HL Deb 21 July 1975 vol 363 cc10-30

2.55 p.m.


My Lords, I beg to move that this House do now resolve itself into Committee on the Bill.

Moved, that the House do now resolve itself into Committee.—(Lord Beswick.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]


I was hoping we might start off in complete agreement. I beg to move the Amendment standing in my name, No. 1. It is common form and it will help towards easier consideration of and reference to the Bill.

Amendment moved— Page 1, line 4, at end insert ("PART I").—(Lord Beswick.)

On Question, Amendment agreed to.

Clause 1 [The National Enterprise Board]:

Lord ABERDARE moved Amendment No. 2: Page 1, line 6, leave out ("National").

The noble Lord said: I wish I thought that all these Amendments could be moved as succinctly and with such a measure of agreement as the noble Lord has achieved in his first Amendment. Amendment No. 2 is a probing Amendment. My noble friend Lord Drumalbyn has indicated that, if it is for the convenience for the noble Lord opposite, we can discuss Amendments Nos. 2 and 3 together. At first sight it might appear that this Amendment was designed to start a discussion on the Title of the Bill, but that was not what was in my mind although it may have been in my noble friend's. I have indicated to noble Lords on the Front Bench opposite that the object of this Amendment is to explore further and in more detail the exact relationship between the National Enterprise Board and the two Development Agencies in Wales and Scotland.

All three, the Board and the two Agencies, have functions in common and it is obviously important that there should be no overlap between them in dealing with different industries in different parts of the country. There should surely be some form of agreement on their different spheres of action. There are many examples, especially in the development areas, where a subsidiary company is established by another company of national importance which, for example, has its headquarters in London. How is this to be dealt with so far as the NEB are concerned? Will they be dealing with the whole company through the company's headquarters in London or will they delegate the subsidiary company's activities through the appropriate Agency?

When we were discussing the Welsh Development Agency Bill, at any rate, the noble and learned Lord on the Woolsack took great pride in saying that the Welsh Development Agency was an independent body and spoke for the whole of Wales. Therefore, it is a key matter that we should have some assurance that the National Enterprise Board in turn recognise the Welsh Development Agency as their agent in Wales and that Agency will have full responsibility for those tasks they are allocated within Wales—and the same, of course, goes for Scotland. It also occurs to me to ask what happens if there is a company in Wales which is a subsidiary of another company which is seeking some help? If it goes to the Welsh Development Agency and its request is turned down, can it then go to the National Enterprise Board? Another point which arises on this exploratory discussion also arises on another Amendment by my noble friend Lord Balfour. Should there be overlapping membership between the National Enterprise Board and the two Agencies, or indeed, as he suggests, the Northern Ireland Finance Corporation?

The National Enterprise Board of course have some functions that the Scottish and Welsh Development Agencies do not have. One to which we shall be coming later, and of which we entirely disapprove, is that of extending public ownership. How will this operate in Scotland and in Wales? Will the National Enterprise Board be buying up companies in Scotland and in Wales without reference to the Welsh and the Scottish Development Agencies which do not have this particular and unpleasant duty?

The opposite side of this coin is that the Scottish and Welsh Development Agencies have various additional functions. For example, they are responsible for providing sites and premises for industry; they have various environmental responsibilities for improving the environment; and they have other responsibilities in respect of derelict land. But seemingly there is no Agency in England to carry out these duties. The Scottish and Welsh Development Agencies are responsible in their regions, but the National Enterprise Board is not responsible for these three functions. Therefore, there is no equivalent body in England to carry out this very important task of providing industrial sites, improving the environment and reclaiming derelict land. This is where we are still a little in the dark in trying to see where the exact relationship lies between the National Enterprise Board, the two Development Agencies and the rest of England where there are certain functions that apparently are not to be carried out by any Agency. I beg to move.


In regard to the general observations of the noble Lord, Lord Aberdare, so far as they relate to the Welsh Development Agency, I am not going to pursue the argument any further at this stage. However, I should like to remind the noble Lord of the speech of the noble and learned Lord the Lord Chancellor when he introduced the Welsh Development Agency Bill. He emphasised the independence of that Bill in relation to the activities in Wales. As the noble Lord, Lord Aberdare, has indicated, there are very great differences between industrial matters in Wales and in other parts of the United Kingdom, and I should like to support the general observations on this matter of the noble Lord, Lord Aberdare.


