INDUSTRY BILL

HL Deb 25 July 1975 vol 363 cc607-706

11.10 a.m.

Lord LOVELL-DAVIS

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

Moved, that the House do now again resolve itself into Committee.—(Lord Lovell-Davis.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

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

Debate resumed on Amendment No. 146:

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

Lord CAMPBELL of CROY

I had just moved Amendment No. 146 when we adjourned last night. I do not intend to repeat what I said then, but I understand it would be helpful if I indicated that we were discussing some groups of Amendments of a similar nature in the names of the noble Lords, Lord Wigoder and Lord Rochester, the noble Baroness, Lady Robson of Kiddington, and of my noble friend Lord Balfour. I will not give the numbers again but the Amendments concerned were similar Amendments to No. 146 in Clause 22.

The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick)

If the noble Lord proposes to recapitulate that point may I say that he did not go as far as I would have gone on Amendments which might be taken with No. 146. May I suggest to him—he can consider it later—that these Amendments all appear to be grouped under his name with a similar, lengthy list under the name of the noble Lord, Lord Wigoder. If we could take Nos. 146, 150, 153, 156, 160, 164, 178, 182, 186, 203, 205, 208, 211, 217, 227, 233, 240 and 245, my researches indicate that the same principle is involved. Then I understand that the noble Lord, Lord Rochester, will be equally happy to have a similar group taken together.

Lord CAMPBELL of CROY

I indicated last night that I did not want to be at all difficult about this, and that I thought it would not be helpful to go further than Clause 22. We are taking a large group together, but although the Amendments look the same on the Marshalled List in fact they are in a rather different context when we come to the later clauses. I hope that your Lordships will agree that we should take what are quite a large number of Amendments together on Clause 22. But I would also add that when we reach the Amendments that appear similar on the Marshalled List and the later clauses, I expect those Amendments either to fall if we decide not to make changes at this stage, or else that it would take only something like 30 to 60 seconds to deal with them, simply to explain the context in which they fall. I do not think we shall waste any time, but I think it might be misleading if it were thought that the Amendments are all on the same basis. On Clause 22 they certainly are. I understand this is something to which the Liberal Peers agree.

If I may briefly recapitulate, the first main purpose of Amendment No. 146 and, as I understand it, of the similar Amendments moved by the Liberal Peers, is to ensure that all employees should benefit from the system of disclosure, and that it should not be limited to those who are trade unionists. There are many employees in manufacturing industry who happen not to be members of trade unions, although, of course, it is important that those who are should receive the information. The second main purpose is to ensure that it should be employees of the firm with whom the clauses are concerned, and in particular Clause 22, and not, for example, a trade unionist who is not a member of the company which happens to fall within the definition that the Government have in the Bill.

The other point is that, as we understand it, once the information under this compulsory system has been screened—that is to say, if there is an objection by the company to it being disclosed because they regard it as confidential, and it has been through the procedure in these clauses—then if it is to be released it is harmless. In that case, it ought to be available to all employees, because undoubtedly the representatives of employees who receive that information will want to pass it on and discuss it, because, presumably, that is one of the objects of their getting it. Therefore, we feel that once it has been through what has been described as the obstacle course, once it has been cleared, then it should be available to all employees. Briefly, that is the case we are putting on these Amendments.

I recognise that this debate, as some of my noble friends said last night, as also did noble Lords opposite, is going to be an important one of principle. We are dealing with three groups of Amendments. It is very convenient that we should have this general debate on the subject at this stage. It may well be that arising from our debate we can reach some agreement on what would be the best words to put in here, and that that may be done at a later stage. Again, I am very glad to introduce the debate which will enable the noble Lord, Lord

Rochester, now to put his case for his wording.

11.18 a.m.

Lord ROCHESTER

As the noble Lord, Lord Campbell of Croy, has suggested, it may be for the convenience of the Committee if I speak now to Amendment No. 147 in the names of my noble friends and myself. As in the case of the Amendment moved by the noble Lord, Lord Campbell of Croy, our Amendment is the first of a series with more or less the same wording. Their purpose is to ensure that—under the procedure whereby manufacturing companies making a significant contribution to the economy of the United Kingdom may ultimately be required to disclose certain information to a representative of each relevant trade union—these arrangements should be altered so that legal rights to the information go to representatives not of trade unions, but of employees. Like the noble Lord, Lord Campbell of Croy, we feel an important principle is here at stake.

Before I go any further, I should briefly refer also to Amendment No. 282 in which we have sought to define "employee representatives" in relation to information being furnished under the Bill. We sought to define that term as: employees of the undertaking to which such information relates (being an undertaking of more than 50 persons) who are the duly elected representatives of all the employees in that undertaking. I hope that that is sufficiently self-explanatory for the moment.

A number of arguments may be adduced as to why statutory information should go to the representatives of relevant trade unions. One is that trade unions are the appropriate organisation for employees in the matter of collective bargaining. But there are, of course, more than 10 million working men and women in this country who are not as yet members of trade unions. Our feeling certainly is that there is no reason why they should be denied all legal rights under the Bill. And, in any case, we feel that the Bill is not the appropriate one to deal with matters affecting collective bargaining, for that subject is already dealt with quite fully in the Employment Protection Bill, which is shortly to come before your Lordships' House.

It may then be argued—indeed I think it was argued in this House at Second Reading of the Bill—that information should go to trade union representatives in the interest of industrial democracy. But it is surely less democratic that information should go to trade union representatives—who may not in every case even be elected to their jobs; they may, in some cases, be appointed—than that the information should go to employee representatives who are elected by their colleagues to serve on the basis of one man one vote. It seems, moreover, that trade union representatives under the Bill to whom the information might have to be disclosed need not even be employees of the company concerned. It has been suggested that that might be remedied by giving the companies the right to decide which trade union representatives might receive this information. If that were done, I can foresee some fearful accusations of the recipients being management's "blue-eyed boys", and we do not think that a good idea at all.

It may further be claimed that the Bill does not prevent companies from giving information to their employees who are not trade union members. I acknowledge that that is true. But if the disclosure of information is desirable throughout industry, as I think members of the Committee will agree it is, why should legislation concerning disclosure of information favour only those companies where trade unions are strongly represented; and why should statutory rights to information be denied to employees in those many companies in the country where trade unionists are in a minority or, in some cases, almost non-existent? If it is the encouragement of trade unions that is desired, surely the growth of union membership should come naturally out of the efficiency and enthusiasm of trade unions, rather than depend on privilege and Government patronage of the kind provided by the disclosure clauses in the Bill as they now are.

As I said in our debate on Second Reading, in companies in which trade unions are well represented the employee representatives on bodies such as works councils will themselves be trade union members, and therefore in those cases the information will, as the Government desire, go to representatives of relevant trade unions. But in those companies where trade union membership is small, we see no reason why legal rights to information should be denied to those employees. We think that the position in each case will be adequately covered by legal rights to the information being given to employees, and we see no reason why in this Bill there should be any reference at all to representatives of relevant trade unions.

So much for what the Government propose. What of the merits of the Liberal Amendment in comparison with that which has just been proposed by the noble Lord, Lord Campbell of Croy; for while we are, I think, largely in agreement in our criticisms of the Government's present proposals, the Committee will be aware that we have put down different Amendments in opposing them. There is also Amendment No. 148 in the name of the noble Earl, Lord Balfour. I should not perhaps anticipate what he may wish to say, but I am nevertheless hoping that on reflection, and in view of what I have just said about there being, in our view, no need for any reference in this Bill to representatives of relevant trade unions, he may feel that what he has in mind is adequately covered by the Liberal Amendment. As regards why it is that we are advocating that statutory rights to information should be given to employees' representatives as opposed to all employees, I should first like to say that we on these Benches want positively to encourage progress by companies in the matter of disclosing information, and in consulting with employees' representatives through the medium of works councils.

Lord POPPLEWELL

I wonder whether the noble Lord will allow me to intervene. I have been waiting very anxiously to hear him define who would be the employees' representatives. Within industry men are organised into trade unions, and those people who object to joining do not represent any section of organised labour at all. Therefore, they are individuals objecting to organising any shape or form within industry. Therefore, who would select the representatives to whom the noble Lord refers, and what power and backing would they have? Does he think it is just a question of individuals with no representative backing behind them? Would the noble Lord be a little more explicit as to how these individuals are to be appointed?

Lord ROCHESTER

I hoped that I had already made plain that as regards works councils the employees' representatives are normally elected by their colleagues. In regard to the other matter to which the noble Lord, Lord Popplewell, referred, I shall have something to say a little later about trade union representation and the need for that. But perhaps he will allow me to come to that in due course.

Lord POPPLEWELL

The noble Lord says that these people would be elected representatives. How would they be elected? There is no question of any organisation there; it cuts out the question of trade union organisation, and it is simply a group of individuals. We in industry know them very well; they completely object to organisation and to being organised. They are individuals representing themselves. Therefore, on what basis would they be elected and who would elect them?

Lord ROCHESTER

They would be elected on the basis of the views of the employees in general. I am suggesting that that is perhaps a more democratic procedure than is sometimes applied in the case of trade unions, where, as the noble Lord, Lord Popplewell, will well know, some trade union leaders are not even elected to their jobs and in some cases are appointed. But I shall have more to say later on this point, and I hope that that will satisfy the noble Lord.

I was impressed at Second Reading by what the noble Lord, Lord Houghton of Sowerby, had to say, when, in his customarily forthright way, he conceded that before trade unions would be ready to accept the additional responsibility offered to them under this Bill, they would need to develop enormously their education and training schemes. I should like to respond to that by saying in an equally open way that, in my view, management also have a responsibility to help trade unions in this matter by encouraging and assisting in the training of shop stewards generally. The noble Lord, Lord Houghton, went on to say that in Europe they would be referring a Bill like this to the works council or the works committee, and it is just these additional responsibilities that we on these Benches want works councils in this country—in line with their counterparts in Europe—to take on.

I am sorry to detain your Lordships for so long, but we regard this as an important matter. There is the question of confidentiality, to which the noble Lord, Lord Campbell, has referred. This is bound up with Clause 25 and Schedule 5 concerning the Advisory Committee to which reference may be made by a company claiming that information should not be disclosed to union representatives for special reasons, and particularly that disclosure would cause substantial injury to the undertaking concerned. We feel that this committee should not be an Advisory Committee at all, nor should it be, for that matter, a judicial tribunal, but rather a decision-making appeal committee, and we have down an Amendment to that effect which my noble friend Lord Wigoder will be moving later.

As things now stand, after having received from this Advisory Committee advice which may even conform to the company's view, the Minister may decide, subject to the Negative Resolution procedure referred to in Clause 25, that the information should be disclosed. The company, for its part, may nevertheless feel that the disclosure of this information would be injurious to the company because it might include some information which is commercially sensitive.

In those circumstances, it is argued that it is preferable for the information to be disclosed to employee representatives of the company, who would have most to lose from breaches of confidentiality because they might affect their livelihood as employees and because their standing in the eyes of their constituents might thus be damaged. In my opinion, based on some experience of disclosing information of a somewhat confidential kind to works councils, the risks of breaches of confidentiality attendant on giving information to employee representatives are likely to be less than those involved in giving information either to trade union representatives or to all the employees. I hope, therefore, that the Committee may feel that there is some merit in the Liberal Amendment.

Until 11 o'clock last night that is about all I would have had to say, but in the interchange which took place among people from all sides of the Committee before we adjourned the noble Lord, Lord Houghton, if he will not mind my referring to him again, said, to the best of my recollection, that for his part he was highly dissatisfied with this part of the Bill. I am sorry that I have not been able to check what it was that he said in the Official Report because it does not refer to that part of the discussion as it was too late, but I am sure that if I misrepresent him in any way he will shortly correct me.

We are also in the position in which we have three Amendments before us, not to mention the Government's view, as already expressed, of Clause 22. Your Lordships' Committee may decide to accept one of the Amendments that is before us this morning and in that case that, I suppose, would be that. But I wonder whether that would in fact be the wisest course to take. What I should like to say in that regard on behalf of my noble friends is that if there is any prospect—and I think that the noble Lord, Lord Campbell, made some reference to this point just now—of common ground being found here (I suppose I am looking particularly to the noble Lord, Lord Houghton, but not alone to him) between now and the Report stage as to how this provision might be altered and improved without any of us sacrificing principles which we may regard as basic, then we shall be very ready to listen to any suggestions that may be put forward. If I may say this finally, I have not been a regular attender of your Lordships' House until recently, but it seems to me, in the light of the situation in which we now find ourselves, that that course may also be in keeping with the best traditions of your Lordships' House.

11.37 a.m.

Lord HOUGHTON of SOWERBY

In order to keep the matter in perspective we should bear in mind that all the Amendments relating to Clause 22 are concerned with the conditions of communication to worker representatives where there is a compulsory obligation on the part of the company to disclose information. I think it is important to bear that in mind, because in most cases where information is disclosed voluntarily the companies concerned will have their own method of communications, which is unlikely to give rise to any difficulty. So what we are now concerned with is when a company is compelled to do something that perhaps otherwise it does not want to do.

If we turn to page 20 of the Bill we see the various conditions that are attached to the exercise of compulsory powers. In the first place, the Minister must identify a firm for the service of a preliminary notice, and your Lordships' will see that when a preliminary notice is served the name of the company and the fact of its having been served have to be reported to both House of Parliament. Then, in subsections (5) and (6) at the bottom of page 20, there are other conditions attaching to the service of a preliminary notice. On page 21 there appear conditions under which the notice may be annulled by both Houses of Parliament. All those conditions surround and qualify the exercise of compulsory power of disclosure of information. It is important that we get these matters clearly in our minds.

My criticisms of this part of the Bill and all other references to the "relevant trade union" are based upon the looseness of that phrase. The imprecision of organisation and staff and worker consultations, the looseness of trade union organisation, all lie behind this phrase "the relevant trade union". We have special difficulties in this country because of it. I have several times pointed out to your Lordships' that in Europe they do not have similar problems, because their staff organisation systems of works councils are in some cases provided for by Statute, and in other cases are widely accepted on a fairly uniform basis by voluntary action.

In my 50 years' experience of staff and Whitley Council organisation in the Civil Service, I have always been in favour of staff consultation being based on union membershsip. This, I believe, is the desirable state of affairs because it gives proper organisation, a sense of responsibility and it identifies where one goes either for one's council or for one's negotiations and agreement. Let there be no mistake about it, I stand for staff consultation and negotiation being based on membership of unions—not only negotiations relating to staff conditions but for staff consultations—and in the Whitley Council system in the Civil Service there is no division between the two. Pay negotiations and conditions of service, superannuation and the rest, all are within the scope of the same councils as are used for the purpose of consultation on methods of work, future legislation on all sorts of matters, discipline and the rest of it, which come within the scope of joint consultation and agreement.

We must recognise, however, that everything is not so tidily organised in many industries and firms throughout the country. There are many cases where everything would probably fall into place, but we are dealing in Clause 22 with firms which are being asked to do something they do not want to do, and it is probable that in those firms there is likely to be a lack of properly constituted employee representation, union organisation or whatever, with which consultation can take place, and we have to provide for this. I quite understand that these provisions in this Bill—the reference to the "relevant union"—are pure TUC doctrine. This is what it wants in connection with works councils, worker participation or membership of two-tier boards. Throughout the piece the TUC has taken the line, understandably, and I support it generally, that it should be union-based, but we must face the fact that this is being done by law over a wide area of industry and in a variety of conditions and organisations—overlapping membership of unions, possibly some parts of a firm being union organised arid others not—a variety of conditions that can obtain in private enterprise and in some cases in the public sector where some point of contact is needed, yet it is not easy to define it in an Act of Parliament.

The TUC has to acknowledge that there are circumstances in which the obligations that are inherent in this Bill cannot be discharged merely by reference to the relevant union, and that even in highly organised trade unions, like the T and GWU, and in many enterprises, it is not the union so much as the shop stewards committee which is the point of contact between the workers and management in that shop. For example, in the car industry we have a classic case of the supremacy of the shop stewards' organisation and not, as in normal circumstances, the full-time official of the union. I come to the conclusion, therefore, that Amendment No. 146 is unacceptable because it deletes "relevant union" and substitutes "all employees". Whatever the difficulties about the relevant union, I do not think one can get rid of it where it exists, so we must keep in the relevant union. For a similar reason, I could not recommend the Committee to accept Amendment No. 147 because that proposes to delete "the relevant union" and insert "employee representatives". Bearing in mind all the difficulties connected with finding employee representatives—my noble friend who intervened a short while ago asked who the employee representatives were; how they got there; whom they represented how many of them would there be, and similar matters—the nearest that I think comes to meeting the situation is Amendment No. 148 which, if enlarged, would probably meet the situation.

We have to provide for four elements in this situation. First is the relevant union, and where it exists it is the obvious point of contact; secondly, a works council, if it exists, or a similar body; thirdly, a staff committee, where it exists, or a similar body; and fourthly, a shop stewards committee where that is the point of contact. If one refers to those alternative forms of consultation the situation would be completely met, because I think it would cover any condition under which the employees could claim to be consulted at all. Where obligations are put on employers to consult employees, it is the duty of employees to put themselves in a condition where that consultation can be properly made and the mutual obligations discharged with some sense of responsibility and understanding.

The employer does not want to meet just a gaggle of employees, but those who are representative, those who are applying their minds to the problems about which he is consulting them—and remember some complicated stuff will be put across on the disclosure required under Clause 22. This is not simple stuff about wages and conditions but about the financing of the firm or the future of the industry, and the trend of trade in a sector, because this information is related to a comprehensive assessment of where the nation is going in its manufacturing industry, where are the strong and weak points, where is growth or decline likely and what opportunities firms and industries may have for contributing more to economic growth. These will be complicated matters and one wants responsible people receiving the information about them so that these matters may be discussed with some understanding.

If the Government would be good enough to look at this again, not to weaken, in any sense, the intention of keeping the relevant trade union as the central point of communication but to provide for other forms of consultation, then I think the requirements of the situation will be fully met. We must not always condemn workers who are not in unions—

Several Noble Lords

Hear, hear!

Lord HOUGHTON of SOWERBY

—noble Lords opposite should wait to hear what I have to add to that before saying "Hear, hear!" We must not condemn people for not being in unions when we realise sometimes the problems of deciding what union to join, the difficulties of union rivalry, overlapping membership and disputes over boundaries of membership. These are the issues which can, to my knowledge, strongly discourage some elements, especially white collar staff and middle management, from joining unions because they fear they will be embroiled in distasteful inter-union disputes and difficulties in which they do not want to be involved. I shall not mention names in this connection, but all your Lordships are familiar with some of the disputations which occur in trade union membership. We are now seeing it in particular in the middle range of salaried executive and administrative staffs. Middle management and white collar workers are perhaps the weakest point of trade union organisation, yet this is the point at which the communication of this type of information would probably be most usefully received.

We want unions themselves to make some contribution to providing the acknowledged network and pattern of union consultation, worker representation, staff committees and the rest, and obligation rests on the trade union movement to play its part. It is the most ragged and loosely organised institution in the country. In these days of increased efficiency, uniformity of organisation and desire for universal coverage, unions themselves have a contribution to make to better order and discipline in the union movement. But we are not getting it in the manner to which we are entitled, in order to provide the basis on which this kind of compulsory consultation can rest. I hope that that offers some possibility of reaching agreement. This matters goes right through the Bill—it is not merely in Clause 22—as both my noble friend and the noble Lord, Lord Campbell of Croy, indicated. It astonishes me that in another place this matter has not been given more satisfactory treatment and so provided a more acceptable basis for lawful obligation upon employers to consult their workers.

