COAL INDUSTRY BILL

HL Deb 23 March 1971 vol 316 cc767-806

2.45 p.m.

THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN)

My Lords, I beg to move that this Report be now received.

Moved, That the Report be received.—(Lord Drumalbyn.)

On Question, Motion agreed to.

Clause 5 [Power of Board to enter into agreements in connection with overseas aid]:

LORD DIAMOND moved Amendment No. 1: Page 4, line 3, leave out ("for any purpose specified in the said section 1(1)").

The noble Lord said: My Lords, before addressing arguments on this Amendment, I suggest that it might be convenient to discuss with this the second Amendment on the Marshalled List, as the two really go together. This Amendment relates closely to an Amendment which was discussed at the Committee stage, and which I then withdrew on certain assurances. I am now returning to the matter because of doubts whether the Government have power to do what they might want to do. I am not arguing about what the Government should do, but merely going on the basis of what the noble Lord, Lord Drumalbyn, has said that the Government might want to do and the advice I have been given as to whether the Government have the power to do that, if the occasion arose. The present two Amendments would certainly give them that power.

May I refresh your Lordships' memory as to the matter to which these Amendments relate? In the Committee stage, which was held a week ago, the noble Lord, Lord Drumalbyn, said: 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."—[OFFICIAL REPORT, 16/3/71; col. 345.] He went on to say, a little later in the same column: 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,…

In column 348, I made it clear that, with your Lordships' permission, I was seeking leave to withdraw the Amendment then under discussion on the basis of the assurance given by the noble Lord, Lord Drumalbyn. He used these words: I think I can give the noble Lord"— that is, myself— the assurance for which he asks … but I do not think that the situation would be any different if the Amendment were carried. When one is told that the situation will be no different it the Amendment is carried, there seems little point in pursuing it. I have since been advised that the position may not be as the noble Lord had understood it. Therefore I am going to put the position before him and seek confirmation that he has been right the whole way through. Alternatively, he would naturally wish to accept the Amendments now before your Lordships' House which would put the matter right.

Supposing the Board—and this is the essential matter that we are considering—could show that giving technical assistance in relation to mining in a foreign country would facilitate in some way the discharge of their duties under Section 1 of the 1946 Act, they would have power to do it; but if they could not show that, they would not have that power. It would not be possible for an order under the subsequent 1949 Act, called an Overseas Activities Order—this is not related to overseas aid; it is purely related to the Act of 1949, which preceded the Overseas Aid Act by many years—to give the Government the necessary power. All such an order does is to extend the area in which the existing powers can be exercised. It does not enlarge the Board's powers. So if I am right in suggesting to the Government that they have not the power to do what the noble Lord suggested they had power to do under the 1946 Act, and they have not power to do so under the 1949 Act, then one would have to rely on Clause 5 of the Bill to give the powers mentioned.

Clause 5 in turn restricts the powers to purposes specified in Section 1(1) of the Overseas Aid Act 1966. That section says, among other things: … for the purposes of promoting the development of, or maintaining the economy of, a country or territory outside the United Kingdom or the welfare of its people". I understand that all those words, in fact the whole of the Act, must be read in the context of aid to developing countries, and therefore the circumstances in which technical assistance was proposed to be given overseas might not come within the scope of the Overseas Aid Act if it were, for example, technical assistance in the United States.

Your Lordships will remember that my concern with this matter is twofold: partly to enable the Board to carry out these activities, but mainly to enable the British interests concerned to follow up; and, in particular, to put this country in the same position as France is in. France, through her nationalised coal industry, set up an organisation whose activities have resulted in visits to 25 different countries advising about mining activities, with follow-up to French manufacturers of mining equipment, with the result that we in this country are competing against France with our arms tied behind our backs. I am suggesting to your Lordships that, in the interests of these providers of mining equipment of one kind and another, the pathfinding activities of the Coal Board should not be restricted.

The noble Lord has not said that they should be restricted. He said that if an application were made to the Secretary of State, and the Secretary of State was satisfied that these activities should be carried on, then he could by an Order give the necessary authority to the Coal Board. I am saying that, unless one is able to read the detailed provisions I have just mentioned of the Overseas Aid Act 1966 in a way which does not relate to overseas aid and developing countries, then I do not think the Board would be able to receive the necessary authority because the Minister would not have the necessary power. Therefore, the first Amendment seeks to remove the restrictive words in this Bill so that the Govern- ment can do what they might—I repeat, might—want to do.

As to the second Amendment, we accept the Government's view that it might be said to go too far merely to delete the restrictive words I have referred to in the first Amendment. I shall therefore propose, after "assistance" in line 5, insertion of the words, "of a kind related to mining". That ties the new powers to the function in which the Board have a particular experience and a particular expertise. I hope that I have made the position clear to your Lordships. As I see it in a nutshell, both sides want the same thing; that is to say, that the Government should have the necessary powers to promote British interests of the kind I have indicated. The Minister has said that no Amendment is needed. I have, with respect, reason to doubt that. I shall therefore be grateful if he will either confirm what he previously said or accept the Amendments the first of which I now beg to move.

2.55 p.m.

LORD DRUMALBYN

My Lords, I am grateful to the noble Lord for the way in which he has moved this Amendment. We are, of course, dealing with an Amendment which would extend very widely the purposes for which the Board may furnish technical assistance. There are two points which must be distinguished. One must distinguish between the purposes for which assistance may be given abroad and the nature of the assistance to be given. The first Amendment deals with the first of these, and the second Amendment with the second.

The noble Lord is quite right up to a point in saying, or implying—and I think this is the gist of what he said—that quite clearly any application under Section 2 of the Coal Industry Act 1949 by the Coal Board to be allowed to engage in overseas activities could not go, beyond those things which they are already entitled, under the Coal Industry Nationalisation Act 1946, to do, in Great Britain. That is the position as I understand it. But I thought the noble Lord went rather further than that. He seemed to say there were limitations under the 1966 Act. I quite agree that, with the words that are in the Bill as it is, it would not be possible for the Coal Board to indulge in overseas activities permitted under this clause anywhere in the world. But it never was intended that they should do so under this clause, except in developing countries.

The first Amendments by omitting the reference to Section 1(1) of the Overseas Aid Act 1966, would confine the purposes for which the Board may furnish technical assistance to promoting the development of, or maintaining the economy of, a country or territory outside the United Kingdom or the welfare of its people". The effect of the Amendment would be to remove the restriction on the purposes for which overseas aid could be given by the Board. There would be no restriction there. But of course the restriction in the 1946 Act on the things they are entitled to do would remain: if they are not entitled to do something under the Coal Industry Act, then they ought not to be entitled to do it under this legislation. The second Amendment deals with the nature of the assistance which may be given overseas by confining it to being of "a kind related to mining".

With regard to the first Amendment, this clause of this Bill is intended to authorise the National Coal Board to participate in overseas aid programmes, and it would be wrong to use it as a vehicle for a proposal to widen the National Coal Board's powers overseas, if only because the need for and the desirability of such powers remain to be established. As I have said, where the 1946 Act confers powers to do certain things in this country, an application can be made under the 1949 Act to do them abroad; and that of course needs the consent of the Secretary of State.

The second Amendment places a new restriction, not in the Bill, on the nature of the assistance to be given. If the second Amendment were accepted and the Board were then asked for technical assistance overseas because of their technical expertise in a non-mining field—for example, drilling for oil—they would be prevented from offering such assistance, even though it was otherwise desirable that they should do so. I doubt whether this was what the noble Lord intended. Certainly the Government did not intend to limit the nature of technical assistance the Board could give in this way, with the consent of Ministers concerned, in developing countries.

My Lords, the Government adhere to the position that, so far as countries other than developing countries are concerned, this is a matter that the Coal Board would have to submit to the Secretary of State under the 1949 Act. Of course, I agree with the noble Lord that if this was something which was desirable and was not covered by the 1949 Act, fresh legislation would be necessary, but unless and until the need and the desirability are established for such activities, it is not felt that it would be right to include the powers to engage in those activities overseas in this Bill.

3.1 p.m.

LORD DIAMOND

My Lords, so far as I can follow it, I am bound to regard that as an answer which I find unsatisfactory—but I cannot follow it completely. The noble Lord said at an earlier stage that he could give the assurance for which I was asking; namely, and I give my own words: I am sure he would want to give sympathetic consideration, 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."—[OFFICIAL REPORT, 16/3/71, col. 348.] That is the point where the noble Lord gave me the assurance.