I should also like to support what my noble friend on the Front Bench has said. I put down my Amendment first of all to question the appropriateness of the name, and secondly to consider the implication of the name in relation to Scotland and Wales.

In his Second Reading speech, which I am sure we have all studied with care, the noble Lord, Lord Beswick, quoted Lord Beveridge in support of his argument that the Bill is designed to improve investment per employee. But the Government are not proposing a National Investment Board. They are proposing a National Enterprise Board, which is a quite different thing—a Board which may invest in private enterprise but which may also compete with private enterprise. In so far as they compete they are no more national than the companies with which they are competing. It is public enterprise versus private enterprise, and that is why I put down the Amendment to substitute the word "Public" for "National".

The duality of the Board's functions—to assist private industry and to compete with it—seems to me to make undesirable the use of the word "National". I think that the Government should take quite seriously the baptismal rites of their offspring. The Board are bound to be called "NEB", and I do not think that is a very pretty word it has several connotations which the Government may not like. Like any other parent, the Government should consider this point seriously before subjecting their child to mockery. I suggest, therefore, that "Public" is a much more apt and suitable description than "National", but I would agree to the omission of the word "National" without anything being substituted if the Government prefer my noble friend's Amendment.

There is also the relationship with the Scottish Development Agency and the Welsh Development Agency to which my noble friend referred. So far as the administration of Sections 7 and 8 of the Industry Act 1972 is concerned, I understand that the Secretary of State for Scotland and the Scottish Development Agency are taking over responsibility for Scotland, and that the Secretary of State for Wales and the Welsh Development Agency are taking over responsibility for Wales. I quite understand that in some places there may be a certain amount of overlapping, but one hopes that this will be minimal. This again illustrates that the word "National" is not an appropriate name.

So far as the participation of the Board in the two Agencies outside the limited scope of Sections 7 and 8 of the Industry Act is concerned, the position is far from clear. On the Third Reading of the Scottish Development Agency Bill, the noble Lord, Lord Hughes, said this: Perhaps the greatest difficulty to be resolved is how to express the dividing line between cases in Scotland which are to be financed by the NEB and those which are to be financed by the Agency…. The point is that there will be no rigid demarcation between some companies or undertakings in Scotland which are the concern of the Agency and others which are reserved to the NEB."—[Official Report; 24/6/75, col. 1298.] It appears that in Scotland and Wales both the National Enterprise Board and the Agencies will be in touch with undertakings which are based in Scotland or Wales. I appreciate that most of these undertakings will be trading in England and may have subsidiaries in England. Nevertheless, it is unsatisfactory that they should have to spend time dealing with two separate bodies. The respective responsibilities of the Board and the Agencies should be defined at least in regard to the firms concerned and not left at large. Even where the Board are considering giving help to an entire industry they should work through the Agencies in obtaining their information about the needs and viewpoints of the undertakings in Scotland and Wales.

I think that my noble friend said that the Agencies should act as agents for the Board. This is a point to which I shall be reverting later in our discussions. I am not certain that that would really be desirable. Some kind of arrangement has to be made to make them at least representative. If arrangements of this kind are made they should be reflected in the name of the Board so that there will be no misunderstanding. This would not prevent undertakings in Scotland and Wales from making representations on their own initiative to the Board, but it would prevent them from being bothered unnecessarily by two Government Agencies. Also it would mean that in Scotland, once the Scottish Assembly had been established, there would be much less danger of "crossing the wires", with all the possibilities of breakdown or even explosion.

Even if it proves impracticable to make the kind of definitions of responsibility that I am suggesting, there would still be a strong case for calling the Board "Public" rather than "National" which inevitably conveys the impression that somehow the Agencies are subordinate to the Board. Finally, the word "NEB" is offensive to a great number of undertakings which have proved themselves to be by no means lacking in enterprise. The Board will have no monopoly of enterprise. Therefore, I suggest that the word "National" is inappropriate and that the word "Public" should be substituted.