11.52 a.m.

Lord BALFOUR of INCHRYE

I wish first to express my appreciation to those Front-Benchers who were responsible for accepting the plea made at five minutes past 11 last night by the noble Lord, Lord Houghton of Sowerby, and myself not to then take this Amendment, because it is an extremely important one, and the Committee would have missed the very wise speech we have just heard from the noble Lord, Lord Houghton. There are various points regarding the Goverment's proposals in the Bill which we ought to consider. The first concerns the wording in the Bill, "representative of each relevant trade union". I can find nothing in the Bill that defines what is a representative; and as the noble Lord, Lord Rochester, said, there is no certainty that the representative of the relevant union would in fact be an employee of the company from which information is demanded.

Let us consider a company which has been forced under this Bill to divulge information and which is reluctant to do so in the knowledge that the representative of the relevant union has virtually nothing directly to do with that company. The information may be on finance, on profits, on future markets or on various other matters. Let us take Coventry, for example. It could be that in that area the recipient of the information demanded was a senior outside trade union representative, and he might be collecting information not only from this one company, but from several other companies which were reluctant to give information voluntarily. From the knowledge he had from so many companies, he would gradually assimilate such a knowledge and, indeed, such power, in that area that he would be in a position to influence the industrial policy of the whole area.

I turn now to the question of the representation of employees who are not members of a union. A most respected Member of your Lordships' House, whom I will not mention by name, is the chairman of a certain public board, and I was talking to him recently on this subject. He told me that in his organisation he has 4,500 employees, of whom approximately 60 per cent. are trade union members—in the Transport and General Workers' Union. I asked him about the other 40 per cent., and he said that they were apathetic: some had objection to a union, while some were looking to which particular union to belong; but at any rate they did not wish to be union members. I am sure that the Committee would agree that these people have a perfect right to make their own decisions—

Lord PANNELL

Will the noble Lord give way? I have had considerable experience of this matter in relaton to what one does with the non-unionist. The non-unionist is in the same position as were Cross-Bench Peers when we were deciding whom we would send to Europe. They represent only themselves, individual people. Is it proposed either by the noble Lord, or by the noble Lord, Lord Rochester, that in giving this information, which employers are unwilling to give the first place, we should give them a leaflet apiece?

Lord BALFOUR of INCHRYE

I do not accept that they are individuals; they are a collection of individuals who have a common point of view—

Lord PANNELL

No, they do not.

Lord BALFOUR of INCHRYE

As the noble Lord, Lord Houghton of Sowerby said, there are ways in works committees, advisory councils—I will not enumerate them—in which the collective views of those who are not members of the union can be obtained, and, I trust, having been obtained, can be represented. I cannot see why those 40 per cent. of the 4,500 employees mentioned should not be represented and should not have access to the information being obtained compulsorily

The suggestion by the noble Lord, Lord Houghton of Sowerby, that Amendment No. 148 is the key to this, is the right suggestion. I should not be wedded to any particular Amendment, provided that we can fulfil the general requirement which I believe my noble friend Lord Campbell of Croy wants; namely, that those who are not members of a trade union shall have opportunity of access to information which is given to trade unionists. Provided that that is obtained—and I believe that the bridge suggested by the noble Lord, Lord Houghton, allows us to obtain that—and if the Government will consider going that far, I think that we would achieve the objective which my noble friend Lord Campbell of Croy and other noble Lords on all sides of the Committee wish to achieve.

Lord BESWICK

We agreed last night that, together with the Liberal Amendments, we should have the Amendments in the name of the noble Earl, Lord Balfour, which are of a similar type, and therefore the whole batch of Amendments would be before us for overall debate. If we were to allow the noble Earl, Lord Balfour, who has already risen several times, to deal now with his Amendment I think we should be able to proceed.

11.59 a.m.

The Earl of BALFOUR

I am most grateful to the noble Lord, and I shall be as brief as I can. There is a difference, in all sections of the community, between those who believe—as a great many of the Labour Government believe—that it is to the unions that management must be bound to do something, and those who think in terms of other workers. I am certainly not happy with that idea and I never have been. I can respect the Government's wish to make disclosure to unions compulsory but they are narrowing the field too much; hence the reason for putting down my own Amendment. However, having had a greater opportunity to consider this point, I very much prefer Amendment No. 147, which was so well spoken to by the noble Lord, Lord Rochester. I feel that he has hit the nail more closely on the head than I have done in bringing in the idea of employees' representatives.

I must ask my noble friend Lord Campbell of Croy to think again about the proposal in his Amendment that information should be disclosed to all employees. That would mean that one would fill a whole canteen or an outside building to try to explain matters to employees, half of whom would understand what was being said and the other half of whom would not. In that way, one could really have a strike on one's hands. I believe that one should stick to representatives here.

Lord CAMPBELL of CROY

If I may explain to my noble friend, the intention of our Amendment is that the information should, at the end of the day, be available to all employees, not necessarily that every single one should receive a piece of paper or should be summoned to a meeting. When it comes to the screening machinery, it is representatives of employees who are engaged. But after that it is up to them to allow anyone in the firm to have the information if he wishes for it.

The Earl of BALFOUR

I am grateful for that information, but I feel that management must go through some representative and not direct to the employees as a group. In my experience in industry, I have tried to explain everything to the people on the shop floor and half have followed what I was talking about and the other half have not. This is one of the unfortunate things that happens. I was very grateful for what the noble Lord, Lord Houghton, said, but that is something which I should like to think about again before I decide whether to move Amendment No. 148. Later on, as the Amendments are called, I should like to go back to one or two points, as I differ slightly from other noble Lords who have put down Amendments on this point.

What I want to get across to Her Majesty's Government is that they must allow representatives to be chosen from the work force of the industry concerned, whether or not they are union members. I prefer to use the expression "workers' council" rather than "works council", which I feel could embrace everybody from the managing director down to the girls who work in the canteen. I can respect the Government's idea that there should be a clear and definite distinction between a worker, who need not be or should be—and this is according to one's point of view, though I say "need not"—a member of a union, and people who are very much on the top management side. I realise that one must make a distinction there, but I believe that the Government's ideas are much too narrow and what concerns me most is the fact that they have at long last decided, in Amendment No. 166A, to insert a definition of "representative", but that that representative can be a lawyer, a chartered accountant or a person appointed from outside by the union. Therefore, the union could, through its finance committee, get extremely valuable information using the expression "representative", in order, for example, to decide whether to increase its shareholding in the company or to sell up. This information must be disclosed only to employees and people connected with the industry and to nobody else. I feel this very strongly.

I believe that Amendment No. 282 gets very much closer to what I am certain most of your Lordships feel should be the definition of "representative". The noble Lords, Lord Rochester and Lord Wigoder, and the noble Baroness, Lady Robson of Kiddington, have chosen the words "employee representatives", which is a very good choice. I feel that this must be considered, and that it should not be restricted simply to a trade union representative who may be called in just to negotiate something like this. I feel that that would not be satisfactory. I have tried to be brief, but I am sorry to have spoken a little longer than is my usual custom, because I felt that there were important points involved.

12.5 p.m.

Lord COOPER of STOCKTON HEATH

I feel that there is a complete misunderstanding in the minds of many noble Lords in connection with trade unionism. We are discussing the Industry Bill and the giving of information, and where that information should pass. In industry, the employer's side is very small. Indeed, the employer may be only a single individual, though in these days of large organisations employers may be a little more than that. However, the work force is very high in numbers and the way in which discussions are carried on in industry, as everybody knows—though I feel that it is important to emphasise this—is that workers are represented. The instrument they use is collective bargaining and the body which wields that instrument is the trade union movement and the relevant trade unions. The Opposition do themselves a disservice, I believe, because they create an impression of anti-unionism when it is not necessary.

A Noble Lord

Of course they are anti-union.

Lord COOPER of STOCKTON HEATH

With permission, I should like to read part of Clause 22, and speak about the present situation. It reads, For the purpose of obtaining information which in the opinion of either of the Ministers is needed to form or to further national economic policies, or needed for consultations between Government, employers or workers on the outlook for a particular sector of manufacturing industry". There is nothing new in this. This has gone on during the whole postwar period. For a short time, I was a member of the National Economic Development Council, nominated by the TUC. These were the matters we discussed. Both Conservative and Labour Governments have recognised the trade union movement as the channel of information in regard to industrial problems, and they have not recognised anyone else. At times, the situation was so tight that individual trade unions making representations to Government were told to proceed through the TUC. That was the Government's attitude.

If one considers the Bill and the reason why the information is being called for, it is clear that the idea is to enable collective bargaining to be carried on more successfully and to give work people, through their unions, a concept of what goes on in relation to such problems as manpower policies, redundancies and discipline. These would all be the type of information which would be looked for. Who can deal with such policies? I ask your Lordships to take any works. It may have 50 per cent. in the unions and 50 per cent. outside. The unions do not like that, because all policies are determined between the management and the unions and the other 50 per cent. gain the advantage—if it is an advantage—that the trade unions are joined together to create. The purpose of this is to help collective bargaining, and so far as I can recall everything in industry has been done in a representative capacity.

The noble Lord, Lord Popplewell, put the position very clearly: how do non-unionists organise? I remember when in the war we had compulsory arbitration under Order 1305. Many non-unionists then rushed to join a trade union. This Industry Bill will encourage trade unionism, and people who feel that they are out in the cold have a remedy—they can either join the relevant trade union or form a trade union of their own. No employer wants to be bothered with the odd individual in industry today. The employer welcomes the trade unions for their representative opinion on behalf of the work force. I suggest that these things ought to be kept in mind and that the clause should be left as it is.

12.11 p.m.

Lord ORR-EWING

I hope I am not going to give the impression of being antiunion. For many years I served as PPS under Sir Walter Monckton when he was Minister of Labour, and i would not have stayed there for five years had it been thought that I was in any way antiunion. There was no man who was more conciliatory or more respected by the trades union movement as a whole than Sir Walter Monckton. So I hope that anything I say will not be interpreted in that fashion. I am sure that no one would wish to say that Peers in other parts of the House are in any way anti-management when they criticise management. They are perfectly entitled to criticise as I do from time to time.

Listening to the argument, I find it very difficult to discover which of these three Amendments is the best. I was very struck by the constructive proposal of the noble Lord, Lord Houghton of Sowerby, that we might put in three categories of people, but even this is not perfect. Working in industry now as I have for most of my life, one has to say that company loyalty has been breaking down over a very long period. You see it in all kinds of ways. When I was an apprentice we all played football, cricket and other sports together on company grounds, where we were lucky enough to have them. Company sports clubs have now almost ceased to exist. In one company with which I am concerned we discovered that of the cricket team I think 10 were outsiders and only one was an employee of the company. That did not make much sense, so after five years we disbanded it. When the whistle blows people go home to their recreation, to their television, to their homes, houses, gardens, to a whole multitude of things, and they tend to leave behind certain dedicated enthusiasts. Too often these are the fringe who may be rather militant and they spin out the discussion. For this reason I have always believed that, in order to strengthen the trade union representatives and the moderate opinion in companies, not only should meetings be held in the firm's time but postal ballots and secret ballots and other contrivances to help strengthen the moderate opinion should become more general. I hope in due course that this will strengthen democracy, and democracy within the unions.

I find no perfect solution to this. If you have only the trade unions then you are automatically putting outside the 10 million other people. It could be said that perhaps these 10 million are in relatively small firms because in terms of the Bill it has to be a firm that has a part to play in the manufacturing industry of the country. But I am not sure that this is true either. There are companies important to our export trade with 2,000 people or something of that kind which are only very moderately unionised, and if it went to the minority of trade unions in those firms the great majority would feel that they were not being kept informed. If you feed it just to the shop stewards—I know this—they are very jealous that all management information should be provided to them and to them only. They discuss it and filter it and sometimes when it is passed down and gets known lower down the chain it does not bear a very great resemblance to the original matters put forward by the management.

I know of other companies, with which I am connected, where the management are not allowed to put a notice on the notice-board. They say that that is the task of the shop stewards committee. It all makes it very difficult for management to get this information which we are discussing generally known. Having considered it as best I can during this very informative debate, I have come round to the belief that it certainly must be available to people who are in full-time employment within the company. I do not think we ought to set up a minority of professionals who take this information and may use it for their own purposes and may even filter it. It would be unthinkable if we had people who were not employed full time in the company. That is the first criterion. The second criterion—

Lord BESWICK

Could I ask the noble Lord a question on that point? Suppose the employees say, "We want Mr. A to speak for us, he is a specialist, a full-time official, he is not working in the company but he is our spokesman, he knows our problems and we wish him to have the information and we wish him to conduct the negotiations for us", is the noble Lord really saying that he should not have the opportunity to do that?

Lord ORR-EWING

I am sorry, I take the view that he should be an employee of the company. It is the company information he is getting. It is not illogical. We are limited—

Lord BESWICK

Would the noble Lord answer that question? Is he really saying—and I am asking him to face up to it—that, when the men voluntarily choose an outside official to speak on their behalf, we should say by law that they are not entitled to have him?

Lord ORR-EWING

The noble Lord is distorting the argument quite a bit. In my submission, he is. The noble Lord said, "to speak on their behalf". Of course, I do not rule out that, if the men say, "Let us have a discussion with the management about these plans and may we bring—"

Lord BESWICK

So that we can cut out some discussion and misunderstanding, all that this Bill would do is to ensure that the authorised representative, as I will move in a later Amendment, would have the right to have the information on behalf of the men. He may be an official outside, he may be an employee of the company; he would be the man in whom the employees have trust. That is all we are saying.

Lord ORR-EWING

The noble Lord is saying that if someone outside the company is nominated—and presumably he has in mind a district official or someone in whom the men have confidence—to represent them, then you will exclude a large number of people who, as has rightly been said in all parts of the Committee, are not members of the union. I come to my second point. In my view it should be somebody who is employed by the company. I do not rule out, of course, that, if the men ask during a discussion that someone should be invited as an ad hoc member to listen to the discussion on their behalf, he should not be there; but I do not think he should be only a person who is elected, particularly if he is not a full-time employee of the company. I think that is democracy. For example, sometimes we have to be ratepayers or to be elected we have to be a person who lives in the council area. It would not be unique to have it from within. I also think that the information must be available. I think this is the point which the noble Earl, Lord Balfour, was touching upon. I would think it wrong to ask the management to set up tremendously complicated rooms setting out all this information. Equally, I think it would be wrong if a person was not allowed access to information if he was a loyal employee of the firm. Those are my two criteria.

I very much hope that the noble Lord will be in a conciliatory frame of mind. The noble Lord, Lord Houghton of Sowerby, deeply respected in all parts of the House, has sought to find a solution; my noble friends have tried to find another solution. The noble Lord, Lord Rochester, in a very constructive speech has found another solution. Surely between us we could find something which would be acceptable, and which would meet the criteria that I have tried to set out.

Lord BRUCE of DONINGTON

I must apologise to my noble friend for prolonging the proceedings a little. He will know that I am an ardent advocate of this Bill and have played my part in resisting many of the limitations which noble Lords opposite nave sought to impose on it. Nevertheless, I should like to follow some of the remarks made by my noble friend Lord Houghton. My noble friend will correct me if necessary, but it seems to me that the wording of this subsection may be unduly restrictive; because the whole purpose of the clause is concerned with the outlook for a particular sector of manufacturing industry. The problems, affairs, outlooks and projects of a company are not necessarily confined to the works floor. There are other aspects of a company's activities that need to be considered in the formulation not only of its policy but of the industry in which that firm happens to be. These are by no means confined to the manufacturing side of what we loosely call "the floor". There are a number of employees—and we art talking specifically about employees in this Bill—who are very often denied information by their own board of directors, and who do not fully know what is happening inside the company.

I would give as an example the sales representatives of a company. They are very frequently in complete ignorance of what is going on inside the company, and they may have some contributions of their own as to its sales policy, its sales outlook and its range of products. On my present reading of the Bill—and my noble friend will correct me if I am wrong—there is no automatic entitlement to information for people such as sales representatives, which would enable them to modify their judgments and make their own constructive contribution to the future of a company, and possibly also to the future of an industry. My noble friend Lord Houghton also referred to middle management. There are far too many companies in the United Kingdom whose middle managements are denied information from their own boards of directors. Is it right that a trade union representative who, by and large—and I do not mean exclusively—represents people on the factory floor should receive information which is denied to the categories of people of whom I have spoken? There is not only middle management. There are the people in the research departments, the people in the development departments and even people in the accounts departments.

I am aware that in ideal circumstances it ought to be possible for all employees, whatever grade they occupy, whether middle management, sales representatives or elsewhere, to belong to trade unions. This is something to which I would give complete support. But we are concerned with actualities. I hope that we shall put this Bill, shorn of the restrictions at present imposed on it, into active, forcible and constructive operation, not in many years time but within a few months. We are concerned with the middle term and have to face the fact that during that middle term, through no fault of the employees themselves, it may not be possible to organise the middle management, sales representatives and others into trade unions. I do not know whether my noble friend thinks it possible to bring forward proposals to Her Majesty's Government, but I think that some further look should be given at what seems to be, on the face of it, the restrictive nature of this clause. I think it is well that Her Majesty's Government should take some account of the views of your Lordships on this point.

12.25 a.m.

Lord LOVELL-DAVIS

The question raised by this group of Amendments may not be novel, but it is of the greatest importance and it is proper that we should be asked to set out our reasons for believing that trade union representatives are the most appropriate means of obtaining the information disclosure that we seek. However. I should like to point out very clearly at the start that the discussion is being conducted as though these provisions in the Bill are to be the basis on which information disclosure would be made in industry. The Government's intention is quite the reverse. It is that this power should be used rarely. Many of the Amendments made by the Government in another place had properly emphasised that these were to be reserve powers, for use only on what the Government hope strongly are a minimum number of occasions. The Government are entirely at one with the CBI in believing that voluntary arrangements are preferable in the efforts that are being made to encourage further voluntary disclosure. It is therefore to be recognised that these powers are to be exercised only in the case of companies which, despite pressure from the CBI and the Government, have refused to make satisfactory voluntary arrangements. As Clause 22(6) explains, there is no question of these powers being used where companies make satisfactory voluntary arrangements.

I should like to make two other points. One is in reference to the specific Amendment moved by the noble Lord, Lord Campbell of Croy, which both the noble Earl, Lord Balfour, and the noble Lord, Lord Rochester, took up; the first asking the noble Lord. Lord Campbell of Croy, to reconsider it and the second pointing out that it was too wide in its terms. I should say at the practical level that I agree with them. These Amendments require certain duties to be carried out by somebody representing all workers; but in some companies there would be no such person and no procedure for creating one. In such cases, and with the best will in the world, a company would be incapable of carrying out the duties that these Amendments seek to impose on it.

I should like also to refer to a matter which was raised by the noble Lord, Lord Balfour of Inchrye, who said that the Bill contained no explanation of "trade union representatives". I would refer the noble Lord to the Marshalled List and to the Government Amendment, No. 166A, which contains such a definition. He expressed concern that a company might regard a particular representative as unacceptable; but the Government Amendment, No. 166A, also makes it clear, as has been explained on many occasions, that, under the system that the Government propose, it is the company which decides to which of the union representatives it will make disclosure. This does not mean that the company can pick on anybody, but that it will be someone who is a trade union representative with status, such as an official or a shop steward.

