mean both. But I think we are entitled to ask the Government how they envisage the collection of this information.
§ LORD HUGHES
I did not exclude the possibility that a number of people may be asked, because, if the noble Lord will recollect the example which I gave, and which singularly failed to impress the noble Earl, Lord Selkirk—the example of the wool mill in the Shetlands—he will remember that I said that the position might arise where the Board had got from half of the producers, quite voluntarily, the information which was necessary to arrive at a decision, but where, in order to find out whether the thing was viable, they needed information from a wider range and therefore might have to seek to acquire by compulsion the information from those who had declined to give it voluntarily. So I certainly did 1290 not exclude the possibility that information might be required from a group of people.
The other example I gave also envisaged the possibility of a group of people being asked to provide information which would be for the benefit of their own businesses; but it would not be confined to one business. I spoke, for instance, about the need of extending a scheme for providing public parking facilities. That parking would not be related to one hotel but would be available for the generality of hotels in the district. So, obviously, there would be occasions when the Board would be seeking information from a number of people with like interests.
But I should hope that the number of occasions, if any, when the Board would feel it necessary to put out a general form which would have to be filled in by everybody in sight would not arise; because people can be persuaded to give information if they can be told the purpose for which the information is required. I think a lot of this discussion will prove to be unnecessary at the end of the day; because most people, when they know why it is wanted, unless they are firmly persuaded that their own interests are going to be directly harmed by giving the information, will make it available. I think that because of this it will not arise in many cases. But the best way to make certain that you do not get information from people is to put out a multiplicity of forms for them to fill up so that they come to the conclusion: "Here is another form from the Highland Development Authority. What will they think of next?" The Board would frustrate their own objects if they sought to gather information only for the purpose of creating statistics. If prosperity could be brought to the Highlands merely by getting out statistics, the Highlands would be flourishing at the present moment.
§ Clause 11 agreed to.
§ Clause 12:
§ Restrictions on disclosure of information
§ 12.—(1) No information with respect to any land, business or undertaking which has been obtained by virtue of section 10 or 11 of this Act shall, without the consent of the owner and occupier of that land or, as the case may be, of the person carrying on that business or 1291 undertaking, be disclosed otherwise than for the purposes of the execution of this Act:
THE DUKE OF ATHOLL moved, in subsection (1), to leave out "otherwise than for the purposes of the execution of this Act:" and insert:
to anyone other than a member or official of the Board:".
The noble Duke said: I think this Amendment is of some importance. Clause 12(1) limits the number of people Ito whom information obtained under Clauses 10 and 11 can be given without the informant's consent. As the clause is drawn up at the moment, so far as I can make out, the Board can give information obtained under Clauses 10 and 11 to any person or any body which has an interest in any scheme they have proposed and which has been approved by the Secretary of State. This seems to me to be far !too wide, because, so far as I can see, they can, without a person's consent, give this information to a county council, the Red Deer Commission, the Forestry Commission or even possibly another private individual who had an interest—although I am less confident about that. This is farther than the inspector of taxes can go, for instance. We return less information to him than is demanded or could be demanded under Clause 11 of this Bill. Yet we do so in perfect confidence, knowing that it will not be passed on to outside bodies—not even to the Secretary of State for Scotland. I must confess to a feeling of gloom at knowing that he will have power to get almost any information he likes from the Highlands.
§ I certainly feel that this clause is far too widely drawn. I have therefore tried, in an amateurish way, to limit the passage of this information to the Board and its officials. It seems to me that they are the people immediately concerned with it. I might point out that the present returns of salmon fishing caught in nets at the mouth of estuaries in this part of the country can be disclosed only to the Secretary of State for Scotland, and not even to the river boards concerned. So up to now, the Government do not seem to have worried to disclose information—even important information like that, which would enable the river boards to do their job properly 1292 —to authorities who had an interest in it. Though I doubt that the noble Lord will be able to accept this Amendment—for I am sure he will say that he would like the Secretary of State for Scotland to be among those to whom information can be disclosed—I hope he will consider that an Amendment drawn an similar lines (and, perhaps, including the Secretary of State for Scotland) might be acceptable at the next stage of the Bill. I beg to move.
Page 8, line 34, leave out from ("disclosed") to end of line 35 and insert ("to anyone other than a member or official of the Board:")—(The Duke of Atholl.)
§ LORD HUGHES
I think the noble Duke and myself must be basically the same sort of simple person; because I felt much as he did when I first saw this Amendment. But I have the benefit of officials to talk to and he has not. The officials find out all the things that are wrong with the Amendment; and at the end of the talks I find myself in complete agreement with them—to the subsequent regret, I have no doubt, of the noble Duke.
But it does not need much probing to find out what are the defects of this Amendment. By confining the information to members or officials of the Board it could be that the object for which the information is sought would be completely frustrated. The Board are not seeking information of this kind just in order to satisfy their curiosity; they are seeking it for the purposes of the proposals they may make. These proposals go beyond the Board. There will be a number of cases—there may be many of them—in which, in order to justify the proposal, the Board have to furnish the Secretary of State with the information. The Board may have to go further. They may have to make the information available to the Treasury in connection with the giving of grants or loans by Government Departments.