Rather surprisingly, I find that I am in favour of the Amendment of the noble Lord, Lord Drumalbyn. The term "Public Enterprise Board" suggests that the function of the Board will be to develop public enterprise, which is how some of us regard it.


I am rather surprised at the observations and comments of the noble Lord, Lord Drumalbyn. He was a Minister in the Conservative Administration. Why did he defend, for example, the National Coal Board which covers the whole of the United Kingdom? These are two forms of enterprise which would operate in a similar way to the way in which the National Coal Board operates. We have the section operating in regard to Wales, there will be the particular section operating in regard to Scotland. Therefore they will have a voice by which they will be able to express and put forward to the national Board that is to be set up under this Bill various proposals relative to their own areas.


If the noble Lord will allow me, I am sure he is aware that the Scottish Development Agency, unlike the Scottish Region of the National Coal Board, are responsible to the Secretary of State for Scotland and not to an English Minister.


The same principle applies. So far as the mining industry in Scotland is concerned what has to be done there has to receive the consent of the Secretary of State for Scotland, and I cannot see any cause for complaint by the noble Lord. I should have thought he had had so much experience in the offices he has held and the arguments that he has had to put forward on behalf of his Government that he should not take exception at the beginning of the Bill on this particular issue.


I welcome this discussion because it raises a matter of fundamental importance, namely, the relationship between the Scottish Development Agency and the National Enterprise Board. While it is difficult to draw the exact lines of demarcation at this stage it should be recognised that the economy of Scotland is very much interlinked with the economy of the United Kingdom. If we look at the number of Scottish-based companies of importance operating out of Scotland it will be found that there are no more than a dozen, and they in turn are closely linked with the economy of the United Kingdom. Indeed the major part of the investment of these companies is in England.

While I realise that no rigid lines of demarcation can perhaps be drawn and in the course of development they may iron out the areas of their special responsibilities, it would be useful at this stage if the Minister could indicate what is in his mind in this regard. For example, let us take the fact that both the Scottish Development Agency and the National Enterprise Board have limited resources and probably have substantial calls on those limited resources, and, as has been said before, the SDA have responsibilities in the whole area of the environment as well as in industry. I think there could be cases where the National Enterprise Board would willingly regard it as important that the responsibility for promotion and investment in industry should be transferred to the SDA.

There are serious problems here. We recently had Government intervention in the case of Ferranti Limited. In some people's minds there was, in the Ferranti organisation, a case for taking the Scottish operation of Ferranti out of the total complex. This represents a rather special Scottish interest in a national concern. So the situation is extremely difficult. Many of the companies who will come to the National Enterprise Board for guidance and assistance are often in serious financial straits, and it is important that they should have a direct line rather than a succession of discussions and negotiations with a variety of organisations responsible to different Ministers, and even different agencies because there is some discussion now about the SDA being responsible to the new Assembly. So I think we are looking at a major industrial development, and in any sensible industrial development you establish your lines of demarcation and responsibility at the beginning, otherwise you fall into extremely unfortunate practices in running the industry. Therefore I very much welcome the opportunity for the Minister to make clear the thinking of the Government in this particular case.


First, I should like to echo the sentiments expressed by the noble Lord, Lord Aberdare. This second Amendment does not seem to me to be an entirely auspicious start to what lies before us. If I may, I will take both these Amendments together, dealing first with Amendment No. 2 standing in the name of the noble Lords, Lord Aberdare and Lord Campbell of Croy.

This Amendment would change the name of the National Enterprise Board to the Enterprise Board. As the noble Lord, Lord Aberdare, has explained, the purpose is to probe the relationship of the Scottish and the Welsh Development Agencies, and I should like to thank the noble Lord on behalf of my noble friend Lord Beswick for this morning letting him know that this was so. The National Enterprise Board will operate on a national basis even though certain of its functions will be exercised in Scotland and in Wales by the Scottish and Welsh Development Agencies respectively. The name, which was first proposed in 1973, has now been in general use for several months and it would be confusing to change it without compelling reasons for so doing.