The Government wish to encourage the development of strong, responsible and independent trade unions. We believe that the trade unions are the proper means through which workers can have an effective say in management decisions which effect their working life. We made this clear in the White Paper when we spoke of "trade union representation from the firm" and of "union representatives to companies" as the means of disclosure. The Bill, therefore, specifies that information should be made available to trade union representatives.

I should however, point out to your Lordships that it does not specify who they should be. This gives the company considerable discretion as to which union representatives they furnish the information. It may be union representatives at the level of the plant—for example, shop stewards within the company; or it may be district or national officials of the trade union. The choice has been deliberately left to the company so that they may make arrangements for disclosure which match other arrangements for consultation and collective bargaining.

The Bill thus provides a considerable measure of flexibility to match the circumstances of a particular company. Moreover, the Bill in no way prevents employers from disclosing information to non-union representatives. They can continue or extend the existing voluntary agreements. The latter are in no way affected. It will be open to the company to provide information by other means. A company will be completely free to provide the information it is required to furnish to trade union representatives to other employees, for example, to works councils or staff associations, where these exist, or direct to all employees, if that is what they want to do. We in no way wish, to prevent this, and the Bill will in no way hinder it. In addition, it is open to all employees to join trade unions and for trade unions to seek recognition in order to benefit from the statutory requirements and the information disclosure clauses.

The Government do not accept that there should be a statutory duty for information to be disclosed to representatives of workers, other than union representatives. As my noble friend Lord Cooper pointed out, consultations and information disclosure are inescapably linked with collective bargaining. Collective bargaining must involve consultations. Any attempt to separate these so that the unions should deal with collective bargaining and other representatives with consultation, would be likely to lead to misunderstanding and confusion. We are concerned to accept that unions have a role, and to take steps necessary to ensure that there will be strong and responsible unions to discharge their powers and duties. We view this as a step towards our goal of strong and responsible unions playing a constructive part in collective bargaining, in consultations and in industrial democracy. I have taken note of what noble Lords have said in the discussions on these Amendments, including the views expressed by my noble friend Lord Houghton of Sowerby and the noble Lord, Lord Balfour of Inchrye, regarding Amendent 148, but what I have said represents the Government's strongly held view in this matter. We have also had the benefit of an extremely cogent contribution from my noble friend Lord Cooper. For these reasons, we cannot accept the Amendments.

12.35 p.m.

The Earl of ONSLOW

There are two questions I should like to put to noble Lords opposite. What happens in the case of some of the big City financial institutions who are totally non-unionised? Some of the very large ones come into this category. If the Government feel that information would have to be given to the union, why should not people who are not unionised also have that information? Secondly, the difficulty of the Amendment moved by my noble friend Lord Campbell in which he says "all employees", strikes me as being apposite. If you disclose information—some of it very confidential—to trade unionists or to other representatives of the work-people, sometimes they have to make a decision not to pass that information on to the people whom they represent, because it is too sensitive. If you say that this information must go to all employees, then I should have thought the value of that information becomes very much less to all the people. I think we have a dilemma here. There is also a third point. Would it not be possible just to say, "to the revelant trade unions or other representatives of employees, which ever is the more appropriate?" That surely is the short version of what the noble Lord, Lord Houghton of Sowerby, was saying.

Lord LEATHERLAND

Before the noble Earl sits down, I wonder whether he could explain a little more clearly what he meant in giving his example of the City institutions. As I understand the term "City institution", it comprises banks, finance houses of all kinds, insurance companies, stockbrokers' offices and so on, yet Clause 22 of the Bill refers to "manufacturing industry". I wonder whether the examples given by the noble Earl are not completely irrelevant.

The Earl of ONSLOW

I am almost certain that the noble Lord is right and I apologise for having taken up your Lordships' time if I have made a mistake.

Baroness ROBSON of KIDDINGTON

I am sorry to come so late into the debate, but I feel very upset at what the noble Lord, Lord Lovell-Davis, has said in his reply to the debate so far, because I have the impression that this clause is being used for the purpose of strengthening the trade union movement of this country. We live in a nation where I think it is tragic that we should need any legislation about consultation within industry; but I realise that perhaps it is necessary, since everything is not completely well. But we must certainly look for legislation which is helpful to both sides of industry. Unless we do that, we simply perpetuate the feeling of there being two sides.

I believe that this clause, if suitably amended along the lines suggested by my noble friend Lord Rochester, holds the key. If one considers the management side of a company which is being asked to disclose information, one sincerely hopes that the compulsory powers of the Minister will be used on the minimum number of occasions. Conditions must therefore be created where the company on the whole will want voluntarily to disclose the information. I believe that would happen if a company was dealing with elected representatives of their own workers. That is what I want the Bill to embody, so that we could avoid ever using the compulsory powers given by the Bill.

Lord ROBBINS

May I echo the dismay expressed by the noble Baroness who has just spoken concerning the appearance of complete "nonplussedness" expressed by the noble Lord, Lord Lovell-Davis, in his statement on behalf of the Government? This is not a matter on which I would claim to have any expert knowledge at all. What knowledge I have of business falls outside manufacturing industry, unless the production of newspapers comes within that category. I have been most deeply impressed by the considerations advanced by the noble Lords, Lord Houghton of Sowerby and Lord Bruce of Donington, regarding the present and the prospective future complexity of the work. It seems to me to be an illiberal attitude not to take account of that in legislation of this sort.

I would only add that the attitude of mind which results from the considerations adopted by the noble Lord, Lord Houghton, is not only something which is, so to speak, a concession to the complexity of the world, which is a nuisance; it also suggests an organisation which might easily arise from some conflation of the Amendment suggested by the noble Earl, Lord Balfour, and the Amendments coming from the Liberal Benches. It might also result in new developments in industrial organisations, which would have the effect of producing greater solidarity between those various members of society so graphically described by the noble Lord, Lord Bruce of Donington, when he was drawing our attention to the multiplicity of persons below top management who have a common interest in the fate of the undertakings with which they are connected.

The EARL of BALFOUR

In view of what has just been said, I feel that the Government must consider all the employees and not just trade union employees. It is an absolutely fatal mistake of Governments—and we have all done it from time to time—to legislate to make compulsory something concerning only a a few people, when half the country can he left out. I must ask the Government to think again. I do not say that they should accept my Amendment at the moment, because I am not too happy about it, but I ask them to reconsider what has been said. The Government have heard remarks about this from every quarter of the Committee, and I ask the noble Lord, Lord Beswick, and his noble friends to take this away and think about it again.

Lord BESWICK

My Lords, I wish the noble Earl, Lord Balfour, would understand just how much thinking has gone into this already. I know a number of us have been thinking of it in our sleep—

Several Noble Lords

Oh!

Lord BESWICK

—and also in our waking hours and, with the deepest respect to noble Lords and the noble Baroness, I believe a lot of people here have been thinking of this without reading the Bill. This is a feature that I have come across before in our debates; people have just not read the Bill and they do not understand what it is we are seeking. There is absolutely nothing in this Bill which prevents any employer from giving any information to anyone he likes. There is nothing in this Bill which prevents any employer from getting the most cosy, the most friendly, the most intimate relationship he would wish to set up. We are not dealing with industrial democracy in that sense.

A lot has been said about the need to evolve these things in a way which comprehends all employees. No one believes that more strongly than I do and, if I may say so to some noble Lords, I have possibly seen it more closely and more intimately than most people here, because this question of non-unionism, as it has been called, is particularly apparent in some of the high technology industries where we have a special problem with which we are trying to deal. But this Bill does not deal with that issue at all. This Bill is concerned with only a few cases and they may never arise. It may be conceivable that, because of the new atmosphere in consultation that is certainly developing in this country—there has been more development in this country on this issue in the last two or three years than in the whole of the rest of my lifetime—and if we get this development of democratic consultation to the satisfaction of both sides of industry, then in any company the provisions of this clause will not arise because things will be done on a voluntary basis.

The noble Baroness said we ought to have a Bill which tries to bring both sides together, and I absolutely agree with her about that. There is something in the Bill which will help towards that. There are a lot of employees in companies who are now thinking much more seriously about the advantages, the possibilities and the opportunities of trade union membership than ever before, and we welcome that. There are many now, to my certain knowledge, who are beginning to organise themselves, when before they were concerned only to get home at night and did not bother at all about the collective responsibility of the company. They are taking a much more sensible and responsible attitude to matters other than their own desk or their own workshop. That is something which we welcome, and under the Employment Protection Bill that will be helped. That is exactly what the noble Baroness wants.

Next Session we are hoping to have amendments to the Companies Act and that, again, will be in order to facilitate the kind of development she wants. That will be done in other legislation. Here we are dealing with the possibility of a company refusing to give information either to its workforce or to the Government. In those few cases the reserve powers will he used, but only in those few cases. All the rest of what has been spoken about is quite separate and, with respect, quite irrelevant to this Bill. I welcome the discussion, because it has highlighted some of the complicated and interesting facets of the problem, but it is quite irrelevant to this Bill.

When we come to the issue of compulsion, and when the Secretary of State believes that in certain cases he should use his reserve powers, the question then arises: to whom do we give this information so far as the workforce is concerned? I suggest to noble Lords opposite that that is a matter which should be considered very carefully indeed. I can well see that there could be a company which had a first-rate consultative machinery which was not union based. There might be such a case, but it would be impossible in a Bill to define that particular set-up. Therefore, we have to consider whether we should use these reserve powers to compel an employer to give information. Surely, the person whom we should define in this Bill is the authorised representative of the workers, the man they trust—the person they trust, because it may well be a woman—and he or she may well be an employee of the company. In certain cases, he or she may be a paid official, an expert, a person who has their full confidence.

The Earl of BALFOUR

I am sorry to interrupt the noble Lord, Lord Beswick, because I know how annoying it can be, but if he will think back about three sentences he will recall referring to the representative of the workers. This is exactly the point we are getting at. It is not necessarily the representative of the union.

Lord BESWICK

Possibly the noble Earl will be good enough to look at the Amendments standing in my name, which my noble friend Lord Melchett will be moving a little later—if we can proceed—where we try to define a little more carefully the person to whom the information should be given, and I hope that that will command the attention and support of the noble Earl, Lord Balfour. I am here saying that when we are dealing with those few cases where the information should be given by request or by order from the Secretary of State, we are behaving responsibly in saying that that information should be given to the authorised representative of the workers; the person recognised by the employer for the purpose of negotiations, the person who commands the respect and confidence of the workers concerned. I should have thought that was eminently reasonable.

I would also expect—I think I have the support of my noble friend Lord Cooper here, and this is what we mean when we say that we hope to strengthen the trade unions—that it would encourage a proper, responsible, disciplined attitude on the part of those who are organised. There has recently been an enormous step forward in this regard. I am quite certain that the attitude of my noble friend Lord Cooper or my noble friend Lord Houghton, both men of enormous experience in industrial life, reflects the attitude in trade unionism, which is much more representative than some noble Lords opposite really believe. It is that responsible attitude that we wish to encourage, and that is what we mean when we say that we want to strengthen trade union organisation.

The noble Earl, Lord Onslow, asked about the position of the financial company which was non-unionised. He was answered by my noble friend who is sitting behind me—that a financial company would not come under the Bill. However, the question still has relevance to a company which is not a financial company. This illustrates what I tried to say earlier. If there is an arrangement in a small company whereby everybody is perfectly satisfied with the information that is given and there are no complaints at all, this clause would not be relevant. The powers would not apply. There would be no complaint from anybody. Therefore, the situation would remain as it was.

The EARL of ONSLOW

May I try to clarify what I said. In the event of there being a complaint from a non-unionised company and the Minister having to make an order that the company should disclose information to a non-unionised company, how do they do it?

Lord BESWICK

If the noble Earl will look at the circumstances in which the powers in the clause are used, he will find in the first place that it is unlikely to apply to a non-unionised company. We are talking about companies which are important to the national economy. I cannot recall any significant company that is important to the economy of this country which is completely non-unionised. Therefore, the situation would not arise in any event. If, however, we were dealing with a small company which was of no great significance to the economy of the country these reserve powers would have no relevance.

Lord ROBBINS

I wonder whether the noble Lord, who is making such a noble effort to achieve understanding, would help me in this respect. I have understood what he says—that the intention of the Bill probably applies only to a few cases. Let me go to the limit and assume that there is simply one case in which it is thought that the compulsory powers of the Minister should be used, that the company in question is recalcitrant as regards the disclosure of information to the relevant trade union, that his compulsory powers are therefore invoked in that respect and the relevant trade union receives the information. Is the noble Lord happy about the frame of mind of the people who were referred to by the noble Lord, Lord Bruce of Donington, and the noble Lord, Lord Houghton of Sowerby, who do not happen to be members of the relevant trade union?

Lord BESWICK

First, may I express the hope that if my effort was noble it was one step above the non possumus effort which he applied to my noble friend. In a case where there has been a decision by the Secretary of State requiring information to be given, that information will be given to the person stipulated in the clause as amended by the Amendment to which I referred and which we shall be discussing later. The noble Lord then asked me about the sales representative to whom my noble friend referred who is working in the North of England and has not been consulted. It is impracticable and I should have thought that, to the noble Lord's logical mind, it was not logical to consider their having to put a piece of paper in the hands of every sales representative in every part of the country. That is not feasible. If, as I would advise him to be, he is in a representative organisation, his representative will have the information. If the company concerned believes that the information they have given to this authorised representative should also be given to each member of their staff—as was given recently by the chairman of Rolls-Royce in connection with an industrial dispute—there is no reason why the company should not send an individual letter to every member of the company. They are perfectly free to do so. On the other hand, the reverse is that if the company say, "We shall give that information and we will see it goes to a responsible representative of the workers, but we think it should be limited, or confidential, or restricted," then the Secretary of State has the discretion to say that the information given to him shall be given either to a responsible trade union representative or probably to no trade union representative at all. He has that discretion in certain cases. I hope that explanation will be satisfactory to the noble Lord.

12.53 p.m.

Lord HOUGHTON of SOWERBY

May I ask my noble friend a straight question. After the words "relevant trade union" in line 35 on page 19, will he consider adding the words "recognised works council, staff committee or shop stewards' committee". That provides for the alternative forms of consultation which exist already in many undertakings.

Lord BESWICK

Certainly I will consider what my noble friend has said, but I would ask him to think about that point and to raise it again on the later Amendment where we define more closely the bodies to which the information should be given. My noble friend may get satisfaction. In any case, I will certainly consider the point. However, when he considers my Amendment my noble friend may think that the point is covered.

Lord HOUGHTON of SOWERBY

I am trying my best to find a basis upon which the Committee could pass on to consideration of later clauses of the Bill without either holding up the debate or dividing the Committee at this stage on Amendments which, however laudable they may be, are unsatisfactory to many of us and which we could not support. Yet there is something in the Bill which we want to have put into better shape.

Lord BESWICK

I am asking my noble friend to look at my Amendment No. 166A, in which I refer to a definition: representative' means an official or other person who is authorised by a relevant trade union to carry on negotiations about one or more of the matters specified … and who is suitable to act as an authorised representative. In certain cases that may well be the kind of organisation which is acceptable to a particular company. I am suggesting to my noble friend that it may be on that Amendment that any adjustment, improvement or clarification is required rather than or the Amendment of the noble Lord opposite.

Lord HOUGHTON of SOWERBY

I am sorry to press this matter. If I could be assured that we are not dealing with an important doctrinal difference, then I should be willing to go along with the Minister. I fear, however, that the noble Lord, Lord Robbins, may be right in believing that the Government have set their minds on recognising for compulsory disclosure only the relevant trade union and nobody else. Of course there is nothing to prevent a firm from disclosing information to whomsoever it likes, but the important thing is that this is compulsion. I beg my noble friend not to excuse any clause of any Bill on the ground that we are now legislating in Bills which we hope will never come into operation. We have to regard the law as being embodied in this clause. If we are to have compulsory disclosure to relevant trade unions only, ignoring as a matter of doctrine works councils, works committees and shop stewards' committees, this is not reality.

Lord BESWICK

I have not made my point clear. I am saying to my noble friend that I am amplifying and clarifying the persons to whom the information should be given. If that amplification and clarification is not adequate, I am suggesting that he should raise this point on the later Amendment.

Baroness HORNSBY-SMITH

May I support the noble Lord, Lord Houghton of Sowerby. There are many firms which have a majority of women employees and a minority of male employees. It is mainly male employees who belong to unions. Only a small percentage of women are in unions. Many of these firms have their own staff association. If this compulsion is to refer only to trade union representatives, then, despite the Sex Discrimination Bill, women will be far less represented.

The noble Lord was at pains to say that employers could disclose to anyone they wished in their works. But does he really believe that if the established, named union representative is to attend discussions representing his union workers he will willingly accept the employer's saying: "Well, I want the staff association which represents the sales and the export staff and the financial clerks to be in on the discussion as well"? I believe the accredited trade union would say: "We are the union. Our discussions are with you". The point is most important and I fully support the noble Lord, Lord Houghton. Many firms with a strong staff association have far better trade relations and superb accord. Many of these firms are small family firms with perhaps 100 or 200 employees, who are nevertheless equally as important as if they belonged to some giant empire. Such firms may have a mere handful of people dealing with their transport who are in one union. In my view, however few employees are in the trade union, the Minister's formula gives the dominance to the trade union and does not accept the staff associations or other organisations within the firm.

Lord COOPER of STOCKTON HEATH

The suggestion of my noble friend Lord Houghton of Sowerby has revealed the danger of thinking aloud and not giving full consideration to the possibilities. When he proposes including shop stewards we might remember what the Donovan findings were in regard to the trade union movement when they came out with the basic principle. There were two systems of industrial relations in this country: there was the one at the centre and the one on the shop floor, and they were opposed to each other. There has been much discussion this morning about trade unions which is appropriate in the right place but not on this particular clause. I would draw attention to the fact that there are shop stewards' committees and shop stewards' committees. Some are very difficult indeed. I therefore again suggest that the wording in this clause "relevant trade union" is far enough to go. When we come to definitions later, perhaps we can overcome and meet some problems that have been raised this morning. Most shop stewards do a good job of work—do not let me be misunderstood—but there are some who tell the "relevant trade union" where to go. I think caution ought to be applied here.

1.4 p.m.

Lord CAMPBELL of CROY

This has so far been a very well-informed debate in which contributions from all sides have been relevant and concise. It fell to me to introduce the debate because of the alternatives we are discussing. My Amendment was ahead of the others simply because I tabled my Amendments before other noble Lords. Having heard the noble Lord, Lord Rochester, speak to his group of Amendments, I would say that he has confirmed that the principles in the Liberal proposals are exactly the same as our own. The difference in wording, which is very small, depends on a point which I put to the Government—I repeated it briefly today—to which the Government have not yet replied. I will come to that in a minute. Also, my noble friend Lord Balfour has spoken to his alternative version which would introduce works councils and provide for a rather different system. But, again, the principle in his group of Amendments is the same as ours.

I would refer to my Amendment No. 156. There, the wording is exactly the same as is proposed by the Liberal Amendments. That is the point where representatives of employees are engaged in the screening process. We recognised and presumed that, once the information had been cleared and was available to representatives of employees, it would not be restricted to them but they would be bound to pass it on to other employees for discussion as part of the reason for having received it. The noble Lord, Lord Houghton of Sowerby, spoke of the point I had raised about limiting this to trade union representation. May I make it clear—I feel sure he recognised this himself—that, of course, we are not excluding trade union representatives. We include them in the representatives of employees. We are saying that those who are not members of unions should also be involved and in the end benefit from the information which is disclosed. If the Government wish to write into the Bill the normal machinery of trade union arrangements, then of course we can examine that fully. But on this side of the Committee we think that all employees should benefit from the disclosure of information.