In the course of this debate there have been frequent references to BOTAC. I am sure that the noble Lord, Lord Drumalbyn, would confirm the fact that an application for BOTAC assistance requires the most detailed information to be submitted for consideration—perhaps much more information about 1293 the finance of an undertaking than the Board might require when seeking to obtain similar information if, for example, there was a proposal to give additional financial aid to the undertaking. That is given to BOTAC which does not include a member of the Government or officials of the Board of Trade. It is a body of outside businessmen who give their services. The information given to these people has never been abused and I am certain that some of it goes beyond BOTAC to the Board of Trade when it is decided whether or not a grant is to be made, and the extent of it.
THE DUKE OF ATHOLL
I am sorry to interrupt the noble Lord, but surely in the case of Bonc—I am a child in these matters—the firm is applying for a grant, and therefore would be only too delighted that the information supplied should be given to BOTAC, to the Board of Trade, and to the Treasury, and the Secretary of State, if they were interested. I am prepared to admit that, had I known the noble Lord would exclude all my other Amendments relating to the Secretary of State, I should have included the Secretary of State in this Amendment, but I thought I ought to be logical and exclude him.
§ LORD HUGHES
Even if the noble Duke had reversed his procedure and included the name of the Secretary of State instead of, as in other Amendments, "shooting him down", the case would not have been met. I began to think that every time the noble Duke saw the name "Secretary of State" he put down another Amendment. The case would not be met by including the Secretary of State in this Amendment. The Secretary of State would not get anywhere with the Treasury if all he could say was, "I have the most convincing information, if I could only pass it on to you, but my colleague in the House of Lords accepted an Amendment which allows me to get information but prevents me from giving it to you". I know what the result would be on that application—we should not get a bean out of the Treasury.
Under the existing legislation previous Secretaries of State, and perhaps the existing one, have on occasions furnished confidential information to the Highland Panel when asking for advice on par 1294 ticular problems. Never once has there been occasion for complaint that the Panel abused this confidence, and no one has ever complained about confidential information being made available to the Panel. But the information which the Secretary got in return was so much more valuable because it was based on the valid foundation which he had been able to give to the Panel.
If we are to get the results flowing back into the Highlands, we cannot deny the authorities reasonable information on which to arrive at their conclusions. The penalties imposed by the provisions in the clause for improper disclosure of information are severe, and intended to make certain that there is no improper use of information. I cannot accept that a Department or authority considered appropriate by the Secretary of State or the Board to receive information should be struck at in the way the noble Duke suggests.
THE DUKE OF ATHOLL
Of course, I should not object to information being passed on to any Government Department. I was worried that it should be passed on to outside individuals and other bodies. I do not think that we can take the argument further. I am sure that my Amendment is defective and therefore I ask leave to withdraw it.
§ Amendment by leave, withdrawn.
§ On Question, Whether Clause 12 shall stand part of the Bill?
§ LORD DRUMALBYN
I should like to ask one question. On page 8, line 36, the Bill states:Provided that nothing in this subsection shall apply to any disclosure of information made for the purposes of any legal proceedings pursuant to this Act or any criminal proceedings, whether pursuant to this Act or not …".I thought of putting down an Amendment to leave out the words "whether" and "or not". It is difficult to see why the Highlands Development Board should be used as a collecting agency for the police and the procurator fiscal. I ask the noble Lord to tell us why these words are in the Bill, and whether it is desirable to retain them.
§ LORD HUGHES
I do not suppose that the noble Lord, Lord Drumalbyn, wishes an answer to that question immediately. If he does, I would say that he 1295 has a positive genius for picking out, without previous notice, things on which to put questions to which I could not possibly be expected to know the answers.
§ Clause 12 agreed to.
§ Clause 13:
§ Accounts of the Board etc.
§ 13.—(1) The Board shall keep proper accounts and other records in relation to the accounts and shall prepare in respect of each of their financial years a statement of account in such form as the Secretary of State may, with the approval of the Treasury, determine.
§ (5) The Board shall provide the Secretary of State with such information relating to their activities or proposed activities as he may from time to time require, and for that purpose shall permit any person authorised in that behalf by the Secretary of State to inspect and make copies of their accounts, books, documents or papers and shall afford to that person such explanation thereof as he may reasonably require.
§ 9.14 p.m.
LORD DRUMALBYN moved, at the beginning of the clause, to insert as a new subsection:
( ) Where any business or undertaking is carried on by the Board, whether directly, through an agent or as agent, the Board shall keep separate accounts either for each such business or undertaking or for any group of such businesses or undertakings, and the accounts of each such business or undertaking or group of businesses and undertakings, as the case may be, shall be audited by an auditor to be appointed annually by the Board.