So far as the relationship with the Development Agencies is concerned, the separation of responsibility as between the NEB and the Development Agencies has been made quite clear by the Government Bills to establish the Agencies as well as in all the stages of the Scottish Development Agency and the Welsh Development Agency Bills in this House and in another place. The functions of both the Scottish and the Welsh Development Agencies in regard to the environment, to derelict land, to promotion, the acquisition of land and their relationship basically to the Secretaries of State for both Scotland and Wales, have been made quite clear.

The noble Lord, Lord Aberdare, referred to derelict land clearance in England. The local authorities have been responsible for this and they are already doing an excellent job, as acknowledged by noble Lords on all sides of this House in a recent debate. Therefore, the environment function so far as derelict land is concerned will remain as it is at the moment. It would be misleading to pretend that the economic development of England is completely separate from that of Scotland and Wales. Many industries are organised on a United Kingdom-wide scale and the NEB must have United Kingdom-wide powers if they are to make an effective contribution to the work of regenerating British industry. In Scotland and Wales the NEB will exercise three functions: first, the promotion of schemes for the reorganisation or development of an industry throughout the United Kingdom; secondly, the extension of public ownership into profitable sectors of United Kingdom industry; and, thirdly, the State holding company task.

The Government have made it clear that they have no intention that the NEB should detract in any way from the responsibilities of the Scottish Development Agency or the Welsh Development Agency. The Government will expect the NEB, in formulating any scheme or proposal affecting a sector of industry which is significantly represented in Scotland or in Wales, to consult fully with the Scottish Development Agency or the Welsh Development Agency about their plans. But by the same token the NEB will expect the Agencies to keep them fully informed of any plans for action in their respective countries which could affect undertakings in the rest of the United Kingdom.

The noble Lord, Lord Drumalbyn, raised the matter of companies which would find themselves going to either the Welsh or Scottish Development Agency and to the NEB and asked what would they do. There would not be any question of this: they would simply decide which body they were going to deal with and then they would deal with that Agency, and as my noble friend Lord Taylor of Gryfe said they would establish a direct line with the relevant agency or with the NEB.

I am very glad that my noble friend was able to put into perspective the matter of the Scottish companies which operate out of England and their very close links with the life of Scotland and their close links with the economy of England and their investment position so far as England is concerned. This is a problem which could easily be settled. Companies will fall into one area or the other. The noble Lord raised the matter of Ferranti. This will fall within the province of the National Enterprise Board. The arrangements for co-operation between the three bodies, in short, will be set out in a formal understanding, but this cannot be determined in detail until the National Enterprise Board, the Scottish Development Agency and the Welsh Development Agency are in existence. The Government are confident that informal working relationships will develop between all three bodies, which will be possessed of a full and sympathetic understanding of the needs, aspirations and problems dealt with by the others. It is the Government's intention that relationships of the Scottish Development Agency and the Welsh Development Agency to the Secretaries of State for Scotland and Wales will be similar to that between the National Enterprise Board and the Secretary of State for Industry. Appropriate provision to this effect is made in the legislation establishing the Agencies.

Obviously, consideration will need to be given to the relationship between the Agencies and the Scottish and Welsh Assemblies respectively, but this will have I to be settled in conjunction with the general proposals on devolution to be announced in due course which, if anticipated by this Bill, would be inappropriate. It is intended that the Secretary of State for Industry will be responsible for the National Enterprise Board, but where he exercises his functions in a way which can affect any operations by the National Enterprise Board in Scotland or Wales, he will consult the Secretary of State for Scotland or Wales as appropriate.

I turn now to Amendment No. 3 in the name of the noble Lord, Lord Drumalbyn. I should perhaps start by pointing out that the noble Lord said that the National Enterprise Board would be called "Neb" and that this sounded silly. Perhaps I can remind the noble Lord that when the Party of which he is a member set up what is now the Department of Trade and Industry, they named it "Dotty"!

The effect of the Amendment of the noble Lord, Lord Drumalbyn, would be to rename the NEB the Public Enterprise Board. It is our contention that the name "National Enterprise Board" gives a good indication of the powers and responsibilities of that Board, as well as being the name used in the White Paper, and now in common use. It reflects the Board's role of promoting more and better investment in industrial activity and the Government's underlying aim in the Bill of entering into active partnership in industry. It is called "National" because its responsibility will be to the nation as a whole, and it will exercise its powers and functions in the national interest. This is clearly brought out in the statement of the purposes for which the Board are to exercise their functions in Clause 2(1).

