INDUSTRY BILL

HL Deb 24 July 1975 vol 363 cc544-601

8.29 p.m.

House again in Committee.

Lord ELTON moved Amendment No. 127:

After Clause 11, insert the following new clause:

Exclusion of power to make orders

(".—(1) This section applies to any important manufacturing undertaking which is carried on partly by persons resident in the United Kingdom and partly by persons not so resident by virtue of an agreement (whether made before or after the commencement of this Act) which has been approved in writing by the Secretary of State for the purpose of this section.

(2) The Secretary of State shall not make a prohibition order or a vesting order in relation to an undertaking to which this section applies.")

The noble Lord said: Your Lordships will be aware that one of the areas of considerable concern to Members of your Lordships' Committee, as to the effects of this Bill, is the effect of uncertainty upon potential investors, particularly investors from abroad. In the case of a joint venture between a United Kingdom enterprise and one abroad, the question of whether or not to proceed may very well hang upon the assessment of the potential investors of their chances of remaining in control or gaining control of the undertaking upon which they propose to embark.

Whether or not we like the powers which the Secretary of State will be able arrogate to himself under this Bill to make prohibition and vesting orders, we feel that the Government should be prepared to concede that if the Minister regards a proposed undertaking as being beneficial to the nation, there is no good reason why he should not do so and thereby agree to waive those powers; and there is a good deal of reason why he should do so, because this will encourage investment of foreign capital from abroad in this country. The result would be—and I say it again—increased employment for British subjects. That, in a nutshell, is the purpose of this Amendment. That is what the new clause is intended to achieve: to enable the Secretary of State to say to intending investors: "All right, the plans are sound, you may go ahead. We will not wave the axe over your head in this respect". I should be interested to hear whether the noble Lord will agree that this is a suitable power to give.

Lord MELCHETT

The noble Lord, Lord Elton, in moving the Amendment, has raised the question of joint ventures which was discussed earlier in another place. May I first point out that it is quite probable that the establishment of a joint venture will not come within the scope of these powers. If a new business is created, the creation of the joint venture would not in itself involve a "change of control" as defined in new Clause 11A, unless control of a key British manufacturing undertaking were to be transferred to the joint venture in such a way that this involved an undesirable "change of control". If this were to occur the companies concerned could come to the Secretary of State and seek his approval. There is no need to provide for this explicitly in relation to the particular category of "changes of control", represented by joint ventures. That covers the point which the noble Lord, Lord Elton, raised about foreign investors deciding whether to set up a new venture in this country, and wanting to know whether that could be vested.

In our view the Amendment would do more than bring joint ventures into prominence as a special category of important manufacturing undertaking, since it would restrict the circumstances when a prohibition or vesting order might be made. The Government recognise that there should be some restrictions on these powers, and these restrictions are set out in Clause 11. In particular, subsection (13) provides that a vesting order may be made only within three months of a prohibition order; or within three months of the Secretary of State's learning of a change of control. In addition, a prohibition or, as a last resort, vesting order may be made before a change of control has occurred only if the Secretary of State believes this change of control would be contrary to the national interest. We discussed this at some length earlier.

The Amendment however, would go further than this. Once the Secretary of State had approved an agreement, no prohibition or vesting order might ever be made in relation to the undertaking. It would be possible for a business owned in part by a British company to be sold to an undesirable foreigner, either through the sale of the British company to an unacceptable foreigner, or through a change in the control of the foreign company from a desirable foreign owner to an undesirable one. Thus even if the original foreigner was acceptable the agreement could continue, but an unacceptable foreigner acquire control. I am not sure whether these effects are intentional, but they would arise if the Amendment were accepted. They would result in undue restrictions on the powers of these clauses in the Bill, and therefore the Amendment is unacceptable.

Lord ELTON

I am obliged for those comments. It would not be the intention to hive indefinite cover to the undertaking if it ceased to be the undertaking as it was when the agreement was made and a change of control would then have taken place. The other effect of the new clause which I did not mention and to which of course the noble Lord did not refer, is the ability it would give for a joint venture already established to apply to the Secretary of State for an assurance that the undertaking as it then existed was acceptable. 'This may have a considerable bearing on possible expansion plans. This is a large area; we have much ground to cover this evening. I understand if we introduce an improved version, a "Mark II", of this Amendment at Report stage, after considering what the noble Lord has said, this may be conducive to more rapid procedure at present. If that is acceptable there-fore—

The Earl of BALFOUR

Before my noble friend withdraws his Amendment may I raise one other point? Where something like a joint undertaking has taken place, can approval be made with the Secretary of State between the foreign part of that joint undertaking and the home part, that the Secretary of State will not try to take over unless there is a change to something undesirable? Then, after all, one of the parties would have broken the agreement between the two parties. I feel that this Amendment has a lot to it, and I wonder whether Her Majesty's Government will look at it again from that point of view.

Lord MELCHETT

As I understand it—and I will write and correct this if I am wrong—there is nothing to stop the parties to this agreement coming to the Secretary of State and asking for his views about the state of the undertaking. This would cover the point which both noble Lords have raised. People are free to come to the Secretary of State and say: "What do you think about our foreign partners in this enterprise, existing or prospective?" I do not think we need anything written into the Bill to enable people to say that they could do that. That is the position.

Lord ELTON

We were in search of something more binding than an expression of opinion. I should like to look carefully at what has been said and therefore beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 12 [Contents of vesting orders]:

8.38 p.m.

The Earl of BALFOUR moved Amendment No. 128:

Page 13, leave out lines 28 and 29 and insert ("which rights, leasing arrangements, hire-purchase agreements, loan agreements, debentures, mortgages and security charges, title deeds, liabilities or encumbrances as well as assets or capital specified in the order are subject.").

The noble Earl said: Before I begin, the first part of Clause 12 is no longer correct, as Clause 11(9) has been deleted as a result of Amendment No. 124 being agreed to. If I may read the Amendment from that point, it says: a vesting order may contain provisions by virtue of which rights, leasing arrangements, hire-purchase agreements, loan agreements, debentures, mortgages and security charges, title deeds, liabilities or encumbrances as well as assets or capital specified in the order are subject. My reason for tabling this Amendment was to make certain these other points were adequately covered, as many other people could be affected where a vesting order has been made. I beg to move.

Lord LOVELL-DAVIS

I should first like to refer to the point about Clause 11(9). That will be changed; I hope that the noble Earl does not think we are going to pull a fast one. It is a well-known precept that the general includes the particular, and in this case the precept adds to the brevity of legislation. I am advised by my legal advisers that there is no question but that, with one exception, all the proposed additions to the general categories of rights, liabilities and encumbrances are indisputably covered by the general heading in the Bill at present of "rights, liabilities and encumbrances". The exception is title deeds, which are the evidence of a right rather than a right in themselves. So with this one exception, which is in any case inappropriate, I am advised that the Amendments are unnecessary.

I am additionally advised that the additions proposed by the Amendments do not constitute a comprehensive list of all the rights, liabilities and encumbrances that may be relevant. There are a number of others such as interest under trusts, annuities or charges to which shares might be subject, and which would be transferred to compensation, easements over land and so on. In all respects, the clause as it stands fully covers the case.

The Earl of BALFOUR

In view of what the noble Lord has said, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Earl of BALFOUR moved Amendment No. 129A:

Page 13, line 38, at end insert ("in the United Kingdom").

The noble Earl said: Perhaps I may refer your Lordships to the wording of subsection (2), which is: A vesting order may include such provisions as the Secretary of State considers necessary or expedient to safeguard—". I believe that the words "in the United Kingdom" should be inserted there so as to cover any capital or any assets. I Think this is important because there should be no confusion between things that might be owned overseas. I beg to move.

Lord MELCHETT

As I understand it, in respect of a foreign company the Amendment would have no effect since it would merely confirm what is already the case. If a business in the United Kingdom is carried on by a foreign company, the only power in a vesting order is to vest the assets in the United Kingdom of the company's business. The safeguarding provisions would apply only to assets in the United Kingdom, irrespective of whether the Amendment were made or not. With that assurance, I hope that the noble Lord wil see fit to withdraw his Amendment.

The Earl of BALFOUR

I am afraid I am not satisfied with that answer. I took considerable advice on this Amendment, and I was advised that such a safeguard was necessary. Perhaps the Government may be able to look at this again and, if so, on that assurance, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

8.45 p.m.

Lord DRUMALBYN moved Amendment No. 130:

Page 14, line 17, leave out from ("has") to end of line 22 and insert ("made a prohibition order.").

The noble Lord said: We are here talking about the power of the Secretary of State to make a vesting order which, among other things, will prohibit or set aside the transfer of any such capital or assets or any right in respect of such capital or assets. Subsection (6) deals with transfers, including transfers, made before the draft of the order is laid before Parliament but after the Secretary of State has given notice to the person carrying on the undertaking of his intention to lay a draft order…". Then it goes on to deal with the method of publication. I take it that the draft order referred to is actually the vesting order, which is what we are talking about in the clause. In that case, the notice referred to will be a notice either after or before the prohibition order is laid. It is not clear from the drafting whether it could be before the prohibition order is laid. If it is, I think it would be objectionable. It would be quite wrong for the Secretary of State to be empowered to introduce an additional process outside those already outlined; that is, the prohibition order and subsequently vesting order. He would do this without any authority from Parliament or any check from Parliament upon it. If it were done after the prohibition order, that would not apply. That is why I have put down the prohibition order as the "nether limit" of the power conferred by this clause. I beg to move.

Lord BESWICK

The subsection which the noble Lord seeks to amend has two purposes. First, the subsection is intended to make it clear that safeguarding provisions can be applied with a limited degree of retrospection. I do not think that the noble Lord challenges that. The Bill provides that they can cover transfers after the time the Government notified the undertaking that it was to be vested. This would be changed by the Amendment to any date after a prohibition order had been made. But a prohibition order will not always be made. For example, if the change of control occurred outside United Kingdom jurisdiction, a prohibition order would be of no avail. In those circumstances, a vesting order would be the only means of protecting the United Kingdom assets at risk but, under the terms of this Amendment, safeguarding provisions would apply only after the vesting order had been made, because that order would include them—that is to say, at least a month later—and its effectiveness, of course, would be considerably reduced.

The second purpose of Clause 12(6) as drafted—a purpose which is the result of an Opposition initiative in another place—is to give the public at large notice that safeguarding provisions apply. This the Amendment would delete, and instead the public would not know—nor would any company—whether any transaction entered into by a company after it had been made subject to a prohibition order might subsequently be set aside by a later vesting order. This would cast doubt in the minds of those who dealt with any company made subject to a prohibition order, and I should have thought it was clearly undesirable.

Lord DRUMALBYN

I understand part, at least, of what the noble Lord has said, but I should have thought that the time of making a prohibition order should still be the right time from which this power is to run. I appreciate what he said about transfers in the case of assets which are already owned by an overseas resident. Possibly some further amendment may be needed on this, but I feel very strongly that the prohibition order ought to be the start of this procedure. I am still not clear whether the noble Lord wants the power to go back beyond the time when the prohibition order is made, or whether he is merely opposing this on the grounds that a prohibition order will not be made in every case. I can see no reason why the prohibition order should not be the start, in these circumstances; and I could not quite understand his argument that in some cases the public would not know about it. If a prohibition order is made, it will be generally known. It has to be laid before Parliament and 28 days must elapse. These 28 days are given for the negation of the order. That being so, I should have thought this might be sufficient notice. If additional notice is given by putting it in the London Gazette, the Edinburgh Gazette, the Belfast Gazette and so on, well and good; but the main point of the Amendment is that the procedure should start with the prohibition order, in all cases except where there is overseas ownership already—and I had previously moved an Amendment to leave these out, so this position would not have applied had my Amendment been accepted. So I must ask the noble Lord whether he will look at this again to see whether the prohibition order cannot be the start of this procedure, except in cases where the asset to be transferred is already owned overseas.

