Lords Sitting of 16 March 1971

Preamble
The House met at halt past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Portsmouth):
The LORD CHANCELLOR on the Woolsack.

ROYAL ASSENT
THE LORD CHANCELLOR (LORD HAILSHAM OF ST. MARYLEBONE): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:
Vehicles (Excise) Act,
Atomic Energy Authority Act,
Hydrocarbon Oil (Customs & Excise) Act,
Buckinghamshire County Council Act,
Southampton Corporation Act.

NAPALM WEAPONS: GENEVA CONFERENCE
2.32 p.m.
LORD REA: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will take steps to seek international co-operation in the outlawing of napalm as an anti-personnel weapon.]
EARL FERRERS: My Lords, the question of the use of napalm in armed conflict was among a number of subjects considered recently by the United Nations Secretary-General in his two reports, Respect for Human Rights in Armed Conflicts. It was suggested in particular that the Secretary-General might be asked to prepare, with the assistance of qualified experts, a study on napalm weapons and the effects of their possible use. The Secretary-General's two reports will be discussed by a conference
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of Governmental experts to be held in Geneva this spring under the auspices of the International Committee of the Red Cross. Her Majesty's Government have accepted an invitation to participate in the conference.
LORD REA: My Lords, I thank the Minister for that Answer, which I must say gives me much more pleasure than I feared I should get. May I assure him that any move in this direction which Her Majesty's Government take will be very much supported by members of all Parties throughout the country?
LORD DAVIES OF LEEK: My Lords, does the noble Earl realise that many of us, in all parts of the House and throughout the country, can see no difference whatsoever between napalm being dropped upon poor, underprivileged people and mediæval stories of people being burned at the stake? Nay, it is worse; and I hope that when our Party go forward in Government they will have the courage to speak out vociferously against this weapon, which I consider one of the greatest evils of modern times.
EARL FERRERS: My Lords, I realise that the view which the noble Lord has expressed is widely held. I would only say that, as a weapon, napalm is not in itself necessarily considered bad; but the method by which it is used is.
LORD WYNNE-JONES: My Lords, will the noble Earl bear in mind that in this House on a previous occasion there was very considerable feeling about the whole business of chemical and biological warfare, of which napalm is a part; and would he make certain that the Government take every action to discontinue its use, and encourage other countries to do the same?
EARL FERRERS: My Lords, I think it would be fair to say that it is not always accepted that napalm comes under the category of chemical and biological weapons. But it would be premature for the Government to make any statement such as the noble Lord suggests until they have seen the report of the United Nations which is being discussed, as I said originally, by the International Committee of the Red Cross.
LORD WYNNE-JONES: My Lords, napalm is almost certainly a chemical.
EARL FERRERS: But it does not necessarily come within the strict definition of chemical and biological warfare.

M.I.D.A. STUDY
THE EARL OF LAUDERDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what are the terms of reference of the MIDA study announced to the Press on February 22 and to Parliament on March 2, which Department of State will provide the study's chairman and services and which Departments will be represented on it.]
EARL FERRERS: My Lords, the study announced on February 22 will form an integral part of the Government's location of industry research, and the terms of reference are:
"to assess the likely long-term needs of bulk processing industries for coastal sites adjacent to deep water".
Because the study is essentially concerned with industrial matters, the Department of Trade and Industry is taking the lead. The other Government Departments represented on the Working Group are the Treasury, the Department of Employment, the Scottish Office, the Department of the Environment and the Welsh Office. The Northern Ireland Government and the National Ports Council are also represented.
THE EARL OF LAUDERDALE: My Lords, in thanking the noble Earl for that reply, may I first of all congratulate him on the Government's decision to relate this study to the location of industry policy? May I ask him whether the study now proposed is not going to be rather cumbersome to the extent of delaying work; and could be tell us, since he assured us a fortnight back that work would start immediately, how many times the Study Group has met since the Government's decision was announced three weeks ago?
EARL FERRERS: My Lords, I do not think my noble friend is right in saying that the study will be cumbersome. The whole object of it is that it will be a
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quicker study than would otherwise have been used, and it will be more directly related to the Government's statutory responsibilities. I cannot give my noble friend the answer to his second supplementary question, but I will obtain the information and let him know.
THE EARL OF LAUDERDALE: My Lords, may I ask the noble Earl whether he is not aware that it is widely supposed that this Study Group has not yet met, and that some people are getting impatient to see work begun?
EARL FERRERS: My Lords, I was not aware of that, but I will pass on to my right honourable friend the views of the noble Earl, and will let him know what the situation is.
VISCOUNT ST. DAVIDS: My Lords, will the noble Earl speed this matter up a little, as this has quite an important bearing on what happens in relation to our next major airport? That the Port of London is slowly dying is clear from the fact that it is silting up and is becoming too small for modern ships. It is evident that if we are to have a major port in the South it must be something on these lines. Will the noble Earl consider speeding up this study so that it can be assessed in the matter of the Port of London and Foulness?
EARL FERRERS: My Lords, I can assure the noble Viscount that this study is being carried out with a degree of speed. The whole purpose of it is that it should be quicker than the previous study.
LORD SHEPHERD: My Lords, how can the noble Earl assure the House that it is being done with great speed when he was unable to answer his noble friend's question as to how often this particular committee had met?
EARL FERRERS: My Lords, the answer was relative. I do not think that speed can necessarily be judged by the number of times the committee has sat specifically in the last three weeks.

ACNCER: INCIDENCE, TREATMENT AND RESEARCH
2.38 p.m.
LORD LEATHERLAND: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will issue a short White Paper or similar document, at a conveniently early date, dealing with the increasing incidence of cancer, and including—in laymen's terms—such information as:—

(a) the yearly number of deaths from this cause during the last thirty years;

(b) the number of fresh cases known to come under medical super vision each year;

(c) an analysis of the foregoing figures to show the various types of cancer, or the parts of the body affected;

(d) a short summary of the methods of treatment employed in various forms of cancer, together with an indication of the degree of success achieved;

and whether they will say whether extra money for research in British institutions and in collaboration with other countries (in addition to that already provided by the Government and by charities) could hold out hope of improved results; and if so, whether, by grants from the Exchequer or by means of a special cancer stamp to be affixed half-yearly to the National Insurance card, they will arrange for this money to be provided.]
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, the Registrar General for England and Wales publishes figures of cancer deaths in his Annual Statistical Review, and the supplementary volumes give numbers and rates for registration and survival. So far as the complexity of the subject permits, all the statistics and analyses are set out as simply as possible. My right honourable friend the Secretary of State for Social Services does not believe that this complex sub
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ject could be adequately treated in a single publication of the type the noble Lord has suggested.
With regard to the second part of the noble Lord's Question, the whole field of medical research, including cancer research, is kept under continuous review by the Medical Research Council to ensure that funds are distributed to the best advantage among scientists who are working in areas of particular promise. Cancer research is regarded by the Medical Research Council as being relatively generously supported at the present time in relation to other areas of research. I will write to the noble Lord more fully, if I may, on some aspects of his Question.
LORD LEATHERLAND: My Lords, I thank the noble Lord for his reply, and will await his letter before pursuing the matter further. But perhaps I may ask him whether he does not think that the general tone of his reply was in the nature of indicating that sufficient is being done at the present. May I ask him whether he considers that sufficient is being done at the present; whether he does not think that there may be a shortage of men, and that this can be overcome by creating a number of fellowships and professorships? Further, does he not think that if more money is made available more work can be done?
LORD ABERDARE: My Loris, this is an almost impossible question to answer. More money could indeed be used in certain areas. For example, one project which is under consideration is the rebuilding of the Institute for Cancer Research. That is a large capital project which would be of use. So far as immediate research is concerned, the Medical Research Council feel that cancer is already getting more generous treatment than some of the other fields of research. If more funds are developed for cancer research it may well mean that skilled manpower is diverted from other fields. There may in the future be need for more money in particulary hopeful lines of research in cancer.
LORD LEATHERLAND: My Lords, I thank the noble Lord, and I will await his letter before taking the matter further. But I must say that his reply did not seem to be as satisfactory as I had expected.
LORD RAGLAN: My Lords, will the noble Lord let us know how accurate are the diagnoses of the causes of death, and whether they are accurate enough to compile the kind of statistics that my noble friend requires?
LORD ABERDARE: My Lords, I should have thought that the diagnoses for deaths from cancer were, on the whole, very accurate.
LORD GRIMSTON OF WESTBURY: My Lords, my noble friend referred to the complexity of this subject. Has he observed the contradictory nature of some of the propaganda that comes out in connection with smoking and lung cancer? Is he aware that for some time it was said that cigarette smoking is the most harmful, whereas in the last few weeks in the Press statements have come out to the effect that this is quite wrong and that cigar smoking or pipe smoking is even more dangerous? Is it not necessary to look at the propaganda coming out, in case it should fall into disrepute?
Loan ABERDARE: My Lords, my information is that cigarette smoking is more dangerous than pipe smoking or cigar smoking. But perhaps my noble friend would like to take part in the debate to-morrow.
THE MARQUESS OF SALISBURY: My Lords, is it not a fact that, apart from what the Government are doing in this field, the Imperial Cancer Research Fund and, I believe, the British Empire Cancer Campaign for Research are doing most valuable work, and are spending large sums of money provided by the public?
Loan ABERDARE: My Lords, I am grateful to my noble friend. That is quite true. The Cancer Campaign for Research and the Imperial Cancer Research Fund are both devoting considerable sums of money to cancer research; and the encouraging thing is that these two bodies have got together with the Medical Research Council and have recently set up a joint co-ordinating committee to co-ordinate research into cancer.

HAVERHILL TRANSPORT SERVICES
2.44 p.m.
LORD GARNSWORTHY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they consider the public transport services at Haverhill, West Suffolk, provide adequate lines of communication with other centres of population and, if not, what proposals they have for improvement.]
LORD MOWBRAY AND STOURTON: My Lords, the provision of public transport for Haverhill is in the first place a matter for the local operators, and for the local authorities who have powers to assist essential services by rural bus grant. The Government will normally reimburse half the local authorities' expenditure. My right honourable friend is also conducting a pilot study in West Suffolk, including the Haverhill area, of local needs.
LORD GARNSWORTHY: My Lords, I thank the noble Lord for that Answer; but it does not really give much information. May I ask whether he considers that one bus a week in winter and two buses a week in summer to the county town of Bury St. Edmunds is providing anything approaching an adequate service?
LORD MOWBRAY AND STOURTON: My Lords, my information is that to Bury St. Edmunds there is a bus on Wednesday and Saturday, which is two a week each way. But this is really a matter for the local authorities. If they wish their people to have more buses they are in a position to implement that wish.
LORD GARNSWORTHY: My Lords, I should like to ask the Minister whether he is aware that owing to the unbalanced development as between industry and housing in Haverhill the domestic rate is already extremely high? Have the Government no interest at all in assisting this town to expand to the figure of 12,000—which was the figure indicated by his noble friend a few weeks ago as being roughly the target aimed at?
LORD MOWBRAY AND STOURTON: My Lords, I do not accept that the increase in population is going to depend on the local rail and bus services. There are already over 11,000 people in this town and Haverhill Urban District Council at the moment are spending about £1,178 on grant, half of which my right honourable friend meets. The West Suffolk County Council also subsidise the Haverhill bus services, so half the cost again is met.
LORD GARNSWORTHY: My Lords, may I ask the noble Lord whether he considers that the inadequate transport services may account, partly at least, for the considerable number of people who leave Haverhill, finding it unsatisfactory?
LORD MOWBRAY AND STOURTON: My Lords, this is another matter that I think the transport studies which are going on at the moment will show up. We hope to have these studies completed in April or May this year—that is, in the next eight weeks—after which we shall be in a much better position to see what recommendations are made to the Government which will be a guideline for the country as a whole.
LORD GARNSWORTHY: My Lords, may I finally ask whether the noble Lord would draw the attention of the study group to the fact that to travel the 15 miles to Bury St. Edmunds by taxi costs nearly £3?
LORD MOWBRAY AND STOURTON: My Lords, I am sure they will be aware of that.
LORD WYNNE-JONES: My Lords, does the noble Lord mean that it is Government policy that as the population expands, more people should walk?
LORD MOWBRAY AND STOURTON: No, my Lords.

CUMBERLAND RIVER AUTHORITY BILL
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWEL): My Lords, I beg to move that this Bill be now read a third time.
Moved. That the Bill be read 3a.— (The Earl of Listowel.)
LORD KENNET: My Lords, on the Second Reading of this Bill, some of us were a little disturbed about the question of the amount of mud that would be exposed around Bassenthwaite Lake when the level was drawn down. The Promoters at that time were not able to tell the House the number of days on which the water in Bassenthwaite Lake would, under the scheme promoted by the Bill, he drawn down to the maximum extent, but only the number of days on which it was drawn down at all. It was obvious that some of those would be minute depressions of only a few inches which would make no difference to the borders. Since then I have been able to obtain from the consulting engineers employed by the Promoters an estimate of the number of days on which one would get a material draw-down which would expose mud on the shores, and I think the House may be interested to know this.
During the ten years that the scheme is to be in operation, the water will be drawn down from its maximum level on about 120 days—that is, drawl down at all, by however little. It will be drawn down to its maximum extent, about two feet, for only two or three days in the ten years. It will be drawn down to a middle distance, about one foot below the proper high level on only about twenty days during the ten years. These strike me as being very favourable figures, about which the amenity interests should not be bothered at all. It might have been to the advantage of the House if we had had these figures earlier, but I am glad that we have them now.
THE EARL OF LISTOWEL: My Lords, I am sure the House will be grateful to the noble Lord for this information.
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

RENT (SCOTLAND) BILL [H.L.]
LORD MOWBRAY AND STOURTON: My Lords, on behalf of my noble friend Lady Tweedsmuir of Belhelvie, I beg to moved that this Report be now received.
Moved, That the Report be received—(Lord Mowbray and Stourton.)
On Question, Motion agreed to.

COAL INDUSTRY BILL
2.50 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Drunzalbyn.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clauses 1 and 2 agreed to.
LORD DIAMOND LORD DIAMOND moved Amendment No. 1:
After Clause 2, insert the following new clause:
Extension of power to compensate electricity generating boards for using coal instead of another fuel
".—(1) The Secretary of State may make payments to the Central Electricity Generating Board, the North of Scotland Hydro-Electric Board or the South of Scotland Electricity Board reimbursing the amount by which the costs incurred between 31st March 1971 and 1st April 1974 by that board in using, in pursuance of an arrangement with the Secretary of State, coal for the purpose of generating electricity exceed the costs which would have been so incurred if that board had used another fuel for that purpose.
(2) For the purposes of subsection (1) above, the amount of any costs which have, or would in the circumstances there mentioned have been, incurred by a board shall be determined in such manner as may be agreed between the Secretary of State and that board, with the approval of the Treasury, and shall be certified by that board's auditors.
(3) The aggregate amount of the payments made under this section shall not exceed £30 million."
The noble Lord said: I beg to move the first Amendment standing in my name and that of my noble friend Lord Delacourt-Smith. The purpose of this new clause is described in the side-note. It is to extend the power to compensate the electricity generating boards for using coal instead of another fuel. This is not a request to the Government to exercise a power, but rather to take upon themselves the power to do something. This power has been used in the past and exists in the legislation which is current
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and which will be continued by the Bill now before us. The power would have been renewed had we had before us the Labour Government's Bill upon which the Bill that we are now discussing is framed. It is a power which, I am suggesting to your Lordships, is a wise power. Although your Lordships may say that there is not a great deal of point in having a power appropriate to a coal surplus situation when we are in fact in a coal shortage situation, I would remind your Lordships that it is very difficult to forecast how long a period either of surplus or of shortage will continue.
It was but two or three years ago that everyone was satisfied that the coal surplus situation would continue; now we are in the reverse situation, and the noble Lord, Lord Drumalbyn, told us on Second Reading that the current situation of shortage is likely to continue for two years. About that I have two things to say. First, not even the noble Lord would claim all knowledge in forecasting when a situation will change, because Ministers have attempted to do that and have been wrong. The other point I would make is that even if the power is taken, it does not need to be used. But it will be an assurance to all those in the coal industry, all the miners who are being asked to work ever more efficiently to get ever more coal, that by doing their national duty they will not be working themselves out of their jobs. That is very important from the point of view of those who have suffered for years and years from the effects of working in a contracting industry. It is a problem which has been regular and permanent in their daily lives and thinking.
I suggest, therefore, to the noble Lord, Lord Drumalbyn, that he should be willing to accept the Amendment. Perhaps the words are not right, but I think that this clause is precisely the one which appeared in the Labour Government's proposed Bill. I suggest that the noble Lord should be willing to take this power, or, at all events, to give us a satisfactory assurance about the matter. I say "satisfactory assurance" because I realise that there is a slight technical difficulty involving a sum of £30 million, and no one could be more aware of such a little local problem involving £30 million than I have been trained to be. So I say to the noble Lord that, given

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the little assistance that I require from him, we could so easily get out of this little technical difficulty. All he has to do is give me a satisfactory assurance in relation to the Government's future action about including a clause of this kind in the Bill at an appropriate time. I would then, of course, resolve the problem by seeking leave to withdraw the proposed new clause.
I have put the matter shortly because I have already made a speech about this matter on Second Reading, and I do not wish to delay your Lordships unduly, especially as I know that many of my noble friends feel as intensely as I do on this topic and no doubt would wish to address your Lordships upon it.
LORD TAYLOR OF MANSFIELD: When we debated this matter on Second Reading the question of coal-burn was much to the fore. We said then that we would return to the matter on Committee stage. In supporting my noble friend Lord Diamond, the first thing I wish to say is that in no way does this proposed new clause establish a new principle. It was included in the Labour Government's Bill of 1967, and also in the 1970 Bill. The clause is omitted from this Bill, and there must be a reason for that. The noble Lord, Lord Diamond, said on Second Reading that this was one of the "sins of omission" regarding this Bill. I have read the arguments advanced by the Minister in another place to justify the omission, and I have also refreshed my mind about the remarks of the noble Lord, Lord Drumalbyn, who had something to say about this matter during the Second Reading debate in your Lordships' House.
The noble Lord opposite said he could understand the disappointment of noble Lords on this side of the House, and the reluctance of some of us to accept the omission from the Bill. He went on to say that the view of the Government was that the risk was not sufficient to make it worthwhile to include the clause. He gave an assurance—it was also given in another place—that if the Government felt it desirable or necessary, they would reconsider the matter. That, briefly, is the history of the events relating to this proposed new clause.
If the circumstances which operated after the 1967 Bill did not occur again,
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and the Government are of opinion that they are not likely to do so in the foreseeable future (that, of course is speculation; because no one knows how it might turn out) putting this clause in the Bill would imply no risk at all, and no harm would be done. As was explained on Second Reading, although this; is referred to as an insurance scheme against certain things happening, no expenditure is incurred and no premium will have to be paid. If certain circumstance emerge, and if this clause is put in the Bill, the Government will have authority, without having again to seek the approval of Parliament, to undertake what they say they would do in the event of its being considered desirable and necessary. This clause was a useful addition to the 1967 Bill. In the immediate period after 1967 to the coal industry it was of great assistance.
May I, for the sake of the Record, quote the extent of the assistance which this clause meant so far as the coal industry was concerned just after 1967? In the following year the then Government, the previous Government to this one, supported coal-burn power stations and gas works to the extent of 7 million tons. What did that mean in human and in physical terms? In human terms it meant the preservation in the mining industry of 15,000 jobs; it prevented the closure of at least 15 pits. The blow to the industry in terms of manpower and output on the basis of those statistics, may I suggest to your Lordships, was considerably softened and it was a good thing that the principles of this clause were embodied in the 1967 Measure.
All that this clause would mean, as I see it, would be this. It would be a stand-by in case circumstances emerge peculiar to those that existed in the coal industry from 1957. We all know the size of the contraction that took place during those ten years that I have mentioned. This went on with increasing momentum, and after 1967 the principle of this particular clause saved 15,000 jobs.
We are in Committee and are negotiating on certain principles. There is a certain art in this business of negotiation and I should like to strike a bargain with the noble Lord. Speaking for the Government on Second Reading he said:

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"I do not see the necessity for this clause". I am sure he believes that, but I do not see the necessity for Clause 7 in this Bill. That will be the subject of debate a little later on, and the offer I make to the noble Lord is this: if he, on behalf of the Government, will withdraw Clause 7, then my suggestion and advice to the noble Lord, Lord Diamond, would be that he withdraws this clause. That, I think, is a reasonable offer, and if it is accepted it will be a victory for the art of compromise in this delicate question of negotiation. I have great pleasure in supporting my noble friend Lord Diamond.
3.3 p.m.
LORD SLATER: I rise to support my noble friends Lord Diamond and Lord Taylor of Mansfield in the introduction of this new clause. This is not something new that is being brought forward. In introducing the Second Reading of the Bill to your Lordships, the Minister said that he was aware of the sentiments expressed—repeated to-day by Lord Taylor of Mansfield—in regard to what we call this coal-burn clause. With the demand for coal exceeding production, according to the Government the support measures, one of which was to save the coal to be used at the power stations and gas works, should not be provided for in this Bill. I would ask the noble Lord to note that the Minister, on behalf of the Government, used these words:
"… should coal again move into surplus, the Government will consider reintroducing this power."—[OFFICIAL REPORT, 4/3/71; col. 1491.]
I direct my question to the noble Lord who is to reply to the debate: why should we consider it? Why not leave the power in the Bill, as it was in the previous Bill proposed by the previous Administration? We have seen over the years that the Ministry of Fuel and Power have been wrong in their forecasts as to what the tonnage produced would be for a particular period. They have constantly been wrong in their estimates. I am sorry to have to say this and I do not say it as a means of discrediting those responsible for advising the Minister as to the tonnage that would be produced within a given year by the mining industry. In my opinion, it might have been more to his credit if he had taken more notice of those who work in the industry and heard
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what their particular assessment would be. At different periods coal stocks could be high; but, on the other hand, coal stocks could be low, as they were this last year. But it could happen again, with the production of coal by the new methods that have been introduced into the mining industry, that production will rise tremendously.
If noble Lords will reflect, they will remember that over the years since nationalisation stocks have been so high that managements and collieries have had to find grounds within their respective areas to dump the coal, until we have had millions of tons actually lying unused because of lower consumption. I well remember one particular area which had been seriously affected by the closing of pits. We agitated with successive Governments and with the C.E.G.B. for a coal-powered power station to be built in that particular area, but the answer eventually was in the negative. To-day we find a nuclear-powered station being built within a coal-producing area.
The Minister, Sir John Eden, said in Standing Committee B on this Bill that the prospects ahead of the coal industry are of a secure and substantial market. The fact is that at present there is not enough coal to meet demand. If the forecast for next year is correct, the position will be just that. But it ought not to be forgotten that while coal stocks last year stood at 7½ million tons, in the previous year they stood in this country at 20 million tons. So your Lordships can see the disparity between year and year and what can happen over a period of twelve months. In 1973–74 the position could be reversed, and instead of a decline we might well see an improvement in the output of the industry. It ought not to be overlooked that if the rate of production in other types of industry had been rising at a similar rate we should not be in the serious economic position that we are to-day.
I would ask the Government whether they have in mind the same aims and objects as the last Government. Can the Minister tell us what is the Government's attitude to the conversion of power stations to oil? Can he tell us that no further conversions away from coal will be sanctioned where there is a permanent loss of outlet for the coal market? If widespread conversions were to take

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place, the coal market would be affected and the shortage that we are experiencing at the present time could change to an excess of supply. If possible, I should like to receive an assurance on this point from the Minister when he comes to reply. If we do not get an assurance, then—and I say this most seriously—it must mean that the statement made by the Minister to which I have referred counts for very little indeed.
This makes it all the more important that the Amendment moved by my noble friend to insert this new clause, which would give the guarantees that we seek, should receive the full support of the Committee. I take the view, as an exminer—and I am not ashamed of being an ex-miner—that the planners, who seek to work to the slide-rule principle in this basic industry, have been proved wrong many times. If I, as an ex-minter, had to choose between the planner's forecast of coal production from a particular mine, and that of the colliery manager who is responsible for the day-to-day working of the mine, then I would choose that of the colliery manager. Why should I do that? My reason is simple. It is the colliery manager who is more conversant with the difficulties to be faced and what will have to be done to overcome them. In other words, he is the one who possesses the practical knowledge from the day-to-day reports that he receives from his officials.
In view of such belief, I have often wondered over the years whether, if due consideration had been given to the opinions of such men, so many pits would have been closed. However, these closures have taken place. I say to noble Lords that in many of these pits that have been closed there are millions of tons of coal that will never be extracted, because it would take too much capital as a form of investment to extract that coal which has been left underground. If the Government want to show goodwill to the coal industry and to the miners, they ought to accept this Amendment. Noble Lords are well aware of what this new clause seeks to do, and I hope that the Committee will pass the Amendment.
3.15 p.m.
LORD DAVIES OF LEEK: Just 120 pregnant seconds of your Lordships' time. I do not want to reiterate any of the
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arguments that have been made, because the purpose of the clause is obvious. I stand as somebody who comes from among the mining families in Wales to support this clause for a reason that has not yet been mentioned. I sincerely believe that this country should think of the social furniture that it has. We have destroyed much of the social furniture in the form of railways, because we work too often with computers. We have destroyed pits, where there is valuable coal, because we have depended on computers.
I used the phrase the other day "crackpot realism". I can give your Lordships an exact example of what I mean by the closure of pits and the use of computers. If you were offered two watches, one that lost two minutes a day and another one that does not go at all and cannot be repaired, and you asked the computer which was the best watch to buy, the computer would reply, "Buy the one that stops, because at least twice in 24 hours it is correct, whereas the other one is only correct once in six months". This is the kind of silly answer that you can get from a computer and if you do not use common sense.
It is a little common sense that I want to apply in this respect. We have seen in the papers this morning about blackmail in regard to the price of oil. I think that we ought to have a little bargaining power about our energy resources. Nye Bevan once said that we are surrounded by fish and live above millions of tons of coal, but we do not seem able to organise either of them. I believe that in this transitional period, before the Government say, "Nay", they should take this clause back, having listened to the speeches that have been made, because behind the speeches, too, is the necessity for us to have recourse, in the event of emergency, to other forms of energy. Besides that, if you want to recruit these magnificent men (and they are great men; they may not be literate in the sense of some noble Lords in this Chamber, but literacy is not wisdom), always remember that when Solomon in the Book of Kings was offered a choice he did not ask for cleverness; he asked for wisdom. Wisdom we find galore among the miners of this country; and when there has been a crisis, these are the men to whom we have turned for energy supplies.