Of course, we are talking about extending the powers of the Coal Board in exactly the same way as Charbonnages de France has done for its national interests. We are talking about giving the National Coal Board the same power to be a pathfinder in developed countries so as to enable the follow-up British interests to take advantage of that. We are interested on this side of the House in promoting both the wellbeing of the nationalised coal industry and the wellbeing of the private sector which serves the coal industry widely. I am particularly interested, my Lords, because in my late constituency were many men and women employed by a very large, very enterprising public company—when I say "public" I mean quoted on the Stock Exchange—which made mining equipment. They made, for example, pit props. In the old days pit props used to be of wood; later they became pit props of a particular kind.

Supposing the Coal Board, which have an enormous reservoir of technical expertise, were to send their advisers, on request, to a developed country like the United States, and the advice was that a particular method of mining should be adopted in order to get the greatest benefits and to act with the greatest efficiency in a given difficult mining situation. If that advice were accepted, the next question might be: who could supply the equipment which is being recommended? Of course the answer would be that it might be the particular firm I have in mind, if it were that kind of equipment, or other kinds of firms. This firm employ 3,000 people and it is very important that these interests should be promoted.

I cannot understand why the noble Lord insists on denying to this country the same capacity to benefit private sec-

tor interests as well as the Coal Board as France has granted to its nationalised industry. Moreover, I cannot, I am bound to say, understand why the noble Lord gave me that assurance which surely related to the very extension of powers which I am now talking about, if that assurance could not properly be given. If he was in error, that is well understood; it is possible even for a Minister to make an error. I do not think he is now saying that; he is saying that one cannot extend the powers of the National Coal Board so as to achieve these purposes. I find this a totally unsatisfactory approach both to the public sector and to the private sector, and I suggest that your Lordships should show your disapproval in the normal way.

3.8 p.m.

On Question, Whether the said Amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents 74; Not-Contents, 96.

CONTENTS
Addison, V.	Gardiner, L.	Royle, L.
Airedale, L.	Garnsworthy, L. [Teller.]	Rusholme, L.
Amherst, E.	Geddes of Epsom, L.	St. Davids, V.
Amulree, L.	Greenwood of Rossendale, L.	Segal, L.
Archibald, L.	Hall, V.	Serota, Bs.
Ardwick, L.	Henderson, L.	Shackleton, L.
Aylestone, L.	Henley, L.	Shepherd, L.
Beswick, L.	Hilton of Upton, L. [Teller.]	Silkin, L.
Blyton, L.	Hoy, L.	Slater, L.
Brockway, L.	Hughes, L.	Soper, L.
Buckinghamshire, E.	Jacques, L.	Sorensen, L.
Burton of Coventry, Bs.	Janner, L.	Stocks, Bs.
Byers, L.	Kinloss, Ly.	Stonham, L.
Champion, L.	Leatherland, L.	Stow Hill, L.
Chorley, L.	Llewelyn-Davies of Hastoe, Bs.	Strabolgi, L.
Constantine, L.	Loudoun, C.	Taylor, L.
Crook, L.	McLeavy, L.	Taylor of Gryfe, L.
Davies of Leek, L.	Moyle, L.	Thurso, V.
Diamond, L.	Nunburnholme, L.	Wade, L.
Donaldson of Kingsbridge, L.	Phillips, Bs.	Walston, L.
Douglass of Cleveland, L.	Plummer, Bs.	White, Bs.
Evans of Hungershall, L.	Ponsonby of Shulbrede, L.	Wootton of Abinger, Bs.
Faringdon, L.	Popplewell, L.	Wright of Ashton under Lyne, L.
Fletcher, L.	Robbins, L.
Gaitskell, Bs.	Robertson of Oakridge, L.	Wynne-Jones, L.
NOT-CONTENTS
Aberdare, L.	Belhaven and Stenton, L.	Cromartie, E.
Aberdeen and Temair, M.	Belstead, L.	Daventry, V.
Airedale, L.	Berkeley, Bs.	Denham, L.
Albemarle, E.	Blackford, L.	Drumalbyn, L.
Alexander of Tunis, E.	Caithness, E.	Dundonald, E.
Ashbourne, L.	Carrington, L.	Eccles, V.
Auckland, L.	Cawley, L.	Effingham, E.
Balerno, L.	Colgrain, L.	Egremont, L.
Balfour, E.	Conesford, L.	Elliot of Harwood, Bs.
Balfour of Inchrye, L.	Courtown, E.	Emmet of Amberley, Bs.
Barnby, L.	Craigavon, V.	Essex, E.
Beauchamp, E.	Craigmyle, L.	Falmouth, V.
Ferrers., E. [Teller.]	Kilmany, L.	St. Just, L.
Ferrier, L.	Lauderdale, E.	St. Oswald, L.
Fortescue, E.	Leicester, E.	Salisbury, M.
Glentanar, L.	Lothian, M.	Sandford, L.
Goschen, V. [Teller.]	Lucas of Chilworth, L.	Savile, L.
Gowrie, E.	MacAndrew, L.	Sherfield, L.
Gray, L.	McCorquodale of Newton, L.	Stonehaven, V.
Greenway, L.	Mar, E.	Strange of Knokin, Bs.
Grenfell, L.	Margadale, L.	Strathcarron, L.
Gridley, L.	Massereene and Ferrard, V.	Strathclyde, L.
Grimston of Westbury, L.	Mersey, V.	Stratheden and Campbell, L.
Hailsham of St. Marylebone, L. (L. Chancellor.)	Milverton, L.	Suffield, L.
	Mowbray and Stourton, L.	Swinton, E.
Hankey, L.	Northchurch, Bs.	Tenby, V.
Hanworth, V.	Nugent of Guildford, L.	Thomas, L.
Hatherton, L.	Rankeillour, L.	Thurlow, L.
Hawke, L.	Rathcavan, L.	Tweedsmuir of Belhelvie, Bs
Howard of Glossop, L.	Rockley, L.	Vivian, L.
Hylton-Foster, Bs.	St. Aldwyn, E.	Wakefield of Kendal, L.
Ilford, L.	St. Helens, L.	Windlesham, L.
Jellicoe, E. (L. Privy Seal.)

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 6 [Power of Secretary of State to call for report of Board's diversified activities]:

3.18 p.m.

LORD DIAMOND moved Amendment No. 3: 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: My Lords, if I may engage your sympathetic attention for a moment, I would ask whether any noble Lord has ever had the nightmare that he was on his feet at the Despatch Box, addressing your Lordships' House on an Amendment the papers in respect of which had suddenly taken flight and flown through the window. If any noble Lord has ever had that nightmare, let me assure him that it is not a nightmare—it is a reality. Therefore I hope your Lordships will be more than usually kind if I attempt, on the basis of a very poor memory, to put this Amendment before you. I hope it will be to your Lordships' convenience that with this Amendment we should discuss No. 5 and also Amendment No. 9 on the Marshalled List because they all relate to the same matter.

This is a further attempt to put into the Bill what the Government have indicated is their purpose, and to find words for a definition which has so far escaped the Government, and which I attempted to fill in at the Committee stage. At that time I put forward an Amendment (which of course had to be to Clause 6), the information clause, because that is where it is first mentioned, although we are really concerned with Clause 7, which is the action clause, as opposed to the information clause, and is really the vital matter. But we have to deal first with the definition in Clause 6, and therefore I hope that I shall not be told in reply, as I was on the last occasion, the reasons why this is not very important for information reasons. I know it is not very important for information reasons.

I have already been privileged to explain to your Lordships' House that Clause 6, the information clause, is not necessary at all. I have already said that in my experience whenever the Coal Board were asked for information it was provided. I asked the noble Lord, Lord Drumalbyn, if he was aware of any occasion when the Coal Board had been asked for information and had not provided it, and he said he was not. He said something to the effect that it was not surprising the Coal Board gave the information they were asked for whenever they were asked because under the Act they were compelled so to do. It is not surprising, therefore, that we are all agreed that Clause 6 does not take the matter very far. But, as I have said, I have to discuss this Amendment under Clause 6 because one could not have it discussed only under Clause 7 and have two different definitions of the same matter in the same Bill.

