SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL [H.L.]

HL Deb 10 June 1975 vol 361 cc121-270

3 p.m.

The MINISTER of STATE, SCOTTISH OFFICE (Lord Hughes)

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

Moved, That the House do now resolve itself into Committee.—(Lord Hughes.)

On Question, Motion agreed to.

House in Committee accordingly.

[The Earl of LISTOWEL in the Chair.]

Clause 1 [The Scottish Development Agency]:

Lord CAMPBELL of CROY moved Amendment No. 1: Page 1, line 20, after ("matters") insert ("agriculture").

The noble Lord said: I have received a message from my noble friend Baroness Elliot of Harwood, who is detained at an engagement and who has asked me to move the Amendment for her. The purpose of the Amendment is to ensure that among the members of the Agency there should be someone who has experience of agriculture. Clauses 7, 8 and 9 affect land and one of the functions of the Agency—a function about which I do not believe there will be argument between the two sides of the Committee—is to deal with derelict land and to be concerned with environmental matters affecting land. The subject of agriculture seems important enough, therefore, to be mentioned because one of the uses of derelict land—and this may be discussed later in the Bill—could be agricultural. I hope that the noble Lord, Lord Hughes, will give an assurance that there will be experience of agriculture in the Agency, but my noble friend feels that it would be much better to have this clearly written into the Bill. I beg to move.

Lord STRATHCLYDE

I rise to support the Amendment. It seems unfortunate that what I have always been led to believe is one of the most important of all our industries should have been excluded. I feel that that was probably inadvertent and I hope that the noble Lord will be able to accept the Amendment.

Lord HUGHES

There is no question of agriculture being excluded. The noble Lord, Lord Strathclyde, has just used the wards, "one of our most important industries". One of the first categories to be taken into account will include agriculture because industry is one of the types named in the clause. However, there is a second opportunity for agriculture to be brought in, because if we look further the clause says, or any other field of activity which the Secretary of State considers is relevant to the discharge of the functions of the Agency. So I can say without hesitation that agriculture is one of the fields of experience which will be considered by the Secretary of State. However, I wish to go further than that. We do not think that the inclusion of the word "agriculture" would cover what we thought the noble Baroness had in mind. The words which have been used by the noble Lord, Lord Campbell of Croy, confirm me in the belief that I had formed. We are willing to have at look at this, because other representations which we have received—from the Scottish Landowners Federation, for example—seem to indicate that it is not so much the interests of agriculture as the use of land which is involved. The wording which has been drawn to our attention is, "rural land management".

I will certainly undertake that we will look at this to find out whether it is necessary, in order to protect these special interests, that something else should be added. If it should be so determined, the Government would be prepared to put down a suitable Amendment at a later stage.

Baroness EMMET of AMBERLEY

Would the Minister agree to include aquaculture as well as agriculture?

Lord HUGHES

I appreciate the very special interest that the noble Baroness has taken in this subject. She almost compels me to use words which I had deliberately excluded from my brief because of what was said on the first Question this afternoon about keeping down the length of speeches. One of the points I would have made is that as soon as one adds something somebody else will inevitably suggest adding something else. The noble Baroness has confirmed this. I am quite certain that if we put in agriculture and aquaculture, other noble Lords will find equally important matters which would have to be added because the fact that they were not specified might mean that they would he entirely overlooked. So the answer must be, probably not.

Baroness EMMET of AMBERLEY

If the Minister has aquaculture in mind, I am quite satisfied.

Lord CAMPBELL of CROY

I believe that on both sides of the Committee we have been responding to the sense of the House resulting from the first Question today. I am grateful to the noble Lord, Lord Hughes, for saying that he will consider this first Amendment for possible action by the Government. We had of course seen that other fields of activity could be taken into account by the Secretary of State, but agriculture is so important that we felt it should have a special mention. However, in view of the fact that the Minister has given us this assurance, on behalf of my noble friend and others on this side of the Committee, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.7 p.m.

Lord DRUMALBYN moved Amendment No. 2: Page 2, line 7, leave out from ("shall") to end of line 10 and insert ("determine the terms and conditions of appointment of the chief executive of the Agency and make the first appointment to that office, and thereafter whenever that office falls vacant the Agency shall, with the approval of the Secretary of State appoint a person to fill it on such terms and conditions as the Agency may, with the approval of the Secretary of State and Minister for the Civil Service, determine.")

The noble Lord said: It may be for the convenience of your Lordships if we take Amendment No. 3 with this Amendment. I put down the Amendment because I felt that the way in which subsections (6) and (7) were drafted did not make clear the position of the chief executive in relation to the Agency. The first chief executive is to be appointed by the Secretary of State; thereafter, he will be appointed by the Agency. I believe that the central question here is this: is the chief executive to be the servant of the Secretary of State or of the Agency? Like many another chief executive, he is, in terms of the Bill as drafted, to sit on the Agency's board. Unlike some chief executives, he is to be an ex-officio member. Does that mean that the terms and conditions of his appointment will be fixed by the Secretary of State under Schedule 1, paragraph 3, in the same way as the terms and conditions of the other members of the Agency? If so, he will be subject to removal by the Secretary of State, and will be the servant of the Secretary of State and not of the Agency. I believe that he should be the servant of the Agency.

I imagine that he is to be appointed by the Secretary of State in the first instance purely as a matter of convenience. The noble Lord nods his head. No doubt the Secretary of State will want to designate the chairman soon and to consult him about who should be the chief executive. Then he will be able to designate the chief executive before the Bill becomes law, so that the latter can get on with his job before being formally appointed. I deduce from that that the man or woman whom the Secretary of State has in mind to appoint as chief executive is already on the payroll of the Government, although I should guess that he or she has not always been on it. Certainly, experience in industry would be a very great advantage for this post; indeed, in view of the functions of the Agency it would be an indispensable requirement. I wonder whether the noble Lord can tell us anything about this? Can he tell us, for example, whether the chairman is to be full-time or part-time?

My amendments propose that the chief executive should, first and foremost, be a chief executive, and only in consequence of being a chief executive should he be a member of the board. It is of great importance that he should clearly be, and should clearly be seen to be, the servant of the Agency, although like many other chief executives he should be entitled ex officio to sit on the Agency board and so to share the responsibilities of the Agency. I am sure that your Lordships will clearly see the crucial importance of this key job. We should know a little more about the intentions of the Government regarding this matter, and that is why I have put down the Amendments.

Lord HUGHES

I believe that I can say sufficient to satisfy the noble Lord, Lord Drumalbyn, on certain of the points he raised. First, I do not know why he assumes that the person to be appointed as chief executive is already on the Government's payroll. If he has any justification for that, then I must confess straight away that he knows more than I do about the Government's intentions in the matter—

Lord DRUMALBYN

May I answer that point? The reason is that he will be paid by the Government in his present capacity, and can go on planning his future job at the same time.

Lord HUGHES

But the noble Lord went on to express the advantage of having someone from industry, and presumably a person from industry would not at the present time be on the Government's payroll. That is the point I was begging leave to query; that the person who may or may not be appointed is already a Government employee. I cannot say whether that will turn out to be the case.

However, I wish to confirm that the noble Lord is correct in his contention that the person to be appointed to the post will be appointed as chief executive and that will he his primary function. His membership of the board of the Agency will be an added advantage to him in carrying out these duties, as has been found in a number of cases. For instance, it was found desirable that the chief executives of the electricity boards in Scotland should be members of their respective boards, and should have a right to participate in the decisions of the boards, rather than merely advising the boards in their posts as chief executives. Therefore, I can confirm the point raised by the noble Lord in this regard. Secondly, it follows from that that the chief executive will be the employee of the board and will be responsible to the Agency. He will not be responsible to the Secretary of State, other than as part of the responsibilities that the Agency generally has to the Secretary of State.

I do not think that the Amendment is necessary. As drafted, the Bill will do exactly what the noble Lord suggests. The noble Lord coupled his remarks on Amendment No. 2 with Amendment No. 3. I am not certain why the noble Lord put this Amendment forward. There are, I believe, two possible explanations. First, perhaps it is a case of a better use of the words to insert "ex officio" in the way proposed, rather than to use it, apparently, as an adjective. The second possible explanation is that as the Bill is worded it could cover the possibility that there would be more than one person who was on the board in that capacity. There is no intention that there should be anyone else who would, by virtue of his office, be a member of the Agency. I therefore invite the noble Lord to withdraw Amendment No. 2 as being unnecessary, but I am prepared to accept Amendment No. 3 as providing a better wording to cover the position.

Lord DRUMALBYN

I am much obliged to the noble Lord for his explanation. One point I had in mind is that one cannot be absolutely certain that the person appointed as chief executive will be a success. But I take it from what the noble Lord says that as the chief executive is to be the employee of the board there will be nothing to prevent the board getting rid of him if, to put it bluntly, he does not prove to measure up to the job. I should have thought it would have been desirable to mention terms and conditions of service in order to clarify this point. But from the advice he has received the noble Lord will know better about that than I do. Can the noble Lord confirm a point regarding terms and conditions? The appointment will be for a certain period of time to start with, at any rate. Will the conditions on which the appointment can be terminated be made quite clear?

Lord HUGHES

I should make it quite clear that the power of appointment includes the power to determine the terms and conditions on which the appointment is made. It is rather unfortunate, before we have even got the Agency set up, to contemplate the possibility that the Agency might start off by appointing the wrong man to be chief executive. But one cannot entirely exclude that possibility and, clearly, if the first appointment or a subsequent appointment is a disastrous one, the Agency must have power to get rid of the chief executive, and I confirm that that is the position.

Lord DRUMALBYN

I am not responsible for the point in the Bill from which this matter arises, but I am much obliged to the noble Lord and I beg leave to withdraw Amendment No. 2.

Amendment, by leave, withdrawn.

3.17 p.m.

Lord DRUMALBYN

I beg to move Amendment No. 3 formally.

Amendment moved— Page 2, line 11, leave out ("be an ex officio") and insert ("ex officio be a")—.[Lord Drumalbyn.]

On Question, Amendment agreed to.

On Question, Whether Clause 1, as amended, shall stand part of the Bill?

Lord CAMPBELL of CROY

This is a suitable opportunity to ask the Government about their views on the question of the chairman and members of the Agency being full-time or part-time. If a member is appointed on a part-time basis, that means that he can continue with outside interests, whereas we assume that a full-time chairman, for example—as in the case of the chairman of the Highlands and Islands Development Board—would have to give up directorships or other activities in which he was involved. This again raises the question of the availability of suitable persons, because some who could be in the running might well not be available because they could not give up all their other activities; indeed, it might be a loss to Scotland if they did. It may be that the Government have not yet made up their minds on this matter, but we should like an indication of their views.

When the Bill dealing with the Highlands and Islands Development Board was considered, this point was changed. The chairman was originally a part-time appointment, but during the course of the Committee stage in another place the appointment was changed to that of a full-time post and it has been a matter of controversy ever since whether it was a good or a bad thing. There is also the question of compatibility with other activities to be considered, if there are to be part-time members. I am here concerned not with the rules about dealing with pecuniary or other interests, but with the question of general suitability, because there can be a conflict with entrepreneurial activities.

There was a case involving the Highlands and Islands Development Board, which is a smaller version of the kind of thing which the Government are now putting forward. The case I have in mind was in 1967 when two members were required to resign. I remember it well, because it happened on the same day as an oral question was answered by me in another place. Indeed, apparently, that was the cause of it, because the question was about an agency and it was discovered that two members of the Board were the two directors of that agency and that its main work was to carry out a scheme which was being considered by the Highlands and Islands Development Board. That was an unfortunate muddle, if I may put it that way, and it meant that those two members had to resign on the very day that the answer was given. I point that out, because it illustrates the kind of difficulty that can arise if one has part-time members, although I believe that part-time members are essential. It is the question of how they are appointed and the fact that one wants to have entrepreneurial ability on a board—in this case the Agency. But one has to be careful about possible conflicts of interest. It is not a question of not attending meetings but of whether in certain circumstances they can be members of the Agency at all.

Lord HUGHES

I am afraid that at this stage I cannot go far in relation to some of the points made by the noble Lord. Lord Campbell of Croy. I can say that as the Bill is drafted it is possible to appoint both full-time and part-time members—it does not limit the field in any way; and past experience of bodies of this kind shows that there are sometimes advantages in having both full-time and part-time members. This is the position in the Highlands and Islands Development Board. Where that Board perhaps differs from some of the others is in the way to which the noble Lord, Lord Campbell of Croy, has referred. There was an Amendment made to the Bill in another place which specifically required that the chairman's should be a full-time appointment. I doubt whether there will ever be a possibility of arriving at a unanimous view on the merits of a decision of that kind. I personally believe that there is considerable advantage in leaving complete latitude to the Minister in a matter of this kind. If the obvious person to be appointed is one who should hold the appointment full-time, then he is free to appoint him. If, on the other hand, he wants to appoint somebody whose abilities make him suitable for the job but who would not wish to divorce himself from other commitments, there are circumstances in which that could be to the advantage of the Agency. If the Bill leaves your Lordships' House with the clause in the form in which it stands it will go to another place with the discretion of the Secretary of State totally unfettered.

The Earl of CROMARTIE

I should like to ask the Minister a question. This Bill has been welcomed by the Highland Region, but the Highland Region would very much appreciate direct representation on the Agency, and I see no reason why they should not have it. I do not know what the Minister feels about that. We are a very much developed area, as he well knows; we are a vast area, and I should like to ask the Minister whether he feels that my suggestion is reasonable.

Lord HUGHES

If I were a member of the Highland Region I would say it is eminently reasonable; but as I am not a member of the Highland Region I am not under any such obligation. I would point out that in Scotland there are nine regions and three Island authorities, and probably every one of them would say with equal conviction exactly what the noble Earl has said in respect of the Highland Region. If the Secretary of State were to concede that this was a proper point of view to express, the only appointment which would be left to him to make would be that of the chairman. I therefore cannot give an undertaking that someone from the Highland Region will be included. I should be greatly surprised if the Agency did not include among their members people who could have particular regard to the problems which are perhaps peculiar to the Highlands.

Lord MACKIE of BENSHIE

Would the Minister bear in mind that this Board is going to administer £200 million of public money, and that the constitution of the Board must include a great deal of industrial and financial expertise? For that reason, with the greatest respect to the noble Lord, the Secretary of State should choose members with great care more for their industrial and financial expertise than for their regional qualifications.

Lord HUGHES

That is probably so. I would draw the attention of the noble Lord, Lord Mackie of Benshie, to the last two lines on page 1 of the Bill— a wide experience of, and to have shown capacity in, industry, banking, accounting or finance … These are the first points to be listed, so presumably certain importance is attached by the Secretary of State to these words.

Lord TANLAW

May I ask the Minister whether all members of the Board have any obligation of confidentiality of information that will come their way during the course of their duties? Is there any written obligation on them to keep such confidence in case there are dangers of this information being used commercially outside the sphere of the Agency?

Lord HUGHES

I am not certain that at a moment's notice I can lay my hands on any written instructions of this kind. Certainly it is the basis on which members of a board of this kind have always been expected to function. I cannot think of any occasion in the past when a member of a public body of this kind—and the nearest approach in Scotland is the Highlands and Islands Development Board—has ever contemplated, even remotely, the abuse of any knowledge which has come to him in this way. I will certainly look at this and perhaps at the next stage, if the noble Lord raises the matter again, it might be possible to get the answer in the record rather than that I should just write to him on this matter.

Viscount MASSEREENE and FERRARD

I think I am right in saying that written into the Highlands and Islands Development Board Bill is the fact that if the Government actually have an industrial secret from a firm they cannot give it to any outside body. I seem to remember something to that effect being written into the Bill. I may be wrong.

Lord MOWBRAY and STOURTON

I welcome first the conversion of the noble Lord, Lord Tanlaw, to the propriety of talking on Committee on this Bill, which on Second Reading he was determined not to do. Secondly, and more importantly, I would draw the attention of this Committee to the point which I raised on Second Reading. I must thank the noble Lord the Minister for writing to me and expressing in principle the desirability of agreement with the fact that the members of the Scottish Development Agency should, if possible, have some very close liaison, if not cross membership, with members of the National Enterprise Board. I should not like the debate on the Question, That Clause 1 shall stand part of the Bill?, to go by without mentioning that point again. While paying full tribute to the noble Lord for the way he answered my letter privately, I raise the point just to draw confirmation that the desirability is there for close liaison between these two bodies.

Lord MACKIE of BENSHIE

Before the noble Lord replies, may I inform the noble Lord that while my noble friend Lord Tanlaw was certainly legitimately entitled to the view that a Bill of this importance should in principle be passed in the Commons before coming to this House, never in his wildest dreams would he allow Amendments, put down in such variety and with such a lack of consis- tency for the Tory Party, to go undiscussed by the Liberal Party.

Lord HUGHES

I am glad that I encouraged the noble Lord to intervene because it now appears that I have two allies on the Liberal Benches whereas formerly I could count on only one. I myself wanted to come to the defence of the noble Lord, Lord Tanlaw, because he has in fact been misquoted. Certainly I have not been misquoted. I confirm that what the noble Lord said about the contents of my letter is correct, so everybody now knows instead of just the noble Lord and myself. If I remember rightly, the noble Lord, Lord Tanlaw, said in relation to proceedings in this House that, having regard to the importance of the Bill and the fact that perhaps given a greater degree of co-operation in another place it would have gone through that place before we considered it, he did not consider that he should be helping to amend the Bill. But he did not say he would not talk on some of the Amendments which would seem not as good as others, and I hope that, like me he will express disapproval if that should seem to him to be a proper course of action.

Lord CAMPBELL of CROY

What the noble Lord said in reply to my comment concerning part-time and full-time members of the Board was satisfactory. That is what I hoped was the situation, but nothing was said about it in the Bill. I certainly believe that in the case of a chairman there is a much wider choice if he can be part-time. But there are some dangers, and I illustrated one. I hope that there will be industrial bodies of the kind that the noble Lord, Lord Mackie, mentioned; but leaving it to the Secretary of State to find the best combination gives him wider scope for finding the most suitable persons to serve as members of the Agency.

Clause 1, as amended, agreed to.

Clause 2 [General purposes and functions]:

3.31 p.m.

Lord CAMPBELL of CROY moved Amendment No. 4: Page 2, line 34, lease out paragraph (b)

The noble Lord said: After what appears to be agreement on the points raised so far I come now to what I think will be one of the controversial matters and where we think this Bill should be improved. I suggest that it might be convenient if Amendment No. 5 be discussed with Amendment No. 4 and my noble friend Lord Drumalbyn agrees with this.

Lord HUGHES

It seems to me that Amendments Nos. 4 5, 6, 14, 17 and 59 are all related on this point. Perhaps after we have considered Amendments Nos. 4 and 5 the noble Lord, Lord Campbell of Croy, might consider that point; so that when we come to these Amendments they can be dealt with formally either as not moved or as going in automatically, as the case may be.

Lord CAMPBELL of CROY

I agree with that so far as Amendments Nos. 17 and 59 are concerned which are Amendments of mine and are consequential if this one is accepted by the Committee. This is the first piece of what I would call the current Industry Bill complex to come before your Lordships and, as we were reminded from the Liberal Benches, originally the intention was that it should be considered first in another place. The "Number One" Bill is there still and this is "Number Two". This is therefore, in current shorthand, the first item of "Bennery" that this House is considering. Much of it is closely linked to the Industry Bill which is being considered elsewhere. It happens to be a Scottish Bill but the question arises as to whether some of the powers proposed for this Agency would damage confidence in industry and would also damage the performance of British and Scottish industry. The proposal for a new Scottish Agency is unexceptionable—I believe that that is accepted on all sides of the Committee. There is new work for it to do—which we shall discuss—in particular connected with funds coming from the EEC. There is also the case (which, again, we will discuss later) for a new body taking over some of the activities of other bodies, smaller ones, which can now be wound up in Scotland to rationalise the work that has been going on.