( ) No person shall be qualified to be so appointed auditor unless he is a member, or in the case of a firm all the partners therein are members, of one or more of the following bodies:—
- The Institute of Chartered Accountants of Scotland,
- The Institute of Chartered Accountants in England and Wales,
- The Association of Certified and Corporate Accountants,
- The Institute of Chartered Accountants in Ireland,
§ The noble Lord said: This looks a fairly formidable Amendment, but the point is simple. On an earlier stage of the Bill, it was argued that because there are some activities of the Board not intended to 1296 show a return, no part of the Board's undertakings should be subject to audit in the usual way. I think that that is a non sequitur. Where the Board engages in any undertaking—that is, broadly, where it exercises its functions under Clause 6—those undertakings, either individually, or, if it is more convenient to the Board, grouped together, should be audited in the same way as any other commercial undertaking and as those commercial undertakings with which it is in competition. That is the sole purpose of the Amendment.
§ Amendments Nos. 33 to 38 are consequential. I am inclined to think, though this is a matter of drafting, that having used the "accounts" in line 1 and in line 3 the words "statement of account", it would probably be more logical to keep "statement of account" separate from "accounts" and make it throughout the statement of account that has to be returned to the Comptroller and Auditor General. If these Amendments were accepted, the effect would be that all those activities which are really an extension of Government activities would be audited in the usual way by Government audit, whereas all those which are commercial activities would be audited by chartered accountants in the usual way and the statement of account of the Board would be accompanied by the audited accounts duly certified. I should have thought that this was a sensible arrangement, and I hope that the noble Lord will feel able to accept it. I beg to move.
Page 9, line 1, at the beginning insert the said subsections.—(Lord Drumalbyn.)
§ LORD HUGHES
I am very sorry that I cannot accept this Amendment. This is another proposal which looks so reasonable at first glance. I am not going to advance the argument which the noble Lord has anticipated, not because it is without validity, but because it has been argued and cross-argued to such an extent in another place that it would be a waste of time to go over it again in your Lordships' House. It has been argued that the Board would not be undertaking operations of a commercial nature, but of a pioneering, launching and rescue character. But no useful purpose would be served by going over the ground again, because one either accepts or disagrees 1297 with the argument and there is no convincing of one by the other.
By the practice established in another place over many years, undertakings which are financed out of monies advanced by Parliament must be subject to audit by the Comptroller and Auditor General, and it is not possible to exempt any part of the monies which are used by the Development Board from the audit of that august officer and his Department. If we made provision that certain aspects of the Board's activities are to be subject to audit by private accountants operating in the usual commercial way, we should be laying down a procedure by which part of the accounts of the undertaking would be audited twice, once by a chartered accountant or similarly qualified individual (if a chartered accountant will permit me to say that anybody can be similarly qualified) and all over again by the Comptroller and Auditor General. Audit by the Comptroller and Auditor General we could not prevent, because he would not be doing his job properly if he did not do so.
However, there are several objections. To do what is required would be asking for accounts to be published in much greater detail than is necessary for the purposes of the Board or of Parliament. That does not mean that if the Board undertook a rescue operation which did not come off, they could lose the resulting information by concealing it somewhere in the accounts. This is the sort of thing that noble Lords might suspect would be happening. The idea of intervention by the Secretary of State is criticised, but this is the kind of situation which justifies the action which we propose the Secretary of State and the Treasury should be able to take, in that it gives the Secretary of State and the Treasury ample power to determine the form of accounts. The Secretary of State, I can assure your Lordships, will certainly have regard to the need for lucidity and informativeness in the statement of accounts, and if it is felt that he is not achieving this, there is the normal Parliamentary remedy, because these accounts will be capable of being discussed by Parliament.
One knows how frequently public Boards are required in their accounts to provide information in a particular form, 1298 because, arising from a discussion of their Annual Report, Parliament has asked that certain things be done in a particular way. I know from my former membership of the North of Scotland Hydro-Electric Board the extent to which the form of accounts of the Board is governed by instructions coming from the Secretary of State and the Treasury, so that information may be clearly available to any qualified person who reads the accounts. The whole purpose is always that the accounts should be framed in such a way as to give the maximum of information, and never on any of these public bodies have they been encouraged or allowed to frame their accounts in such a way as to conceal information. That is the first point.
The second point I have already referred to. The Amendment would make it mandatory to publish a publication of accounts of a detailed nature, which would be unnecessary in some cases and undesirable in others. The third one, the question about rescue and so on, I will not refer to. In any event, even in the detail required by the Amendment it would not necessarily accomplish the purpose it seeks to achieve, because it could well be defective in the completeness and accuracy of the picture it would present (I do not say that this is a major point, but it shows that the officials think up every possible argument against the proposal)—for example, because of the difficulty of checking overheads, such as the Board's overheads.
I think the best safeguard for publication of that amount of information which can legitimately be expected by any reasonable person is the fact that these accounts are subject to discussion by Parliament, because it is an expenditure of monies which are voted by Parliament. It may well be that the first time, and the second time, the accounts are presented, Parliament seeks to get more information than is in them; but over a period I am certain that the accounts will be put in a way which will give the sort of information that noble Lords seek.