Having explained that I am really directing your Lordships' attention to Clause 7, although we are dealing with the first Amendment I have moved, to Clause 6, may I now go on to say why, so far as I recollect, we regard this as a matter of importance? There was a very clear indication by the noble Lord, Lord Drumalbyn, of the distinction to be drawn between the basic activities of the Coal Board and what he went on to describe as ancillary activities; and those ancillary activities were to be subject to a review and to powers of action, which he may think of a beneficial kind but which we think of a damaging kind, under Clause 7. Without wishing, therefore, to interfere with the Government's right, or without having power to interfere with the Government's right, to take what action they want to take under Clause 7, we can at all events endeavour to see that the action taken under the powers of the Bill corresponds with the action that Ministers say they will want to take; and Ministers are saying they will want to take action after information upon the ancillary activities.

On the last occasion, I moved an Amendment in an attempt to define the proper central activities of mining without which coal could not be got, but leaving out peripheral, ancillary activities, so that the Government could get information about them and have a review of them and take action about them if they were so minded. The objection to the definition I then put forward was that there was reference to a broad activity which noble Lords opposite found confusing; there was a reference at the end of that definition to "the efficient development of the coal mining industry". The noble Earl, Lord Ferrers then said, I suggest to the noble Lord that this"— that is to say, the words I have read out— is making a blurred distinction between what may be permitted to be subject to review and what may not."—[OFFICIAL REPORT, 16/3/71, col. 356.] He went on to say, at col. 366: 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 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'. Therefore, the definition in the Amendment which is now before your Lordships' House excludes those words, but by and large it is the same definition as before, with a slight grammatical improvement. It is a definition which, I repeat, I understood would have been acceptable except that the words "the efficient developing of the coal mining industry" were included.

I am relying on an assurance given in another place and on the words of the Government spokesman in your Lordships' House. Both make it clear that there is a distinction to be drawn below or before ancillary activities. It is obviously for the benefit of the Coal Board that they should certainly know which area of mining activity is not to be subject to Ministerial interference in management. Therefore, words have been used which I hope now accurately reflect the Government's desire.

I would add one final argument, which I have never in my life used before—and I should not care to try to recollect how many Amendments I have put before one or other House of Parliament—that had I had my papers before me I am sure the argument would have been twice as persuasive as the one I have endeavoured to put. I hope the Government will be willing to accept the Amendment which I am moving.

3.30 p.m.

LORD DRUMALBYN

My Lords, I should like to congratulate the noble Lord on the clarity with which he has moved this Amendment. I doubly congratulate him because of the circumstances in which he has done so. I think we perfectly understand what the noble Lord is getting at, and I know that my noble friend did not really intend to treat the noble Lord's Amendment on the last occasion as if it were dealing purely with information. The reason is that the purpose of Clause 6 is to set the pattern within which the directions, if any, will be given under Clause 7. I do not mean to pledge the Government that in no circumstances will a direction ever be given without a previous review; what I am saying is that in the broad context of the Bill the purpose of Clause 6 is to provide for reviews which may cover the whole of the area that is left open to review in the Bill, or may deal with that area with exclusions.

What I should like to say—and I do not think there is a great deal between us, if I may say so, on this particular Amendment—is that when you are trying to decide on an area to be covered, your main concern is to make certain that you cover the whole area and do not leave anything out. If we were to prescribe a narrower area, we might find that we had left out some things that ought to be covered. My noble friend at an earlier stage referred to words that were used by my honourable friend the Under-Secretary of State in another place, in which he mentioned some of the activities in respect of which directions would not be given, and which, therefore, the review was not going to cover. But to try to exclude those by a redefinition here would, I think, be very difficult.

I ask the House to accept that the Government have no preconceived ideas about the outcome of a review of the Board's activities. We certainly should not wish to exclude the National Coal Board's interests in retail fuel distribution from review, or from the possibility of directions arising thereafter. What the noble Lord has left in his definition, as opposed to what he took out of the definition at the earlier stage, is: supplying, selling or otherwise making available coal. We think it better to leave that open to review, because while there may be a good case for the Board's retaining these interests, the Government do not want that conclusion to be prejudged in this Bill, but want the possibility of covering those activities in the review. Therefore, in spite of the readiness that the noble Lord has shown to move nearer to the Government's definition, I must ask the House to reject the Amendment so that we can be sure that the review covers all those activities outside colliery activities which it may be found, when we set the terms of the review, should be covered.

LORD SLATER

My Lords, it is not my intention to take up very much time in regard to this Amendment, because we had a very long debate on Clauses 6 and 7 during the Committee stage. The noble Lord says that Clause 6 was put into the Bill to set the pattern for Clause 7. But it is Clause 7 that is the most devastating part of this Bill, and it concerns the new activities which the Coal Board took upon themselves by their powers of investment. The Government say they are prepared to have a review, yet at the same time they take exception to the Coal Board's attempt to take within their operation of the coal industry a responsibility whereby they are able to improve their financial position and to meet the commitments imposed upon the Board because of certain circumstances.

I am at a loss to understand noble Lords who vote against the application that is made by these Amendments, when I look outside at private industry. As I have been sitting here this afternoon I have been thinking that at one time you had a butcher. He had a shop, and he had a carcase, and he would cut that carcase down; and that is all he would be able to sell within that particular shop. But to-day the butcher has become more or less a general dealer; and he not only sells meat but sells other types of commodities, in order to keep his business going and to meet his commitments, because he is in a competitive market. It is the same with the Coal Board. Why these restrictions should be imposed, and why the Minister should have sought, by this Bill, to take upon himself the responsibility of imposing such sanctions—and I claim them to be sanctions—against the Coal Board, I shall never know. The only conclusion I can draw is that it is because it is a nationalised industry; it belongs to the State and operates on behalf of the State, and gives a service to the people of the State. But when it comes to outside the perimeter of the Coal Board and their functions, then there is nothing said at all.

After listening to the reply of the noble Lord to my noble friend Lord Diamond I am beginning to wonder whether he has had any discussions at all with the Minister of Fuel and Power with regard to this matter. If he has had consultations with his right honourable friend in the other place who is responsible, as Minister, for the Coal Board, then I can only arrive at one conclusion: that the Tory Party are still within the doldrums, because they know nothing whatever about the milling industry, how it works and how it ought to function. I am rather surprised that the Minister is not prepared to accept the Amendment which was so ably moved by my noble friend.

3.37 p.m.

LORD BLYTON

My Lords, to some extent I spoke on Clauses 6 and 7 at the Committee stage, but I was amazed to-day to hear the Minister say that the Government have no preconceived ideas on this Bill. I hope he is not trying to delude us, because example is better than precept. When we see how the Government have hived off air routes, how they have hived off Thomas Cook & Son Ltd., and when we know that they are to introduce a Bill to take out of State control the public houses and breweries in Cumberland, how can we accept these nice soft words coming from the Tory Front Bench in relation to Clause 7?

LORD DRUMALBYN

My Lords, I do not want to be accused of misleading the House on every Amendment. I certainly have no intention whatever of misleading the House, and I do not believe I misled them on the last occasion, either. Let us be quite clear about this. When I say that we have no preconceived ideas, I do not mean that we have no preconceived ideas that, in certain circumstances, it might be right to hive off—to use the words the noble Lord has used—some parts of the Coal Board's present undertakings. What I said we had no preconceived ideas about is what parts, and this is what we are talking about here, because we are talking about definition.

LORD BLYTON

My Lords, I thank the noble Lord, because he has made my case, and I will say no more. He said that the Government have no preconceived ideas, but when they have looked at the figures, they may want to hive off some of the coal industry. Well, the noble Lord has made my case. I hope that my noble friend on the Front Bench will take us to a Division, because what is to happen is a scandal.

LORD DIAMOND

My Lords, I am most grateful to my noble friends for the support which they have given to me on this Amendment and for their clarification of the essential issues. I can only say to my noble friend Lord Blyton that although he is absolutely right in what he said about this matter being a scandal, if I were to suggest to your Lordships' House that we should divide on every single Amendment or on every single issue in this Bill which was scandalous, we should spend the whole of the day dividing. Therefore I have the difficult and, indeed, impossible task of selecting between greater and minor scandals. That is all I can say to my noble friend on that issue.

May I say to the noble Lord, Lord Drumalbyn, that again I regret that his answer was most unsatisfactory. He was right in saying that this Amendment narrows the issue. I do not think that an Opposition, feeling as hot under the collar as we do about the whole of this part of the Bill, could have been more modest or more restrained in the Amendments which we put forward at the Committee stage and again at this stage. We are seeking only to put into the Bill assurances given by the Government. That is, in effect, all we are trying to do. I do not accept from the noble Lord, or from any other spokesman, that the Government are not supplied with Parliamentary draftsmen of such a skill that they are able to give words to describe accurately decisions which the Government have made. They are capable of doing so and, in my experience, have always done so with extreme ability and precision—

LORD DRUMALBYN

We have done so.