The Conservative Party favour the establishment of a new Scottish body to help and to stimulate industrial development. Such a body would also be the means of dispensing money from the EEC and, in particular, from its new Regional Fund. As indicated last year, we had in mind a Scottish Development Fund for these purposes. The powers proposed for the Agency in this Bill, however, go far beyond what would be required for these purposes. They would equip the Agency to be a means of extending public ownership as a deliberate policy. Whether or not the noble Lord, Lord Hughes, would wish that, none the less the powers in this Bill, if it stands as at present drafted, would enable it to do that. The effect would be to alarm and antagonise Scottish industry rather than to assist it.

With this Amendment we seek to delete the powers whereby to establish and run industrial undertakings. With this and our other principal Amendments, the role of the Agency can be changed into one more helpful to Scottish firms and no longer threatening to absorb them or to compete unfairly against them. The Government are presenting the Agency in the guise of a harmless, benign creature of the Secretary of State for Scotland; but comparison of this Bill with the Industry Bill reveals identical wording in many important places. This Scottish Agency is being over-furnished with powers in order to act as an arm of the National Enterprise Board although the latter is to operate separately in Scotland as well. The similarity between the two Bills signals the danger of what is called "back-door Bennery".

This Scottish Agency does not need to have the claws of a carnivorous beast; it will be more suitable when they have been clipped. One of the principal bodies representing Scottish Industry, the Scottish Office of the CBI, have publicly made clear that they oppose the Bill until this has been done; and that they also would accept an Agency equipped with suitable powers and functions. Again, there is no argument about having an Agency to carry out certain functions; but there is considerable alarm and opposition to quite unnecessary powers being written into the Bill, similar to those in the Industry Bill and which we believe could be misused in Scotland. We aim to make a few basic changes to convert this into an Agency capable of carrying out a real task and not being the instrument for carrying out extensive interventions and public ownership.

The country is in a very serious economic crisis. We expect measures soon to curb inflation and to improve the productivity of industry and exports. I do not think there is any argument in this Committee about that; but the good will and co-operation of Scottish industry will be essential if those measures are to be carried out and if we are to extricate ourselves from our present economic difficulties. It would be foolish to antagonise industry by the proposals which are now in the Bill and which are unnecessary; it would be a greater folly then to launch a new Agency, otherwise welcome, with powers to start businesses and with its other powers to extract information and in other ways to compete unfairly with existing firms. Scottish firms have enough of a burden to carry at present. They will have considerably more to cope with when the measures to be announced by the Government are published. We believe that this power proposed, and which we seek to delete in these Amendments, is unnecessary and would also antagonise industry. It has already caused alarm among those responsible in Scottish industry and I hope that this Committee will delete it. I beg to move.

3.39 p.m.

Lord DRUMALBYN

I fancy that the noble Lord, Lord Hughes, will reply to my noble friend as he did when he replied to the Second Reading debate by referring to the fact that there are similar powers in the Highlands and Islands Development Act to the powers we are here referring to. But I said then, when that Bill was going through your Lordships' House, and I say again, that I do not think that can properly be taken as any precedent for treating Scotland as a whole. The Highlands and Islands are a very special case and ought to be treated in a special way if only because their resources of capital, of native capital, are so extremely small.

I would support what my noble friend has said; but in my own Amendment I have put in a clause in place of the clause he wishes to remove. Perhaps I could say a word or two about that; for I think it would be of convenience to the Committee. It has long been the aim of all Governments to get more advanced technology in Scotland. There have been some notable achievements but, generally, the new production units have been subsidiaries of companies based outside Scotland. There is a well recognised need to encourage the setting up of new advanced technology enterprises located and controlled in Scotland. What I think we are talking about here is whether that can be done or cannot be done without the powers in this paragraph. We do not know yet, but all the evidence is that, given the proper support, it would be possible to set up enterprises of the kind I have in mind once the Agency is established. This is what the Agency is for. If the Agency prove they are able to give the necessary assistance here, then the power for them to run enterprises in competition with enterprises that they may be assisting in other ways will not need to be used.

There has also been pressure from the NEDC in days gone by to save imports by establishing new enterprises in the United Kingdom or by encouraging existing companies to develop new products with import-saving in view. I recall that I introduced a Motion on this matter in this House some years ago; I cannot say it had any notable support or success, but at any rate it is there on the record. This Amendment envisages that the new Agency should actively help to do so by entering into undertakings; for example, to help to finance such developments through commissioning the production of prototypes, by facilitating the placing on the market of products not at present manufactured in the United Kingdom, including new products incorporating new inventions. We on this side of the Committee believe that new inventions can best be exploited, and products not at present manufactured in the United Kingdom can best be produced and marketed in competition with foreign products, by firms and joint stock companies rather than by Government Agencies. To try to achieve the same result through State-controlled enterprises is bound to give rise to all kinds of questions of preferential treatments and even State-favoured monopolies.

There are great dangers in blurring the distinctions between public and private enterprises. In the long run by setting up wholly owned public companies able to call on State finance at any time the Government would inevitably discourage private capital from taking risks in competi- tion with them and so might defeat the very end they set out to achieve; that is, to increase investment. For these reasons I support the removal of the paragraph from the Bill and commend to the Committee my substitute Amendment. I beg to move.

3.42 p.m.

Lord MACKIE of BENSHIE

The removal of the paragraph and indeed Lord Drumalbyn's substitute raises many questions and, in our view, might well prejudice the work of the Board. I can see that great advantage could be gained for Scotland by joint enterprises with the Agency putting up to half the capital with a reputable and enterprising Scottish firm. It is a great advantage if it is put up in the form of equity, because one does not start by paying interest. If the operation was sensibly run—and this is why I put the point about the business expertise—it may restrict the use of the £200 million being put up. I recognise the dangers, but perhaps "Bennery" may not always be with us. I can see tremendous advantages in a joint stock enterprise with a good Scottish company.

Lord DRUMALBYN

Would the noble Lord be in favour of leaving out the words, "Whether by themselves or" and moving a manuscript Amendment to that purpose?

Lord MACKIE of BENSHIE

We are restricted in moving Amendments at this stage by the previously-made point. I would be far happier to see a joint business enterprise with the Agency putting up half the capital than some enterprise wholly run by a public body.

Lord GLENKINGLAS

I have listened with interest to my noble friends Lord Campbell of Croy and Lord Drumalbyn. They have suggested that it may be in the Minister's mind—and who am I to decide whether or not it is?—that he should argue that because certain powers have been given to the Highlands and Islands Development Board, they should be carried through in this Bill. I have been widely criticised, at least by the Socialist Party in Scotland—and there are a number of splendid quotes in their Manifesto and other documents—for having opposed certain powers in the Highlands and islands Development Board which I felt were unnecessary and probably dangerous. It is interesting looking back—and I never opposed the Highlands and Islands Development Board as such—over the nine years that that has been in operation that not on one single occasion have they used any of the powers that I criticised in the Second Reading and subsequent stages of that Bill.

There is a very real danger in producing in a Bill powers which wil lscare the people on whom we rely to produce the industry in Scotland, whether it is right of wrong that they should occasionally be scared. It is wrong to give them this unnecessary fright when you have no intention whatever of using those powers because you know if you did the whole thing would collapse. I would ask the noble Lord to say honestly to the Committee, for their careful consideration, whether the powers he is asking for are actually to be used. This was the question I asked over and over again in the Highlands and Islands Development Board: whether they could conceivably use those powers. I never received an answer. In fact over nine years they never have used those powers.

Lord HARMAR-NICHOLLS

This Bill is a Scottish Bill; I have been chastised in the past for intervening as one from the South of the Border on Scottish matter—chastised in a friendly and delightful way.

Lord HUGHES

The noble Lord will never be chastised in this House for intervening on Scottish affairs.

Lord HARMAR-NICHOLLS

I think it was the noble Lord, Lord Hughes, who chastised me in a delightful way which did not discourage me.

Lord HUGHES

I did not chastise the noble Lord for intervening, I chastised him for the errors of his intervention.

Lord HARMAR-NICHOLLS

I accept the difference and will try not to commit an error which will bring forward any chastisement. The reason I intervene is that I believe the points made by my noble friend regarding possible danger, if they are sound, are something which will stretch over the Border. Maybe when the Bill was prepared the atmosphere was not as intense as it is today on this matter. Industry and investors generally are in a nervous state—and they would say with good reason. If we were living in what in the past we would call "normal times", it may well be this would be a trivial point and we ought not to think that people running businesses, or thinking of investing on the scale we have in mind here, would be disturbed by something of this sort. But that is the situation at the moment.

I was very interested when the noble Lord from the Liberal Benches gave some support for very practical reasons; one saw the point. If the Agency have wide powers, they are more likely to be able to use them under certain circumstances better than if they have narrow powers and they have to keep within those boundaries. The sick comment he made emphasises the point I have in mind in intervening. He said: "Bennery" will not be with us for ever. In saying that he was admitting that in the minds of many people "Bennery"—whatever that may mean—is certainly here today. It is certainly interfering with the confidence of the people who would otherwise be investing at a time when we need investment. And in view of what we are having to face in business today, unless the noble Lord can show that these words and clauses which it is proposed should be omitted are absolutely essential, I suggest that it would be prudent, practical and constructive to exclude them.

By and large, all the other points in the Bill lend themselves to the sort of encouragement which Scotland needs and I do not see any need, on this slightly ideological point—because many people will look upon it from that angle—to interfere with the rest of the good things which are in the Bill. Therefore, I would suggest to the noble Lord and the Government that it is not sufficient to look at the words just as they stand, or to look at the Bill just as it stands. We have to look at the atmosphere and the general climate in which it has to be applied. There is no doubt, as my noble friend has just said, that this is a minor part, but it is a minor part which will have its effect in atrophying the confidence on which the real success of this Bill truly depends.

Lord TAYLOR of GRYFE

I have listened to the debate so far and should like to return to the original question of the nature of the board which is to be set up. I think that if we return to the nature of the board, its composition and functions, some of the nervousness felt by businessmen might be removed. The board as such is not a political agency. It is not obeying political directives. It is commissioned to play an important role in the regeneration of Scottish industry, and in order to do this effectively it needs wide-ranging powers. It would be quite wrong to approve some powers and exclude the area of public ownership. I have never regarded the question of public ownership in any dogmatic or theological sense, as some politicians do. There are areas where public ownership may be justified and many Members on both sides of this Chamber would subscribe to that view, I have always regarded nationalisation and public ownership as matters to be studied on their merits, in the light of discovering the most effective and efficient way to run a business. So I admit that if certain paragraphs were excluded from the Bill you would be removing from the hands of this entrepreneurial body one of the devices which it may at some stage desire to exercise. Consequently, I would suggest to our friends on the other side of the Chamber that they should look at this matter in a non-doctrinaire way.

It has been suggested that Scottish business is somewhat alarmed at this prospect. I think that Scottish business is more alarmed at the prospect of the continued degeneration of the Scottish economy. Nobody likes to invest in an atmosphere which does not have a sense of vital growth in it, so I would suggest that this Agency, which has been commended by all parts of this Chamber, might be an Agency which could inject some new life and vitality into the Scottish economy and, in so doing, encourage private investment. Accordingly, I would suggest that even with wide-ranging powers the executive of this Agency, the chairman and his board—and we have a fair idea from the Bill of the composition of the board—would presumably not look at this in terms of taking over private industry as a matter of dogma; they would look at it as a businessman charged with entrepreneurial responsibility would look at it. So I believe that some of the fears which have been expressed are hardly justified.

Viscount MASSEREENE and FERRARD

I should like to make the point that I do not think your Lordships should be lulled into complacency by the fact that the wide powers granted under the Highlands and Islands Development (Scotland) Act have not been used by the Government. I have always understood that those extremely wide powers which the Government now want to include in this Bill were introduced in order to have the excuse of a precedent. I am told there is no intention of using them in the Highlands and Islands. After all, it was very easy to force Socialist measures through regarding the Highlands and Islands, because there are very few Conservative MPs involved and there are not many Members of your Lordships' House who are interested in the matter. Of course, once there is a precedent Governments then want to go after bigger game, and here is bigger game. Therefore, I am quite convinced that if these powers are written into this Bill and become law the Government will set up businesses with taxpayers' money, in competition with private businesses.

The latter are producing the goods quite efficiently but the new businesses will have a very unfair advantage, because they will have taxpayers' money to back them up ad infinitum. Even then the Government will not make a profit, but what they probably will do is to destroy a private industrial undertaking that is making a profit and contributing quite a lot in taxation to the country. I am all for State help in industry where it is a joint venture and where it may be needed, economically speaking, but it is quite unnecessary in this case and would represent a bad principle. As I have already said, this would give the Government great powers to set up an industry in competition with a private industry which is already producing the goods or services efficiently and satisfactorily and which is making a profit.

Lord OGMORE

If I may, I should like to intervene briefly here. I am not a Scotsman, but the Welsh have their own Bill coming along on Thursday and many of the proposals in that Bill are identical with those in this one. I should like to support my noble friend Lord Mackie on the point he has just made about helping other people; that is, those in private enterprise. I was for six years a member of the Commonwealth Development Corporation, which has the same sort of identity and purposes as this organisation which we are discussing. I suppose that this has been copied from the earlier one. We found that in the Commonwealth it was usually not desirable to put Government money, or to put the Commonwealth Development Corporation's money and energies, solely into a project. It was much more desirable to have a project developed jointly between the Corporation and some of the local people, or perhaps an organisation from outside the Commonwealth country concerned. There is not very much point in setting up a corporation and financing it without involving local people. I think my noble friend Lord Mackie is quite right on that score.

I can understand the fears of the noble Lord, Lord Campbell of Croy, about involving Mr. Benn in Scotland; I believe we should have the same doubts about involving him in Wales. But I think the noble Lord is quite right about this clause as a whole. If it is agreed to by the Committee, we shall throw out the possibility of the Agency being able to join with local people in establishing industries, factories and the like in Scotland. I do not at all pretend to be an expert on Scotland, and I bow to many other noble Lords in this Committee on Scottish affairs. But I do know something about Wales, and I am certain that in many parts of Wales it would be a great mistake—and I have no doubt that the same Amendment as this one will be tried on on Thursday—if the Agency did not have this power to join with others. Therefore, I suggest that it ought to be within the limits of possibility for the noble Lord, Lord Hughes, and the noble Lord, Lord Campbell of Croy, to get together before Report stage and keep the desirable points of this clause in being. At the same time, they could do away with those they consider to be undesirable; or, at least, those which the noble Lord, Lord Campbell, and the noble Lord, Lord Drumalbyn, think undesirable.

Lord DRUMALBYN

I wonder whether the noble Lord, Lord Ogmore, could answer this point. I do not see why he thinks that by throwing out this paragraph we should make it impossible for the Agency to combine with other people in the sense that is indicated. There is nothing to prevent the Agency from taking shares and having a director in a company and so participating in that way. They will not be prevented from participating at all. What this Amendment refers to is their carrying on in participation with somebody else.

Lord OGMORE

Our experience on the Commonwealth Development Corporation showed that this provision was not enough. We have that provision about finance already but it is not enough; one must be in it. One must be participating in the work, in the direction; not merely in the financial position of the company that is being set up. I guarantee that, if this Amendment is passed, in a few years' time noble Lords sitting on the Tory Benches will have reason to be very sorry for it.

4.3 p.m.

Lord LEATHERLAND

I have listened attentively to what noble Lords on the other side have said and I have been wondering whether they are not perhaps boxing against a shadow. The noble Lord, Lord Campbell of Croy, used the word "Bennery". I can quite understand why he used that particular term in application to paragraph (b) of subsection (2) of this clause. But he also said that there was an exactly similar clause in Mr. Benn's Industry Bill. So if it is cut out of this particular Bill, if Mr. Benn is evicted from this Bill, he will still be alive and kicking in the Industry Bill. Therefore, if you delete this clause from this Bill you have done nothing at all.

However, there are one or two positive reasons why the paragraph should remain in the Bill. We know very well that in Scotland there are a number of multinational companies—a huge one in the electronics industry and others in some other industries. We know that it is always possible for a multinational company to say, "We will close down this factory in Scotland. We will establish it in Spain or in Mexico." If you have tied the hands of the Government and forbidden them to step in and buy out such a company and keep its wheels humming and its people employed, then you are creating a derelict area in that part of Scotland. That is a very im- portant reason why the Government, not as a matter of general principle, but just occasionally when the need demands it, should be able to step in.

Lord CAMPBELL of CROY

I should be grateful if I might intervene; it is a convenient point in the noble Lord's speech. This power is available to the Government under the Industry Act 1972, which has been used by both the last Government and this Government.

Lord LEATHERLAND

Then why take objection to it now? Why say it is wicked now if it was virtuous in the other Act passed by the previous Government?

Lord CAMPBELL of CROY

I am afraid that the noble Lord misunderstood me, so I must make the point clear at slightly greater length. The situation which he described, and the ability of a Government to come to the rescue of a company in those circumstances, is already catered for in the Industry Act 1972. It is unnecessary to have this additional power for a body to start up businesses—not only coming in, but starting up businesses—because the situation which the noble Lord has described, sometimes known as "a rescue operation", is already covered in existing legislation and therefore the purpose of this clause must be different.

Lord LEATHERLAND

Therefore it is virtuous when it is incorporated in a Tory Act of Parliament but vicious when in a Labour Act of Parliament?

There is another circumstance in which it might be desirable for the Government to be able to step in. There are various industries, as your Lordships know better than I do, which operate in various stages. One industry perhaps produces nylon thread; there is another industry which can knit or weave that thread up into garments; and there is another part of the industry which markets the final products. It may happen—not in the nylon industry, I know, but I use that as an example that is easy to understand—that industrialists will come in to perform stage 2 and stage 3 of that operation, but nobody wants to come in to perform stage 1. It will be for the benefit for Scotland as a nation, and of Scot- tish industry as an industry, if the Government had to come in, as a last resort perhaps, to perform stage 1 of that operation. If you are asking the Government to sacrifice paragraph (b) of this subsection you do a lot of harm, because the clause as a whole is calculated to benefit Scottish industry in many ways. One paragraph says that the Agency shall assist industries; another says they shall provide sites for industries. If they are to provide sites they probably have to purchase the land. If they are to assist an industry they probably have to take a shareholding in that industry. So I think your Lordships are asking this nonpolitical Agency to fight with one hand tied behind their back if you delete this particular paragraph from the Bill. I sincerely hope that my noble friend on the Front Bench will be able to defend its retention.

Lord TANLAW

On a point of information. I think that so far four noble Lords in the debate have used the word "Bennery". I am afraid that this word is not in the dictionary and I should be grateful for the purposes of this debate if we could have from the Minister or from the noble Lord, Lord Campbell of Croy, a definition of the word, because otherwise I personally shall have difficulty in following the arguments that are attached to it.

Lord FORBES

We have had many arguments on this Amendment. I wonder whether the Minister would care to comment on this view: If this country is to survive, does the noble Lord agree that industry must remain competitive? And if industry is going to remain competitive, surely industry must be left to its own devices and not be told what to do.

4.8 p.m.

Lord STRATHCLYDE

I am bound to confess that I am extremely frightened of any other incursions into State industry. If one looks at the State industries we have so far I think it will be seen that not one of them has ever done very well, and many of them have done very badly. I think I am quoting figures correctly—though I am subject to correction if I am wrong—in saying that during the last two years the State has been put in a position of having to carry the losses of the existing State industries to the extent, I understand, of about £1,000 million. At the same time the State has also made grants to these industries to the tune of another £1,000 million. Two thousand million pounds is a good deal of money to be throwing about. And we are not getting results from these industries; we really are not. We travel in trains. Are they as good as they used to be? Anywhere where State industry exists in this country, it seems to me, is going back instead of forward. I am using these statements by reason of experience I have in travelling up and down the country and visiting various places.

Baroness WHITE

I have just returned from the United States where the railways are still in private hands. I assure your Lordships that they are much worse than our railways here.

Lord STRATHCLYDE

That may be true. My noble friend sitting in front of me has just reminded me of an experience in another connection. I happened to be in San Fransisco at one period during the war and had to communicate with my secretary who was in Washington. I lifted the telephone receiver in my bedroom and asked for the number in Washington. I said to the operator, "How long will I have to wait?" The answer was, "You are right there". And I was; I was speaking to my secretary. Perhaps your Lordships will compare that with the kind of thing that happens in this country: you lift the telephone and listen and listen, but you do not get an answer. This goes on time and time again, and you have no redress whatsoever.