Paragraph 30 of the White Paper indicates the intention of the Government that: The National Enterprise Board will be the instrument by which the Government will ensure that the nation's resources are deployed to the benefit of all. To call it the Public Enterprise Board would be wrong, because the National Enterprise Board are not solely concerned with public enterprise. They will also act as a source of new investment capital for private manufacturing industry, and private firms will be able to seek the advice of the National Enterprise Board on financial and managerial issues. Clause 3 specifically enables the National Enterprise Board to act as a channel for Government assistance to private companies. I hope noble Lords will accept that the National Enterprise Board have a national role to play, that their name is now in common use, and that they will decide to withdraw their Amendment.


I am grateful to the noble Lord, Lord Lovell-Davis, for having gone to some trouble to try to explain to us what the arrangements are to be. I am not sure that I was really convinced that they produced the clear lines of demarcation that the noble Lord, Lord Taylor of Gryfe, was asking for. He mentioned at least three specific areas in which the National Enterprise Board would be operating in Scotland and Wales. First, there was the case of companies with United Kingdom coverage. I accept that that probably is the right area for the National Enterprise Board to be responsible. With regard to the other two areas mentioned by the noble Lord, one was in respect of the extension of public ownership, and the other was in respect of taking over existing State-owned companies. This seems to me to be an area where the National Enterprise Board should transfer their interests to one or other of the Agencies, if those Agencies, as we were told throughout the debate on them, are to be as fully responsible within their own countries as they should be. However, as I said, this was a probing Amendment. We have had a useful discussion, and I beg leave to withdraw the Amendment.


Before the noble Lord, the Chairman of Committees, puts the Question, may I make one point? I understood the noble Lord, Lord Lovell-Davis, to say that the companies themselves would decide with which body to establish links. That rather conflicts with what was said by the noble Lord, Lord Hughes, when he said that it would be part of the responsibility of the Agency to develop contacts with the whole of Scottish industry. They would be able to enter into discussions with any Scottish-based company, or the management of any Scottish undertaking, to see how that company or undertaking might best contribute to the general good of the Scottish economy. I am sure it is what people in Scotland in general would want, but it does not indicate that the statement of the noble Lord, Lord Lovell-Davis, that a company can decide whether to deal with the Scottish Development Agency or the National Enterprise Board has been fully thought out.


I am sorry if I have confused noble Lords; it was unintentional. I did in fact say that. It depends really where the initiative comes from.

The Earl of ONSLOW

What happens if a company goes to the Welsh Development Agency or the Scottish Development Agency and gets turned down for assistance? Can it then go back to the National Enterprise Board? I did not hear the noble Lord, Lord Lovell-Davis answer that question.


In fact, I did not answer it. There would be nothing at all to stop that company approaching the National Enterprise Board, or making its case to them.

Amendment, by leave, withdrawn.

3.29 p.m.

Lord DRUMALBYN moved Amendment No. 4: Page 1, line 11, leave out ("six") and insert ("eight").

The noble Lord said: Page 1, line 10 of the Bill reads: The Board shall consist of a chairman and not less than six nor more than sixteen other members.

For such an enormous enterprise, six would be a very small number indeed—or seven if you count the chairman. One has only to consider the kind of people we would hope the Government intend to appoint. For example, one would expect there would be representatives of local authorities, that there would be a representatives of the trade unions, and certainly I would hope that there would be representatives from the Scottish Development Agency and the Welsh Development Agency. There will have to be some representation of industry as a whole, so that the Board will know what it is talking about. I should imagine also that a counsel would be a useful person to have on the Board.

We have already passed the number of six, and I cannot see any circumstances in which such a small Board of six members would be appointed. Even if there were a desire to have a very small Board, one has to bear in mind that a Board of that description would not have the links throughout the country which a Board of this character ought to have. They would tend to be too much of a cabal and, indeed, would have only one member more, if you leave out the chairman, than the original cabal. I think we want a Board that is broadly representative of various interests, and able to bring a wide range of opinion to bear on the various problems that they have to face. Six is too small, and eight is the absolute minimum. I beg to move.