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Do not let us destroy this great piece of social furniture too quickly in this transition to this euphoric Utopia that all kinds of people have been trying to discover, with all the problems of inflation, since the May Report of 1930. And the truth is that nobody has a clue to the answer. I am certain that at the moment we are destroying some of our social furniture by closing pits too quickly, when with a little aid and commonsense they could be kept open as a bargaining power for energy for the future.
3.19 p.m.
LORD DRUMALBYN: The debate on this Amendment, which was very succinctly introduced by the noble Lord, Lord Diamond, has ranged rather widely. Perhaps it might be expedient therefore if I start by reminding noble Lords of what was in the 1967 White Paper about the objectives of energy policy, which were to make possible the supply of energy at the lowest total cost to the community having regard to the whole range of economic, social and regional considerations. The reason why the Government payments for extra coal-burn were introduced in 1967 was that stocks were rising at the time, and also that it was thought no longer desirable that the extra cost of using coal, as against oil, should be borne by the consumers of electricity and gas.
The Government therefore decided to introduce the extra coal-burn provision. They decided to provide up to £45 million over three years and eight months, to March, 1971, to meet the additional cost of burning coal instead of oil. In the end, perhaps I may remind your Lordships, about 12½ million tons of extra coal was burnt at power stations at an average extra cost of about £1·50 per ton. There was also about 1½ million tons that was burnt at gasworks, but at much higher cost. Perhaps I should say to the noble Lord, Lord Slater, in passing, that the Amendment does not deal with gas; it deals only with electricity.
In 1969 the scheme was phased out because coal stocks were declining. Nevertheless, as noble Lords have reminded me, the last Government decided early in 1970 to make further provision for extra coal-burn, but for electricity
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only. Since then it has become clear that we are facing a shortage which is likely to persist for at least the next year or two. The National Coal Board's planning is aimed at keeping production in balance with demand. What the demand will be depends on how competitive coal is in comparison with other fuels—and, of course, the cost of other fuels has been rising more rapidly than that of coal.
Besides maintaining that balance, the National Coal Board at the present time have also to build up winter stocks of coal. Last December it looked as if stocks might be insufficient, and permission was therefore given for the import of coal on open general licence. Imported coal is dearer than home production, so that imports are unlikely to continue once home stocks are available to meet demand. If the shortage abroad persists, we in turn should be able to export more if there is no fear of a shortage at home. The purpose of the extra coal-burn subsidy was not to enable uneconomic pits to be kept in production; it was to reduce excessive stocks. In the judgment of the Government, the risk of excessive stocks in the next two years or so is too slight to justify renewing the provision.
I hope the noble Lord will take note of what I have to say now. The Government recognise, with the noble Lord, Lord Diamond, that the position could change within 18 months or so. Productivity might regain its average annual rate of increase over the past 10 years of 4¾ per cent. We might be free from strikes, which lost us 3 million tons of coal both last year and this year. Next year we may have an even milder winter than this one. These are the considerations that arise. But if the position did change—this is the real point in this Amendment—there would be no sudden emergence of an intolerable burden of over-supply of coal. If stocks show a tendency to increase beyond a reasonable level, then action can be considered. The Government have given an assurance, which I now repeat, that they will consider reintroducing these powers if we once again find that we have too much coal instead of, as at present, too little. The Government believe that there is even less need for this provision than there was a year ago.

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I think that the noble Lord, Lord Diamond, really put his finger on the point here. I always admire the honesty of his approach to these matters. The fact is that it does not make sense to put on the Statute Book a provision authorising expenditure up to £30 million in the next three years for a particular purpose when all the signs are that not one new halfpenny of it would be spent. If the situation changes, then the Government, in the period when the situation is changing, will be prepared to reconsider introducing the provision. But in the present circumstances I suggest that it would be paradoxical to commit the country to a potential expenditure of £30 million over the next three years when there does not appear to be any likelihood that it will be required.
LORD TAYLOR OF MANSFIELD: May I ask the noble Lord a question? Does he take up the offer that I made to him?
LORD DRUMALBYN: The noble Lord may have thought that it was a generous offer. I am afraid it was not one that I should feel able to consider in the circumstances.
LORD DIAMOND: I was hopeful that the noble Lord would address himself to the essential arguments. I regret to say, with the greatest respect, that he has failed to do that. The essential point is that, broadly, the two sides are agreed on the facts. One fact is that it is impossible to say whether these powers will be needed or not. What I should have thought the Chief Whip could say is that he could not by any means guarantee to get a Coal Bill through both Houses every 18 months. That, I should have thought, was the second fact.
A third fact is that this proposal need cost absolutely nothing. The noble Lord has misunderstood the £30 million if he regards it as a cost of £30 million. The £30 million is a ceiling, because he and I both dislike open-ended commitments. Therefore, instead of providing an open-ended commitment on a power which exists to-day, as the noble Lord sits there and I stand here; instead of providing an open-ended commitment by way of a continuation of that power, the Amendment suggests that there should be a ceiling of £30 million. I repeat that the facts are that these powers may be needed, and
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nobody can foresee the position further ahead than 18 months. Against a background of existing legislative difficulties in both Houses, it is absurd to suggest that any Government can guarantee that every 18 months there will be introduced a new Coal Industry Bill in order to provide the powers.
The present proposals need cost absolutely nothing. What is provided, at no cost at all, is reassurance in an area where, with the greatest respect, the Government ought to wish to seek to give reassurance—that is, in the area of industrial relations, where the Government could not claim at the moment that the country is in its happiest situation. My noble friend made it clear what the attitude of the mines and the miners is.
LORD ROBBINS: I wonder whether the noble Lord, Lord Diamond, could provide some elucidation on this matter. I am perplexed at the exchange of views which has just taken place. Could the noble Lord outline the conditions in which he would think that these powers would be needed? It would help me a great deal if he could give a concrete example.
LORD DIAMOND: With the greatest of pleasure. The powers would be needed in the same conditions as those in which they have been used. I am sorry that I did not make it perfectly clear that they had been used in the past two years. These powers would again be used, and we should obviously wish to use them if the situation were such that it was worth while to import coal even though there was an excess of coal production in this country—that is, worth while taking all considerations into account. These are the considerations which were in the mind of the last Government, and which are not denied by the present Government—
LORD ROBBINS: Does the noble Lord—
LORD DIAMOND: I will give way in just one moment. The present Government are not suggesting that these powers could not be needed; they are suggesting that these powers will not be needed for 18 months. And I have the noble Lord's assurance that if they are needed the matter will be considered. All I am saying to the noble Lord who has spoken

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for the Government is that he is incapable of giving a guarantee that that consideration will move to legislation. Therefore the present position is unsatisfactory.
LORD ROBBINS: Does the noble Lord mean "worth while" in the long term sense of the term, or simply in order to meet a transitory situation?
LORD DIAMOND: Nobody can say whether a transitory situation arises with regard to the winning of coal. That has been the great difficulty. Everybody has been advised, Ministers have made statements, and nobody knows with certainty what the position will be in 24 months' time. The relevant Minister of the previous Government and the relevant Minister of this Government have taken up an identical attitude; namely, that the policy must be one of flexibility. That is precisely the word used by each Minister on the appropriate occasion. All I am saying is that "flexibility" means taking these powers which enable you to do something you may want to have done, without which powers you could not do it, without which you could not guarantee the necessary Parliamentary time for legislation to get it done, which cost nothing in the meantime but give an assurance in an area where assurance should be given. That assurance is that the Government are considering the attitude of important workers down the pits. This is something the Government can get for nothing, and if the Government are not prepared to make use of it I am bound to say they are disregarding their responsibilities in a way which I myself could not find acceptable. I hope that the noble Lord will move a little further.
LORD WRIGHT OF ASHTON UNDER LYNE: There are apparently two sides to this case. One is the sociological problem of the coal areas. This is a social problem. But the other one is a commercial problem for the Central Electricity Generating Board. It is perfectly understandable that, if there be a surplus of coal, some subvention may be needed in order to encourage people to use it. Such action would be taken for social reasons, and is understandable. But the Central Electricity Generating Board are in effect having to pay very large sums, without a subvention. If this
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Amendment is not accepted, we shall be in the position that there may well be a shortage of coal—although in the long term, of course, it is very "dicey" and difficult to estimate—and the Central Electricity Generating Board will have to continue to burn coal at the Government's expense without receiving the allowances they are already receiving—
LORD DRUMALBYN: It would be right for me to intervene, I think, if the noble Lord will allow it. The Electricity Boards are not having to pay this charge at the present time because they are not burning coal uneconomically in a way which is not in accordance with their plans.
LORD WRIGHT OF ASHTON UNDER LYNE: May I put the point I am thinking of in the form of a question? As I understand it, the Central Electricity Generating Board have from time to time asked the appropriate Ministers for permission to change over from coal to oil or to gas, and permission has been refused. The Government have insisted—maybe properly in the social context—that they must continue to burn coal for social reasons. If social reasons no longer apply but the C.E.G.B. must still continue to burn coal, a hardship is caused which does not seem to make a lot of sense. Because of the circumstances which the Minister has described concerning a shortage of coal, would the appropriate Minister now be ready to say to the C.E.G.B., "In the circumstances which were explained to the House of Lords on such-and-such a date, the Government now give you permission to burn more oil and more gas, and less coal, because the supply of coal is not adequate"?
LORD TAYLOR OF MANSFIELD: I was interested in the point which the noble Lord, Lord Robbins, raised. I understood him to ask whether the noble Lord could see an eventuality when we might return to the conditions immediately post-1967. What I am going to say now is an assumption, and perhaps a rather unimaginative one, but not outside the realm of possibility. Supposing there is an influx of miners into the pits. The Coal Board are now actually conducting a campaign to increase manpower in the pits. I was told only a fortnight ago by a noble Lord that this was

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taking place even in Norfolk. Therefore, supposing there were an influx into the pits and productivity increased and, as a consequence of that, global output increased. Then the eventuality of supply being greater than demand might arise. It is because of this possible eventuality that we should like to see this particular clause in the Bill.
3.35 p.m.
LORD DRUMALBYN: We are getting into considerable complications on this matter, but perhaps I may reply first to the noble Lord, Lord Wright of Ashton under Lyne. He is right in saying that from time to time permission to convert to oil is refused by the Secretary of State. As my honourable friend said in another place, however, there were seven conversions to oil in the last year of the previous Government, and another seven have been authorised since. In each case one of them—I think, the largest in each case—was conversion to dual-firing. But the whole of this question of keeping supply and demand in line must depend to a large extent on the degree to which the price of coal is competitive. We know that the price of oil is going up quickly. It went up 60 per cent., as against the price of electricity coal which went up 28 per cent. in a comparable period over the last year or so. So the demand for coal is likely to be relatively greater because the price of coal is now more competitive. Therefore, the points which the noble Lord, Lord Taylor of Mansfield, has been making are to some extent met by the state of the market.
What we are concerned with in this Amendment is the stocks. Naturally, it is impossible for the Coal Board exactly to balance supply and demand over a period, and in so far as they do not balance them stocks are drawn down or are increased. When they are increased to an embarrassing extent, then it will of course be desirable for electricity to take off more of these stocks. The purpose of the previous provision was to encourage this to be done, and the extra cost of using coal, as compared with that of consuming oil, was borne by the Government. The Government's view at the present time is that, in view of the market situation, and of the present low level of stocks, it is extremely unlikely that the stocks will reach an embarrassing
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position within, let us say, 18 months. That is a reasonable minimum. To go on from that, if these calculations and the market indications which seem to be quite clear are falsified by events, and stocks begin to mount to an embarrassing position, then we say that we will reconsider the position.
Undoubtedly the noble Lord is quite right in that one can make a strong case for saying, "If you think you may have to reconsider the position in any case, you ought to make provision now because it is simpler." Against that, it seems absurd to put into the Bill a provision of this kind, which has not been used in the last 18 months or so and which, on market prognostications at present, it seems very unlikely will be used.
I hope that, in view of the explanation I have given, noble Lords will be prepared not to press their Amendment. The noble Lord, Lord Diamond, very delicately skated over the fact that, if this Amendment were pressed and won, another place might disregard it altogether because it really poaches on their preserves. That is one reason, at any rate, why I hope noble Lords will not press the Amendment. But my real reason for hoping that they will not do so is the assurance I have given. The noble Lord must know perfectly well that if a Bill of this kind were to be introduced because there was something like an emergency it would go through very quickly indeed, simply because he and his noble friends are at the present time in favour of it. So I think that the noble Lord is perhaps putting too great a weight on the difficulty of getting legislation through the unlikely event that we should have to reconsider the position. In the light of what I have said, I think that considering all the market trends at the moment this would not be a reasonable Amendment to accept.
LORD SHINWELL: I do not wish to delay the Committee in coming to a conclusion as a result of the debate, but I am bound to say that I fail to understand the variety of arguments adduced by the noble Lord, Lord Drumalbyn. There seemed to me to be only one relevant argument adduced by him, but doubtless he will correct me if I am wrong. His argument was to this effect: what is the use of inserting in legislation

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something which, in the circumstances, appears to be unnecessary although it is admitted that it might become necessary later on. That is the Minister's case. The rest was mere "pocket fluff", if I may say so—not meaning any offence; but that is how it appears to me.
I have some understanding of the coal industry. I do not know whether I should mention the matter, but I piloted through the other place the Coal Industry Nationalisation Bill and the Electricity Supply Bill. The complications came later on, and we are now discussing one of them. If the Minister's argument—namely, what is the use of inserting in legislation something which in the circumstances appears to be unnecessary?—had any relevance at all, it would apply to any kind of legislation. This Government, and indeed all the Governments that I can recall in this century, some of which I have been associated with, have introduced legislation much of which has in course of time become unnecessary and irrelevant, but in the prevailing circumstances it was regarded by the Government of the day or their advisers as being necessary. At some time it might be necessary to implement these items.
I am baffled by the Minister's reluctance to accept the Amendment. I hope I am not giving any offence by what I say to my noble friends, but even the proposition seems to me to be unnecessary. I should have thought that any person with even the rudiments of intelligence—not even common sense—would have asked: what is the situation? Who can tell what productivity in the coal industry will be in the course of time? Who can tell whether there is to be a shortage next year or 18 months hence, or whether there is to be an excess of coal? Who can tell whether production will exceed consumption, or, conversely, whether consumption will exceed production? All Governments have failed accurately to forecast what the situation would be in 18 months' time. There has been a variety of forecasts, all of which have been less successful than the astrologers—and you cannot be much less successful than that. The proposition seems to me to be quite a simple one. Insert something in the Bill which, although it may
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not be regarded as relevant in existing circumstances, and therefore is unnecessary, can be regarded as an insurance. My noble friend mentioned that there was a sociological factor—we might go so far as to say a psychological factor. The miners feel insecure. They never know whether the pit in which they work is to be closed down. They read that the noble Lord, Lord Robens of Woldingham (not to be associated with the intelligent Lord Robbins who ventured just now to ask a question), has decided to recruit more labour into the mining industry, while only a year ago he was trying to get rid of them. It is a baffling problem. So in the circumstances why not give the miners of the country some assurance that if there is an excess of coal production and that coal has to be disposed of, we will look round for a possible potential consumer?
Who is the most likely consumer? The electricity supply industry. But the Central Electricity Generating Board and the area boards say, "We do not want the coal because it costs too much: we would rather use oil". I might say, in parenthesis, that the noble Lord, Lord Drumalbyn, was right in one thing he said. The fact that oil prices are now rising and coal may become favourably competitive with oil prices in the future is a point to be kept in mind. But if the Central Electricity Generating Board are asked to buy coal at a price in excess of the price of oil, they will have to be compensated. So the Government go to the Board and say: "We want to get rid of this coal. The domestic consumer wants less of it, so we are asking you to take it over and use it instead of using oil. Use the coal and we will compensate you." It is an insurance, and it will work very well all round. As the Minister so rightly said, it does not need to work now, but it may be required to work 18 months or two years hence. So why have a quarrel about this? Why have a Division? Why have a controversy? Let us be reasonable and accept the Amendment.
LORD ERROLL OF HALE: I was wondering whether somebody might intervene from this side of the Committee to say that, impressive though the arguments that have been adduced by noble Lords opposite, many of whom

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have had practical experience of the coal mining industry, are, there is a very important point which has not yet been touched upon. It is the effect of this clause, if accepted by your Lordships, on the commercial judgment of the Coal Board. It will be all too easy for them to say, "Let us produce. If we overproduce we have this section in the Act"—as it will then be—" which will enable us to pass on our surplus production, to pass on our incorrect estimates to the C.E.G.B." The very fact that if this clause is not passed they will have to apply to the Government, who in turn will have to put legislation through Parliament, will in itself be a disciplinary control on the commercial side of the National Coal Board and will mean that they will say "Well, we cannot be sure that we can get this subsidy from the taxpayer. Perhaps we had better be rather more careful when advocating a higher rate of production". I think this clause, so attractively and persuasively proposed by noble Lords opposite, would in fact have a damaging influence on the commercial judgment of the National Coal Board.
Secondly, I am sorry that there is nobody here to speak for the Central Electricity Generating Board. Why should they have to take coal all the time because the coal industry chooses to over-produce? It is not merely a question of their being compensated for the higher price of coal as an alternative fuel to either oil or natural gas. The Electricity Board are to have their commercial judgment, their purchasing policy, biased by a clause of this sort, and are to be denied their own business, scientific and engineering judgment.
Thirdly, although we in this Chamber represent none but ourselves, let us not
forget that it is not the Government who will be paying the subsidy, but the taxpayer. I think that all of us in this Chamber, although we may not represent taxpayers, are ourselves taxpayers. This clause, even if it is not used, nevertheless represents a kind of promise—limited to a modest £30 million by the noble Lord, Lord Diamond—to take £30 million from the taxpayer in order to subsidise the coal industry. I hope, therefore, that noble Lords will reject the blandishments of the mining lobby now so handsomely ennobled.
LORD DIAMOND: I feel your Lordships have heard most of the arguments for and against this Amendment and would wish to come to a conclusion. May I point out that the figure of £30 million is the figure that was provided in previous legislation and was not a piece of imagination on my part. May I say to the noble Lord, Lord Erroll, that I do not imagine that there are any Ministers who regret that they did not use these powers more than the present Ministers, who are having to battle with a shortage of coal which would not have been so acute had these powers been used more in the past. But my main difficulty lies with the noble Lord, Lord Drumalbyn, who has, after two invitations, refused to recognise that he can, at no cost, deal with a very difficult social problem: that of labour relations in the mining industry. We therefore insist on drawing attention to our feelings in this matter by dividing the House.
3.52 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided:—Contents, 75; Not-Contents, 116.

CONTENTS

Addison, V.

Chorley, L.

Hughes, L.

Archibald, L.

Constantine, L.

Jacques, L.

Ardwick, L.

Davies of Leek, L.

Janner, L.

Arwyn, L.

Diamond, L.

Kennet, L.

Bacon, Bs.

Douglass of Cleveland, L.

Kilbracken, L.

Beswick, L.

Faringdon, L.

Leatherland, L.

Birk, Bs.

Fulton, L.

Lee of Asheridge, Bs.

Blyton, L.

Gaitskell, Bs.

Lindgren, L.

Boothby, L.

Gardiner, L.

Llewelyn-Davies of Hastoe. Bs. [Teller.]

Bowden, L.

Garnsworthy, L.

Brockway, L.

Geddes of Epsom, L.

Loudoun, C

Buckinghamshire, E

Granville of Eye, L.

McLeavy, L.

Burntwood, L.

Henderson, L.

Milford, L.

Burton of Coventry, Bs.

Hilton of Upton, L.

Milner of Leeds, L. [Teller.]

Champion, L.

Hoy, L.

Moyle, L.

Nunburnholme, L.

Serota, Bs.

Taylor of Gryfe, L.

Phillips, Bs.

Shackleton, L.

Taylor of Mansfield, L.

Plummer, Bs.

Shepherd, L.

Walston, L.

Popplewell, L.

Shinwell, L.

Wells-Pestell, L.

Raglan, L.

Silkin, L.

White, Bs.

Ritchie-Calder, L.

Slater, L.

Williamson, L.

Rowallan, L.

Snow, L.

Willis, L.

Royle, L.

Stonham, L.

Wright of Ashton under Lyne, L.

Rusholme, L.

Strabolgi, L.

Wynne-Jones, L.

St. Davids, V.

Strang, L.

Segal, L.

Summerskill, Bs.

NOT-CONTENTS

Aberdare, L.

Erroll of Hale, L.

Mills, V.

Aberdeen and Temair, M.

Essex, E.

Milverton, L.

Ailwyn, L.

Ferrers, E.

Monck, V.

Albemarle, E.

Ferrier, L.

Monckton of Brenchley, V.

Alexander of Tunis, E.

Glasgow, E.

Mowbray and Stourton, L.

Amherst, E.

Goschen, V. [Teller.]

Napier and Ettrick, L.

Amulree, L.

Gowrie, E.

Nugent of Guildford, L.

Ashbourne, L.

Gray, L.

Ogmore, L.

Atholl, D.

Greenway, L.

Poltimore, L.

Auckland, L.

Grenfell, L.

Powis, E.

Balfour of Inchrye, L.

Gridley, L.

Rankeillour, L.

Barnby, L.

Grimston of Westbury, L.

Reay, L.

Beaumont of Whitley, L.

Hailes, L.

Reigate, L.

Belhaven and Stenton, L.

Hailsham of St. Marylebone, L. (L. Chancellor.)

Rhyl, L.

Belstead, L.

Robbins, L.

Berkeley, Bs.

Hatherton, L.

Rochdale, V.

Bledisloe, V.

Hawke, L.

Rockley, L.

Boston, L.

Henley, L.

Sackville, L.

Bourne, L.

Hood, V.

St. Aldwyn, E.

Bradford, E.

Howard of Glossop, L.

St. Helens, L.

Brooke of Cumnor, L.

Hurcomb, L.

St. Just, L.

Buckton, L.

Hylton-Foster, Bs.

Sandford, L.

Carrick, E.

Ilford, L.

Sandys, L.

Clwyd, L.

Inchyra, L.

Sempill, Ly.

Conesford, L.

Jellicoe, E.

Shannon, E.

Cork and Orrery, E.

Jessel, L.

Skelmersdale, L.

Courtown, E.

Kindersley, L.

Stamp, L.

Craigavon, V.

Latymer, L.

Strange of Knokin, Bs.

Cromartie, E.

Lauderdale, E.

Strathcona and Mount Royal, L.

Daventry, V.

Leathers, V.

Swaythling, L.

De Clifford, L.

Lindsey and Abingdon, E.

Swinton, E.

Denham, L. [Teller.]

Lothian, M.

Teviot, L.

Derwent, L.

Lucas of Chilworth, L.

Thomas, L.

Drumalbyn, L.

MacAndrew, L.

Thorneycroft, L.

Dundee, E.

McCorquodale of Newton, L.

Thurlow, L.

Dundonald E.

Mar, E.

Tweedsmuir, L.

Eccles, V.

Massereene and Ferrard, V.

Vivian, L.

Effingham, E.

Merthyr, L.

Windlesham, L.

Emmet of Amberley, Bs.