Lord BESWICK

Clearly the Amendment as it stands is unsuitable because as I say, there may not even be a prohibition order. As to the second point, possibly I could look at it.

Lord DRUMALBYN

I am much obliged to the noble Lord, and beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 12 shall stand part of the Bill?

8.50 p.m.

Lord ELTON

There is one further possible defect to the Bill to which I should like to draw to your Lordships' attention, in the hope that the Government will produce an Amendment themselves at Report stage. It concerns the protection afforded by the right of recovery of assets of which bodies corporate have divested themselves in anticipation of a vesting order. When they do this, under subsections (3), (4) and (5), it is provided that these subsections entitle the Secretary of State or the Board to recover the capital or assets transferred. They entitle the body corporate by whom the assets have been transferred to recover them and they give the person entitled to recover the capital or assets a right, if he fails to recover them, to be compensated in respect of the transfer.

I do not want to make a meal of this point and to give numerous and complicated examples. The essence of the matter is simply this. So long as the transfer is between party A and party B, the Bill applies, and compensation can be sought and recourse can be had to redress—if that is the right way of expressing it. But if it goes on to party C and party D. then we do not have the provision, because the provision in the Bill refers, so far as I can see, to only the first transfer. A third party may be involved. Let us say that a body corporate divests itself to a subsidiary, trying to evade the effects of a vesting order. Let us suppose that the subsidiary, in questionable faith, divests itself to a third party. When the third party, having acquired this block of material, disposes of it in its turn, breaks it down into smaller parcels—it may not be stocks and shares; it can be bulldozers and storage tanks sold for different purposes—it seems to me there is a danger that parties C and D will have claims against each other which cannot be fulfilled; and party B will be unable to recover.

The interests of the banks in this is clear, because loans may well be secured, or finance may be secured, on the assumption that these were free goods—goods free to be exchangtd. Where third and fourth parties are involved, the notice to which the noble Lord has just referred, given in various gazettes, and indeed the notice laid on the Table in the Houses of Parliament, may not be effective for drawing atention to the purchaser, or indeed at some stage the vendor, or those financing the operation. I hope that this rather complicated but fairly straight forward matter can be looked into.

Lord MELCHETT

As I understand it, the compensation which would be claimed from a British company which had improperly divested itself of assets would be claimed from the directors of the company. If the company had acted improperly, or if the directors had acted improperly in this way, it would be the directors who would be liable. Therefore, I do not think there would be any question of trying to recover things several further stages down the line from people who had bought them or taken on liabilities in good faith. I think it would be at the point of the original divesting that the redress would bite.

Lord ELTON

I think that the noble Lord is looking at the question only from the position of, as it were, the Secretary of State. I am concerned where we have a case of company A divesting itself to company B. Both parties at that stage should be aware that an offence is taking place and that redress may be had. Then B passes to C and only one party need necessarily know this, and C passes to D and nobody need know. Redress may be available to the Secretary of State who has lost the assets if he cannot get them back. But I am speaking about the position of company or party C, who may have to return the assets and has no claim against D; or D who has paid for them and has them taken away from him. Or the assets may have just evaporated in this situation. I do not want to continue. The noble Lord would probably like to deal with it.

Lord BESWICK

I gather that there has been some correspondence between my Department and the London Clearing Bankers Committee. It has been made clear that there is no power to obtain compensation from the parties to any transaction after the first transaction, and that if the first transaction is to set aside, then all subsequent transfers will be set aside and each party will be able to recover any money which has passed in the subsequent transaction. If the noble Lord will look at that reply he may find that it answers the point. If not, we will indeed look at it on Report stage.

Lord ELTON

I am much obliged.

Clause 12 agreed to.

Lord BESWICK moved Amendment No. 130A:

After Clause 12 insert the following new clause:

Remedies for contravention of prohibition orders

".—(1) No criminal proceedings shall lie against any person on the ground that he has committed, or aided, abetted, counselled or procured the commission of, or conspired or attempted to commit, or incited others to commit, any contravention of a prohibition order.

(2) Nothing in subsection (1) above shall limit any right of any person to bring civil proceedings in respect of any contravention or apprehended contravention of a prohibition order, and (without prejudice to the generality of the preceding words) compliance with any such order shall be enforceable by civil proceedings by the Crown for an injunction or interdict or for any other appropriate relief."

The noble Lord said: This is an Amendment which simply repositions provisions in the Bill. Subsections (10) and (11) of Clause 28 now form a new clause for Part II of the Bill. These subsections, and hence the new clause, deal with the enforcement of prohibition orders and most appropriately fit into Part II of the Bill. There is a further advantage in putting the provision here in that Clause 28 will, after the deletion of these subsections, deal entirely with events connected with information disclosure and will in turn be properly placed in Part IV. There is no change in the significance or the application of the clause. I hope it is acceptable. I beg I to move.

On Question, Amendment agreed to.

Clause 13 agreed to.

Clause 14 [Compensation orders]:

Lord MELCHETT

Amendment No. 130B was spoken to with Amendment No. 100A. I beg to move.

Amendment moved—

Page 15, line 2, at end insert ("Part of this").—(Lord Melchett.)

On Question, Amendment agreed to.

8.59 p.m.

Lord DRUMALBYN moved Amendment No. 131:

Page 15, line 31, leave out from ("Parliament") to end of line 38.

The noble Lord said: Subsection (4) gives a choice, presumably to the Secretary of State, in the way in which compensation may be paid. It may be paid either out of monies provided by Parliament or by the issue of Government stock. Over the last 30 years the history of Government stock has been frightful. To pay in Government stock; to see the value of that Government stock depreciate; to see the value of the fixed interest diminish in real terms, is not good enough. It would be quite monstrous if compensation was not paid out of money provided by Parliament, because then at any rate the person who received it would be responsible for what happened. Suppose the person disposes of the stock. He is only wishing the same malady, the same misfortune, on somebody else. This is a very bad thing to do. I beg to move.

Baroness HORNSBY-SMITH

I should like to support my noble friend Lord Drumalbyn. It is one thing if a company goes "bust" and the Government bail it out. One expects, having taken the risk of shareholding, possibly not to get one's money back. But it is quite a different thing that people who have bought into profitable enterprises, who have hazarded their savings on a good choice and a profitable company, should have to exchange those shares for Government stock which over the years would possibly give them a quite lamentable return. It is a very different proposition when people have made the decision of their own choice. Because they may have had to yield up their stock, to be given Government stock is not, with its sad record, good enough.

Lord MELCHETT

The White Paper made it clear that, if necessary, compulsory acquisition would be subject to prompt and fair compensation to the existing shareholders. Through their willingness in another place to accept Amendments which make more clear individuals' rights to compensation, the Government have shown that they intend to honour to the full this commitment. However, as the noble Lord has said, this Amendment goes further and would restrict the Government to paying compensation through the issue of Government stock, I am sorry if I have misunderstood the noble Lord?

Lord DRUMALBYN

We are proposing to leave out paragraph (b), not paragraph (a).

Lord MELCHETT

I apologise. It would restrict the Government to paying compensation in cash and would not allow them to pay compensation in stock. The normal, although not the sole, means of paying compensation for major nationalisation measures has been either through the issue of Government stock or through a combination of cash and stock payments. As it is drafted, the Bill provides that compensation may be paid either as stock or as cash. It makes no statement about which method will be used.

Whatever the means, compensation must be fair. There is no question of the Government attempting to pay less compensation through the issue of Government stock. The amount of stock paid will be determined by the market value of the stock on the day of payment of compensation and thus allows, in so far as it is possible to do so, for the recipient of stock to seek an equivalent cash value, since the two will be inter-convertible. What would not be reasonable, in our view, is to attempt to restrict the payment of compensation to payment in cash. It would restrict the Government without any benefit by way of an increased guarantee of fair treatment for the recipient of compensation.

There is one further important point which I should like to make to the noble Lord, Lord Drumalbyn. If compensation were paid in cash for shares acquired under a vesting order, this would count as a disposal for the purposes of capital gains tax. Any gain which had occurred between the share being bought and its being vested by the Secretary of State would be liable for tax. However, if compensation is paid by the issue of Government stock, this will not count as a disposal but the former owner of the shares, who will now own Government stock, will be able to choose when to dispose of the stock. Capital gain for the offsetting of losses against other gains would be calculated on the change of value of the shareholding, when the Government stock issued as compensation is sold. Any gains or losses made on Government stock within 12 months of the acquisition of the stock would also be considered for capital gains tax purposes. The Chief Secretary to the Treasury said that the Finance Bill 1976 will make provision to give effect to this and that this provision would apply to any vesting order made before that Bill becomes law. There may, therefore, be considerable advantages to the recipient of the compensation when it is paid in Government stock. With that explanation, I hope that the noble Lord may feel that this Amendment may well lead to some disadvantages to those people who receive compensation.

Lord LLOYD of KILGERRAN

I had not intended to intervene in this debate, but having listened to the noble Lord the Minister on this matter I am wondering whether it is fair that stock should be offered. May I ask the Minister whether this is undated or dated stock? At this late hour, I do not wish to raise a Party political point but there is a large number of people in the country from which I come—and I note that the noble and learned Lord the Lord Chancellor is present—who were offered Daltons stock and felt that Government stock was something which they should accept, because they had great faith in it. However, those men and women in Wales now write to me and ask me what they can do; they have lost all this money, and they ask what is to happen. Therefore, may I say as fairly and as objectively as I can I notice that the noble Lord, Lord Robbins, has been good enough to nod his head in agreement with me at this stage, and if I have misinterpreted him no doubt he will correct me—that to offer stock at this stage to people as a means of compensation may lead them to believe that this stock has greater value than the cash which they would be entitled to receive by way of compensation.

Lord ROBBINS

May I confirm the interpretation of my bodily movements which the noble Lord mentioned. I simply cannot conceive how the Government imagine that ordinary people would prefer stock to cash.

Lord ELTON

May I add my support to the Amendment which stands in the name of my noble friend Lord Drumalbyn and associate myself with the remarks of the noble Lord, Lord Lloyd of Kilgerran. The words "War Loan" hover at the back of my mind. There is a great deal of unredeemed Government stock, and there is a lot of Government stock which is not as valuable as it might be expected to be. We do not know what kind of stock it may be. We do not know whether it will be redeemable or whether it will bear interest. Will the interest bear any relation to the interest which was borne by the stock which it replaces and, if so, in which year, because rates of interest fluctuate violently. I do not want to spin this out. I sympathise with and support my noble friend.

Baroness WHITE

May I add my support to the noble Lord, Lord Drumalbyn. Many years ago when Daltons were first issued my family was advised to put into Daltons money which had been subscribed to a family charitable trust in memory of my brother. This advice was given to us by a person who should have known better a Second Secretary in the Treasury. If you cannot trust that kind of advice, how can you trust any Government—this applies to all Governments—who issue undated stock in return for assets which no doubt they have quite properly acquired.