LORD DIAMOND

—and if there is any dubiety, it is in Ministerial minds; not in the minds of the draftsmen. Having said that, may I ask: Why, then—this is an oratorical question, because we are at the Report stage—do the Government say that they prefer to legislate by means of provisions which are excessively powerful, limited by assurances given in another place? Why do the Government not say: "We are quite clear what we want to do. We have methods of putting into effect what we want to do, and of drafting what we want with complete precision"? Why do the Government not proceed in that way? Why does the noble Lord say that this House has no function to perform—

LORD DRUMALBYN

My Lords—

LORD DIAMOND

I shall give way in one moment. By itself, that phrase needs explanation, because the noble Lord did not use those words. Perhaps the noble Lord will be good enough to allow me to explain what I mean by it. Why did he implicitly say that this House has no function to perform, when he said that it was not right or proper or necessary or convenient—I forget the words he used—for this House to attempt to put right words that had been used in another place? I thought it was the whole function of your Lordships' House to find areas where a Bill could be improved, without affecting major policy, so as to represent the views of the Government themselves and benefit individuals in the country if possible. That is all we are seeking to do here—to improve management possibilities. I shall gladly give way if the noble Lord wishes to correct me.

LORD DRUMALBYN

My Lords, I am much obliged to the noble Lord, Lord Diamond. What I have tried to make clear to him is that in the definition of "colliery activities" we have something which is absolutely clear cut. He is now seeking to substitute a definition which includes items that we cannot accept, such as, supplying, selling or otherwise making available coal. The noble Lord makes the definition still wider by referring to, activities undertaken for the purpose of other activities.

LORD DIAMOND

My Lords, why does the noble Lord not bring in his own Amendment, if he does not like mine? Why should I do his work for him? The Government have said that the words they have used are not coterminous with the powers that they seek. The Minister has said it, and it is not denied. The Minister has said—and it has been repeated in this House—that the definition of "colliery activities" excludes such essential activi-

as baths, welfare activities and electricity activities, without which no pit could function. The Minister in another place has said that and the noble Earl, Lord Ferrers, has said it here. So the incontrovertible fact remains that the definition which the Government are using is, in their own words, inadequate to describe their intentions.

The noble Lord, Lord Drumalbyn, has agreed with me that the Government are supplied with very skilled draftsmen who can put the Government's intentions into precise words. Why do the Government not ask them to do that? We have attempted to do it for the Government, and each time we have done it the Government have picked on some part of the words we used and have said, "We do not like that." Then, flexible as ever, we have produced other words and the Government have said, "We do not like that." Why do the Government not carry out their own task? I agree with my noble friend Lord Blyton that this is scandalous. It is a totally authoritarian way of governing. It is a total discourtesy to this House not to enable it to have any effect on the legislation under discussion. I am bound to agree with my noble friend that in this case the scandal is of such a nature, and the gross admitted incompetence of the Government is of such a size, that we ought to divide.

3.46 p.m.

On Question, Whether the said Amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 76; Not-Contents, 110.

CONTENTS
Addison, V.	Diamond, L.	Lindgren, L.
Airedale, L.	Douglass of Cleveland, L.	Llewelyn-Davies of Hastoe, Bs.
Archibald, L.	Evans of Hungershall, L.	McLeavy, L.
Ardwick, L.	Faringdon, L.	Moyle, L.
Arwyn, L.	Fiske, L.	Nunburnholme, L.
Aylestone, L.	Gaitskell, Bs.	Ogmore, L.
Balogh, L.	Gardiner, L.	Phillips, Bs. [Teller.]
Beswick, L.	Garnsworthy, L. [Teller.]	Plummer, Bs.
Blyton, L.	Geddes of Epsom, L.	Ponsonby of Shulbrede, L.
Brockway, L.	Gladwyn, L.	Popplewell, L.
Brown, L.	Granville of Eye, L.	Raglan, L.
Buckinghamshire, E.	Greenwood of Rossendale, L.	Royle, L.
Burntwood, L.	Hall, V.	Rusholme, L.
Burton of Coventry, Bs.	Henderson, L.	St. Davids, V.
Byers, L.	Henley, L.	Segal, L.
Chalfont, L.	Hilton of Upton, L.	Serota, Bs.
Champion, L.	Hoy, L.	Shackleton, L.
Chorley, L.	Hughes, L.	Shepherd, L.
Constantine, L.	Janner, L.	Slater, L.
Crook, L.	Kennet. L.	Sorensen, L.
Davies of Leek, L.	Leatherland, L.	Stocks, Bs.
Delacourt-Smith, L.	Lee of Asheridge, Bs.	Stonham, L.
Stow Hill, L.	Taylor of Gryfe, L.	Wright of Ashton under Lyne, L.
Strabolgi, L.	Thurso, V.
Summerskill, Bs.	Wade, L.	Wynne-Jones, L.
Taylor, L.	Walston, L.
NOT-CONTENTS
Aberdare, L.	Falmouth, V.	Molson, L.
Aberdeen and Temair, M.	Ferrers, E. [Teller.]	Mowbray and Stourton, L.
Ailwyn, L.	Ferrier, L.	Moyne, L.
Albemarle, E.	Fortescue, E.	Northchurch, Bs.
Alexander of Tunis, E.	Glentanar, L.	Nugent of Guildford, L.
Ashbourne, L.	Goschen, V. [Teller.]	Perth, E.
Auckland, L.	Gowrie, E.	Rankeillour, L.
Balerno, L.	Gray, L.	Rathcavan, L.
Balfour, E.	Greenway, L.	Rhyl, L.
Barnby, L.	Grenfell, L.	Robertson of Oakridge, L.
Beauchamp, E.	Gridley, L.	Rockley, L.
Belhaven and Stenton, L.	Grimston of Westbury, L.	Ruthven of Freeland, Ly.
Belstead, L.	Hailes, L.	St. Aldwyn, E.
Berkeley, Bs.	Hailsham of St. Marylebone, L. (L. Chancellor.)	St. Helens, L.
Caccia, L.		Salisbury, M.
Carrick, E.	Hankey, L.	Sandys, L.
Carrington, L.	Hanworth, V.	Savile, L.
Colgrain, L.	Hatherton, L.	Sempill, Ly.
Conesford, L.	Hawke, L.	Sherfield, L.
Courtown, E.	Hood, V.	Sinclair of Cleeve, L.
Craigavon, V.	Howard of Glossop, L.	Stamp, L.
Cranbrook, E.	Hylton-Foster, Bs.	Stonehaven, V.
Crawshaw, L.	Ilford, L.	Strang, L.
Cromartie, E.	Jellicoe, E. (L. Privy Seal.)	Strathalmond, L.
Daventry, V.	Jessel, L.	Strathcarron, L.
De Clifford, L.	Kilmany. L.	Strathclyde, L.
Denham, L.	Kinloss, Ly.	Stratheden and Campbell, L.
Drumalbyn, L.	Lauderdale, E.	Suffield, L.
Dulverton, L.	Lothian, M.	Swinton, E.
Dundee, E.	Lucas of Chilworth, L.	Tenby, V.
Dundonald, E.	McCorquodale of Newton, L.	Thomas, L.
Eccles, V.	Mar, E.	Thorneycroft, L.
Effingham, E.	Margadale, L.	Tweedsmuir, L.
Egremont, L.	Masham of Ilton, Bs.	Tweedsmuir of Belhelvie, Bs.
Elliot of Harwood, Bs.	Massereene and Ferrard, V.	Vivian, L.
Emmet of Amberley, Bs.	Mersey, V.	Wakefield of Kendal, L.
Essex, E.	Milverton, L.	Windlesham, L.

Resolved in the negative, and Amendment disagreed to accordingly.

3.48 p.m.

LORD DIAMOND moved Amendment No. 4: Page 5, line 24, after ("steps") insert ("of a general character")

The noble Lord said: My Lords, this is a short Amendment, but it is a very important one indeed. Clause 7(3) reads: The Secretary of State may direct the Board to take specified steps, in respect of any activities of the Board or a subsidiary of Board, with a view to altering the way in which those activities are organised. Your Lordships will know that we on this side of the House consider that that is not only a new but a totally unnecessary invasion into the administrative and managerial sphere proper to the Coal Board itself. We are therefore very concerned to know exactly what is meant by the powers that are being taken.