Meston, L

Wolverton, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Clauses 3 and 4 agreed to.
Clause 5 [Power of Board to enter into agreements in connection with overseas aid]:
4.0 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 2:
Page 4, line 1, leave out ("and the said Minister of the Crown").
The noble Lord said: I beg to move the next Amendment standing in my name on the Marshalled List. I suggest
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to your Lordships that it might be convenient to discuss with this Amendment the following Amendment, to leave out
"for any purpose specified in the said section 1(1)".
Both Amendments affect broadly the same point in the same clause. The purpose of the two Amendments is really to enable the Coal Board to assist in attracting business to British manufacturers of mining machinery and, as such, I should have thought it would be welcome on all sides.
The position is that the scope of Clause 5 is rather narrow. There is no objection to subsection (1)(a) of Clause

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5 being narrow, because there the Board will be acting merely as the agent of the Minister responsible for overseas aid, and the Minister must necessarily act within the limits laid down by the Act of 1966. However, when we come to subsection (1)(b) of this clause, it is a different story. When the Board are acting as principals there is no need to tie them to the limitations of the Overseas Aid Act. They could usefully provide technical assistance in countries additional to those needing help under the Overseas Aid Act. Furnishing technical assistance overseas is a field of activity in which the Board could do a lot of good for this country. With the contraction of the coal industry, opportunities here for manufacturers of mining machinery are becoming seriously curtailed. It is of vital importance for them to be progressive in their business and their techniques, and, to that end to be able to improve their opportunities for development in various types of mine in other countries.
Therefore in my view it is in the national interest to have an adequate mining consultancy service available to potential buyers of British equipment, and the technical knowledge and skill of the National Coal Board's engineers and scientists can make a most useful contribution to such a service. In addition, the Board would benefit, because the contraction of the industry has also, to some extent, limited opportunities for the Board's technical experts. If they are to develop and apply their techniques to the best advantage they need wider opportunities to do so and to study the efficiency of equipment used in the mining industry in other countries. In giving the Board powers, subject to Ministerial control, because that would still stand, to furnish technical assistance overseas, it is undesirable to limit their powers by reference to Section 1(1) of the Overseas Aid Act, because the areas intended to benefit are not the best in which to study or apply modern mining techniques.
A further and important point is that such a restriction would put the Board at a disadvantage in comparison with agencies in foreign countries. Without going into the detail (which I have here), it is the fact, which I am sure the Government recognise, that the Board's
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opposite number in France, Charbonnages de France, have joined with others in providing an organisation which has been of considerable benefit to French manufacturers and which has worked in 25 countries in Europe, Africa, Asia, and North and South America. It is most desirable, therefore, that there should be some agency in the United Kingdom to parallel that, and the National Coal Board is the obvious choice.
If Clause 5(1)(b) were to be amended in the manner which I am proposing, the National Coal Board would be able to carry out this kind of activity overseas, but it would not be given a completely free hand; the power would be restricted to furnishing technical assistance and would be exercisable only with the consent of the Secretary of State. There would, however, be no need to require in addition the consent of the Minister of the Crown responsible for overseas development, and that is why the first Amendment provides for deleting reference to that Minister. I am sure there is no problem here because if, in fact, that Minister needed to be consulted, then the Secretary of State as a matter of normal, wise Government administration would, of course, consult him before reaching a conclusion. I hope, therefore, that the Government will welcome these Amendments. I am sure the second one would undoubtedly benefit both British interests and the National Coal Board.
4.9 p.m.
LORD SLATER: I rise to give support to my noble friend Lord Diamond on these Amendments. The clause, as drafted, as he has already said, is concerned with aid as provided for in the Overseas Aid Act 1966. However, as I have read that Act, I am left with the impression that its main function is to concentrate principally on welfare activities. I have no doubt that on visits abroad, particularly to developing countries, noble Lords will have recognised that if more technical assistance were forthcoming to those countries there would be greater economic advancement. How often has the plea been made in your Lordships' House, as it has been made in the other House, that if more aid were given, the conditions of people in the developing countries would improve much more rapidly than is the case at present!

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Time and time again, the amount of money directed towards this end by successive Governments has come under attack as inadequate, and I believe that more aid is desirable in order to accelerate the improvement. I must admit that we do not have a bottomless purse from which to draw, but why should we not assist when we can do so without imposing the heavy hand of restriction? I believe that the coal industry, which is a basic industry upon which this country so much depends, could give a lot of technical assistance to the developing countries if more freedom and licence were given to it. We are being constantly reminded that we have a smaller coal industry in this country than ever before, and that means that manufacturers of mining equipment may be seriously affected. I have no doubt that noble Lords are aware of the manufacture and experimentation in connection with the mining industry which goes on at the Bretby installation, and to visit Bretby is an experience which anyone interested in mining never forgets.
Noble Lords will be aware that the bulk of the manufacture of equipment is still undertaken by outside manufacturers, and I should not like to see their interests curtailed through new techniques not being available to them. I should have thought that it was in the interests of the country to have an adequate mining consultative service available to the potential buyers of British equipment, and the technical knowledge and skill of the National Coal Board's engineers and scientists can make a useful contribution to such a service. There is no doubt that a smaller mining industry will limit the opportunities for some of the Board's technical experts. The Board having been given power to furnish technical assistance overseas when the consent of the Secretary of State has been obtained, it ought not to be necessary for them to get the same kind of consent from the Minister responsible for overseas development. This matter could surely be settled administratively within the Government framework. We know how Government Departments work, and this could easily be done. In moving the Amendment, my noble friend made the position quite clear, and I think that the Minister who is to reply will have some difficulty in knocking down his proposals. I have
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great pleasure in adding my support to what my noble friend has said.
LORD DRUMALBYN: To start with, I think I should make it clear exactly what we are talking about here. We are not talking about anything in Clause 5(1)(a), which deals with those cases where requests for aid might come to the Minister for Overseas Development, who would then enter into agreements with the National Coal Board for providing it as part of the official aid programme. I say that because something which the noble Lord, Lord Slater, said might have been taken to indicate that we were—
LORD SLATER: If the noble Lord will study the Report of the Committee stage in another place, he will see that the comments that I have made are more or less the same as those which were made there.
LORD DRUMALBYN: I, too, have read the comments which were made in another place about this provision. All I am doing is to indicate what we are talking about. As usual the noble Lord, Lord Diamond, stated the case for the Amendment quite clearly. In paragraph (b) we are dealing with requests for aid which come direct to the National Coal Board, in which case that aid is going to be provided on a commercial basis. But because the Minister for Overseas Development co-ordinates aid to developing countries as a whole, it was thought appropriate—and, I may say, thought appropriate by the previous Administration in the previous Bill—that the Minister for Overseas Development should be consulted in this second case. Inadvertently, I think that that need would be removed by the first Amendment, but the noble Lord, Lord Diamond, will probably agree that where technical assistance is asked for by the developing countries and the Coal Board provides it on a commercial basis, then the Minister for Overseas Development should also be brought into the matter. It is a question of coordination.
Let us deal with the substance of the two Amendments. Taken together, they would mean that the National Coal Board would be empowered to furnish technical assistance on a commercial basis in any country or territory outside the United Kingdom, provided that it first obtained the consent of the Secretary of State. Of course technical assistance can cover a

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wide area; it is not quite the same as advice. I understand that the National Coal Board has from time to time sent members of its staff to advise when it was asked to do so, but what we are talking about goes rather further than that.
I think that, just as in another place—and, as in another place, we do not need to mention any of the names concerned—we know exactly what is the issue here. The point is that, given the distinctive relationship between the Government and nationalised Boards, it is right and proper that the Government should be consulted before they engage in activities abroad. The activities as a whole of the National Coal Board abroad are at present controlled by the Coal Industry Act 1949. Apart from Clause 5, authorisation for any activity would be required and would have to be given by an Order under Section 2 of that Act, and that Order would have to be laid before Parliament.
This clause is thus an exception, an exception confined entirely to developing countries—and it is confined in that way because it was asked for by the Minister for Overseas Development. That is the whole purpose of this clause; and in the Government's view it would not be appropriate to extend the purpose so as to alter radically the present law governing the overseas activities of the National Coal Board. If the National Coal Board have at any time a considered proposal to make for overseas activity—and it may well be that it would be of great advantage if they had, whether by themselves or in conjunction with others—they can put it to the Secretary of State, as they have been able to ever since 1949, and if he approves of it he will make an order under the Act. That is the present statutory position, and the Government see no reason why it should be altered.
Moreover, I would add that it seems hardly sensible to extend the powers of the National Coal Board further, into areas not related to their duties under the Coal Industry Nationalisation Act, in a Bill which is providing for a review of such activities. The main point that I wish to stress is that there is nothing at the present time to prevent the National Coal Board asking for authority from the Secretary of State to undertake overseas activities, and if the Secretary of State approves (and his approval is
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required in any case under the clause now before your Lordships) then that can be done. All that has to be (lone is for the Secretary of State to make an order and lay it before the House.
LORD SLATER: Before the noble Lord sits down, may I say this with regard to technical aid and to the consent of the Minister and the introduction of an order when an application is made by the National Coal Board? I am somewhat at a loss here. Prior to the Post Office becoming a public corporation, it did not require a particular order to be laid by the Minister for anyone to go from the Post Office at that time to give technical assistance or advice, or whatever it may have been, to other countries If it could apply then within that Ministry as it applies now to this nationalised industry, I cannot understand the reason why, under this Bill, it will have to receive the consent of the Minister and he will have to lay an order in regard to it if it is asked for.
LORD DRUMALBYN: We are here, of course, going back over a long period of history, but, as I understand it, when the 1946 Act was introduced, as it concerned coal under this land of ours, it was not thought fit at that time to talk about overseas activities. But three years later it was felt that there should be some possibility of the National Coal Board entering into arrangements overseas and going into activities overseas in certain circumstances. It was thought that that was quite possible; but, first, because its main functions, its duties, are in this country, it was thought right that the Minister should be consulted and should have to give his consent and to notify Parliament by making an order and laying it before them. That is all there is to it. It seems to me quite a reasonable procedure; and, if I may say so, I do not really think there is very much in this Amendment.
LORD DIAMOND: I have listened most carefully to what the noble Lord has said. I take his points. First of all, there is nothing for us to fall out about as to the Amendment dealing with the exclusion of the Minister. If the noble Lord prefers the words referring to the Minister to remain in the clause for the reasons he has indicated, he understands my point and I understand his

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and we certainly would not fall out about that one. I understand that what the noble Lord is saying is that he is not unsympathetic to the purposes that I have described as justifying my Amendment, but that these purposes can be carried out at the moment with this sole difference, that an order has to be laid—I hope I have understood it correctly.
LORD DRUMALBYN: Made and laid.
LORD DIAMOND: Yes, made and laid. That would mean some delay but not necessarily a very large delay, particularly as presumably an order of this kind, once the Government were prepared to make it and lay it, would have the support of all sides of Parliament. Therefore I agree that there is not a great deal of difference between us. But the noble Lord has not directed his mind to my one anxiety; namely, that of reasonable competition. I like competition to take place without one party having his hands tied behind his back; and I have already indicated that the French national coal board have joined together with two other appropriate bodies to form a company called Sofremines which has been of considerable benefit to French interests in French areas. That is excellent.
All I am saying is that my desire—and I should have thought the Government shared it—is that British manufacturers should be similarly helped, and I am wondering whether the lack of an Amendment of the kind I have suggested, which I accept immediately is additional, new, does not put them at a disadvantage. I do not apologise for the fact that the Amendment is new, additional or imaginative. It is a little out of place, but one has to make use of whatever Bills come forward, so there is no need to quarrel about that. But without the Amendment I should have thought that the National Coal Board and the British interests were working at some disadvantage as compared with French interests.
I believe the noble Lord has taken my point, and I shall be grateful if he will look at this matter and see whether some other form of organisation is not the appropriate opposite number of the French organisation. It would assist British manufacturers. I am sure he would want to give sympathetic con
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sideration, as I understood him to say, to proposals put by the National Coal Board to give assistance of the kind we have been discussing outside the scope of the Overseas Aid Act. If the noble Lord thinks that that can be satisfactorily done under the existing legislation, with the slight delay of an order but nothing worse than that, then so long as I have interpreted his views aright I should not wish to pursue the matter unduly.
LORD DRUMALBYN: I think I can give the noble Lord the assurance for which he asks. As I understand it, there would be nothing to prevent the Coal Board, if it wanted to parallel the activities of Sofremines (if that is what it is called), from preparing a scheme and submitting it to the Secretary of State. I could not of course anticipate what the Secretary of State's decision would be, but I do not think that the situation would be any different if the Amendment were carried.
LORD DIAMOND: Then with your Lordships' permission I will seek leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 [Power of Secretary of State to call for report of Board's diversified activities]:
4.29 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 4:
Page 4, line 24, leave out ("colliery activities within the meaning of the Act of 1946") and insert ("coal-mining activities").
The noble Lord said: Your Lordships will see that this Amendment is identical to Amendment No. 6 (at page 5, line 33), to the next clause, and I imagine that your Lordships will find it convenient that these two should be discussed together. In fact, the words in my Amendment are defined in Amendment No. 11, which is to page 7, line 9, and says "'coalmining activities' means …", and so on. So I hope it will be convenient to your Lordships that I should also refer to that definition at the same time. The purpose of this Amendment is, if I may say so without being at all patronising, to help the Government out of a little difficulty; and a responsible Opposition is always delighted to do that.
Perhaps I may first of all set out the position as it is understood on all sides. It was made clear by the noble Lord, Lord Drumalbyn, on the Second Reading of this Bill on March 4. He said—and I quote:
"To take the Coal Industry Nationalisation Act, there was one single central feature to it: the duty laid on the Coal Board under Section 1 of the Act to work and get coal; to secure the efficient development of the coal-mining industry and to make supplies of coal available at such quantity and at such prices and so on. These were the duties of the Coal Board, and to exercise these duties they were given a discretion to extend their functions in certain directions. These were called discretionary functions.
"What we are saying in this Bill is that over the period of years there has never been any full examination or even a partial examination of the ancillary functions of the Coal Board."—[OFFICIAL REPORT, 4/3/71; col. 1527.]
That is what this Amendment seeks to deal with: to describe those additional ancillary functions. The words at present in the Bill fail to do that. The words which I am suggesting in the Amendment do achieve the Government's purpose, and I hope that they will prove acceptable.
The expression at present in the Bill, "colliery activities", means no more than getting coal out of the ground, making it saleable and disposing of soil. The expression excludes a number of activities without which collieries cannot be worked—for example, colliery electricity activities, as defined in paragraph 3 of the First Schedule to the 1946 Act. But a colliery could not be operated without engaging in electrical activities of the kind referred to. Similar considerations apply to colliery transport activities which are concerned with colliery loading and storage arrangements, and to colliery sales activities which are concerned with marketing arrangements. These important services, and also those such as the provision of pithead baths and canteens, which are known as colliery welfare activities, are not covered by the expression "colliery activities". Nor indeed is ventilation in colliery workshops and offices.
All these activities are essential functions, yet they are not ancillary functions. They are absolutely central to the act of coal-mining. What I am suggesting is a new definition which is set out, as I have said, in Amendment No. 11. That definition is based on the language of Section 1 of the 1946 Act in which the
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Board's duties and powers are set out. It covers in my view precisely what the Government have in mind; that is to say, the main coal-mining activities. May I deal with them in a logical order?
The section starts, as your Lordships will see, with "searching and boring" (and these are taken from Section 12(a) of the Act); then follows "working and getting" (which is in Section 11(a)); then "treating, rendering saleable, supplying, selling" (which is in Section 12(b), with the addition of "making available" (from Section 11(c)). Finally, a new expression is incorporated: "efficient development of the coal-mining industry" (which is from Section 11(b)). This new definition includes essential activities which are excluded, I imagine unintentionally, by the use of the expression "colliery activities". I hope that I have found a definition which carries out the Government's intentions as expressed by the noble Lord, Lord Drumalbyn, on Second Reading and that the Government—they need not say "Thank you"—will accept the Amendment.
4.35 p.m.
LORD BLYTON: This clause in the Bill calls for a review of all the Coal Board's activities other than the winning of coal and preparing it for sale at the surface. This clause is the forerunner to Clause 7, which is to hive-off the profitable parts, and therefore Clause 6 will allow speculators to know in the books what wealth they can get for themselves. Whenever a large robbery takes place in this country there is always the organisation before the actual event. Therefore, Clause 6 represents the organisation before we get the taking away of the plunder in Clause 7. I have a deep suspicion that pickings are being prepared for the robbing of the coal industry of its profitable parts to hand over to the friends of the Tory Party who supported them financially in the last Election. When we see how the Government have hived-off £6 million from B.O.A.C.; when we see that they are going to sell the nationalised breweries and public houses in Cumberland, it makes us doubly suspicious that this exercise in Clauses 6, 7 and 8 of the Bill is the forerunner of another gift of the nation's assets to the friends of the Tory Party.

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This clause which we seek to amend gives the Minister power to call for reports of non-colliery activities which are an integral part of coal production: those which earn big profits, like computers and North Sea gas; the farms; the coke ovens; the by-products plant; open-cast mining, and coal distribution. "Colliery activities "—coal-getting—last year lost £4½ million before interest, even after making a profit of £7·3 million on opencast. According to the 1970 Report of the Board, coke, by-products and processed fuels made profits, before interest, of £9·4 million, and other activities made £4·2 million. Clearly, these interests are vital to the industry, and if they are hived off and only an extractive industry is left, this loss will have to be made up from somewhere for these assets are vital to the industry.
It will follow, as I understand Tory philosophy, that they will say, when the hiving-off is done, that wage increases cannot be paid because the industry would be losing heavily—as we saw in the Post Office dispute. Last year, the profits made by the non-colliery activities turned a loss of £4·5 million into a profit of £8·8 million. Surely these assets are important to the Coal Board in relation to its financial welfare—they were a godsend to the industry last year.
LORD DRUMALBYN: We may have to return to this point later, but the noble Lord realises, I am sure, that the figures on profits and losses which he quoted were the figures before the payment of interest on capital, and that the overall loss of the Board (I think we ought to get this straight, otherwise there may be misunderstanding) was £26·3 million.
LORD BLYTON: I have said that the figures were of profits before interest. I made that very plain. It makes one wonder why the Government want to review activities which are concerned with improving the Board's profitability and with achieving the full use of assets to assist efficient coal producing.
The Government have not shown, either in another place or here, any evidence that these activities lead to any losses on coal-mining. Surely the Minister does not need a review to tell him that the processing of coal goes on at collieries.
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It has gone on for over fifty years to my knowledge. It went on under private enterprise, and I see no reason at all why nationalised mining should not be allowed to carry on in the same way—except prejudice.
It does not need an inquiry to know that once the coal is on the surface it faces competition from cleaner and more adaptable fuels. It has always been known that it is better to transform coal into coke, in respect of which there is no competition, and which to-day brings a high price when sold for use in steel industry blast furnaces and in other industries. In the old days pits were owned by steel companies who made their own coke and got the by-products as well. What was good for private enterprise can also be good for the nation. To-day a great deal of money may be made from the manufacture of specialised fuels, especially bearing in mind the clean air legislation, and this is known by both the Coal Board and also by private enterprise.
It may be that this is one of the sections which it is intended to hive off to private enterprise. There has always been money in the development of chemical by-products. The old coal owners knew this and they located their coke ovens and their chemical plants at the collieries. All that the Coal Board has done, since it took over from the owners in 1945, is carry on in the same way; and it was sensible to do so because it reduced transportation costs. It does not need an inquiry to discover that the Board is involved in the distribution of coal. The old coal owners had a distribution organisation; they had their depots, their lorries and their sales departments, and the Coal Board has carried on where they left off.
In this field the Coal Board has tried to reduce distribution costs. Why do not the Government draw the attention of the nation to the big difference between the pithead price of coal and the price when it reaches the coal house of the consumer? That is something about which they could have a profitable inquiry. The Coal Board has joined Amalgamated Anthracite in forming the British Fuel Company for the reasons I have stated. The Board has created large mechanised depots in order to reduce distribution costs, and has been

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making money in that way. Why is the Coal Board to be put through the hoop for doing something which, were it done by private enterprise, would be exalted to the skies as a great achievement? It is ridiculous to think that the Board can be confined to selling coal at the pithead. Its activities must be diversified and it should be allowed to act in whatever way it thinks best.
If the Government want to do something to help the industry, why do they not set un a review of coal distribution? According to the 1969–70 Report, coal costs were £5 2s. 0d. per ton at the pithead; and coal is sold in the South at something like £15 to £20 a ton. It would be useful if the Government would investigate this, instead of trying to plunder the nation's assets in coal. Oil, gas and electricity are all in the central heating market, and surely it is common sense for the Coal Board to be interested in that market as the other industries are its competitors. These industries have organisations to assist in extending central heating and it is important that coal should have a footing in this market.
One product of the mines is shale and clay. I remember that in Durham, in the days of private enterprise, coal owners had brickworks and made drains and bricks from the slag, or clay, brought from the pits. The Coal Board is doing the same. Is it something in which to glory when private enterprise does these things, but something which is criminal when the Board does them? The Board has hundreds of houses, many of which were built in order to attract miners to the Midlands; and the Board makes a profit on its houses. Are the housing speculators to get their hands on these houses? Many of the old houses taken over from the coal owners have been modernised and there would be some "loot" here for the boys, if they could get their hands on it.
I know that the Tories are upset by the fact that the Board is also involved in the computer market and in North Sea gas; but why not? The Coal Board is associated with the Continental Oil Company in respect of North Sea gas. It is interesting to note that the Continental Oil Company developed from the Continental Coal Company. If this Government take away the N.C.B., the
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company which will carry on was originally an American-based coal company. It would be nothing short of a scandal if Britain's coal industry was sold out so that an American-based coal company involved in continental oil could carry on.
The Bill and this clause is designed to examine the profitable parts of the National Coal Board, leaving the unprofitable parts for the nation to carry. If an examination is to take place, one would have thought that it would be an examination of the unprofitable parts. If there is no ulterior motive, why examine the profitable parts and not the unprofitable parts? Is it because the Government want to make sure that later they will not be faced with the need to hive off something which will be unprofitable? It cannot be said that it is in the public interest to hive off the profitable parts of our nationalised industries.
This clause is a preparation for the plundering which is to take place under the provisions of Clause 7. It is a sad thing for the industry in which I spent so many years of my life that its fortunes are now in the hands of its greatest enemies. It is tragic for my people that the Government are determined to give away the profitable parts to their friends, as they have done with the natianalised airlines and the pubs and breweries in Cumberland. It is tragic that leaving only the unprofitable parts will produce great problems for my people and bring discontent and bitterness again to the mining industry. I support the Amendment, and I hope that it will be carried to a Division.
THE EARL OF GOWRIE: It seems to one on these Benches who, admittedly, is an outsider, that the remarks of the noble Lord, Lord Blyton, have "blown the whistle" on the Amendment of the noble Lord, Lord Diamond. I am quite aware that there is a genuine political difference of opinion; one that might even cause some "abrasiveness" as I believe we term it now, over the issue of Clause 7. But it seems very curious that there should be framed an Amendment which would make it impossible for there to be any real review of activities, as suggested by Clause 6; that is to say, activities other than colliery activities under the definition of the 1946 Act.