On the point to which the noble Lord referred, about the wording of "accounts" and "statement of account", the only answer is that this prevents (and this must be a serious drawback to civil servants) a certain slight untidiness of 1299 language, which I should think is almost a No. 1 crime, but which would cause no difficulty in practice. On this aspect, if other Amendments are being made I should think that we should take the opportunity of bringing these two statements into accord with each other, so that at the end of the day, at least inside St. Andrew's House, they would be happy that the untidiness did not survive to the end. I must therefore invite the noble Lord to withdraw this series of Amendments, which I cannot possibly accept. I hope that I have been able to assure him and his noble friends that ultimately, if not immediately, he will obtain all the information that is available. One thing which I cannot guarantee, of course, is that any chartered accountants will have any fees out of the matter; but that, I presume, was not the object of the exercise.
§ LORD POLWARTH
I wonder whether I might ask the noble Lord for a little elucidation on two points. Before doing so, I should clearly declare my interest as a member of the first-named and senior body of accountants referred to in the Amendment. Although technically an accountant in practice, I am, in fact, very much an accountant out of practice, and it is therefore highly improbable that I should ever be personally involved in this matter. The first question I ask in ignorance. Does the office of the Comptroller and Auditor-General maintain any staff in Scotland who are familiar with Scottish conditions, and particularly Highland conditions? The second question I ask more in anxiety. The noble Lord referred to the desirability, or otherwise, of publishing information relating to these accounts. Can he assure us that, in relation to commercial undertakings carried on, we shall be given no less information than would be required to be given by a public company under the Companies Act?
VISCOUNT COLVILLE OF CULROSS
I wonder whether I could re-echo what my noble friend Lord Polwarth has just said. I think the noble Lord, Lord Hughes, said that under this Amendment in some cases more accounts would have to be provided than were either necessary or desirable. I am sure the noble Lord 1300 ought to have the information that the noble Lord, Lord Champion, is giving him now, but I should like him to listen to me.
§ LORD HUGHES
The noble Lord would not expect me to get up and answer him immediately until I have been provided with the answer to the first question of the noble Lord, Lord Polwarth.
VISCOUNT COLVILLE OF CULROSS
The noble Lord, Lord Hughes, was speaking about the possibility of examining these matters in Parliament, and I have no doubt that that is right. Of course, the clause provides it. What concerns me a little is that supposing—and I appreciate the arguments about the rescue operations—there are commercial undertakings being carried on by the Board, the phrase used by the noble Lord, Lord Hughes, that there might be some undesirable element of the accounts which should not be disclosed, seems to me to preclude the effectiveness of Parliament in being able to examine these accounts. I do not think the noble Lord intended to suggest that anything was going to be concealed, but he used a particular epithet which might arouse considerable disquiet. I think it would be of great assistance to the Committee if he would go a little further and explain what he meant by saying that this particular Amendment would require accounts to be kept which were not necessary or desirable, because, of course, the desirability or otherwise of making the contents of the accounts public, either in Parliament or elsewhere, is exactly what this Amendment is intended to deal with. I hope that he may have an answer to that point, as well as to the question of my noble friend.
§ 9.30 p.m.
§ LORD BURTON
I was rather surprised at the answer on auditors, because I tried to do some research and I could not find any organisation at all similar which did not have auditors appointed. There is the Electricity Act, 1947, the Transport Act 1947, the Gas Act 1948, the White Fish Authority, the Herring Industry Board, Harbours, and even the Airports Act, 1965—in all cases auditors had to be appointed and I could not find any body that did not. I know some 1301 people consider that the Highlands are an unusual place, but I do not see why we should have an unusual Board.
§ LORD HUGHES
The answer to the first question raised by the noble Lord, Lord Polwarth, is that the accounts are first of all examined by people in the Department in Scotland, and that is a detailed examination and therefore is by people qualified from a Scottish point of view. Then further examination which the Comptroller and Auditor General's officials wish to make is whatever may be necessary in order to supplement what is done virtually on his behalf by the Departments in St. Andrew's House.
I was rather surprised at what the noble Viscount, Lord Colville of Culross, attributed to me. I certainly hope that I did not say there would be undesirable things in the accounts.
§ LORD HUGHES
Yes, that is what the noble Viscount said the first time, that there would be undesirable things in the accounts, but when he continued the noble Viscount said I had said that there were things which it would not be necessary or desirable to publish. It is one thing to say that it may not be desirable to publish, but it is another thing to say that the items are in themselves undesirable. I do not believe for one moment that there would be anything in the accounts of this body which would be undesirable.
VISCOUNT COLVILLE OF CULROSS
I think the noble Lord has missed the point. He was suggesting that there might be some things which it would be undesirable to put into the accounts but not that there would be anything in the accounts which was undesirable.
§ LORD HUGHES
I would commend the noble Viscount on that effort, but it still does not meet the point. It is the trained legal brain thinking on its feet, but sometimes the untrained legal brain sticks to the point, which is what I intend to do. I did not say anything about the desirability or undesirability of the information, but it is not always desirable or necessary to publish everything in the sort of detail which this Amendment 1302 would require to be done. The extent to which Parliament considers that information is not being given in as much detail as it would wish is a matter upon which Parliament can comment and give decisions.