Now the Government were most helpful when this subject was discussed on the Committee stage, and at column 384 the noble Earl, Lord Ferrers, said: 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-clay management. Indeed I did. 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."—[OFFICIAL REPORT, 16/3/71; col. 384.]

Your Lordships will immediately appreciate that that is a very different kettle of fish. I was so surprised to hear what the noble Lord said, that when I came to reply (at column 385) I was clearly in error. In response to the noble Earl, Lord Ferrers, drawing my attention to the fact, I said that "specified" steps means "specific" steps. Not at all, said the noble Earl, "Specified' is not the same as specific'". I said, "I am very glad to hear that." I repeat that I heard these words with considerable pleasure: that "specified" is not the same as "specific". Clearly, it is not because the last two letters are different. We are not concerned with how the words are spelled, but with the intention of the Government, the meaning of the clause and the powers which are sought by the clause. The Government have said—and it is very important—that their intention is not what some of us understood it to be. I am grateful for that. I am grateful for the assurance that I have read out, what it is not the intention of the Government to interfere with the day-to-day management. The intention is now merely to give broad lines on which the various activities of the Coal Board are to be organised.

What I am doing, the noble Lord will realise, is to repeat that assurance at least twice so that there can be no doubt that the pages of Hansard will be decorated by that assurance in many places; because it is so vital and necessary to the sensible management of a most important national interest, the Coal Board. Having said that, I go on to direct your Lordships' attention to the exact words of the Amendment, which are: after ("steps") insert ("of a general character"). So that it would now read: The Secretary of State may direct the Board to take specified steps of a general character … The words are not invented by me; they are taken from the Coal Industry Nationalisation Act 1946. I hope that on this occasion I am doing no more than giving effect to what are the Government's intentions by adding to the clause words which mean no more than we have been told are the Government's intentions. I hope therefore that this Amendment, which I have pleasure in moving, will be acceptable to the Government.

LORD DRUMALBYN

My Lords, the noble Lord is showing great skill in trying to pin down the Government to accept an interpretation of the Bill that he particularly would like them to accept. I think that I ought to start by making it clear that, as your Lordships are aware, we are dealing with subsection (3) which 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. That is one of the things, and only one of the things, that may be done by way of direction under this clause. The first subsection gives power to the Secretary of State to direct the Board to dispose of assets or any part of its undertaking or to discontinue or restrict any of its activities and so on.

But here we are really dealing more with a question of semantics than with a matter of principle. My noble friend was absolutely right in what he said. But that is not equivalent in any way to the words which the noble Lord has put down in the Amendment. The noble Lord is trying to restrict the "specified steps" to steps of a general character. That is an odd way of proceeding from an intervention in which my noble friend merely said that "specified" was different from "specific"; because when you specify something, I gather from the dictionary, you name it expressly or mention it definitely. You may mention things definitely which are of a broad character or you may mention things definitely which are of a very narrow character. I really think that the noble Lord is pressing the meaning of words very far indeed in this case.

He then proceeds to rely on the fact that the directions "of a general character" are already provided for in the Coal Industry Nationalisation Act. The Act empowers the Secretary of State, as he said, to give to the Board directions of a general character … in … relation to matters appearing to the Minister to affect the national interest. The point here is that in the Amendment it is the steps that are to be of a general character; whereas in the Act it is the directions which are to be of a general character. And that is a very different matter.

The noble Lord is also trying to tie us down in this Bill in a way that the Government are not tied down in Section 7 of the Iron and Steel Act 1967 or Section 45 of the Transport Act 1968. In neither of these sections is the power to give directions about organisation limited to matters of a general character. I see no reason to impose a restriction in the case of the coal industry which does not obtain in the steel and transport industries. Although the noble Lord tried to develop this into a matter of great importance, we are really talking about a matter arising out of a very narrow interpretation of words. I must hasten to say that it was certainly never in the mind of my noble friend to contemplate that we should alter the clause in the way that this Amendment would alter it. I must invite your Lordships to reject the Amendment.

LORD DIAMOND

My Lords, you will have observed that the noble Lord is not lacking in imagination in order to produce reasons—which differ somewhat from time to time from those previously given—why this House should not interfere with a Bill which has come from another place. The underlying theme is broadly the same: "I have my brief; I have my instructions; we are instructed not to alter this Bill in any way at all and therefore I give the arguments which come to my mind". That is the underlying theme which has been made clear as we have proceeded. This is a very difficult lesson for one so new to your Lordships' House to learn—brought up as I am to believe in the great benefits which come from having a bicameral Government. However, I must proceed with my duty and say to the noble Lord that we could not possibly accept what he has said with regard to the words themselves: that this is merely a question of semantics—although I prefer the more euphonious word "semasiology". Whichever it is, I do not accept it.

It is in fact a very important Amendment; and all that I can do is not to make matters worse; because it seems to be the case that the more I stir up the noble Lords the more they think of things they ought to have said which they did not say and which would damage industry even further. I had better not do any more than underline that I am relying not only on the undertaking, the assurance, given by his noble friend but also on his own just repeated statement that what his noble friend said was absolutely right; namely, that that is not the intention of the subsection; that the intention is merely to give broad lines on which the various activities of the Coal Board or its subsidiaries should be organised. If that is the case, and if in fact it takes place, I would agree that the words themselves are of less importance. We are still proceeding on the basis of assurance by the Minister rather than by enactment; but if it is the Government's desire to do that, I do not feel that I can ask your Lordships' House to waste any further time on this Amendment, and I beg leave to withdraw it.

Amendment, by leave, withdrawn.

4.11 p.m.

LORD DIAMOND moved Amendment No. 6:

Page 5, line 37, at end insert— ( ) The Secretary of State shall not give a direction to the Board under this section if as a result of compliance therewith the interests of any person other than the Board or a wholly owned subsidiary of the Board would be adversely affected.

The noble Lord said: My Lords, those of your Lordships who attended the Committee stage of this Bill will recollect that I was anxious about the effect on third parties of the provisions in this Bill, and the words of my Amendment make clear that what I now seek to do is to improve the lot not of the Board, not of a wholly owned subsidiary, but of third parties; that is to say, a minority holder in a company in which the Board have shares, or parties with whom the Board have entered into agreement by way of joint venture or something of that kind. I made it clear that I was more than anxious about the interests of such persons who might be affected by a direction given by the Board as a result of a requirement by the Secretary of State under Clause 7. The noble Lord, Lord Drumalbyn, was good enough to promise that there would be careful inquiry about this matter. He said: I promise him that I will look very care fully into these points before the next stage of the Bill and perhaps we can come back to them then."—[OFFICIAL REPORT, 16/3/71; col. 408–9.] The noble Lord will be glad to know that we have come back to them now, and no doubt he will be good enough to explain to me how the interests of third parties are protected if a direction is given of the kind to which I have referred.

May I give one example that occurs to me in order to make my point clear? Any of your Lordships who either borrows or lends money on a mortgage will be familiar with the normal principle under which you lend money for a period of, say, five years, to someone who wants to borrow it in order to build a house. You take security on the house and receive a document from your solicitors. What does the document say? It says that the money shall be repayable within six months. It is the understanding that the loan is a five-year loan; it is the legal fact that it is repayable on six months' notice, or at the end of six months. That is a normal, everyday provision with which your Lordships are familiar. In short, the mortgagee has power to call in a loan at a shorter period than that which the underlying agreement provides, and the other party would expect to have to repay at the end of five years. But if this were a loan by the Coal Board, and the Secretary of State so instructed, the Board would have to say to the other party, "We call in the loan because we have the power to do so."

If it meant bankrupting the other party or terminating with considerable damage a joint venture, arrangement or business, that would still be the result. It would not be a reason why the power could not be exercised; of course it is a reason why the power should not be exercised. Therefore I have proposed to your Lordships an Amendment which should protect the interests of third parties, the wording being, as your Lordships will have seen: … the interests of any person other than the Board or a wholly owned subsidiary of the Board would be adversely affected.

Of course it is in the interests of the Board that it should be known that the Board is a body which keeps it bond, and that when it has said, for example, "Here is £x-thousand on a five-year loan" it means what it says. It does not mean that the legal clause of recall at six months will be used. It is to the advantage of the Board that it should be known as an honourable body in commercial terms, and that those who may wish to do business with it in future will know that they can do business on those terms and with that expectation. As the clause is at present drawn, there is nothing whatever to protect third parties. I hope, therefore, that either the Government will accept the Amendment I have put down or they will give us a full explanation of how the interests of those other than the Board and other than wholly-owned subsidiaries of the Board are to be protected.