As I have been asked to give examples, I will do so. On Monday mornings, in order to catch a 'plane at 11.10, I travel on a train which leaves the town of Ayr at 9.45. I can do the journey quite comfortably if the train runs to time. However, on two Monday mornings recently, the first train was a quarter of an hour late arriving—mark you, on a 30-mile journey! Through the kindness of a gentleman who helped me into his taxi and then ran to say that we were coming to catch the 'plane, I just managed to catch the 'plane. But on the second Monday morning we did nothing of the kind. We lost the 'plane because the train was 20 minutes late arriving at Ayr station from Glasgow. When I telephoned the railway offices to make a mild protest about the service, I was told that there was nobody in authority who could possibly speak to me; they were all far too busy. Eventually, the gentleman at the other end of the telephone said. "You must realise that there are all kinds of things that can happen—numberless things. Something may be wrong with the points". However, he concluded by saying. "The driver may have been late". If that is the condition of State industry today, God help this country in the future! That is all I have to say about it. I think it is perfectly appalling. There is a shout for nationalised industries, but who runs the blooming things? And who will run the new nationalised industries that may come into being? People who do not know the first thing about it will run them.

May I point to something which is about to happen, or has happened? We are told that two of the great shipyards are to be taken over—Yarrows and Scott Lithgow. Both have large order books and both are doing very good business. Why is the State going to take them over? I am surprised that the Scottish Nationalists are not waving their arms and making a noise about it. This is taking industry away from Scotland and away from the control of Scottish people. What grieves me about it is that Yarrows cannot be supported by British orders alone. They specialise in warship construction and they must have foreign orders. Who is going to take them over? Looking at the examples of State industry that we already have, I cannot think of any foreign nation which would ever think of placing a shipbuilding order with a State-owned company as operated in Britain. I am frightened about what will happen to our country if this process continues. This paragraph frightens me. It says: (b) carrying on, or establishing and carrying on, whether by themselves or jointly with any other person, industrial undertakings. I support the Amendment which has been moved for the reason that I think it will be death to this country if we go on with these State industries as they are being operated at the present time.

4.14 p.m.

Lord HUGHES

It may be convenient if I intervene before we venture too far into the field of reminiscence and cover the whole of the economy. This is a Bill to establish a Scottish Development Agency and I should like to try to bring the debate back to that point. However, I was a little surprised by the comments of the noble Lord, Lord Strathclyde, whom only tradition prevents me from referring to as my noble friend. He talked about the losses of bodies which are publicly owned—I will use that expression, because it covers what might be contained in this Bill, rather than the expression "nationalised industries". The noble Lord was the chairman of such a body at the time when I was one of the members. He will recollect that on more than one occasion during his chairmanship the board ventured into a period of loss, not because it was inefficient but because the Secretary of State for Scotland required him not to increase charges at that particular time because it was in the national interest that the board should make a loss which would then be recouped to it by State subsidy.

Yesterday in another place we had a continuation of these circumstances. Losses may be occasioned in any organisation, either through its own inefficiency or through the intervention of Government Departments. Unfortunately, with publicly-owned enterprises it is much too easy for this to happen because of the second event. However, that does not mean that the operation itself is inefficient. May I point out that in the kind of circumstances which were referred to by the noble Lord, Lord Mackie of Benshie, and the noble Lord, Lord Ogmore, there has not been any record of Government intervention, telling companies in which there would be State shareholdings that they must do this or that they must not do that.

I must make it quite clear to the noble Lord, Lord Glenkinglas, that I do not intend to embark on a second series of arguments with noble Lords opposite about the merits, or otherwise, of the things they have said about past legislation. Happily, we have now disposed of the merits of the 1971 Housing Act, and I do not want to bring it into the argument. Certainly I do not intend to return to the arguments of nine years ago regarding the Highlands and Islands Development Board, except to remind the noble Lord that he is not correct when he says that the Highlands and Islands Development Board did not use the powers, and have never used the powers, to which he takes exception.

What I am now going to say will be of particular interest to the noble Lord, Lord Mackie of Benshie, and the noble Lord, Lord Ogmore, in view of the way in which they have come into this discussion. The Highlands and islands Development Board have taken a large number of shareholdings in a range of companies under their powers to engage in business. Without exception, these are minority holdings. In some cases, the Board has a director on the board of the company concerned. If the noble Lord believes that they have never used powers to set up a wholly-owned company, then he is correct; but I must point out, as has already been pointed out by my noble friends and by noble Lords on the Liberal Benches, that what is being done in this Amendment is to take out any power of participation. I cannot accept that the intervention by the noble Lord, Lord Drumalbyn, during the remarks made by the noble Lord, Lord Ogmore, when he pointed to the power to give financial help, is a substitute for what is being taken out. If it were possible to do the things which are needed by virtue of subsection (2), we should not have bothered in the first instance to insert subsection (3). I am afraid that this is not a case where intervention—

Lord GLENKINGLAS

I am most grateful to the noble Lord for what he has said. Certainly I do not wish to draw him into a long-term discussion about what happened nine years ago. If, however, he will study the results obtained by his research department—the Labour Party have certainly studied carefully the things I have said—he will find that not one of the things that I said were wrong has been used. I have checked this with all the Chairmen of the Highlands and Islands Development Board. I do not object to their taking some part in the shareholding; I object to them taking over the whole thing. Not one thing to which I objected has been used.

Lord HUGHES

I will take up the noble Lord's information in order to do a little more unbiased research into the matter. However, the Amendment which is before us would prevent either whole or part-participation, and it is proposing to give powers to the Scottish Development Agency which are less than those which are available to the Highlands and Islands Development Board. That cannot be disputed. These powers have been used effectively by the Highlands and Islands Development Board during the years of their existence.

I do not like to trail my coat in debates of this kind because in such a field the votes are against me, but I do not think it would be right if I were merely to attempt to put this away with soothing noises because there is a fundamental difference between the wishes as expressed by noble Lords on the Conservative Benches and what the Government want to do in this connection. I suspect that, from the way in which the noble Lord, Lord Campbell of Croy, spoke, this Amendment to the Bill will be carried, not by the merits of the argument but by the merits of the number of votes which may be cast for it in the Division. The noble Lord, Lord Ogmore, will not have to wait for a future Conservative Government to make an Amendment of this kind, restoring such a provision to the Bill, because I can say with certainty that if your Lordships in this Committee decide to emasculate the Bill in this way it will certainly be the intention of the Government to restore that provision, not in some future Parliament, but in the consideration of the Bill when it goes to another place. That of course is no reason, if your Lordships feel it is wrong for it to be in, for you to refrain from taking it out; I am merely pointing out that it is fundamental to the Bill. It is not only Labour Members of Parliament who want to see this done; it is people who accept the fact that in existing circumstances, with all the needs which are available to existing industry under existing powers, still more needs to be done if we are to get a viable economy in Scotland.

It has been said that what was said about the Highlands and Islands Development Board was justified because there were special circumstances, but one of the things which is quite obvious is that in West Central Scotland today there are special circumstances which require attention and therefore it is justification for having powers for this Agency to use in the Industry Bill which are at least as good as the powers available to the Highlands and Islands Development Board. Does the noble Lord wish to intervene?

Lord OGMORE

I think the noble Lord misunderstood what I was saying. I was not waiting for the advent of a future Tory Government to do anything. I was hoping perhaps for a future Liberal Government, but I do not hope for a future Tory Government to do anything. What I was saying to the noble Lord was that now—and not at some future date—perhaps between this debate today and the Report stage of this Bill, he and the noble Lord, Lord Campbell of Croy, could get together and keep the desirable parts of the clause, the parts which we would say are desirable, and thus obviate what he and I believe will do a great deal of harm if the Amendment is passed. That is what I was saying.

Lord HUGHES

That was not the part of the noble Lord's remarks to which I was referring; it was when he spoke a little earlier and said that if this Amendment were carried he thought that in the future the Conservatives would wish to see it put back, and I assumed that he was going on to the disastrous possibility that they might return to Office. I am glad to see that it is the lesser alternative that he is contemplating.

Lord BALERNO

If the noble Lord will excuse me, there is one point I should like to raise. The noble Lord used the phrase "West Central Scotland". May I ask his precise meaning? Is it the Western part of Central Scotland or is it the Eastern part of Strathclyde?

Lord HUGHES

The noble Lord must not tempt me into rediscussing the reorganisation of local government. One knows that he wanted the Central Region to be called "Forth" and he knows perfectly well what is meant in Scotland when we talk about "West Central Scotland". We are in Scotland, not in the reorganisation of local government at the moment.

Past experience has shown quite clearly that Scotland's economic problems can- not be solved by reliance on traditional United Kingdom methods of applying inducements and instruments of persuasion—or, as the noble Lord, Lord Polwarth, put it, when he was chairman of the Scottish Council, the carrot and the stick. There are too many examples of Scottish establishments and the jobs they provide having been rationalised out of existence—and we are seeing it this week with Scottish branches of United Kingdom companies being closed down and their operations being transferred South of the Border. It could obviously be of considerable advantage to the Scottish economy that these powers should continue to be in operation in Scotland. That is why I particularly appreciate the contribution from my noble friend Lord Leatherland, because as things stand at the moment, it is one of the facts of life that we have to live with. They have been transferred and the jobs have gone to promote the greater profitability of United Kingdom or, in some cases, international concerns, and where there have been no active entrepreneurs who could step in and see what could be done to make the Scottish end viable and freestanding. This is one of the gaps we are trying to fill, and to achieve the purpose clearly stated in the Bill of providing, maintaining and safeguarding employment, the Agency must have the powers to engage in business which this Amendment seeks to delete.

What Scotland needs is an institution which makes its primary concern the creation of the greatest amount and quality of jobs and decision-taking in Scotland. Let me emphasise that it is viable undertakings which the industry will wish to promote, since only these can offer long-term job security. And let me emphasise again, as I said at Second Reading, that the Agency will have no powers of compulsion in the acquisition of share holdings. It will obey the same rules as private commercial enterprises but with the dedicated motivation to which I have just referred.

We cannot of course ignore the fact that there is a clearcut division between the Parties at United Kingdom level on the issue of public and private enterprise which tends to be pursued on doctrinaire rather than on practical grounds. This is not necessarily the case in other countries, and I think it is a mistake to let our traditional attitudes blind us to the considerable degree of support which I believe exists not just in the Government Party but well beyond the Government Party for a new mechanism in the Scottish industrial scene. The opponents of excessive centralisation of decision-taking are drawn from both ends of the political spectrum. The private sector has not come up with an answer to these problems and I do not think it is a service for the Opposition to seek to deny the Agency the powers which will enable it to pioneer a totally new approach.

We do not put these forward on the basis that the powers of the Agency will be a panacea for all Scotland's industrial ills; we put them forward as something which will help to deal with them. I would remind noble Lords of the Industry Bill. This, I think, is the kind of thing which the noble Lord, Lord Campbell of Croy, means when he talks about "Bennery", although it is not for me to write the additions to the Conservative dictionary, whether of fact or mythology. If I were to apply a word of that kind, I would wish to emphasise that so far as this Bill is concerned, if it has to be attributed to anybody it is to the Secretary of State, Mr. Ross. So I say it is not "Bennery", it is "Rossery" and it is not necessarily the same thing.

Lord BALERNO

Is this not Bennery in Ross's clothing?

Lord HUGHES

I do not know which is supposed to be the wolf and which the sheep, but I think each would resent either definition.

I would remind noble Lords that the Industry Bill, which has been approved in principle in another place, provides the National Enterprise Board with corresponding powers to establish and engage in industrial undertakings throughout the United Kingdom, and so far as I am aware no attempts were made in Committee to remove those powers. In this context the present Amendment is contrary to the policies of this Government for achieving the greatest possible devolution of industrial decision-taking to Scotland. It would mean that the National Enterprise Board would have powers to set up and run businesses in Scotland, powers denied to the Scottish Develop- ment Agency. I find this inconsistent with the view of the Opposition on the role of the National Enterprise Board in Scotland, expressed in the Second Reading debate on this Bill.

The powers which this Amendment would delete are not unprecedented in Scotland. The Highlands and Islands Development Board have broadly similar powers in Section 6 of the 1965 Act, and Section 1 of the 1968 Act relating to that Board. There are also precedents in other countries, notably Italy, where public enterprise has been a major element in that country's strategy for creating jobs in its regions in need of employment. Coming to Amendment No. 5, to which the noble Lord, Lord Drumalbyn kindly spoke at this stage in our proceedings, it is by no means clear to me, even after what the noble Lord said, what kind of undertakings Amendment No. 5 seeks to enable the Agency to enter into, if they are not to be able to take a direct share in the running of any business. Exploiting new inventions and filling any gaps in United Kingdom production would certainly contribute to the growth and development of Scottish industry, and by virtue of function (c) in this subsection, the Agency are empowered to exercise their powers for these very purposes.

But if the noble Lord is afraid that for some malevolent purpose the Scottish Development Agency would use the powers we are proposing to give them in order to set up a business in close proximity to an existing business of the same kind, so that the latter is forced to close down, then I hope that the noble Lord will not seriously pursue that line of argument. After all, the purpose is to create more jobs, and you do not do that if you set up with Government funds a company whose primary objective is to destroy the jobs already being successfully carried out by someone else. I can say without fear of hesitation that any Scottish Development Agency set up which proceeded to act in that way would not survive very long in their membership under any Secretary of State, whether Labour, Conservative or Liberal, because they would be fundamentally against the objectives of the Bill. I agree that the most likely way is the way in which the Highlands and Islands Board have developed their powers, by co-operation with existing companies, perhaps by pro- viding agreed capital. I like the idea of its being equity capital rather than loans and grants. But there could be circumstances where the desirability of doing something of this kind was not matched by the willingness of someone else to come into it, and the State, through the Board, might set up such a company. But if it did so, it would not be competing with someone else, but stepping in to fill a need which no one else at that stage was prepared to meet. An example quoted by the noble Lord, Lord Leatherland, is a case in point where operations Nos. 2 and 3, clearly profitable, could go ahead, but which would be dependent on someone else outside the country to provide the materials which could come only from operation No. 1.

So while it is very easy either to argue for this or to argue against it on doctrinaire grounds, I do not propose to do so. I do not think it is a doctrinaire need that requires these powers to be in the Bill. It is a fact that in the circumstances in which we exist, and the circumstances which may lie ahead, it is desirable that the powers which have been shown to be useful to the Highlands and Islands Development Board, and which would be taken out by this Amendment, should not in fact be taken out. It is desirable that powers which the Highlands Board have had, but which have not had to be used, should also be available to this Board. If it should turn out that they are not needed and are not used, there is no harm done. The argument against putting them in is that if they are there and not used, this will frighten people away, but the Highlands Board has shown it does not work that way.

There has been no difficulty in getting participation because there were also powers for the Board to do the thing entirely at its own hand. So for all of these reasons, while I may be wasting good breath if I am arguing against a doctrinaire point of view, I do not put it forward from the Government side as something being done for doctrinaire reasons, but something for which in the limited field of the Highlands and Islands Development Board is shown to be something worth doing and which could, with advantage, be applied to the circumstances which now exist over much wider areas of Scotland. Therefore I cannot advise the Committee to accept these Amendments.

Lord FORBES

I wonder whether the noble Lord would clarify one matter for me. Have organisations representing industry been consulted and if so, what was their view on this clause?

Lord HUGHES

The noble Lord, Lord Campbell of Croy, made it fairly clear that this Amendment was inspired by the views of the Scottish office of the CBI. I do not know who did the drafting but it does not matter. The Amendments, it is fair to say, clearly reflect the thinking of the CBI in Scotland. There were wide consultations in connection with this, but in a Bill of this kind it does not follow that consultation necessarily means that one accomplishes agreement. I had occasion to comment on the somewhat wild statements made not by the CBI in Scotland but by the Secretary of the CBI in Scotland, which revealed a rather remarkable degree of ignorance about the contents of the Bill.

I am willing to assume the Amendments inspired by the CBI spring not from ignorance of the contents of the Bill, but from their views about the way certain procedures should be put into the Bill, and the possible use of those procedures. It is quite possible that we could not reach agreement with the CBI on that, just as I am fairly certain, notwithstanding the tempting proposals put forward by the noble Lord, Lord Ogmore, that the noble Lord, Lord Campbell of Croy, might come up with a composite Amendment.

The Earl of PERTH

The noble Lord, Lord Hughes said that, under the existing clause as it stands, anything that was established would follow the same rules. Is there anything which proves that that would be the case? Listening to the debate I have been struck by the very real fears that some noble Lords have that what may be established will in fact be used for doctrinaire purposes, and there is no safeguard against that. It is all very well for the noble Lord to say that it will follow the same rules. He said also that it would not be in competition with existing businesses. This may be true, or it may not be.

The noble Lord, Lord Taylor of Gryfe, made a very good point when he said that the members of the Board should be some sort of a guarantee. It is not entirely satisfactory when one knows that the Secretary of State is the person who has the power to appoint. I think it would be a mistake to accept the Amendment as it stands, because as the noble Lord said, and as the Liberal Party have pointed out, it excludes the possibility of working in conjunction with an existing business. That would be a pity. I would hope very much that there was some way of bringing out that point, either in some new Amendment on Report stage, even if this Amendment is carried today and there is, therefore, that gap. But I would be grateful if the noble Lord could tell us on what he bases his statement that it would follow the same rules, because this, apparently, is the main fear on the part of those on the Conservative Benches.

Lord DRUMALBYN

Before the noble Lord, Lord Hughes, winds up—

Lord HUGHES

Would the noble Lord, Lord Drumalbyn, permit me to answer the question put to me by the noble Earl, Lord Perth? I do not know if I used the words "following the same rules", but it is a fair description of the way I was thinking. The object of the exercise is to promote the prosperity of Scotland. As I said, one will not promote the prosperity of Scotland by using public funds to set up a company to manufacture something already being manufactured by someone in Scotland, if the result is to drive them out of business, because one would merely finish up with a lower number of jobs than that with which you started. The Highlands and Islands Board never found it necessary to do anything of that kind.

In giving the same sort of powers, I think it is perfectly reasonable to say that they are being given because the way in which they have been used in the past has been found to be acceptable in a particular area. It will be equally acceptable to use the same kind of powers in a similar way in another area. So far as the taking of shareholdings in existing companies is concerned, we will come to that later on in the Bill, but one of the things which I will be emphasising then is that the Agency will be operating entirely within the rules which operate in a take-over of or participation in private enterprise, such as are laid down by the Exchange.

The Earl of PERTH

I thank the noble Lord. I am quite clear, because I wrote it down, that he used the words "follow the same rules". I do not think the answer he has given is entirely satisfactory. As I said, the fear is that there is to be unfair competition. If there could be some assurance on that, which I took to come from the words "follow the same rules", I, for one, would be very much happier. But I do not see it in the Bill, and that is very worrying.

Lord HUGHES

I will look at the point. I can certainly say that it is not part of the intention of the Government in setting up the Scottish Development Agency that there should be unfair competition between enterprises of the Agency and enterprises already existing in Scotland. That would be a self-defeating exercise. I should think it does not need to be re-emphasised that this is the Government's position.

Lord DRUMALBYN

If I might refer to what the noble Lord was good enough to say about my alternative Amendment. I wonder whether I could ask him, now that I have expressed what I have in mind in this Amendment—and I fully admit that there may be serious deficiencies in drafting—if he would have a look at the intention I have in mind, possibly having looked back to the NEDO report, to see whether my point is already fully covered by the Bill. The second point I should like to make is that the noble Lord must realise that we are in a very difficult position in a Scottish debate of this kind. It is one thing to say "This is a power that was in the Highlands and Islands Development Act; true, it has never been used but it might still be used, and it might be just as well to put it in this Bill". But it is a totally different thing to say that in the present climate, when we have the Industry Bill before another place, when there is a National Enterprise Board—and I would describe "Bennery" as sheer grab—and there is a totally different situation from this. This is placing this House at this time in a difficult position.