I should hope that the form in which the accounts are published, having regard to the fact that they will be prepared under the guidance of the sort of information which the financial departments and the Treasury would want, would in fact give all the information they expect Parliament would want. In so far as they give instructions which Parliament seeks to override because they are not satisfactory, this is in fact a criticism of the officials, that they have not done the job in the way that Parliament considers competent, and that is the best safeguard. No official likes to be told by the Accounts Department of another place, for instance, that they do not think the accounts give all the information to which Parliament is entitled. They lean over backwards to avoid that one. So I think there is no fear at all that the accounts which will be available from the Board will not be fully informative.
It is quite possible that the accounts might be regarded by Parliament as fully informative for their purposes without of necessity being in the exact form or giving all the information which a public company would have to give in its form of accounts, because there are many variations in the accounts of public bodies at the present time. Some of them would give information which a public company is not obliged to give, whereas in other directions they do not give information which a public company would be expected to provide. But neither one nor the other is necessarily right or wrong.
Lord Polwarth's intervention and his disclaimer of other than a qualification of a chartered accountant without the desire to become a practising auditor, reminds me that he is actively engaged in banking activities. One knows, for instance, that banks are permitted to do certain things which no other public company can get away with, although many of them would like to. No one suggests that because a bank is allowed to withhold certain information it is 1303 indulging in sharp practice. For that reason I believe that this is a perfectly reasonable way in which to work. The only item which I cannot satisfy is in regard to the accountants, who might have been paid fees for doing this job. But as a number of these undertakings may be very small in total, fees are probably small in extent, and accountants at least have the consolation that there are no terribly big fish escaping.
§ LORD DRUMALBYN
The general impression the noble Lord has left, with me at any rate, is one of great gloom about the activities of the Board under Clause 6. If the Government intend that the businesses and undertakings which the Board might acquire or set up are really to be so hoplessly uneconomic that it is not a good thing to treat them like ordinary commercial undertakings and they must be dealt with as Government expenditure departments, then I think the outlook is very poor. I had hoped, in reading Clause 6, that it was the intention of the Board to pave the way for viable undertakings and for industries in Scotland that would be viable. There is not the slightest reason why they should pay their way at once. Even if an industry were to be set up and get BOTAC aid it would not necessarily be expected to pay its way at once. But one was hoping in the long run that it would become economic and, in the end—I expressed the hope on Second Reading—it could be hived off and take its place in the economy of Scotland as a going concern. There could be no better training, surely, for the concern than to be audited as a commercial concern from the start, because this puts it on a par in its methods, and it would get guidance from commercial auditors right away. It would not be a bad thing if these concerns were subject to taxation like other bodies that have to compete.
I think the noble Lord does not really understand the dangers in leaving undertakings of this kind in the hands of Goverment accounting. For one thing, it is rather a slow process. First of all, you have to make the accounts and then pass them to the Comptroller and Auditor General; and one of the great criticisms of our system, I am afraid, is that the Public Accounts Committee is working on 1304 such very dead meat. I think I am right in saying that the noble Lord, Lord Champion, has been a member of that Committee. They are very old accounts indeed by the time the Comptroller and Auditor General draws attention to any particular thing which he thinks is not right and should be considered by the Public Accounts Committee.
I do not think this is the right way to deal with the accounts of businesses and undertakings which are intended to be commercial, and this is why we try to make this distinction here. I do not think that the criticism that this would mean duplication is valid. If the account is audited and certified it would save an immense amount of the time of the Comptroller and Auditor General, even if he did a quick check. I am afraid the real fact of the matter is that the Government have not really thought out what the Board are going to do and what their objectives are, because if they had done so, I feel sure that if they really want to set up viable undertakings they would want those undertakings to be financed in an ordinary way, and the accounts audited in an ordinary way, from the start.
I am not certain that all of my noble friends on this side were here at the time, but earlier this afternoon we asked about subsection (2) of Clause 9, and we were told that in the ordinary way money would be borrowed only on overdraft and would never be borrowed on the market. I agree that in a way that weakens the proposal that there should be an audit by chartered accountants. Nevertheless, I think that, as my noble friend Lord Polwarth suggested, it is essential to accept the discipline of commercial accounting from the start if these undertakings are to have any chance of paying their way.
I think it is not too late to hope that the noble Lord will think again on this matter. But even if it is too late at this stage, and would not be easy to do, I would still express the hope that the objective, at least, should be that at the earliest possible moment these businesses and undertakings should move on to a full commercial basis, with an audit and all the rest of it. I do not think there is much point in pursuing this matter. Does the noble Lord wish to say something?
§ LORD HUGHES
Yes. I think the noble Lord is going to withdraw the Amendment. But before he does so, I should like to remind him that on Second Reading I did say that the intention was that we should expect that the best use of funds would be to offer money on a circulating basis. There have been so many conversations that I forget what I said in the debate and what I said in the Lobby, but we do not expect to use a lot of the Board's money in setting up undertakings which we do not expect to succeed. If we or the Board are persuaded that there is no chance of an undertaking's succeeding, then it will not be set up, because I completely accept the argument which was advanced, that at the end of the day it will not help the Highlands if we set up an undertaking which can continue to exist only by being subsidised from beginning to end. That will be of no use. Therefore, the Board will be setting up only schemes which they anticipate will be a success.