I should like to support this Amendment. The Minister has said that the National Enterprise Board are to have responsibility, to some extent, for companies which are also operating in Scotland and Wales. If we look at the make-up of the Scottish Development Agency and the Welsh Development Agency, we find it is now agreed as a result of Amendments made in this House that there should be a chairman and six members in Scotland, and a chairman and deputy chairman and six in Wales. There is much more responsibility on the National Enterprise Board. Not only are they representing, as it were, 55 million people, but they have a capital which starts at £700 million and can go up to £1,000 million.

As my noble friend has rightly pointed out, one starts to think who is likely to be represented on the Board—certainly, presumably, the TUC; certainly the CBI; no doubt, after the long debates we have had in recent days on sexual discrimination, there will be the statutory woman, perhaps even two; there is bound to be some industrial representation, and I hope very much that there will be some financial expertise on this Board. Six is a very small number. I do not know of a public company in either the public or private spheres, which operates with a minimum as low as six. I very much hope that early in the proceedings on this Bill the Government will be in a mood to accept the very reasonable Amendment very logically moved by my noble friend.


I should like to support my noble friend Lord Orr-Ewing. I know of no company of a corresponding size in commercial life that has a board as small as six. As the Government have not the slightest hope of running this Board with six people, cannot they accept a minimum of eight and show a little good will?


The situation here is that the National Enterprise Board, unlike most public corporations which inherit a whole existing agency, will build up their activities progressively from a base of existing Government shareholdings, including Rolls-Royce and BLMC. Provision has deliberately been made for the possibility of a relatively small Board at the beginning, which will build up progressively as they take on further responsibilities and expand their activities. In another place, it was suggested that the Board should consist of an initial number of eight members. Our original proposal was 6 to 15. At that stage we accepted a change in the numbers and although the minimum remained at six we increased the potential number. I think this is relevant to the point made by the noble Lord, Lord Drumalbyn, when he talked of the representation of different expertise on the Board.

I should like to pre-empt a later Amendment by going further into the matter of representation on the Board. The fact remains, however, that as the Board's activities increase the number can be built up to 18. I think that is a very adequate Board, and certainly it is on the general line of other nationalised organisations, such as the 1RC, which is 7 to 15, the British Steel Corporation 7 to 20, British Airways 8 to 15, and so on. The fact is that in this case there is nothing to stop the Board's appointing eight members at the start, if they feel they need to do so, and I have no doubt they will do so. At the moment, the NEB's organising committee seems to be functioning very satisfactorily with an initial group of five people under the noble Lord, Lord Ryder. We are keen, therefore, that we should stick to this limited number, confident in the knowledge that it will build up as the activities of the Board increase.

The noble Lord, Lord Orr-Ewing, raised the matter of representation; I think he started to raise the matter of representatives of industry in Scotland and Wales. Perhaps I may refer him to the next Amendment which refers specifically to the two Agencies. I should hope that in due course, as the Board expands, they will have more than the statutory woman member. I do not think I can say any more than that. As I say, they are not in the situation of a public corporation taking over a large existing industry, but they will progressively build up and call in such members as they need, with the expertise required as they develop.


In view of the fact that a third of the workers in industry in this country are women, could my noble friend say at this stage, because he rather implied that they have been thought of, how many women will be on the Board?


No, I am very sorry. I should like to assist my noble friend Lady Summerskill, but I cannot. I am simply expressing a personal and general hope in today's conditions.


Could it be made clear to the noble Lord, Lord Orr-Ewing, that the whole purpose of the Sex Discrimination Bill is to destroy the concept of the statutory woman?


I should not like to enter into that controversy now. I am a little surprised at the way in which the noble Lord has defended this position. It may be true that in the initial stages the assets to be invested, and so on, will be relatively few, but the Board will have the responsibility right from the start and will have to reach decisions. It is in the exercise of that sort of task that they need the right range of expertise. I should not like to pursue this further, but I wonder whether the noble Lord would think this over before the next stage, in the light of what I have said. I am certain that as we go through the Bill we shall find more and more things which the Board will be called upon to do—probably pretty soon.