I would suggest to the noble Lord that if he wants this power retained he should consider Parliamentary safeguards about the setting up of new enterprises in Scotland to be carried on entirely by the Scottish Development Agency. I think it would be a mistake for the Scottish Development Agency themselves to run enterprises. They have quite enough to do. They are primarily an administrative body stretching over a very wide field, development of derelict land, Scottish rural industries, and all the rest of it. I have doubts whether it is really a good thing for the Agency themselves to run enterprises. The only exception would be a power in default, to do something it was desirable to do which could not be done in any other way. I wonder whether the noble Lord would at least have a look at that.

4.45 p.m.

Lord HUGHES

Certainly I will look at it. I have been under the difficulty that I have been arguing against an Amendment which takes out two things; it takes out the opportunity of setting up a wholly-owned company but it also takes out the other matter. There has been a considerable defence of and I think no attack on the power to participate. Yet the Amendment, of course, does also do that. I do not think it is part of my responsibility, as a Minister for a Government who have produced a Bill in what they consider a perfectly satisfactory form, to produce Amendments to take away the unsatisfactory features of Opposition Amendments. If the argument has shown that there is no case for removing the powers of participation, then it is for the noble Lord, Lord Campbell of Croy, and his colleagues not to proceed with this Amendment but to find one which would be more acceptable generally to the Committee. If the noble Lord insists on this Amendment going into the Bill, and succeeds in doing that, I will be content for it to be left there. This would be so completely contrary to the wishes of another place, as already expressed and discussed on the Industry Bill, that it would be equally certain to be contrary to their wishes on this Bill. I do not see any reason why I should waste your Lordships' time in attempting to put forward another Amendment with no certainty of success, when it is much more likely to be amended in another place, if by a decision of the Committee this Amendment should be unwisely put in the Bill.

Lord CAMPBELL of CROY

The noble Lord said in the course of his statement what I had already said and what I thought was agreed, that there is much support in Scotland among those interested for a new mechanism, for the reasons which I stated earlier. He also spoke about decentralisation, but certainly there has been no evidence that putting things into public ownership has caused decentralisation so far as Scotland is concerned. Then he said just now that this Amendment which seeks to take out this paragraph means that functions which are agreed by most members of the Committee would then be removed. But in the rest of the Bill there is a great deal which permits this new Agency, to which we are not objecting, to carry out what we think to be desirable purposes and functions to be acquired by such a new body in Scotland. I do not think it is for us, the Opposition, to try to redraft this Bill, to have to vote on perhaps 20 or 30 Amendments in order to carry out the kind of redrafting the noble Lord was suggesting.

We have suggested here an Amendment which greatly improves the Bill, and I can assure the noble Lord that this is what the majority of private industry in Scotland thinks, that the removal of this paragraph would greatly improve it. The noble Lord did not give a very satisfactory answer to my noble friend Lord Forbes. The impression he gave was that the Secretary of the Scottish CBI was speaking for himself. I can assure him that all the normally accepted representatives of Scottish Industry are concerned about this paragraph and other parts of the Bill, which would give the Agency wide-ranging powers far in excess of anything they need for the functions and purposes which most people see them carrying out in Scotland.

Lord HUGHES

I thought I made it perfectly clear that I acepted that this Amendment and similar Amendments perfectly reflect the views of the CBI in Scotland, and therefore, in so far as they are the principle spokesmen of industry in Scotland, I accept that they are the views of industry as reflected by the CBI. What I was careful to point out was that I was not ascribing some rather foolish remarks which were published to the CBI as a whole but perhaps to the personal peccadillo of the Secretary.

Lord CAMPBELL of CROY

I will not go into that last point; it is a matter between the noble Lord and the person concerned. I am glad that he has said quite categorically that the Scottish Office and the CBI have made it clear to him that members of industry in the private sector in Scotland have stated that they are worried about these powers. The noble Lord said that this Bill was something to be operated by the Secretary of State for Scotland, but it was quite separate from the Industry Bill and what has been described as "Bennery". I have sidelined all the passages in this Bill which are almost identical to the Industry Bill. I will not go through them, but there are important sections, whole sections of this Bill, which are word for word straight from the Industry Bill; that applies to most of this clause in fact. There is one part of this clause which is—

Lord HUGHES

If the noble Lord wants to quote something, I should like to come in now.

Lord CAMPBELL of CROY

All right.

Lord HUGHES

The noble Lord makes the assumption that everything that is identical in the Scottish Development Agency (No. 2) Bill has been taken from the Industry Bill. We have been on this point for a long time. He might at least concede the possibility that some of the things that are in the Industry Bill have been taken from the Scottish Development Agency (No. 2) Bill.

Lord CAMPBELL of CROY

If I believed that, I think I would believe anything about the subsections with which we are dealing now, because we have had debates both in the other place and here on Scottish development and have dealt with these matters, but not with proposals of the kind in this clause, but there they are, identical with what is in the Industry Bill next door.

I was coming to the important subsection which does not appear in this Bill but which appears in the other Bill. I was asked by, I think, the noble Lord, Lord Tanlaw, what is the definition of "Bennery". I could not give a defini- tion of that, but I should like to point out that in the Industry Bill there is this function in Clause 2(2): extending public ownership into profitable areas of manufacturing industry. That is an example of "Bennery". We should bear that in mind, because it is quite clear that the Scottish Agency, because so much of the rest of the clause is repeated from the Industry Bill, is to be an arm of the National Enterprise Board. The noble Lord speaks about the Highlands and Islands Development (Scotland) Act and our consideration of that nine years ago. It was not brought forward at a time when that kind of function was being written into the parent Act, which was quite clearly a blatant extension of public ownership into quite profitable areas of manufacturing industry, and not simply the sort of rescue operation which can be carried out under the 1972 Industry Act.

The noble Lord, Lord Ogmore, suggested that I and the noble Lord, Lord Hughes, might get together before Report stage and try to find parts of Clause 2 which we agree should remain, and which the noble Lord, Lord Hughes, would agree to remove. But that is what we are doing, because we are not dealing with the whole of Clause 2 now. We are not suggesting that other functions in Clause 2 should be removed. We are suggesting that one or two objectionable features, including this subsection, should be removed.

Lord OGMORE

May I ask why this part of the clause is put in, because if the Amendment goes through today the opportunity of the Agency to work with private companies or developers will be lost?

Lord CAMPBELL of CROY

No, I was coming to that. But I would point out that I have already indicated that there are other parts of the Bill under which it is possible, as my noble friend Lord Drumalbyn pointed out, for the Agency to co-operate closely and financially with a firm. I shall come to that near the end. My noble kinsman Lord Glenkinglas spoke about Section 6 of the Highlands and Islands Development (Scotland) Act. When that appeared 10 years ago in the other place, Section 6 did not have the words "by agreement" written in, and it was during the Com- mittee stage that they were added. Of course, they immediately made it clear, as the noble Lord has been doing in regard to this Agency, that the Highlands and Islands Development Board could take over and run industries only by agreement. We are coming to a debate on a similar Amendment to this Bill, so I shall not pursue it.

In the Second Reading debate on this Bill the noble Lord, Lord Hughes, was guilty of an error. He was not able to give way to allow me to correct it at the time, so I must do it now. He then said that that Amendment, which made sure that this could be done only by agreement in the case of the Highlands and Islands Development Board, had been added again in the 1968 Act. That is not so. The 1968 Act produced additions to Section 6, but they were not additions that were originally in Section 6, and there was no record of their having been in the original Bill. He made his statement at columns 897 and 898 of the Report of our Second Reading debate in referring to the 1968 Bill, saying that they had been reinserted. That is not the point I was making. I was saying that when Section 6 appeared in the other place in the Highlands and Islands Development (Scotland) Act there was nothing to indicate that the powers would be used only by agreement. That point was later conceded by the Government at Committee stage, and it made a considerable difference.

The noble Lord, Lord Taylor of Gryfe, took the line that the members of this Agency would never use these powers in the kind of way which Scottish industry fears. If all the members were reasonable people like him, I am sure that would be so. Certainly, in the work he has done in Scotland he has shown great sense in the way he has dealt with such matters. But that is not the point. Parliament does not like giving Agencies, the membership of which is not known and which is subject to Ministers of the future, powers which greatly exceed those that would be needed for their functions. The noble Lord, Lord Tanlaw raised the question of the fears of Scottish industry about "Bennery". I have already pointed out, and I say the same to the noble Lord, Lord Taylor of Gryfe, that it is that function in the Industry Bill about extending public ownership into profitable areas of manufacturing industry, and the very close connection with this Bill, which causes such concern in Scottish industry.

The noble Earl, Lord Perth, suggested that something might be retained for joint undertakings so that the Agency had powers to carry out joint undertakings with industry. That is certainly something to be considered. This also deals with the point that the noble Lord, Lord Ogmore, raised. I would advise your Lordships to remove this subsection, in any case, because that would remove the greater powers which are unnecessary and which are objectionable, because they antagonise the Scottish firms, the private industry, upon which we will depend in the coming years, and also because it would give the Agency powers—whether they used them or not—which are not necessary in order to carry out the kind of functions which most people in Scotland expect. I would ask my noble friends to join in supporting this Amendment.

4.57 p.m.

Lord HUGHES

Before the Amendment is put I should like, finally, to draw attention to what seems to me to be a total inconsistency in the advice which has just been tendered by the noble Lord, Lord Campbell, on this Amendment. He was at great pains to put forward the argument that this Bill is a child of the Industry Bill. I have emphasised, and I re-emphasise, that there is no parent and child relationship at all about these Bills. Obviously, where there are similar objectives being sought outside Scotland which figure in the Industry Bill and similar solutions are being sought, it would be ridiculous to adopt one form of words in the Industry Bill and another in the Scottish Development Agency (No. 2) Bill.

It is fair enough to make the comparison, but it seemed to me to be going beyond what is reasonable and fair if the noble Lord should follow up criticism of similarity by then pointing to something which is in the Industry Bill, and which he was fair enough to say does not appear in the Scottish Development Agency (No. 2) Bill, as being an argument against the Scottish Bill. If your Lordships want to refer to that, you must look at the restrictive purposes of Clause 2(1) of this Bill. Of course the powers of engaging in industry are in the same words. But it is the purpose for which the powers are used which is all important. The noble Lord, Lord Campbell of Croy, has himself put his finger on the difference between these matters and, having put his finger on the precise difference, I cannot for the life of me see why he cannot accept the fair and logical conclusion of that difference.

It is clear that the noble Lord intends to proceed to a Division on this issue, but I remain of the view that it is not so much justifiable fears—and there could be and are fears; not necessarily justifiable fears but legitimately held fears—on the part of the CBI, because this is how they are thinking, that are the reason, but a much more a doctrinaire approach, which I do not believe is a justification for removing the whole provision. The noble Lord admitted that part of the powers are desirable, yet he is recommending to the Committee an Amendment which would remove from the Bill all these powers, whether for complete or partial participation.

Lord CAMPBELL of CROY

The noble Lord has made yet another point and perhaps I may be permitted to answer him. He has suggested that the Industry Bill, which, after all, represents the policy of this Government over the whole country—it is not just limited to England—has a function in relation to the National Enterprise Board in extending public ownership into profitable areas of manufacturing industry. Yet according to the noble Lord the Government would not carry out that policy in Scotland and the Secretary of State for Scotland would be going a different way. I know that there has been an absence of Cabinet responsibility in recent weeks, but surely that discretion has now come to an end. The point is that in the climate of today, where the Government are putting for-

ward in an Industry Bill covering the whole country that function and that purpose, industry is naturally worried when it finds a Bill which is almost exactly the same for Scotland setting up an agency within that framework.

Lord HUGHES

That will, of course, be a very suitable Amendment to suggest for the Industry Bill when it arrives here, if that provision still remains. But I do not see how one can amend the Industry Bill by taking out of the Scottish Development Agency (No. 2) Bill something which has nothing to do with the matter about which the noble Lord is talking.

The Earl of PERTH

Would the noble Lord be prepared to consider on Report an Amendment which restricted the powers in this clause so that the fears of the CBI would be largely removed?

Lord HUGHES

I think my record shows that I am always prepared to consider any Amendment that is put forward. What I am not prepared to accept is the responsibility for correcting what I think is presently a bad Amendment. But if this Amendment is not accepted and something of a more acceptable nature is produced then, obviously, I must consider it and I will certainly undertake to give such consideration. But that does not necessarily mean that I can give an assurance in advance that I shall accept it. Obviously, I must see such an Amendment first.

The Earl of PERTH

The noble Lord misunderstood me. I was hoping that he himself would introduce such an Amendment.

5.3 p.m.

On Question, Whether the said Amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 91; Not-Contents, 54.

CONTENTS
Aberdare, L.	Campbell of Croy, L.	Dundee, E.
Alexander of Tunis, E.	Carrington, L.	Eccles, V.
Allerton, L.	Clifford of Chudleigh, L.	Effingham, E.
Alport, L.	Cork and Orrery, E.	Elliot of Harwood, B.
Amory, V.	Cowley, E.	Elton, L.
Arran, E.	Cranbrook, E.	Emmet of Amberley, B.
Auckland, L.	Crathorne, L.	Erskine of Rerrick, L.
Balerno, L.	Cromartie, E.	Falkland, V.
Barnby, L.	Daventry, V.	Ferrers, E.
Belstead, L.	Davidson, V.	Forbes, L.
Berkeley, B.	de Clifford, L.	Fraser of Kilmorack, L.
Boyd of Merton, V.	Denham, L. [Teller.]	Gainford, L.
Buckton, L.	Digby, L.	Glenkinglas, L.
Cairns, E.	Drumalbyn, L.	Goschen, V.
Gridley, L.	Mersey, V.	Sandys, L.
Grimston of Westbury, L.	Meston, L.	Savile, L.
Hailsham of Saint Marylebone, L.	Monck, V.	Selborne, E.
	Mottistone, L.	Sempill, Ly.
Hanworth, V.	Mountgarret, V.	Somers, L.
Harmar-Nicholls, L.	Mowbray and Stourton, L. [Teller.]	Stamp, L.
Home of the Hirsel, L.		Strathclyde, L.
Inglewood, L.	Nugent of Guildford, L.	Strathcona and Mount Royal, L.
Jessel, L.	Onslow, E.
Kinnoull, E.	Orr-Ewing, L.	Strathspey, L.
Long, V.	Penrhyn, L.	Terrington, L.
Loudoun, C.	Rankeillour, L.	Tweedsmuir, L.
Lyell, L.	Reigate, L.	Vernon, L.
Macleod of Borve, B.	Rockley, L.	Vickers, B.
Mancroft, L.	Ruthven of Freeland, Ly.	Vivian, L.
Mansfield, E.	St. Helens, L.	Ward of North Tyneside, B.
Massereene and Ferrard, V.	St. Just, L.	Young, B.
Merrivale, L.
NOT-CONTENTS
Ardwick, L.	Hale, L.	Platt, L.
Arwyn, L.	Henderson, L.	Popplewell, L.
Aylestone, L.	Houghton of Sowerby, L.	Segal, L.
Beswick, L.	Hughes, L.	Shepherd, L. (L. Privy Seal.)
Blyton, L.	Jacques, L.	Slater, L.
Boothby, L.	Janner, L.	Stedman, B.
Brockway, L.	Leatherland, L.	Stewart of Alvechurch, B.
Bruce of Donington, L.	Lee of Asheridge, B.	Strabolgi, L. [Teller.]
Burntwood, L.	Lee of Newton, L.	Taylor of Gryfe, L.
Castle, L.	Llewelyn-Davies of Hastoe, B.	Taylor of Mansfield, L.
Champion, L.		Wallace of Campsie, L.
Crook, L.	Lovell-Davis, L.	Wells-Pestell, L. [Teller.]
Davies of Leek, L.	Maelor, L.	White, B.
Donaldson of Kingsbridge, L.	Maybray-King, L.	Wigg, L.
Evans of Hungershall, L.	Melchett, L.	Willis, L.
Fisher of Rednal, B.	Paget of Northampton, L.	Winterbottom, L.
Gaitskell, B.	Pannell, L.	Wootton of Abinger, B.
Gordon Walker, L.	Phillips, B.	Wynne-Jones, L.
Goronwy-Roberts, L.

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

Resolved in the affirmative, and Amendment agreed to accordingly.

5.13 p.m.

Lord DRUMALBYN moved Amendment No. 6: Page 2, line 37, leave out ("otherwise")

The noble Lord said: I am not clear whether "otherwise" refers to paragraph (a) as well as paragraph (b). I took it that it referred only to paragraph (b). If it does, it is now redundant. I beg to move.

Lord HUGHES

I was proceeding on the assumption that the Amendment was consequential on Amendment No. 5. As the noble Lord has not moved Amendment No. 5, I think that the present Amendment should fall. If I am in error in that, I can give all sorts of other explanations as to why the word "otherwise" should not be taken out, but I should have preferred the noble Lord not to move the Amendment.

Lord DRUMALBYN

I thought that it was consequential on the words, "leave out paragraph (b)". If, as I said, it was intended to relate to both paragraphs (a) and (b), I would not press the Amendment. If it relates only to paragraph (b), clearly the word "otherwise" would fall, since paragraph (b) has been deleted.

Lord HUGHES

It is not affected by the taking out of paragraph (b). The simple explanation is that paragraph (c) is regarded as being in a different category from paragraphs (a) and (b). If (b) is taken out, (a) and (c) would still be in different categories. If I were to employ the language of the noble Lord, Lord Campbell of Croy, for simplicity, if not for accuracy, I would say that he might characterise paragraphs (a) and (b) as "Bennery" and (c) as not. Therefore it is necessary to put "otherwise" at the beginning of paragraph (c).

Lord DRUMALBYN

I take it that that noble Lord is now saying that the paragraph means, "otherwise than as provided in (a)." That being so, I beg to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.15 p.m.

Lord CAMPBELL of CROY moved Amendment No. 8:

Page 3, line 3, leave out paragraph (f) and insert— ( ) conducting its affairs in relation to the employees, shareholders, customers and suppliers of undertakings which the Agency controls in accordance with the best industrial practices;

The noble Lord said: Perhaps we may discuss this Amendment with Amendment No. 9, if that is convenient. It would seek to remove paragraph (f) and to insert the words on the Marshalled List. This is an example of a subsection which exactly reproduces one in the Industry Bill. As the noble Lord, Lord Hughes, had something to say about this, I would point out that there are quite a number of these in the Bill, though I shall not enumerate them all on the present clause.

One person's ideas of industrial democracy may be very different from another's. Whether or not the Bill is greatly amended in its passage through Parliament, the Agency may be controlling one or more undertakings in due course and may therefore be concerned with employees. Surely an Amendment is required in order that the Agency should conduct its affairs so as to be unexceptionable to both sides of this House, whatever their interpretation of industrial democracy. I believe it wrong to leave the words "industrial democracy" undefined and unqualified in the Bill. For example, to some it may denote workers taking part in running companies as directors on boards, but to most I believe that it will mean consultation before decisions affecting workers are taken. I think that that is a concept with which many of us can agree though, on the whole, I believe that most unions in this country prefer the latter interpretation. I believe that there are signs that in the coming years more will be done about this and that better machinery will be extended throughout the country to provide for this. So, in principle, I, for one, would be in favour of a system where there was suitable and adequate consultation with workers before decisions affecting them were taken. However, I believe that it is wrong to insert as a purpose of this Agency a term that is ambiguous, undefined and interpretable in different ways. I therefore propose that it should be deleted and that the words on the Marshalled List—which I believe all sides of the Committee would accept—should be inserted in its place. I beg to move.

Baroness ELLIOT of HARWOOD

I should like to support the Amendment because my Amendment No. 7 was put down primarily to see whether there was any definition which made proper sense of the words "industrial democracy". Of course anybody who is chairman of a board or who is running a business must obtain the co-operation of all the people in that business, but how? What is the best way of doing it? What is the right way to set about it? To put in an ambiguous phrase like, industrial democracy in undertakings which the agency control", may mean nothing or it may mean a great deal; it might be very obstructive or it might be very helpful. What does it mean? Anyway, I do not myself feel that, as it stands, this paragraph should remain in the Bill. It should be qualified.