Lord MELCHETT

As I understand it the stock would normally be dated and, as I said, it would be issued at the market value on the day it was issued and therefore could be sold by the recipient for the cash equivalent. As I have already pointed out, in some instances there are considerable advantages in receiving stock rather than cash from the point of view of capital gains tax, which none of the noble Lords who spoke after I had spoken referred to at all. There is also the point that if one receives stock it is bearing interest from the moment it is handed over, whereas of course cash does not bear interest until it is invested in some way or put on deposit. In the past it has been perfectly normal practice for Government stock to be issued in these matters. For example, for road haulage British Transport 3 per cent. guaranteed stock was issued, but for payments below a certain figure cash payments not exceeding £20,000 were made. This provides a degree of flexibility which we consider is highly desirable, and I do not think noble Lords who oppose this have fully taken on board the fact that there are some advantages to the recipients.

Viscount MASSEREENE and FERRARD

Does the noble Lord not realise that if the holders of this stock all put it on the market at the same time the price would plummet? I would only add, "Put not your faith in Princes".

Lord LLOYD of KILGERRAN

May I ask the noble Lord why he should assume that the noble Lords who spoke after he had sat down knew nothing about the advantages which most people know accrue when one purchases Government stock? What we are trying to say to the noble Lord and the Government is that they should make clear what kind of Government stock they are proposing to offer and if, as the noble Lord has been good enough to say, it is to be dated stock then that should be made clear in the Bill.

Lord HEWLETT

Furthermore, cannot the Government appreciate that literally every side of the Committee has expressed its dissatisfaction on this point? Whereas no other Peer has mentioned what the noble Lord the Minister has suggested—namely, the advantage of taking Government stock rather than cash in compensation, because of the provisions of capital gains tax—it surely lies with Her Majesty's Government to amend the capital gains tax provisions, rather than to throw that answer in the face of consistent opposition from every Peer who spoke.

Baroness HORNSBY-SMITH

The noble Lord has implied that the unfortunate people who compulsorily have to sell their shares will be at an advantage, because if they take Government stock they will not have to pay capital gains tax. But these are people who, of their own volition, chose to invest their money in some company and have no desire to sell their shares in what may be an excellent company, but the Government decide that they wish to acquire a shareholding in this profitable company and the shareholders are forced to sell. I do not consider that the Government are rendering any advantage to them if they then say that they can change into Government stock, into a share they would not of their own volition buy. If they had wanted Government stock, they would have bought them in the first place and not gone into the private company. For the Government to say that they are doing a favour to people being deprived of shares they have chosen of their own volition, is rather monstrous.

The Duke of ATHOLL

Before the noble Lord replies, I take the point made by the noble Lord, Lord Melchett, about the advantages of holding Government stock if you are subject to a large capital gains tax payment. Will the choice be in the hands of the person to whom the compensation is being paid, whether he receives cash or Government stock? This would seem to me to be eminently fair. But if the choice is in tile hands of the Government, which I am inclined to suspect it is, I am inclined to agree with my noble friends that this is not satisfactory, although I fully recognise that to many people the advantages of being able to receive Government stock are quite considerable.

Lord BESWICK

I wonder whether the memories of certain stocks are not raising the temperature in the Committee a little. The difficulty with the stock to which the reference has been made was that it was undated stock. My noble friend has already said that it is envisaged in this case that it would be dated stock. It would also be an option, not necessarily in a particular case, open to the Government, according to the circumstances at the time, to make provision either for money or for stock, or for both. I do not think on reflection we should wish to limit the power of the Government in a particular case to issue stock.

The noble Viscount, Lord Massereene and Ferrard, spoke about the market being flooded, but we are not talking about an issue of stock such as was issued at the time of the transport takeover, or even gas or electricity. It would be comparatively small sums of money and I should not have thought that the market would have been unduly upset if two or three recipients went along and sold their stock on a given day as a result of a transaction involving £100,000 or £200,000 or £300,000. Where I think there is more of a point, is that something might be in the Bill about the kind of stock, whether it be dated or undated stock, and if noble Lords want me to look at that I will undertake to do so.

Lord ROBBINS

That elucidation casts a flood of new light on the possibilities. If it be the case that the people to be compensated are given the option of taking Government stock or cash, personally I would see no objection at all. It is if they are forced to take Government stock that I think the gravest possible objection of principle arises.

Lord BESWICK

I really do not think that the noble Lord, Lord Robbins, believes that.

Several Noble Lords

Oh!

Lord BESWICK

The noble Lord and I have had many discussions on these matters, and if I take advantage of my respect for the noble Lord, I hope noble Lords opposite will allow me to have my friendship unsullied by their intervention. It is a question of principle. I am quite sure he does not mean to say that the Government should not issue stock. Of course they should be allowed to issue stock. In this particular case, it would be stock with a certain money value. It would be the option of the Government of the day as to whether, in certain market circumstances or with the amount of money involved, one used cash or stock equivalent to cash. I really cannot think there is anything unduly frightening about all that, except that we all do get

frightened sometimes when we look at the price of certain stocks in the market.

Several Noble Lords

Hear, hear!

Lord BESWICK

The point was put about dated or undated stock. I agree that there is great apprehension about this, and we should look at it.

Lord ROBBINS

The noble Lord has approached the matter sympathetically. I asked the question, although I do not propose to press it, as to why the noble Lord, Lord Melchett, should assume that after he sat down the people that followed him did not know anything about these matters in relation to Government stock. It is rather late to pursue the point, and I do not propose to pursue it in view of the assurances given.

Lord BESWICK

May I ask the noble Lord why he assumes that my noble friend assumed that?

Lord DRUMALBYN

I am sure the noble Lord will not lose in friendship over this whatever he does, and whatever we do in this matter. But we think there is a risk here. In the first place, if the noble Lord had undertaken to refer to dated stock, and if he had undertaken to make it at the option of the recipient, then I think we could have gone along with him. But the noble Lord has merely undertaken to consider whether there should be a reference to dated stock. He must face the fact that with a choice like this at the instance of the Government, the Government will make the choice in the interest of the Government and not in the interest of the recipient. It is a compulsory purchase and should be made in the interest of the recipient. I think we should divide on the matter.

9.18 p.m.

On Question, Whether the said Amendment (No. 131) shall be agreed to?

Their Lordships divided: Contents, 65; Not-Contents, 39.

CONTENTS
Aberdare, L.	Bethell, L.	Ellenborough, L.
Atholl, D.	Campbell of Croy, L.	Elles, B.
Balernio, L.	Cathcart, E.	Elliot of Harwood, B.
Balfour, E.	Colville of Culross, V.	Elton, L.
Balfour of Inchrye, L.	Cowley, E.	Emmet of Amberley, B.
Balniel, L.	Cullen of Ashbourne, L.	Falkland, V.
Beaumont of Whitley, L.	de Clifford, L.	Gainford, L.
Belstead, L.	Denham, L. [Teller.]	Hewlett, L.
Berkeley, B.	Drumalbyn, L. [Teller.]	Hives, L.
Hornsby-Smith, B.	Northchurch, B.	Sandys, L.
Limerick, E.	Nugent of Guildford, L.	Selkirk, E.
Lloyd of Kilgerran, L.	Orr-Ewing, L.	Sharpies, B.
Long, V.	Rankeillour, L.	Sinclair of Cleeve, L.
Lucas of Chilworth, L.	Reading, M.	Strange, L.
Lyell, L.	Reigate, L.	Strathclyde, L.
McFadzean, L.	Ridley, V.	Terrington, L.
Macleod of Borve, B.	Robbins, L.	Vickers, B.
Massereene and Ferrard, V.	Robson of Kiddington, B.	Vivian, L.
Monson, L.	Rochester, L.	Ward of North Tyneside, B.
Mowbray and Stourton, L.	St. Davids, V.	Wigoder, L.
Moyne, L.	St. Just, L.	Young, B.
Netherthorpe, L.	Sandford, L.
NOT-CONTENTS
Ardwick, L.	Elwyn-Jones, L.	Milner of Leeds, L.
Arwyn, L.	(L. Chancellor.)	Morris of Kenwood, L.
Bacon, B.	Gaitskell, B.	Pitt of Hampstead, L.
Beswick, L.	Gordon-Walker, L.	Popplewell, L.
Birk, B.	Goronwy-Roberts, L.	Ritchie-Calder, L.
Blyton, L.	Harris of Greenwich, L.	Shepherd, L. (L. Privy Seal.)
Caradon, L.	Henderson, L.	Stewart of Alvechurch, B.
Castle, L.	Houghton of Sowerby, L.	Strabolgi, L. [Teller.]
Champion, L.	Janner, L.	Taylor of Mansfield, L.
Collison, L.	Llewelyn-Davies of Hastoe, B.	Wallace of Coslany, L.
Cooper of Stockton Heath, L.	Longford, E.	Wells-Pestell, L. [Teller.]
Crowther-Hunt, L.	Lovell-Davis, L.	White, B.
Davies of Leek, L.	Maelor, L.	Winterbottom, L.
	Melchett, L.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.

9.26 p.m.

Lord ELTON moved Amendment No. 131A:

Page 16, line 1, leave out from ("if") to end of line 2 and insert ("for the words "may by notice given in the prescribed manner, withdraw the order or may" there were substituted the word "shall"").

The noble Lord said: I would draw your Lordships' attention to the effect of the Government's amendment, in the Bill, of the procedural Act, which is to delete one of the two alternatives open to the Secretary of State and to leave the other. Whereas the word "may" which the Government have left in the Bill was appropriate when it came between the two alternatives because the Secretary of State had to take one course of action or the other, now that there is only one course of action the effect of leaving "may" standing part of the Bill is to make it read as follows: …if the Minister considers it inexpedient that the order should take effect as so amended, he may… cause the order to be submitted to Parliament for further consideration by means of a Bill for the confirmation thereof. Therefore, it is open to him either to do that or to do nothing at all. It is the intention of the Bill that he shall take the second course of action that was open to him, and that is the effect of this Amendment.

Lord MELCHETT

I hope that we can reach agreement on this. I accept that this is a complex part of the Bill and that the noble Lord has hit upon a valid point. I think that both he and the Government are in agreement about the end we want to achieve. We should like to examine this again to see whether we can bring forward an Amendment at Report stage to make our intentions clearer. I hope in this way to give effect to what the noble Lord and the Government are trying to achieve.

Lord ELTON

I am grateful for that courteous reception. It was too much to hope that the Amendment would be accepted, perhaps because the notice was so short. But if the noble Lord would like to table it under his own name at Report stage that would be acceptable. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 14, as amended, shall stand part of the Bill?

9.29 p.m.

The Earl of LIMERICK

May I ask a question on a point of information. This clause deals with compensation orders and the following clause, Clause 15, deals with arbitration of disputes in the event that agreement is not reached. The Bill is silent on the general basis on which compensation is to be assessed. I appreciate that in a Statute it is quite impossible to lay down rules and regulations in any detail, but is there any guidance that could be given to us concerning the principles that would be used in determining the calculation of compensation in such cases?

Lord BESWICK

It would depend entirely on the circumstances. If shares were quoted on the Stock Exchange, that would obviously be one method. If there were no publicly quoted shares on the Stock Exchange, then there are certain formulae now employed by the Inland Revenue authorities for estate duty purposes and those techniques would be applied. If the noble Lord has a particular point in mind which he thinks should be clarified, if he will put it to me I will try to give him the information.

Lord ROBBINS

Is the noble Lord saying that if shares are quoted on the Stock Exchange, that would be the method?

Lord BESWICK

If there are quoted stocks then, without saying that that would be the price at that particular time, it would certainly be the basis of compensation.