I think that the noble Lord, perhaps rather unwittingly, attributed to me a fear, which underlay what I sought to do, that the undertakings would have something to conceal. That is not the purpose at all, because at the end of the day it will certainly be possible for people to find out from the accounts which undertakings are viable and which are otherwise. On that I can assure the noble Lord. So that it is not out of any desire to conceal information that we are seeking to proceed in this way. My final word on this point before, as I hope, the noble Lord withdraws the Amendment, is that I am quite certain that if the noble Lord had been speaking from these Benches, and moving this Bill, he would have been advancing the arguments which I have put forward in favour of the Comptroller and Auditor-General, and it is not beyond the bounds of possibility that I should have been saying what he has said.
§ LORD DRUMALBYN
I am not quite sure about that last remark. It is an entirely hypothetical argument, and I should not like to say "Yes" or "No" to it. But I might at any rate have tried, perhaps harder than even he did, to convince the Civil Service on this occasion that the right thing to do was to have an audit; because I believe that he probably argued this quite strongly but that cir 1306 cumstances overpowered or over-convinced him in the end, with the result that he is now putting forward this argument. If I remember rightly, the noble Lord, Lord Champion, and I served together at the same time on the Public Accounts Committee, and I would not suggest for an instant that the purpose of this kind of arrangement would be concealment. That is not what I would say at all. I feel that it may have the danger that it will not contain the necessary spur to incentive and profitability. That is why I express the hope once again that the noble Lord might be able to reconsider this. I know that it is a complicated matter; I am not extremely hopeful. If the noble Lord had told us this afternoon that the Board was to be able to borrow on the open market, I should have taken a totally different view. As it is, all one can do is to rest on the assumption he has given, that there will at least be the objective that commercial accounting and auditing will be adopted as soon as possible. In the meantime, I have no option but to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
THE CHAIRMAN OF COMMITTEES
Before I call Amendment No. 39, may I point out to the Committee that No. 39 pre-empts No. 40? In other words, if Amendment 39 is agreed to, No. 40 cannot be called.
§ 9.47 p.m.
THE DUKE OF ATHOLL
Having failed on Amendment 31, I was sorely tempted not to move this one, but I will move it formally. I should like to have a little elucidation about the person who is going to be authorised by the Secretary of State to inspect and make copies of the accounts, et cetera, of the Board. What sort of person does the Secretary of State have in mind?
Page 9, line 17, leave out subsection (5).—(The Duke of Atholl)
§ LORD HUGHES
I am quite certain that if I answered the noble Duke's question by saying, "A perfectly respectable person to whom the noble Duke would take no exception", he would not consider that to be a satisfactory answer. In fact, it would of course be a responsible official of one of the Secretary of 1307 State's departments, qualified to examine these matters. The purpose, of course, was to seek information in connection with the Secretary of State's responsibilities in order to help him to arrive at a proper decision on a proposal. I inquired into this rather carefully this morning, and I wanted to know the extent to which there was a precedent for this sort of thing. It is very regularly done, say, in relation to new town development corporations who may wish to examine particular aspects in detail, and a spot-check may be made on certain items; or the Board may be asked to furnish more intimate details than they normally would do in relation to that particular item. It may be done by an officer going from St. Andrew's House to discuss the matter with the Board's officials on the spot, or it may be accomplished by the information being transmitted to St. Andrew's House. I can assure the noble Lord, returning to my initial facetious comment, that the people who will undertake the job will undoubtedly do it beyond reproach.
THE DUKE OF ATHOLL
I thank the noble Lord for that reply. I was wondering whether "any person" might include a member of Lord Polwarth's institution, or something like that. I gather that it will not. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 13 agreed to.
§ Clauses 14 to 17 agreed to.
§ Clause 18 [Interpretation]:
§ THE DUKE OF ATHOLL moved, in the definition of "land" to leave out "salmon fishings". The noble Duke said: This is a very simple Amendment and it is to alter the definition of "land" contained in Clause 18(1). I wish to alter this definition because salmon fishings are, on the whole, not under-used in Scotland. In fact, I think there are only two rivers which one could possibly describe as being under-used. In most other rivers the opposite is the case, and they are very much overused. Therefore I cannot see that the Board would wish to acquire them in order to increase their use. Secondly, and more important, we are told that the Hunter Committee is going to report in 1308 the very near future. It will undoubtedly make recommendations for salmon fishings over the whole of Scotland, and I feel that if we could get salmon fishings out of this part of the Bill the Government would have an even greater incentive to act upon the recommendations of the Hunter Committee when they are eventually produced.