I would now refer to the point which I put to the Government and to which we have not yet received a reply—I know that noble Lords opposite need to have some consultations together, but at this moment I should like their attention because this point has not been answered. I said that we assumed—because it is not clear in the Bill; we really need this information—that once the information had been through the screening process it could be regarded as harmless. What we need to know from the Government is: what is the classification of the information when it has been through the screening process? Would it still be likely to be sensitive and, therefore, possibly damaging to a company if it went into certain hands? I hope that when I sit down the Minister will reply to that. This has some effect on the precise wording that goes into the Bill.

Provided that the special reasons which are written into the Bill (which we intend to widen because there ought to be more special reasons put into it) have been considered, then whether there is an advisory committee as the Government propose, or an appeals tribunal as we have proposed, when the information or part of it has been cleared for disclosure is it still to be regarded as sensitive? Is it still information which ought not to reach certain hands without the possibility of damage to the company? On the question of trade union representatives, can the Government give any indication of how many they expect to be engaged in the process and event of screening and eventually to receive the information? I know that large firms are involved, but there is nothing to give us an indication of whether the number is likely to be three, 30, or 300.

I now come to the point to which the noble Lord, Lord Beswick, referred, which is his definitions of an "authorised representative". Under the Bill, and in the proposed Government Amendments, it appears to be left to the company to determine who are to be the representatives of the union for the purposes of Clauses 22 to 26. The noble Lord confirmed this during the course of this debate. This appears in line 23 on page 20 of the Bill and is also in the first five lines of Government Amendment No. 166A. It was the noble Lord, Lord Lovell-Davis, who confirmed that it was left to the company to decide which of these persons is the "authorised representative" to be served with the notice in the first place under Clause 22.

The noble Lord, Lord Beswick, referred to his Amendment No. 166A which we will be considering in full later, but at this moment we must take it into account temporarily. The noble Lord indicated that his new definition would make sure that it was a recognised representative of a trade union, recognised for certain purposes. We quite understand that in questions of wages, conditions and other normal negotiations between trade unions and employers, that would be what one would expect. But I believe from the debate we have had so far that it is widely felt in all parts of the Committee that on this subject of the disclosure of information involving a company's own affairs and its plans ahead, it should not only be the authorised representative of a trade union in general, but also should be an employee of that company. Surely it is unlikely, with the size of the companies who are likely to be involved here, that there would be no one who could meet both the requirement of being a representative under the definition in Amendment No. 166A, and also being an employee in the company. This was well explained and advocated by the noble Lord, Lord Orr-Ewing.

I would also point out that the noble Lord, Lord Beswick, said—and I think the noble Lord, Lord Lovell-Davis, said it, too—that these were reserve powers, and that this was a procedure likely to be used only infrequently. But if one looks at Clause 23 and observes the list of matters on which the Minister can demand information—and again I do not want to anticipate the debate that will take place on these company items—it can be seen that there are a large number of subjects on which, indeed, a company could very well say, "The information is sensitive and confidential, and if it got into the hands of a competitor it could be damaging." So even though the Government may think these clauses will be invoked only on rare occasions, the list in Clause 23 cannot reassure companies on that point, unless the Government intend to alter it radically when we reach that clause. In any case, those cases where a company is objecting to the disclosure of information will be exceedingly important. It is essential that in Parliament we should prescribe the procedure which will protect companies when they feel that something which is highly sensitive is to be disclosed against their wishes.

Mention has been made of the voluntary system. I must point out that where companies are providing information now, every day, voluntarily, within their companies to employees, they have to watch the Stock Exchange and City rules, and legislation, because they have to be sure they are not placing some people in their companies in a position in which they can indulge in insider trading. This is a matter we are going to consider on a later Amendment. There is also a certain obligation under the legislation for companies to inform their shareholders of certain information, and they would do this in cases where they are giving that information to their employees. Once again, we will be considering this later on, in particular on an Amendment in the name of the noble Lord, Lord Torrington.

I must mention at this point that there are these further problems which in due course we will be debating, and which very much affect whether the information can, or should, be made available to all employees, or to only a limited number of representatives of those employees. Having listened to the debate, I think there is little to choose between our Amendment and that of the Liberals; it is simply a matter of wording. Very much depends on the answer which the Government give to my question about the status of the information once it has come out of the screening process.

There have been thoughtful speeches in this debate. The noble Earl, Lord Balfour, produced his system; my noble friend Lord Balfour of Inchrye and the noble Lord, Lord Houghton of Sowerby, have warned us from their own experience about restricting this process simply to the trade union representatives. The noble Lord, Lord Cooper, told us about the accepted and normal channels by which arrangements are made through trade unions. Of course, I recognise straight away that that known and respected system is available, and we are not excluding that. We hope that system will be used. However, we do not think it should be to the exclusion of the interests of those not in the unions as well, and we do think it ought to be within the company.

The noble Lord, Lord Lovell-Davis, told us that the Government still stick to their view. I must say I am very disappointed in the replies which both he and the noble Lord, Lord Beswick, have given to us. The Government appear to show little, if any, sign of change in their views. It is clear that serious and careful thought has been given to this matter by noble Lords in all parts of the Committee. I believe this has been a very constructive debate. Some of my noble friends may well feel that the Amendment I have moved in this Committee has been proved to be superior to what is at present in the Bill, and that the wording of the Liberal Amendment, which is very similar, has proved to be the same. Before we consider further whether this is something we ought to decide on now, or whether we should see if there is a possibility among those concerned of reaching agreement on some acceptable wording—and the noble Lord, Lord Houghton of Sowerby, suggested that there should be time for building a bridge in this matter—I hope that the Government can reply to my point about the status of the information when it has come out of the screening process, because apart from the points about shareholders and the obligations of companies to inform certain people or make certain information public, that is a very important matter regarding the actual wording of ally amendment we make to the Bill in this Chamber.

1.18 p.m.

Lord BESWICK

Arising from what the noble Lord, Lord Campbell of Croy, has said, there is no misunderstanding at all now, I hope, that if information is given to a properly constituted trade union representative, and the company wish to give that information to any other individual in the company, there is no reason why they should not give it to the works council, the shop stewards, the lot. That is the situation.

The noble Lord asks: what is the status of the information which has been the subject of this most elaborate screening process? If it is decided by the Secretary of State and by the Advisory Committee that the information is not classified and can be made available to the trade union, then, by definition, it is not classified. On the other hand, if the companies still say that they are not content with this, then the Secretary of State would have to lay an order, which would lie for twenty-eight days, and it is possible for Parliament to challenge that. If, at the end of twenty-eight days, it is not challenged, then the information is given. I hope that that satisfies the noble Lord, Lord Campbell of Croy.

Lord CAMPBELL of CROY

It does not really. We will reach it later in the Bill, because we have not discussed the complicated procedure which the noble Lord, Lord Beswick, described, and which some others have described, as an obstacle course. But I regard twenty-eight days laying of the Order as part of the procedure, because if the company is still objecting that the information is not disclosed until the matter has been before Parliament, then Parliament could well decide that it should not be disclosed.

What I am asking is this. At the end of all this procedure, which includes the twenty-eight days for laying the Order, is the noble Lord saying that the information is then regarded as not sensitive or confidential in any way, because if it were it would have been caught by the procedure? It seems from what he said earlier on that that is the position, because he said that any information which, at the end of this process, was in the hands of a trade union representative could be passed on to any employee, which is, of course, very similar to what we are suggesting in our Amendment. I would ask that as he seemed to qualify this at the end of his statement by referring to the last part of the screening process, which is the right of Parliament to decide in the last analysis what is the status of the information. I am giving him time to receive a message. I know that the noble Lord has been on this Bill for a very long time and I am giving him time to reply. I should be very grateful if he would.

Lord BESWICK

There is no reply at all involved. I have told the noble Lord that if there is an issue of doubt it goes through this screening process. If the Secretary of State still thinks that the information should be given, then he has to lay an order. At the end of the twenty-eight days, if it has not been challenged and has not been defeated in Parliament, then the information is given. In the meantime, the information is classified.

Lord CAMPBELL of CROY

I am grateful to the noble Lord. That confirms completely that once this information has gone through the screening procedure—and part of it may be removed during that—what comes out at the end is regarded as harmless so far as the company is concerned, and therefore there is no objection to its being made public. One may assume that the representatives of the employees who receive it, be they trade unionists or not, are then free to pass it to other employees.

Lord BESWICK

If I may say so, the noble Lord is getting himself confused. There is no question here of the company being compelled to give information to the rest of the workforce. The whole question arises only because the company itself says, "We are reluctant to give this information." It is this reluctance on the part of the company which is tested through the screening process. It is not a question of holding back information by some Governmental gimickry; this is a question of being fair to the company. I wish that the noble Lord would try to accept that and not think up difficulties where none exists.

Lord CAMPBELL of CROY

I am not. I am afraid the noble Lord has, in that last intervention, misunderstood. This is not a question of compelling a company to do anything. I am simply asking about the status of the information. I think the noble Lord has replied to me on that. Just to make sure that there is no misunderstanding, I am not suggesting that the company is being compelled to issue the information to every employee. The information, when it has emerged from the screening process, including the 28 days in Parliament, is then regarded as innocuous, and is therefore available to be passed to employees, or to become public without the possibility of damage to the company. If the trade unionists who receives it passes it to other employees, he knows that he cannot be causing damage, because it has gone through the process; the possibility of its being damaging to the company has been considered, and it has been decided that it would not be.

I think the noble Lord has answered that point, which is the one I wanted. It vindicates the view we have taken of the interpretation of this Bill, that there would be no harm in this information being passed to all employees once it had been screened. I am not suggesting that there is any compulsion that it should go to all employees, but it is available to all employees. Our own feeling was that the union representative was bound to discuss it with the employees.

As I say, this has been a most constructive debate. I am sorry that the Government have not seen fit to make any signs of change in this, even though they have received requests to do so from some of their noble friends. I believe that this is a matter which needs to be considered in the light of discussions we are to have later in the proceedings on the Bill, to some of which I have referred. Also, I hope that we can, with the Government, find a form of words—if the Government are prepared to help us in this—which can be an alternative and be much better than the wording in the Bill now. Therefore we intend to—

A Noble Lord

Divide.

Lord CAMPBELL of CROY

No, we intend to look at this. This has been an extremely serious discussion on something which is vital to all these clauses. Of course, I am very tempted to press my own Amendment immediately, but I believe that, in the light of the very important contributions that have been made in this debate, it would be much better for us to have time to consider what has been said by some of my noble friends and noble Lords opposite, and see whether we can find a form of words which meets all the suggestions made, including that of my noble friend Lord Balfour. Therefore, at this stage, but with a view to deciding this matter at Report stage if we can. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

1.27 p.m.

Lord ROCHESTER had given Notice of his intention to move Amendment No. 147: Page 19, line 34, leave out from ("and") to ("with") in line 35 and insert ("employee representatives").

The noble Lord said: I shall be very brief, but there are one or two things I should like to say. First, may I agree categorically with the noble Lord, Lord Houghton, that it is better that wherever possible negotiation and consultation should be with trade union representatives. There are a number of companies where trade unionists are represented in only a small way and it is that situation with which we have to contend too, was somewhat disappointed by the response of the Government to the debate. Great play seemed to be made of the point that there was nothing to prevent companies giving information to employees. But the point is that this Bill contains reserve statutory powers to oblige companies to give information to particular groups and not to other groups. This is what concerns us.

I should like to follow the noble Lord, Lord Houghton, in what he was saying. It seems to me that there was a great deal of merit in his proposal that the solution to this might lie in some form of words which enable information to be disclosed either, as I understood it, to trade union representatives or to works councils or members of staff committees. At first sight I was not too happy about the thought of the shop stewards committee being involved here, because, as he will know from his experience in trade union negotiations, problems may arise with a body of that kind. But I liked his general suggestion, because it seemed to me to cater for firms in which trade unionists were in a minority, and it also placed emphasis, as I understood him—and here I sympathise with the noble Lord, Lord Campbell of Croy—on the information going to people who were actually employed by the undertaking concerned.

I agree with the noble Lord. Lord Campbell, that we have had a very useful debate. We, too, would like to think about what has been said. We hope that at Report stage it will be possible to find common ground, and indeed we shall ourselves consider putting down an Amendment to achieve that end. I have not formally moved Amendment No. 147, and I do not in these circumstances propose to do so.

Lord MELCHETT

I beg to move Amendment No. 149A. With this Amendment I should like, with your Lordships' permission, to take No. 159C. These two Amendments are purely drafting Amendments which recognise that the Bill is now divided into Parts. I beg to move.

Amendment moved— Page 19, line 39, after ("this") insert ("Part of this ").—(Lord Melchett.)

On Question, Amendment agreed to.

1.30 p.m.

Lord MELCHETT moved Amendment No. 14913: Page 20, line 9, leave out ("and").

The noble Lord said: With your Lordships' permission, I should like to take Amendments Nos. 159A, 159B, 159D and 167A. The purpose of these Amendments is to bring greater clarity to provisions which have been criticised as perhaps being not readily understandable. This we have sought to do in two ways. First, we have brought the definition of "relevant trade union" from Clause 30 to Clause 22, so that it can be appreciated as the Bill is read rather than require cross-referencing between the clauses. Clause 22 and the new clause which we propose immediately after it will now contain all the definitions needed to understand this part of the Bill.

The definiton of "relevant trade union" has been slightly amended to take account of the new concept of "company or companies concerned" and to relate negotiations to collective bargaining by means of a reference to Section 29(1) of the 1974 Act. The second means of clarification is to introduce the concept of "the relevant undertaking". This in simple language is the business about which information is sought, and we now wish to make it clear in subsection (23)(l) that information can be sought only in relation to that business, and to require that the order made under subsection (22)(4) will apply to the company or companies concerned in relation to that business. These are Amendments to correct some loose ends in the Bill as it is at present drafted, and I hope they will be acceptable to your Lordships. I beg to move.

Lord CAMPBELL of CROY

I think that the significant Amendment which is being discussed with this is Amendment No. 159A, in which the Government are introducing definitions of "relevant trade union" and "relevant undertaking". If at the Report stage your Lordships agree to make changes on the lines we discussed just now in our long debate on that very important matter concerning this part of the Bill, it could be that the terms "relevant trade union" and "relevant undertaking" will not be necessary. But it would be convenient for your Lordships if, at this stage, as these are definitions, they went into the Bill because it obviously widens the options. We certainly regard the trade union representation as exceedingly important in this; what we have been arguing is that others should not be excluded. With that qualification, we have no objection to this being added to the Bill at this stage.

On Question, Amendment agreed to.

Lord CAMPBELL of CROY moved Amendment No. 159: Page 20, line 30, leave out ("he has") and insert ("they have").

The noble Lord said: I think your Lordships will appreciate that by taking the large batch of Amendments in the previous long debate we were not wasting any time, because we have covered a number of Amendments which we need no longer discuss. This is a drafting Amendment. In reading this Bill—and I can assure the noble Lord, Lord Beswick, that I am one of those who has read this Bill exceedingly carefully several times—it seemed to me that there was an error here. If there is not an error, then it needs some explanation as to how the Minister is referred to here, because I think it should be in the plural. I hope that the noble Lord who is to reply will tell me that I have assisted in getting this right. It is an Amendment introduced in the Report stage in another place, but somehow this has survived.

Lord MELCHETT

Since starting the Committee stage of this Bill last Monday, I understand that we have debated 115 Amendments tabled by noble Lords opposite. This is the third which effects a genuine improvement to the Bill and, like the previous two, we accept it.

Lord CAMPBELL of CROY

I am grateful for that. It is something which clearly was wrong, and I claim nothing more than having spotted a mistake.

On Question, Amendment agreed to.

Lord BESWICK

I beg to move Amendment No. 159A. This was taken with Amendment No. 149B.

Amendment moved—

Page 20, line 31, at end insert— (""relevant trade union" means an independent trade union, as defined in section 30(1) of the Trade Union and Labour Relations Act 1974, which the company or companies concerned recognise for the purposes of negotiations about one or more of the matters specified in section 29(1) of that Act in relation to persons employed in the relevant undertaking; and relevant undertaking "means an undertaking in relation to which a preliminary notice states that a condition mentioned in paragraph (a) or (h) of subsection (I) above appears to the Minister to be satisfied.").—(Lord Beswick.)

On Question, Amendment agreed to.

Lord MELCHETT

I beg to move Amendment No. 159B. This was taken with Amendment No. 149B.

Amendment moved— Page 20, line 34, leave out ("and the date on which it") and insert (", the relevant undertaking and the date on which the notice").—(Lord Melchett.)

On Question, Amendment agreed to.

Lord MELCHETT

I beg to move Amendment No. 159C. This was taken with Amendment 149A.

Amendment moved— Page 20, line 38, leave out ("sections 23 to 25 below apply") and insert ("this Part of this Act applies").—(Lord Melchett.)

On Question, Amendment agreed to.

Lord MELCHETT

I beg to move Amendment No. 159D. This was taken with Amendment No. 149B.

Amendment moved— Page 20, line 39, at end add ("in respect of the relevant undertaking").—(Lord Melchett.)

On Question, Amendment agreed to.

1.38 p.m.

The Earl of BALFOUR moved Amendment No. 163: Page 21, line 2, after ("concerned") insert ("the confederation of British Industries, any employers' association affected by that order,")

The noble Earl said: Before making an order a Minister shall give the company or companies concerned an opportunity to make representations to him. I feel here that the company or companies concerned must have an opportunity to bring in the CBI or any employers' association affected by that order. I feel it to be a more democratic approach. I do not think it changes the meaning to any great extent, but it broadens it a little, which I think would be of advantage to the companies concerned and give them a chance to bring in their own employers' association or anybody else like that. With those brief words—and I hope the Ministers follow me—I beg to move.

Lord BESWICK

If the company wishes to bring in advice from the CBI then it it quite free to do so. There is no restriction on it, either from the employers' association or trade associations, or anyone else. It is probably better to leave it at that. They have complete discretion, and they should not be restricted in this way.

The Earl of BALFOUR

In other words, the Minister can provide an opportunity for the CBI or the employers' associations to make representations to him?

Lord BESWICK

The employer has the right to have advice from the CBI or any trade association.

The Earl of BALFOUR

Thank you. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

1.40 p.m.

Lord MELCHETT moved Amendment No. 163A: Page 21, line 2, leave out ("a") and insert ("the authorised")

The noble Lord said: I think it would be for the convenience of the Committee if at the same time I spoke to a large number of other Government Amendments; namely, Nos. 166A, 177A, 181A, 185A, 202A, 206A, 207A, 212A, 218A, 218B, 222A, 229A, 232A, 235A, 241 A, 246A, 246B, 251A, 254A, 258A, 270A and 296A.

Lord CAMPBELL of CROY

I think I am right in saying that all these Amendments introduce the word "authorised" and that that is the common factor.

Lord MELCHETT

I was about to explain the purpose of the Amendments, but if the noble Lord is satisfied with his explanation I will say no more.

Lord CAMPBELL of CROY

So many Amendments are in this group was simply commenting on the common factor, the insertion of the word authorised," and I see no objection to all these Amendments being considered together.

Lord MELCHETT

Amendment No. 165A seeks to introduce the concept of an "authorised representative," as the noble Lord, Lord Campbell of Croy, said, which is the phrase we wish to use in place of the references in Clauses 22 to 26 to representatives of relevant trade unions. I apologise; I am referring to Amendment No. 166A, which is the new clause.