Clause 14, as amended, agreed to.

Clause 15 agreed to.

9.30 p.m.

Lord LOVELL-DAVIS moved Amendment No. 132:

After Clause 15, page 16, line 18, at end insert ("Part III").

The noble Lord said: I give your Lordships the insertion of the words "Part III" at the end of line 18, dividing the Bill into parts, coupled with the name of your noble friend and my noble friend Lord Beswick, confident in the assurance that your Lordships will signify in the usual way the enthusiastic reception you have already given to the welcome appearance of Parts I and II in earlier Amendments.

Clause 16 [Financial assistance under Industry Act 1972 for bodies corporate which make planning agreements]:

9.32 p.m.

The Earl of BALFOUR moved Amendment No. 133:

Page 16, line 26, leave out ("may") and insert ("shall").

The noble Lord said: Clause 16 begins: When a body corporate has made a planning agreement—

1. (a) the amount of grant under Part I of the Industry Act 1972 (regional development grant) in respect of approved capital expenditure incurred during the period mentioned in subsection (2) below in respect of any project identified in the agreement may be not less than—".

In other words, as I read it, it could be less than that available under a regional development grant under the Industry Act 1972. I feel that the word "may" should be "shall", otherwise what will be the advantage of a body corporate making a planning agreement? The Explanatory and Financial Memorandum says: No power to increase expenditure will be conferred by Clause 16 unless there is a reduction in the rates of regional development grant currently payable. The Government is not at present considering any such reduction. In view of the credit problems we now have, it would be advantageous if the Committee were told whether the Government are still of that opinion.

Lord LOVELL-DAVIS

The Government are seeking agreements with companies, a concord in which a balance is struck, and the powers in Clause 16(1) must be seen in that context. They are part of the contribution which the Government will be able to make to these agreements so that the benefits afforded to a company from entering an agreement match the responsibilities which it will accept. The point in question is the guarantee that regional development grants will be unaffected by changes in qualifying activities or in geographical areas. The basic claim of a company to regional development grants will be unaffected. We are concerned here with a marginal but important advantage derived from increased certainty; and this is the advantage about which the noble Earl has asked.

Industries often complain that the effect of Government assistance to industry to undertake projects in assisted areas has been reduced by uncertainty about the stability of particular forms of assistance. It is desirable that the Secretary of State should be able to give additional certainty to planning agreement companies in respect of regional development grants for appropriate projects, in return for the greater assurance which the Government and their workers will have about their future plans as a result of the planning agreement. However, it would be inapposite for the Secretary of State to have to offer this for all projects. For example, it would make it impossible for the Secretary of State to make the offer dependent on certain conditions. In a situation of this sort, I believe it is fair enough that he should be in this position of having some power to strike a bargain. As the Amendment is drafted, all projects would receive the benefits, irrespective of whether the company offered an adequate bargain, or of whether it had fulfilled its part of the bargain concluded in the agreement.

There may be times when there are some projects which particularly merit additional certainty, in that this will persuade the company to advance them, whereas other projects would anyway proceed without the additional benefit. The Government believe that the Secretary of State should be able to use his discretion and not be committed to giving the benefit with increased certainty to all projects whether or not they require benefit.

The Earl of BALFOUR

May I ask the noble Lord whether the Government are at present not considering any such reduction? It is mentioned in the introduction to the Bill, which mentions Clause 16 on page viii. That is the only question I feel I should ask.

Lord DRUMALBYN

I am bound to say that I think the noble Lord's explanation is very unsatisfactory. He might as well say, "may or may not be not less than". It is quite absurd. Either it is worth putting this in the Bill or it is not. If it is put in, it should say "shall".

Lord LLOYD of KILGERRAN

The noble Lord, Lord Lovell-Davis, has spoken about the certainty that is necessary. I should have thought that "shall" would be the most appropriate, because it gives a minimum, and that is a matter for discussion. Does the noble Lord mean that perhaps nothing will be done about it if planning agreements obtain? I should have thought that if he wanted certainty "shall" would be the more appropriate term, though I may be entirely wrong.

Lord LOVELL-DAVIS

I have been trying—perhaps ineffectually—to make this point. "Shall" completely removes any bargaining power from the Secretary of State. If he were forced to do this, he would be without power. He may do it and the implication is that he probably will do it, but he is not necessarily forced to fulfil this condition. He is not, for instance, absolutely bound to give a regional grant in any event.

Lord LLOYD of KILGERRAN

The words are "may be not less" or "shall not be less". Surely that gives the Secretary of State a powerful argument in discussion and negotiation.

Lord LOVELL-DAVIS

I believe the noble Lord has got it wrong. It is not "shall not be less"; it is "shall be not less". "Shall" is an absolute compulsion on the Secretary of State, in my view. It ties his hands. It is not a bargain to send someone in and to say, "You are forced to pay this level of grant, irrespective of whether the other party has fulfilled his obligations under the existing level of grant. Even if they have let you down, you shall give them precisely the same grant as before, though they may not have fulfilled their bargain." That would be to tie his hands appallingly.

Lord BEAUMONT of WHITLEY

In that case will the noble Lord please inform us what is the purpose of the clause as it stands? It seems to me to make absolute nonsense if it does not say "shall".

Lord LOVELL-DAVIS

What it means precisely is that he may give this grant, and so far as I am aware the Government are not considering any reduction in the level of the regional development grant. If the Secretary of State is willing to confer the certainty then he would undertake in the planning agreement to do so. The purpose of the provision is to enable the Secretary of State to offer the increased certainty in appropriate cases.

Lord CAMPBELL of CROY

It is clear that the wording of this is most unsatisfactory, and the noble Lord has not given us a good explanation of it. I hope that the Government will agree to look at this matter again to see whether there could be clearer wording. I hope that the matter can be explained at Report stage, and that wording is introduced to carry out more fully the intention of what the noble Lord said was the Government's intention.

Lord BESWICK

I wonder whether the noble Lord in dismissing this as an unsatisfactory wording is overlooking the fact that we are talking about a voluntary agreement. Nobody is being compelled to do anything. Both sides have things to offer and the Secretary of State may make an offer. It is part of an agreement.

Lord DRUMALBYN

What this really means is that the amount of the grant may, without the consent of the Treasury, be "not less than". In other words, this empowers the Secretary of State to make this grant without having to get the Treasury's permission.

Lord BESWICK

I wish to emphasise—because we are to discuss this element later—that we are talking about a voluntary agreement. There is no compulsion on the part of anybody. One does not use the word "Shall" when talking about voluntary acts.

Baroness HORNSBY-SMITH

The noble Lord said that it was a voluntary act, but if I understood the noble Lord, Lord Drumalbyn, correctly, he drew attention to the note in the preliminary explanation that, no power to increase expenditure will be conferred by Clause 16…". Does that mean that if they ran out of money they cannot make the payments anyway? We should have an explanation tying this initial early descriptive paragraph and the terms of the clause, which say "may" not "shall".

Lord BESWICK

If they have run out of money, there is no agreement.

Lord BEAUMONT of WHITLEY

I suggest that the whole Committee is slightly baffled by the wording and the explanations given. I do not think that it would be a weakness on the part of the Government to take this back and, even if they think that they have got it absolutely right, to try to draft it in terms which are at least more comprehensive. I hope they will consider doing this and that they will at least look at the matter again.

Lord BESWICK

I certainly give an undertaking to look at the matter again, but I confess that I fail to see what the difficulty is. But I will look at it in the cold light of morning.

Lord MOYNE

There may be a question of semantics here owing to several shades of meaning in the word "may". Perhaps the noble Lord in considering the matter further will look at that point.

Baroness GAITSKELL

We were told by the noble Lord, Lord Drumalbyn, that the word "may" is exactly the same as "may not". For someone who is as ignorant of the Bill as anyone can be, I think that kind of explanation is absolute rot.

Lord DRUMALBYN

If I had given that explanation it would have been rot, but I did not.

Baroness GAITSKELL

Would the noble Lord mind repeating that, as I did not hear him?

Lord DRUMALBYN

I am sorry that the noble Baroness did not hear what I said. I assure her that it was quite polite. I said that if I had given that explanation it would have been rot, but I did not.

The EARL of BALFOUR

I thank all noble Lords from all sides of the Committee for taking such an interest in this Amendment. At this stage I am quite prepared to withdraw the Amendment, but I should like to have the assurance that the Government will again consider this matter and look at the introduction in the Bill to see that nothing here has really changed. Perhaps they can find better wording. I am sure that we are not satisfied with the position at present. With those few words, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lord BESWICK moved Amendment No. 134:

Page 16, line 41, leave out ("subsection (1) above") and insert ("this Act")

The noble Lord said: The term "planning agreement" appears in other parts of the Bill and it is not appropriate to restrict it to subsection (1). Therefore instead of "subsection (1)" we wish to have the words "this Act". I beg to move.

9.45 p.m.

The EARL of BALFOUR moved Amendment No. 135:

Page 16, line 41, leave out ("an") and insert ("a voluntary")

The noble Earl said: Briefly, as has already been mentioned by the noble Lord, Lord Beswick, a planning agreement is a voluntary arrangement and therefore I think we should have the words, "a voluntary arrangement". As the noble Lord has already given an indication that it is a voluntary organisation, this would make it clear beyond doubt. I beg to move.

Lord BESWICK

My confidence was shaken by the previous discussion. I was formerly of the opinion that this was a voluntary agreement and I had in mind to accept the noble Earl's Amendment. Now that such words as "Shall" and not "may" have been bandied about, I have my doubts. Probably I ought to be more Christian, and I accept the Amendment.

Lord CAMPBELL of CROY moved Amendment No. 136:

Page 17, line 12, at end insert—

"(4) Information which has been furnished to a Minister of the Crown by a body corporate or by one or more of that body's subsidiaries for the purpose of making a planning agreement with the Minister shall not be disclosed without the consent of that body corporate."

The noble Lord said: Perhaps the noble Lord would be able to extend this new attitude to this Amendment, too. This clause is at present drafted so as to be separate from Clauses Nos. 22 and 26 on the disclosure of information and we shall no doubt be discussing that when we reach that Part of the Bill. The information which companies are expected to supply to the Minister ought to be protected where it is confidential. There is nothing in this clause indicating that. Confidentiality is catered for in the disclosure Clauses, Nos. 22 and 26. I hope that the Minister will be able to give us an assurance that the information will be kept confidential and not disclosed without the consent of the company concerned. If the Minister cannot accept the wording of this Amendment, I hope that he will be able to put in equivalent wording so that there is a definite assurance to safeguard in Clause 16.

Lord BESWICK

First of all, may I say that I have not changed my attitude; it has been consistent throughout this Committee stage. I have accepted what is right and rejected what is not right. When we came to this Amendment, I had hoped that I could accept it, and I confess that I have had a good deal of argument about it. On the face of it, it would seem a sensible thing to make certain that information given on a confidential basis should be declared to be confidential. However, it is pointed out to me that there are many other Statutes and much other business done between industry and Government when information is given on a confidential basis, and I do not know of any case where that confidence has been breached. If you make provision in this Bill that if a thing is given to you in confidence you preserve that confidence by implication, it would suggest that information given, say, in connection with the 1972 Act (when a company discusses whether finance can be made available) is in fact confidential as by Statute. I hope it will be accepted that there is a certain code in this country in Government circles and when it is understood that information is given in confidence, that is respected. On the basis that it is not necessary to be put into a Statute, I suggest that the noble Lord might withdraw the Amendment.