§ Thirdly, I should like to suggest that, as the noble Lord, Lord Hughes, has already said, land is defined in the Interpretation Act as including buildings but not, so far as I am aware, salmon fishings. So far as I know, salmon fishings are included only in certain Acts which obviously had to include them because they were dealing directly with water, such as the Hydro-Electric Development (Scotland) Act, 1943, and the Land Drainage (Scotland) Act, 1958. In both of those Acts it was obviously advantageous that land should include salmon fishings, because in many cases the salmon fishings would no longer exist when the schemes proposed under those Acts had been completed. So far as I can make out, the Board will not enter into any major hydro-electric works, and I hope it will not engage in any land drainage scheme of such magnitude that it would destroy salmon fishings; if it did, I feel that it ought to acquire them by consent of the owner and not by compulsion. Therefore, I hope that the words "salmon fishings" will be excluded from this Bill. I beg to move.
Page 11, line 16, leave out ("salmon fishings").—(The Duke of Atholl.)
§ LORD BURTON
I must declare a considerable interest in this subject, because I am a director of two salmon fishing companies, one on the East Coast and one on the West Coast, both in the Highlands, and I also own substantial rod fishings. However, my object in getting up is to find out for what possible reason the Board could want to acquire salmon fishings. As my noble friend has said, they are already overused in most cases, and the only possible reason I can think of is that they might be attached to some hotel which was not paying its way, to try to make it pay its way. I think this would be the wrong type of use to put these fishings to, and I should be most grateful if we could get some elucidation as to what other uses they might be put to.
1309 Finally, I feel that the nationalisation of salmon fishing is not a good basis on which to work, as in the cases where they are publicly owned they have been grossly over-used. The Crown Commissioners own a great many fishings around the coast, and I think they let all their fishings on blind tender to the highest bidder, regardless of whether or not they are already over-used. I approached them in one case where I considered fishings were considerably over-used and asked them to join me in stocking a certain river. But they refused to cooperate, because they said that if they started on one river they might have to do it all round Scotland, which I think was a very weak excuse. Another example is a local authority which owns some salmon fishings. They are trying to get as much as they can out of the fishings in the way of rent, and have threatened to open up the nets again which have been off for a number of years.
§ 9.55 p.m.
§ LORD HUGHES
I assure noble Lords that there is no ulterior motive in this. "The definition of "land" as including salmon fishings is well precedented in Scotland. I am not absolutely certain whether Scotland is alone in regarding salmon fishings as not being a separate estate from land, but it is certainly the position in Scotland that salmon fishings are included in "land ". So the definition of salmon fishings as being part of land is not something which is novel. I must admit that it is not in the definition of "land" in the Interpretation Act, so far as I know, but the references which I have given are admittedly the main Acts where there is a reference to water—the Hydro-Electric Development Act, the Drainage Act and the like; but they are not completely confined to that. For some reason, which is not immediately obvious to me, Section 66(1) of the Pipelines Act, 1962, also has some reference to salmon fishings, where they are defined as being part of the land. Whether they contemplated that pipe-lines would be running through salmon fishings in the North of Scotland or not, I do not know, but it is certainly within that particular Act—once again a tribute to the efficiency of the Civil Service in foreseeing all sorts of possibilities, even although they may never in fact take place.
1310 The noble Duke, in speaking to his Amendment, has really spoken—and so also, I think, has the noble Lord, Lord Burton—from the point of view of the compulsory acquisition of salmon fishings; and I may say that I am interested in the fact that the noble Lord, Lord Burton, simplifies these matters even more than I do myself. He has no difficulty in equating compulsory purchase with nationalisation—not always the normally-used definition of nationalisation; but we will not quarrel with him on that aspect. But, of course, the effect of the Amendment would be to deprive the Board of any opportunity of acquiring salmon fishings at all, whether by agreement or by compulsion; and if they were unable to acquire salmon fishings, even by agreement, it might prevent them from acquiring the land itself, because there have been occasions when an owner in whose land a public body has had an interest was prepared to sell only if the body would buy the lot, salmon fishings included. I admit that it has also been very frequently the practice that an owner, having got the price for the land and the salmon fishings, has proceeded to negotiate a lease of the fishings back to himself; so that in many ways he had the best of both worlds.
I would not hold out the possibility that this would happen in relation to the Highland Development Board, because there will not be many cases in which they would be interested in acquiring the salmon fishings as a primary objective; and, if the acquisition of the salmon fishings was only incidental to obtaining the land, it might well be that the easiest way of dealing with the matter would then be to lease the fishings to someone, who might well be the original owner. Although I have treated the matter in somewhat light fashion, that has proved to be the most advantageous way of handling the proposition. So the Board obviously must have power to acquire salmon fishings if it is a necessary part of the operation of acquiring the land.
But, having said that, I would not be prepared to agree lightheartedly that there could be no circumstances in which the acquisition of the salmon fishings themselves might not be part of the Board's procedure, and that it might not therefore be necessary at some point to acquire both land and salmon fishings by 1311 compulsion, simply because there was the difficulty of separating the estate in one from the estate in the other. The noble Lord, Lord Burton, shakes his head. I am afraid that sometimes during the course of this debate I have shaken my head—not because I was unconvinced; but because I did not want to be convinced. I know that on this matter the noble Lord does not wish to be convinced of the validity of the argument; so I write him off in despair. I would remind him that he has half an offer—he should be grateful for small mercies.