Lord CAMPBELL of CROY

I am sorry to interrupt the noble Lord again, but it seems that Amendment No. 166A comes in the wrong order, which makes the position rather confusing. It is at the top of page 5 and, as I understand it, that is the definition of "authorised representative." Again, I have no objection to that being considered with the original Amendment No. 163A, Amendment No. 165A being a blank.

Lord MELCHETT

I am grateful to the noble Lord for explaining the confusion, which I inadvertently led the Committee into. As the noble Lord indicated, the meaning of "authorised representative" and of "representative" is defined in a new clause, the subject of Amendment No. 166A, which is the substantive Amendment in the long list of Amendments to which I am speaking. The purpose of these Amendments is to correct what we now recognise to be an ambiguity in Clauses 22 to 26, which, if left uncorrected, would leave unclear part of the procedure for the information disclosure provisions. Under paragraph (c) of subsection 22(2), the company which receives a preliminary notice must pass this on to representatives of relevant trade unions, and tell the Minister who these representatives are. In any company, there will be many representatives of each relevant trade union, and the choice of the representatives of a relevant trade union to whom notices and information are given will be made by the company.

The ambiguity in the provisions in the Bill at present arises from the fact that it is not made clear whether the trade union representatives referred to in Clauses 23 to 26 are the same as those to whom the preliminary notice was given, and whose names were given to the Minister. This ambiguity is untidy. It would allow the company to provide the preliminary notice to one set of representatives, but to furnish the information to another set; it leaves it unclear which trade union representatives may require a reference to the advisory committee. Nor is it clear which representatives the Minister must allow to make representations to him under subsection 22(7). We seek to resolve these ambiguities by providing that the representatives who will receive notice and information, who may require a reference to be made to the advisory committee, and who may make representations are those representatives to whom the company first provided the preliminary notice under paragraph (c) of subsection 22(2), or their successors. This will provide greater certainty for all concerned—companies, unions and the Government. This is accomplished by introducing the concept of the "authorised representative" in the new clause. This is simply the representative chosen by the company to receive the information.

In a further attempt to reduce uncertainty, we also seek to introduce a definition of a "representative". This follows the definition set out in subsection 17(2) of the Employment Protection Bill, and gives legislative effect to explanations of the meaning of this phrase given by Ministers in another place. I particularly draw to your Lordships' attention that the choice of the representative remains with the company—so that is unaffected by these Amendments—and the company may choose any suitable person from the representatives of a relevant trade union—shop steward, local, district or national official. I hope that that explains the purpose behind this long list of Government Amendments and that they will be acceptable to the Committee.

Lord CAMPBELL of CROY

I do not think we need spend any time on this. What I said about the earlier insertion of definitions applies here, too; they may not be needed, but at this stage they should be added to the Bill.

On Question, Amendment agreed to.

Lord MELCHETT

I beg to move Amendment No. 166B, which shortens the Bill by omitting six redundant words.

Amendment moved— Page 21, line 7, leave out ("for the purposes of this section").—(Lord Melchett.)

On Question, Amendment agreed to.

1.48 p.m.

Lord BESWICK moved Amendment No. 166C:

Page 21, line 10, leave out subsection (10) and insert— ("(10) Schedule 4 to this Act shall have effect as to the keeping of a macro-economic model by the Treasury.")

The noble Lord said: This Amendment was designed to improve wording which was accepted in the other place, but since then I see that my noble friend Lord Rhodes has further words on the Order Paper and if the Committee accepts his wording I shall be pleased to agree to that course. My noble friend's Amendment would have the effect of removing mine and, if that is acceptable to the Committee, it would be acceptable to me.

Perhaps I should make one point clear at this stage. It was said, I forget when, that the Government were accepting an innocuous Amendment simply to enable them in another place to remove an insertion that was made at a late stage of the Bill in another place. That is not the case. I said on Second Reading that we intended to improve the wording to make the provision more workable, and that was the intention of my Amendment. We do not intend to make any effort to remove the provisions in another place. However, before my noble friend moves his Amendment, I should explain that, while I am happy to accept it, we may have to change not the meaning but the wording. We shall come to that at the next stage. I beg to move.

Lord HAWKE

For the benefit of the more ignorant among us, I hope the noble Lord will explain what a "macroeconomic model" is. There are now more economists and statisticians in the Government service than ever before, and our economy is in a worse state than at any time I can remember since the war. It may be a coincidence or a consequence, but I should rather like to know what is this mysterious thing which the Treasury is supposed to keep, and whether it is merely a new name for a prognostication. Looking back over the series of White Papers and prognostications from the Treasury, very rarely have they been within a mile of the correct solution in the end.

Lord BESWICK

The definition of the noble Lord, Lord Hawke, is near the mark if he would accept the amendment that it is a computerised prognostication. However, I do not like the wording and I should prefer instead to accept the wording proposed by my noble friend Lord Rhodes.

Lord RHODES

Would my noble friend accept the wording as it is in the Bill?

Lord BESWICK

I am sorry if I have confused the Committee. I have moved the Amendment, but I understood that my noble friend would move his Amendment and, for my part, I shall be glad to accept it. I therefore beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Lord CAMPBELL of CROY

Could we perhaps have an explanation? The noble Lord, Lord Beswick, moved Amendment No. 166C and he now appears to be withdrawing it. Is that the position?

Lord BESWICK

I have withdrawn the Amendment, and have done so in the hope that we can accept my noble friend's Amendment, which is an improvement in wording and which I hope will be acceptable to the noble Lord, Lord Hawke.

Lord CAMPBELL of CROY

I did not understand that the noble Lord, Lord Rhodes, had moved his Amendment. He asked whether the Government were prepared to accept the wording in the Bill, which is somewhat similar to his Amendment.

Lord BESWICK

Possibly we might allow my noble friend to move his Amendment.

1.53 p.m.

Lord RHODES moved Amendment No. 166E:

Page 21, line 10, leave out subsection (10) and insert— ("(10) Schedule 4 to this Act shall have effect as to the duty of Ministers of the Crown and the Treasury to publish, make available and provide access to information and analysis.").

The noble Lord said: I had intended to withdraw my Amendment in the hope that my noble friend Lord Beswick would agree that the words in the Bill should stand. The present Amendment was only intended to follow the Amendment of my noble friend Lord Beswick, and in substance to put back what was already in the Bill, if my noble friend would be content that we should leave the Bill as it stands, I should be content as well. To save time, I should like to ask my noble friend whether that could be arranged.

The Earl of BALFOUR

It appears to me that the noble Lord, Lord Rhodes, has drafted his Amendment quite well. It seems rather better than that of Lord Beswick.

Lord BESWICK

That was my impression, and I hope that my noble friend will keep to his improvement. For my part, I shall be happy to accept it.

Lord CAMPBELL of CROY

I find myself in disagreement with my noble friend Lord Balfour—something which rarely happens. The noble Lord, Lord Rhodes, is proposing in his Amendment to revert to the wording in the Bill. I, for my part, should prefer to keep the wording of the Bill as it now stands rather than to amend it in this way.

Lord RHODES

Would my noble friend Lord Beswick put down an Amendment on the basis of the wording as it stands in the Bill? I am afraid we are a little confused. Does he think that my words are better than those in the Bill? I am only doing this for clarity, because it is very important that everybody should know where he stands on this.

Lord BESWICK

I believe that my noble friend will be helping the Committee if he presses his Amendment. It is an improvement on the words in the Bill and I am advising my noble friend to press the Amendment. I hope the Committee will accept it.

Lord CAMPBELL of CROY

On the contrary, I hope that the noble Lord, Lord Rhodes, will not press the Amendment, because his intention is simply to revert to what is already in the Bill. There is not much in it, but we should prefer what is already there. It seems unnecessary in view of what has been said by both the noble Lord, Lord Beswick, and the noble Lord, Lord Rhodes. What the noble Lord is trying to do is to leave the position as it is in the Bill, whereas the noble Lord, Lord Beswick, was trying to alter it. Now that the noble Lord, Lord Beswick, has withdrawn his Amendment and is not aiming to make that alteration surely the best thing for the Committee to do is to leave subsection (10) as it is. The noble Lord, Lord Rhodes, said at the beginning that that was what lie wanted to do.

Lord RHODES

I have moved the Amendment and I hope that it will be included in the Bill.

The DEPUTY CHAIRMAN of COMMITTEES

The Question is, That the Amendment be agreed to?

Lord CAMPBELL of CROY

In that case

Several Noble Lords: Order! The Question has been put.

Lord CAMPBELL of CROY

I was hoping to speak on this.

Several Noble Lords: Order!

1.58 p.m.

On Question. Whether the said Amendment (No. 166E) shall be agreed to?

Their Lordships divided: Contents, 44; Not-Contents, 52.

CONTENTS
Ardwick, L.	Elwyn-Jones, L. (L. Chancellor.)	Pannell, L.
Balogh, L.		Pargiter, L.
Beswick, L.	Feather, L.	Peddie, L.
Birk, B.	Gordon-Walker, L.	Pitt of Hampstead, L.
Bolton, L.	Goronwy-Roberts, L.	Rhodes, L.
Boyle of Handsworth, L.	Hale, L.	Ritcnie-Calder, L.
Brockway, L.	Hall, V.	Royle, L.
Bruce of Donington, L.	Harris, of Greenwich, L.	Shepherd, L. (L. Privy Seal)
Castle, L.	Henderson, L.	Stewart of Alvechurch, B.
Champion, L.	Houghton of Sowerby, L.	Stow Hill, L.
Chorley, L.	Leatherland, L.	Strabolgi, L. [Teller.]
Collison, L.	Llewelyn-Davics of Hastoe, B.	Wallace of Coslany, L.
Cooper of Stockton Heath, L.	Lovell-Davis, L.	Wells-Pestell, L.
Crowther-Hunt, L.	McLeavy, L.	White, B.
Davies of Leek, L.	Melchett, L.	Winterbottom, L. [Teller.]
Douglass of Cleveland, L.	Paget of Northampton, L.

NOT-CONTENTS
Aberdare, L.	Dundee, E.	Piatt, L.
Airedale, L.	Effingham, E.	Rankeillour, L.
Alexander of Tunis, E.	Elton, L.	Rcigate, L.
Amherst of Hackney, L.	Fraser of Kilmorak, L.	Robson of Kiddington, B.
Atholl, D.	Grenfell, L.	Rochester, L.
Balerno, L.	Hanworth, V.	St. Davids, V.
Balfour, E.	Hawke, L.	Sandford, L.
Balfour of Inchrye, L.	Hives. L.	Sandys, L. [Teller.]
Banks, L.	Hornsby-Smith, B.	Selkirk, E.
Brougham and Vaux, L.	Ironside, L.	Strange, L.
Campbell of Croy, L.	Long, V.	Strathclyde, L.
Cathcart, E.	Lyell, L.	Terrington, I..
Clitheroe, L.	Macleod of Borve. B.	Vickers, B.
Colville of Culross, V.	Massereene and Ferrard, V.	Vivian, L.
Cowley, E.	Merrivale, L.	Ward of North Tyneside, B.
Cullen of Ashbourne, L.	Monck, V.	Wigoder, L.
Denham L. [Teller.]	Ogmore, L.
Drumalbyn, L.	Onslow, E.

Resolved in the negative, and Amendment disagreed to accordingly.

2.7 p.m.

The DEPUTY CHAIRMAN of COMMITTEES (Lord Royle)

The Question is, Whether Clause 22, as amended, shall stand part of the Bill?

Several Noble Lords: No!

The DEPUTY CHAIRMAN of COMMITTEES

I am following my brief. The Question is. Whether Clause 22, as amended, shall stand part of the Bill?

Lord RHODES

Surely Amendment No. 166D has not been called?

The DEPUTY CHAIRMAN of COMMITTEES

I assure the noble Lord that I am carefully following my brief, and that that matter comes next after the Committee decides on the Question, Whether the clause shall stand part. The Question is, Whether Clause 22, as amended, shall stand part of the Bill?

Clause 22, as amended, agreed to.

2.8 p.m.

Lord BESWICK moved Amendment No. 166D: Divide Clause 22 into two clauses, the first consisting of subsections (1) to (9) and the second of subsection (10).

The noble Lord said: This is a most important Amendment. It explains the difficulty that was in the minds of my noble friends behind me. It simply seeks to divide the clause into two parts. Now we have agreed the clause, we can divide it into two parts. I beg to move.

Lord HAWKE

Would the noble Lord say why he wants to divide it? It is a rather unusual procedure.

Lord BESWICK

It is not all that unusual; we have already divided one clause into three parts. It was done simply to make it easier of reference. The clause is rather lengthy and it divides into two different matters.

Lord CAMPBELL of CROY

We for our part cannot agree that this is simply an editorial adjustment. The noble Lord, Lord Beswick, has just said that it was a lengthy clause, but in dividing it subsection (10) consists of only three lines. As we see it, the effect of making this a separate clause is to remove the Government's part in providing information. It would mean that this subsection, which concerns Ministers and the Treasury, would no longer be in the clause which, as stated in the rubric, is related to persons who have a duty to disclose information. When this was discussed at great length in the Committee and Report stage in another place, there was general agreement that where companies have this duty—and in some cases it can be an onerous task—of providing information, there should be some contribution by the Government. Of course the Government can assist not only companies but whole sectors of manufacturing industry by themselves providing some information from the centre. It was acknowledged that this was a joint exercise in which both Government and companies could take part. It looks as though the separation proposed by the noble Lord indicates that the Government are wishing to withdraw some of what might be called their part of the bargain.

We would very much deplore what appears to be just a matter of format because we see a far greater significance in it. We think it would undo what has already been accepted in another place, and which was certainly discussed there on this basis; that is, that the Government provide a certain amount of information and the companies have the duty of providing information, too. I very much hope that your Lordships will not accept an Amendment which, on the surface and as presented by the noble Lord, appears to be simply a matter of drafting. It is far more than that, and we certainly would not wish to see this done.

Lord RHODES

I sincerely hope that the Minister will withdraw this Amendment. The rubric to Clause 22, on page 19, is: Persons to whom duty to disclose information applies". It may have been overlooked that it is essential to state unequivocably and clearly in one clause the persons to whom the duty to disclose information applies. The duty applies both to Ministers and to companies. I do not think the noble Lord opposite made that point. I would be pleased if the Minister could look at it again and make absolutely certain that Clause 22 unequivocably means Ministers and companies. If that could be done, I would be satisfied.

Lord BOWDEN

I think this is a matter of great importance in principle. For many years the Treasury has refused to give the information on which it has based its economic forecast, even to other Ministries, much less to industry. I should like to ask whether, as a result of this Bill, the Government are going to be obliged to be much more forthcoming in giving to the whole of the Government as well as to other people who depend on Government decisions the information which the Treasury so jealously guarded and kept secret for so long.

2.14 p.m.

Lord BESWICK

I can understand what my noble friend Lord Rhodes fears and I can understand the point made by my noble friend Lord Bowden, but I cannot understand the noble Lord, Lord Campbell of Croy. He seems to be wanting to divide more and more about less and less. Of course we accept what Lord Bowden said: that there was an Amendment which was accepted (or, at any rate, put into the Bill) in another place which has the effect of making more widely available information known in the Treasury. There is no intention of going back on that. My noble friend Lord Rhodes had an improvement in the wording which I accepted, a very narrow difference between the words in the Bill; and for some obscure reason the noble Lord marshalled all his forces and voted against it. It was a most extraordinary procedure.

He is now proposing to divide the Committee simply because I am sugprocedure. He is now proposing to divide the Committee simply because I am suggesting that this matter be dealt with separately. We were, in Clauses 1 to 9, dealing with procedures. We are here dealing with a matter of some substance, of some importance. It will have its own separate rubric. If the noble Lord wishes to have it made clear in the rubric what is the intention, then I will confer with him to see that it is made clear. There is no intention of trying to belittle in the rubric what the clause sets out. To say that it cannot be accepted and there is something peculiar because we are proposing that it should be kept separate is beyond me.

Lord RHODES

I do not want to preempt any debate which should rightly take place and which I hope will take place on the Schedule because everybody in this House should have the opportunity of having his say on that. There was a tremendous majority in favour of it and it was put into the Bill in another place—on two occasions, not only in Committee but on Report stage—and it was all-Party. I do not want to start that debate now. On the assurance that the Minister will make it crystal clear in Clause 22 that the duty applies both to the Government and to companies I withdraw my objection.

The Earl of BALFOUR

At this stage I must support my noble friend Lord Campbell of Croy, because if you come back to Clause 22(1) it says: to further national economic policies, or needed for consultation between Government, employers or workers… I feel therefore that the Minister of the Crown and the Treasury shall publish what is provided in Schedule 4, which concerns Clause 22 more than any other part of the Bill, and which needs to be kept in Clause 22 and not made into a separate clause. He has a very good point and I must support him.

Lord DRUMALBYN

Apart from anything else, surely it would be wrong to deal with this in this way until we have dealt with the Schedules! If the noble Lord wants to make a change like this, there is no reason why he should do so at this stage, which is the wrong stage. Let us consider what is in the Schedules and what we are to do about them. Then let us see whether to amend this.

Lord CAMPBELL of CROY

I agree with what the noble Lord, Lord Drumalbyn, said. Clearly we need to have a debate when we reach Schedule 4, because there is a lot of new material tabled by the Government only last Wednesday. We can only make reference to it now. It is paving the way to Schedule 4 that we are discussing in the present subsection and Amendment.

The noble Lord, Lord Beswick, started by moving this as if it were just a drafting, editorial Amendment. Later, in his reply to Lord Rhodes, he said it was an important matter. Certainly I rate it, as I said earlier, as a matter of more significance than a simple editing of the Bill. For the reason I gave earlier, this is a matter which we must resist if the noble Lord is going to press it; although I hope he will not.

Lord BESWICK

I certainly will, as a matter of principle. I sent to confirm what was the origin of this Amendment. As I thought, it was from Parliamentary counsel, a drafting Amendment. If noble Lords opposite are going to be so fulll of suspicion that they will divide on a matter of this kind then I think it will not do credit to this Committee. This was a drafting Amendment. There is no other reason for it. That is why I did not even have a note on it in the first place. I am surprised that the noble Lord raises this matter. I can understand my noble friend being concerned lest the matter is kept completely separate and is belittled in some way. It is a separate clause because it is a separate matter. It is an important matter and it will have its own rubric. It is associated, of course, with the Schedule and not with the processes of the disclosure of information, which are quite different. I must tell the noble Lord that there is absolutely nothing at all covert about this, and I hope that he will accept the Amendment.

Lord CAMPBELL of CROY

I am sure there is nothing covert about it; and as regards draftsmen, I know very well that they carry out their instructions. They are instructed to do something, and they do it. In this case the alteration would have considerable significance. The noble Lord has said to his noble friend—

Lord BESWICK

May I—

Lord CAMPBELL of CROY

I do not want to repeat my earlier statement, but it removes from the Government an obligation, which they had themselves introduced earlier to contribute information. That is the point made by the noble Lord, Lord Rhodes.

Lord BESWICK

May I—

Several Noble Lords: Order!