LORD DRUMALBYN

My Lords, I recognise that the noble Lord, Lord Diamond, has raised a point about which he feels strongly and I am sorry that I must say at the start that this is not an Amendment that we can accept.

LORD DIAMOND

What, again?

LORD DRUMALBYN

That is partly because it goes much wider than it would be at all sensible for the Government to accept, and partly because we do not think it is necessary. The Amendment is similar to, but not the same as, an Amendment moved in another place, which would have bound the Secretary of State to act only in circumstances where arrangements were made that were acceptable to persons affected. This Amendment goes further than that. Its effect would be that if the interests of any person other than the Board or its wholly owned subsidiaries were adversely affected, the Secretary of State could not act, even if arrangements could be made that were satisfactory to a person whose interests would be adversely affected. So, my Lords, with respect, this is very little short of a wrecking Amendment.

The Government are fully aware that there is concern about the possibility of third parties being adversely affected, but there is no reason to suppose that in fact this will be so. In the first place, under subsection (5) of this clause the Secretary of State will consult the National Coal Board before giving any direction to the Board. At this stage the Board will bring out any difficulties arising out of its relationship and arrangements with third parties, whether individuals or companies, which might result from the carrying out of the direction. The Government will take full account of the interests of all third parties, and also very much account of the reputation of the National Coal Board itself, to which the noble Lord referred; of course they will do that.

Secondly, if the direction is under either subsection (1) or subsection (2) of this clause, involving direction to discontinue activities or dispose of assets and so on, both Houses of Parliament will be able to debate the direction before it is given. So Parliament will be able to judge whether in the circumstances it is reasonable that the direction should be issued. I wonder whether the noble Lord has really considered how hopelessly restrictive this Amendment would be. I fully recognise that he has a very proper concern that care should be taken to ensure that directions do not result in the interests of the Board's partners or fellow shareholders being adversely affected, and the Government, of course, in consultation with the Board, will do all they can to prevent that happening.

I think that I should draw your Lordships' attention to the fact that there is only one subsidiary of the Board which is not wholly owned. I accept that care is needed in the case of that one exception, and also in the case of the Board's partners, because some of the Board's arrangements are partnerships; but the Amendment goes much farther than that. There are few changes one can make that do not benefit some and affect others adversely. Under the Amendment, if one single person in the country or elsewhere—even the smallest customer—could show that his interests would be adversely affected by a direction, then the direction could not lawfully be made. I cannot believe that the noble Lord intended that result. He seems merely to be trying to defeat the clause in another way and, that being so, once again I advise my noble friends not to accept this Amendment. Though I accept absolutely the noble Lord's concern in this matter and his right to make certain that we do all we can to protect the interests of third parties, I do not believe that this would be in any way an appropriate Amendment to achieve that object.

LORD DAVIES OF LEEK

My Lords, I have listened with interest to the noble Lord's reply. In my view, the semantics of Clause 7 show that the Government are asking in the whole clause for further powers to the Secretary of State to give direction to the Board. What my noble friend is asking is that no person should be adversely affected. That does not mean, as the noble Lord, Lord Drumalbyn, says, that nothing should be done. Many years ago I was privileged to sit on the Mining Subsidence Committee, and visited every coalfield in Great Britain. May I give an illustration from the work of that Committee, which did two-and-a-half years' hard work? If my interests were adversely affected by a direction, what I should want to know would be whether that adverse effect would be for the benefit of the nation, because I am one tiny individual against this mighty Government, which is taking everything into its own hands. I want to know if I can be protected and get compensation.

The Committee to which I have referred worked very hard to get protection for people building houses in subsidence areas, and we worked out and inserted in the Act a formula which gave to an individual building a house, or to those building churches and public buildings, a right to see, for a small payment, the mining engineer's maps of the Coal Board. I do not say that the Government would do it, but under this clause the power exists for them to direct, if they so wish, that in a certain area the Coal Board, which may be paying huge sums to surveyors—like the £20,000 they are trying to take off the pubs in Cumberland—shall not produce maps of the area to show whether building sites are undermined or not and so save that amount of money.

There is real sense in what we are putting forward here, and I beg the Minister to look at it in more depth. We are asking that where hiving is going to be done, nobody should be adversely affected. I should like a guarantee, for example, that these maps will still be produced as they have been in the past, because they are important to the little house builders, to people owning historic properties and to local authorities who are erecting modern buildings. I think the point is worth making, if only to draw the attention of judges to the fact that this House has noted it.

LORD DIAMOND

My Lords, I am grateful to my noble friend for drawing attention to these important matters and for refreshing our memories from his own experience, which is very relevant to this Amendment. I want to start by relieving the noble Lord, Lord Drumalbyn, of any anxiety he has for the future by telling him that no answer of his on further Amendments could possibly be worse than the answer he has given on the one we are now considering. He has thought it right to call this a wrecking Amendment. He has paid practically no interest to the rights of third parties who have entered into contractual agreements with the Coal Board which are going to be broken.

Under this clause we are considering almost exclusively private sector interests, and all the noble Lord has done is to read with great care and ability the brief put before him and give the same answer that he has given on every single Amendment discussed on the Committee and Report stages of this Bill. Although the Bill does not represent the views of the Government, the Government are not going to adjust the Bill so that the enactment will comply with the Government's intentions. The Government have said through the noble Lord, Lord Drumalbyn, that of course they will take account of the interests of third parties. But there is nothing in the Bill about that—not a word.

The noble Lord says that this is a wrecking Amendment because it would mean that the Government could not act without consulting third parties, and perhaps paying for damage to third parties. What is wrong with that? What is wrong with having to obtain the agreement of third parties who have honestly entered into arrangements with the Board and are having those arrangements broken by the diktat of the Secretary of State? I

cannot see anything wrong with that. I do not call that a wrecking Amendment.

I am sure the noble Lord has considered this point, and I am grateful to him for that. I gave him notice of it and mentioned it in my Second Reading speech, and it is not a new point. If he does not like this Amendment, why did he not bring forward his own Amendment? Why should it be for us to provide the Government with Amendments the whole time? The Government are saying that the rights of third parties will be taken into account, but there is nothing whatever in the Bill to accomplish that. I have never known any Conservative Government, ever since I have had the privilege of knowing Conservative Governments—that is, since 1945—act in such an authoritarian way. I do not know a single case where the Government have attempted to act in such an authoritarian way, time and time again saying: "Do not pay attention to the Act; pay attention to the assurances that Ministers give". This is not the way to legislate. This is not the way to regard the interests of third parties who have honourably entered into arrangements with the Coal Board. I invite your Lordships to show your displeasure.

4.30 p.m.

On Question, Whether the said Amendment (No. 6) shall be agreed to?

Their Lordships divided: Contents, 62; Not-Contents, 121.