Lord CAMPBELL of CROY

I thank the noble Lord for giving the reason why this is not necessary, without completely accepting the principle in the Amendment. I accept that information which is passed to a Government Department on a confidential basis is respected and protected, but in the later part of the Bill there is a clause on confidentiality. I know that in that case it is going beyond the Minister and the Department to other people as well, and it may be important to have something in other parts of the Bill. Here there will be a Statute which deals with confidentiality and which has the same wording as at the beginning of Clause 26: Information to which this section applies shall not be disclosed without the consent of the person furnishing it… The reference to that section could give the impression that such confidentiality does not apply to Clause 16. Perhaps the Minister would say something about that.

Lord BESWICK

I have had a look at the later part of the Bill, and in view of what I said it may seem that the argument can be used against me. But that is not true because we are talking about a voluntary agreement. There is no compulsion upon anyone to give any information; but if they give it they can say, "We are giving this in confidence". I think we will find when we come to the other part of the Bill that we are dealing with other conditions. The circumstances here are as I have said they are and, on that basis, I think the noble Lord understands what I mean.

Lord BEAUMONT of WHITLEY

The noble Lord, Lord Beswick, has put forward an argument which I am always loath to accept. I do not think this is a major problem of confrontation; but to say to put it in would be to make an argument by implication against other Acts where it has not been put in has always seemed to me not a good argument, particularly since I do not think it can be used as an argument against Acts which have been pasesd prior to our first putting in this kind of provision. I think it should be open to Parliament, as indeed it is—and I am sure the noble Lord, Lord Beswick, would not deny that—to have the opportunity to start putting things into legislation where it is thought it may he necessary to put in statutory provisions which previously have been merely understood and have been merely honourable agreements. I am not suggesting any of those honourable agreements are going to be by-passed. But the argument that we should not put into a Bill something like this to make certain something happens, on the basis that it might imply that in other Acts we did not mean it should happen, seems a bad argument. I do not think this is an argument which should be employed.

Lord CAMPBELL of CROY

On Lord Beswick's last statement, surely he does not want to discourage companies from entering into a voluntary agreement. One would hope they would not be discouraged by this point, which is one of assurance but is important. With that, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 16, as amended, agreed to.

Clause 17 [Extension of powers to give selective financial assistance under industry Act 1972]:

9.53 p.m.

The Earl of BALFOUR moved Amendment No. 137:

Page 17, leave out lines 16 to 25 and insert ("1972 are amended as follows:

1. (a) for subsection (4) (which restricts the power to give assistance by means of investment by acquisition of loan or share capital to cases where the Secretary of State is satisfied that financial assistance cannot, or cannot appropriately, be given in any other way) there shall be substituted the words "The Secretary of State or the National Enterprise Board under the Industry Act 1975 in giving financial assistance in the way described in subsection (3)(a) above shall not acquire any shares or stock in a company without the consent of that company"; and
2. (b) in subsection (5) for the words "shall dispose of the shares or stock as soon as" there shall be substituted the words "or the National Enterprise Board may dispose of the shares and stock, if".")

The noble Earl said: I should also like to speak to Amendments Nos. 138, 139, 140, 141 and 142. There is not much difference between this Amendment and what the Government have in Clause 17. In Clause 3(1) it was possible for the Secretary of State to direct the Board to carry out functions under Sections 7 and 8 of the Industry Act. As Clause 17 amends the Industry Act, the Board should be mentioned in the way I have drafted these Amendments. The Government are not altogether just carrying out a repeal in their Clause 17. If you go to the very end of the Bill you will see that they are putting in words like "in subsection (3)(a) of Section 7", or whatever it is. They have done this in two parts and I have tried to do it in one.

What is undesirable is that the Government are repealing section 8(3) of the Industry Act which reads: …and the Secretary of State, in giving financial assistance in the way so described … shall not acquire any shares or stock in a company without the consent of that company". Unfortunately, the rest of that part is repealed. Then it goes on …shall not acquire more than half, by nominal value, of the equity share capital of any company. I feel it is taking too much in the repeal procedure, as is at present in the Bill, and the company can be taken over completely once it is involved in moneys accepted or received under Sections 7 and 8. Furthermore, the whole of subsection (4) of Section 8 of the Industry Act is being repealed.

I should like to read it. It states: Where financial assistance is given under this section…"— of the Industry Act— …by acquiring shares or stock in a company, the Secretary of State or the National Enterprise Board may dispose of the shares and stock if in his opinion it is reasonably practicable to do so, and before making the disposal the Secretary of State shall consult the company. As the Bill is now drafted, once the Government, or the Board, or the Secretary of State, have acquired shares, so far as I can see they hang on to them for ever and never dispose of them. May I again say that the Government really have no capital to dispose of; they have to borrow money to do anything.

I think this must be made perfectly clear. Let us suppose that they put a lot of money, by way of shares or stock, into a company to get it on its feet. Those shares or stock might be very low in value at that time. Then the company might get back on to its feet again and the Government should then be able to sell those shares for quite a large profit—at least, I hope they would—and put the money thus gained into some other company. But for the Government constantly to go on buying more and more into industry, into land and everything else will cause higher and higher taxes to be levied and offer less and less chance of any company making a profit; and I see no advantage in these procedures. Certainly, the Government have to help, but they should not help to that extent. I beg to move.

Lord ELTON

Perhaps I might be able to expedite matters if I say to my noble friend that I should like to use this group of Amendments as the basis of a probing Amendment myself. During the Welsh Bill, I tried at every single stage to get a statement of policy from Her Majesty's Government on our attempts to ameliorate the modifications to the Industry Act 1972; and every time (including Third Reading) I was told that this could not be done, because the whole thing had to be harmonised with the Bill which is now before your Lordships. In fact, it is clear that the Government have not yielded.

I should like to mention that Sections 7 and 8 of the Industry Act 1972 are safeguarding sections, restricting the scope of intervention of the Minister and also limiting the duration of that intervention. But the clause has been eviscerated and looks like a colander. The Minister can do what he likes when he likes, and for as long as he likes. I do not think your Lordships would wish to dwell at great length upon this at the moment, but I think Her Majesty's Government should seek an opportunity to make a statement, which has so far been denied to us, giving the reasoning behind this. I should be prepared to put down an Amendment at the Report stage, if they would like to go into this more fully then. It may be that the noble Lord, in replying, will find this a suitable opportunity to allay at least some of our fears.

Lord MELCHETT

I will certainly attempt to allay all the fears of the noble Lord, Lord Elton. May I say how much I welcome the spirit in which the noble Earl, Lord Balfour, moved this Amendment, particularly his recognition that once a company had been taken over by the National Enterprise Board there was a very good chance that its profitability and the value of the company would increase over the years. I think that this general view now being shared by both sides of the Committee is a very welcome step forward. May I also—

Lord DRUMALBYN

May I—

Lord MELCHETT

No. I have been asked by the noble Lord, Lord Elton, to make a statement. I have a little to say and it might be better if I got on with it. I was going on to say that the Government accept the points made in the first of the noble Earl's Amendments, No. 137. But, in our view, the Amendment is not necessary. When either the Secretary of State gives assistance under Sections 7 and 8 of the 1972 Industry Act, or the Board act as a channel for such assistance under Clause 3 of the present Bill, the Secretary of State will be obliged to obtain the consent of the company to the acquisition of its shares or stock. Subsection 3(8) of the Bill makes it quite clear that the responsibility for seeking such consent remains with the Secretary of State in all cases. I believe that that point has already been accepted as desirable by your Lordships' Committee.

The second part of the first Amendment to Section 7, and the corresponding Amendment to Section 8, seek to ensure that the Secretary of State or the National Enterprise Board may dispose of the shares and stock acquired if it is reasonably practicable to do so. There is nothing in the Bill at present to prevent the Secretary of State or the Board from disposing of shareholdings should a suitable opportunity arise. Indeed, disposals will probably be necessary from time to time if the Board are to maintain a balanced portfolio. So what I am saying is that it is our view that the first Amendment does not add anything to the powers of the Secretary of State or the NEB as they currently are.

The remaining consequence of this series of Amendments to which the noble Earl has spoken would be to reinstate the provision that under Section 8 of the 1972 Act no more than half of the nominal share capital of a company may be acquired. There are a number of situations in which it could, in our view, be appropriate for the Government, or the NEB acting as a channel for assistance, to take a shareholding greater than 50 per cent. It might be helpful to your Lordships if I gave an indication of what some of these circumstances might be. First, in rescue cases, where a company may well be so burdened by debt that this is a prime cause of its weakness, a major injection of new equity could well be essential to strengthen its financial structure.

Secondly, where the only alternative would have been for the company to cease trading, and where the shareholders would have suffered losses, in our view it is only equitable to the taxpayer to reserve the right to take a commensurate share of future profits, through part or all of the assistance being provided in equity form, even to the point of the Government's holding a majority equity stake. Thirdly, where a company to be assisted has unproven or suspect management, or simply as a means of protecting a major Government investment, a majority shareholding could be desirable to secure the continuing authority it would confirm. It would, in our view, be anomalous that this limitation—the limitation to 50 per cent. of the equity capital—should be imposed on the powers under Section 8, as it would be by the noble Earl's Amendments, whereas there is no equivalent limitation under Section 7, particularly when companies of the scale of the Court Line's shipping interest can be treated under Section 7. I hope I have explained to the noble Earl why we consider his Amendments are not strictly necessary, and have also given the noble Lord, Lord Elton, the assurances and the explanation he was seeking.

Lord ELTON

I am much obliged to the noble Lord. What he said contained a concentration of information and implication which I should like to study closely before I make any comment upon it. I will endeavour to return to the matter on Report stage.

The Earl of BALFOUR

May I say that subsection (5) of Section 7 and subsection (4) of Section 8 of the Industry Act have been repealed at the present moment en bloc. That is to say, where financial assistance has been given the Government can dispose of the shares. As I understand it, this would be a pity. Part of those two provisions should be preserved. Perhaps noble Lords opposite will consider this point.

Lord MELCHETT

The noble Earl is quite right. These two subsections have been completely repealed. As I have attempted to underline, this Bill will give power to the Secretary of State or to the National Enterprise Board to dispose of shareholdings, if they see fit. Therefore, to reinstate those parts of the Industry Act, as the noble Earl is seeking to do in his Amendment, would not add anything to the powers which the Secretary of State and the National Enterprise Board will already have. We are not losing anything by repealing these two paragraphs. I hope that this further clarifies the situation.

The Earl of BALFOUR

May I withdraw this Amendment? However, I should like to think very carefully about what has been said and to take further advice upon it.

Amendment, by leave, withdrawn.

On Question, Whether Clause 17 shall stand part of the Bill?

10.6 p.m.

Lord DRUMALBYN

There are one or two points which I should like to put to the Government Front Bench. This is a very important clause. The noble Lord, Lord Melchett, has been good enough to explain some of the points in it, and we are grateful to him for his explanation. However, it is right to explore this matter further. In effect, Clause 3 empowers the National Enterprise Board to exercise the powers of the Secretary of State under Sections 7 and 8 of the Industry Act which would enable them to acquire and hold shares. The Secretary of State has to reimburse the National Enterprise Board for the consideration paid for the acquisition of shares. Therefore, either the shares belong to the Secretary of State or the Secretary of State has virtually given a grant to the Board to buy shares. It seems to me to be wrong that the National Enterprise Board should increase their own capital simply because they have been directed by the Secretary of State to give assistance to a company which is either in trouble or needs assistance for modernisation, or whatever.