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If noble Lords opposite are prepared to acknowledge that there is going to be a difference of opinion over Clause 7, and the authority to hive off or dispose of certain non-mining activities, I do not see why they should yet feel it necessary to reject the principles underlying Clause 6. We know that it is now 25 years since the 1946 Act, and it would seem to me to be a perfectly legitimate request by the Secretary of State to have a review of the whole of the activities of the Board at this time.
4.50 p.m.
EARL FERRERS: My Lords, the debate on this Amendment has certainly been most interesting. I found Lord Diamond's speech in moving it characteristically disarming. He said that he wanted to help the Government out of a difficulty, because on Second Reading my noble friend Lord Drumalbyn referred to the ancillary functions of the Coal Board, and these included electricity and transport. The noble Lord, Lord Diamond, made his Amendment sound highly commendable, but the noble Lord, Lord Blyton, rather showed up the other side of the Amendment, which really seeks to curtail the Government's review of the Coal Board activities.
When I first saw the Amendment on the Order Paper I am bound to say that I could not see quite what the point was, until I read the distinction between colliery activities and coal-mining activities which, as the noble Lord, Lord Diamond, says, is given in Amendment 11 to Clause 10. The operative phrase which the noble Lord, Lord Diamond, wishes to include by his Amendment, is:
"activities undertaken for the purpose of … supplying, selling or otherwise making available coal, or for the efficient development of the coal mining industry."
These are the spheres in which he wishes the Government not to be able to carry out a review. This is indeed understandable. One understands the reasons why the noble Lord has out forward the Amendment, but I should like to reassure him, as well as the noble Lord, Lord Blyton, who said, I think, that the Government were going to hand over the pickings to the Tory Party and plunder the nation's coal industry. With the greatest respect for the noble Lord, Lord Blyton—and one knows his interest and
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lifelong attachment to the coal industry—this is not in fact what this clause seeks to do, nor what the Government seek to do. All the Government seek to do is to carry out a review of the non-mainline activities, if one can so put it, of the coal industry.
LORD DIAMOND: With respect, I have listened to the not very complimentary opening comments of the noble Earl, who has been challenging my motivation in putting forward this Amendment, which is unusual, and he certainly may not invent a new phrase of his own. This phrase has come forward because the Government have been in real difficulty in finding a form of words to give effect to their intention. I have tried to find such a form of words. If there is anything wrong with the form of words I shall be glad to listen to what the noble Earl has to say.
EARL FERRERS: I am sorry if the noble Lord found what I said to be in any way disagreeable. This was the last thing I had intended. What the Government wish to do is to be able to carry out a review of what I described as the non-mainline activities of the Coal Board. If we incorporate the words which the noble Lord has in his Amendment No. 11 to Clause 10,
"or for the efficient development of the coal-mining industry",
I suggest to the noble Lord that this is making a blurred distinction between what may be permitted to be subject to review and what may not. It may well be said that many aspects of the Board's work are for the efficient development of the coal-mining industry, and what the Government are anxious to do is to be able to review all the non-colliery work which the Coal Board carries out. That does not mean to say that there is any intention of selling off or hiving-off vast areas, or indeed many of the areas to which the noble Lord, Lord Blyton, referred.
The noble Lord, Lord Diamond, referred to the electricity activities of the coal-mining industry and other ancillary parts of collieries and I would only, if I may, draw his attention to the assurance that was given in another place by my honourable friend, the Parliamentary Under-Secretary of State for Industry, who said the only thing he could ask

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the House to do (and this was on a similar Amendment to the noble Lord's) was to leave it to the good sense of his honourable friend
"not to review things like pithead baths and activities of the sort which are clearly part of the activity of a colliery. Anyone who thought that it was worth having a special review of pithead baths or of the electrical machinery in a pit would be wasting the time of all concerned, and we have no intention of doing so."—[OFFICIAL REPORT, Commons, 25/2/71, col. 936.]
I would offer that to the noble Lord as an assurance that the Government do not intend to embark on a review covering these small, or relatively small, yet important aspects of coal-mining work.
If the Government were to accept the noble Lord's Amendment this would in fact make it far less clear to which areas such a review may extend and I would only say, to the noble Lord, Lord Blyton, who was concerned about this, that if at any time (this comes to the next clause) any directions should be given by the Minister there is a perfectly good provision in Clause 7(6) which states that any such directions would have to be laid before Parliament under a Statutory Instrument and would be subject to the Negative Resolution procedure.
LORD BLYTON: These activities could still be hived-off.
EARL FERRERS: Yes, but I thought the noble Lord was concerned that this review was anticipating some kind of hiving-off of particular elements on which he would have no further say. In fact, before anything happened—if indeed it did happen—there would be this obligation on the Minister to place any such suggestions before Parliament. The Minister does not have any sinister motives; it is simply that after 25 years of nationalisation it is considered appropriate that the workings of the Coal Board, excluding their main activities, should be reviewed. I hope that I have satisfied the noble Lord, Lord Diamond, that his Amendment would not improve this Bill because it would make less clear the particular parts which the Minister may not review.
BARONESS GAITSKELL: My Lords, before the noble Lord sits down may I ask him a question? If, as he says, the intentions of the Government about hiving-off are so benign, why is it that
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for weeks and months the Press have not only stated but argued and accused the Government of hiving-off the profitable parts not only of the coal industry but of the railways and of the steel industry? How can he explain that?
EARL FERRERS: This particular Amendment does not refer to the whole lot. It refers to the difference in colliery activities and coal-mining activities, which as the noble Lord, Lord Diamond, said involves transport and matters like that. It does not refer to the other parts of the operations of the coal industry.
LORD POPPLEWELL: Could the noble Earl please help us a little? These ancillary activities to which he has referred were undertaken in the days of the privately owned coal-mining industry. If it was found necessary for efficient working under private ownership, by what reasoning have the Government arrived at the decision that it is now necessary to divorce these things from the main industrial development here? We are always being told that publicly owned undertakings should be on equal terms with privately owned undertakings and should be commercially viable. The noble Earl is being very apologetic at the moment, and says that it will not necessarily be done; it is a review. That is all right for Parliamentary talk in order to get a Bill through, but we all know that if these provisions are included there is an ulterior motive behind it. Will the noble Earl explain why it is necessary now to interfere with something that even private enterprise found essential for the efficient operation of the industry?
5.2 p.m.
LORD SHINWELL: Before the Minister replies, in the matter of a distinction between colliery activities and coal-mining activities could it not be argued that the distinction is meaningless except that the submission made by the Minister is somewhat disingenuous? Let me explain. Even the words "coal-mining activities" can be regarded as somewhat restrictive in character, but certainly less restrictive than "colliery activities", because colliery activities could be rightly interpreted as being confined to a particular colliery, whereas coal-mining activities could be applied to the industry as a whole.
The reason why I suggest that the Minister's argument is somewhat disingenuous is that the Government are

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trying to hide something. Is it not this that they are trying to hide—that as a result of a review that has been suggested it may be discovered that some sectors of coal-mining activities, or even for that matter colliery activities, are not necessarily closely integrated with the activities of the colliery or of the industry itself and therefore should be hived off?
I can imagine how a Government would be tempted to extract from the nationalised industries some very profitable sectors. To take an example, I understand that the National Coal Board in the course of their progress and development have entered the hotel and restaurant industry. That may be regarded as quite improper and irrelevant to the industry, but is that necessarily so? Let us examine it for a moment. It is the purpose of the industry to produce coal: that is expressly stated in the legislation for which I was responsible and piloted through the House of Commons 25 years ago. Its purpose is the production of coal; not even the distribution of coal to the ordinary consumer, although it was intended that the coal should be conveyed to the wholesalers in the business, who would, in turn, provided the price was satisfactory, convey it to the retailers.
On the other hand, in order to develop an industry on satisfactory lines—this is consistent with the general run of industry in this country, and indeed in all industrial countries—it is necessary to export part of the product. The nationalised coal industry arranges for the production of coal, and part of it is used for the purpose of export. As a natural consequence of this it engages in transactions with foreign importers. It may be necessary to invite foreign importers to come to the United Kingdom for the purpose of engaging in the commercial transactions associated with the business. Surely, therefore, it would not be improper for the National Coal Board to arrange hotel accommodation, and even catering, for the foreign importers who come to this country and assist materially in the development, financially and otherwise, of the nationalised industry.
That may be regarded as fantastic and absurd; but is it really? Let us consider what has been happening in this industry over the past century or so. I was asso
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ciated with the Ministry as a result of being a junior Minister in a Government long before nationalisation. Indeed, I had conversations with prominent members of the privately-owned industry: for example, the Marquess of Londonderry and the Marquess of Linlithgow—Linlithgow with coal in Scotland, in the constituency that I first represented, and Londonderry with coal in the constituency that I recently represented over a long period of time. There was an occasion in 1924 (this is a parenthetical observation; nevertheless it might be regarded as an item of political history) when the Marquess of Londonderry came to me when I was with the Ministry of Mines and suggested that because of some turbulence in the mining industry it might be desirable to form something in the nature of an amalgamation: a national trust engaged in coal-mining activities. He asked me whether I would enter into partnership with him. There was a very strong temptation to do so.
If I had accepted that invitation I should to-day probably be a millionaire or a multi-millionaire, with aristocratic and plutocratic connections: and somebody close to me suggests, quite improperly, that I might even be sitting on the other side of the House. I remember that at that time, in the period of private ownership of the coal-mining industry, I was (I must confess this) invited as a member of the first Labour Government to go to a most elaborate and palatial mansion in North Yorkshire to stay for a few days and nights, be regaled with all kinds of delicious comestibles, and where the accommodation was superb, the best I had ever experienced at that time of my life. I discovered that this was all part of the privately-owned colliery industry. So they were doing that sort of thing at that time—running a kind of hotel and restaurant business for private persons. Surely, if they were engaged and entitled to be engaged in that kind of transaction there is no reason why the National Coal Board should not do so. It is quite proper; there is nothing wrong with it all.
In this assembly there is a disposition, a quite proper and righteous disposition, to be friendly. It is the most friendly assembly I have ever been in. Sometimes, indeed, one even engages in compromise. Sometimes it is excessively friendly and

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it disarms one; one has to struggle against it. There is a strong temptation to conform. In such an assembly one must not dare to offend. Noble Lords on all sides of the House are so likeable. I would say that of every noble Lord on the other side of the House, equally with noble Lords on this side. Indeed, I would go so as far as to say that noble Lords on the other side of the House are sometimes more friendly to one than noble Lords on this side of the House. So one does not wish to be unfriendly. Yet I am bound to say, quite honestly, earnestly and I would even go so far as to say relevantly, that there is something sinister behind the legislation that the Government have now offered and is now embodied in the Coal Industry Bill.
My noble friend Lady Gaitskell suggested that we have to rely sometimes on what appears in the Press. That is true. Never mind about the Press; the speeches in the other place, on the Government side, surely have indicated the proper and real intention of the Government—the time is ripe for a review. I could not put it more emphatically than that. The time is ripe for a review after 25 years; the noble Lord said so. He said that almost pathetically, pleading to noble Lords, seeking to be persuasive. He said that after 25 years surely the time is ripe for a review. But for what purpose? An innocent review? Is it a casual review, a review with no sinister intention? Surely the noble Lord would not go so far as that, because if it is completely innocent and there are no sinister motives behind this legislation, then the Government need show no reluctance whatever in accepting the Amendment moved by my noble friend Lord Diamond.
My noble friend Lord Taylor of Mansfield, in his speech to a previous Amendment—an excellent and earnest speech—made an offer to the Government. They rejected it. I believe that was a mistake. I will make an offer to them: let the Government expose their true intention, come clean about it, tell us, tell the world at large, that it is now the intention to have a review for one purpose and one only: that is, to extract from the National Coal Board some activities, a sector that is profitable, and use it for private gain—not for the Government's private gain but for the
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gain of those who take advantage of the situation and purchase at a reasonable price the hived-off section of the coal mining industry. That would leave what? An industry turning the clock back to all the struggle, the turbulence and the insecurity. In other words, it amounts to defeating nationalisation. Is not that the intention?
Noble Lords opposite—I do not regard this as a serious misdemeanour, for they have been educated in this way—are against nationalisation. They dislike it. They prefer private ownership and enterprise. Private enterprise, such as it is, is very private, but there is very little enterprise. This is surely their intention. So why not say so, and then we shall know where we are? Then we can divide not so much on the Amendment, which after all is very small beer, but on what really is the difference between noble Lords on this side and noble Lords on the other side of the House. This is not in a quarrelsome fashion; it is not because we dislike noble Lords on the opposite Benches, or they dislike us, but simply because there is a fundamental difference of opinion. Let us divide on that. That is what we should divide on, not so much on the Amendment.
5.17 p.m.
EARL FERRERS: The noble Lord, Lord Shinwell, has made some remarks which will obviously be very carefully considered, but if I may say so this Amendment is slightly narrower than the considerations to which he addressed himself. This debate is on whether we use the words "colliery activities" or the words "coal-mining activities". I am bound to point out the difference in the Bill as it stands. "Colliery activities" says quite clearly what they refer to. They refer to:
"… searching or boring for, winning working or getting, coal, bringing it to the surface, treating it and rendering it saleable, and includes depositing spoil arising from working coal or from any other of the activities mentioned in this definition."
It is absolutely crystal clear under this definition precisely what "colliery activities" refers to. It is this of which the Minister may not have a review.
If we take Lord Diamond's Amendment, this would be unexceptionable if it included precisely what was meant by

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"colliery activities", but it goes wider than that. It says:
"'coal-mining activities' means activities undertaken for the purpose of …"
which could be for the purpose of, "searching, boring for," and so forth. That could be given a wider interpretation. It includes supplying selling or otherwise making available coal, and then it says:
"… or for the efficient development of the coal-mining industry."
It is those last few words particularly which I suggest we draw attention to, because if the Minister were to ask for a review to be carried out it could be argued perfectly fairly that almost anything which the Coal Board does now could, in the last analysis, be for the development of the coal-mining industry. The noble Lord, Lord Shinwell, said almost the same when he said that the Coal Board ran hotels. You could argue that the running of hotels, if they make money, would help the Coal Board to make money, and therefore it assists the efficient development of the coal-mining industry. So, those words which are in the noble Lord's Amendment make it far less clear precisely what the Minister may not review. It is for that reason that I would suggest we keep the words which are used in the Bill.
The noble Lord, Lord Popplewell, said earlier on, "Why is it that we have to have this review since the Coal Board took over a great many assets that were run by private enterprise before?" It is perfectly true that they did take over a number of enterprises some years ago. It is merely the Government's view that it should now be considered whether the National Coal Board should still be involved in all these enterprises which were taken over. May I give one or two examples of the type of thing which could well come within the purview of the Amendment of the noble Lord, Lord Diamond? If there is reference to "the efficient development of the coal-mining industry", then, of course, there are such things as coke ovens, brickworks, tar distillation plants and so forth, all of which could be considered as being part of the coal industry and necessary for its efficient running. But it is the Government's view that the provision authorising such reviews as may be carried out should be
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perfectly specific as to what may be reviewed and what may not. I would suggest that the words in the Bill are very much clearer as to where the line is to be drawn than are the words in the Amendment.
5.22 p.m.
LORD DIAMOND: I have been much helped by the valuable and moving speeches of my noble friends who have covered both this Amendment and some general principles stemming from it. I do not want them to think, because I am now going to concentrate more narrowly on the Amendment, that I am not grateful for everything they have said, and indeed for what they are going to say when we come to the Question, Whether the clause should stand part. But I do not want to make this a wide discussion because, of course, if one makes a wide discussion on a narrow Amendment one lets the Government off the hook; and I have no intention of doing that. So I refer simply to the Amendment.
I repeat what I said at the start: that my desire is to find words which fit the Government's intentions. The noble Earl, Lord Ferrers, was perhaps led off his normal, most courteous manner of addressing the Committee by his noble friend behind him who thought that he could see a distinction between what one of my noble friends was saying and what I was saying. There is no distinction at all. I loathe Clauses 6, 7 and 8 of this Bill with as deep a loathing as that of all my noble friends put together. But what I want to do is to achieve what I hope and continue to think is the function of this noble House: to improve legislation coming from another place. In another place, and in this place, both the responsible Ministers concerned have said that what they wish to exclude from this review are activities wider than colliery activities. The noble Earl, Lord Ferrers, said the same thing. He has just said to us that colliery activities do not include welfare and pithead baths and the like; and he said, quite sensibly, that anybody who thought the Government would call for a review of those things was "off his nut". I accept that entirely. Therefore, what we are trying to do is to find words which fit the statements of the Government. We think it is better that legislation should incorporate a Government intention rather

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than that it should not do so. That is the best I can do, having regard to the current philosophy of the Tory Party.
I repeat what was said by the noble Lord, Lord Drumalbyn, who carefully described the origin of the phrases and differentiated between "the efficient development of the coal-mining industry" and the discretionary functions. I again quote him:
"… what we are saying in this Bill is that over the period of years there has never been any full examination or even a partial examination of the ancillary functions of the Coal Board."—[OFFICIAL REPORT, 4/3/71; c. 1527.]
I have therefore put forward words which would enable all the ancillary functions to be fully examined, not because I believe that they need to be; not because I believe that the Government need the power. I am bound to tell the Committee that in the six years in which I had ministerial responsibility during which time I had of necessity to inquire about a whole host of things, week after week, regarding the figures of the National Coal Board, I was not once met with the reply, "I am sorry. We cannot give the information." If the noble Lord, Lord Drumalbyn, is aware of a single occasion on which the Coal Board has been asked for information by a Minister and has refused to give it, he might well tell the Committee. All I am saying is that it is beyond my experience that that ever took place. So I repeat that I do not think the powers to get the information are even necessary. But we know why the Government are getting the information. We know because it appears in the next clause, which is the hiving-off clause.
What I am saying to the Government is this. As soon as they define an area, as a local authority defines an area, which is going to be hived off, they cast a blight on that area; and in the interests of this country I want the blighted area to be as small as possible. That is what I am saying to noble Lords opposite, and it is a perfectly reasonable proposition to make. Their own words exclude ancillary functions. The words I am putting to your Lordships are the words used in the Coal Industry Nationalisation Act, which for greater accuracy I have in front of me. The noble Earl, Lord Ferrers, has complained about only the last few words in that definition. He
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says that "the efficient development of the coal-mining industry" is a phrase which is capable of more than one interpretation. I do not disagree about that. It is. I use it only because the noble Lord, Lord Drumalbyn, drew the historical creation of the words at col. 1527 of the OFFICIAL REPORT of March 4 last. And here it is in the Coal Industry Nationalisation Act 1946 in exactly the same words, in Section 1(1)(b):
"securing the efficient development of the coal-mining industry".
So, with respect to the noble Earl, Lord Ferrers, those are precisely the words which accommodate the views of his noble friend Lord Drumalbyn and which are consistent with the views expressed by the Minister in another place.
Nevertheless, if the noble Earl were to say to me, "The words you have proposed are better than the definition in the Bill because they mean what we, the Government, want; but, on second thoughts, we do not like the last few words and, although they stem from the Coal Industry Nationalisation Act, Section 1(1)(b), we would like to see those words removed", then that is something we can talk about. I am not married to every word that is proposed. But what I do say, with respect, is that this Amendment must be treated seriously. It is an honest attempt to meet the definition described by Ministers in both Houses, and it is an attempt by me to limit the area of blight.
EARL FERRERS: May I first of all say to the noble Lord that if I was in any way discourteous, either to him or to his noble friends, I would certainly apologise, for that was not what I intended at all. But he has said that his purpose in putting forward this Amendment was to help the Government by preventing such things as pithead baths, electricity, and so forth, from being examined. He said that I said that anybody who was going to examine them was "off his nut". I think that this is perfectly true, and in so far as his Amendment were to do that it would be a help; but of course it does a very great deal more than that. This is where the problem arises. Were it only to circumscribe that one particular area in which I have suggested that the words of a Minister in the other place should be taken as being a pledge by

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which the Government would undertake not to involve themselves in such activities, then this Amendment would be acceptable. The whole point is that the Amendment goes very much further by using the words "for the efficient developing of the coal-mining industry". The noble Lord rests a good deal of his argument on the fact that these are the principal words of the principal Act. This is perfectly true, but the Act defines what the Coal Board is to do. This particular Amendment defines the area in which the Minister may not make a review, and therefore I suggest the two are not comparable.
LORD DIAMOND: I do not want to delay your Lordships, and I am sure it is time we reached a conclusion on this Amendment. I wish to say only one thing. May I remind your Lordships of the words used by the noble Lord, Lord Drumalbyn, on the Second Reading debate on this Bill; namely
"the duty laid on the Coal Board under Section 1 of the Act to work and get coal; to secure the efficient development of the coal-
mining industry and to make supplies of coal available. … These were the duties of the Coal Board,".—[OFFICIAL REPORT, 4/3/71, col. 1527.]
The noble Lord then makes it clear that additional duties were laid upon them. That is the distinction which he has made. But his noble friend Lord Ferrers says something quite different. The noble Earl says that the original duties are now to be subject to the same review. It is absolutely clear that either the Government have not thought about this at all or there is such an inconsistency between what one Minister says and what another noble Lord says that we really do not know where we stand. All we can do—and I have regard to the speeches made by my noble friends—is to protest both against the words in this clause, if they remain unamended, and against the attitude of the Government by dividing the Committee.
5.33 p.m.
On Question, Whether the said Amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 70; Not-contents, 108.

CONTENTS

Addison, V.

Garnsworthy, L. [Teller.]

Plummer, Bs.

Archibald, L.

Geddes of Epsom, L.

Popplewell, L.

Ardwick, L.

George-Brown, L.

Raglan, L.

Arwyn, L.

Hall, V.

Ritchie-Calder, L.

Bacon, Bs.

Henderson, L.

Royle, L.

Blyton, L.

Hilton of Upton, L.

Rusholme, L.

Bowden, L.

Hoy, L.

St. Davids, V.

Brockway, L.

Hughes, L.

Serota, Bs.

Buckinghamshire, E.

Jacques, L.

Shackleton, L.

Burntwood, L.

Janner, L.

Shepherd, L.

Burton of Coventry, Bs.

Kennet, L.

Shinwell, L.

Champion, L.

Kilbracken, L.

Slater, L.

Chorley, L.

Leatherland, L.

Snow, L.

Collison, L.

Lee of Asheridge, Bs.

Stow Hill, L.

Constantine, L.

Lindgren, L.

Strabolgi, L.

Crook, L.

Llewelyn-Davies of Hastoe, Bs. [Teller.]

Summerskill, Bs.

Delacourt-Smith, L.

Taylor of Mansfield, L.

Diamond, L.

McLeavy, L.

Walston, L.

Donaldson of Kingsbridge, L.

Mais, L.

Wells-Pestell, L.

Douglass of Cleveland, L.

Milford, L.

White, Bs.

Faringdon, L.

Milner of Leeds, L.

Williamson, L.

Fiske, L.

Moyle, L.

Wright of Ashton under Lyne, L.

Gaitskell, Bs.

Nunburnholme, L.

Gardiner, L.

Phillips, Bs.

Wynne-Jones, L.

NOT-CONTENTS

Aberdare, L.

Berkeley, Bs.

Clitheroe, L.

Ailwyn, L.

Blackford, L.

Colyton, L.

Alexander of Tunis, E.

Boston, L.

Conesford, L.

Ashbourne, L.

Bourne, L.

Cork and Orrery, E.

Auckland, L.

Boyd of Murton, V.

Courtown, E.

Balfour of Inchrye, L.

Bradford, E.

Craigavon, V.

Barnby, L.

Brooke of Cumnor, L.

Craigmyle, L.

Belhaven and Stenton, L.

Brooke of Ystradfellte, Bs.

Cromartie, E.

Belstead, L.

Camoys, L.

Daventry, V.

De Clifford, L.

Hanworth, V.

Nugent of Guildford, L.

Denham, L. [Teller.]

Harris, L.

Poltimore, L.

Derwent, L.

Hatherton, L.

Rankeillour, L.

Digby, L.

Hawke, L.

Rathcavan, L.

Drumalbyn, L.

Hood, V.

Reigate, L.

Dundee, E.

Howard of Glossop, L.

Rhyl, L.

Dundonald, E.

Hylton-Foster, Bs.

Rochdale, V.

Ebbisham, L.

Ilford, L.

Rockley, L.

Eccles, V.

Ironside, L.

Sackville, L.

Effingham, E.

Jellicoe, E. (L. Privy Seal.)

St. Helens, L.

Emmet of Amberley, Bs.

Jessel, L.

St. Just, L.

Erroll of Hale, L.

Kilmany, L.

St. Oswald, L.

Essex, E.

Kilmarnock, L.

Sandford, L.

Falkland, V.

Kindersley, L.

Sandys, L.

Ferrers, E.

Latymer, L.

Selkirk, E.

Ferrier, L.

Lauderdale, E.

Sempill, Ly.

Gisborough, L.

Lindsey and Abingdon, E.

Skelmersdale, L.

Glasgow, E.

Lothian, M.

Strang, L.

Goschen, V. [Teller.]

McCorquodale of Newton, L.

Strange of Knokin, Bs.

Gowrie, E.

Massereene and Ferrard, V.

Strathcona and Mount Royal, L.

Gray, L.

Merrivale, L.

Greenway, L.

Mersey, V.

Teviot, L.

Grenfell, L.

Milverton, L.

Thorneycroft, L.

Gridley, L.

Monck, V.

Thurlow, L.

Hacking, L.

Monckton of Brenchley, V.

Vivian, L.

Hailes, L.

Mowbray and Stourton, L.

Windlesham, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Napier and Ettrick, L.

Wolverton, L.

Northchurch, Bs.

Resolved in the negative, and Amendment disagreed to accordingly.