Lord MACKIE of BENSHIE

On this occasion, I can say that we would support this Amendment or one like it because this phrase does really need to be better defined. "Industrial democracy" could mean anything. The Liberal Party has been in the forefront in the promotion of consultation, profit sharing and worker participation in many fields of management. But "industrial democracy" is too vague a phrase. I should certainly prefer a redefinition.

Lord HUGHES

I can understand the view expressed both by the noble Baroness, Lady Elliot, and by the noble Lord, Lord Mackie of Benshie, about the vagueness of the phrase. However, even if we accept the general idea—and there has not been disagreement on this point for, unlike in the previous discussion, there is nothing fundamentally different between what the noble Lord, Lord Campbell of Croy, desires and what the Government want—the Government have used the words "industrial democracy" advisedly. One thing which is quite certain in the times in which we live is that fundamental changes are taking place in attitudes in industry, in the structure of industry and sometimes even in the balance of power and responsibility in industry. We must be able to take account of these changes.

I think everyone is entitled to expect that the Agency will ensure that enterprises under its control will provide for the full involvement of employees in all appropriate ways in decision making. We do not think it is necessary to define the form that industrial democracy takes. Indeed it is quite impossible to define it, because what might be quite appropriate in one company could be totally unsuitable in another. The Government have sought a term which would cover all the possibilities of participation. The sort of things which the Liberal Party has been advocating—profit-sharing and so on—could be comprised in this. But if we were to attempt a definition of all the matters that might be possible, I fear that we would add many pages to the Bill without necessarily making it any better.

To promote industrial democracy is a function, but in Amendment No. 8 this is being replaced by an exhortation to adhere to the best existing practices. But the way in which this is worded means that it is inappropriate. If you want to be logical you can say that the functions of the Agency shall be conducting its affairs in relation to the employees, shareholders, customers and suppliers … but it is not a definition of a function, and so what is proposed does not make sense. I accept that it is an attempt to define a way in which industrial democracy might be worked out, and as a possible definition I would not dissent from it. But this is a field in which we can apply only the general and widest possible—and indeed even the vaguest possible—sort of description, and see what is involved. But it is obvious that what might turn out to be a satisfactory form of industrial democracy in one company up in the North of Scotland—if I might take something which will not be a function of the Scottish Development Agency, making Orkney cheese or Caithness glass—will be totally different from what might happen in, say, British Leyland.

There is a tremendous range of activity involved and the sort of thing which might commend itself to the noble Lord, Lord Mackie of Benshie, would be capable of being repeated in many enterprises in Scotland without offence to anybody. Therefore, the Amendment is not appropriate as a description of a function. It does not describe a function. But on specific matters, there is a code of standards—such as the take-over code—which the Agency and the subsidiaries will follow. In the unlikely event—I stress that it would be very unlikely—of the Agency failing to maintain appropriate standards, the Secretary of State will have the power of direction to ensure that these deficiencies are recognised.

I do not want to disagree with the noble Lord, Lord Campbell of Croy, because we are pursuing the same sort of objective here. But it is not enough to say that you rely on consultation, because consultation means that you talk to somebody but you do not necessarily carry it cut. We had an example of consultation across the Floor with regard to Amendment No. 4. But the consultation did not result in my doing what the noble Lord, Lord Campbell, wanted done; nor did it result in the noble Lord doing what I wanted. So we must look beyond the possibility of merely consulting people.

I suggest that whatever disagreements we may have on wider principles, there is nothing in this matter that would justify our taking out the paragraph. I do not think that leaving it in will ultimately cause any anxiety on the parts of noble Lords opposite. If during later consideration another form of words which were capable of giving a general definition were found, then I would not be averse to that. But at the moment this is a matter which it is impossible to specify in detail.

Lord DRUMALBYN

I understand that we are discussing Amendment No. 9 at the same time as Amendment No. 8, and therefore I wonder whether the form of words proposed in Amendment No. 9 might conceivably commend itself to the noble Lord. I must confess that some of the interpretations of "industrial democracy" that I have heard are so abhorrent to me that I would be very loath to allow such a general term, which is interpreted so widely and so differently in various places, to be retained in the Bill. I am sure that what we are really after is what I suggest in my Amendment; that is, good industrial relations. Therefore, I hope that the noble Lord will agree to accept something which we can all accept; that is, promoting or helping to promote good industrial relations in undertakings to which the Agency provides finance". I do not think I need say anything more about this. I can only say to noble Lords opposite that I have heard so many different interpretations from Labour supporters of what they mean by "industrial democracy" that it would be dangerous to include this wording in the Bill. I ask them to recognise that some of the interpretations are strongly disagreed with on this side, and it would be very much better to get a neutral description.

Lord HUGHES

I have just appreciated what is perhaps a defect in the reasoning that I put forward on this point. I said that there is no fundamental difference, but looking at the wording of the Bill I see that there is a reference to, "undertakings which the Agency control". Having regard to the Amendment just made to the Bill, it may well be that the words "in undertakings which the Agency control" no longer have the validity which they would have had if the Amendment had not been made. With regard to Amendment No. 9, at least I cannot argue that what it contains is not a function, because the Amendment refers to, promoting or helping to promote good industrial relations in undertakings to which the Agency provides finance". When I looked at the words "provides finance", I directed my attention to the words in the Bill. We do not think it would be appropriate to accept the wording suggested by the noble Lord, because it would not be appropriate to give the Agency a duty of this kind in relation to undertakings over which the Agency has no control, and to which it has merely given financial support. It could be regarded as the Agency seeking to intervene or interfere in the way that a company was running its undertaking, and that the mere giving of finance by the Agency did not give it such a right.

While the Bill, as it stands in relation to the last words of that paragraph which the noble Lord, Lord Campbell of Croy, wishes to have taken out may not be entirely what he wants, the last words of the Amendment put forward by the noble Lord, Lord Drumalbyn, are unacceptable to the Government. If the noble Lord, Lord Campbell of Croy, does not feel having regard to Amendment No. 4, that there is inconsistency in leaving this paragraph in, I hope that he will not press the Amendment. If he feels that it is a natural follow-up to what he has done, I would not ask the Committee to divide on the matter.

5.30 p.m.

Lord TAYLOR of GRYFE

I have a good deal of sympathy with the various speakers who tried to get a clearer definition of industrial democracy. When I read this phrase in the Bill I consulted a variety of sources—for example, the Institute of Management, the Institute of Personnel Management and some trade unions—and I got a variety of interpretations as to what "industrial democracy" means. To that extent it is dangerous to put it in the Bill, because if people are trade unionist they feel that industrial democracy means something different. In these days with the popularity of the concept of workers' control, "industrial democracy", for many trade unionists, involves a degree of workers' control. I wonder whether a code of practice in employment and so on written into the Industry Bill that is going through the other place might not cover this rather than bringing it forward in a Bill of this kind. We are talking about industries where the Agency has control. A large number of industries are controlled by the Government and I wonder whether, in the light of this clause, there would be any comment as to whether existing nationalised industries came into this category of industrial democracy.

I think it is rather dangerous to use a phraseology which could be a source of conflict because so many people interpret it in so many different ways. I am encouraged by the statement of the noble Lord, Lord Hughes, that perhaps this Amendment might be looked at again and not be pressed to a Division. It is important that there should be some better definition of the phrase "industrial democracy".

Viscount AMORY

I would not think that this should be carried to a Division because I do not think there is much between us. I agree with so much of what has just been said by the noble Lord, Lord Taylor of Gryfe, which seems to me to be extremely wise. I also agree with the suggestion of my noble friend Lord Drumalbyn that good industrial relations is what we all mean. I am not quite clear what objection the noble Lord, Lord Hughes, has to those words. It seems to me that they carry the broad consensus of what all of us would hope to see in this case and all other similar cases.

Lord HUGHES

If I could reply to the point raised by the noble Viscount, Lord Amory, the advice I got was that if we accepted the Amendment moved by the noble Lord, Lord Drumalbyn, we should be imposing a duty on the Agency to intervene in the industrial relations of companies in the running of which they had nothing to do, simply because they may have provided finance to the company, by way of a loan or a grant. In the ordinary course of events this does not entitle Government agencies to say, "You must do this", or, "You must do that". It was felt that if we imposed such a duty on the Agency merely because they provided finance it could be interpreted as an intrusion into the ordinary affairs of a company. It could, of course, be argued that this would be the right thing for the Agency to do. Employees might think it a good thing to do, but the shareholders might take a different view.

Lord LYELL

I should like to support the Amendment of my noble friend Lord Campbell of Croy, but I find myself a little confused by the explanations we have had from the noble Lord, Lord Hughes. I believe that the phraseology in the Bill as at present drafted gives the Agency the power to encourage industrial democracy, and, sadly I think, this will mean all sorts of different things to different people engaged in a particular industry. Amendment No. 8 as drafted may in one way or another be unsatisfactory to the noble Lord, Lord Hughes, and possibly to the Government, in that it may not be perfectly drafted, but I believe that it spells out clearly the interested parties within the particular industries—the employees, the shareholders, the customers and the suppliers, all of whom I believe are part of that undertaking, at least for a profitable and successful industry, which is what we are talking about. If this Amendment could be better drafted I think we might consider it and it would be better than the phrase "industrial democracy" as set out in the Bill.

Secondly, I think that the noble Lord, Lord Hughes, tried to draw a distinction between two companies—Caithness Glass and British Leyland. I believe that the principles of successful industrial relations and the successful participation of everybody—not just employees, not just shareholders or even management, but also of customers and suppliers—is just as vital for large companies in Scotland or elsewhere as for smaller companies, or small undertakings. Speaking for my own personal interest, I believe that in running a farming enterprise, as I do, I have to conduct it on the lines laid down in Amendment No. 8, and I believe that such conduct should be fostered by the Agency. In the way in which it is set out in the Bill I feel that "promoting industrial democracy" could give rise to all sorts of wrong thinking.

Lord MACKIE of BENSHIE

May I ask the noble Lord, Lord Campbell of Croy, to accept the Minister's kind offer to look at this again at a later stage?

Lord CAMPBELL of CROY

I am not sure whether the noble Lord, Lord Hughes, is rising again. If he wishes to reply to any other points I shall certainly give way to him.

Lord HUGHES

I should just like to comment that if the noble Lord, Lord Campbell of Croy, felt that it was absolutely essential to pursue something along the lines of his Amendment No. 8, or some sort of variation of Amendment No. 9 to be moved by the noble Lord, Lord Drumalbyn, or even some variation of Amendment No. 10 to be moved by my noble friend, I would suggest that these Amendments should be withdrawn today and that the noble Lords should sit down together to get a variety of it which would at least be correctly described as a function. The drawback about Amendment No. 8 is that it includes as a function something which clearly is not a function, and therefore it needs redrafting.

I would prefer what is in the Bill as it stands, but if the noble Lords could get together and draw up something which fits tidily into the Bill as it stands, I will not oppose it at the next stage. That does not mean to say that on behalf of the Government I will accept the correctness of it, but I would not go through the procedures of dividing against the Bill. I would just say, "Not Content" and let it rest. Therefore the noble Lord could get into the Bill something which he thinks is in better form; it could then go to another place for their consideration, in such a way as he thinks is better in order to achieve the same object as the Bill in the use of the words "industrial democracy". I think that is the most helpful suggestion I can make. I would suggest that the noble Lord, Lord Drumalbyn, would be a very useful adjunct to the noble Lord, Lord Campbell of Croy, in drafting, because I have told him before that it has been the opinion of the Scottish Office that when he elected to become a Scottish politician we lost a very good potential Scottish draftsman.

Lord DRUMALBYN

I do not rate my drafting ability as highly as the noble Lord described it, but may I say that I quite deliberately framed my Amendment because so often one has seen Government money passed to firms where industrial relations were thoroughly bad and the money went down the drain. This is a point to be considered. I do not suggest that my drafting is correct. I would willingly accept the suggestion which the noble Lord made to sit down with my noble friends and any others to try to work out an alternative to what I am afraid I still think is a rather objectionable clause in the Bill.

Lord CAMPBELL of CROY

I am sure we are all grateful to the noble Lord, Lord Hughes, for his offer. This short debate has produced agreement on all sides that we dislike the term "industrial democracy" undefined and simply appearing in the Bill like that. The noble Lord has offered to remove that or to agree to something at Report stage without commitment to what might happen to it elsewhere. For my part, I am ready to accept that. The noble Lord, Lord Taylor of Gryfe, expressed what we all agree with about the fault of putting this term in the Bill in this way. My noble friend Lord Amory also pointed out that my noble friend Lord Drumalbyn's alternative had great merit in it although I see the point that the noble Lord, Lord Hughes, made that it would give the Agency the opportunity to interfere in a firm's affairs even if it were giving it quite a small grant and did not come near to controlling it. I therefore accept the offer that we should produce something that in form is more acceptable in the Bill. I am glad that the noble Lord, Lord Hughes, agrees with the sentiments in my Amendment which I now seek to withdraw.

Amendment, by leave, withdrawn.

5.42 p.m.

Lord TAYLOR of GRYFE moved Amendment No. 10:

Page 3, line 11, at end insert— In pursuance of these functions the Agency will seek the acceptance of financial targets to which management and employees will jointly subscribe.

The noble Lord said: We have been talking about industrial democracy and I believe that industrial democracy carries with it certain responsibilities. There is sometimes a misunderstanding of the purpose of State intervention in industry. State intervention in industry is designed not simply to create employment, although that may be one of the objectives. I listened to some shop stewards on television the other day who were standing outside a Scottish factory. They said, "We want it nationalised." The interviewer asked: "Why should you be nationalised?" They replied: "Because it will protect our jobs." It may or may not protect jobs; but State intervention is seen in many areas as simply a device for maintaining employment when the long-term maintenance of employment can be guaranteed only with the viability and efficiency of the industry. So I think that when you get State intervention through the instrument of the Scottish Development Agency or any other source, there ought to be a clear understanding on the part of employees and management as to what are the objectives of that State intervention. There should be clearly defined targets for the intervention. Why do we do it? Is it in order to achieve viability or certain financial targets? So this Amendment is designed to bring the employees and management into the acceptance of certain targets when public money is being spent in support of or the acquisition of an industry. I should have thought that this was self-evident but, strangely enough, it has not happened in recent experience of large-scale State intervention. I hope the Government will see this as being a desirable Amendment and a necessary part of their instruments for regenerating Scottish industry. I beg to move.

Lord CAMPBELL of CROY

Before the noble Lord rises to reply, may I say that I agree with what the noble Lord, Lord Taylor of Gryfe, has said. I think that in moving this Amendment he has raised a valid point and I hope the Government will seriously consider this Amendment or some form of it.

Lord MACKIE of BENSHIE

May I say that I should like to support that.

Lord HUGHES

I thought I had succeeded in lumping this along with the others. It seems to me to be a variation on the same theme. Apart from anything else, it suffers from the same defects that I attributed to the others; that from the drafting point of view it is not at all acceptable. For one thing it is unsatisfactory because it relates this new part of the clause to the whole of the Agency's functions. While I would accept it could appropriately be regarded as referring to the functions (a), (b) and (f), I am not so certain that it has any validity in relation to some of the other functions. Yet it is being put on as something that has to be taken into consideration in pursuance of all of these. Although the reference to joint subscription to financial targets is apparently precise, it does not give any indication as to what the targets would relate to or consist of; and, in particular, how the Agency would go about securing their acceptance other than in companies which they control.

This does not mean that I disagree with these as being reasonable things to accomplish. It is this sort of thing which led us to the much more general term; because as soon as you get down to attempting a definition of a part of the thing in this way you come up against so many difficulties. If the underlying thought is that workers ought to accept responsibility for achieving their company's financial targets, then it becomes a little difficult to say how little or how much say they should have not just in deciding what the target should be but in reaching and implementing decisions which would effect the achievement of those targets.

The noble Lord may envisage participation of this kind. This brings it completely into the field of the Amendments which the noble Lords, Lord Campbell of Croy and Lord Drumalbyn, have put forward. I would suggest that my noble friend should withdraw this Amendment and seek to join in the consultations with the others to see whether there can be a combined Amendment brought forward which would cover these points. Although I am talking to an Amendment put down by my noble friend rather than one from the other side of the Committee, it must be on the same basis; if it becomes part of something agreed I would not seek to prevent its being included in the Bill, but that does not necessarily mean the Government will accept it.

Lord MACKIE of BENSHIE

Would the noble Lord agree that, if the financial targets and financial and industrial responsibility that the noble Lord, Lord Taylor of Gryfe, was talking about were written into the terms under which the Agency operated, it would remove a large part of the distrust felt by industry in Scotland and by Members on the Tory Benches that you could have industries running with a constant supply of Government money in competition with private industry which is subject to normal financial restrictions. I think this is quite a different clause and a very much more important one than the previous definitions of industrial democracy.

Lord HUGHES

That could be so. Can I then put another ground of objection? As it stands: In pursuance of these functions the Agency will seek the acceptance of financial targets to which management and employees will jointly subscribe. If the Agency in particular concerns are unable to reach such agreement between management and employees, it could be argued that the Act would then prevent them from carrying out their functions because they had been unable to reach agreed targets. It could stultify operations for a considerable time while they attempted to get agreement in fields where, perhaps, it was obvious that no agreement would ever emerge. This may be a reasonable thing to do as a part of ordinary business administration. It may be the sort of thing that many companies would wish to undertake in the pursuance of their own affairs; but they would not like to see it written as part of the Companies Act that if they could not reach agreement they could not carry on with the job. But that is what is being done at the present time. It will be a condition to which the Agency would have to adhere. As a state of working arrangement I cannot take exception to it; but as a legal requirement I must do so.

Lord MACKIE of BENSHIE

With respect to the noble Lord, I think he would find that if he was providing money for a bankrupt company, they would agree to the conditions; if they did not agree they would not get the money. That is the time to lay down financial targets, not after you have set the company up.

Lord HUGHES

Yes, I agree with that. But that is not what the Amendment seeks to do. It is not the pursuance of financial targets to which the Government or Treasury and the employees will agree, it is: … financial targets to which management and employees will jointly subscribe. The Government or the Treasury are not coming into this picture. The Secretary of State is not coming into it; it is inside the company.

Lord TAYLOR of GRYFE

In view of the undertaking given by the noble Lord, Lord Hughes, I propose to withdraw the Amendment. I do not think the point the noble Lord, Lord Hughes, has just made is valid. The Agency are to spend public money in companies which are in difficulty; if the companies are not in a difficulty, they will not apply to the Agency. Anyone who is raising money has to provide some kind of prospectus to the people putting money into the business. I suggest that prospectus involves financial targets, the operation of the company, its prospect of success. Where there is public money being spent in the support of companies—and I want to see this Agency succeed—it is perfectly reasonable to say to the companies receiving the money: What are the conditions? What are the prospects of financial success? It would be wise for the workers, as well as the management, to subscribe to these objectives in order to maintain their own employment. I apologise for my poor draftsmanship, and I hope there is some frame of words which might interpret these ideas in the final Act. I accept the kind offer of the noble Lord, Lord Hughes, to sit in on the drafting of Amendments which might meet the case.

Baroness SEEAR

May I ask the Minister whether he is right in his interpretation in saying that without this agreement they would be unable to proceed? The Amendment says the Agency will seek, it does not say they have to find. There is much precedent for recognising that you can seek but not find. Provided they have sought to get agreement, they are still free to go on, surely, in the wording of the Amendment.

Lord HUGHES

I am not a lawyer—thank God! I suggest that there is a perfectly wonderful field for argument if this goes in. At what point in seeking are you entitled to say that you no longer need go on seeking? Do you turn your cheek twice, three times, seven times or seven times seven? I may be seeing a "bogeyman" where one does not exist; but it is at least a possibility that it could be interpreted in this way. But, apart from anything else, it has the defect, which my noble friend accepts, that he is seeking to apply this objective to some functions to which it could not be applied. It could be applied to functions set out in paragraphs (a) and (b) in providing assistance in finance, to which the noble Lord, Lord Mackie of Benshie referred. If this is a good thing, I think it is reasonable at least to get it into the Bill in such a way that the other place, if it is willing to accept it, does not have to put another Amendment in just to make sense of it.