I think that the owners of salmon fishings have nothing to fear in this. One would expect it to be unlikely or improbable that the Board would acquire salmon fishing's ever by compulsion; but it may be that salmon fishings would be acquired along with a proposal compulsorily to acquire a piece of land. But it has been indicated, both here and in another place, that it is not the Government's intention that the Board should proceed, except as a last resort, to acquire by compulsion. In fact, the merits of compulsory powers are largely lost if they are used. The real value of compulsory powers (I remember that I indicated this in a talk in the Lobby with the noble Lord, Lord Burton, and others) is to enable the Board to negotiate with somebody who, if there were not the possibilities of compulsory powers, might be completely unreasonable. Therefore, I must ask the noble Lord not to press the Amendment, if only for the first of the reasons I have advanced: that it goes very much further than he intended, in that it would prevent the Board from acquiring fishings from a willing seller.
THE DUKE OF ATHOLL
Of course, I see that argument; and, if I was not aware of it before, I am now aware that if these words were not in the Bill the Board would not be able to acquire salmon fishings, even from a willing seller. I consider this would be a disadvantage to the Board's activities in, for instance, a case where they bought an hotel which had salmon fishing attached. In order to put the undertaking on its feet, the Board would obviously require to buy the salmon fishing also. Therefore, I can see that our Amendment goes too far.
1312 But I wonder whether the noble Lord would consider putting down an Amendment himself—since I could not attempt to draft it—whereby, if salmon fishings were acquired compulsorily for any reason and were afterwards let or leased to someone, the person from whom they were acquired should have the right to lease them back at a reasonable rent. This is, in fact, what the noble Lord said did happen. All I ask is that he should put it somewhere in the Bill. So long as the Board act in a reasonable way and we have a reasonable Secretary of State there is no worry; but one does not know what is likely to happen in a few years' time. As it appears to be the intention of the noble Lord and his right honourable friend that this should be the case, I feel it would be helpful if this were in the Bill.
§ LORD HUGHES
The noble Duke is inviting me to enunciate a new principle—the "Crichel Down Salmon (Amendment) Principle, 1965". I do not think that could possibly go into the Bill; although, as I have indicated, it is a likely way in which the Board could operate. But if this were incorporated in the Bill, I think the noble Duke would realise that it would be very difficult for the Board to extract in the lease what they consider would be a fair rental in return—if it was more or less laid down that the Board could only stipulate a rental acceptable to the original owner. To say that they should be required to lease it back to the owner at a reasonable rent raises the question of who should consider what is a reasonable rent.
THE DUKE OF ATHOLL
I should imagine it would be the district valuer. Presumably he fixed the price at which it was compulsorily purchased in the first place, and I should have thought that he would be the person to fix the reasonable rent in the second place.
§ LORD HUGHES
If I could be sure that we could have the valuer who valued the salmon fishings purchased by the Hydro-Electric Board I should be agreeable to that, but we cannot guarantee that it would be the same person. I cannot refuse to look at this point, but I should not be honest if I invited the noble Duke to place too much hope on what would emerge from further consideration.
§ Amendment, by leave, withdrawn.
§ Clause 18 agreed to.
§ Remaining clause agreed to.
§ Schedule 1 [Provisions as to the Highlands and islands Development Board]:
§ LORD DRUMALBYN
The hour is late and I think it would not be the wish of your Lordships that I should move the last four Amendments to the Schedules. Naturally I reserve the right to put them down again at the next stage. I should like to ask a question about Amendment 43, if the noble Lord would be so kind as to move the Schedule.
§ On Question, Whether Schedule 1 shall be agreed to?
§ LORD DRUMALBYN
Paragraph 12 states:Subject to the foregoing provisions of this Schedule, the Board shall have power to regulate their own procedure and that of any committee appointed by them.I wonder whether the wordswhich may include persons other than members of the Boardshould be added. It is not at all clear that there are powers to appoint committees which would contain members who are not members of the Board.
§ LORD HUGHES
I am grateful to the noble Lord. It was my intention, had Amendment No. 43 been moved, to give the information that the powers given to the Board to regulate their own procedure and that of any committee appointed by them cover the power to bring into membership of a committee people who are not members of the Board. The legal advice is that it is quite permissible for them to do so. They could set up an advisory board consisting of people outside the Board to advise on a particular subject, although I am told that if they did so, it could not properly be regarded as a committee of the Board if it did not include at least one member. What is clear is that in setting up a committee of the Board, the Board will have freedom to co-opt other people into membership. That is a legitimate use of the power to regulate their own procedure and that of any committee appointed by them.
§ On Question, Schedule 1 agreed to.1314
§ LORD DRUMALBYN
I should like, on behalf of all my noble friends and myself, to express our great appreciation of the courtesy shown by the noble Lord, Lord Hughes, throughout our proceedings, our admiration for his staying powers and his ability to remain lucid to the end.
§ LORD HUGHES
I am most grateful to the noble Lord, Lord Drumalbyn. I can assure him that the various things which I have undertaken to look at will be in the hands of the noble Lords concerned in ample time to enable them to decide a course of action for the next stage of our proceedings.
§ Remaining Schedule agreed to.
§ House resumed: Bill reported without amendment.