Lord CAMPBELL of CROY

I have been on my feet for only a minute or two and I really must complete what I was saying. The noble Lord, Lord Beswick, in response to his noble friend, spoke about what would be in the rubric, but we cannot go into that now. That is not a matter for amendment here. But in response to what the noble Lord has just said, I think I have been extremely reasonable in the debates we have had, when a variety of opinions have been expressed and discussed from all parts of the Committee, and I have not tried to press my Amendment to a Division. I have said: "Let us have time for further thought and consultation between ourselves". In this case, it is quite clear to us that this is something we should oppose.

Lord BESWICK

I rose to ask the noble Lord a perfectly straight forward question. He said that my Amendment, designed to split the clause into two parts, removes an obligation. Would he have the goodness to tell the Committee exactly what the obligation is and how this splitting of the clause removes it?

Lord CAMPBELL of CROY

I shall now have to repeat very briefly what I said earlier. When the noble Lord first introduced this he simply said, in perhaps half a dozen words, that it was just a drafting Amendment. I then pointed out that by creating a separate clause

it removes subsection (10) referring to the duty of persons to supply information. Therefore, it looks as though the Government are withdrawing themselves from the category of persons who will supply information as their part of what was understood to be a joint exercise. That is exactly the same point as was made by the noble Lord, Lord Rhodes.

Lord RHODES

May I try to elucidate this? My fear on this, now to some extent relieved, was that the Government, through the Treasury, were playing down what they were merely obliged to do by a decision of the House of Commons. On this Amendment and this clause, if the Government can say categorically to us that there is no intention of playing down or getting out of something they were obliged to do by a decision of another place, then I am satisfied—as long as they will incorporate it and make it quite clear that the duties apply to Ministers as well as to companies. I think I would accept this, if I were the Opposition, if the Minister categorically assured us that it was not a device to play down this part of the Bill.

2.25 p.m.

On Question, Whether the said Amendment (No. 166D) shall be agreed to?

Their Lordships divided: Contents, 49: Not-Contents, 53.

CONTENTS
Ardwick, L.	Gordon-Walker, L.	Pargiter, L.
Balogh, L.	Goronwy-Roberts, L.	Peddie, L.
Beswick, L.	Hale, L.	Pitt of Hampstead, L.
Birk, B.	Hall, V.	Rhodes, L.
Bolton, L.	Hanworth, V.	Ritchie-Calder, L.
Boyle of Handsworth, L.	Harris of Greenwich, L.	Royle, L.
Brockway, L.	Henderson, L.	Shepherd, L.(L. Privy Seal.)
Bruce of Donington, L.	Houghton of Sowerby, L.	Stewart of Alvechurch, B.
Castle, L.	Janner, L.	Stow Hill, L.
Champion, L.	Kilbracken, L.	Strabolgi, L.[Teller.]
Collison, L.	Leatherland, L.	Wallace of Coslany, L.
Cooper of Stockton Heath, L.	Llewelyn-Davies of Hastoe, B.	Wells-Pestell, L.[Teller.]
Craigavon, V.	I.ovell-Davis, L.	White, B.
Crowther-Hunt, L.	McLeavy, L.	Wigg, L.
Douglass of Cleveland, L.	Melchett, L.	Winterbottom, L.
Elwyn-Joncs, L.(L. Chancellor.)	Pannell, L.	Wynne-Jones, L.
Feather, L.
NOT-CONTENTS
Aberdare, L.	Balfour of Inchrye, L.	Cowley, E.
Airedale, L.	Banks, L.	Cullen of Ashbourne, L.
Alexander of Tunis, E.	Beaumont of Whitley, L.	Denham, L.[Teller.]
Amherst of Hackney, L.	Campbell of Croy, L.	Drumalbyn, L.
Atholl, D.	Cathcart, E.	Dundee, E.
Balerno, L.	Clitheroe, L.	Effingham, E.
Balfour, E.	Colville of Culross, V.	Elles, B.
Elton, L.	Macleod of Borve, B.	St. Davids, V.
Fraser of Kilmorack, L.	Massereene and Ferrard, V.	Sandford, L.
Grenfell, L.	Merrivale, L.	Selkirk, E.
Hailsham of Saint Marylcbone,	Monck, V.	Strange, L.
L	Nugent of Guildford, L.	Strathclyde, L.
Hawke. L.	Ogmore, L.	Terrington, L.
Hives, L.	Onslow, E.	Trefgarne, L.
Hornsby-Smith, B.	Rankeillour, L.	Vickers, B.
Ironside, L.	Reigate, L.	Vivian, L.
Long, V.[Teller.]	Robson of Kiddington, B.	Ward of North Tyneside, B.
Lyell, L.	Rochester, L.	Wigoder, L.

Moved accordingly, and, on Question, Motion agreed to.

The DEPUTY CHAIRMAN of COMMITTEES

Before we proceed to the next Amendment I must announce that there was a mistake in a previous Division. The Contents were 46, not 44. The Not-Contents were 52. It makes no difference whatever to the ultimate result, but those are the figures which will be recorded.

2.34 p.m.

Lord MELCHETT

I spoke to Amendment No. 166A when I dealt with Amendment No. 163A. I beg to move.

Amendment moved—

After Clause 22, insert the following new clause:

Meaning of "representative" and "authorised representative"

".—(1) In this Part of this Act— authorised representative" means a representative of a relevant trade union to whom the company or companies concerned give—

1. (a)a notice of service of a preliminary notice, or
2. (b)a notice under subsection (2) below; and

representative" means an official or other person who is authorised by a relevant trade union to carry on negotiations about one or more of the matters specified in section 29(1) of the Trade Union and Labour Relations Act 1974 and who is suitable to act as an authorised representative. (2) If an authorised representative

1. (a)ceases to be a representative of the relevant trade union of which he is the authorised representative, or
2. (b)gives the company or companies concerned notice that he desires to be discharged from acting as authorised representative of that union, or
3. (c)ceases for any other reason to be available to act as that union's authorised representative,

it shall he the duty of the company or companies concerned—

1. (i) to give another representative of the relevant trade union notice that he is to 672 be the authorised representative of that union, and
2. (ii) to give the Minister a notice requesting him to insert the name of the new representative in the list of authorised representatives in place of that of the old representative.—(Lord Melchett.)

Clause 23 [Ditty to give information to Minister]:

Lord CAMPBELL of CROY moved Amendment No. 167: Page 21, line 18, after first ("to") insert ("the activities in the United Kingdom of").

The noble Lord said: It would be convenient to take Amendment No. 168 with this Amendment. Amendment No. 168 is on the same point but in different wording. We hope that it is the intention of the Government that the information which is the subject of this clause should be restricted to activities in the United Kingdom. Therefore, in Amendment No. 167 we propose that these words should be inserted in subsection (1) of Clause 23. If the Government think that Amendment No. 168 would he a better version, or if both Amendments are needed, we will gladly suggest that both should be included in the Bill. I seek an assurance from the Government that this is the intention of the clause.

If that is so, may I suggest that it would promote confidence if these words were inserted in the Bill. The Government may have a draft which they consider is superior to the Amendment we have suggested, and if they will table it at a later stage we shall be glad to see it. However, it could cause holding back and apprehension so far as overseas investment is concerned, and also to companies in this country which are considering their activities abroad, if it were not made absolutely clear that this clause is restricted to activities within the United Kingdom.

Lord BESWICK

I cannot accept the Amendment. I accept the principle and, if the noble Lord agrees, I will bring forward an Amendment on Report.

Lord CAMPBELL of CROY

I am extremely grateful to the noble Lord, Lord Beswick, for having considered this point and recognised that something is needed in the Bill. In view of his assurance about tabling an Amendment at Report stage, I beg to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lord MELCHETT

I beg to move Amendment No. 167A. This was dealt with with No. 149B.

Amendment moved— Page 21, line 18, leave out ("undertaking to which the order relates") and insert ("relevant undertaking").—(Lord Melchett.)

Lord CAMPBELL of CROY

Amendment No. 168 has already been discussed, and is not moved.

Lord DRUMALBYN

My noble friend Lord Orr-Ewing has asked me to deal with his three Amendments, but I should prefer to speak on the next Amendment and so I do not move Amendment No. 169.

2.37 p.m.

Lord CAMPBELL of CROY moved Amendment No. 170: Page 21, line 26, leave out ("or intended disposal").

The noble Lord said: I beg to move Amendment No. 170. I think it would be convenient if No. 172 in my name and that of my noble friend Lord Aberdare were considered at the same time. Amendment No. 170 deals with intended disposal and No. 172 with intended acquisition. The purpose of Amendment No. 170 is to inquire from the Government what these words mean. It is clear in this list of subjects from which the Minister can choose information which should be disclosed that a disposal of assets or acquisition of fixed capital are matters which could be dealt with under the system proposed, with the safeguards which are written into the screening machinery which we shall be considering later. But it is unclear what the term "intended disposal" is to cover. Companies may have very vague plans a long way ahead, perhaps highly speculative and confidential, and may just be discussing them and not be in a position to take decisions about whether they are intending to dispose of an asset or to acquire one.

What stage does the company have to reach in its intention? Has it to be something quite definite, all planned and ready to be done? I hope that that is the case, because otherwise it could be difficult for companies to have to give all the options. Many may have a great many options extending before them in their forward planning. I should be grateful if at this stage the noble Lord who is to reply to these Amendments could tell us what the Government mean by these words.

Lord LOVELL-DAVIS

The acquisition and disposal of fixed assets are decisions essential to a company's business and therefore essential to its future plans. Both Government and workers in a company will be concerned to know what the company intends to do by way of acquisition and disposal, since many other issues will be determined by these key decisions. Scale of output and of exports and level of employment will all be affected and to some extent decided by the decisions the company makes as to acquisitions and disposals. This would provide the Government with information needed to formulate an industrial strategy for a particular sector. This is not available at present under the voluntary investment surveys carried out by the Government. The Government therefore believe that acquisition and disposal of fixed assets are sufficiently important for them to be listed as a subject in themselves.

To answer the noble Lord, Lord Campbell of Croy, specifically, the power to require information in respect of acquisitions and disposals must extend into the future. To obtain future information is the purpose and effect of the words "intended disposal" and "intended acquisition". To delete these words would, therefore, severely restrict the scope of the powers. So far as the interpretation of the world "intention" is concerned, the noble Lord must be aware that there is a difference between a speculative possibility and an intention. An intention is something the company has decided it will do, and it will do it if the circumstances work out right. I hope that that has clarified the matter and put the noble Lord's mind at rest.

The Duke of ATHOLL

Although the noble Lord may think it clarifies the matter, I believe it is extremely difficult for any company to forecast very far ahead on its intended acquisition or, for that matter, disposal of fixed assets, because things like a downturn in the economy, causing a shortage of cash available for investment, can easily make a company change its mind about disposing of somewhat dated fixed assets and replacing them with more modern ones, as we all know only too well at the moment. It would be useful if the Government would give some indication of how far ahead they think the word "intended" covers. This is a great difficulty. Many companies, particularly at times like the present, would find it difficult to forecast ahead which fixed assets they will be able to dispose of and which they will be able to acquire instead.

Lord DRUMALBYN

I find great difficulty in seeing how this can possibly work. The noble Lord, Lord Lovell-Davis, has made it quite clear what the Government want to know about decisions for future acquisitions or disposals. He further qualified that by saying words to the effect of "contingent upon certain events happening"; in other words, provisional decisions. As soon as you get into the provisional area, you run into the greatest trouble. By announcing that there are such contingent decisions, you will affect the practicability of carrying them out. If this becomes known publicly, things will very likely be rigged against you and you will not be able to do what you want. Confidentiality is extremely important in this area, and I must impress this very seriously upon the Government.

For example, if it is known that a company is anxious to dispose doubt begins to be cast upon its prosperity and the way in which things are going. This would be highly inadvisable. It would give rise to all kinds of speculation, and probably have an effect on the shares of the company. But, even more important, it will have an almost certain effect on its ability to carry out its contingent intention. This has to be borne carefully in mind. May I ask the noble Lord another question? When we are talking about the information to be obtained, if we refer back to the beginning of Clause 23 we see: A Minister…may by notice require the company or companies concerned to furnish him…with such information as may be so specified… This could mean that the only question the company was asked is, "Are you intending to make any disposals or acquisitions?" Or it may be even more specific than that. On the basis of rumour, the question may be, "Are you intending to acquire this or to dispose of that". The answer you would probably get is: No, because the final decision has not been taken. We are all well aware, for example, of cases where almost the day before a devaluation of the pound the Government have said, "We have no intention of devaluing the pound". How can they possibly expect to get this kind of information from the companies? The situation is exactly the same.

Lord BRUCE of DONINGTON

My noble friend seems to have made the position perfectly clear in regard to this. The disposal of a company fixed asset, or its acquisition, is normally the subject of a board resolution. When the resolution has been passed for the asset to be acquired or disposed of, this is the formal expression of the company's intention, and all the considerations of uncertainty as to what would happen when this becomes disclosed have already been in the minds of the board of directors when the decision has been made. As I understand the position from my noble friend, the intended acquisition or disposal is in itself expressed by formal board resolution in other words, it is not a speculation which is in somebody's mind and not yet formalised. I should have thought that with the assurance my noble friend has already given, as I understand it in the sense that I have expressed it, noble Lords opposite ought to be satisfied.

Lord DRUMALBYN

Perhaps I could make one point. The noble Lord, Lord Lovell-Davis, went a little further than simply a firm decision. His last words were to the effect that, "If something happened, they would acquire", or something like that in other words, a contingent decision, which is not quite the same thing.

Lord BRUCE of DONINGTON

But that can happen in any case. The board can pass a resolution expressing a decision to dispose of an asset, and there is nothing to stop the board within a couple of days revoking the resolution.

Lord DRUMALBYN

The point is that the language here is perfectly specific; it is an intention. An intention to acquire must be a firm decision—I do not say an irrevocable one, but a firm one. The noble Lord, Lord Lovell-Davis, added qualifying words.

Lord BRUCE of DONINGTON

The intention is a corporate intention.

Lord LOVELL-DAVIS

I wonder whether I could bring this exchange to an end. The position is that if the company has not formed a positive intention to acquire or dispose of assets, it can answer quite truthfully that it has not any intention to acquire or dispose of assets. I hope that that resolves the matter. The noble Lord, Lord Drumalbyn, also raised the point of damage as a result of this information being made available. This is fully covered in Clause 24: …substantial injury to the undertaking…substantial injury to a substantial number of employees of the undertaking. The noble Duke asked how far ahead this information would have to be provided. I think anybody who has been involved in forward planning in management will know that it is extremely difficult. The point at which a positive intention is made to acquire or dispose of assets is the point at which the intention can be stated as clear. If it is speculation in a ten-year projection or a five-year projection, that is all it is and it is not a positive intention. This is much shorter term.

The Duke of ATHOLL

Before the next stage, could we consider using some word other than "intention", such as "commitment"? It is the word "intended" which causes difficulties, because most companies have fairly longterm plans, and they intend to dispose of or to acquire fixed assets, but very frequently, in the light of the economic situation nearer the time, they have to alter those intentions. When companies are faced with a document from the Government asking what their intentions are, most of them try to reply truthfully, but the word "intention" does not seem to me the appropriate word for a fairly well-defined commitment. I should have thought that between now and Report stage it might be possible to find some more appropriate word.

Lord LOVELL-DAVIS

I do not think the word "intentions" comes into this at all; it is "disposal or intended disposal". The Government are well aware of what happens in business. I personally have spent most of my life in business. I know the distinction between a long term plan a short term plan, and a positive intention on the part of the board to acquire or dispose of assets. At that point, if required to provide the information, the company must truthfully say that it has the intention to act "as follows".

Lord CAMPBELL of CROY

I noticed that the noble Lord, Lord Lovell-Davis, agreed with what I said, that the acquisition and disposal of assets, when it is taking place, is clearly a subject which is quite reasonably one to be included in this list. He then said that the intended disposals and acquisitions were to be those where decisions had been taken for the future. That was some assurance that the vague plans of a company, or possible options, are not to be included in this clause.

My noble friend Lord Drumalbyn pointed out that this is an area where justifiably there could well be objections from companies because of the sensitive nature of this information. It is a difficult area, and when one of the noble Lords on the Government Front Bench earlier stated that he expected the machinery in these clauses to be invoked only on rare occasions, I can point out that if information of this kind is often going to be requested companies must be expected to be objecting to some of it because it is an area, as my noble friend pointed out, where some information, if it got into the hands of competitors, could be damaging to a company.

Lord LOVELL-DAVIS

Given the qualifying circumstances in which the Secretary of State, or the Minister, would require different information in these unusual circumstances, then surely it is even more relevant to him to have information of this sort as to the intentions to acquire or dispose of assets.

Lord CAMPBELL of CROY

I recognise that there may be some cases where a Minister will be asking for this information, and it may well be something which the Minister himself needs; but when it comes to the point where it is being considered for transmission also to, as we think, employees of the company, as the Government think certain trade union representatives, if it passes through the screening machinery it is likely to become public knowledge later. If on many occasions the Government are going to try to obtain this kind of information, they must recognise that it is an area where, as my noble friend Lord Drumalbyn pointed out, there are bound to be a number of objections. Therefore, if it is information which the Minister wants to pass on, or to be passed on to employees' representatives, companies will be pointing out through the machinery that we eventually devise in this Bill the serious, injurious effects which it could have upon them.

I am not entirely satisfied with what the noble Lord has said to us here, but he has given us some assurance and it has enabled an important matter to be ventilated and the Government's view to be given. I now beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

2.55 p.m.

The Earl of BALFOUR moved Amendment No. 173: Page 21, line 31, leave out ("output") and insert ("efficiency").

The noble Earl said: My understanding of the word "productivity" is a relationship between inputs and outputs. As a matter of interest, that is made clear in Report No. 36 of the National Board for Prices and Incomes. I feel that a much more suitable phrase here would be "efficiency and productivity", because we must surely consider a company's efficiency. One of the most regrettable things about this Bill is that, despite all the information that is being sought, not a word has been said about such things as time and motion studies, conditions of employment and health hazards. I am surprised that a Labour Government, introducing what is called the Industry Bill, should have left out of account such items which are so vital to the worker on the shop floor. It is a Bill concerned with industry, yet there is so little in it about these aspects which affect those who work in industry.

Lord LOVELL-DAVIS

I fully accept the case which the noble Earl makes about the importance of the efficiency of an undertaking. This is, of course, extremely important to the Government and to workers, and the Government fully recognise this. Indeed, that is why there is the word "productivity". This is a wide measure of efficiency; it covers both labour and capital productivity and is capable of allowing non-specific questions to be asked about particular measures of productivity appropriate for certain types of efficiency. Nothing would be gained, therefore, by adding "efficiency" as "productivity" covers the same ground. However, to delete "output" would lose a valuable item from the list of subjects about which information may be sought. I hope, therefore, that the noble Earl will accept my assurance and will withdrawn his Amendment.

Lord CAMPBELL of CROY

Before my noble friend Lord Balfour considers that course, may I point out that I had several points to raise about the question of productivity, but I thought of raising them when we came to the clause stand part? I have been wondering whether it would be helpful if the Government, having put so many definitions in the Bill, tried to find a definition for "productivity". I know this has been difficult in the past, not in legislation but in the deliberations of various commissions, because people's ideas of what productivity is can vary. I would ask the Government at this stage whether the clause can be clarified by a definition of productivity, even if it is only for the purposes of the clause or the Bill.

Lord LOVELL-DAVIS

I believe that this is an extremely difficult word to define specifically. The noble Lord is plainly more aware than I am of the difficulty which there has been at this sort of level in defining it. However, we will certainly have a look to see whether there is any better definition, though do not feel that we stand much chance of success. I undertake to have another look.