On Question, Whether Clause 6 shall stand part of the Bill?
LORD DIAMOND: I would not wish to detain your Lordships long on this question. I think we have had a fair discussion on the whole of the clause arising out of the Amendment which has recently been decided upon. However, I just want to say that of course we are wholly opposed to this clause. We think it unnecessary, as I have already indicated. I entirely agree with my noble friend that not only is it an unnecessary clause but it is a sinister clause. I dislike intensely the powers which enable the Government to get information out of the private sector by backdoor methods. I think this is reprehensible. There are powers in this clause which enable a Government to get information through the Ministers and through the Coal Board in cases where the Coal Board has only a 5 per cent. interest in another company, and that company can be required to give information.
But this is only one of the aspects which we dislike intensely. The subsequent clause, Clause 7, is the really vicious part of the Bill, and it is that clause which I am sure many of my noble friends would wish to speak to. I will not detain your Lordships longer, except to
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say that although we do not propose to divide the House, in order to save time, we are wholly opposed to this clause.
Clause 6 agreed to.
Clause 7 [Further power of Secretary of State to give directions to the Board]:
5.45 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 5:
Page 5, line 23, leave out subsection (3).
The noble Lord said: I beg to move Amendment No. 5. There are several reasons why I am opposed to the whole of this subsection. First, in my view it goes clearly against the whole scheme of the Statute relating to the Board. The way the Statute was drawn up was to provide a scheme under which the Board were to decide how to carry on their activities, and the Minister was given a broad power of intervention, as in Section 3 of the 1946 Act. But in contrast to that, subsection (3) in this clause gives the Minister power to direct the Board to take specified steps with a view to altering the way in which activities are organised. I consider that that is bad for management.
I cannot see how the Board can be expected to act as a commercial concern if the Minister is to have an uncontrolled power to say to them: "No: do not do it that way; do it this way". I con

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sider it is bad for the Ministry, which would have to involve itself ever more closely in the affairs of the Coal Board so as to be able to inform the Minister, who would have to answer questions in both Houses of Parliament relating to the day-to-day activities of the Coal Board. The relief which has previously existed would no longer apply, because, of course, under this subsection the Minister could give a direction, and he could be asked, once he has that power and responsibility, why he has not given a direction to do this or that of a specified nature. This goes completely against the provision made. It will destroy the initiative of individuals who should be acting in a commercial sense and driving forward; they would have the knowledge that at any moment anything they had done or were proposing to do could be questioned or altered.
The legality of it (I speak with considerable doubt, not being a lawyer) too, troubles me very much. What is proposed here is that the Coal Board could be directed to say to one of its subsidiaries, or to one of the companies in which it has an interest "You must do so-and-so". The Board does not have to say to the subsidiary, "You, the directors of the subsidiary, must comply with the law of the land and have regard to the general interests of your total body of shareholders"—which is the way every board of directors behaves at the moment. It could be required to say to the directors of the subsidiary company, irrespective of the interests of the non-Coal Board shareholders (which, although they would mostly be a minority, could be up to 99 per cent.): "The Minister requires us, the Coal Board, and we therefore require you, the board of the subsidiary, to do so-and-so in a certain way, irrespective of whether in your opinion it is in the best interests of the shareholders or not."
I think that that is of doubtful legality, to put it at the minimum. It is not of doubtful commercial morality: I am quite sure that it is commercially immoral. I have never heard of such goings on, nor do I know anybody in the City who has heard of such goings on: that the board of a company would be required to disregard the interests of the general body of shareholders, which
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is what this subsection requires them to do. I say I dislike the subsection, and I think it is going to create all the difficulties to which I have referred. The only thing we can do with it is to omit it completely, and therefore I beg to move this Amendment.
5.51 p.m.
LORD BLYTON: I rise to support the Amendment moved by my noble friend. I regard Clause 7 as the "plunder" clause of this Bill. Clauses 6 and 7 are tied up together, and therefore we must look at this matter from that point of view. These two clauses have resulted in the noble Lord, Lord Robens of Woldingham, being driven from the chairmanship of the National Coal Board. The noble Lord made his position very clear, that he did not accept the invitation to carry on, partly because of what the Government were embodying in this particular Bill. He also said, "I will not stay to operate such measures", meaning, of course, the hiving off of the profitable parts of this industry. Just as my noble friend Lord Hall and Professor Clegg were sacked, so the Government have driven the noble Lord, Lord Robens, out. That is the effect of this particular clause.
Somebody will have to operate this industry, and whoever gets the job will no doubt be one who will be accommodating to the Government in helping the surgical operation contained in this particular clause. What is the Government's case? The Conservatives have always argued since I came to Parliament that they were not opposed to the nationalised industries, their argument being that they are opposed to the nationalised industries being able to compete with private enterprise on what they have called unfair terms. I sat on the Select Committee for Nationalised Industries for 12 years, and over the years I always thought that the nationalised industries were more hampered because they were nationalised and responsible to Parliament than private enterprise was. The claim of the Conservatives when they were in opposition was for equal competition between the public and the private sector, but that now is not their claim, and that has gone by the board. The Government's claim now is for unhampered private enterprise, and a hampered and restricted public industry. The

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argument that has brought forward Clause 7 is that the Government say that the task of the Coal Board is to produce coal, and to stop at the pithead. Their argument is that what happens to the coal industry's product after that is not the Board's responsibility; and their programme to this end is to remove, by this legislation, as many of the Coal Board's assets as they can.
If diversification is good for noble Lords opposite in all their own business interests, why, then, is it wrong for a nationalised industry? Why is it wrong for public enterprise, and good for private enterprise? The only reason I have found is their hatred for our nationalised industries, and their haste to give the plums of these industries to their friends as sharply as they can. I mentioned in my previous speech B.O.A.C. and the Post Office. I did not mention Thomas Cook; but that is another plum that has been handed over. I mentioned what has happened in Carlisle, and I am convinced that Clause 7 is the clause that will operate against this industry in the same way as has happened in these other industries.
This Bill will not produce an ounce of additional coal. It will cause great difficulties throughout the coal fields, and make the financial position of the Coal Board intolerable. Except for the continuing payment for the social consequences of closures, the Bill does nothing at all to help the coal industry, and I am pleased that we shall oppose it to the end. It is quite apparent to me that the Government are guided by a doctrinaire determination to reduce the scope of our nationalised industries. Their philosophy is the belief that if a nationalised industry makes a profit and a success of an activity, it should be hived off and given to private enterprise.
The ancillary industries of the Coal Board have most certainly played a useful part in helping the industry's finances. In the year ending March, 1970, the sale of coal amounted to £726 million, while sales of other products and services brought in £100 million, or about 12 per cent. of the total. The profit made on these activities before interest payment was over £13 million, and that compares with an operating surplus of £28·6 million from colliery activities. Of
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the £13 million profit, £7½ million came from the Board's coke ovens, and another £2 million came from its processed fuel plants. There was a small operating loss last year on the brickyards, mainly due to the Government's housing policy depressing the building industry.
The ancillary industries of the Board cover a wide field. I should like the House to appreciate this. They include coal depots, farms, estates, and joint undertakings with other firms for the production of chemicals and building materials. The Board is engaged in the exploration of the North Sea and the Irish Sea, and I understand that the sales of gas from the Viking fields will begin in 1972. If this activity is taken away, then the profits will go again to private enterprise. In these enterprises the Board have made use of their technical knowledge and their existing organisations to expand into other industries which, in one way or another, are closely associated with coal.
Why should there be this threat to the diversification of our industry? This is being followed by almost every large company in private enterprise, and mostly by the principal competitors of coal. All the major oil companies have expanded into the production of chemicals in a large way since the war. No one knows this better than the Secretary of State for Trade who brings this Bill forward. He was chairman of Shell-Mex for many years. I never knew of his advocating there the abolition of Shell-Mex ancillary industries, and I met him many times over the years when I was dealing with fuel and power in another place. British Petroleum is expanding into chemicals. Coal companies in foreign countries have done the same. The Dutch State mines, the German and the United States coal companies, are all examples. I ask: what is wrong with the coal industry of Britain doing the same? Why are the Government prepared to deny to the coal industry what is done on a larger scale by the oil companies? If it is right for them, it must be right for us. In their programme of 1968 called, Make Life Better the Tory Party said that they would let managements get on with the job, and stop messing them about with damaging political pressures and interference by a Government Department.

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Now they have turned a double somersault with this Bill to suit the private investors.
The Board's expansion into associated industries does not in any way create a monopoly. On the contrary, it increases the competition in such industries as building materials and chemicals. It follows that if, under this clause, the Board are deprived of the profitable section of their business, then there will be greater need of financial assistance from the Government or someone else. No coal industry can survive, or ever did survive, without a major degree of diversification. When we nationalised this industry it was never suggested that it was simply an instrument for coal-getting, and the Board have diversified not so much because it is a nationalised industry but because it is in the nature of colliery activities and coal-mining that they must do so.
Where does all this end? The Board will be told to stop some of their activities for no other reason than that it is a nationalised industry. Here we have a dogma of delusion erected as a public policy and contrary to all the economics that, to my knowledge, have been preached for over fifty years. Can the Government say—and I listened to the remarks of the noble Earl, Lord Ferrers, on the last Amendment—whether the coke ovens are an improper activity of the Board? If so, let them tell us why. If coke ovens are considered to be improper, then the whole range of heavy organic chemical production must follow. How can you have coke ovens involving coke production without moving into the heavy chemical activity? Is the distribution of coal an improper activity, any more than the actions of an oil company which permits the sale of cars or has garages in its ownership?
Who will buy the profitable parts of this industry? I am certain that there will be many ready to make money out of a national asset, and when these parts are put on the market we shall want to know what is to happen. Will it be the State mines of Holland, which the Sunday Times said last year would be a most interested and aggressive bidder for the chemical interests? Who will get them? It will be ironic if the highly successful operations of the Coal Board get
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into foreign hands. What of the future? Instead of our nationalised Boards getting on with the job of producing more coal, steel, electricity, gas and other essential fuels, they will be spending a large amount of their time warding off attacks from the Minister upon their respective industries.
The Tories must appreciate that they are doing incalculable harm to one industry after another. Why do they do it? There can be no other reason than that they intend to give to business interests the plums of the nationalised industries. This is a sinister Bill, devised to cater for the greed and avarice of those who would seek to exploit the coal industry and our other nationalised industries. There is no justification at all for it. We shall be watching the way in which the profitable parts are taken, and we give a warning that at some future date we may want to take them back. Furthermore, there is a deep feeling in this country, especially on the Labour side, that if we do take them back no compensation will be paid.
I conclude my opposition to this clause and my support for my noble friend's Amendment by quoting a paragraph from the Economist, which cannot be said to be a friend of the Labour Party or an ardent advocate of nationalised mining. On November 28, 1970, the Economist stated:
"There are some attractive tit-bits in the N.C.B. non-colliery cupboard. With a total capital of £122 million, the non-coal activities show an average return on capital of 33 per cent. on coke ovens; 10·3 per cent. on processed fuel plants; 2·7 per cent. on housing, and 13·2 per cent. on other activities. The Government would be wrong to compel forced sales of any of these."
That is a quotation, not from me but from the Economist, which is the Bible of the Conservative Party.
I do not think it is much use asking the Minister to call a halt. I believe the Government mean to hive off the successful parts of this industry, and they do not take much notice of what is said here. I can only say, in all seriousness, that if they rush ahead and pursue this disastrous and discouraging policy of plundering the coal industry which is outlined in Clauses 6, 7 and 8, the Government will bear a heavy responsibility for the dangerous consequences which are bound to follow. I shall be pleased

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to go into the Lobby to support my noble friend in his Amendment.
6.7 p.m.
LORD POPPLEWELL: I should like to support my noble friends' observations on this Amendment. Subsection (3) indicates very clearly the differences between the Opposition and the Government, and we believe that publicly-owned undertakings should have the same commercial viability as private undertakings. Since the coal mines were nationalised there has been very heavy capital investment in all sections of the industry, not only in the mines but in all the ancillary undertakings, and there is now very efficient production. This is a very enticing tit-bit to would-be private investors who are looking forward to taking over these profitable undertakings with a view to reaping the reward of public investment. Reference has been made to the profitability of the coking side. Every year at the commencement of winter there is a general outcry about the shortage of smokeless fuel, and many local authorities have had to put a brake on declaring smokeless zones. What will happen if the coking ovens are handed over to private enterprise?
LORD DRUMALBYN: I wonder whether we are not getting a little too far out of order. If I may suggest it to your Lordships, we are discussing an Amendment which deals entirely with directing the Board "to take specified steps". We are not at the moment discussion subsection (1), which deals with requiring the discontinuance of any functions or the disposal of assets, and so on. I wonder whether we should not get on a little faster if we were to concentrate on the particular Amendment we are dealing with.
LORD POPPLEWELL: We are discussing leaving out subsection (3), and surely subsection (3) gives very wide powers to the Secretary of State with a view to hiving off.
SEVERAL NOBLE LORDS: No.
LORD POPPLEWELL: It says:
"The Secretary of State may direct the Board to take specified steps, in respect of any activities of the Board or a subsidiary of the Board, with a view to altering the way in which those activities are organised."
If that is not a blank cheque for hiving off, I do not know what is.
LORD DRUMALBYN: With respect, I have been advised that that is not the meaning of those words, but that the hiving off is dealt with in the previous subsections.
LORD POPPLEWELL: That is my interpretation of it, and this is my opportunity, under Clause 7, to register my distinct objections to it. If I may return to the provision of smokeless fuel, which I think is extremely important, I wonder what will happen if the coke ovens are hived off. Will private enterprise be able to continue the various bits of research that are being carried out under the Coal Board, and will they do so, with a view to providing this essential commodity? I wonder, too, in regard to this power to alter the way in which these activities are organised: will private enterprise follow the same policy concerning human relations as has been followed by the Coal Board? This is the general pattern that is to be followed in the case of a wide variety of other industries, and no matter what blandishments may be advanced by the Minister in reply this principle is involved. This is the time when it should be noised in this House. This is a big step backward for all the publicly-owned undertakings. From the other side we get lip service paid to us, saying, "We are living in and we accept a mixed economy". As to a mixed economy, the indications are that so far as concerns the profitable sides of publicly-owned undertakings, they should be hived off; so far as concerns the non-profitable sides of publicly-owned undertakings, they should remain as publicly-owned, and then they can be held up as examples of the failure of publicly-owned undertakings.
THE EARL OF GOWRIE: Before the noble Lord sits down, may I ask him a question? If he is concerned with preventing hiving off or the disposal of non-colliery assets or activities, how, without this subsection, does he imagine that they can be reviewed in order to make decisions about their future?
LORD POPPLEWELL: I have seen what happens when this type of development takes place. One remembers the question of transport. When the Tory Government came into power in 1951, one remembers that the directives they gave to the transport undertakings—not clearly laid down, but suggestions—ultimately led,

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as the House will know, to the retirement of Lord Robertson, then chairman of the B.T.C., in exactly the same way as we have had the retirement of Lord Hall and others. This power to give directives pinpoints the will of the Government to interfere with the efficient running of the undertakings, and so to prepare them for hiving off.
6.1 p.m.
LORD SLATER: Noble Lords are apt to forget that we are dealing here with a nationalised industry—one of the most basic industries that this country has ever had and upon which the economy of the country, apart from the mining industry itself, was tremendously built up. I want to say this to the young noble Earl, who is more or less not just out of his teens but not an advanced politician: that when the nationalisation of this basic industry took place it was the policy of the Labour Party that adequate compensation should be paid, and adequate compensation was paid to the old coal-owners for this basic industry. I was in the industry at the time that took place, and I know what happened at the particular pit that I was working at then. Let me say this to the young noble Earl—and he can look this up in the history of the Miners' Association. In the conditions which then prevailed inside the industry I was producing coal at the coal face for 1s. 0½d. a ton. We were hewing at that particular time under private enterprise.
However, that time has passed, and we are now dealing with this nationalised industry. I repeat that the owners received fair compensation. My noble friend Lord Shinwell made reference to Lord Londonderry. I should like to refer to his son, also Lord Londonderry, who was known at my particular time as Viscount Castlereagh. When the nationalisation of the coal industry took place, what were his words to Arthur Horner, the Secretary of the Mineworkers' Union? They were: "This is one of the best things that were ever done. So far as we are concerned you have taken away the responsibility, and we have no longer any need to worry." But here we are faced with a situation in which a Tory Government, because of expansion under the Nationalisation Act into fields of
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operation, take exception to and seek to denigrate (if one may be allowed to use that term; I know it will be challenged) action going outside the 1946 Act and entering into, taking over or taking an interest in other subsidiary activities.
Let us have a look to see what the Minister said during the Second Reading debate—and I want to be fair to the Minister. To be fair to the Minister, he listed some of the things that were taken over: brickworks, shale depots, coke ovens, forms of housing. Admittedly, they were among the vested interests transferred to the Board under the 1946 Act. What he was taking exception to, on behalf of the Government, was that the Board have further interests in other fields. Now if the Coal Board had stepped outside the 1946 Act—and that is what Ministers must establish—then I could have understood the type of action and approach that they are seeking to pursue on this occasion. I could have understood their concern, as a Government, if that had been the case. But the Coal Board have not done so. The Minister admitted that a profit of some £50 million, before interest, was made by the Board. To the Minister who is to reply for the Government—and I know that he is not attached to what used to be the Ministry of Fuel and Power—I put this question: what is wrong with that? What is wrong with making that profit? I should have thought that the Government would have welcomed the initiative of this great undertaking.
Let us suppose that the mining industry had not been nationalised; let us suppose that the previous owners still controlled this operation. Does anyone think for a moment that a Tory Government would have stopped them from doing what the Coal Board are charged with doing on this occasion? Of course not, I can imagine a Tory Government—as did the Baldwin Government—complimenting the coal owners on their enterprise and their initiative and crying, "Carry on boys! You are going a good job. There is a wider field to cover. Open up new outlets, outlets which will give you positive returns." That would have been the attitude if the coal industry had still been in private hands.
But what happens now—now that it is a nationalised industry? What happens

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now when the industry takes the initiative in wider fields? I am not surprised at the Tory attitude. I am not surprised because a similar situation obtained when we were putting through the Post Office Bill, trying to formulate a Board and put the industry under nationalisation. They took a similar attitude then. So I know what I am talking about. "Big business" is desirous of coming into the market—and the chopper comes down. Let us be honest about this. Noble Lords on the other side know this to be true. When big business cracks the whip, they have to take notice. We have seen it often in the past. Every Tory Government of the past led their troops this way, and this Government will not be allowed to escape the privilege. Big business must be protected, irrespective of the consequences. My experience in Standing Committees has proved that such is the case.
My noble friends Lord Blyton and Lord Popplewell made reference to a mixed economy. I am not arguing against the principle of a mixed economy, for one must admit that some of our major industries under private enterprise have proved themselves efficient; there was one such in the community I represented before I came to your Lordships' House: the chemical industry, I.C.I., and Monsanto. They do a very good job in seeking to assist the nation's economy and to have good relations with their employees. But I fear the attitude taken by the Tory Government in this case and in this particular Bill, as set out under this particular clause, Clause 7. This is a devastating attitude and will not only upset the National Coal Board as such, will not only restrict them in their forms of enterprise and initiative, but—and I say this to the Minister kindly and candidly for I do not look upon members of the Tory Party or upon noble Lords opposite as wicked people—will upset those men who are working in the industry and who are now endeavouring to give of their best. The Government, by their action in introducing legislation of this type in this particular Bill, are asking for trouble.
I ask the Minister to consider earnestly what has been said in this Committee today when he comes to have further talks with his right honourable friend; though I sometimes wonder what power even
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his right honourable friend has in relation to the policies that have been introduced. During the course of the Steel Bill, when the Labour Government, despite their narrow majority, were still prepared to go ahead with the nationalisation of steel, I well remember Winston Churchill saying in effect, "You say that you had it in your Manifesto. Well, if you put that in your Manifesto why do you not put everything into your Manifesto?" Was this in the Tory Party Manifesto?—this action against this basic industry, this nationalised industry. Time and again we challenged the Tory Party as to what were their intentions in this regard and whether they were prepared to denationalise. I hope that the Minister responsible for carrying the Bill through this House will have further thoughts. I hope that he will have some influence with those responsible for drafting this Bill so that certain Amendments may be made in the interests of the industry and in the interest of those who are responsible for running it at this moment.
6.27 p.m.
EARL FERRERS: Nobody who has listened to the noble Lord, Lord Slater, could fail to be moved by the views he has expressed, coming as they do from one who has spent a lifetime in the coal industry. We on this side of the House appreciate full well the sincerity with which he expressed those views, and the attachment he has to the coal industry as a whole. All I would say is that, while I greatly respect those views, the noble Lord, Lord Popplewell, brought the matter to the nub when he said that this is the big difference between the two sides of the House. One does not wish to get involved too much in what one might describe as Party political controversy over this matter, although one necessarily accepts that it is controversial. I only hope that any remarks I may make will be made in such a way as to keep the tenor of such controversy as even as possible. But there is a difference and one might as well recognise the difference.
Noble Lords opposite and the Party to which they belong feel that the nationalised Coal Board has carried out its duties under the Act—as it has done—and that therefore it should not be interfered with. The view of the Government is that since the coal industry was nationalised it has grown and grown,

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and its subsidiaries have grown and grown, and that the time has come when a review should be held of all their non-colliery activities, simply in order to see what they are and where they are. It is no more than that at the moment. There is no question at this stage of the hiving-off of activities or subsidiaries. The subsection which noble Lords opposite wish to delete gives power to the Minister to give directions in certain circumstances. The effect of this Amendment would be to remove the power of the Secretary of State to direct the Board to take steps to see that any of its activities, or those of its subsidiaries, are reorganised. That is its purpose, so that the Amendment runs counter to what the Government have in mind.
When the review is made it may turn out that various aspects of the situation are not clear. For instance, it may turn out to be as the noble Lord, Lord Blyton, put it when he listed a host of different industries with which the Coat Board is connected. The noble Lord referred to coke ovens, housing estates, farms, road transport, wagon repair shops and so on. As a result of the review the Minister may feel it appropriate to give a direction about the broad lines on which the subsidiaries should operate, in order to avoid the possibility of a cross-subsidisation of activities which might not be apparent in the accounts as they are at present produced. For example, it may be that the coke ovens, or some other such enterprise, subsidise the brickworks, though that fact may not be apparent. It could be—I am not saying it will be—that the Minister might consider that directions should be given to make perfectly apparent how the structures of the various enterprises are made up.
The noble Lord, Lord Blyton, asked a specific question: are coke ovens improper? The answer is that I have not the slightest idea, and the purpose of the review which the Government have in mind is to find out the position.
LORD BLYTON: Surely the Minister is not saying that a coke oven is improper. To my knowledge, coke ovens have been with the collieries for up to 72 years. On top of that the collieries
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have always had by-products, so surely this is not something new.
EARL FERRERS: Of course it is not new. I think the context in which the noble Lord said it was slightly different from that in which I put it. He has insinuated that the Government would consider a coke oven an improper thing for the Coal Board to manage.
LORD GRANVILLE OF EYE: May I ask the noble Earl, before he leaves the question of the review, if it is not a fact that, in practice, the Chairman of the Coal Board meets the Minister periodically and reviews policy, finance, and so on, for the current year; and that all the things the noble Earl has mentioned are known by the Ministry officials?
EARL FERRERS: No. These vast enterprises with which the Coal Board is involved use, I think, a capital of something over £100 million, and they are outside the colliery activities. They are very complex. Very often they intertwine and interrelate. For this reason the Government would like to have a review to see precisely what is what. That, I repeat, is the purpose of the review.
To return to the point made by the noble Lord, Lord Blyton, it is not for me to say whether it is proper or improper for the Coal Board to run coke ovens. That is something which must wait for the review. It would be only subsequent to such a review that the Government would be in a position to make up their mind. The other point to which I think it important to refer was made by the noble Lord, Lord Diamond, in his opening speech. He said that this would involve the Government in day-to-day management. That is not the intention of the subsection: the intention is merely to give broad lines on which the various activities of the Coal Board or its subsidiaries should be organised.
A number of noble Lords opposite, quite understandably, said that they were worried about the interference of the Government and about the powers the Government are taking under this subsection. I do not think noble Lords need be so worried. The subsection does not incorporate any new principle. Both the Iron and Steel Act 1967 and the Transport Act 1968—measures introduced

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by a Government supported by noble Lords opposite—contained powers to direct the alteration of the organisations or their activities. Those particular powers extended to the whole of the activities and not, as in the present case, only to the non-mainline activities. So the principle of the subsection which noble Lords opposite wish to remove is not new. This has been done before. The precise drafting of the present subsection is calculated to be appropriate for the coal industry.
LORD POPPLEWELL: Does the principle in the 1946 Act still operate? If so, why is there a necessity for this subsection?
EARL FERRERS: What I said was that such principles as are contained in this clause operate in both the Iron and Steel Act and also the Transport Act. But they cover the whole of the industries concerned, whereas this subsection does not. I fully recognise the feelings which noble Lords opposite have expressed, but this is not a subsection which is new in principle, and it is one which the Government think should be kept in the Bill.
6.37 p.m.
LORD DIAMOND: The noble Earl has not moved us at all by his argument—quite the contrary. He has said that this subsection is not for specific powers but for broad powers—I think those were the words he used. I cannot accept that from the noble Earl, otherwise words would cease to have their meaning. Subsection (3) says:
"The Secretary of State may direct the Board to take specified steps …
"Specified steps", means specific steps.
EARL FERRERS: With respect to the noble Lord, I do not think it does. "Specified" is not the same as "specific".
LORD DIAMOND: I am very glad to hear that. So the Secretary of State is not going to direct the Board to take specific steps. I have that on the authority of the Minister. That is a little advance. The noble Earl said that the purpose is to give broad indications. But as my noble friend Lord Popplewell has made clear, the broad indications are already contained in the original Act. Therefore
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I cannot see the purpose of this subsection, if it has been accurately described from the Government Front Bench.
It is perfectly true that these powers are similar to the existing powers in other Acts. But the noble Earl did not go on to explain the different context. The context of the nationalisation of coal was, I think (I am speaking offhand) different from every other one, in that when coal was nationalised it took over specific listed assets. When every other industry has been nationalised it has taken over companies and shares in companies. It has been essential, therefore, in order to define the boundary between the nationalised sector and the private sector, for the Government to have powers to say clearly which activities shall come on which side of the line, so that nationalisation should take place. That is a total difference between the two, and it is quite unnecessary for the purposes of the coal industry, which it has been made perfectly clear functions well—it has been complimented on its functioning by Ministers opposite. It has functioned well over all these years, and it is totally unnecessary to have the kind of powers which the words in the subsection indicate.
I am in the difficulty of having to toss up and say, "Shall we vote against the Bill itself, which is totally unsatisfactory so far as its subsections are concerned, or shall we accept the word of the Minister who speaks with a different voice?" I am bound to say, with the greatest respect to him, that those outside this House will have regard to the words in the Bill; and the words in the Bill are quite unacceptable for the reasons I have given and which the noble Lord did not see fit to deal with. The words are unacceptable because of the management difficulties, because of the legal difficulties, because of their commercial immorality, and for all the reasons which my noble friends have given; and I can only invite my noble friends to divide the Committee on this Amendment.
6.52 p.m.
On Question, Whether the said Amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 57; Not-Contents, 92.

CONTENTS

Addison, V.

Gifford, L.

Ritchie-Calder, L.