Amendment, by leave, withdrawn.

5.55 p.m.

Lord CAMPBELL of CROY moved Amendment No. 11: Pane 3, line 12, leave out subsection (3).

The noble Lord said: I think it would be convenient if this Amendment were discussed with Amendment No. 21, because that is my suggestion for what might be put into the Bill in place of subsection (3). This subsection, which I seek to delete, is another which appears in the Industry Bill, where it is subsection (3) of Clause 2. In Committee in another place objections were raised and the Minister of State for Industry expressed himself as unhappy about the wording. Later, in the Industry Bill the Government inserted an Amendment which appears as subsection (7) of Clause 2 of this Bill. That is supposed to be a safeguard. But I suggest that it does not act as more than a partial safeguard. It states categorically that the Agency cannot break the law. The Agency, under the subsection which I am seeking to delete, are allowed to do anything, and subsection (7) simply states that they cannot break the law. Many of us have taken that for granted. However, what we are concerned about is that the Agency should not have a sweeping range of unspecified activities within the law, and that is what this subsection appears to give them. It appears in the part of the Bill about the Agency's main functions. We do not believe this to be necessary; we do not think that this needs to be put in as a function of the Agency. We think it will be made suspect to Scottish firms who find themselves competing with the Agency in the same field.

If the noble Lord, Lord Hughes, considers that there is some residual discretion needed—and he indicated this in the Second Reading debate—or that some tidying up sentence is required, as has appeared in other legislation of this kind, then we suggest that it should be in Clause 3, which deals with ancillary powers. That is the purpose of my Amendment No. 21. There it appears in a much milder form. This has appeared in other legislation. If it were to appear as an ancillary power in that form, it would immediately be understood as being the normal residual discretion which is given simply to tidy up and make sure there was not some minor activity resulting from its major functions which was not covered. Its inclusion in Clause 3 would demonstrate that it was a provision which was entirely incidental and supplementary to the main functions, and thus allay the fears of blanket powers being given to the Agency to enable them to engage in substantial and unspecified activities.

The subsection refers to "in Scotland or elsewhere". It is not clear how much the words "or elsewhere" are qualified by Clause 26, which states that the Bill extends to Scotland only. Suppose the Board wished to carry out one of their functions in England—that is to say, set up a body corporate in England because they believed it would help some activity in Scotland. Would they be empowered to do that under the Bill, since it extends only to Scotland? If so, which Secretary of State would be responsible? Would if be the Secretary of State for Industry, or the Secretary of State for Scotland? The Secretary of State for Scotland normally does not have departmental functions outside Scotland. If there were a main function of that kind, the "or elsewhere" would mean the Agency would presumably be able to carry out all kinds of other activities, perhaps connected with that, also South of the Border. Therefore I ask the Government for some clarification on that.

The main point is that this wording is not necessary; it is in the wrong place, and if there is to be a residual discretion given to the Agency, it ought to be in Clause 3, as suggested in my Amendment No. 21. I beg to move.

6 p.m.

Lord HUGHES

The Agency need a power—and the noble Lord, Lord Campbell of Croy, is not disputing this—to do anything which facilitates or is incidental to the discharge of their functions, because, as a creature of Statute, the Agency need specific powers for any action, and provisions on these lines are in common form. This is not something which is being invented for this Agency; it is something which has happened more than once. In doing this in this way, the need to specify an exhaustive list of all the things which the Agency need to be able to do is avoided; for example, to be able to receive dividends on shareholdings held by them, and so on. It seems remarkable that if we do not give a power of this kind it could be held that the Agency did not have the right to receive a dividend on their investments, and obviously nobody wants to be put in that sort of position. So this kind of thing enables all that to be done. It does not convey any special right on the Agency as compared with a private person; and it was done not because we felt we were doing something which would give the Agency a right to break any other laws but merely to avoid doubt. In other words, the provision in the sub- section was designed to make it perfectly clear that the Agency had to operate under exactly the same legal restrictions as anybody else.

As regards the point relating to "outside Scotland", because of the scale and nature of the Agency's activities it has to be made clear beyond doubt that they are empowered to do things outside Scotland, in England or even abroad, which are conducive to their efficient functioning. For example, if they acquired a holding in a Scottish company which happened to have a branch establishment in England, it should not be necessary for the English interest to be disposed of; but if we did not make it perfectly clear that the Agency had a power to do things incidental or conducive to their interests beyond Scotland, because the power was omitted they would be compelled simply to dispose of the English part of the concern. This might in fact be ruinous to the whole concept of the enterprise.

Then, obviously, the Agency might find it necessary to set up an office in some other part of the United Kingdom, or overseas. We know, for instance, that the voluntary organisation, the Scottish Council for Development in Industry have found it most valuable to have an office here in London. We know the extent to which the tourist boards have offices in countries abroad from which they particularly wish to attract tourists. This is most advantageous to them. I do not know whether there is any likelihood of the Agency ever having to go abroad, but it is not inconceivable. It is certainly much more likely that they might become involved with companies having operations in England, because while it is common for English companies to have branches in Scotland it is not unknown for there to be Scottish companies with branches in England. So we have to provide for that.

The formulation in Amendment No. 21 might not debar the Agency from acting outside Scotland if that were held to be a necessary implication in the remainder of the Bill. For example, this might be held to be the case in relation to the industrial promotion and publicity powers of the Highlands and Islands Development (Scotland) Act 1965. But, in the opinion of our advisers, it could leave an undesirable doubt as to whether the extent to which the Agency might operate outside of Scotland is incidental or conducive to their powers, particularly in view of the Industry Bill which in many ways is a parallel. If we do not have this reference to "outside Scotland" it might be hold that as soon as you got outside Scotland this was a matter not for the Development Agency but for the National Enterprise Board. We do not wish to hand over to the National Enterprise Board functions which we think from the Scottish point of view can be more effectively handled by the Scottish Development Agency.

It seems to me, as a layman, that it does not matter whether it is in Clause 2 or Clause 3, but the technical advice I have is that it is better to have this in Clause 2 rather than Clause 3. I would wish to see whether there is any possibility of a combination here. I should like to have another look at it. I would not wish to accept the Amendment as it stands, omitting the reference to Scotland, because it might be harmful; but if in this case, the noble Lord would not proceed with these Amendments, I would undertake to look at the matter and, if possible, put down a Government Amendment in other form. If on consideration I found it impossible to do so, then I would certainly advise the noble Lord, Lord Campbell of Croy, in ample time so that, if he wished, he could return to the matter.

Lord CAMPBELL of CROY

I am grateful to the noble Lord for that suggestion. He will know from what I said that certainly, in the equivalent debate in another place, the Minister of State for Industry was concerned about this wording, because it seemed to go much further than anything used in previous legislation and would not be understood outside Parliament, even given the explanations that Ministers were making. But I should like to point out that the equivalent Welsh clause on the question of operating within the country or not is differently worded. It gives the Welsh Agency discretion to do things in the United Kingdom and not just elsewhere, but only with the approval of the Secretary of State—in that case the Secretary of State for Wales. So I suggest that in the redrafting it might well be that something which indicated that for Scotland the United Kingdom was involved, with the approval of the Secretary of State for Scotland, that would be the kind of safeguard that would immediately be clear and agreeable to those who were worried about this wording.

I asked the noble Lord whether the main functions of the Agency could be carried out elsewhere other than in Scotland. Perhaps I might revert to that when we reach Clause 26, which states that the Bill extends only to Scotland. I will not pursue that now, but I will pursue the matter of whether they can operate abroad. The term "or elsewhere" gives an indication that they can operate abroad as well, and there may be good reasons for that. We quite understand that and certainly would not wish the Agency, in carrying out the kind of functions we agree are necessary, to be inhibited by not being able to perform some minor activity abroad. In response to the noble Lord's offer to look at this point again, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

6.8 p.m.

Lord CAMPBELL of CROY moved Amendment No. 12: Page 3, line 18, at end insert ("provided that the disposal of these securities is achieved as soon as possible").

The noble Lord said: I beg leave to move this Amendment, which could conveniently be considered with Amendment No. 13 and, if my noble friend agrees, perhaps with his Amendment No. 18. They are all on the same point. I have put forward two alternatives for the Government's consideration and, depending upon their comments, I shall seek to pursue one or the other. Amendment No. 13 follows the wording of the 1972 Industry Act—not in full, but it uses the words: in the opinion of the Agency"— in that case it was the Secretary of State— it is reasonably practicable to do so. My noble friend spells it out at greater length in his Amendment No. 18, but uses the same wording from the 1972 Act. That in itself is a reassurance to firms that in pursuit of the public ownership which I mentioned just now in profitable areas of industry, a Government would not be encouraging an Agency, once having taken shares in a firm, just to continue holding them long beyond the time required. Under the 1972 Industry Act, as I mentioned earlier, the Government can help a company in difficulties. This has been done and there is a safeguard in that Act that when the situation has passed—and it may have arisen because of problems abroad which have nothing to do with the company itself—then the Government withdraw, with the wording as in my Amendment No. 13, "in the opinion of the Agency". If the Government have any difficulties about using that wording, then there is the alternative "as soon as possible". It is very simple and straightforward. I therefore beg to move Amendment No. 12, and associate it with Amendment No. 13.

Lord DRUMALBYN

We are also discussing Amendment No. 18. I thought it simpler to incorporate the appropriate section from the Industry Act, which is Section 7(5), pretty well as it was in this Bill. I hope I have put it in the right place. It is important to recognise that a great deal of discretion is left in the hands of the Agency here. They are to dispose of shares or stock as soon as in the Agency's opinion it is reasonably practicable to do so. No doubt it would be unfortunate if they were obviously being stubborn about this and refusing to act when they ought to dispose of the shares, but I think this is safe. Of course, it is all the more important to have this provision in the Bill because it is being taken out of the Industry Bill; we are not working, as the noble Lord, Lord Hughes, has said, in the same terms here. Therefore, I hope that this Amendment will commend itself to the Committee.

6.12 p.m.

Lord HUGHES

The Government believe that if we are to be participating in companies in the way the Bill envisages we should also be able to participate fully in the rewards which come from the use of public capital. This means that when a public stake is taken in a company it should be possible to retain the stake and earn a proper return on it. The restriction which these Amendments would impose on the Agency's shareholdings is one which, as has been made quite clear by noble Lords opposite, is currently applicable under Sections 7 and 8 of the Industry Act 1972 but which, I would remind your Lordships, will be removed if Section 15 of the Industry Act, now before another place, is approved. That makes a subsequent Amendment, No. 28, inappropriate. But if Parliament approves the removal of the restriction in relation to the giving of selective assistance by the Secretary of State, there is no reason why it should continue to apply in cases where he decides that the Agency rather than himself should hold the shares in question.

The Government do not consider that this restriction was appropriate in relation to the giving of financial assistance to companies in difficulties. But it is even more inappropriate to impose such a restriction on the Agency when providing investment funds to Scottish industry and establishing joint ventures with private sector companies. It would impose a negative approach to the giving and taking of shareholdings which would be completely at odds with the positive, enterprising approach which the Agency are expected to adopt to their industrial role. The Agency will have the option of disposing of shareholdings which they have acquired with their investment funds if circumstances arise where they consider that disposal would further their objectives; for example, as a way of facilitating a merger which is considered desirable in the interests of maintaining undertakings under Scottish control. If the Agency are to be able to make a genuine impact on the Scottish industrial scene they must be given the discretion to deploy their investment funds in ways which they consider will best further their objectives of securing the development of Scotland's economy and in particular, providing, maintaining or safeguarding employment. In this connection, an obligation to dispose of shareholdings as soon as possible would be an unacceptable restriction.

Let us envisage what might happen. The Agency may take a shareholding in a company as part of their efforts to help that company to become a viable proposition. They will do it by agreement with the company concerned in the first instance. The thinking which must lie behind this is that if the Agency do not do so then there is at least a possibility that the company goes to the wall and the enterprise disappears. If as a result of the Agency's participating in the equity of such a company the company becomes profitable, it does not seem to me to be reasonable from the public point of view to maintain that so long as there is a risk of the money going down the drain the State should remain in, but as soon as the company is becoming profitable the State should move out. Having regard to the criticisms made earlier on about the way in which nationalised undertakings may or may not be successful, it seems to me that this is inviting an import into this Bill of exactly the same thing. It is being suggested that public enterprise should be confined, so far as possible, either to concerns that cannot make money or to concerns which are unlikely to make money, and if this proves not to be so and a concern is successful then the Sate should get out at the earliest possible opportunity, the presumption being that it should look around for something else at which it can lose money.

That is not what we are aiming at. I admit that what the noble Lord, Lord Drumalbyn, has put in about the Agency gives a certain qualification, but I doubt whether it would enable the Agency to continue to hold their shareholding simply because of the point of view that it was a good investment of their funds and they did not have any other use to which they wished to put that money at the present time. As I have said, obviously if the Agency thought that they could best serve their purpose by disposing of a holding perhaps at a profit and then apply the funds elsewhere, that is the kind of action they will take and they will not need an instruction from Parliament to carry that out. If we accept this Amendment, we are requiring the Agency to operate under the worst possible conditions.

Lord DRUMALBYN

Is there not one point which the noble Lord is overlooking? We envisage, of course, that in as many cases as possible the object of putting money into a company will be to nurse it back to viability. In the course of that the value of the shares are bound to rise because the company will then be known to be viable. So the State will get its profit because of a considerable capital appreciation in the value of the shares. Then it can continue using its capital in the same way again all round: and we hope that it will in each case succeed. Surely this is the right way to use public capital, rather than to sterilise it in particular firms when they can readily be disposed of. The money, if the Agency like, can then be reinvested where it is needed. If we have a situation in which there is a shortage of capital, largely because of taxation policy, it seems only reasonable that the State should step in and put back some of the money it has taken out of the economy. It should do this as a kind of restoration of companies, and keep the money revolving. This is the way it should work. This is our conception of it.

Lord HUGHES

I would not dissent from that, but what would happen if we attempted to put the Agency in the same situation as a responsible private individual or company? If the noble Lord, Lord Drumalbyn, has invested some money in a company which is not viable but which because of changed circumstances becomes viable, he is not under an obligation to dispose of his assets in this company at the first point at which he can dispose of them at a profit. If he thinks that by hanging on for another year the capital appreciation is likely to be greater, he is much more likely to wait until next year and realise a bigger profit still. But he is debarring the Agency from having regard to their best interests in this matter. They must get rid of them at the first suitable opportunity. The first suitable opportunity may not necessarily be the best opportunity, and I suggest that it should be left to the enterprise of the people who are running this Agency to decide when they can best make use of what I accept is a right conception of the way to use money—to have a rolling fund.

If the point arises when they think that the time has come either to take out their money and use it for another purpose, since they are running short of funds and getting near to their limit and can make better use of their money or, alternatively, to realise their profit at that stage and put it into something else, this may be a chance to add to the number of jobs available and, incidentally, to create further profit. I do not dissent from the motives. However, I say that it is wrong to require them to do it at a particular time and in a particular way without regard to when the best time to do it may be.

Lord CAMPBELL of CROY

Having listened to the comments of the noble Lord, Lord Hughes, on these Amendments, it is quite clear that Amendment No. 12 is the one which is most unacceptable to him. I believe that Amendment No. 13 meets most of the points he has made because it contains the words "in the opinion of the Agency". Then it goes on to say that the disposal of these securities should be achieved as soon as "it is reasonably practicable to do so".

The difference between us is one of policy generally. The noble Lord appears to give the impression of an Agency which hangs on to securities once they have taken them over and runs businesses long after the time when it was necessary, because of circumstances, to take shares in those companies. We believe that the Agency will have plenty of other things to do in terms of industrial development, quite apart from all the other things which are dealt with later in this Bill—for instance, derelict land and environmental improvement. It will be an Agency which continues to run companies long after it is necessary for them to do so, because they can hand them back to other people who are in a position to run them. Therefore, may I ask my noble friends and the Committee to support me in pressing Amendment No. 13 when we reach it. However, I beg leave to withdraw Amendment No. 12.

Amendment, by leave, withdrawn.

Lord CAMPBELL of CROY

I beg to move Amendment No. 13.

Amendment moved— Page 3, line 18, at end insert ("provided that the dispersal of these securities is achieved as soon as, in the opinion of the Agency, it is reasonably practicable to do so;")—(Lord Campbell of Croy.)

Lord HUGHES

I had hoped that the noble Lord would not proceed with this Amendment because it suffers from exactly the same defects as the other Amendment. It does not leave the Agency with a choice in the matter. All it has to consider is what is practicable. To sum up what I have said on the previous Amendment, I want to give the Agency the right to do this when they consider that it is desirable or good to do it. It may be practicable to dispose of it even at a time when it will lose money or make a minimum loss, but it may be desirable for the Agency to hold on to it even after the point where it is practicable to do so. It could be a reasonable interpretation of "practicable" that it would not be right to dispose of their shares at a time when they were obviously going to lose money; but as soon as they were able to make the transaction wash its own face by extracting from it what they had put in, it would obviously be practicable to do so.

May I suggest that it is not reasonable to put upon such a body the restriction that it must get out at the first opportunity that it can recover its money. While I do not necessarily wish to commit myself to accepting it, if the noble Lord were not to move this Amendment but were to look at something which at least extended the ranges of time which the Agency could properly consider, I would not necessarily commend it to your Lordships but would suggest that there is at least the possibility that it would have a better chance of appearing to be more acceptable to another place than this Amendment. If this Amendment goes into the Bill, I can certainly say that Her Majesty's Government will have no alternative but to invite another place to take it out again.

Lord MACKIE of BENSHIE

I think that there is another point to be made. I should hate to be involved with any Agency which was given instructions to sell profitable shares as soon as it was practicable to do so. It can be used against you. The noble Lord, Lord Hughes, has said quite clearly—and it is on record in this House—that the object of the Agency is the regeneration of industry, not to sit like a fat cat holding useless shares if money can be employed elsewhere. May I urge the noble Lord, Lord Campbell of Croy, to consider that it is not practicable to ask people to run a company in a businesslike way if it actually forces them to sell. Secondly, the general principle appears to be the regeneration of industry, not the sitting on profitable shares which are not increasing employment or the prosperity of the country.

Lord DRUMALBYN

When the 1972 Act was being considered, I understood that "practicable" meant "mutually convenient"—or words to that effect. Obviously, it is not practicable if it does not suit both parties; namely, the party which wants its money back and the party which is going to be deprived of the money, or the shares, or whatever it may be. I suggest that it would be worth while looking again at this Amendment and accepting the offer which has been made by the noble Lord.

Lord CAMPBELL of CROY

Again I am grateful to the noble Lord, Lord Hughes, for going as far as he has gone. I explained earlier that the reason for this wording is that I took it from an Act which has been operating for three years, has been understood by industry and has not caused the kind of troubles which, quite understandably, the noble Lord, Lord Mackie of Benshie, has pointed out. If to meet the point which has been made by the noble Lord, Lord Hughes, two or three other words can be inserted into the Amendment to cover the kind of situation which has been described and which my noble friend Lord Drumalbyn has mentioned—because he was concerned with the 1972 Act when it was a Bill—I shall be quite glad to see an amended form of this Amendment. At the moment, however, there is nothing in the Bill to meet this point.

May I say this to the noble Lord, Lord Mackie of Benshie, who has been much concerned with this matter: we have worked together in another place on similar matters in the past and usually have taken the same view. At the moment, however, there is no qualification in the Bill. Therefore, I have put down on the Order Paper something which has been operating in an Act, which is understood by industry and which does not cause the kind of troubles that the noble Lord has mentioned. However, in view of what he has said, I am perfectly ready to withdraw the Amendment in the hope that at Report stage we can devise something which carries out the purpose of this Amendment but which does not appear to point a pistol at the head of the Agency to dispense with shares at a particular moment. That is not the purpose of the Amendment; namely, the words, "… in the opinion of the Agency", and also the word "reasonably". The Amendment was designed to give the kind of latitude which my noble friend has mentioned. However, in view of what the noble Lord has said, I hope that we can devise an Amendment which will be acceptable to the House at Report stage. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

6.28 p.m.