Lord CAMPBELL of CROY

I thank the noble Lord for that undertaking. It is not easy, but I am grateful to him for saying that he will look at it.

The Earl of BALFOUR

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Earl of BALFOUR moved Amendment No. 174: Page 21, line 32, at end insert ("and exports of those products, if carried on by the undertaking").

The noble Earl said: What I am doing here is to group the sales of an undertaking's products and the exports of those products if they are carried on by the undertaking itself. That is the object of the Amendment. There is many a manufacturing industry which sells its products through some service industry or export/import agency and, in many cases, once the product has left the factory gates, the company has no idea where they are exported to or anything else. To give a very simple example, once I have sold 50 tons of barley or wheat off the farm I may have little or no idea for as long as four or five months where that grain went to. On the occasion I remember it had gone by sea to Belgium and on another it had gone as far as Cornwall from Scotland.

These matters are completely outside the control of industry and that is why I feel it important to relieve the undertaking of the burden of trying to find out information which could be costly and very exacting if it does not carry out the exports or the sales side itself. If that is the case, they should be relieved from this lengthy list. I beg to move.

Viscount MASSEREENE and FERRARD

What my noble friend says is true enough if one sells barley or wheat hut, if one is a manufacturer—and I have been both—and one sells one's goods to a wholesaler and the latter exports them, one can always tell where they are going, or, at least, one can always find out.

Lord LOVELL-DAVIS

Dealing with the point raised by the noble Viscount, Lord Massereene and Ferrard, this is a legitimate addition. Manufacturing companies can and do export their products. I recognise the point made by the noble Earl and I undertake to look again at the drafting of this part of subsection (2). The point which has been made is a fair one and the Government wish to consider whether it is best to meet it on the lines of the Amendment or on the lines of Section 20 of the Companies Act 1967, which makes an exception for exports made by a company acting as an agent for another person. If the noble Earl will agree not to press the Amendment now, we will undertake to return to this point on Report.

The Earl of BALFOUR

I am most grateful to the noble Lord for what he has said because this is an important point. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Earl of BALFOUR had given Notice of his intention to move Amendment No. 175: Page 21, line 33, leave out paragraph (1).

The noble Earl said: I should have moved Amendments Nos. 174 and 175 together. It was a misunderstanding on my part, for which I apologise. I propose not to move Amendment No. 175.

3.6 p.m.

Lord DRUMALBYN moved Amendment No. 175A: Page 21, line 38, leave out paragraph (k).

The noble Lord said: I should like to move this Amendment on behalf of my noble friend Lord Orr-Ewing. In his speech on Second Reading—which no doubt the noble Lord who is to reply on behalf of the Government has looked at again—he made it clear that he was very anxious about the disclosure of any research and development that was taking place. It is obviously very important for a firm to play their cards very close to their chest, as my noble friend put it. If it becomes known that a firm is undertaking a piece of research or development, other firms may well get going on it and try to beat that firm to it. It would also cause a good deal of speculation as to what is to come about as a result of the research and what the effects will be on the market, and so forth. This is of particular importance in technological engineering matters, where the costs of research are so very high, and for a firm to be beaten to the post in patenting something on which it has been spending years of research is very serious. Divulging information about such a matter can be very serious for a firm.

I appreciate that the Government will be fully aware of this matter, but I wonder why they felt it necessary to include this paragraph, especially in the form they have. Would the noble Lord be good enough to explain this? I beg to move.

Baroness HORNSBY-SMITH

I wish to support my noble friend on this issue, because in many cases research is a very lengthy business. It may take years to evolve a new and revolutionary machine tool, or a new fibre, or a new motor car. It is a long-term process, and after the pilot stage when field tests are being carried out a great deal of money is involved. The mere knowledge that a firm is spending a very considerable sum of money—running into many millions of pounds—immediately acts as a red light to a competitor that that firm is on to a winner. I recall that a few years ago a document was published by the Department of Trade, dealing with British "firsts"; and our inventiveness has always been of enormous value to us. I think that the document is still published. One item that I recall in that document was the disclosure that America and ourselves were both trying to make an even better undersea cable. The American one was of only half the speed and half the lines of our new one. It would have been worth a great deal of money for the Japanese, or the Americans, to have got wind of our great development in the best and most modern cables.

We must look at this matter very seriously in order to protect our inventiveness, and to ensure that it is not disclosed beyond areas where it will obviously be safeguarded by loyal members of the company, who bear in mind their own livelihood. This happens every day. Members are loyal to their own company. They honour the secrets and the knowledge they receive, or the information on the prototypes they are making. One cannot be assured of that if it goes beyond the company. This matter should be considered again very closely.

Lord MELCHETT

I accept that there is a real worry about this matter, but I hope that I can set at rest the minds of the noble Lord and the noble Baroness. The subjects listed in Clause 23 have been chosen as those likely to be central to the main decision of a company. Therefore I must tell the noble Lord that the Government are opposed to Amendments which seek to restrict the informa- tion within narrower confines than those set out in Clause 23(2).

This applies in particular to Clause 23(2)(k) which deals with expenditure on research and development programmes. This item was added to the list in response to strong arguments adduced in Committee in another place that this was a topic of great significance. The Government accept this, and believe that for a proper coverage of the most important of a company's affairs they should be able to seek information about research and development.

I should like to emphasise that the powers could not be used to require the disclosure of the substance of the know-how, process, technology or invention. In the Bill we have deliberately spoken of expenditure on research and development to make it clear that we are not seeking details of the process or the discovery. We provide in subsection (5) explicitly that this is not a power to obtain information about the details of know-how or of any research and development programme. I hope I have answered the point which the noble Lord raised.

The Earl of BALFOUR

I do not think it does. If, for example, you decided at the end of the year that a balance sheet shall be produced or that the expenditure that may have been in the company's balance sheet is all that should have been disclosed. As it is worded, the expenditure on research and development could be asking for a lot more information which could be just the sort of information which our competitors are looking for.

Lord MELCHETT

What sort of other information does the noble Earl think the words at present in the Bill would enable the Government to ask for?

The Earl of BALFOUR

It is the disclosure of the expenditure on research and development which I think is just what a competitor might leap on to—"This company is spending £2 million in research on a certain product", and they immediately get all their boffin boys on to that.

Lord MELCHETT

I am sorry to interrupt the noble Earl again. As I understand it, all that we would be able to ask a company for is the amount of money which it is spending on research and development. We would not know the product on which the money was being spent so there would not be any chance of a competitor saying, "Company X is spending so many million pounds on developing a product". If these powers remain in the Bill, all that will be known is the total amount of money being spent on research and development.

Baroness WARD of NORTH TYNESIDE

Then would the noble Lord explain what advantage it is to the Government to know this?

Lord BERNSTEIN

It is essential that we should know what money is being spent on research. One of the problems is that insufficient money has been spent on research, and sonic money spent on research, as the noble Lord, Lord Rothschild, said last year, has been badly spent. It is essential that we should know this in order to say whether the NEB have done a good job or a bad one.

Lord DRUMALBYN

Is it necessary to have it in its present form? Could it not he obtained from a certificate of trade?

Lord BESWICK

In that case, why object to it being given here?

Lord DRUMALBYN

For the very good reason that you cannot identify a particular company from certificates of trade. You will only achieve what the noble Lord wants to achieve, which is to get the overall figure. This is the purpose of certificates of trade.

Lord BESWICK

May I ask the noble Lord what is the conceivable value of knowing the overall industrial expenditure if we do not know it in reference to a particular company? For example, there is a discussion about the pricing policy and the company argues that a price is insufficient to permit adequate expenditure on R and D, and you ask, "What is your R and D expenditure?" They say, "We are not going to tell you that". Unless you know that, you do not know whether they already have sufficient money available for an adequate R and D programme. Surely the noble Lord, Lord Drumalbyn, would know that you cannot assess the overall competence or efficiency of a company unless you have some idea as to the amount it is spending on R and D. Moreover, there may well be a situation where for national reasons you want to encourage a company to have a bigger R and D programme and you want to know what the figures are before you can come to a conclusion about that.

Lord DRUMALBYN

I tried to make it clear to the noble Lord, Lord Beswick, that I was only answering the question his noble friend raised as to the insufficiency overall of research expenditure.

3.15 p.m.

Lord CAMPBELL of CROY

I think this is an important point and I am glad that my noble friend has raised it in the absence of my noble friend who could not be here himself to move the Amendment. I have two points to make. First, the noble Lord in his reply said it was important that the Government should know what a company is spending on research ands development; and that raised the question whether this includes future intentions, because this could be very sensitive. If it is a question of the Government being asked what they spent last year, or in the last five years, that would not be in most cases as sensitive as asking what are the intentions to spend five years ahead. I would ask for some explanation of that, because it is unclear in the Bill at present.

Secondly, I agree with the noble Lord, Lord Beswick, that the Government need to know some of these things; but the point about Clause 23 is that this is information some of which is to be retained by the Government but other parts of which are to be suggested by the Minister to be passed on to a much wider circle of people when, as was agreed earlier, it becomes public knowledge. That is why industry is more concerned about this clause than about the ordinary arrangements that have continued for many years, where companies have been able to supply the Government and Government Departments with information in confidence which they know will be respected. We must look at this clause in a different light, because it is intended that information may also, if it goes through screening machinery, eventually become public. I understand that in another place the Bill was changed, because originally it included research and development itself, and that the Government agreed that information about research and development itself need not be sought in this clause.

Again, I am sure that the Government, through their own arrangements, receive information from individual firms quite apart from what is proposed in this Bill. That is why there is a clear division between what is going into this Bill and is associated with disclosure, and what is going to the Government to be retained in confidence by the Government. I hope that the noble Lord will be able to answer the points I have raised, and that the Government will recognise that this is a very sensitive area. Again, when companies provide information of this kind they may well object if sensitive parts of it are suggested for passing on compulsorily to what will virtually be the public.

Lord MELCHETT

We accept that this is a sensitive area. I started by saying that there is a real fear here in the point raised by the noble Lord, Lord Drumalbyn. If a company could show that it would cause substantial injury to disclose information about expenditure on research, it could argue that this should be withheld for special reasons. The noble Lord, Lord Campbell of Croy, mentioned the screening procedure, which is something we are coming to in future Amendments. That would be the moment to discuss the safeguards which will apply, and if any substantial damage is to be caused to a company or its employees there will be an overwhelming argument for the information not being revealed. We accept that this is important and I do not think there is anything between us on that.

The other point—and I should have made this earlier—is that this would enable the Government to ask for information about future expenditure, again with the safeguards which I have just mentioned applying. It is absolutely essential in our view, when we come to assess the competence of a company, to be able to know their long-term investment plans in research and development. It is only with that information that we can make a sensible decision about the company's competence. That is why what is in the Bill goes beyond merely looking at statistics collected about past expenditure. I should like to end by emphasing the safeguarding and screening provisions which the noble Lord, Lord Campbell of Croy, mentioned, and to suggest that the time to discuss them is when we come to those Amendments.

The Earl of BALFOUR

There is quite a problem here, particularly of longterm investment or productivity in a longterm programme. I well remember that in a firm in Scotland we were involved in the early development of producing the wire that goes into the reinforcing of tyres. The company developed its production in this field and we increased our output out of all recognition. We increased our labour force and everything else, and were making a handsome profit out of it. Then at least five other companies also started production and be-because of one fault in our works we decided it was going to cost us too much to continue producing this product. Having built up production over six months from 5 tons to 25 tons per week, after a period of two years our production of that quality wire is now back to the original five tons. The whole thing went phut! This can happen so very easily in industry, and it is most unkind to ask for any long-term project to be put forward, particularly in cases, as I fear, where the company concerned might suffer considerable loss—if in no other way than by loss of confidence in the Government to whom knowledge has been disclosed.

Lord MELCHETT

With great respect, I do not see the relevance of the case of the company which the noble Earl has put before us. Apparently, there was no question there of information of long-term expenditure on research and development leaking out in some way and leading to a cut-back in production. That is surely the worry with which we are concerned at present, because noble Lords are saying that if it is known how much money is being spent on the development of a particular project—and I have already said that I do not think the powers will necessarily enable us to know that anyhow—there would then be a danger of competitors seeing that a particular company was spending a lot of money on some future project and being alerted in some way. I have already said with great care that if a company can show that a substantial loss will be caused by disclosure of information—and in the case quoted by the noble Earl it is clear that a substantial loss was sustained by the company, although I do not think this is really a parallel situation to the one we are discussing—then the information will not be disclosed to anyone and there are no grounds for fear.

Lord DRUMALBYN

I am grateful to the noble Lord for his clear explanation of the Government's attitude over this. Of course, it is one thing for the expenditure on research and development by a large company to be divulged, because it is probably researching into a great many different things. It is rather different for the smaller company, because probably they cannot afford to research into more than one or two things at a time. I am sure the noble Lord will be aware of this difficulty, and I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

3.24 p.m.

Lord CAMPBELL of CROY moved Amendment No. 176:

Page 22, line 6, at end insert— ("( ) Any expense reasonably incurred by a person served with a notice under subsection (1) above in assembling and furnishing the information shall be refunded to him by the Secretary of State.")

The noble Lord said: This brings us to the question of what happens if companies are out of pocket by carrying out the purposes of this clause and, if they are, what is the extent to which they have to spend money without its being refunded. At present, as I see it, there is nothing in the Bill which covers this side. It could well be that in certain cases the company might go to considerable expense to provide information which they are quite willing to supply and which they recognise is needed by the Government: indeed, they may well see no harm in its being passed eventually to representatives of employees. But we ask whether there is to be any provision for refunding the company for expenses incurred in doing this. If so, whether this will be added to the Bill, and what the provisions will be. I beg to move.

Lord MELCHETT

I was going to suggest that Amendment No. 181 could well be spoken to with this Amendment.

The Earl of BALFOUR

I trust I am, not upsetting my noble friend Lord Campbell of Croy in his Amendment. We are on a similar point. His Amendment is slightly more broad than mine. But I particularly chose my own Amendment No. 181 as an example, and I should like to use it as such.

The object of my Amendment was that, so far as I could see, there was nothing to prevent the Minister making an order under Clause 22, requiring only one company or undertaking to furnish him with any of the information he required in Clause 23(2). I felt very strongly that if that company has obviously been put to a lot of expense, as the noble Lord, Lord Campbell of Croy, just pointed out, then it must be able to reclaim that expense if it can satisfactorily say there has been no financial gain by the obtaining of such information.

Let us be a little more explicit. There is a vast number of companies making all kinds of bricks. One of the few trick-making companies in which, up to a few years ago, there was quite a high profit was that concerned in the making of high quality fire bricks, a lot coming from the Falkirk area of Scotland. So far as I can see, there is nothing to prevent the Government making an order asking one of those companies to supply the information required in Clause 23(2). The company has gone to a lot of trouble to obtain this information.

Again, if I may be a little more specific, not so long ago we went over to metric measurement. Much to my surprise, although the metre is three inches longer than the yard, it was then decided to make bricks a little smaller, so that in fact we finish up with the brick, allowing for mortar and so on, complying to roughly 0.9 of a metre, which seems to me crazy. Whether there is uniformity throughout Europe is something I am investigating, but so far there seems to be little uniformity. However, there could be quite a lot of development in new machinery and so on to comply with a world standard. I feel the Government might push this on to the one firm in Scotland producing firebricks.

Furthermore, as far as I can see from the provisions of this Bill, the Minister could then take advantage of this information, and the National Enterprise Board could form their own company, for argument's sake, in a depressed area of South Wales—not that I am saying South Wales is necessarily depressed, but they might find the right kind of clay there. The Board might set up in competition with the makers in Scotland. If the firebrick makers in Scotland, which I have chosen as an example only, could prove that they have had no financial gain, then I think they jolly well deserve to be compensated for all the effort, trouble and expense they have had to go to in order to provide this information.

3.29 p.m.

Lord MELCHETT

Both Amendments Nos. 176 and 181 would enable the company required to provide information to the Government under Clause 23 to claim reasonable expenses from the Government. I think the differences in detail between the two do not obscure their central point, and it is that which we must consider. The Government do not look upon the furnishing of information by key companies as an unreasonable demand to make on them for which they should be recompensed. Rather, this is a social duty which key companies should discharge to the community.

I have explained that the Government hope that normally information would be provided voluntarily. Indeed, I think that is the hope and expectation of noble Lords on both sides of the Committee. In our view, it would be extremely odd, incongruous and, indeed, extremely unfair, if those companies which discharge voluntarily their duties to society bore their own expenses, whereas those who provide information only under Statute were recompensed. Once I have outlined the situation, I think that noble Lords opposite will see that that is patently absurd.

There are numerous precedents for Government requiring information to be disclosed without recompensing firms. The Statistics of Trade Act 1947, the Companies Acts of 1948 and 1967 and the Counter-Inflation Act 1973 are obvious examples where information has been provided by companies without any expenses being paid by the Government.

Lord BRUCE of DONINGTON

May I draw your Lordships' attention to the fact that the information required under Clause 43 should be readily available, in all but two cases, in those companies, anyway. The costs of extraction of the information which is set out in the various paragraphs of subsection (2) are minimal. Only typing time and selection are required to provide the information. I readily concede that the information which is required under Clause 23(2)(f) and (k) may need a little research in the case of some firms, in order to obtain the data required by the National Enterprise Board. However, once extracted and made available in this way, the information would be of immeasurable benefit to the company itself. It seems to me that there is no case for obtaining Government reimbursement in respect of any marginal costs which are incurred.

Lord LEATHERLAND

My noble friend Lord Bruce of Donington speaks with the authority of a chartered accountant. I speak with the more humble qualification of an accountant who was once in charge of a fairly big costing system. It seems to me that if the accounts and costing systems of an organisation have been properly conducted, it would be a matter of only a few minutes of an accountant's time, and an hour or two of a typist's time, before this information was made available. In any case, the administrative expenses involved in the salary of the accountant and the typist would appear on the expenditure side of the company's statement of accounts, and would therefore benefit it in so far as its ordinary taxation was concerned. If this Amendment is accepted, I shall forthwith put in a plea for the expenditure and time involved in making out my income tax return each year.

The Earl of BALFOUR

I see that the Amendment standing in the name of my noble friend Lord Campbell of Croy is very much wider than mine, which is Amendment No. 181. I must draw your Lordships' attention to my Amendment. It says, Where a Minister has made an order under section 22"— I was going to move that Amendment only if the information was not easily available— requiring only one company or undertaking to furnish him with any of the information under subsection (2) above…". I feel that a company should certainly be able to claim any reasonable expenses if and only if—it can satisfactorily show that it has obtained no financial gain by obtaining such information.

I have already said that the information in Clause 23(2) is just the kind of information that the Government could obtain quite easily from a company. On the other hand, even in those cases which I have had to deal with in industry, one can go to a great deal of expense to obtain this kind of information, which might allow the Government to decide whether the National Enterprise Board should form an undertaking to compete directly with it. So far as I can see, this is exactly the state of affairs. To ask a company to go to all that expense and trouble without getting any financial reward at all out of it is being unreasonable. If the company can supply the information quite easily, fair enough. But to demand it under an order, which can involve a lot of expense, is being unreasonable.

As it is, companies have to employ a vast number of people to supply the Government with the information which they require by law at the present moment—on income tax returns, PAYE, all the employee statistics, and so on. To demand this additional information, when a company may gain nothing and it may be purely to the advantage of someone else—an ulterior motive could possibly exist—is being most unreasonable.