Archibald, L.

Granville of Eye, L.

Rusholme, L.

Ardwick, L.

Hall, V.

St. Davids, V.

Bacon, Bs.

Henderson, L.

Segal, L.

Beswick, L.

Hilton of Upton, L. [Teller.]

Serota, Bs.

Blyton, L.

Hoy, L.

Shackleton, L.

Bowden, L.

Hughes, L.

Shepherd, L.

Brockway, L.

Jacques, L.

Slater, L.

Champion, L.

Janner, L.

Stow Hill, L.

Collison, L.

Kennet, L.

Strabolgi, L. [Teller.]

Constantine, L.

Kilbracken, L.

Summerskill, Bs.

Davies of Leek, L.

Leatherland, L.

Taylor of Mansfield, L.

Delacourt-Smith, L.

Llewelyn-Davies of Hastoe, Bs.

Wells-Pestell, L.

Diamond, L.

Mais, L.

White, Bs.

Douglass of Cleveland, L.

Milner of Leeds, L.

Williamson, L.

Fiske, L.

Nunburnholme, L.

Wright of Ashton under Lyne, L.

Gaitskell, Bs.

Phillips, Bs.

Gardiner, L.

Plummer, Bs.

Wynne-Jones, L.

Garnsworthy, L.

Popplewell, L.

Geddes of Epsom, L.

Raglan, L.

NOT-CONTENTS

Aberdare, L.

Ferrers, E.

Merrivale, L.

Ailwyn, L.

Ferrier, L.

Mersey, V.

Albemarle, E.

Gisborough, L.

Milverton, L.

Alexander of Tunis, E.

Glasgow, E.

Monckton of Brenchley, V.

Auckland, L.

Goschen, V. [Teller.]

Mountevans, L.

Barnby, L.

Gowrie, E.

Mowbray and Stourton, L.

Belhaven and Stenton, L.

Gray, L.

Napier and Ettrick, L.

Belstead, L.

Greenway, L.

Nugent of Guildford, L.

Berkeley, Bs.

Grenfell, L.

O'Neill of the Maine, L.

Boston, L.

Gridley, L.

Rankeillour, L.

Brooke of Cumnor, L.

Grimston of Westbury, L.

Rathcavan, L.

Brooke of Ystradfellte, Bs.

Hacking, L.

Rochdale, V.

Brougham and Vaux, L.

Hailes, L.

Rockley, L.

Clitheroe, L.

Hailsham of St. Marylebone, L. (L. Chancellor)

St. Aldwyn, E.

Colyton, L.

St. Helens, L.

Conesford, L.

Hanworth, V.

St. Just, L.

Cork and Orrery, E.

Hatherton, L.

St. Oswald. L.

Craigavon, V.

Hawke, L.

Sandford, L.

Craigmyle, L.

Hertford, M.

Sandys, L.

Cromartie, E.

Howard of Glossop, L.

Sempill, Ly.

Daventry, V.

Hylton-Foster, Bs.

Skelmersdale, L.

De Clifford, L.

Ilford, L.

Somers, L.

Denham, L. [Teller.]

Inglewood, L.

Strathcona and Mount Royal, L.

Drumalbyn, L.

Jessel, L.

Dundee, E.

Kilmany, L.

Teviot, L.

Dundonald, E.

Kindersley, L.

Teynham, L.

Ebbisham, L.

Kinnoull, E.

Thurlow, L.

Eccles, V.

Latymer, L.

Vivian, L.

Emmet of Amberley, Bs.

Lauderdale, E.

Windlesham, L.

Erroll of Hale, L.

Lindsey and Abingdon, E.

Wolverton, L.

Essex, E.

McCorquodale of Newton. L.

Falkland, V.

Massereene and Ferrard, V.

Resolved in the negative, and Amendment disagreed to accordingly.
6.48 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 7:
Page 5, line 34, at end insert—
"( ) In giving a direction to the Board under this section the Secretary of State shall have regard to the requirement imposed on them to direct their policy to securing the financial objective specified in section 1(4)(c) of the Act of 1946."
The noble Lord said: The purpose of this Amendment is to ensure that in giving a direction under Clause 7 the Secretary of State takes into account the financial consequences of what he requires to be done. Under Clause 6(2) paragraph (c) ensures that any report made under that clause deals with the financial consequences of continuing the activities reported upon or of modifying them in some way. It is certainly important to take financial consequences

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into account when reviewing and reporting on a matter, but it is even more important to do so when making a decision that some activities are to be discontinued or some part of an undertaking is to be disposed of. The Board is required under Section 1(4)(c) of the original Act to break even, in effect, over a period of years, and the Board's ability to do that will be affected by any exercise of the power given to the Secretary of State by Clause 7 of this Bill. So, consistently with the provision in Clause 6, this Amendment specifically provides that the financial implications for the Board are to be taken into account when the Secretary of State is considering the exercise of the very wide power proposed to be given to him. I beg to move.
LORD DRUMALBYN: I would suggest to the noble Lord that this Amendment is unnecessary. He has quite correctly quoted the fact that the advantages, if any, and financial consequences foreseen as resulting from a continuance of the activities must be contained in the report, and therefore they are bound to be brought to the notice of the Secretary of State. Furthermore, when the Secretary of State is consulting the Board, as he is bound to do before giving a direction, they will again without doubt be brought to his attention. On the basis of what is in the report, and as a result of the consultations, the Minister will then have to make up his mind what to do.
The noble Lord says that the Bill does not lay down that in making up his mind he must have regard to the financial objectives specified in Section 1(4)(c) of the original Act. But surely the Secretary of State must have regard to what is a duty placed upon the Board. He cannot possibly give a direction to the Board to do something which it would be outside his powers to give. The Board has to meet these requirements; the Secretary of State knows this, and therefore is bound to take it into consideration. As I say, this seems to me to be a wholly unnecessary Amendment.
LORD DIAMOND: I am not sure whether to welcome or to reject that reply. The noble Lord says that the Amendment is unnecessary because this is what the Secretary of State is going to do anyway. I am bound to say that if that is so I see no reason why it
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should not be incorporated in the Bill. If, on the other hand, the noble Lord is saying (I do not know whether he meant to say this, but it is what I understood him to say) that the Secretary of State will not have power under this Bill to direct the Coal Board to do something which the Coal Board thinks is against its duty under Section 1(4)(c) of the original Act, then I welcome it and will leave it there. But he is now going to tell me that I misunderstood him.
LORD DRUMALBYN: I did not say that it was a question of what the Coal Board thinks. It is a question of fact whether it would or would not be so.
LORD DIAMOND: With the greatest respect, nobody on earth could say what the fact is about this. If I may say so with negligible authority, an army of accountants could all express different views as to whether the financial consideration was such as to make it essential for this particular activity to be carried on in order to make ends meet: because it is the totality of the Board's activities which has to be organised in such a way to make ends meet, and not any single one of them. It is an impossible argument to pursue.
I should have thought that we are on far safer ground if we take the words in the Bill to mean what they say. They mean that under the previous clause the financial effect has to be taken into account; and under this clause, which is even more important than the information clause (this being the action clause as opposed to the information clause) that the financial consequences should be taken into account. The noble Lord is saying that they will be taken into account. I merely put to him the simple proposition: why not put it in the Bill?
LORD DRUMALBYN: The answer, which I am sure the noble Lord must himself often have given, is that you do not put things into a Bill which are unnecessary.
LORD DIAMOND: I will have it to your Lordships. It is obvious that there is a difference of view here. It would detain the Committee too long to vote on it. We merely register our view once more that the sensible thing is that Bills should mean what they say.
On Question, Amendment negatived.
7.0 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 8:
Page 5, line 37, at end insert—
"( ) The Secretary of State shall not give a direction to the Board under this section the effect of which would be to require them to dispose or require a subsidiary of theirs to dispose, of any part of their or its undertaking, or any asset, which is managed or held wholly or mainly for the purposes of colliery activities."
The noble Lord said: I suppose one must never tire of doing good, and so I offer this Amendment to your Lordships. The purpose of this Amendment is to repair an omission in Clause 7. Subsection (1) refers to the continuing activities and also to the disposal of assets. It is made clear by subsection (4) that the power to require the discontinuance of activities does not apply to colliery activities. However, the wording of subsection (4) is such that the same restriction does not apply where the Secretary of State's direction is to dispose of an asset. He could, therefore, require the Board to dispose of (shall we say?) the surface of a colliery, or something else essential to the working of the colliery, and in that way bring about what he is specifically precluded from doing by the Bill; namely, to restrict the carrying on of a colliery activity.
I am talking here about a real colliery activity. The argument about going beyond the definition of colliery activity was disposed of. It is clearly illogical to restrict the Secretary of State's powers in regard to activities, while not doing so in relation to part of an undertaking or assets that may be directly associated with the carrying on of the activities. I repeat, one should never tire of doing good, and I therefore offer the Committee this Amendment, which should help the Government to put right that omission.
EARL FERRERS: This Amendment would result in the widening of the protection given to colliery activities. It would prevent the Secretary of State from requiring a subsidiary to dispose of any parts of its undertaking or assets managed or held wholly or mainly for colliery activities. The noble Lord, Lord Diamond, gave an example of the surface of the coal mine being sold. But it is perfectly possible that the National Coal Board may have many other assets which, after a review, the Government might consider
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should be subject to direction, yet which could be said to be held wholly or mainly in connection with their colliery activities.
One example that comes to mind is computers. It could perfectly well be argued that the main object of a computer is to deal with all the facts and figures which come out of the colliery activities. But it could also be used for other purposes. It is this type of situation which the Government feel should be subject to review. That is why we are not keen to have the Amendment which the noble Lord has suggested incorporated in the Bill; and it goes very much farther than the rather specific example which the noble Lord gave.
LORD DIAMOND: I do not believe my Amendment goes as far as the noble Lord has indicated. I am bound to say that he seemed to indicate that there were Amendments which might be satisfactory to him, although this one is not. In these circumstances I think the best way of dealing with this is for me to ask your Lordships' permission to withdraw this Amendment, so that I can read and consider very carefully what the noble Earl has said. Then I can perhaps at a later stage put down an Amendment which might be acceptable.
Amendment, by leave, withdrawn.
LORD DIAMOND LORD DIAMOND moved Amendment No. 9:
Page 5, line 37, at end insert—
"( ) Where, by virtue of a direction given under this section, the Board are under a duty to dispose of any part of their undertaking or any assets, or to secure the disposal of any part of the undertaking, or any assets of a subsidiary of theirs, they may discharge that duty in such manner and by such stages, and with such postponements as are necessary to secure that the consideration obtained in respect of the disposal is financially adequate."
The noble Lord said: This Amendment is merely designed to give statutory effect to assurances given by the Minister in another place. Sir John Eden said in Commons Standing Committee B at col. 529:
"There would be no question of a forced sale in the sense that the Board would be required to dispose of an asset by a particular time."
Later he added:
"When a requirement is placed on the Board to sell an asset, the direction must be carried out in such a way as to ensure that

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the best possible price is obtained for that asset."
This Amendment does no more than give effect to that.
The Minister's assurances relate to a most important aspect of the matter—the price to be paid for an asset which he has said is to be disposed of. It is so important that feel sure he will welcome his words being given statutory effect. The language chosen is the language of the Amendment and follows closely that of a proviso to Section 18 of the Iron and Steel Act 1953, which was passed by a previous Conservative Government. The proviso says in the context of setting up I.S.H.R.A. (the Iron and Steel Holdings Realisation Agency) to return the iron and steel undertakings to private ownership:
"Provided that the Agency may discharge their duty under this section in such manner, and by such stages, and with such postponements of the sale of securities or other assets, as they may with the approval of the Treasury determine, and shall so discharge the said duty as to secure, without disregard to other relevant matters, that the consideration obtained from the disposal of assets is financially adequate …"
I should have thought that this Amendment serves that purpose; that it gives statutory effect to the undertaking of the Minister, and would, therefore, be welcome to the Government.
LORD DRUMALBYN: I am struck by one thing from the parallel that the noble Lord quoted in the Iron and Steel Act; that is, that the approval of the Treasury was required in the steps for the disposal. I can see no parallel to that in the Amendment that the noble Lord has moved. Our intention, the noble Lord has correctly stated, is that the timing of such disposals as may turn out to be necessary shall secure that the consideration is financially adequate. He was quite correct in quoting what my honourable friend said in another place. But the difficulty of putting an obligation of this kind on to the Board (particularly the last sentence of the Amendment), is that it can really never be quite certain that it has got the best possible price. If you say:
… with such postponements as are necessary to secure that the consideration obtained in respect of the disposal is financially adequate"
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they may always feel, "If we postpone a little longer we might get more". It may be found afterwards that they might have postponed, and that had they done so they would have received more. This would be a very unsatisfactory burden to place upon them.
I hope that the noble Lord will review these words again, for I do not think that they are really apt for the purpose that he has in mind. Nobody wants disposals to take place at other than the best possible price. When the best possible price can be obtained is a matter of judgment. If you put obligations in this form all that will happen is you will secure delay in disposing of assets, and that would in itself be undesirable and might lead to loss.
LORD DIAMOND: The noble Lord has said that the provision made in the Iron and Steel Act 1953, which, if my recollection serves me correctly, was introduced by a Government of which he was a member, and the words used, were unwise. I do not think that they were. They served their purpose; the Iron and Steel Holdings Realisation Agency were not able to carry out the complete hiving-off of the steel industry, any more than the Government would be able to carry out the complete hiving-off of the peripheral activities of the coal-mining industry. I realise that a great deal of heat and energy will be wasted, the Government's time will be wasted and the nation's assets will be wasted. Nevertheless, it is our duty to protect the nation's assets as well as we can. The way the Government of that day thought they could best protect them was the way in which every businessman knows how best to protect his assets: by not having a forced sale; not selling under the auctioneer's hammer, or the receiver's hammer (if I may refer to something nearer at home at the moment), but by having a sale under which the best price is obtained because time is given.
Already the Government are putting a blight on these assets—I know I have used the phrase before but it is very true. As soon as the Secretary of State says that a certain activity is going to be hived off, no purchaser is going to be such a fool as to offer a fair price for the assets involved. He knows that all he

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has to do is to wait for the right plum to fall, because the Secretary of State has decided, and the public will know that he has decided, that a certain activity is to be hived off. There can be only a certain number of people interested in buying, and they will wait their time and obtain the assets at their price. So already the act of the Secretary of State under this Bill will do enormous damage to the value of assets which are held by the nation.
All I was seeking to suggest was that the damage should be minimised by requiring those concerned to take account of the financial result, and to dispose of the assets in a sensible way, as any ordinary businessman would dispose of any assets which he did not require for the running of a going concern. The noble Lord has only told me, really, that the words I propose do not include the words which were included on a previous occasion with the approval of the Treasury. Do I gather him to mean that he would find the Amendment acceptable if those words were added? I am sure that it is an easy procedure in your Lordships' House to move a manuscript Amendment to add those words at an appropriate place. If that is what the noble Lord wants, I will gladly accommodate him by moving an Amendment to the Amendment in order to add those words. I will do so if he tells me that that is what he wants.
LORD DRUMALBYN: The noble Lord has illustrated the differences between the Iron and Steel Act procedure and what is likely to take place here. He said that a blight is cast over the whole of the ancillary activities of the Coal Board from now on, if I understand him correctly—
LORD DIAMOND: No, I did not. I apologise for interrupting, but it is important that I make my point clear. What I am saying is this. Just as when a local authority says that certain streets are going to be pulled down within the following 15 years a blight is cast over the streets and the value of the houses in them, so a blight is cast when the Secretary of State says that he is not going to continue, for example, coke ovens. Apparently, the Minister is saying that the Government do not know
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whether the Coal Board have closed up the business of coke ovens (although a coke oven is not something which can be hidden under the kitchen dresser) and therefore a full examination has to be held under Clause 6 to determine whether or not they are carrying on the business of running coke ovens. But, having discovered that the Board are running coke ovens, the Secretary of State could then say that coke ovens must be hived-off, in which case he would have to lay an Order in the House and everybody would know about it. When the Secretary of State says that a particular peripheral activity must be hived-off he immediately blights the price.
LORD DRUMALBYN: Obviously this is a difficult situation, no doubt partly because of the public direction that has to be given—I heard the noble Lord's sotto voce remark.
LORD DIAMOND: I apologise. I assure the noble Lord that it was sotto voce. If it had not been, adjectives would have been added to it.
LORD DRUMALBYN: At any rate I am glad the noble Lord does not whisper to himself obscenely. However, the point here is this. Obviously in circumstances of this kind there will be commercial difficulties; there can be no doubt about that. The question is whether one is going to make the position any better or worse by an Amendment of this kind. As the noble Lord has made quite plain, these are circumstances which are rather different from those under the Act which he quoted. What I have said is that it might be possible under the words as they are before us for the Board, in good faith, to postpone indefinitely the disposal of these assets. I do not think this would be a desirable result. The fact of the matter is that working provisions of this kind can be dealt with only with the fullest co-operation and understanding between the Minister and the Board. If that understanding exists, then words of this kind are not necessary. That is the first argument. The second argument I have already given. It is that I am very doubtful whether the words of the Amendment would be apt to achieve the purpose, and I am not at all certain that they would not run the Board into difficulties by putting upon them an impossible task.
On Question, Amendment negatived.
7.16 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 10:
Page 5, line 39, leave out ("or (2)") and insert (", (2) or (3)").
The noble Lord said: Subsection (6) of Clause 7 of the Bill, which requires directions by the Secretary of State to be made by Statutory Instrument the draft of which has to be laid before Parliament, applies at present only to directions under subsections (1) or (2); that is to say, it applies only to directions to discontinue or restrict activities, or to dispose of any part of an undertaking or of any assets. It does not apply to directions pursuant to subsection (3) to alter the way in which activities are organised. Accordingly, my Amendment is designed to make the requirement to proceed by way of Statutory Instrument apply to all kinds of directions under Clause 7.
A direction to alter the way in which particular activities are organised could be just as adverse to the Board, just as damaging to the national interest, as a direction to restrict activities. Moreover, as I indicated on an earlier Amendment, a Ministerial direction under subsection (3) would completely cut across the scheme of the Coal Industry Acts. It would represent an even greater degree of interference on the part of the Minister in the management of the industry, and it requires the safeguard of an Order subject to Parliamentary control just as much as a direction to discontinue or restrict an activity does.
This is a reasonable precaution. The Government must recognise that they are acting in an extremely controversial field. They are taking up powers which are very great indeed, yet they are giving to Parliament only the minimum check, the check of the Negative Resolution procedure—not of an Affirmative Resolution. I am suggesting to the Government that they would seem to be totally authoritarian, unless they agree at all events to extend the area of check which Parliament has over the activities of a Government. I beg to move.
7.19 p.m.
LORD DRUMALBYN: The reason why I am afraid that I must once again say that the Government cannot accept this Amendment is that it seeks to make directions under this subsection subject
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to the same Parliamentary procedure as directions under subsections (1) and (2). The point is that the directions under subsection (3) are of quite a different kind. They are concerned only with the way in which non-colliery activities of the Board or its subsidiaries are organised, and they do not involve the disposal of assets. The principle which makes Parliamentary procedure appropriate to directions under subsections (1) and (2) is not applicable to directions under subsection (3).
When one is disposing of assets in this way, involving nationalised industries, it is surely proper that where financial considerations are directly involved there should be reference to Parliament by an Order. But where there ate simply directions as to organisation, this is a different matter. After all, there are many points in the nationalisation legislation where directions can be given—and directions of a general character are in fact given. In most cases they are not subject to Parliamentary approval. Normally, the most that happens is that the Board will record the direction in their Annual Report, and I presume that the same would apply if a direction were given to the Board, under subsection (3), for the reorganisation of assets. I would expect that to happen, but it is in that same class of direction and not in the class of the disposal of assets.
I hope the noble Lord will accept that argument, but I might perhaps add one further point. He was concerned at an earlier stage, both on Second Reading and earlier this afternoon, that this might mean almost day-to-clay interference with the activities of the Board. That of course is not the intention. The general intention, as my honourable friend has made clear in another place, is that there should first of all be a general review, and that following that general review he would have a look (the whole purpose of the review being to see the industry in perspective) and decide what action required to be taken and where reorganisation of activities might be required.
I should have thought that in circumstances of that kind it would not be improper (this is obviously a matter for the Committee) to ask in Parliament what directions the Minister had given and

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what they were about. So such directions can be raised in Parliament. It would not be in the nature of day-to-day interference, yet information about directions would still be available to Parliament, if only when the Board present their Report. That being so, I should have thought the noble Lord need not be unduly disturbed about the position.
LORD DIAMOND: Well, the noble Lord is unduly disturbed, because one of the activities I do not rejoice in is crying over spilt milk: it is a great waste of time. All the noble Lord has said is that once the Minister has given a direction Parliament can, of course, ask the Minister what direction he has given—that is, assuming that Parliament knows about it, or that somebody has been put wise that a Question should be asked. That is far too late for the protection of the national interest. Parliament is the proper place in which the national interest should be judged and in which the power should finally reside.
The noble Lord said that this is totally different from subsections (1) and (2) under which assets are disposed of or activities are restricted. I can only repeat that it is just as adverse to the Board, in their opinion, and in my opinion and the opinion of my noble friends, for the way in which particular activities are organised to be altered as for activities to be
restricted. The Board would not be organising them in a certain way unless they thought that organising them in a different way would be damaging, foolish or unwise, and so the financial interests which the noble Lord referred to are involved just the same.
I see no distinction between these different categories, and therefore, with one exception, I see no reason why Parliament should not have the opportunity of considering the spilling of the milk before it is spilt. The one exception I am beginning to see—I am slow on these things and it takes me rather a long time—is that the Minister has come here to reject every single Amendment, one after the other, and to pay no attention at all to any of the arguments; and the same remarks apply to his noble friend. I have never heard arguments dealt with, with less clear understanding of what the arguments are about, and I have never heard briefs stuck to more rigidly. I suggest that we demonstrate our dissatisfaction with the unwillingness of the Government to have regard to a simple argument on a most controversial matter by dividing the Committee.
7.30 p.m.
On Question, Whether the said Amendment (No. 10) shall be agreed to?
Their Lordsips divided: Contents, 48; Not-Contents, 61.

CONTENTS

Addison, V.

Garnsworthy, L.

Rusholme, L.

Ardwick, L.

George-Brown, L.

Segal, L.

Bacon, Bs.

Granville of Eye, L.

Serota, Bs.

Beswick, L.

Henderson, L.

Shackleton, L.

Blyton, L.

Hilton of Upton, L. [Teller.]

Shepherd, L.

Brockway, L.

Hughes, L.

Slater, L.

Burntwood, L.

Jacques, L.

Stow Hill, L.

Champion, L.

Janner, L.

Strabolgi, L. [Teller.]

Collison, L.

Kennet, L.

Taylor of Mansfield, L.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, Bs.

Walston, L.

Delacourt-Smith, L.

Mais, L.

Wells-Pestell, L.

Diamond, L.

Milner of Leeds, L.

Williamson, L.

Douglass of Cleveland, L.

Nunburnholme, L.

Wright of Ashton-under-Lyne, L.

Fiske, L.

Phillips, Bs.

Foot, L.

Plummer, Bs.

Wynne-Jones, L.

Gaitskell, Bs.

Ritchie-Calder, L.

Gardiner, L.

Royle, L.

NOT-CONTENTS

Aberdare, L.

Brooke of Cumnor, L.

Conesford, L.

Albemarle, E.

Brooke of Ystradfellte, Bs.

Cork and Orrery, E.

Auckland, L.

Brougham and Vaux, L.

Craigavon, V.

Barnby, L.

Carrington, L.

Craigmyle, L.

Berkeley, Bs.

Clitheroe, L.

Daventry, V.

Boston, L.

Colyton, L.

De Clifford, L.

Denham, L. [Teller.]

Hailes, L.

Rankeillour, L.

Drumalbyn, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Rochdale, V.

Essex, E.

St. Aldwyn, E.

Falkland, V.

Hawke, L.

St. Helens, L.

Ferrers, E.

Hertford, M.

St. Just, L.

Ferrier, L.

Howard of Glossop, L.

St. Oswald, L.

Gisborough, L.

Jellicoe, E. (L. Privy Seal.)

Sandford, L.

Glasgow, E.

Lauderdale, E.

Sandys, L.

Goschen, V. [Teller.]

Lindsey and Abingdon, E.

Sempill, Ly.

Gowrie, E.

McCorquodale of Newton, L.

Somers, L.

Gray, L.

Mersey, V.

Teynham, L.

Greenway, L.

Milverton, L.

Thurlow, L.

Grenfell, L.

Mountevans, L.

Vivian, L.

Gridley, L.

Mowbray and Stourton, L.

Windlesham, L.

Grimston of Westbury, L.

Napier and Ettrick, L.

Resolved in the negative, and Amendment disagreed to accordingly.