If the noble Lord is asking us to consider this I shall do so, without of course giving any commitment at all. In part, I feel it will depend upon when this organisation is launched. Had it been launched at the end of this month, which conceivably might be the case if the Bill is finished, six would be ample if it went on to October, it is conceivable that they may want more. The point which the noble Lord has made about the range of expertise is well taken. There is nothing at all to prevent the Secretary of State from appointing the necessary number. It was simply that we did not want at the beginning, when the responsibilities were minimal, to have too many or an unnecessarily large number.

The Earl of ONSLOW

I had the impression from the noble Lord, Lord Lovell-Davis, that the Board are not to take in a large responsibility. He went on to say that they will take over the Government's shareholdings in British Leyland and Rolls-Royce. I should not have thought that either of those was a small responsibility. Also, Rolls-Royce certainly have factories in Scotland. Surely, the point the noble Lord, Lord Orr-Ewing, made, that there should be a representative of the Scottish Development Agency on this Board, is very valid. Furthermore, if such a representative is not there initially he will push off somebody who should be there, in the event of the Government's not appointing more than six people to the original Board.


I should like to refer the noble Earl, Lord Onslow, to the next Amendment so far as Scotland and Wales are concerned. He raised the matter of Rolls-Royce. The NEB are not going to be administering Rolls-Royce; Rolls-Royce has a separate board and it is a separate organisation. There is one other point I should like to make which I omitted earlier. We must bear in mind that although the number of members of the Board is six, there is the Chairman as well so there are in fact seven members. There is also another point to be borne in mind; that is, that any chief executive of the Agency need not necessarily be a member of the Board. Therefore, one could be in the position of starting with eight members who were fully operating the NEB.


I am grateful for what the noble Lord has said. We shall consider these matters carefully. Would he also bear in mind the need to constitute a team from the start? It is disruptive to go on adding the odd one or two members from time to time, especially in the formative time. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.40 p.m.

The Earl of BALFOUR moved Amendment No. 5:

Page 1, line 11, at end insert— ("(2A) Among the persons appointed to the Board specified in subsection (2) there shall be one person appointed under each of the following enactments—

  1. (i) the Scottish Development Agency Act 1975,
  2. (ii) the Welsh Development Agency Act 1975,
  3. (iii) the Northern Ireland Finance Corporation Order in Council.").

The noble Earl said: Again, to a great extent, this is a probing Amendment. If I have the Northern Ireland Finance Corporation Order in Council wrong, forgive me, but I do not know very much about Northern Ireland legislation. I took the trouble to ring up the Northern Ireland Office to ask whether that was the correct way of putting it down. The purpose of this Amendment is to try to create a situation where the Board have representation from a fairly wide area of the United Kingdom. The noble Lord, Lord Lovell-Davis, said that a company would know where to go. I am not sure about this. In the Scottish Development Agency (No. 2) Bill—it may have been changed now—Clause 5 said: The powers conferred by the Secretary of State by section 7 of the Industry Act 1972 may be exercised by the Agency.

Then Clause 3 in this Bill says: …where it appears to the Secretary of State that the powers conferred on him by section 7 or 8 of the Industry Act 1972…may direct the Board to exercise them;".

It is extremely important that in anything like this the Agency know what the Board are doing and that the Board know what the Agency are doing.

I have perhaps not drafted this Amendment very well, but for the purposes of the Board and here is where I should like to support my noble friend Lord Drumalbyn in the previous Amendment—it might be of great advantage if England was split into provinces of some sort so that we have fairly wide representation covering the whole country. This is particularly important if you go further into the Bill where it says, for example: The purpose of the Board may be to assist a part of the United Kingdom.

It would be a pity if, in assisting that part, some other part suffered.

I do not want to make a long speech. I hope that some of these points can be answered by the Minister. In particular, I should like to say that it will be difficult for an individual industry in, for example, Scotland, Wales, and Northern Ireland, to know which body to go to. Equally, if there is that doubt then there must be co-operation between them. Furthermore, as has been mentioned, you could have a problem with an industry which has a subsidiary in Scotland although its headquarters are, say, in England. Forgive me if I have the drafting wrong, but I hope that this Amendment meets with some sympathy.