Lord CAMPBELL of CROY moved Amendment No. 14: Page 3, line 19, leave out paragraph (b).

The noble Lord said: This is a consequential Amendment. Its purpose is to omit paragraph (b) which is simply the words "to form bodies corporate". Inasmuch as we have already taken out paragraph (b) of subsection (2) of Clause 2, it follows that the Agency should not have power to form bodies corporate. We see no need for the Agency to be able to establish industrial undertakings. I will not repeat the arguments that I used on the earlier Amendment. We believe that this paragraph should be deleted from the Bill for the same reasons as the previous paragraph has been deleted.

May I point out that this, too, is a repetition of the Industry Bill. In fact, paragraphs (a) to (e) and (g) and (i) are all in the Industry Bill. I say this because the noble Lord, Lord Hughes, said earlier that there is not very much of the Industry Bill in this Bill.

Lord HUGHES

I did not say that at all!

Lord CAMPBELL of CROY

In that case, we misunderstood him. But at one point he gave us the impression that there is not very much of the Industry Bill in this Bill, and I pointed out that I had sidelined whole sections; and a great deal of this page is sidelined. This paragraph is part of the Industry Bill and we think that for the same reasons it could be deleted. I beg to move.

Lord HUGHES

My objections to the removal of this paragraph are as fundamental as my objections to Amendment No. 4 which the Committee, in its wisdom or otherwise, decided to carry. Just for the record, I did not say that there were not large parts of the Scottish Development Agency (No. 2) Bill which were similar to the Industry Bill. What I invited the noble Lord to consider—and he seemed to think it was incredible that the Scots could possibly have any influence on these matters which was rather a poor reflection on what he regarded as his own ability in these matters when he was Secretary of State for Scotland—was that there was at least a possibility that what appeared in the Industry Bill was what we wanted to have in the Scottish Development Agency (No. 2) Bill. I can assure the noble Lord that, although he finds it difficult to believe that the Secretary of State can prevail over an English Member of Cabinet, Mr. Ross does not work on that basis and there are parts of this Bill which are in the Industry Bill, just as there are parts of the Industry Bill which are in this Bill. I can assure the noble Lord that it has been a two-way traffic.

However, that does not affect our views on the Amendment which is before us. I am fundamentally opposed to it. I accept, however, that if Amendment No. 4 is to remain part of the Bill it is logical that this paragraph also should go out. Therefore, I accept the situation that having taken the other part out this part also should go. I will not say that I am content on the matter, but I will not compel the noble Lord to divide the Committee on it. I will rely on the better wisdom of another place.

Lord CAMPBELL of CROY

I understand the noble Lord's position in this matter and I am grateful to him for not repeating his arguments. I will only comment on the question of the relationship between this Bill and the Industry Bill, because it is vital to all our debates during this Committee stage. I was disappointed when he suggested that the major functions in the Industry Bill might have emanated from the Scottish Office, because I did not think that the parts which we have called "Bennery" would have come from the Scottish Office. However, I immediately agree that in normal times there are often proposals which come from Scotland which are adopted in England and vice versa. It is a very happy situation. Sometimes we in Scotland are ahead of the rest of the United Kingdom, and I can say that having been a civil servant in the Cabinet Office and having worked for Governments of both political persuasions, as well as from my experience as a Minister. Therefore, I agree with the noble Lord in general. But I was astonished, as I am sure were other noble Lords on this side of the Committee, at the suggestion that some of the very wide-ranging parts of the Industry Bill, which have been described as "Bennery", should be described as "Rossery".

Lord HUGHES

I did not say that either. What I said was the noble Lord must not assume, every time there is a coincidence between the wordings of the two Bills, that we waited to see what was happening in the Industry Bill and then put it in the Scottish Development Agency (No. 2) Bill. I asked him to concede the possibility that there were times when it worked the other way around. I am grateful for the fact that he now accepts as a workable proposition that the Scots can have influence in these matters, because when I made that comment earlier he said that if we believed that the Scots could influence this situation we would believe anything. I am now saying, however it may have worked during the time when he was at the Scottish Office, that in these days the Scots do have influence in the Cabinet.

6.35 p.m.

Lord CAMPBELL of CROY moved Amendment No. 15:

Page 3, line 37, at end insert— ("Provided that nothing in this section shall authorise the Agency to acquire any securities, land, premises, plant machinery or equipment otherwise than with the consent of the person entitled thereto.")

The noble Lord said: I hope that this is an Amendment which, from the words of the noble Lord, Lord Hughes, at Second Reading, he can also accept. It covers the whole of Clause 2 and indicates that none of these functions will be carried out except with the consent of the persons entitled to the shares or other property. I think it is equivalent to the Amendment which was accepted on the Highlands and Islands Development (Scotland) Act some years ago and which was inserted by agreement. The most convenient way of doing it seemed to be by a provision at the end of the clause. The noble Lord indicated that compulsion would not be used, and I believe it will be greatly to his advantage and to the advantage of the Government if this is made clear by being written into the Bill so that no one in Scotland will be under the impression, as I believe some of them were to begin with, that the Agency will have powers of compulsion in order to carry out the functions enumerated in this clause. I beg to move.

Lord HUGHES

To a certain extent, this would be in conflict with another part of the Bill, because there is power in it—and it is not the subject of amendment by the noble Lord—to give powers to acquire land compulsorily in the ordinary way in Clause 2 and in Clause 9(1). The Government cannot recommend the Committee to accept this Amendment, because in so far as it is related to anything other than land it is unnecessary. As I have said, the Agency will be a creature of Statute, and in so far as it is such a creature it has powers to do only what the Bill will permit it to do. No such organisation has compulsory powers unless they are conferred on it, so it is not necessary to say that it does not have compulsory powers to do this, that or the next thing. What is necessary in a piece of legislation is to specify the circumstances in which it does have compulsory powers, and these have been expressed in the Bill in relation to laud only and they are confined to land.

If the words, Provided that nothing in this section shall authorise the Agency to acquire any securities, land, and so on, except with the consent of the person entitled were inserted it would mean that there would not be any compulsory purchase exercised under the other clauses in relation to land. In so far as the words purport to make it impossible to acquire land by compulsory purchase, with all the safeguards attaching to that procedure, they would be a wrecking part of the Amendment. The Agency might be unable to carry out those functions to which nobody suggests any objection—such as the clearance of derelict land—because an owner of derelict land might not consent. So here noble Lords will be taking away the only compulsory powers which are in the Bill. But by leaving the Bill as it stands, it is perfectly clear that it is only in relation to these clauses that any powers of compulsion are applied, and in the way in which legislation is enacted it means that there is no compulsion except in these cases. So we should be putting in something which in one respect is totally unnecessary, and a side effect is ant it would be harmful in removing the only compulsory power which exists in the Bill.

Lord CAMPBELL of CROY

May I make clear straight away that land is not dealt with in this clause. Therefore, in drafting this Amendment it was not intended to detract from the later clause which deals with the whole question of the compulsory purchase of land. I recognise that there may be a drafting defect in it in that respect, because I am very much aware that in the subsection of the Industry Bill which is equivalent to subsection (4)(g) in this Bill, the word "land" is inserted, but it does not appear here. The purchase of land is dealt with elsewhere in this Bill. Therefore, I hoped that by including the word "land" in this Amendment, it would cover only the matters affected by Clause 2.

From what the noble Lord has said, it sounds as though there may be a drafting defect, in that if "land" is mentioned here it will also cover the later clauses dealing with land; but I tell the noble Lord straight away that that was not intended. It was not intended to cover, for instance, Clause 8 dealing with derelict land. It is a wholly different set of provisions. The wording of my Amendment says, Provided that nothing in this section shall authorise … For the purpose of avoiding ambiguity, I recognise it may be necessary to spell that out, but there was no intention that this would deal with Clause 8 and others to which we shall be coming later on.

It is vitally important that Scottish industry should know what the noble Lord has just told us; that there is no question of compulsion. It should know this for certain when this Bill is enacted, because it is not enough just to say that it is an understood part of drafting. If it were clearly written into the Bill in the same way as an Amendment was made to the Highlands and Islands Development (Scotland) Act, it would greatly clarify the situation, and be help- ful to all those who will be concerned with the Bill later on.

Lord HUGHES

I am quite certain that this is a matter about which it will be very easy to get the maximum publicity. I do not think anyone is under any doubt about this matter, because of what I said on Second Reading and what has been said here. It was given quite unusual prominence in Scottish newspapers then. I am quite certain that if the noble Lord, Lord Campbell of Croy, had still been in Office, he would himself have objected most strenuously to importing into a Bill anything saying, "You do not have power to do certain things", when the Bill is specifically on the basis that you have power to do only things which it permits. As soon as you start saying that you have compulsory powers in certain directions, and you do not have compulsory powers in other directions, you make the second one as wide as possible, and it then turns out that something emerges which is not covered by the wide range, just as "land" has crept in inadvertently. You may discover that you are then in the position where the Bill confers compulsory powers to do certain things in relation to land; it denies compulsory powers, or anything other than things by agreement in other directions; and then something crops up which does not fall into other categories.

How is it covered? There is neither the power to acquire compulsorily, nor is there a barrier against acquiring other than by agreement. Because of this, Parliament has always worked on the basis that one should do one thing or the other, but not attempt to do both at the same time, and that is the defect of this Amendment. Incidentally, I may say that I do not think that even the inclusion of the word "land" in Clause 2 would invalidate the later powers, simply because, as the noble Lord, Lord Campbell of Croy, has said, his Amendment is related to this clause. What it could do is cast doubt on what Parliament had intended when it was making different references to "land" in different clauses.

If the question was in doubt, I am certain that the Government of the day would argue that it is what is in Clauses 8 and 9 that matters, not what is in Clause 2. It is not desirable to have anything which is a source of possible ambiguity. I can assure the noble Lord, Lord Campbell of Croy, that, at the end of the day, it could be detrimental to his purpose to seek to put in this additional wording. It is not necessary. The Agency can never require anything other than with the consent of the people concerned. If it attempted so to do, it would be acting outwith its powers, and it would be a wholly improper use of the funds provided by the Secretary of State. You can be certain that the Scottish Office would come down on them like a ton of bricks and at the end of the day they would have the Ombudsman after them. There is no risk of this whatsoever if the Amendment is not made.

Lord CAMPBELL of CROY

As the noble Lord, Lord Hughes, will have realised, I am glad he has confirmed that the inclusion of the word "land" in this Amendment would not necessarily cover the later clauses, including Clause 8. The noble Lord will realise that my intention was to cover those situations where the land on which premises stood, and so on, arose under this clause. What the noble Lord is saying is that nothing is necessary to make it clear that what is in this clause has to be carried out by agreement. We had the alternative of putting in as Amendments the words "by agreement" in various places in the clause. That would be the equivalent of what has been accepted by the Labour Government on a previous occasion. But we thought that was a clumsy way of doing it, and that it was better to have at the end of a long clause one sentence to tie it all up, and that was our object.

Therefore, the argument put forward by the noble Lord that this produces difficulties drives us back to the question whether we ought to put forward a number of Amendments inserting the words "by agreement". As I have said before, that had a great effect in transforming the way in which people viewed the Highlands and Islands Development (Scotland) Bill when they realised that the functions about which they were apprehensive could be carried out only by agreement. In view of what the noble Lord has said, I do not intend to press this Amendment, but we should like to consider it further. He says it will be quite enough for his words to be reported in the Press and elsewhere in Scotland. However, I am not sure that that necessarily always happens. It is not possible for people who may be involved in this matter in a few months' time to remember everything that was said either here or in another place. I will not pursue this Amendment, but I give notice that I should like to think further about it to see whether at the next stage it is necessary to put in something else, bearing in mind the points the noble Lord has made. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Lord CAMPBELL of CROY

I beg to move Amendment No. 16.

Amendment moved— Page 3, line 39, leave out ("(e)") and insert ("(d)").—(Lord Campbell of Croy.)

Lord CAMPBELL of CROY

I beg to move Amendment No. 17.

Amendment moved— Page 3, line 41, leave out ("and (b)").—(Lord Campbell of Croy.)

Lord DRUMALBYN moved Amendment No. 19: Page 4, line 4, after ("construed") insert ("(a)").

The noble Lord said: Perhaps we can take this as a paving Amendment for the next one. The purpose of this Amendment is to make quite certain that the Scottish Development Agency will be subject to the various enactments listed in the Amendment; that is to say, the Restrictive Trade Practices Acts of 1956 and 1968, the Monopolies and Mergers Act 1965, and the Fair Trading Act 1973—in effect, the same rules which apply to any other undertaking. Any restrictive agreements into which they enter shall be registrable; and mergers which they arrange shall come within the purview of the Office of Fair Trading. If they are involved in any monopoly, it should be liable to investigation by the Monopolies Commission and in this connection, as noble Lords will recall, a monopoly situation could arise if at least a quarter of the goods of any description were supplied under their control, or were supplied to them not only within the United Kingdom, but within any part of the United Kingdom. In particular, this would apply to Scotland.

As to trading practices, if the Agency, were to pursue any course of action which appeared to the Director of Fair Trading to affect adversely the interests of the consumer, they would also come within his purview. It is probable that if such activities involving monopolies, restrictive trade practices or practices detrimental to consumers' interests were carried on, they would be carried on by subsidiaries of the Agency. Mergers, however, could be arranged by the Agency, and so a provision of this kind would seem to be needed.

I drafted this Amendment on the basis of the function conferred by the Bill on the Agency of carrying on, or establishing and carrying on, industrial undertakings. That, of course, has now disappeared from the Bill. But clearly the Agency should be subject to the supervision of the Director General of Fair Trading in any such undertakings if they were wholly owned by the Agency; equally they should be subject to supervision if they were carried on jointly with any other person. May I ask the noble Lord whether I am right in supposing that any subsidiaries of the Agency would be subject to these various provisions without any special provision in the Bill? I am rather more doubtful whether they would be subject to the Director General's supervision and possible reference to the Monopolies Commission unless there were a provision in the Bill along the lines of my Amendment.

These are highly technical matters, and I shall not be in any way disconcerted if the noble Lord says that the Amendment is unnecessary. If, however, he were to say it is inappropriate I would be somewhat shocked. The belief that businesses behave better if they are publicly owned has long since proved to be unfounded. If we are to have undertakings fully owned or even partly owned by the State in competition with the private sector, it is essential that they should be in every way subject to the same rules as apply to the private sector. I beg to move.

Lord HUGHES

I can remove at least one concern from the noble Lord's mind. I have no intention of saying that the Amendment would be inappropriate, although not necessarily doing so for the reasons he then went on to state. But I am going to say—and I think he at least anticipated the possibility—that Amendments are unnecessary. I cannot think of anything which is more clear and wide-ranging in its effect on the Agency than subsection (7): For the avoidance of doubt, it is hereby declared that nothing in this Act is to be construed as authorising the disregard by the Agency of any enactment or rule of law. It adds nothing to the validity of that to single out particular Acts which it must abide by. If you say it must abide by all law and then say, "and especially it must abide by such and such a law", it adds absolutely nothing to the effect of it.

But I would wish to go further than that. It is no part of the Government's intention that the Agency should exercise an unfair competitive advantage over the private sector. The Agency will be required to earn an adequate return on the capital they employ for their industrial investment and entrepreneurial activities. When engaging in business, the Agency and its companies, being in open competition with companies in the private sector, will be free to determine prices for products and services in accordance with the requirement to earn an adequate return on capital and in accordance with their own commercial judgment. They will, however—this applies to the Agency and its subsidiaries, wholly or partly owned—be subject in the same way as other companies to any Government prices policy, as well as the fair trading legislation, and they will be required to avoid showing undue preference in their trading relationships. But it goes further than that, because as well as being automatically subject to the Monopolies and Mergers Act 1965 the Agency will be required to abide by the City code on takeovers and mergers.

That goes further than the noble Lord's Amendment. We are really applying all that must be done whether by law or by good practice such as the City code; we are applying all of this to the Agency. The one thing, of course, which they will have is well-precedented compulsory powers in connection with their land development functions, but that, of course, will be subject to all the safeguards which are applied to the compulsory purchase procedure in land. I hope, therefore, that I have satisfied the noble Lord that the objects which he has in mind are ones which are totally accepted by the Government and for which the Bill makes complete provision.

Lord DRUMALBYN

I am very much obliged to the noble Lord. I am not absolutely certain that the wording of the clause, as it now stands, is entirely appropriate in dealing with this particular series of Acts. It says: … it is hereby declared that nothing in this Act is to be construed as authorising the disregard by the Agency of any enactment or rule of law". If the Agency happen to have more than a quarter of the supply of goods, they are not disregarding the monopolies legislation, but they could easily come under the purview of the investigatory powers of the Monopolies Commission. I wonder whether the noble Lord would look at that particular point. I am not certain that the words are absolutely appropriate. In other words, the Agency are not necessarily disregarding any enactment by having a monopoly, but having a monopoly may make them liable to an investigation.

Lord HUGHES

I will certainly look at this. This is perhaps one of the difficulties of putting things into legislation which are not strictly necessary. If this particular part had not been in the Bill the Agency would have had to comply with the law of the land. This is one case where the Government succumbed to the blandishment of putting something in just to reassure the public. As soon as it is put in it immediately raises the sort of doubt as to what effect it has on a particular piece of legislation. I reiterate that they will have applied to them and will have to apply to themselves exactly the same conditions as are applicable over the private sector.

Lord DRUMALBYN

I take it that the noble Lord will look at this point. On that understanding, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 2, as amended, shall stand part of the Bill?

6.59 p.m.

Lord CAMPBELL of CROY

First I should like to say that I think we have made some improvement in the clause, and particularly with the matters which the noble Lord has been good enough to say he will look at again. There is one point I want to raise on the question, Whether the clause shall stand part. It is the question of the media, and whether the Government visualise stocks and shares being taken in newspapers and television companies. This has been raised also on the Industry Bill. It does affect the freedom of the Press. There has been a newspaper situation in Scotland where the Government have given some assistance, so the point is very relevant. I do not know whether the noble Lord can give us any assurance now or whether he would like to leave it to another occasion, but I think it would be helpful to have some statement by the Government as to whether newspaper and television companies would be included in industrial undertakings. Newspapers are regarded as manufacturing companies. I wonder whether the noble Lord could say if there would be any limit to the extent to which they could move into this field, because, of course, it raises the whole question of the freedom of the Press.

Lord HUGHES

I must admit that I have never contemplated that this was a field in which the Agency would venture. I would hesitate to say that there is anything in the Bill which would prevent it, so I must ask time to investigate the situation. I have no doubt that an opportunity will present itself before we part company with the Bill to give an answer to the noble Lord on this point. Perhaps this would be a convenient time to have an adjournment for dinner.

Lord MACKIE of BENSHIE

Before the noble Lord proceeds to move the adjournment, I should like to make a comment on Lord Campbell's last speech when he said that he thought we had improved Clause 2. If I may protest, I think that we have wasted a lot of time because noble Lords on the Tory Benches have objected and carried Amendments on points of principle, which really make the discussion of many of the points of detail in your Lordships' House, which should be particularly valuable, a matter of indifference. I protest at this waste of time of the House. Perhaps the Government, with respect to the noble Minister, are at fault in bringing a Bill of this character to the House of Lords first before the principle has been settled in the Commons, so that noble Lords opposite feel that they have to contend points of principle when they should be discussing detail. Having made that protest, I sit down.

Lord HUGHES

The noble Lord has not been here long enough to realise that even though a point of principle is discussed in the other place that does not deprive your Lordships of the right to consider the same principles. The Bill did not start here, in fact it started in another place. It may well be a lack of co-operation which prevented progress in another place, but at least the Government attempted to start it there. I would not like to argue too strongly against Bills of this kind starting in your Lordships' House. There are advantages in the unacceptable Amendments starting here rather than coming in after a Bill leaves another place. Having said that, I think it might be appropriate that I should now move that the Committee adjourn.