On Question, Whether Clause 7 shall stand part of the Bill?
LORD TAYLOR OF MANSFIELD: I would ask the indulgence of your Lordships for a few more moments. I know the hour is getting late, but when we consider that Members had more than 100 hours in Committee in the other place and we have had only about three, we realise that we have been very conservative. I could not let this clause pass without a parting word, because I dislike it so much; I did not conceal my dislike on Second Reading, nor have I again this afternoon. Talking about dislike of this clause, I am not the only person; I think all my noble friends on this side of the House dislike it as much as I do. But let us look at external dislikes. The National Coal Board does not like it, in my opinion, and Clause 7 may be one of the reasons why the present Chairman of the National Coal Board is vacating his office. I can say with authority, too, that the organisation which represents the men in the industry, the National Union of Mineworkers, dislike the clause as well. If the noble Lord had accepted my offer this afternoon, we could have "called it a day" long ago, and I am sure we should have gone away happy and abundantly satisfied. But for reasons best known to himself he was not inclined to accept the magnanimous offer I put to him a few hours ago.
To me this clause is a dangerous clause, dangerous psychologically so far as the men in the industry are concerned. I am quite certain that it will not help to sweeten industrial relations in the mining industry. There is a bit of dynamite in this particular clause, and it would have been much better had the Government
402
not sought to introduce it, and particularly in a Bill of this kind. What does it do? We should be clear about it, and I should like to read it very briefly.
"The Secretary of State may direct the Board to discontinue or restrict any of their activities …"
That is point number 1. The clause then goes on to say:
"dispose of any part of their undertaking …"
My understanding of those particular words is that the Minister may direct the National Coal Board to sell off, dispose of—whatever term you like to use—any of the non-colliery activities upon which the National Coal Board are et present engaged. I could recite quite a number of these, but the ground has been covered by my noble friend Lord Diamond, my noble friend Lord Slater and other noble Lords, and it would be a waste of time.
But may I mention one or two by-products of coal: distribution of solid fuel, brickworks, and now North Sea gas. My information is that last year the income of the National Coal Board from these activities which are described as non-colliery activities was in the legion of £100 million, and the profit accruing therefrom was in the neighbourhood of £13 million. These activities are not unusual; they have not sprung up overnight since nationalisation; they have been common in this mining industry for a long number of years, except of course, North Sea gas. They were carried on long before nationalisation in 1947.
May I make one reference to coal distribution, because that subject was raised earlier on. I knew a man, now deceased, named Frank Hodges. When he left the Electricity Commissioners he went to be general manager of a group of collieries in the Leicestershire coalfield. One of the things that he did was

403
to take over completely every bit of coal distribution from that group of collieries. That was one of the reasons why Frank Hodges, the general manager of that group of collieries, began to make those collieries pay. The particular colliery that I worked at for a number of years had brickworks. Why? This was the result of the sagacity of the colliery company. The shale which came out of the pits, had it not been made—and it was suitable for the purpose—into bricks, would have gone on the spoil heap, disfiguring the countryside. Non-colliery activities of that kind could be multiplied many times, but I will not labour the position at this hour of the night.
We are told that no decision has yet been taken regarding the disposing of these non-colliery assets; but there are grave suspicions. If there is a clause in this Bill which arouses the suspicions of many of us, it is Clause 7. I will not talk about B.O.A.C. or Thos. Cook & Son, or the proposal, already in the form of a Public Bill, about the breweries and public houses in the county of Cumberland, which I suppose we shall be dealing with in the near future. What concerns me, and what deepens my suspicions, is the statement that was made to the Bournemouth Evening Echo by the Minister responsible for this Bill in another place. He is reported as having said:
"The Government will almost certainly make a start this year on selling off parts of the State-owned sections of British industries."
He does not specifically mention the coal industry, it is true, but it has happened so far as B.O.A.C. and Cook's Tours are concerned, and, who knows, it could be, although we are told that no decision has yet been taken, that the non-colliery activities of the mining industry will be next.
It reminds me of the young man and woman whose engagement was announced. A mutual friend met them in the street and said, "I notice you are now engaged". They said, "Yes. We have looked at it, made all the reviews we can, and decided to get married; but we have not yet decided the date." I am wondering whether that is in the mind of the Government so far as these non-colliery activities are concerned. So
404
far as the coal industry is concerned, have they decided in principle to implement what I regard as this hiving off Clause 7? I hope that is not so. Believe me—and I say it to the two Ministers who are responsible in this Committee stage of this Bill—in my view it would be a very sad day psychologically for the mining industry if this hiving off process takes place.
Before I sit down may I say one more thing. I wish the Government were more interested in the burdens that the coal industry is carrying. This was a sadly neglected feature by all post-war Governments until 1965, when the then Labour Government reduced the capital debt by £400 million. That resulted in a considerable saving so far as interest payments were concerned. I do not want to talk about imported coal. I do not want to say anything at this stage about the coal industry from nationalisation right up to the end of 1956 when it was regarded as a social service.
I should like to draw the attention of the noble Lord to the question of coal royalties. In 1938, coal royalties were nationalised by the Chamberlain Government, and a commission was set up to administer them. On nationalisation, in 1946, the Coal Commission was wound up, and the whole of the liabilities were transferred to the National Coal Board. The initial cost of compensating the royalty owners in 1938 was £66 million. The liability transferred to the National Coal Board under the Act of 1946 was £78 million. A few years ago in another place I asked a Question as to what the position was, and the information given to me (this is on record in the OFFICIAL REPORT) was that beyond 1990 the National Coal Board has to pay more than £2 million in the form of interest for those royalties nationalised in 1938. One could go on about the burden which has been placed on the National Coal Board, and I would ask the noble Lord to use his influence inside the Government to see that some of these burdens are eased so far as the Board is concerned.
I regret that this particular clause is in the Bill, and I am insistent on dividing the Committee on it. I hope that my noble friend on the Front Bench, at the end of this debate on this clause, will call

405
for a Division, and that we shall register our dissatisfaction at its being in the Bill.
LORD RITCHIE-CALDER: Before my noble friend sits down, did he mean £2 million or £2,000 million?
LORD TAYLOR OF MANSFIELD: I meant £2 million per annum. As a matter of fact, the figure is just over £2 million, but I was using round figures.
7.49 p.m.
LORD DIAMOND: I do not think my noble friend need have any anxiety about what action we shall suggest on this side of the Committee with regard to the Question whether this clause shall stand part of the Bill. As I have indicated, it is the most vicious clause in the Bill. All the damage stems from this clause: the damage to the Coal Board, to the national interest, to the morale of the miners and to our relationship with them. I have made clear, both on Second Reading and on the previous Amendments to which I spoke, what my own views are with regard to this clause, and I should not wish to delay your Lordships by going over all these matters once more. However, there are some matters to which I must draw the Government's attention because they are matters which are not in the clause.
I have referred to the question of management and the interests of the shareholders—possibly majority and possibly minority shareholders—in subsidiary companies. I referred to the problem of the disposal price. There is still nothing in the clause to secure that a fair price will be obtained by the State-owned industry. But what I want to draw your Lordships' attention to is the question of the rights of third parties. In a number of instances the Board have undertaken ancillary activities by means of joint enterprises. The arrangements vary, but in each case an agreement has been freely negotiated with a third party which was no doubt believed by the Board and the other party concerned to be to their mutual advantage. Now it is normal practice for the parties either to agree to continue the enterprise for a minimum term, or to provide restrictions on one or other withdrawing without the consent of the other. That is perfectly normal drill. But the clause makes no provision
406
in respect of the Board's obligations or the third party's rights. Yet a statutory direction to the Board to withdraw would override a bargain entered into in good faith. It must be almost unheard of for a Bill to provide for the private rights of a person to be overridden without one sentence to adjust the rights of that person or to provide for the situation which results.
A similar chaotic situation will arise in connection with the Board's financial obligations. Under this clause, the Secretary of State has power to give a direction to call in a loan made by the Board or to exercise any power they might possess to revoke a guarantee. Again, no provision is made to deal with the resulting situation. Let us suppose that the Board were in a position to call in a substantial loan or to revoke a guarantee. The result might be to bankrupt a company with a promising future. "Bankrupt" is a word which still causes certain reactions on this side: noble Lords opposite may be getting used to it, but we hope not. Alternatively, the Board may be called upon to withdraw from a joint enterprise and dispose of their assets without having any say in the choice of a purchaser, and may then be left with a substantial loan to the joint enterprise without any control over its activities. As noble Lords know, the normal method of protecting your loan to a joint enterprise is to have a right to appoint somebody to the board, to take part in its activities. Here there can be a direction to dispose of the assets, to dispose of the shares and to be left with a substantial loan—which one cannot call in—to the joint enterprise, without any control over it at all.
These problems are of particular consequence in respect of the Board's interest in North Sea gas. The Board's partners are mostly American owned and certain contracts were negotiated freely with the oil companies. I am told that collaboration has often been both successful and harmonious, and it has also been very active. The Board have not been sleeping partners, and certainly their interest in some of these enterprises is extremely valuable. Will the Board be made to give this up? If so, on what terms and, for heaven's sake! why, except that these activities are highly profitable?

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So far I have discussed only the effect of the proposals and the clause on existing transactions, but the impact of the clause on the future management of the industry by the Board could be even more serious. How can anybody be expected to collaborate with the Board or to enter into long-term commitments, with the knowledge that the Secretary of State can destroy a bargain by a direction over which neither the Board nor the third party has any control? We on this side have made it clear how we regard this clause, and I have dealt only with those parts which have not previously been covered. We are dealing with it briefly because we feel that it is to the convenience of your Lordships that it should be dealt with in that way. We shall obviously come back to many of the points to which there have been totally inadequate answers. The main difficulties have not been dealt with at all, and we shall come back to them at a later stage in the Bill. But I assure my noble friend Lord Taylor of Mansfield, who made such an interesting speech, that in addition to his views, my views and all views on this side of the House—and I hope more than on this side of the House—are wholly opposed to this dogmatic approach to one of our most successful and important industries, and that we shall divide the Committee on this clause.
7.56 p.m.
LORD DRUMALBYN: One could not have expected noble Lords on the other side to welcome this clause; nor, I suppose, could one have expected the mineworkers in general to do so. As I said on Second Reading, those who create an industry quite naturally tend to take a paternal interest in it, and they do not like the prospect of its being altered in any way whatsoever. Yet there can be no doubt that the Coal Industry Nationalisation Act was one which provided less scope for alteration than subsequent nationalisation Acts, and the result is that we now have a state of affairs where subsidiaries have been built up over the years, further assets have been taken on, additional interests have been acquired—all perfectly correctly, and very often with the consent of the Minister; in fact, where any substantial capital investment was involved that consent was obtained. But the general effect is that we now find
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that the Coal Board have a mixed lot of assets.
I do not believe anybody really anticipated, when the Coal Industry Nationalisation Act was passed, that developments would go on in the way they have done. A great many assets were taken over compulsorily along with the colliery assets. Furthermore, some were taken over at the option of the colliery owner with the consent of the Coal Board, while others were taken over at the option of the Coal Board. Out of this has grown quite a considerable edifice and it is not too much to say that in a way, instead of a Coal Board we now have a great holding company. Surely it must be right at some time for the Minister who has overall responsibility for the Board to be put in a position to take a careful look at the whole enterprise, to see whether or not it is right; and, if not, what changes can be made. One must surely accept that no activity of this kind, which has been built up in this way, can be so perfect that no alterations are necessary.
LORD DIAMOND: Is the noble Lord going to answer at this stage the question which I asked earlier? I asked on which occasions, if any, the Government have been denied the information for which they asked the Coal Board.
LORD DRUMALBYN: The noble Lord did not exactly ask me a question. He merely challenged me to say whether to my knowledge this had ever happened. To my knowledge it has not happened, but I am bound to confess that my personal knowledge in this matter is not very extensive. In any case, since the Coal Industry Nationalisation Act provides that facilities for obtaining this information must be made available to the Minister, one would hardly have expected that the information would not be forthcoming. Noble Lords opposite cannot get into their minds the idea of an overall review of the industry.
I should like to be able to answer all the detailed points which the noble Lord, Lord Diamond, has put to me, but I confess that I do not have the knowledge to do so, and, as he said, he will come back to these rather detailed points about the effect on third parties of any directions that may be given. I promise him

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that I will look very carefully into these points before the next stage of the Bill, and perhaps we can come back to them then.
I would say only this: that as these provisions are almost identical with or are closely parallel to provisions in other legislation, such as the Iron and Steel Act, the Transport Act and even the Post Office Act—these directions to discontinue are in very similar terms in both the Iron and Steel Act and the Transport Act—I should have thought that the difficulties that the noble Lord envisages, if they had been going to arise at all, would have arisen already; and presumably, as we have not heard a lot about the difficulties, they have not arisen. I can only give the noble Lord that answer in the meantime, but where there have been parallel powers and there has been no great shout about them I do not see that the fears of the noble Lord are going to arise.
We acknowledge the difference of approach here. The noble Lord calls it
Resolved in the affirmative, and Clause 7 agreed to accordingly.
a vicious clause. All we are saying is: let us have the review; let us see what needs to be done; and then, under the clause, a direction can be drafted and an order laid before the House, and both Houses can consider whether it is proper that that order should be made. The noble Lord complained that this did not apply to subsection (3). We have argued about that, and we can leave it at that for the moment, at any rate; but the broad picture must be right. I put it very simply and very shortly: that here is an industry which has grown up like Topsy, and it is time to have a look at it. When we have had a look at it, action may be necessary. If it is, that action will take the form provided for in Clause 7, and to us on this side of the Committee, at any rate, that does not seem unreasonable.
8.2 p.m.
On Question, Whether Clause 7 shall stand part of the Bill?
Their Lordships divided: Contents, 59; Not-Contents, 42.

CONTENTS

Aberdare, L.

Ferrers, E.

Lindsey and Abingdon, E.

Auckland, L.

Ferrier, L.

Lothian, M.

Barnby, L.

Gisborough, L.

Mersey, V.

Belstead, L.

Glasgow, E.

Milverton, L.

Berkeley, Bs.

Goschen, V. [Teller.]

Mountevans, L.

Brooke of Cumnor, L.

Gowrie, E.

Mowbray and Stourton, L.

Brooke of Ystradfellte, Bs.

Gray, L.

Napier and Ettrick, L.

Broughan and Vaux, L.

Greenway, L.

Rankeillour, L.

Clitheroe, L.

Grenfell, L.

Rochdale, V.

Colyton, L.

Gridley, L.

St. Aldwyn, E.

Conesford, L.

Grimston of Westbury, L.

St. Helens, L.

Cork and Orrery, E.

Hailes, L.

St. Just, L.

Craigavon, V.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

St. Oswald, L.

Craigmyle, L.

Sandford, L.

Cromartie, E.

Hawke, L.

Sandys, L.

Daventry, V.

Hertford, M.

Sempill, Ly.

De Clifford, L.

Howard of Glossop, L.

Teynham, L.

Denham, L. [Teller.]

Inglewood, L.

Thurlow, L.

Drumalbyn, L.

Jellicoe, E. (L. Privy Seal.)

Vivian, L.

Falkland, V.

Lauderdale, E.

Windlesham, L.

NOT-CONTENTS

Addison, V.

Garnsworthy, L.

Segal, L.

Ardwick, L.

Granville of Eye, L.

Serota, Bs.

Bacon, Bs.

Henderson, L.

Shackleton, L.

Beswick, L.

Hilton of Upton, L.

Shepherd, L.

Blyton, L.

Hoy, L.

Slater, L.

Brockway, L.

Hughes, L.

Stow Hill, L.

Burntwood, L.

Jacques, L.

Strabolgi, L. [Teller.]

Champion, L.

Llewelyn-Davies of Hastoe, Bs.

Taylor of Mansfield, L.

Collison, L.

Mais, L.

Walston, L.

Davies of Leek, L.

Milner of Leeds, L.

Wells-Pestell, L.

Diamond, L.

Nunburnholme, L.

Wright of Ashton under Lyne, L.

Douglass of Cleveland, L.

Phillips, Bs. [Teller.]

Foot, L.

Plummer, Bs.

Wynne-Jones, L.

Gaitskell, Bs.

Ritchie-Calder, L.

Gardiner, L.

Rusholme, L.

Clause 8 [Further provision as to annual accounts of the Board]:
8.10 p.m.
On Question, Whether Clause 8 shall stand part of the Bill?
LORD DIAMOND: I will not detain your Lordships but there are just two short questions I should like to ask about this clause. First, why are the provisions here not the same as those in the Companies Act? Why is the Coal Board being required to do more than ordinary companies are required to do under the Companies Act? Secondly, may I take it that before being required to carry out the instructions of the Minister under this clause there will be prior consultation with the Board?
LORD DRUMALBYN: With regard to the noble Lord's first question, it does not follow necessarily from the clause, of course, that subsidiaries will be required to do more than they are under the Companies Acts, but they may be. I think the noble Lord recognises that the Companies Acts really prescribe minima, and it may be that in certain circumstances the Secretary of State may consider that more information is desirable, particularly in regard to certain activities. For that reason, he may require the accounts to be in a slightly different form. As to the noble Lord's other question, he sat down so quickly that I was unable to make a note of it.
LORD DIAMOND: I did not wish to detain the Committee for too long at what I thought was getting to be an inconvenient hour. The question that I wanted to ask was this. Can I take it—that is the form in which I pose it—that before exercising his power under this measure the Minister will have had prior consultation with the Board?
LORD DRUMALBYN: I have certainly taken it to be so. May I simply say that I will consult and will let the noble Lord know. I had assumed that this would be so, for that would be consonant with the general spirit in which my honourable friend intends to operate the Bill.
Clause 8 agreed to.
Remaining clauses agreed to.
House resumed: Bill reported without amendment.

POWERS OF ATTORNEY BILL
8.15 p.m.
LORD DIPLOCK: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Diplock.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD CHAMPION in the Chair.]
Clause 1 agreed to.
Clause 2 [Abolition of deposit or filing of instruments creating powers of attorney]:
LORD DIPLOCK LORD DIPLOCK moved Amendment No. 1:
Page 1, line 19, at end insert ("under section 25 of the Trustee Act 1925, section 125 of the Law of Property Act 1925 or section 219 of the Supreme Court of Judicature (Consolidation) Act 1925.")
The noble and learned Lord said: This is not a substantial Amendment; it is put down for clarification only. Although I have no doubt that it will be known to solicitors what are the relevant provisions under which powers of attorney are deposited or filed at the Central Office, this is not so transparently clear to others, including Law Lords, and to insert these words into the Bill will make the position clearer to them.
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clauses 3 and 4 agreed to.
Clause 5 [Protection of donee and third persons where power of attorney is revoked]:
LORD JANNER LORD JANNER moved Amendment No. 2:
Page 3, line 10, at end insert ("in good faith and")
The noble Lord said: I do not propose to keep the Committee for long, but I should like to point out in connection with' this Amendment that the Law Society, after giving extremely careful consideration to the Bill (incidentally, solicitors and the Bar are in favour of the Bill and believe it to be a good one),

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feel that from a practical point of view the words to which I have referred should be inserted. Their worry concerns Clause 5(2). Although it seems that a power of attorney can be revoked without any formality, it is quite another matter for a donor to make sure that a donee does not go on acting under it, perhaps using certified photo-copies which might still be in circulation after the donor has destroyed the original. It is difficult to get to the root of this problem, but the Law Society think that from a practical point of view it might help—and I believe it would—to tidy up Clause 5(2) slightly as suggested in the Amendment. I beg to move.
LORD GARDINER: It would help me, and no doubt other members of the Committee, if my noble friend were to explain how any third party can be acting in bad faith if he does not know that the power of attorney has been revoked.
LORD JANNER: In the view of the Law Society circumstances may arise in which, if these words were not inserted, the donee might be in a position to act. They feel—as I say, the point has been very carefully considered—that these words would help.
8.20 p.m.
THE LORD CHANCELLOR: I hope that the noble Lord who has proposed this Amendment, in admirably concise terms, will, when he has heard the explanation that I give, not wish to press it. Clause 5 provides for the protection of the donee of the power of attorney, and third persons who deal with him, against the consequences of revocation. Subsection (2) provides that:
"Where a power of attorney has been revoked and a person, without knowledge of the revocation, deals with the donee of the power, the transaction between them shall, in favour of that person, be as valid as if the power had then been in existence."
This Amendment would require the third person not only to have no knowledge of revocation but to be "in good faith" for the validity of the transaction to be upheld.
I share the difficulty of the noble and learned Lord, Lord Gardiner. It is difficult at first sight—and I am not sure that one would actually go much further than first sight however deeply one penetrated—to see that this is not purely tauto
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logical. At any rate, whatever "good faith" may mean, it must in very great part at least be comprehended by lack of knowledge. It would be unfortunate—and we all agree—if the courts were given the impression that a whole second limb was required for validity (when it is not) and then left to puzzle out what that second limb can be—to the possible prejudice of clarity and the certainty of transactions. I therefore accept the criticism implied in the question of the noble and learned Lord to the noble Lord, Lord Janner.
But let us suppose that the noble and learned Lord, Lord Gardiner, is wrong: I do not think he is—it seems almost impossible. But let us suppose that in fact he is wrong and that I am wrong, too. Let us assume, therefore, that a second limb, whatever it may mean and however obscure the meaning, is required and the purchaser ought to be in good faith, a; well as ignorant of the revocation. This, if it were so, would expose a deeper objection to the Amendment; namely, that it is both inappropriate and also irrelevant to the form of the subsection. If the subsection said that in these circumstances a purchaser will gel a good title, the question of good faith might be relevant. But it does not. All it says—and I stress these words—is that if the condition (of lack of knowledge of revocation) is satisfied, then the transaction shall be as valid—that does not mean to say valid, it means neither more valid nor less valid—as if the power had not been revoked.
Even if the condition is satisfied, and the power must be treated as if it had not been revoked, the transaction may still be invalid for some quite different reason—for instance, because the purchaser is knowingly a party to a fraud by the donee. It is at this stage, and not before, that the question of good faith, if it is different from knowledge, becomes relevant.
The Law Commission have accordingly taken the view that the Amendment is misconceived and should be resisted. I hope that the noble Lord, Lord Janner, who has done us all a service by putting forward the view of the Law Society, will on reflection feel that it would not be wise, at any rate at this stage, to press the Amendment until he has fully

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considered the objection I have put forward.
LORD JANNER: I appreciate the point which has been made. Part of that point was made by the Law Commission, for whom I have a high regard—I do not want the Committee to be under any misunderstanding about that. The Law Society feel that as the matter stands at present there might be difficulties, but I am quite prepared to consider the points put forward and leave it for another stage. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
LORD DIPLOCK LORD DIPLOCK moved Amendment No. 3:
After Clause 5, insert the following new clause:
Additional protection for transferees under stock exchange transactions
" .—(1) Without prejudice to section 5 of this Act, where—

(a) the donee of a power of attorney executes as transferor, an instrument transferring registered securities; and

(b) the instrument is executed for the purposes of a stock exchange transaction,

it shall be conclusively presumed in favour of the transferee that the power had not been revoked at the date of the instrument if a statutory declaration to that effect is made by the donee of the power on or within three months after that date.
(2) In this section "registered securities" and "stock exchange transaction" have the same meanings as in the Stock Transfer Act 1963".
The noble and learned Lord said: I beg to move Amendment No. 3, the object being to insert an additional clause after Clause 5. This is an Amendment of substance because on consideration, particularly by the Stock Exchange, the conclusion was reached that the existing Clause 5, particularly the provision for the statutory declaration, would not work in the case of Stock Exchange transactions. This results from the fact that under the Stock Transfer Act 1963 the form of transfer is not signed by the transferee, and indeed is often not seen by him. Further, in the case of a broker's transfer, which takes place where the original holding has been split up, the transferee may never know who the transferor was.
In those circumstances, if he were to be required, as under Clause 5(4), to make a statutory declaration to the effect that he did not know of the revocation of the power at the material time, it would be a nonsense; because at the material time he would not even know whether the transfer was made under a power of attorney or not. In those circumstances, it is thought that the position is best preserved by the new clause which requires the statutory declaration to be made by the donee of the power.
This is a matter which has been discussed between the Law Commission and the Stock Exchange and it has the approval of both. It is thought that it will work in a practical way so far as Stock Exchange transactions are concerned. I would draw attention to the fact that the clause is limited to Stock Exchange transactions. I beg to move.
On Question, Amendment agreed to.
Clauses 6 to 8 agreed to.
Clause 9 [Effect of general power of attorney in specified form]:
8.27 p.m.
LORD JANNER LORD JANNER moved Amendment No. 4:
Page 5, line 42, after ("effect") insert ("but expressed to be made under this Act,").
The noble Lord said: I propose to be very brief in moving this Amendment. The problem is to be sure what form will satisfy the statutory requirement. I agree that the reference to "a form to the like effect" is fairly standard in these cases, but solicitors who have to put these things into practical effect feel that it should be made clear beyond a doubt that a person is not to be regarded as having conferred the very wide powers provided for in the clause unless he has specifically indicated his intention to do so by at least referring to the Act. In those circumstances, I hope that the Committee will accept the Amendment. I beg to move.
LORD GARDINER: I hope that the noble and learned Lord, Lord Diplock, and the noble and learned Lord the Lord Chancellor, may be favourably inclined to accept this Amendment. I cannot see that it would do any harm. I am not even clear that without these words an appointment would be valid under Clause

417
9. It is clearly most desirable, I think, that any appointment should include these words, and on those grounds I hope that the noble and learned Lord will feel inclined to accept my noble friend's Amendment.
THE LORD CHANCELLOR: This is very much a question of judgment, but the Law Commission in fact considered this proposal and on the whole came to the conclusion that it would be better not to accept it. I should like to tell the Committee why I do not think that this is an Amendment either for which or against which one should die in the last ditch; but I should like to tell the Committee why the Law Commission, on balance, were against it. They thought that powers of attorney sometimes have to be executed at very short notice. It would be unfortunate if proper identification of the Act in precise terms became a formal requirement, when, for example—and I am using a phrase which might be used by somebody who did not have the Act of Parliament before him with the actual schedule form in it—"I grant this general power of attorney under the Act of Parliament in that behalf", or some such words, is perfectly plain. The Law Commission thought on balance that such a form should be valid and that the clause seemed better without the Amendment. I can only give the Committee the wisdom of the Law Commission on this subject because, to be perfectly candid, I do not have any strong feelings about it. I do not think any great harm would be done either way, but I was persuaded, on balance, that the Law Commission were right.
LORD DIPLOCK: So far from being prepared to die in the last ditch over this, I am completely neutral.
LORD JANNER: In the circumstances, may I ask that the view of the Law Society, which, after all, is dealing with practical practitioners, be considered? While I have the highest regard for the Commission—as I have said before, they have done remarkably good service—nevertheless, the actual practitioner who has to deal daily with these matters in his hands and the Society which represents him feel that this should be inserted. In view of that fact—it is not a question of a last ditch matter—I thought the
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Committee would see its way to accept the Amendment.
On Question, Amendment agreed to.
Clause 9, as amended, agreed to.
Clause 10 [Short title, repeals, consequential amendments and extent]:
LORD DIPLOCK LORD DIPLOCK moved Amendment No. 5:
Page 6, line 20, at end insert—
"( ) This Act shall come into force on 1st October 1971."
The noble and learned Lord said: This is simply an Amendment to provide the date when the Bill shall come into force. It was thought better that it should not come into force immediately on passing, but that a short time should be given for the profession to familiarise itself with it and the Land Registry to consider some alterations in its rules as a result. The date, October 1, 1971, being the first day of the legal term, was thought to be a suitable date for that purpose. I beg to move.
On Question, Amendment agreed to.
Clause 10, as amended, agreed to.
Schedules agreed to.
House resumed: Bill reported with the Amendments.