There is nothing in the Bill which requires the Board to reimburse the Secretary of State if they choose to dispose of their shares. In effect, the Board are simply being given additional assets to play with. Moreover, it is wrong in principle that the Board should be left to decide how much assistance to give to a company which is in need, yet as I understand it this is what the clause does. The more assistance they give to companies the more they receive from the Secretary of State. I am not intending in any way to impugn the integrity of the Board. I could not do that, anyway, because they do not yet exist. However, I say that it would be bad administration to allow the Board to acquire assets in this way without Parliamentary control, except to the extent that the financial assistance given exceeds £5 million in any one case.

Perhaps the noble Lord who is to reply will remind me whether the Industrial Development Advisory Board which was set up under Section 9 still exists and will continue to exist. That would provide some brake on the National Enterprise Board. However, the fact remains that Sections 7 and 8 of the Industry Act and this clause could enable the National Enterprise Board to build up assets of £50 million or more, quite apart from the £700 million provided for in the Bill, on the assumption that all outstanding loans as well as securities provided so far under Sections 7 and 8 are transferred to the National Enterprise Board, as I understand they will be, and on the further assumption that the financial limits are extended to the full amount provided for by legislation. This is a very large amount of money and it seems that it is being passed over without any accountability at all.

I should like to ask an additional question arising out of Clause 17. The assets that have already been provided, whether by way of loan or shares, to individual undertakings by the Secretary of State are to be transferred, I understand, to the National Enterprise Board. It was a condition then—one of the understandings—that the undertaking which was being helped would have the advantage of the shares that were being acquired by the Secretary of State being disposed of as soon as practicable. That was a part of the understanding. As I understand it now, the Government are removing the provision in the Industry Act relating to this, not only in relation to future transactions but in relation to shares that have already been taken. This seems to me quite simply a breach of trust. They are proposing to ignore the undertakings on which the assistance was given. I do not think this is right. If I am right about that, I hope the Government will correct it.

There are just two more points I wish to raise: subsection (2)(b)(ii) removes the limit on the proportion of equity share capital which may be acquired in any one company to one-half. The point about the one-half was that the company remained the same. So long as you have one-half or more of the shares you can control the board. As soon as the NEB get 50 per cent. of the shares they can sack the whole board. This is the difference, and this is why we do not think it right that more than 50 per cent, of the shares should be taken over, except in the most extreme circumstances. I am not saying it should never be done, but I think it should be very closely restricted and be subject to Parliamentary control such as is provided in section 8(8) of the Act.

Lastly, the limit of time in which the special and novel assistance available under Section 8 may be provided is to be removed. What was the temporary expedient in that Act becomes the permanent provision in this Bill. I see no reason why this should be done. Surely it would be enough to make provision for the operation of Section 8 to be extended by an Affirmative Resolution, say, for three years at a time. This is the way in which provisions of this kind have been treated in the past. I think it is a good one. The one way in which the Government can make sure of a repeal is by making a firm provision of this kind. It is far wiser to give Parliament the opportunity to review the situation from time to time and extend the number of years by Affirmative Resolution. I hope the Government will reply to these points and consider them.

Lord BESWICK

I think it would be better for me to say that we will consider them rather than try to reply to them straight away. The noble Lord has raised one or two quite substantial matters. So far as the acquisition is concerned, I think his fears are probably unrealised. There is no question here of any compulsory acquisition. The Industrial Development Advisory Board still remains and its advice will be required, and if its advice is ignored then Parliament has to be informed. So there is that protection as far as acquisition is concerned.

What I cannot answer straight away is the situation with regard to the disposal of assets. I do not think that has been properly considered. The noble Lord appears to me to have raised quite a reasonable point and probably he will allow me to look at it and either return to it at Report stage by way of Amendment or I can deal with it then.

Clause 17 agreed to.

Clauses 18 to 21 agreed to.

Lord BESWICK

This is another milestone or signpost. I beg to move.

Amendment moved—

After Clause 21, page 19, line 11, at end insert ("Part IV").—(Lord Beswick.)

10.15 p.m.

Clause 22 [Persons to whom duty to disclose information applies]:

Lord CAMPBELL of CROY moved Amendment No. 144:

Page 19, line 13, after ("obtaining") insert ("from a company or companies which have made or which have signified in writing to the Secretary of State their intention of making a planning agreement").

The noble Lord said: We now come to the five clauses on disclosure of information, and I suggest it would be for the convenience of your Lordships if Amendment No. 149, which has much the same wording, were discussed with this one. These five clauses have grown into a complicated part of the Bill, but are still regarded with distrust and apprehension by industry. This is because there is a danger of confidential and sensitive information reaching the competitors of a company and causing damage to it. There is also a danger that these clauses could deter investment from abroad in this country for the reason I have just given, and would be likely to impair the good voluntary arrangements for the transmission of information which already exist in many companies. Therefore, we are proposing changes to these five clauses, and trust that the Government will still, at this stage, consider them very carefully in order to retain the co-operation and good will of manufacturing industry throughout the country. This Amendment is one of the most important.

I must refer the Government to the White Paper upon which this Bill was based. I refer to page 3 of it, which was the first of three pages devoted entirely to planning agreements. On page 3, we read: The Act which gives effect to the new system will also provide reserve powers to require the relevant companies to provide the Government and the workers in the firm with the information needed to formulate and monitor a planning agreement. Further on in the White Paper, paragraph 20 states: If consultation is to be effective, union representatives must be provided with all the necessary information relevant to the contents of planning agreements. The Government will therefore require employers to disclose information of this kind, except where disclosure could seriously prejudice the company's commercial interests or would be contrary to the interests of national security. That was the basis of the disclosure clauses in this Bill.

However, when the Bill appeared it was seen that the disclosure clauses were not to apply to companies which entered voluntarily into planning agreements, because, as the noble Lord, Lord Beswick, said just now, in the White Paper it was stated that planning agreements were to be voluntary, were to be separate and applied to any companies upon whom the eye of the Minister fell. The Prime Minister was questioned about this on 25th February and in his reply in another place he stated: What I did in that speech was to repeat what I have said many times: that the Bill, and its operation when it becomes an Act, will follow exactly the White Paper which was published before the election…".—[Official Report, Commons, 25/2/75; col. 286.] There is still time for that. The Bill is not yet an Act and, if that assurance is to be carried out, then the Government should revert to their original intention. The five clauses should not be separated as they are now, and altered from the original plan.

We believe that the original intention was far better than what we are now examining. I should like to ask the noble Lord whether he agrees that the Government changed their mind since the White Paper and since the statement of the Prime Minister. Can the noble Lord tell us why, in that case? We believe that compulsory disclosure of information should be restricted to companies which have entered into, or are considering entering into, a planning agreement. I would just repeat what I said on Second Reading, that we on this side of the Committee favour the maximum transmission of information within undertakings. Later we will be considering the whole question of voluntary transmission of information as well as compulsory, but where these compulsory clauses are concerned we believe that the original intention of the Government was far better than what they are now putting forward. I beg to move.

10.20 p.m.

Lord BESWICK

I agree that with this clause we are entering into an area where there is more possibility of controversy, but I am surprised, in a way, that the noble Lord seeks to concentrate this controversy at this point and in this way. He is here linking the information disclosure to the planning agreement, but we had always said that the planning agreements would be voluntary. The noble Lord nods his head; he agrees. I could never myself see why or how one could have a voluntary planning agreement if that carried with it the requirement compulsorily to give information. Immediately one has by law to give information, one is compelled to give information, and that no longer is a planning agreement.

Lord CAMPBELL of CROY

I am sorry to interrupt the noble Lord, but it would be convenient to ask him whether that means that he disagreed with the White Paper when it was issued last August.

Lord BESWICK

If that is the noble Lord's interpretation of that White Paper, then I disagree with that White Paper, certainly, although I think I could argue all night about what was intended. What I am saying is that there is a requirement for information, which in certain cases should be compulsory; we go on to that later on. But as far as planning agreements are concerned, it was always intended to be voluntary, and the White Paper itself referred to the planning agreements as being voluntary. I personally think there was a contradiction there, talking about voluntary planning agreements which embodied a compulsory element. Again, in my judgment at any rate, if you are voluntarily going to enter into an agreement with me and I say that I shall require you compulsorily to give certain information, that is going to be a deterrent to the planning agreement, and we really do want the planning agreement to be a voluntary exercise. It was for that reason that the compulsory powers were taken away from the planning agreement. I should have thought that that sort of approach would commend itself to the noble Lord opposite.

Moreover, to limit the powers to companies which are willing to provide information would, I submit, be a useless provision. It would not bring the Bill any closer to the White Paper. We did say there would be reserve powers; not powers to be used, except when necessary. But if we accept the Amendment which the noble Lord is now moving, he is saying that there will only be information compulsion when the firms concerned are prepared voluntarily to give information. It would be a work of supererogation to have this power in this clause in this way. It is not necessary because we are dealing here with voluntary planning agreements, where firms are prepared voluntarily to give information. If they are prepared to give information, why talk about compelling them?

10.25 p.m.

Lord CAMPBELL of CROY

I do not find the noble Lord's answer adequate to the proposals we have put in these Amendments. If a company enters into a planning agreement that company will receive certain advantages—again we shall be considering that later on—but they know that they will get advantages and information from the Government which will be helpful to them in their operations and their planning. But if they do that voluntarily they also would accept a compulsory system of providing information both to the Government and, in the case of certain information, to their employees, and they would voluntarily accept that system. That was what was clearly set out in the White Paper.

Clauses 22 to 26 are restrictive in any case because they refer to "manufacturing industry". If the Government were more concerned in these clauses about improving relations between management and employees, they would no doubt have extended this to service industries as well. So that there is a restriction here based on manufacturing industry, and originally in the Government's intentions also based on planning agreements. The noble Lord, Lord Beswick, has told us—and I am sure this was fascinating to noble Lords on all sides of the Committee—that he personally (and I congratulate him on being so frank—and I am not making a pun) was not in favour of the proposals in the White Paper last August. But the Government made it clear what their proposals were then. They apparently changed their mind. We have not had an answer to that. In our view the original intention was the right one, and we believe that the Bill should be made to carry out the clearly stated intention of the White Paper, which was carefully considered not only in Parliament but also by industry all over the country and recognised as a set of proposals. Industry was much confused and disturbed when those proposals emerged in a quite different form later.

Lord BESWICK

May I ask the noble Lord to repeat for my benefit what he is saying should be made clear? Is he saying that we should make clear that a voluntary planning agreement should include a compulsory requirement to give information?

Lord CAMPBELL of CROY

What I was trying to do was to interpret the White Paper, which I have here and from which I will not read further extracts I have read the main extracts, and noble Lords can read the rest. The Government were putting forward last August, and then continuing for weeks afterwards, proposals which included voluntary planning agreements with a compulsory system of disclosure of information. There has been no argument about that. That is what was being done. When the noble Lord said that he found this difficult to swallow, it was his own Government's proposals. I was saying that that was what the White Paper suggested, and presumably a company was being invited voluntarily to enter into an agreement in the knowledge that one of the conditions of that agreement was a compulsory system of disclosing information—with safeguards, and we shall be coming to safeguards later; and safeguards must of course be an essential part of any successful disclosure system which is compulsory.

10.30 p.m.