CONTENTS
Addison, V.	Gardiner, L.	Raglan, L.
Archibald, L.	Garnsworthy, L. [Teller.]	Royle, L.
Ardwick, L.	Geddes of Epsom, L.	Rusholme, L.
Arwyn, L.	Greenwood of Rossendale, L.	St. Davids, V.
Balogh, L.	Hall, V.	Segal, L.
Beswick, L.	Henderson, L.	Serota, Bs.
Blyton, L.	Hilton of Upton, L. [Teller.]	Shackleton, L.
Brockway, L.	Hoy, L.	Shepherd, L.
Brown, L.	Hughes, L.	Slater, L.
Buckinghamshire, E.	Jacques, L.	Sorensen, L.
Burntwood, L.	Kennet, L.	Stocks, Bs.
Burton of Coventry, Bs.	Kilbracken, L.	Stonham, L.
Champion, L.	Leatherland, L.	Stow Hill,
Chorley, L.	Lee of Asheridge, Bs.	Strabolgi, L.
Constantine, L.	Lindgren, L.	Summerskill, Bs.
Davies of Leek, L.	Llewelyn-Davies of Hastoe, Bs.	Taylor, L.
Diamond, L.	Moyle, L.	Wells-Pestell, L.
Douglass of Cleveland, L.	Nunburnholme, L.	Wootton of Abinger, Bs.
Faringdon, L.	Phillips, Bs.	Wright of Ashton under Lyne, L.
Fiske, L.	Plummer, Bs.
Gaitskell, Bs.	Popplewell, L.	Wynne-Jones, L.
NOT-CONTENTS
Aberdare, L.	Essex, E.	Moyne, L.
Ailwyn, L.	Falkland, V.	Napier and Ettrick, L.
Albemarle, E.	Falmouth, V.	Northchurch, Bs.
Alport, L.	Ferrers, E. [Teller]	Nugent of Guildford, L.
Amulree, L.	Ferrier, L.	Ogmore, L.
Ashbourne, L.	Fortescue, E.	O'Neill of the Maine, L.
Auckland, L.	Glentanar, L.	Rankeillour, L.
Balerno, L.	Goschen, V. [Teller.]	Rathcavan, L.
Balfour, E.	Gray, L.	Rea, L.
Balfour of Inchrye, L.	Greenway, L.	Rhyl, L.
Barnby, L.	Grenfell, L.	Rockley, L.
Beauchamp, E.	Gridley, L.	Ruthven of Freeland, Ly.
Beaumont of Whitley, L.	Grimston of Westbury, L.	St. Aldwyn, E.
Belhaven and Stenton, L.	Hailes, L.	St. Helens, V.
Belstead, L.	Hailsham of St. Marylebone, L. (L. Chancellor.)	St. Just, L.
Berkeley, Bs.		Salisbury, M.
Brooke of Cumnor, L.	Hankey, L.	Sandford, L.
Brooke of Ystradfellte, Bs.	Hanworth, V.	Savile, L.
Byers, L.	Hatherton, L.	Sempill, Ly.
Caccia, L.	Hawke, L.	Sinclair of Cleeve, L,
Conesford, L.	Henley, L.	Stamp, L.
Courtown, E.	Hood, V.	Stonehaven, V.
Craigavon, V.	Howard of Glossop, L.	Strang, L.
Craigmyle, L.	Hylton-Foster, Bs.	Strange of Knokin, Bs.
Cranbrook, E.	Ilford, L.	Strathcarron, L.
Crathorne, L.	Ironside, L.	Strathclyde, L.
Cromartie, E.	Jessel, L.	Stratheden and Campbell, L.
Daventry, V.	Kilmany, L.	Suffield, L.
Darcy (de Knayth), Bs.	Kilmarnock, L.	Swinton, E.
Davidson, V.	Kinloss, Ly.	Tenby, V.
De Clifford, L.	Lauderdale, E.	Teviot, L.
Denham, L.	Lothian, M.	Teynham, L.
Drumalbyn, L.	Lucas of Chilworth, L.	Thomas, L.
Dundee, E.	McCorquodale of Newton, L.	Thurso, V.
Dundonald, E.	Mar, E.	Tweedsmuir, L.
Ebbisham, L.	Masham of Ilton, Bs.	Tweedsmuir of Belhevie, Bs.
Eccles, V.	Massereene and Ferrard, V.	Vivian, L.
Effingham, E.	Mersey, V.	Wakefield of Kendal, L.
Ellenborough, L.	Meston, L.	Windlesham, L.
Elliot of Harwood, Bs.	Milverton, L.	Wise, L.
Erroll of Hale, L.	Mowbray and Stourton, L.

On Question, Amendment agreed to.

4.42 p.m.

LORD DIAMOND moved Amendment No. 7:

Page 5, line 37, at end insert— ( ) The Secretary of State shall not give a direction to the Board under this section if he has approved the carrying on of the activities, the acquisition or setting up of the undertaking, the acquisition or creation of the assets, the making of the loan or the giving of the guarantee, as the case may be, to which the direction relates.

The noble Lord said: My Lords, the purpose of this Amendment is to reassure those who would wish to enter into business arrangements with the Board that they can, as it were, get a clearance, so that they may know that, once they have entered into the arrangements they will not be unpicked as a result of a direction to the Board by the Secretary of State to discontinue some activity, or get rid of part of their undertaking. This is a proposal which I hope will meet with the Government's approval, if not in terms of words, in terms of the idea implicit in the Amendment.

Noble Lords will know by comparison with tax legislation, for example, that it is often the case that business arrangements may be of a complex nature and costly to unravel. Often those who wish to enter into these arrangements may want to know the effect of them so far as certain income tax provisions, or corporation tax provisions, are concerned. It is a perfectly reasonable request on the part of citizens that they should have clarity in the impact of tax legislation on their business proposals. Therefore there are in appropriate cases—and there are several such cases—methods of obtaining a clearance so that individuals, before entering into a transaction, may know the ultimate effect of it.

Similarly, it would be essential for individuals, before entering into business transactions with the Board of a kind referred to in this Amendment, to know that, notwithstanding the powers of the Government given by this Bill, once the appropriate Minister had approved a certain transaction, that transaction would be cleared and they would know that it could be safely entered into and continued. Investments could be made without anxiety in the sure knowledge that only good, commercial and national interests would determine the progress of the venture. I am bound to say "particular Minister", because at the moment nobody is protected.

If, for example, the present Secretary of State gives consent to a proposal put before him by the Coal Board for a joint venture operation with some private interests, nobody is protected by the fact that that Secretary of State has given his approval. It is not a statutory approval, just his approval. Another Secretary of State could come along and say, "I dislike what my predecessor did." His predecessor may have been in the same Government or the Government of a different party. He may say, "I think my predecessor was unwise to give his consent in this case; I think the undertaking ought to be brought to an end." In that event, once again the private interest would be damaged and the business arrangements would be unpicked. So I am suggesting a form of words—not necessarily the ideal form, but a suitable form—in order to provide some kind of minimum assurance for those who would wish to enter into joint business enterprises with the Coal Board, and I hope that the Government will regard this Amendment as acceptable to them.

4.45 p.m.

LORD DRUMALBYN

My Lords, despite what the noble Lord has said, I should be happy to accept an Amendment if it were acceptable. Unfortunately the noble Lord has not succeeded in putting forward an Amendment that is acceptable. He has spoken as if individual Ministers were going to act quite capriciously in this matter of giving directions, of bringing to an end associations, partnerships, and so forth. That is not the intention. It is very difficult to go on saying again and again that the purpose of Clauses 6 and 7, taken together, is to have a review to see where the Board are going, and, having had that review, to see what action should be taken.

The noble Lord says in this Amendment that one must not have an arrangement brought to an end if the arrangement has initially been approved by the Minister. Under section 3 of the Coal Industry Nationalisation Act the Board's lines of action in respect of programmes of reorganisation, or development involving substantial outlay on capital account, have been approved by successive Ministers since 1947. So it may be said with justification that the general lines on which the Board's activities and assets have developed since nationalisation have had the approval of Ministers as and when the question arose.

It has already been made clear in another place, and also in this House, that the present Government are not in any way criticising the Board for the way or the direction in which they have extended their activities. What I hope has also become clear is that, irrespective of the past actions of the Board, or the approval of previous Governments, it is the considered opinion of the present Government that the stage has been reached when the range of activities undertaken by the Board should be the subject of a thorough review by the Board and the Government, so as to determine the course towards which the Board's activities should in future be directed, in the interests both of the Board and of the nation, as shareholders.

Obviously, if this involves giving directions for the discontinuance or the restriction of activities, the disposal of assets and the like, this may well mean giving a direction for the discontinuance of an activity that has been previously approved. But there is nothing new about that.

LORD DIAMOND

My Lords, may I interrupt the noble Lord? I do so in case he is leaving that point.

LORD DRUMALBYN

No, my Lords; I am not. I was saying that there is nothing new about that. The Transport Act 1962 requires Boards to submit to the Minister proposals for the conduct of their manufacturing activities—this is in Section 13. Section 13(4), after providing for the approval of those activities, goes on: but the Minister may, after consultation with a Board, direct that Board to discontinue any of the activities which they are carrying on in accordance with proposals so approved". So there is nothing unprecedented in this. I would suggest, despite what the noble Lord said, that it would be constitutionally improper for any Administration to be committed to a course of action simply because it had been approved by a previous Government. An action might well have been justified at the time it was taken but the situation may very well have changed. After all, approval may have been given to some of the current activities of the Coal Board twenty years or more ago. One must recognise in these circumstances that these activities must be looked at again. As I have said, of course the Government, any Government—I am sure the noble Lord's Government would do this, too—will have regard to the interests affected.