ADMINISTRATION OF ESTATES BILL
8.35 p.m.
LORD SIMON OF GLAISDALE: My Lords, I beg to move that this Bill be read a second time. I feel that I must start with a number of apologies. The first is for introducing so technical a Bill at so late an hour. The second is that anyone so junior in the service of the House should be presuming to sponsor a Bill of this sort. I can only say that I have done so because the noble and learned Lord on the Woolsack asked me to do so, presumably because much of the Bill is concerned with a sphere of judicature and administration for which I myself am partly responsible. I am particularly sorry that I should be moving it when I am so junior, because I know that noble Lords would wish the sponsor of this Bill to congratulate the noble

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Lord, Lord Milner of Leeds, on being, as I understand he is to be, for the first time the spokesman from the Front Opposition Bench on this Bill, and I hope that I may be allowed to do so without being thought impertinent.
My third apology concerns the subject matter of the Bill: it would be idle to pretend that it is hilariously entertaining. I doubt whether even the noble and learned Lord on the Woolsack, with his great capacity for giving animation to inert material, could make it very gay. I certainly cannot; but I do commend it to your Lordships as a useful improvement in the law and practice governing the administration of estates—that is to say, the law and practice which authenticates the right of persons to deal with the estate of a deceased person. The Bill implements the recommendations of two Reports. The second one has received wide publicity; both have been widely welcomed. In view of that, I hope your Lordships will think that I may deal fairly summarily with the provisions of the Bill. So far as I know, there is only one clause, Clause 10, which has provoked any misgivings at all, and I propose to say a word or two about that in due course.
My Lords, the fourth matter of apology is that this Bill is concerned not only with England and English law and practice but also with those of Scotland and Northern Ireland. I am constantly conscious of my own gaps in knowledge of English law, and I am almost completely ignorant of Scottish and Northern Irish law and practice, though I am told that Northern Ireland practice and law in these matters do not differ very greatly from our own. But part of the ostensible difficulty in this Bill springs, I think, from a mere difference in nomenclature. For example, your Lordships will see in the Bill a reference to the commissarist office in Edinburgh. Now that corresponds, as I understand it, to the principal probate registry in this country, both of them being the administrative substructures of judicature in this sphere.
As to the rest, in England we speak of grants of representation, in other words the sort of authentication which I mentioned. We speak both of "probate" of a will which appoints executors and of
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"letters of administration"—the latter being when there is either no will or one appointing no executors. The Scottish grants of representation, as your Lordships have probably seen, have a different nomenclature. They speak only of "confirmation", where we should speak both of probate and letters of administration. There is also, though, a reference to "certificates of confirmation". I have been advised that those refer to certified extracts from confirmations which, for administrative convenience, are made in Scotland, dealing particularly with specific assets—especially, for example, with the shares of one particular company. The other term that your Lordships may see which may be unfamiliar is "additional confirmation". That, as I understand it, is merely a confirmation where the estate is not fully administered. We have a similar concept in our own probate law. As I have said, as I understand it, Northern Ireland employs very much the same sort of nomenclature as we do, as well as having a similar law and practice.
Clauses 1 to 7 abolish the necessity of re-sealing grants in the various countries in the British Isles. The problem arises where a person dies domiciled in one part of the British Isles leaving property in another part. A grant of representation can always be made in the country where the property is left, but that is quite an expensive and formal proceeding. It involves examining not only the authenticity of the document—say, a will—but also the credentials of an applicant. Therefore an alternative procedure has been evolved known as "re-sealing". Where a person dies domiciled, say, in Scotland, the grant in Scotland may be re-sealed in England. That means that only the authenticity of the document—that is to say, the grant in Scotland—is examined, and not the qualifications and credentials of the applicant. That applies not only between England and Scotland but also between England and Northern Ireland, and again between Northern Ireland and Scotland.
That, as I have said, is a simpler and cheaper procedure than the original grant, but it is still troublesome and of some expense. The Law Societies of England and of Scotland made representations on that matter to the noble and learned Lord, Lord Gardiner, when he

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was Lord Chancellor. In consequence, he and the Secretary of State for Scotland at the time appointed a Committee under the chairmanship of one of the registrars of the Principal Probate Registry and consisting of probate officials (as we call them) and solicitors of both countries to examine the problem. They found that the cost was by no means minimal. They estimated the annual cost of re-sealing, both the direct cost to the public and the administrative overheads, to be between £71,000 and £81,000 a year.
Their terms of reference were to see whether re-sealing any longer served any really useful purpose. They found that in Scotland it was a mere empty formality; in England it still served two useful purposes. But the Committee came to the conclusion, which I think has commanded general approbation, that those advantages could be obtained in other ways. Their conclusion was:
"Re-sealing does not serve any useful purpose on either side of the Border."
They therefore recommended its abolition. That, as I have said, is done by the early clauses of the Bill.
I hope your Lordships will think that that is sufficient explanation at this stage. If your Lordships have any further points of detail that you wish to raise I will try to deal with them either in reply or on Committee stage. If they relate to Scottish and Northern Irish law, I think the latter course is virtually a certainty.
I turn to the second Part of the Bill which consists of Clauses 8 to 11. That is the result of the Law Commission's Report, Administrative Bonds, Personal Representatives' Right of Retainer and Preference and Related Matters. It corresponds very closely to the Bill that was drafted by the Law Commission as the annexure to their Report. There are only minor amendments, and the arguments in favour of the various steps proposed are set out with great clarity in the Law Commission's Report. Therefore I do not think I should be justified in troubling your Lordships with the detail.
The position is this. At present an administrator—not an executor—must enter into a bond that he will collect, get in and administer the estate of the deceased. That is only therefore when there is no will appointing executors.
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Moreover, the bond must be for double the gross value of the estate, and not merely for its value. In most cases, in addition, sureties are required for the bond—sometimes one; sometimes, and generally, two—and they are often, for convenience, an insurance company, which of course charges a premium. The cost, certainly cumulatively, is quite extensive.
I know that the Law Society were of opinion that it was questionable whether the necessity for bonds and sureties was still potent. Actions on a bond are very rare because there is an alternative available in the form of an administration action in the Chancery Division. Even the main purpose of the bond, the action against sureties, is very rarely exercised. There are, however, two indirect purposes of the bond which have considerable moment to this Bill, particularly to the clause which is the only one that has aroused misgiving. In the first place, when there is a grant to a creditor of the estate, it is always a term of the bond that he should undertake to waive any right to prefer his own claims to those of other creditors. The other one is less important: the bond sets out concisely the duties which the general law imposes on executors.
The Law Commission, after extensive consultations, came to the conclusion that bonds were no longer necessary; the interests of creditors could be otherwise safeguarded. What they recommended was that bonds should be abolished, except that a probate registrar should have a discretion to require guarantees by sureties up to the value of the gross estate—no longer twice the value—in certain types of cases which seemed to call for safeguards. Those cases are set out in paragraph 14 of the Report. They are practically entirely similar to the cases whereby under the present law and practice the sureties are required to "justify": that is a technical term for proving to a registrar that the sureties are good for their guarantees. The Law Commission went on to recommend that the rights of personal representatives to prefer their own claims to those of others was an anachronism and should be abolished. That was so whether the grant was obtained as a grant to a creditor, or in any other way. They recommended finally that the duties of a personal representative, which would be

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no longer defined in the bond because the bond would be abolished, should be defined by Statute.
The advice I had from the Probate Registry coincided with the advice that was proffered to the noble and learned Lord the Lord Chancellor by the Law Commission. The Law Commission also considered whether the existing right of a personal representative to prefer one creditor to another of the same class, including himself, should be perpetuated. That is the only matter that I think has aroused any misgivings. They recommended that the power should be continued only where the personal representative, acting reasonably and in good faith, pays the claim of a creditor at a time when he has no reason to believe the estate is insolvent.
My Lords, may I deal quite briefly with Clause 10? As I say, that is the only one which has been questioned; indeed all the other clauses, so far as I know, have been welcomed. That clause has two purposes. It abolishes the personal representative's ancient rights of retainer and preference, and, secondly, it affords protection to a personal representative who makes preferential payments to creditors in good faith at a time when the personal representative does not know that the estate is insolvent. In other words, it implements the Law Commission's recommendations. The Law Commission sent out invitations to professional bodies to comment, and I think there has been some misunderstanding, or miscarriage, because the Report was printed before any misgivings were expressed. So far as I am concerned, it was only at the end of last week that I knew that there was any difficulty in that clause.
May I set out what seemed to me to be the arguments in favour of the clause as it stands, and the arguments of the Law Society and part of the Bar Council—the arguments in favour of the retention of the present system. It said first that it may be necessary for the protection of a personal representative acting in good faith. It said secondly that without that power, administration might be slowed up; thirdly, with the abolition, persons might be discouraged from accepting the duties—which are often onerous—of personal representatives; and, finally, that abolition places the
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personal representative creditor in a worse position than other creditors. The Law Commission were not persuaded by those arguments. They felt that the right of retainer, the right to pay one's own debts in priority to creditors of the same class, was an archaic rule and was inconsistent with the general equitable principle that a person in a fiduciary position should not benefit from his trust. They felt that the personal representative acting in good faith was adequately protected in two ways: one, by advertising for claims, as he can do under the Trustee Act, and, secondly, under subsection (2) of Clause 10, which gives a new and additional safeguard. They did not feel that administration would be slowed up; they felt that subsection (2) gave sufficient safeguards for an administrator to get on with the payment of small bills, servants' wages, and so on.
I apprehend that the noble and learned Lord on the Woolsack will wish to hear the arguments that may be deployed in this debate, on that clause at any rate, so as to be in a position to advise the Committee on the matter in due course. If the noble and learned Lord is agreeable and willing for me to do so, and if the course commends itself to your Lordships, I am very willing myself to discuss this matter with the Law Commission and with the Law Society and the Bar Council, to see what measure of agreement can be obtained. That will not, of course, preclude any noble Lord from moving an Amendment at Committee stage. But since, as I understand it, that is the only clause which arouses misgiving, I trust that your Lordships will give the Bill a Second Reading. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Lord Simon of Glaisdale.)
9.1 p.m.
LORD MILNER OF LEEDS: My Lords, may I first thank the noble and learned Lord, Lord Simon of Glaisdale, for his kind remarks? Secondly, I am sure your Lordships would wish me to congratulate the noble and learned Lord on his appointment as a Lord of Appeal in Ordinary. I should also like to thank him for introducing this Bill. We are all, I am sure, grateful to him for his explanation of its provisions. We on this side of the House welcome this Bill, subject only to some reservations in respect

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of Clause 10, which has already been referred to by the noble and learned Lord. As he has said, both the Law Society and the Chancery Bar Association warmly welcome this Bill, with the exception of Clause 10.
Clauses 1 to 7 relate to the reciprocal recognition of grants of probate and administration. It is now generally accepted that resealing is a useless formality which wastes time and money; and Mr. Registrar Kenworthy's Working Party, which was set up by my noble and learned friend, Lord Gardiner, and the Secretary of State for Scotland, satisfied themselves that no administrative or other difficulties would result from its abolition. The proposals in the Bill also extend to Northern Ireland.
The remainder of the Bill, as the noble and learned Lord has said, gives effect, with slight modifications, to the recommendations in the Law Commission's Report on administration bonds, and this arose out of a proposal which the Law Society made to the Law Commission in 1966. We have no objection to this part of the Bill, except to Clause 10, relating to personal representatives' rights of retainer and preference. The noble and learned Lord, Lord Simon of Glaisdale, has said he will discuss this clause with the interested parties before the Committee stage. I welcome this suggestion and am hopeful that the noble and learned Lord the Lord Chancellor will accept any proposals resulting from such discussion. My noble friend Lord Janner will be speaking next, with, I understand, particular reference to Clause 10, so I do not propose to comment further on it.
The abolition of the need to reseal grants of probate and letters of administration between the courts of England and Wales, Scotland and Northern Ireland, and the abolition of the statutory requirement that administrators must give a bond, will save personal representatives both time and money. I therefore support the request to your Lordships to give this Bill a Second Reading.
9.5 p.m.
LORD JANNER: My Lords, may I, too, offer my congratulations to the noble and learned Lord, Lord Simon of Glaisdale on his new appointment; and also to my noble friend Lord Milner of Leeds on the manner in which he has expressed
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himself in respect of this Bill, this being the first occasion on which he has spoken from the Front Bench. May I also say that I had no doubt, judging from the opinions which have been expressed in the profession and outside, that there was not likely to be any serious argument about the main objects of the Bill, to abolish administration bonds and the resealing of grants in different parts of the United Kingdom?
The noble and learned Lord, Lord Simon of Glaisdale, said that this was not a matter which was likely to be regarded as an hilarious one. Well, it certainly will not be a matter in which hilarity will be felt by anyone who might find himself at some time or another in a position of having commenced the administration of an estate which ultimately turns out to be insolvent. So far from being a matter of hilarity, in practice it may place him in a very serious position indeed. The Bill may seem like a very dry piece of lawyers' law, but in fact it has the sole purpose of saving members of the public unnecessary expense and delay in the administration of estates of deceased persons.
The economies of time and money will not be spectacular, but even to save a few pounds and a few days on each of quite a large number of estates every year is very welcome at a time when the usual effect of legislation is to make the administration of estates slower and more expensive. I say this as a practising solicitor myself, and I am sure that the public as a whole will appreciate this from a profession which is not always regarded as being extremely helpful—I do not know about the feeling in this House, as I have not been here long enough; but sometimes in another place, quite wrongly, it has not been regarded as being helpful in these matters. The support of a Bill of this nature means, of course, that legal costs will be saved to people who otherwise would have to incur them. This is something which the profession itself commends.
If, for example, a husband dies intestate leaving a fairly modest estate, his widow may well have difficulty in making ends meet. The inevitable expenses of administering the estate are increased by the premium on an administration bond and the legal charges for the work involved in obtaining it. If, as is quite

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common nowadays, some of the securities of the estate are registered in Scotland, there are the further fees and charges for the sealing of a grant in Edinburgh. All this could add up to £20 or £30, which the widow could ill afford at such a time. The solicitors' profession have for long thought that the rules requiring administration bonds and the resealing of grants are a nuisance, and have suspected they have completely outlived any useful purpose they may ever have served. We are therefore grateful to the Law Commission and to others concerned with the preparation of this Bill for having demonstrated clearly that this is so and providing its solution.
I now come to a matter which has caused a considerable amount of concern to both branches of the profession, and to which the noble Lord, Lord Simon, referred when moving the Second Reading of the Bill. The position with regard to the administration of an estate when it becomes insolvent, or if it is insolvent at the commencement, causes considerable anxiety and concern to those who would be prepared, under normal circumstances, to administer the estate, and who in the circumstances are placed in an extremely serious and difficult position. To place upon administrators obligations in the event of anything occurring at any time to make the estate insolvent—and it is not an unusual fear in present circumstances—is something which has to be very carefully considered. This is where the two professions—the solicitors' branch and the Bar—feel that the matter must be extremely carefully considered, because as the position stands at present it is almost impossible to get people, if they feel that there is a possibility of the estate becoming insolvent, to administer an estate. It is quite a reasonable attitude to take.
Let us examine, for instance, the position to-day. Who would have imagined, when winding up an estate, that shares in the Rolls-Royce company would have dropped in the manner they have done? Yet, on administering the estate, as your Lordships well know, the price quoted for those shares at the time of the death of the individual is what will be included in the application for letters of administration to be granted. As circumstances are at present, situations of that sort—though not so drastic, everybody sincerely hopes
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—may arise, and consequently no one can be really sure, if certain assets belong to an estate, what may happen to decrease their value.
In these circumstances, both professional bodies feel that the time has come when consideration should be given as to the method to be adopted in place of the present one, which demands that letters of administration must be taken out first, before bankruptcy proceedings can be taken in respect of an insolvent estate. And who is going to do it, with safety, unless there is some provision whereby he is protected? I think that is at the bottom of the fear and anxiety which prevails in respect of Clause 10.
As I said before, I have a high regard for the Law Commission and those connected with it, but I hope that neither they nor your Lordships will consider it impertinent if one were to say that, after all, the people who really know the difficulties in all matters are not necessarily members of that Commission. The practitioners who have to deal with these situations, both in the solicitors' profession and at the Bar, get the experience in the course of their practices of dealing with the practical issues that arise, and both sides of the profession have come to the conclusion that the situation is very unsatisfactory. Therefore it is suggested that perhaps at some later stage your Lordships may consider it advisable to remove Clause 10 from the Bill as at present drafted, and that a Committee of some kind should be set up (one appreciates, of course, that the Law Commission has heavy duties on its hands) which would consider such suggestions as that in the event of an estate appearing to be likely to be insolvent it should be dealt with perhaps by a county court or by a registrar in bankruptcy, with provision for persons concerned to intervene and to ask that the administration should proceed in the normal way, or that some method of that kind might be devised to cope with this situation.
The Law Society themselves, in a memorandum which some of your Lordships may have received, say this:
"It is proposed by Clause 10 of the Bill that a personal representative's right to retain a debt due to himself should be abolished altogether. We have endeavoured to apply our minds to the situation that would result from this. If the right of retainer is abolished how

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would a personal representative in such circumstances ever pay his own debt short of going to court? Lord Atkins' explanation of the right in Attorney General v. Jackson was this:

'Without the right the executor would be bound to pay the other debts of the testator and to leave the testator's debt to himself unpaid. A personal representative cannot sue himself and therefore he cannot pay himself. Any other creditor would be entitled to say'"—

LORD SIMON OF GLAISDALE: My Lords, if the noble Lord will allow me to say so, surely that is quite exaggerated, because at the moment the condition of the bond insists on waiver of the right of preference.
LORD JANNER: Yes, my Lords, but now, with the greatest respect, the position is that you are introducing a clause which excludes altogether this possibility of retainer, and in my view—if a person enters into a bond that is an entirely different matter—he is compelled, according to the provision in Clause 10, to accept the position in which his debt can never be recovered.
THE LORD CHANCELLOR: My Lords, I think the noble Lord is wrong about that. If he looks at paragraph 8 of the Law Commission's Report, he will see it quite clearly stated therein that the abolition of the right of retainer will in no way interfere with the personal representative's right to pay his own debt pari passu with others, and I cannot see that there is anything in what the noble Lord is saying which would not entitle him to take advantage of Lord Simon's invitation to discuss this matter with him before Committee stage.
LORD JANNER: My Lords, I am loath to argue any matter on which the point of view of the Law Society may differ from that of the noble and learned Lord the Lord Chancellor, but I gathered from what he has said now that there is a possibility between now and Committee stage of the position being considered by the professions. Obviously, if that is the position, then at some later stage the two professions might get together with the Law Commissioners.
I do not want to press the noble and learned Lord the Lord Chancellor. I would certainly be happy to accept the suggestion that has been made, so that by the time we come to Committee stage the
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matter could be carefully considered and could be argued out. But the views I am expressing are not my views alone. I am reading from the manifesto which is issued by the profession and which has been accepted by the appropriate committee of the Bar Association.
I am quite prepared to sit down at this stage and give way to the noble and learned Lord the Lord Chancellor if he would be prepared to express himself in respect of the suggestion that was made by the noble and learned Lord, Lord Simon, because I think that everybody in the House would be very pleased if that were done. Apparently the noble and learned Lord is not prepared at this stage to agree to that.
THE LORD CHANCELLOR: My Lords, I do not want to interrupt, but I said what I had to say once, and I do not think that it would be improved by saying it twice. I was proposing to address the House when the noble Lord resumed his seat.
LORD JANNER: My Lords, if I misunderstood, I offer my apologies, and I shall not proceed further in the circumstances.
9.21 p.m.
THE LORD CHANCELLOR: My Lords, I do not want to detain the House at this late hour. I should like to echo what noble Lords have said, both in welcome to the noble Lord, Lord Milner of Leeds—whose father I sat under in another place, and whom I knew very well in this House—and also to the noble Lord, Lord Simon of Glaisdale, who I think has placed the House again in his debt by undertaking this not very exciting but, I hope, valuable piece of legislation, which he has been in a position to expound rather better than any noble Lord on either side of the House. I should like to join in the congratulations to him on his new appointment, which will bring him into this House in another capacity where, I hope, he will give incomparable service like his predecessor, the noble and learned Lord, Lord Hodson.
I do not want to weary the House at this stage, because the Bill has been so admirably canvassed by the three speakers so far. I should just like to say, on the first part of the Bill, that the

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Northern Ireland Government welcomes the change, and my noble friend the Minister of State for Scotland has asked me to underline the welcome which she and my Scottish colleagues give to the Bill as regards the resealing provisions. The point about the administration bonds was dealt with fully by the noble Lord, Lord Simon, from the Cross-Benches. Your Lordships simply cannot leave out Clause 10 altogether for the reason that the noble Lord advanced: that at present administration bonds prevent an administrator who is a creditor from putting the money in his own pocket in preference to the other creditors. That seems to me to be a perfectly reasonable thing to expect of an administration bond.
As we are abolishing the administration bond, we have to say something about the right of retainer. We cannot just leave it like a floating kidney until somebody has looked into the situation; it has to be dealt with in this Bill in one way or another, otherwise this part of the Bill would have to go altogether. It is unthinkable that the right of retainer should be left unspecified if the administrator's bond is being abolished. The noble Lord, Lord Simon, said that he would be prepared to discuss this matter. It has brought misgiving to members of the Chancery Bar Association and to the Law Society. I can think of nobody who could conduct those discussions better than the noble Lord, Lord Simon. If it is thought that insufficient protection is given to the personal representative in an insolvent estate, I am sure that if it is possible to find an adequate solution it will be found on Committee stage.
I must just say that I have not quite the sympathy with the personal representatives expressed by the noble Lord, Lord Janner, and by the Law Society. My advice, which comes from the Law Commission, is that there is nothing in the abolition of the right of retainer which does not entitle the personal representative to pay a debt due to him pari passu with the other creditors, but it does prevent him from putting himself in a position of advantage by reason of his fiduciary position. My own inclination was to feel wholly persuaded by the argument to that effect in paragraphs 7 to 10 of the Law Commission's Report, which advocated the abolition of the right
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of retainer on the terms contained in Clause 10. Basically this is a question which is better discussed on Committee, as the rest of the Bill is acceptable. The only thing which would not be acceptable would be to pass into law an Act of Parliament which abolished the administration bond and remained silent about the law of retainer, because that would be a nonsense.
In conclusion, before seeking to take the opinion of the House, I should like to express my gratitude both to the noble Lord, Lord Simon, for taking on this Bill, and to Sir Clive Bossom in another place for sponsoring this not very exciting piece of legislation. They both do all the more service to the public by undertaking legislation of this kind precisely because it is both difficult and onerous, and, as I say, it carries little kudos for those who undertake the work. I should also like to thank the noble Lord, Lord Milner, and the noble Lord, Lord Janner, for the contributions they have made to the debate.
LORD SIMON OF GLAISDALE: My Lords, I should certainly be abusing your Lordships' patience if I did more in exercising a right of reply than to thank your Lordships most warmly for what you have said about me to-day.
On Question, Bill read 2a, and committed to a Committee of the Whole House.