Lord HOUGHTON of SOWERBY

I thought that the White Paper published last autumn had undergone a good deal of noisy discussion in the interval before the introduction and final passing of the Bill in another place, and I thought that part of the debate on the White Paper was to soften the objectionable provisions of that document and to make the Bill more acceptable to industry. Did not the Prime Minister go out of his way to assume personal responsibility for these proposals in the name of the Government and, indeed, did we not hear that the Secretary of State for Industry had been moved to another post in order to make way for another Minister who might find the changes in the Bill more agreeable? All this happened before this Bill reached your Lordships' House.

As a semi-independent observer of this situation, one with a fairly open mind on the comments of the noble Lord, Lord Campbell of Croy, I come to this conclusion, and it confirms what my noble friend Lord Beswick said: that if one enters into a voluntary planning agreement—and the change in emphasis of the Bill has been to underline the voluntary nature of planning agreements—then if one has a system of voluntary planning agreements, there is surely no need to write into the provisions for a voluntary planning agreement compulsory powers to require the disclosure of information. My noble friend is absolutely right; if one accepts a voluntary planning agreement one does not at the same time make difficulties about disclosing information. It is all of apiece and it is all voluntary.

This Amendment seems to be a nonsense. It is trying to provide that the disclosure of information set out in Clause 22 should relate to voluntary planning agreements, but Clause 22 has nothing to do with planning agreements. It is designed for a different purpose altogether and when the noble Lord, Lord Campbell, said that we should bear in mind that this relates to manufacturing industry only, had he not realised the purpose for which this information is required? He has only to read the first half-dozen lines of Clause 22 to know what the disclosure of information is for. It sets it out clearly. It is to do with the general economic situation, it is to deal with the prospects of trade in a particular sector of manufacturing industry; it has nothing to do with gas, electricity or coal but with manufacturing industry and this is surely the purpose of Government; namely, to try to find out in the national interest how everybody is doing and what the prospects may be in manufacturing industry because this is the exporting industry, this is the wealth-creating industry and this is what the Government want to know about. In these circumstances, I humbly appeal to the intelligence of the noble Lord, Lord Campbell—intelligence which I long appreciated in another place—to apply his mind to the realities and common sense of the situation and to set aside unfounded fears and any lurking political motivation and withdraw the Amendment.

Baroness HORNSBY-SMITH

The noble Lord, Lord Houghton of Sowerby, is an expert at putting a good face on a bad issue—he does it quite brilliantly at times—but I wonder where in Clause 22 he can really suggest that there is not an element of compulsion? It is not voluntary on the firms. The noble Lord made excuses about Ministers being allowed to obtain any information anywhere for the good of the economy, but that boils down to being able to demand information which will not solely be within the grasp of the firmly-bound members of the Civil Service, Ministers or the companies. It is also to be made available to other sources, and they may be neither civil servants nor members of the company to whom they owe any loyalty.

I really cannot see how the noble Lord can possibly suggest that there are not all the powers of compulsion in this and that it should not be of very grave concern to many firms that the demands for information that can be made and that information under the various parts of Clause 22 and under the present clause could perfectly well be given to people who have no bond of secrecy in the Civil Service and no loyalty, allegiance or contract with the company. Companies are rightly concerned that, if information which offended against, for example, the City Code were disclosed, the directors could be bound, but an outside trade unionist who gave away information, even unwittingly, would not be bound in relation to any information he might give away about plans, or about a takeover or any financial undertaking of the company. There are many members within those companies who are bound under contract not to disclose the purposes or the new developments or inventions of their company. There is no such embargo on outsiders, and there is very real concern among companies that it would put their projects and their company at risk against rivals or foreign competitors. They insist that this compulsory demand for information under the aegis of planning should have in it the words which my noble friend has recommended. Where there are voluntary planning agreements, all this information would be readily and willingly supplied, but there is nothing in Clause 22 that does not allow the Minister and the Board to ask for almost any information at any moment as the whim may move them.

Lord BESWICK

Before we have the same fears expressed again, may I tell the noble Baroness that she has completely misunderstood the effect of her noble friend's Amendment? She has painted a very frightening picture of what would happen if firms were compelled to give information and has gone into a long argument—which we have heard elsewhere—about what may or may not happen and the hands the information may fall into. Does she not realise that the clause, as the noble Lord proposes to amend it, would mean that all those evils of compulsory powers would apply to the most important companies in the country'? It is with the biggest companies that we hope to conclude planning agreements, but the noble Baroness is saying that all these terrible practices, all these compulsory powers, all this possibility of information getting into the wrong hands shall apply to the most important companies in the country. That is what she is saying, and I am saying that that is silly. I am saying that if we are to have voluntary agreements with these important companies, let them be voluntary and with no question of compulsion.

What the noble Lord has done with his extraordinary Amendment is to say that in those cases where information is readily forthcoming and in which companies are prepared to conclude a voluntary planning agreement we should give ourselves compulsory powers and in those cases where companies do not want to give information we should not have compulsory powers. It is really the most extraordinary Amendment we have had in the whole course of the Committee stage and I hope that the noble Lord will not press it.

Lord CAMPBELL of CROY

Everything that the noble Lord has just said is simply a reflection of the White Paper of last August, which was putting forward exactly those proposals. I should like to ask noble Lords opposite to refresh their memories by reading pages 2 to 5. The noble Lord, Lord Beswick, clearly knows it very well and has told us that he disapproved of it, but I ask other noble Lords to refresh their memories.

On what the noble Lord has just been saying, we shall be dealing with the whole question of the protection of information and the best machinery for deciding what kind of information needs to be protected. I am sure that my noble friend will be taking part in the discussion when we reach that part of the Bill.

I should like to put a point to the noble Lord on what he keeps saying about the question of having some element of compulsion in a voluntary agreement. May I put this to him? Again, when we read the White Paper this is what we had to try to comprehend. We understood it as this. One enters into an agreement voluntarily, but that does not mean that the observation of any condition in the agreement is then a voluntary exercise. Once a condition of an agreement—and an agreement is a set of conditions—has been concluded, then it is not a voluntary exercise as to whether or not one observes that agreement for the duration of it. Heaven knows, treaties and contracts all over the world would not survive if that were a principle.

Therefore, there can be a voluntary agreement which a company does not have to enter into. As I said earlier a company decides to enter into it because there are certain advantages which it weighs against a possible disadvantage; that is to say, having to supply some information. But I am sure that there are companies which will not regard that as a disadvantage, provided we' get the machinery right when we come to it later. The machinery in the Bill at the moment is not right—I say that straight away—and we shall be discussing later the whole question of a voluntary system of information.

I have a great respect for the noble Lord, Lord Houghton of Sowerby, which was also, if I may say so, reciprocally absorbed in another place, from what he said. I should like to tell the noble Lord that his robust defence of the Government, as usual—and I congratulate him on that—was assisted by the fact that he had not familiarised himself very recently with pages 3 to 5 of the Government's White Paper of last August. I also suspect that he did not hear the date which I gave of the Prime Minister's Statement, which was 25th February this year—a good time after the White Paper was issued. I realise that this is an issue between the two Front Benches of this House, but it is a very important matter and one which we intend to press.

Lord BESWICK

Before the noble Lord presses this matter, let us get on the record the other part of the White Paper. I did not say that I disagreed with the White Paper; I said that I disagreed with the noble Lord's interpretation of it—

Lord CAMPBELL of CROY

Ah!

Lord BESWICK

This is what the White Paper says: The Government envisage that union representatives from companies, whilst not formally parties to planning agreements, would also take part where they so wished in consultations on agreements with the Government. If consultation is to be effective union representatives must be provided with all the necessary information relevant to the contents of planning agreements. The Government would therefore require employers to disclose information of this kind, except where disclosure could seriously prejudice the companies' commercial interest or would be contrary to the interests of national security. The word there is "require". If I am to have an agreement with someone, it is reasonable to say that I will require the person concerned to do this or that. We are now arguing about whether this should be put into a Statute.

I accept that there is a difference of interpretation. I simply say that I interpret it differently. Moreover, I have always maintained that with a voluntary agreement it is wrong to have a compulsory element in it. I hope that all the libertarians sitting behind the noble Lord opposite, who do not believe in compulsion, will vote against his Amendment which proposes to make a voluntary planning agreement contain this important element of compulsion.

Lord BEAUMONT of WHITLEY

Before we divide on this, I think we should be a little clearer as to exactly what we are talking about. There is a very serious misunderstanding between the two Front Benches, and one which the noble Lord, Lord Houghton of Sowerby, went a very long way to dispel in the second part of his speech. What the clause is about—and noble Lords will correct me if I am wrong—is the compulsory disclosure of information on a general broader basis about matters affecting the whole economy of the country and manufacturing companies. That is the point which the noble Lord, Lord Houghton of Sowerby, made—

Lord BESWICK

No, we are not—

Lord BEAUMONT of WHITLEY

Was the noble Lord, Lord Houghton of Sowerby, wrong?

Lord BESWICK

The noble Lord himself is wrong. We are not on these Amendments discussing the whole broad question of compulsory powers of information. That will come later. Here we are discussing whether the compulsory powers should be hinged on to, and only on to, voluntary planning agreements.

Lord DRUMALBYN

I find myself rather in agreement with the noble Lord who spoke from the Liberal Benches, and I hope that we shall not press this matter at this time because we have not yet got it sufficiently clear. The Bill says that we are dealing with obtaining information, which in the opinion either of the Ministers is needed to form or to further national economic policies". I cannot understand why the noble Lord, Lord Beswick, has denied that. The Bill goes on: …or needed for consultations between Government, employers or workers on the outlook for a particular sector of manufacturing industry… Planning agreements are concerned with agreements with the Minister, on the one hand, and the particular firm, OT undertaking, on the other. They are two wholly different things. I am not saying that those who go in for planning agreements might not also, under this clause, be asked to disclose information. But that would be a different matter. They would be asked so that the Government would be able to obtain the information about a particular sector of the manufacturing industry in order that they could make a plan for that sector or build up a model for further national economic policies. I hope that my noble friend will consider the link-up with planning agreements which are separated by five clauses and are plainly in a different part of the Bill dealing with a different subject. I hope that we shall consider this further before dividing the Committee. I strongly recommend that we leave this for the next stage.

Lord BEAUMONT of WHITLEY

I am sure that the noble Lord, Lord Drumalbyn, is right. I hope that the noble Lord, Lord Campbell of Croy, will consider this.

Lord ROBBINS

May I add my support to what the noble Lord, Lord Beaumont of Whitley, has said? Lord Drumalbyn's pronouncement is the first I have heard in the last quarter of an hour which has introduced some clarity into the situation. The paragraph we are discussing does not mention planning agreements and bears the interpretation the noble Lord, Lord Houghton of Sowerby, put on it. The proposal in itself is perhaps controversial; more controversial is the question of safeguards. I think the introduction of planning agreements, whether voluntary or otherwise, at this stage have tended to create unnecessary misunderstandings.

10.48 p.m.

Lord HOUGHTON of SOWERBY

I apologise for intervening again, but I cannot let that pass. Either the noble Lord, Lord Beaumont of Whitley, is in a muddle or I am wrong. Clause 22 deals with the disclosure of information over the broadest front of manufacturing industry without reference whatsoever to the existence of a planning agreement or the intention of reaching one. We are now dealing with an Amendment to that clause. The Amendment proposes to insert certain words after the word "obtaining" in the first line of Clause 22. Those words immediately restrict the compulsory power to obtain information to those firms which are reaching a planning agreement, or intend reaching one. My noble friend the Minister of State has been right all along; the Front Bench opposite are in a muddle about what the Amendment is intended to do. The Amendment is restricting the compulsory power to get information solely to those companies entering into a planning agreement, or intend reaching negation of the purpose of the clause. I hope that I have vindicated my intelligence, even though I have not added very much to the enlightenment of the Benches opposite.