Lord CAMPBELL of CROY

The Minister has made it clear that this is not a matter which the Government are prepared to consider. So far as I am concerned, this was a probing Amendment. Of course, I accept that where expenditure is derisory and minimal, as the noble Lord, Lord Bruce, has indicated, this point does not really arise. But he himself admitted there might be cases where a company incurred some expenditure, because the Minister required the company to furnish this information, which meant assembling it and collecting it in the first place.

There is a difference between the voluntary system and the compulsory system. In the reply it was stated that it would be unfair to those who were transmitting information within their companies on a voluntary basis. But there is a difference when a Minister, in addition to what the company is doing itself in transmitting information, requires information to be submitted to him and serves a notice. All I would do at this stage is to indicate that there could be cases of considerable expenditure, and hope that the Government will bear this point in mind and put them in a separate category from companies which are carrying out their own arrangements voluntarily. I therefore beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The DEPUTY CHAIRMAN of COMMITTEES (Lord Nugent of Guildford)

In calling Amendment No. 177A in the name of the noble Lord, Lord Beswick, I should explain that if this Amendment is agreed to I cannot call Amendment No. 178.

Lord BESWICK

Amendment No. 177A is an Amendment which my noble friend was going to move. So far as I am aware, it is a drafting Amendment. We took it with No. 163A. I beg to move.

Amendment moved— Page 22, line 8, leave out ("a") and insert ("the authorised").—(Lord Beswick.)

3.39 p.m.

The Earl of BALFOUR moved Amendment No. 181:

Page 22, line 8, at end insert— ("( ) Where a Minister has made an order under section 22 above requiring only one company or undertaking to furnish him with any of the information under subsection (2) above, that company shall be able to claim any reasonable expense if it can satisfactorily show that there has been no financial gain by obtaining such information.").

The noble Earl said: May I say just a few words on this Amendment? I feel I must ask the Government to look at this matter very carefully again. Where they may demand information from one or two companies, I feel that the situation needs to be specially considered. If three or four companies can combine to obtain the information they can spread the expense among themselves, and one company alone is not put to a great deal of trouble. But if you are asking only one, which so far as I can see is perfectly feasible within the provisions of the Bill, then I ask the Government to consider this again between now and Report stage. I beg to move.

Lord BESWICK

Since the noble Earl has raised the question of a situation where there may be three companies in the country involved in a particular industry or a particular service—and there are an extraordinary number of situations now where three or four companies have a monopoly, or a near monopoly—two of the three may give the information voluntarily while the third one does not. In the third case it will be necessary to invoke the powers of the Bill. According to the noble Earl's Amendment, the third company—the truculent company—without whose information the total information is valueless, would have their expenses paid and I should have thought that that was unreasonable. Nevertheless, my noble friend has said that we will look at this. I doubt whether there is anything in it but I support what he said and we will consider it.

The Earl of BALFOUR

I realise that perhaps I have gone wrong in the drafting, but I hoped I had made it perfectly clear that the point I am trying to make is where the Government require the information from only one company. Perhaps my drafting is not quite right and I certainly need to think about it again. Where they have asked three or four companies and three have given the information and the fourth one has refused then I support what the noble Lord, Lord Beswick, has said. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 23, as amended, shall stand part of the Bill?

3.42 p.m.

Lord CAMPBELL of CROY

I wish to say a few words on this clause. This includes the subjects, some of which we have been discussing, on which information may be called for by the Minister, and indeed insisted upon by the machinery of the Bill. I would say straight away that this is a very reasonable list of subjects where information for Government Departments is required and information for the Minister concerned in his Department. But it is from this same list that the Minister decides what information should also be extracted and passed to employees and therefore eventually, if it is screened and cleared, made public. Of course it is that which makes it sensitive, because of the difference between something being in a Government Department and held confidential, and something which gets much wider circulation and is, as we agreed in an earlier debate, public knowledge.

When we come to the screening machinery and the safeguards, we really must ensure that confidence is shown in the system and that we can ensure that industry outside this House, which is looking carefully at the Bill and what changes may be made in it, can feel reassured that that system will be foolproof and one which has the necessary safeguards to ensure that their confidential and sensitive information will not get into the wrong hands.

May I give an example, because some noble Lords may have thought that we have been making this appear to be more serious than in fact it is. I do not know whether noble Lords read the Scottish Press, but if they do they will have seen fairly recently that the Committee concerned with the development of Dundee and Tayside—which, as the noble Lord. Lord Beswick, will recognise is an area where there is high unemployment and one that has been of particular concern to successive Governments—registered the anxiety of United States oil tool manufacturers about these clauses and the effects of this Bill. Naturally. United States oil tool manufacturers are needed in the new North Sea oil industry and in fact they are supplying tools which British industry cannot yet supply and at the same time providing employment and activity which is very welcome.

According to this Committee, as reported in the Press, they have equipment and methods which they have developed over the years and which are not covered by patents. They are prepared to enter into joint ventures with British firms, which I am sure all noble Lords would applaud, but they are worried as they feel that they could be exposing confidential expertise to the danger of disclosure to competitors and potential rivals. I would just mention that—which has appeared in the Press and emanated from a responsible committee—as the kind of unfortunate effect which we all want to avoid. Therefore I say how important it is that in dealing with this list of subjects—because they have looked at this list and thought that all that might become public—we try to make certain in considering the safeguards we are coming to, not only that we get it right but also that everyone outside this Committee who is deeply concerned about it, where their business is concerned and employment and industrial activity are concerned, are satisfied that such sensitive information is to be completely safe.

Lord BESWICK

I am much obliged for what the noble Lord has said, and I would agree with him absolutely: that it is essential that we have an atmosphere of confidence in this; otherwise the whole thing is worthless. The fact that we have emphasised the desirability of voluntary agreements as against any form of compulsion is precisely because we want to engender this atmosphere of confidence. This exercise was not designed to help any Secretary of State or Minister of State; it was designed to help industry in the national environment and in the national economic climate. The noble Lord said we appear to have been impatient on one or two occasions. If that is so, one reason why I might have indicated impatience is the fact that some of the more extreme anxieties that have been raised, either here or outside—unnecessary anxieties as I think—awaken fears in the breasts of precisely the persons the noble Lord spoke about, American oil manufacturers; they read in the Press that there is all this danger and they take it seriously. They have not read the Bill, any more than certain noble Lords opposite have read the Bill. I believe the anxieties are not justified. But I accept what the noble Lord says, that we must engender the highest possible spirit of confidence.

Clause 23, as amended, agreed to.

Clause 24 [Information for trade unions]:

Lord BESWICK

I beg to move Amendment No. 181A. This was dealt with with Amendment No. 163A.

Amendment moved— Page 22, line 22, leave out ("a") and insert ("the authorised").—(Lord Beswick.)

Lord TERRINGTON moved Amendment No. 185: Page 22, line 23, after ("union") insert ("and to the members of the company or companies").

The noble Lord said: I should like to speak very briefly to this simple Amendment, and with permission I will include Amendments Nos. 239, 250 and 258. Unlike some other Amendments to Clauses 24 and 25, mine relate only to the members of industrial undertakings, in other words, the shareholders in the various companies. Of course, that being so, I must immediately declare my interest, both as a member of the Stock Exchange and as an executive member of the Wider Share Ownership Council. Having done that, I should like to preface my remarks by making three points which I believe are relevant to my Amendments.

First, I should like to make it absolutely clear that I have always been in favour of the maximum disclosure of suitable information to employees and shareholders alike. Secondly, I am aware that the Government have pointed out in another place that there is nothing in the Bill which prevents companies from passing information to their shareholders if they wish to do so. Thirdly, I appreciate that a Companies Bill would be a more normal vehicle for dealing with disclosure of information to shareholders. But I would submit that the circumstances surrounding these disclosure clauses are not normal, and therefore require closer examination by this Committee.

I of course accept what the noble Lord, Lord Beswick, has said to us today about the likelihood of compulsory disclosure, but I am still uneasy about this one-sided arrangement. The sole purpose of my simple Amendments is to ensure that by law any information which the Bill already requires to be given to trade unions shall also be given to the shareholders in the companies concerned. That seems to me perfectly logical and fair and it would in no way interfere with the proposed disclosure of information to employees and trade unions.

I realise that we all speak in this House as individuals, but at this point it might be helpful, and I hope in order, if I explain the attitude of the Stock Exchange in this important matter. I can say with their full authority that they are anxious to see in this Bill a legal obligation to pass to shareholders any information given to trade unions under Clauses 24 and 25. They feel that if all such information had to be passed in that way, the directors of companies would be relieved of the burden of deciding which piece of information might be price sensitive. In fact, as recently as 20th June they wrote to the Secretary of State for Industry asking the Government to bring in an Amendment along the lines I am now proposing, and they did so despite the existence of a very strict rule in their listing agreement which reads as follows: Directors shall not divulge price sensitive information in such a way as to place in a privileged position any person, or class, or category of persons, outside the company or its advisers.

If an authority which is concerned with the day-to-day working of these matters expresses such views, I really think we ought to consider them carefully before passing these clauses unamended. Personally, I think it will be a mistake to rely solely on the listing agreement in this matter of disclosure, and apparently the Stock Exchange takes the same view. For this reason, I find Clauses 24 and 25 incomplete in their present form, and I should like to suggest that this group of Amendments is a means of filling the gap. I beg to move.

Lord CULLEN of ASHBOURNE

I support this Amendment. Like the noble Lord, Lord Terrington, I am also a stockbroker, and I have similarly been authorised by the Stock Exchange Council to say that they are fully behind this Amendment. There is little for me to add to the persuasive case that the noble Lord has made. I would, however, point out that the listing agreement with the Stock Exchange naturally applies only to quoted companies. This of course leaves out of account many companies, some of which are very large, like Rubery Owen, Clark's Shoes, and many others. There is, so far as I know, nothing in the Bill to prevent information being given to employees, the relevant trade unions, or anybody else. It just seems odd to me that the advice of the Stock Exchange Council should be ignored on a matter in which they are highly authoritative.

3.54 p.m.

Lord BESWICK

I recognise the interest that there is in this matter, and I am glad to think that this Bill, this projected piece of legislation, has had the effect not only of stimulating interest in industrial democracy in industry but also apparently awakened the interest of shareholders. For too long they have been content to have a holding, and leave it at that. The noble Lord spoke about the one-sided arrangements of this Bill. I doubt whether that description is quite right. It is not a one-sided arrangement at all; we tried to make it quite balanced.

There are three parties to these agreements, three parties to the sharing of information: the Government; the companies concerned and their management; and the workforce in those companies and their representatives. This seemed to us a well-balanced and by no means one-sided arrangement, but I accept that there is another party in industry—namely, the shareholder—and one might even go on to say that there is yet another party, one too often overlooked these days and whom I have always been trained to think should be brought more closely into discussions of this sort, namely, the consumer, but the noble Lord has chosen to speak on behalf of the shareholder. As he says, there has been correspondence between the chairman of the Stock Exchange and my right honourable friend the Secretary of State, and I had hoped that the assurances that had been given to the chairman would have been adequate.

Perhaps it would be appropriate and permissible for me to quote some extracts from what was said to the chairman, which was largely what was indicated by the noble Lord, Lord Terrington. We said in the letter: We have no intention in the Bill to make the representatives of trade unions and I am now paraphrasing to some extent— the sole and privileged possessors of price-sensitive information, and the Bill is drafted to ensure that there is no constraint on trade union representatives advising their fellow members about information they acquire under the Bill. Equally, there is nothing in the Bill to prevent directors of companies from publishing, either to their shareholders or to the public at large, the information they have been required to provide to trade union representatives. So in this respect, again, there is equality of treatment and there is nothing at all one-sided about it.

The noble Lord may well go on to argue, as I suppose in effect he did, that we ought to give much more consideration to the question of keeping shareholders informed as to what is happening to their company. However, I suggest to him that the proper way of dealing with that is by separate legislation in connection with the Companies Act, and that of course is a matter which is now under discussion, as the noble Lord knows. I assure him that I recognise the point he has made. I hope he will accept our point that this is not really the vehicle through which changes should be made in a very important new field of thinking.

Lord TERRINGTON

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.57 p.m.

Lord MELCHETT

I beg to move Amendment No. 185A, which was spoken to with Amendment No. 163A.

Amendment moved— Page 22, line 28, leave out ("the representatives of each relevant trade union") and insert ("each such representative").—(Lord Melchett.)

Lord MELCHETT moved Amendment No. 188A. Page 22, line 37, leave out ("do so") and insert ("furnish it").

The noble Lord said: This is purely a drafting Amendment. I have no doubt, however, that it will act like a red rag to a bull and that noble Lords opposite will seek to divide the Committee. On the other hand, I hope they will not do so, because I assure them that it is a purely drafting matter.

3.59 p.m.

Lord CAMPBELL of CROY moved Amendment No. 189: Page 23, line 3, after ("communicated") insert ("by or").

The noble Lord said: This is a somewhat complicated and perhaps abstruse matter and I hope that the Committee will bear with me if I indicate the situation which I have in mind. Subsection (4) says that the information was …communicated to the company or companies concerned in confidence. There can be a situation—and I am told that it happens not rarely in industry—where a company has not only received some information in confidence but has asked the givers of the information also to keep it to themselves, so that only the two are aware of the process, the information or whatever it may be. It is not only the company that has received the information, but also the company that has given it, which is bound not to divulge that information to any third party. The paragraph which I have quoted goes on to say, …or was information which they otherwise obtained in consequence of the confidence reposed in them by another person;".

It could be that the Government, in drafting the Bill, was proposing to cover that kind of situation with those words, but they do not appear to us to cover that situation and we think that it would be much clearer if the words suggested were inserted to make it clear that not only the company that has received information in confidence but also the company that has passed it to another company, but by agreement has arranged to keep it secret, would be excluded from the effect of this clause by this paragraph.

Lord BESWICK

The noble Lord said that the point was abstruse hut, as he knows, it was debated at some length in another place. I recognise that there could be a difficulty in the case which he described, but, for reasons which I shall give, I suggest that that problem is well covered by various provisions in the Bill. The problem he would create by the Amendment—namely, the abuse of this protection of confidential disclosure of information by one party to another—is not covered in the Amendment, and it leaves a loophole which I believe the noble Lord would not, on reflection, wish to leave.

The position is that if there is a matter which involves technological secrets—information has been given by one party to another on some sensitive technological subject—this matter is protected by Clause 23(5), which establishes beyond doubt that there is no requirement on the company to disclose sensitive information of that kind. There may be other transactions which there is a case for keeping secret where the information is provided in confidence. I accept that Clause 24(4)(a) would not cover such a case, but that is not to say that such information would have to be disclosed. If its disclosure would cause substantial injury to the company, it would be covered by the safeguard in Clause 24(4) and, if necessary, the company could require the Minister to seek the advice of the Advisory Committee.

Thus the company has a clear means of safeguarding itself if disclosure is really harmful and the Secretary of State has a duty to see that it is not required to be disclosed. If its disclosure would cause damage not to the company itself but to the third party to whom it had previously been communicated in confidence, the Secretary of State would be able to use the discretion which he now has under Clause 24(1). It would be the intention there to protect the third party. I recognise that there may possibly be doubts, but I assure the noble Lord that, for the greater part, there is specific protection in the Bill, and there will anyhow be the discretion of the Secretary of State.

Lord CAMPBELL of CROY

That is an assurance which the noble Lord has given and, in the noble Lord's view, this kind of situation should be left to be screened and considered in the procedure which we shall be discussing. Our point is that, in so far as the Government are in this subsection spelling out special reasons which will be considered by the Advisory Committee under the procedure, they might just as well include in those special reasons a company which has given such information—with the proviso which I mentioned—as a company which has received it, rather than leave it to the screening procedure, which is more chancy, to consider each case in turn. However, in view of what the noble Lord said, which I hope means that the Government are aware of this kind of situation and will give it serious consideration. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4.5 p.m.

The Earl of BALFOUR moved Amendment No. 190: Page 23, line 7, leave out ("would") and insert ("could").

The noble Earl said: With this Amendment I should like to speak to Amendment No. 194, which deals with exactly the same point. In Clause 24(4) it is stated: if the Minister considers…that the disclosure of the information would cause substantial injury to the undertaking; or…that its disclosure would cause substantial injury to a substantial number of employees of the undertaking.

The point here is that the Minister is concerned with considering something he is concerned not with definitely making up his mind, but with thinking about it. I feel it is rather important that he should bear in mind the possibility that the information could cause "substantial injury", or, substantial injury to a substantial number of employees of the undertaking.

The word "would" is far too definite. The word "could" is better in this instance. I beg to move.

Lord MELCHETT

I hope the noble Earl will accept that the Government attach importance to the safeguarding provisions against disclosure. We have listened very carefully to criticisms of them as they were originally drafted, and in another place we amended them to widen their scope. However, the Amendment is not acceptable to the Government. In our view, it would replace what is a question of fact to be determined by responsible judgment—that is, will disclosure harm the business or its workers—by hypothetical circumstances. The word "could" requires every circumstance, however unlikely, to be reckoned. It would prevent disclosure in the event of the existence of a logical possibility of damage, even though all concerned agreed that such damage was extremely unlikely.

In using the word "would" in this subsection, we are following the precedents of the Conservative Industrial Relations Act 1971. As noble Lords opposite are no doubt aware. Section 158 of that Act contains safeguard provisions in some way analogous to the provisions in this subsection, and that Act uses the word "would". I hope that with that explanation the noble Earl will be prepared to withdraw his Amendment.

Lord DRUMALBYN

This is extremely narrow, and I should have thought, because of the uncertainty involved here, that the Government would at least be able to go as far as including the phrase, "would be likely to cause". The word "could" may be a little too lax, but one could not do more than ask: "Is it likely?" Otherwise, this would be completely inoperative in this case, which is different from the case to which the noble Lord alluded.

The Earl of BALFOUR

Reference has been made to the Industrial Relations Act, most of which has now been repealed. If I recall correctly, when we were considering that Act, we had quite a lengthy discussion in this House on the very point we are now dealing with, and afterwards I came to the conclusion that in retaining it on that occasion we on this side of the House had made a mistake. I must support my noble friend Lord Drumalbyn. He is quite right in what he says. I feel that the Government are wrong and are making the field far too narrow, and I must say so.

Lord MELCHETT

As I have said, the difficulty with these Amendments is that they would introduce an entirely hypothetical situation, and it would be necessary to take account of even the remote possibility of damage. This would be widening the matter much too far. I hope that, on that basis, the noble Earl will withdraw his Amendment.

Lord WIGODER

In the view of the noble Lord, Lord Melchett, what should the Minister do if his conclusion is not that he is certain that substantial injury might be caused, but that there is a strong probability of it?

Lord MELCHETT

There is a strong possibility that that would be covered by the word "would". The noble Lord, Lord Wigoder, I think is shaking his head as well as the noble Lord, Lord Drumalbyn. In that case, I shall certainly seek advice on the matter and let the noble Lord, Lord Wigoder, know. As I say. I think the Amendment which we are discussing widens the situation far too much and, as we are discussing the Amendment, I would rest on that point.

The Earl of BALFOUR

I am grateful that the Minister will have another look at this. I am not very happy with the answer so far, but all the same I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lord BESWICK

The faces opposite rather alarm me and I wonder whether we might at this stage pause to consider the progress we have made. I fear that it has not been too good. We have been extremely slow and we have left ourselves a fairly long stint for Monday, but on the basis that we have agreed to finish on Monday, I would suggest that we now adjourn this afternoon and I would move that the House do now resume.

House resumed.