The purpose of this Amendment is to provide that of the members of the National Enterprise Board one should also be a member of the Scottish Development Agency, one a member of the Welsh Development Agency, and one of the Northern Ireland Finance Corporation. The Government are very well aware that it will be essential for the Scottish and Welsh Development Agencies and the NIFC to keep closely in touch on matters of common concern since the functions of the NEB, the SDA, the WDA and the NIFC are similar in many important respects. This consultation and co-operation, however, can best be accomplished by establishing close and amicable working relationships within the framework of a formal understanding arrived at between the Boards.

As the noble Earl has said, it is essential that the NEB and the Agencies know what the others are doing. It might on occasion, therefore, be desirable that a member of one of the Agencies, or the NIFC, should sit on the NEB and vice-versa, and there is nothing in any of the establishing measures to prevent this. However, the nature of the relationship between the NEB and the other bodies is not such that it is essential for interlocking membership to be established by Statute. There is no reason to suppose that the presence of an SDA and WDA or NIF member on the NEB would be a crucial factor affecting the degree of consultation and co-operation that would exist between the Agencies and the NEB. To be effective this must be established at the executive working level. It will not be a matter of resolving difficult issues of principle but of avoiding conflicts in day-to-day practice.


I note what the noble Lord has said, but I am sure that he would recognise that there would be a very strong expression of opinion indeed if there were no Scottish representative on the Board—and I dare say the same is true of Wales. I know that this is different from having a member of the Agencies on the Board, but I hope that we are to take from what he has said that there will be a Scottish and Welsh representative on the Board.


I assume there will. There is absolutely nothing in the Bill that prevents a Scot or a Welshman sitting on the NEB.


Can we be assured that there will be room for one Englishman?


I should like to back up what has been said by my noble friend Lord Drumalbyn. As the NEB have specific responsibilities under the Industry Act 1972 in the development areas, I do not think that the Welsh, and equally the Scots, would accept it for a minute if there were not a Welsh or Scots representative on this Board. If there is to be, what more natural and more effective and helpful than to have cross-membership with the relevant Agencies?


I venture to express the hope that Her Majesty's Government will not give an inch on this Amendment. I say nothing about what is already the law of the land, the setting up of these regional Development Agencies, although I confess that I regard them with the deepest suspicion. But I should have thought that it was common opinion that if this Bill, of which many of us have grave suspicions, is to have rationality at all, it is to increase the efficiency of industry in this Island as a whole, and to pack the Board with regional representatives seems to me to be an absolutely sovereign recipe for inefficiency.


I wonder whether we might accept advice from the noble Lord, Lord Robbins. It is wise advice, not for the first time, coming from him. We have later on another Amendment which refers to the need to have recognition of administrative capacity, technological capacity: a whole string of them, another six different definitions of types of people. I do not know whether we would have a Scottish technologist and a Welsh technologist, or whether we are to have a Welsh administrative man and whether he might find himself at cross-purposes with a Scottish technologist. I think it would be a great mistake to have this Board divided up. They ought to be a Board with the united purpose of serving the United Kingdom as a whole. I would be surprised if we did not find someone of Scots extraction upon the Board—that is just taking the law of averages—but I do not think there should be statutory provision for it.


May I say to the noble Lord, Lord Robbins, that he has been quite deliberately provocative on this and I have no intention of rising to his bait. But I am quite certain Scotsmen can find some perfectly good men capable of running this country as they have always done.

The Earl of BALFOUR

I should like to say one more word on this. Perhaps the Board might have one of their representatives in the regions. I wonder whether the Government might think about this. From all that has been said, I would very much appreciate if the Government would again look at Amendment No. 4 in the name of my noble friend Lord Drumalbyn. This might he an even more important point. Although some of us may have great knowledge in certain fields of industry, many of us may not necessarily know the situation that exists in individual areas of the United Kingdom. Very few of us have both a geographical knowledge and an industrial knowledge of the whole country. Therefore, in choosing members for this Board I would suggest that regard be paid to where they are domiciled, as well as obviously complying with the next Amendment, Amendment No. 6. However, I beg leave to withdraw this Amendment.

Amendment, by leave, withdrawn.


I wonder whether it would be for the convenience of the House to resume at this point to take a Statement from my noble friend Lord Donaldson of Kingsbridge.

House resumed.