Lord CAMPBELL of CROY

I am sorry that at this late hour we are embarking on what is a matter of great concern to all sides of the Committee. In response to what the noble Lord, Lord Houghton of Sowerby, has said, it is the purpose, as he described it, of the Amendment that this system of compulsory disclosure should be related to planning agreements. That is why we find fault with Clause 22—because it is entirely different from what had been originally proposed.

I do not want to go over that ground again, but what the noble Lord has just said about this Amendment is exactly what I said at the beginning. It is not what Clause 22 is doing; and that is our complaint. Clause 22, as at present drafted, is separated from planning agreements, as my noble friend Lord Drumalbyn pointed out, by four or five clauses. That is why, when the Bill appeared, it immediately became apparent that it was different from the White Paper, because the extract which the noble Lord, Lord Beswick, re-read—as it was what I had also read—comes from these pages which are all in the section headed "Planning Agreements". The whole question of this compulsory disclosure arose only in the section in the White Paper headed "Planning Agreements". That was the concept of it—the concept which the noble Lord, Lord Houghton, was saying that I was proposing. It was not what is now proposed in Clause 22 of the Bill.

We suggest that the Government ought to revert to their original intention, even though the noble Lord, Lord Beswick, was one of those who apparently was not in favour of what was being suggested. It is clear that this debate has aroused an interest in this subject, and I am sure your Lordships would not wish to take a decision on this at this hour, because clearly we should like to consider this further in the light of the comments which have been made. However, I have to make it clear that we must revert to this on Report stage, when I hope it will be possible to have a debate which will go on for longer than we can continue now, and that, meanwhile, people will have the opportunity of reading the White Paper and the Government's statements up to the moment when this Bill was introduced. Therefore, at this stage and in the light of the comments which have been made by my noble friend Lord Drumalbyn and also from the Liberal Benches, and in view of the fact that the noble Lord, Lord Houghton, suggested that there might be some muddle there, I would say that in our next debate about this at a later stage we shall have plenty of time to sort out all possible misunderstandings.

Finally, I must make it clear again that what the noble Lord, Lord Beswick, is criticising is what was originally proposed by the Government, was considered by industry and was understood to be the basis of what would appear in the Bill. The Bill now has planning agreements separated in a different section, and that is what we consider to be less beneficial, so far as industry is concerned, than the original intention. At this stage, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

10.53 p.m.

The Earl of BALFOUR moved Amendment No. 145:

Page 19, line 14, leave out ("either") and insert ("any").

The noble Earl said: Very briefly, I am not quite happy about the expression "either of the Ministers" in Clause 30, where it refers to: The Secretary of State and the Minister of Agriculture, Fisheries and Food. I cannot quite see how the latter finds his way into industry. Is there some other Minister involved? Also, as a matter of good English usage, it should be either one thing or another. I would therefore suggest that the phrase "any of the Ministers" might perhaps be better. I am rather intrigued as to who these Ministers at present referred to might be, and why this particular wording has been used. Whenever possible, do let us have good English in legislation! Ordinary people occasionally have to read things like this. I beg to move.

Lord LOVELL-DAVIS

The phrase "the Ministers" is defined in Clause 30, as the noble Earl says, as the Secretary of State and the Minister of Agriculture, Fisheries and Food. It is a convention in our legislation to refer to the office of Secretary of State as a single office, even though a number of persons actually discharge the duties of that office at the same time. Following this convention the Bill uses the word "either" deliberately, since there are only two offices involved: the Secretary of State and the Minister of Agriculture.

The use of "Secretary of State" in the singular in no way implies that the information powers will be exercised by one Secretary of State only. It is the Government's intention that the responsibility for exercising these powers in relation to firms in a particular industry will lie with whichever Minister is the Minister normally responsible for that industry. It is a matter of chance that the Ministers who are responsible for particular manufacturing industries are all Secretaries of State with the single exception of the Minister of Agriculture. I must confess to the Committee that I do not know whether there is any significance in this distinction which he enjoys of having his own legislative identity and not being part of a collective. But that is the essence of the matter: that there are a number of Secretaries of State—this is a collective office—but there is only one Minister. This is why this clause of the Bill is worded as it is. I hope that this explanation will satisfy the noble Earl.

The Earl of BALFOUR

I must come back briefly. We are talking here about manufacturing industry. I cannot think of anything in the production of food that could be quite classed as "manufacturing". Agriculture may be, and I am sure is, a very important industry. But I should not have thought that agriculture would have been in the provisions of this clause. I am still a little intrigued.

Lord LOVELL-DAVIS

I would reply simply on one point. The food manufacturing industry is one of the largest manufacturing industries.

The Earl of BALFOUR

Processing is rather different. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

10.58 p.m.

Lord CAMPBELL of CROY moved Amendment No. 146:

Page 19, line 34, leave out from ("and") to ("with") in line 35 and insert ("all employees").

The noble Lord said: With Amendment No. 146 it might be convenient if a number of other similar Amendments were considered, and, if the noble Lord, Lord Wigoder, and his colleagues agree, the similar Amendments in their name. Perhaps my noble friend Lord Balfour would think that his Amendments could be considered in this debate also. Furthermore, may I suggest it would be convenient for your Lordships if the Amendments of this kind to Clause 22 were considered. There are some rather different points affecting similar Amendments in later clauses. In that case, the Amendments to be considered now are Nos. 147, 148, 150, 151, 152, 153, 154, 155, 156, 157, 158, 161, 162, 164, 165 and 166. So at least by having this discussion we shall make some progress so far as the Marshalled List is concerned.

Amendment No. 146 is designed to ensure that those who receive the information and are being considered in the course of the procedure are not confined to trade unionists, on the one hand; they should be employees who are not members of trade unions as well as those who are members of trade unions. If the representatives of the employees in a company are given certain information at the end of this procedure they will undoubtedly wish to pass it on to others and to discuss it. That is the purpose of the transmission of this information. We believe that when that stage has been reached the information should be available to all employees of the company. After the information has been through the screening mechanism, whether it be the advisory committee suggested by the Government or an appeal tribunal of the kind which the Liberals and we are suggesting as an alternative, our understanding is that once it has been decided that the information should be transmitted it means that it would not be damaging to the company, or wrong for some other special reason, for it to become public knowledge. Once the information had been through the machinery, presumably all employees would receive it, and if it were to become public then no harm would result.

We should be grateful if the Government could tell us whether they share that view—whether it is their view that the screening machinery will produce information at the end of the day which is no longer sensitive or confidential, and that it will not be information which in some way is a halfway house and may still be sensitive. That is one of the important considerations in deciding to whom the information should ultimately be made available.

Companies now make voluntary arrangements for transmitting information within their own companies. The question of to whom they pass it and what information is transmitted in the future is not a matter for this Bill. However, the compulsory system which is included in this Bill should, we believe, be that of transmitting information, when that information has been cleared by the system, to all employees.

My Amendment No. 156 is slightly different. It replaces the words in the Bill, "representatives of relevant trade unions". At that stage, it is the representatives who are brought in. Therefore, the Amendment proposes to insert the words, "those representing all employees". We consider that this is a matter from which employees who are not members of trade unions should benefit. We are also concerned that it should be those employed within a firm who are involved. That is the reason for this set of Amendments. The noble Lord, Lord Wigoder, will no doubt explain his variation. It is very similar to our Amendment. As I understand it, it covers both of those points. We consider that this is an important matter for consideration and an improvement so far as the Bill is concerned. I beg to move.

Lord HOUGHTON of SOWERBY

May I intervene on a matter of business? I do not know the intentions of the Government regarding how long your Lordships' House should sit tonight. We are now embarking on matters which are crucial to the purpose of this Bill and involve a very important principle; namely, whether information shall be disclosed only to unions. I doubt whether we shall be able to dispose of this question in a few minutes. I warn your Lordships' House that I have a considerable speech to make on this matter because I am very unhappy about the provisions of the Bill. I am ready to stay here all night, if necessary, but please may we know what our plans are so that at least we can telephone our wives and tell them where we are?

Lord BALFOUR of INCHRYE

I should like to support the noble Lord who has just spoken. The time is now five minutes past eleven and the attendance is pretty thin. We have been sitting for many hours, Members are very tired—quite rightly and naturally—and it seems to me thoroughly wrong that we should embark upon a debate, which will be of some length and great importance, at this late hour. I sincerely hope that the two Front Benches will agree to adjourn before we start upon that debate.

Lord BESWICK

I was hoping, and was advised, that it would be possible to dispose of this Amendment and the related Amendments of the noble Lords on the Liberal Benches, and then I hoped we could adjourn. We have not made very much progress today and if we could dispose of that it would be helpful to us tomorrow.

Lord DRUMALBYN

I feel that with a little pressure the noble Lord will revise his opinion. It is clear that we are going to have a very long debate on this, and I should have thought it would be better either to accept that fact and go on and have a long debate, or decide to adjourn now.

Lord HOUGHTON of SOWERBY

I must add my protest. This Bill cannot reach the Statute Book this side of the Summer Recess. Surely we all understand that, and in those circumstances I do not see why we should go on the grindstone late at night in order to get this Bill through, when there is obviously a long way for it to go. Consideration of your Lordships' Amendments will have to take place in the Commons, the Bill will have to come back here, and presumably the House of Commons will rise on 8th August. Let us know what is in store for us and let us understand whether this is a rational approach or whether we are just being pushed along because the Government want their Bill at some stage which has no relation to its ultimate destination.

Lord ROCHESTER

I should like to support the general expression of view throughout the Committee, and particularly what the noble Lord, Lord Houghton, has just said. Like him, I have a speech of some length to make and I share the views that have been expressed that this is a vital matter of principle. It is bound to take quite a long time and for my part, and speaking for my noble friend, I should be quite happy to adjourn the Committee if that is the general feeling.

Lord BESWICK

Very often, when wearing another hat, I used to come to some sort of arrangement with noble Lords opposite, such as that we should finish the Bill on Monday. If we can agree that we can finish the Committee stage of the Bill on Monday, I shall be quite happy to rise now. But I am thinking of the noble Lord, Lord Orr-Ewing, and his desire to get home and, not wishing to press him into a very lengthy sitting on Monday night, I thought we might dispose of these Amendments tonight. If, through the usual channels, we can have an understanding that we shall complete the Committee stage on Monday, I am quite happy to adjourn now.

Lord BEAUMONT of WHITLEY

As the noble Lord knows, it is almost impossible to come to such a conclusion, because noble Lords control their behaviour in this House. I am sure that those of us on all sides who are responsible for the conduct of this Bill would agree that, if we tackle this extremely important problem at the beginning of tomorrow, we will all do our best to see that it is finished on Monday night. But of course, with the best will in the world and the best agreements through the usual channels, it cannot be guaranteed.

Lord ABERDARE

I think there is a general feeling that it is wrong to embark on this particularly important subject tonight. It is rather awkward, because I do not think for a moment we can guarantee that the Committee stage of the Bill will now be finished on Monday. We hoped to get a long way further today and it is not within the power of the Front Benches to control your Lordships. There are many of your Lordships who are quite uncontrollable. We will do our best, but I cannot say more than that.

Lord BESWICK

I am sure the noble Lord opposite will do his best. What frightens me are the noble Lords who are probably in their beds now and who will come along tomorrow morning.

If that is the general feeling, I suggest that we now resume.

House resumed.