LORD DIAMOND

My Lords, the noble Lord has said that Ministers do not act capriciously. I do not understand, therefore, why he is not willing to have some words (not necessarily these words) inserted into the legislation which will give substance to that statement. It is reasonable for the Board and for those who enter into business arrangements with the Board to know that their future is reasonably certain. I quite agree that it is not possible, or at any rate not constitutionally proper, for one Government to attempt to determine what a future Government are going to do. Nevertheless, we manage in practice to get over that difficulty quite well. But the noble Lord has not said (maybe I misunde7- stood him and he is prepared to say this) that this Government are prepared to undertake not to change their mind about any business arrangement which they approve, through the appropriate Minister, at all events during the life of the present Government. Would the noble Lord be prepared to go so far as that? If he is prepared to go that far and to introduce some words to that effect into the Bill, that would give some modicum of reassurance. But without any reassurance at all, we are still left with the situation that neither the Board nor anybody dealing with the Board knows how to obtain the kind of clearance which I indicated was well known to the law in terms of income tax and corporation tax legislation.

The noble Lord may say, "You cannot determine what a future Government shall do. Once you lay down a law, everybody reasonably accepts that the law will continue until Parliament decides on a different law. At all events, people will have an opportunity of discussing and arguing it, and people will have good warning of a change." But it is very unreasonable indeed that anybody should be expected to take the chance of a change of personnel and of personalities within one Administration, with the changed personalities having the right to take a different point of view which will affect in a damaging way the interests of those who have entered into arrangements with the Board in good faith.

LORD DRUMALBYN

My Lords, will the noble Lord forgive me for interrupting? I wonder whether he sees where his argument is leading to. He is suggesting perhaps a specific protection for people who enter into arrangements with the Coal Board. If he is maintaining this as a doctrine, would he also go so far as to say that there will be no further nationalisation at any stage? It has exactly the same sort of result.

LORD DIAMOND

My Lords, I do not see the relation between one case and the other.

LORD DRUMALBYN

It is a change of ownership.

LORD DIAMOND

It is a change of ownership, but there has never been any nationalisation except on the basis of fully discussed and "propaganded" or publicised proposals, and with full compensation. Furthermore, the compensation was fully discussed, as I well know. Here we have a situation in which people are being invited to enter into business arrangements with the Board, without the security of knowing that the Board are their own masters. It is a very difficult situation. The whole managerial propriety of the Board is brought into question. I should have thought that the Government would be prepared to say that when a Minister speaks on behalf of the Government he means what he says, and if he gives authority for a certain transaction to be entered into then the Board may reasonably anticipate that that transaction will be continued.

If the noble Lord thinks that there ought to be some restrictive words saying, "If so-and-so happens the incoming Government will have the right to review", people in entering into arrangements would have the opportunity of considering whether it was worth their while to do so in view of such a restriction. The path would be reasonably clear, whereas at the moment the path is totally unclear. Individuals, companies and businesses will be dealing with the Coal Board knowing that the Board are not their own master even in these small areas, and that the Government may order the discontinuance of an arrangement or development—may change their mind although it has been approved of. This is a totally chaotic situation.

The noble Lord was good enough to say that the Board come for approval when they require money. The assumption he drew—I must be very careful what I say now—is that where the Board have had money they have had approval. That does not necessarily mean that in all cases requests were met with the answer, "Yes". One does not want to particularise, but the point I am making is that the noble Lord himself said that Government had been broadly in control of the situation hitherto. There is no need, therefore, for these additional powers which the Minister is seeking. If he does seek them, I hope that he will limit them in some way and give the assurance that the Board can act with reasonable knowledge that if they behave commercially and sensibly they will be able to carry through an undertaking which a Minister has said it was proper to undertake. I think that this is a very reasonable request indeed.

On Question, Amendment negatived.

4.59 p.m.

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 dis- pose, of any part of their or its undertaking, or any asset, which is managed or used wholly or mainly for the purposes of colliery activities.

The noble Lord said: My Lords, I beg to move the last Amendment that I shall ask your Lordships to consider. If your Lordships will refer to columns 391 and 392 of the OFFICIAL REPORT of March 16, 1971, you will see that we discussed the provisions in this clause on the Committee stage. In column 391 I drew your Lordships' attention to the fact that it was: 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. In short, it seemed to me at that point of time that there was an omission in the drafting and that, just as certain activities, certain powers, had been restricted, so other powers should logically be restricted in the same way—because there is more than one power in this clause.

I moved an Amendment to that effect, and it seemed to me from the reply which I received from the noble Earl, Lord Ferrers, that some Amendment might be suitable to the Government, although the Amendment which I had moved was apparently unsuitable because of certain words which had been used. I have now substituted the word "used" for the word "held" in the last line but one of the present Amendments, which refer to: …any assets, which is managed or used wholly or mainly for the purposes of colliery activities. My recollection is that the noble Lord referred to a computer; he said that a computer might be used for a variety of purposes, so that ownership was not a sufficiently clear definition. I therefore propose that we should accept the essence of his argument and change the qualification from "ownership" to "use", and I hope that the present Amendment, which merely seeks, as I think to remedy an omission in the original drafting, will be acceptable to the Government.

I have a second reason for hoping that it will be acceptable to the Government: the next Amendent is not going to be moved. We have already discussed it, so the noble Lord, Lord Drumalbyn, should take serious account of the fact that this is the last opportunity which he will have of removing from my mind the impression, which is pretty deeply embedded by now, that his job differs not a jot from what my job in the Government was for six years—that is, to say "No" to everybody on every conceivable occasion. However, I hope that he will rid me of that impression by saying that this Amendment at all events can be accepted.

LORD DRUMALBYN

My Lords, I wish I could gratify the noble Lord; I would willingly do so if it were possible. The reason I cannot is not that I am a kind of "abominable no-man", but simply that again, I am sorry to say, this Amendment is not acceptable. In the first place it is unnecessary. May I make it clear to the noble Lord that the status of an asset depends on whether or not it is essential for colliery activities, as he will see from subsection (1)? The proviso thereto says that the Secretary of State shall not give any such direction unless he is satisfied that the carrying on of the activities … is unnecessary for the proper discharge of the duties of the Board or, in the case of a direction to the Board to restrict any activities, that any extension of them is unnecessary as aforesaid". The fact that, in so far as an asset is used at all, its sole or main use is in relation to colliery activities should not debar it from being put to some other use if its retention is unnecessary. If its retention were necessary, the Secretary of State would be debarred from disposal by the proviso to subsection (1), for a direction for disposal must not be given unless he is satisfied that the retention of the asset is unnecessary for the proper discharge of the duties of the Board, The Amendment is therefore unnecessary. It is also unacceptable because it would increase doubt. The words, "managed … for the purposes of colliery activities" might be interpreted as covering assets used for activities other than colliery activities—for example, for using the products of colliery activities.

My Lords, it is for those reasons that I cannot accept the Amendment. I am very sorry to have to disappoint the noble Lord once again, although I repeat that I take my hat off to him for the way in which he has conducted the proceedings from his side of the House without his notes.

5.6 p.m.

LORD DIAMOND

My Lords, if I may have the permission of the House, as I moved the Amendment I should like to reply to it. I am most grateful for the courteous remark of the noble Lord, and wish I could reciprocate fully. I have noticed that the noble Lord has taken to himself the exclusive right to represent the views on the other side of the House. I do not think he has been assisted by any noble Lord or Baroness from that side of the House; nor indeed has he been assisted by his noble friend Lord Ferrers who made one or two valuable contributions.

LORD HAWKE

My Lords, I have been very tempted once or twice to come to my noble friend's rescue but there is an important debate coming on to which we all want to listen.

LORD DIAMOND

That is why I have been anxious to deal with these matters as shortly as possible. I am bound to give some comfort to the noble Earl, Lord Ferrers, who has been good enough to sit here and watch the whole of our proceedings without taking part in them and to assure him that although I do not know why those matters which he dealt with previously are no longer being dealt with by him, he could not have given a worse answer than his noble friend has given. I hope that that will be taken as the courteous response to the noble Lord's courteous remark. As to this Amendment, I note what he says. We are in the same difficulty: the noble Lord says that my Amendment is not suitable, yet he offers no Amendment of his own, although it is a valid point. We have now reached the stage when, for all practical purposes, this Bill, after being discussed very fully and very seriously by a number of Members of your Lordships' House on two separate occasions, will, I suspect, finally leave this place, precisely word for word and dot for dot, in the same condition as it entered it; and that must give us all cause to think.

On Question, Amendment negatived.