Lord CAMPBELL of CROY

The noble Lord asked for time to consider my point about the Press, and I should like to say that I will await with interest what he has to say. I referred to the situation of one newspaper in Scotland where the Government had to help. This raises the problem of what might happen in the future. May I also at this stage congratulate the noble Lord on his stamina. I think we need to adjourn. Without assistance he has answered many of these points, and done so at length. That also is a reason why we have spent quite a lot of time. I know that the noble Lord, Lord Mackie, and his noble friends make the point again that the Bill, in their opinion, ought to have started in another place. But given that Clause 2 contains the kernel of the Bill and seeks to give the Agency wide-ranging powers, may I say that it is incumbent upon this Committee, even though I am a very new Member of this House, to examine it fully. I, for my part, appreciate the way in which the noble Lord, Lord Hughes, for several hours now has single-handedly been dealing with it. He certainly deserves not only some solid refreshment but also some liquid refreshment.

Lord HUGHES

I beg to move that the Committee do now adjourn during pleasure until 7.35 p.m. I explored the possibility of sausages coming and being consumed on the premises while we carried on, but I gather that it is not in accordance with the dignity of the House.

[The Sitting was suspended at 7.4 p.m. and resumed at 7.35 p.m.]

Clause 2, as amended, agreed to.

Clause 3 agreed to.

Lord DRUMALBYN moved Amendment No. 22: After Clause 3, insert the following new clause:

Annual Reports of Agency

" —(1) It shall be the duty of the Agency to make to the Secretary of State, as soon as possible after the end of each financial year, a report dealing with the exercise of the functions of the Agency and with their financial operations during that year.

(2) It shall be the duty of the Secretary of State to lay before each House of Parliament a copy of each report received by him under this section."

The noble Lord said: The noble Lord, Lord Hughes, will recognise of course that the words in this Amendment are substantially those which appear in paragraph 9 of Schedule 2, with the exception that I have introduced the words: … a report dealing with the exercise of the functions of the Agency and with their financial operations during that year. I thought that it was somewhat derogatory to the Houses of Parliament—and, for that matter, to the Secretary of State bearing in mind the importance of the subject—that the annual report should be tucked away in the last paragraph of a Schedule, in this case Schedule 2, dealing with the financial and administrative provisions only relating to the Agency. I regard this as an exceedingly important matter. In my experience, certainly in the old days of early nationalisation, considerable prominence was given to the requirement for an annual report in the body of legislation and I see no reason to depart from that situation. I think it is also desirable that this should come in before reference is made in Clause 4 to the Agency's report. It is odd that we should have a casual reference to the Agency's report in Clause 4 without any mention of it preceding and then have to refer to the back of the Bill before finding that there will be an annual report at all. I beg to move.

7.35 p.m.

Lord HUGHES

I must accept of course that the Amendment is essentially a drafting one, but I hope that the noble Lord, Lord Drumalbyn, will not press it because it would involve a number of other consequential alterations throughout the Bill, and as I do not particularly want a lengthier Report stage than is absolutely necessary I would want to avoid having to go through the Bill looking for all the drafting Amendments that would be necessary. For example, even the heading to Schedule 2: Financial and Administrative Provisions Relating to the Agency". would have to be changed. I think it is rather a new idea to suggest that as one gets towards the end of a Bill the items become unimportant or less important; we do not draw up legislation on the basis that one starts in order of priority, with all the important matters in Clause 1, with the less important ones in Clause 2 and the even less important ones further on. Necessarily the various parts of a Bill are divided up as different things are being done.

Thus, if a provision appears in a Bill, it does not make any practical difference at all and I assure the Committee that the obligation to account fully to Parliament on both the financial and administrative aspects of the Bill is in no way lessened by its appearance as a provision in the Schedule. Paragraph 8(4) of Schedule 2 already secures the laying before Parliament of the statement of account with the report of the Comptroller and Auditor-General thereon, and paragraph 9 secures a further report dealing with the operations of the Agency—that is, with the discharge of its functions. It is clear, therefore, that all the matters which the noble Lord wishes to have attend to are dealt with fully in the provisions of the Bill. The only difference is whether it is better that it should be in one place rather than another. I would not be disposed to argue with the noble Lord that it might have been better to have had it in the body of the Bill rather than in the Schedule, but I argue as a matter of convenience that to shift it now would involve us in a good deal more work without in any way altering the effect. I hope that the noble Lord will accept that his purpose will be fully achieved by leaving these provisions where they are in the Schedule.

Lord CAMPBELL of CROY

The noble Lord, Lord Hughes, has given some mechanical reasons for not accepting the Amendment and I assure him that if he needs help in finding the necessary consequential Amendments that might need to be made to the Bill on Report, we will certainly assist him, if that is really an objection to making what would otherwise be a good Amendment. Earlier today the noble Lord rightly complimented my noble friend Lord Drumalbyn on being an excellent draftsman and I am sure that my noble friend would volunteer his assistance in that regard. I am also concerned that some important words in my noble friend's Amendment would disappear, and they are to the effect that the report would deal with the exercise of the functions of the Agency. I do not think the noble Lord, Lord Hughes, mentioned that, but that is an important inclusion which my noble friend has inserted in his proposal and which does not appear in the Schedule.

Lord HUGHES

Except that I pointed out that the report would deal fully with the financial and administrative aspects of the Board's affairs; and I can hardly imagine in a report dealing with its administrative affairs being able, even with great skill, to avoid a reference to the way in which the Board had exercised their functions. While dealing with their administrative affairs, they would need to be very much cleverer than any draftsman and better than most lawyers to avoid commenting on the way in which they had exercised their functions.

Lord DRUMALBYN

I am not certain that I agree with the noble Lord about the division between the substantive part of the Bill and the Schedules attached to it. The important thing is that it is not a question of importance as between one and the other; it is a question of what is and what is not substantive. I regard it as a matter of great substance that the duty to make an annual report should be in the body of the Bill itself. I accept that the operations of the Agency would cover the exercise of the functions. I do not dispute that at all, but I suggest to the noble Lord that he should look at this again and, if he finds that the changes which would be required are not as many as he expects, I should be grateful if he would make those changes because I attach great importance to this point. For some 30 years now I have seen these Bills go through Parliament, and I attach great importance to the reporting to Parliament by these publicly-owned bodies. I think that it is absolutely crucial and I believe that it should be given prominence in the legislation. Therefore, I should much prefer it to be in the body of the Bill. I invite the noble Lord to have a look at this again.

Lord HUGHES

I will have a look at it but, as the noble Lord will be aware, the Parliamentary draftsmen are at the present time working under considerable difficulties.

A Noble Lord: Whose fault is that?

Lord HUGHES

It is the usual fault. It is the fault of the Government which requires legislation, but if we had no Government and no Parliament we should not need Parliamentary draftsmen and they might regard that as being a worse situation than being overworked. Anyway, whoever is at fault, the fact remains that the draftsmen have a great deal of work to do. Therefore, I feel there is an obligation on us not to involve them in needless work. However, I certainly undertake that if, without adding considerably to their burdens, this point can be brought into the body of the Bill, I shall arrange for it to be done. If I believe that it cannot be done, I shall write to the noble Lord explaining why I think the work involved is more than the end result is worth. As the noble Lord is a reasonable person, I shall expect him to agree with any letter which I write under these conditions. I hope that I am a reasonable person, and I should not write him a letter unless I thought that it would be persuasive.

Lord DRUMALBYN

I am much obliged to the noble Lord. I can only say that, given the fact that there are bound to be amendments to the Bill and that the draftsman is bound to have to look through it again, could he please bear in mind this point when doing so? I think that he will find that very few amendments will be needed. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 4 [Power of Secretary of State to give Agency directions]:

7.46 p.m.

Lord DRUMALBYN moved Amendment No. 23: Page 4, line 17, after ("with") insert ("the National Economic Development Council and").

The noble Lord said: I am well aware that this provision would not be applicable to all the functions of the Agency or to every kind of general or specific direction that the Secretary of State might make, for example, with regard to derelict land and so on. However, on the industrial side, I think it very important that close liaison should be kept with the sub-divisions of the NEDC. For example, let us suppose that a direction was to be given in relation to one aspect of the economy or one sector of industry. Let us say that it was the linen industry, if, as I hope, there is anything of that industry left in Scotland. Supposing that were to be done, I feel that it would be sensible to discuss with the Fibrous Industry EDC or whatever it is of the National Economic Development Council, whether the direction in question was or was not appropriate.

What I am arguing here is the clear necessity, to which the noble Lord himself referred in his opening speech on Second Reading, for dealing with industries on a national basis. With all respect, I do not think that it is enough for him simply to discuss with the National Enterprise Board, if we ever have one. Nor should I think it sufficient simply to have consultations with his "opposite number"—if that is the right phrase—at the Department of Industry; that is, the Secretary of State for Industry.

It is important to get the opinion of those who are working in that section of the industry. I do not say that this is necessarily the correct place for this; I do not even say that it is necessary to put this provision into the Bill. But I have put down the Amendment as a peg on which to hang the argument, and to enable me to ask for an assurance that there will be the closest possible co-operation with the various sub-divisions of the National Economic Development Council in matters of this kind.

Lord HUGHES

I can, without hesitation, give the type of assurance which the noble Lord, Lord Drumalbyn, requested. When the Secretary of State proposes to give a direction to the Agency he will, in the normal course of events—as the noble Lord indicated—consult bodies which he considers will have an interest in the matter. On some of these subjects it is absolutely inevitable—perhaps I should say essential—that the National Economic Development Council will be one of the bodies to be consulted. Therefore in any circumstances, when it would seem to be the appropriate thing to do, such a consultation will take place. I can give that assurance.

However, we should not like to have a provision in the Bill to this effect because it would then become an obligation, and difficulties could arise, as I am sure the noble Lord will appreciate. There may be an occasion when a direction within a specific time was essential, and this would prevent the Secretary of State from carrying out a proper consultation with the National Economic Development Council. It might mean that in such circumstances all he would be able to do would be to have a telephone message sent to the chairman or some of the members to inform them that time compelled swift action on a particular matter and that a direction had to go out. This could not be regarded in any proper sense as consultation with the body. But when time did not prevent it, it could be a very worthwhile exercise from the point of view of the Secretary of State. Indeed, in many cases it could provide a defence mechanism for the Secretary of State, in that he could ensure that he had the widest possible consultation before issuing a direction. It would be much more acceptable if he knew the extent to which people were in agreement with what he was proposing to do.

A second reason against having this put into obligatory form is that if it were done there would be some consultations with the National Economic Development Council which would be a waste of time of members of the Council and other people, because it would not be a case of consulting only on matters in which the Development Council might be interested, but of consultations taking place every time there was a direction. I think that we can safely leave the matter as it is, because it is very much in the interest of the Secretary of State and of the Agency that the widest possible consultation should take place on certain matters. I hope that the noble Lord will accept that as the fullest possible assurance on this question.

Lord DRUMALBYN

I am much obliged to the noble Lord and I am perfectly prepared to accept his assurance. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

7.54 p.m.

Lord CAMPBELL of CROY moved Amendment No. 24: Page 4, line 18, leave out ("or specific").

The noble Lord said: This clause of the Bill is identical with Clause 6 of the Industry Bill, which applies to the National Enterprise Board. My object here is to query whether it is necessary for the Scottish Agency to be under what would appear to be very close control of the Government. One can understand the need for the Secretary of State to have power to give general directions, but the words "or specific" make it look as though he could tell the Agency to do particular things and this could be carried to extremes. I recognise that this may be necessary, but my purpose in putting down the Amendment is to ask the Government for an explanation of why there might be occasions when specific directions would be required from the Government to the Agency.

Lord HUGHES

I accept that the purpose of the Amendment was to probe, rather than anything else, and not necessarily to probe in order to get information for the noble Lord, Lord Campbell of Croy, who is as well versed in these matters as anyone in your Lordships' House, but to enable the situation relating to this matter to be put into the record. I must admit right away that it is unusual for a Minister to have power to give a specific rather than a general direction. The reason for this is that the general power, which is the common thing, has always proved difficult, if not almost impossible, to operate. This must have happened during the period when the noble Lord, Lord Campbell of Croy, was Secretary of State for Scotland. Almost every time a Department seeks to give a general direction, when it is examined the observation is made: "Yes, this is not so much general as specific, and if you do this, even though you are calling it a general direction, it could be regarded as being ultra vires because it is more of a specific nature than of a general nature."

On those occasions, involving successive Governments, which might have led to the giving of a direction which would have been more of a specific than a general nature, the Secretary of State has conveyed to the body concerned his feelings on the matter, and the body, after discussion, knowing what the Minister was seeking, has acceded to the direction. This has happened, for instance, in the matter to which I referred earlier this afternoon regarding the desirability or not of increasing the price of electricity at a particular time. It would be doubtful whether the Secretary of State could have issued a general direction to the Electricity Boards not to increase their prices. If he had issued such a direction, it would have been of a specific nature. The Secretary of State had no difficulty in getting the Boards to accept his views on the matter without the need to give a specific direction.

But one cannot always be certain that things will work that way. It is not intended that there should be wholesale interference in the affairs of the Agency by giving specific directions. As the noble Lord, Lord Campbell of Croy, will confirm from his own experience, he and other occupants of the post he held always lean over backwards to avoid giving directions at all. The thing is to reach agreement. But if circumstances arose where a direction had to be given, we ought not to exclude the possibility that the Secretary of State has to abandon the operation because he cannot get it described in sufficiently general terms to come within the ambit of the Bill.

Bearing in mind the very wide and general powers given to the Agency—and we have had a bit of argument about that already—and having regard to the responsibility which the Secretary of State then has to Parliament, he ought not to be put in the position that it is only if he can make a general direction that he can intervene in matters. I certainly would not expect it to be a provision that would be used frequently. I must point out that the power of direction is safeguarded by the statutory obligation which is placed on the Secretary of State to consult the Agency before he issues a direction which will not—I wish to emphasise this—in any way concern the day-to-day running of the Agency. A specific direction would be issued only where it was designed to ensure that the Agency was implementing strategic decisions which had been taken by the Secretary of State.

Lord CAMPBELL of CROY

As the noble Lord has agreed, the provision for specific directions to be given by a Minister to a body of the kind we are considering is a new departure. As I have pointed out, this provision is also included in the Industry Bill, and we are glad to have on the record the statement by the noble Lord that this power would be used only infrequently, and that it is intended to meet occasions where technically a general direction might not be thought to be a general direction. Whether this is one of those occasions—following what the noble Lord claimed earlier this evening—when the Scottish Office made a suggestion to the Department of Industry or whether it was the Department of Industry who thought this one up, the noble Lord has not told us.

Clearly it is something new which is appearing in both these Bills and I think also in the Welsh Bill. I am sorry that it should be necessary because it could, of course, be misused by a Secretary of State who wanted to interfere with the Scottish Agency's day-to-day business but, having had an explanation and an assurance from the noble Lord which is on the record, I do not propose to press this and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

8.3 p.m.

Baroness ELLIOT of HARWOOD moved Amendment No. 25. Page 4, line 20, at end insert ("and to publish the same by means of a notice in the Edinburgh Gazette")

Lord DRUMALBYN

Would my noble friend forgive me? I wonder whether it would be convenient to take the next two Amendments together with this one? It is a question of how publicity should be given to specific directions.

Baroness ELLIOT of HARWOOD

I would agree if the Minister agrees. This clause gives power to the Secretary of State to give directions to the Agency. My Amendment seeks to provide that directions issued by the Agency in the course of any financial year should not only be set out in the Agency's report but published also in the Edinburgh Gazette. Many people will not have access to the Agency's report or be in a position to obtain copies. It is therefore vital that they should know what the Agency is doing, how it is functioning, and so on. Consequently directions issued by the Agency should be published in all newspapers and also in the Edinburgh Gazette. I am sure that the noble Lord will agree to this because obviously it is greatly to the advantage of the Agency to have as wide publicity as possible for what they are carrying out. I beg to move.

Lord DRUMALBYN

The noble Baroness has made very clear the necessity for giving some publicity to any form of directions which are given. As the noble Lord has said, we are moving to quite a new field with the giving of specific directions. General directions are very rarely given and I should have thought that it is inconceivable that the Secretary of State would not make a statement to Parliament if he felt obliged to give a general direction, unless of course it was in the interest of national security that the direction should not be divulged. Incidentally there is no provision for not publishing a direction in the annual report if it is not in the national interest for it to be disclosed. I mention this in passing because the noble Lord may wish to consider this. How likely it is in the future I do not know.

As for specific directions, I should have thought that by their very nature it is desirable for Parliament to know about them as soon as they are given. At the very least it would enable the Press to pick them up and report them to the public at large. It is important that the public should know how their affairs are being conducted in their interest and what directions are being given. The point about the need for early publication is that as we know very well, it is at least six months after the end of a financial year before a report of an agency or public corporation or whatever is published; in fact it may be longer than that. If a direction were to be given early in the financial year it would be nearly 18 months before the public became aware of it. That is not good enough.

If the first part of my Amendment were accepted then I think the second part would also be necessary. The second part reads: Without prejudice to his power to make a further direction in modified terms the Secretary of State may withdraw any direction given under this section. If the Secretary of State published a direction and laid it before Parliament—as I hope he will—Parliament might disagree so strongly that the Secretary of State would obliged to withdraw it; or Parliament might disagree with part of it so strongly that the Secretary of State might wish to withdraw the whole direction and issue a modified direction. To keep the record straight the withdrawal of a direction should be reported in the annual report. It might happen that a direction was reported in one annual report and the withdrawal reported in the next annual report, hence the words "or withdrawn." I thought of this rather carefully.

With the new concept of agencies and specific directions it is necessary to consider what the appropriate safeguards should be. I fully recognise that an agency is an agency; it is there to carry out the intentions of the principal—the principal in this case is the Secretary of State—and that there may be certain directions which he thinks ought not to be divulged. I am sure that the bulk of them ought to be disclosed to Parliament as soon as possible. We hear a lot these days about open government—something more talked about than practised. Openness is a sham if disclosure is to take place only long after the fait accompli. A specific direction is a kind of order directed to a particular person, in this case an agency. It is rather like a Private Bill as opposed to a Public Bill. Nevertheless, it can affect many people and many interests besides the person to whom it is given. To me at any rate it seems only right that it should be made known as soon as possible. The noble Lord may be able to convince us that there are some instances where it would not be desirable to make these directions known, but I am quite certain that he cannot convince us that in all cases it would be undesirable to make them known. Therefore, while some modification may be required, in general terms I think the Amendment is probably right. If the noble Lord has specific reservations perhaps he will let us know what they are. I beg to move.

Lord HUGHES

I think it was right that we should be considering the three Amendments together. I shall therefore deal first with Amendment No. 25, which technically is the only one before us, to publish in the Edinburgh Gazette. I do not think this is a good way of achieving what the noble Lord, Lord Drumalbyn, and the noble Baroness, Lady Elliot of Harwood, have in mind. After all the Edinburgh Gazette has a somewhat limited readership; it does not by a long chalk compete in circulation with the popular dailies. The Government think it would be much better that Parliament should be informed directly if possible. This brings me to Amendments Nos. 26 and 27. It is the Government's intention to lay directions before Parliament as soon as possible after they are made, but as this Amendment is worded the Government would have no discretion in the matter. I know there is room for argument as to what is meant by "as soon as may be", but so far as I know it is the Parliamentary equivalent to "immediately". You cannot put "immediately" into a Bill because if you do not do something five minutes after the direction has been given you are not, strictly speaking, in the realm of immediacy. When the noble Lord talks about "as soon as may be "he means"as soon as possible" or "immediately". The Government will generally wish to agree with that, but, as he indicated, he always anticipates not only the reasons for putting Amendments bat also the objections the Government may make. This comes from his long experience as a Minister of digging up objections. He knows the way the Department think and how the Minister reacts to Departmental thinking.

There are circumstances in which it could cause difficulty: if for example, there was a direction to the Agency to acquire shares or other property. Such a case would be a rare event; but the result of it becoming widely known would be almost certainly to force up the price to an unfair and unrealistic level so directions might touch on commercially sensitive matters. The Government intend to inform Parliament immediately after directions are given, except in cases where there are clear reasons in the national interest why this should not be done. When a direction is not published immediately on being made, the reasons for having done so would be set out in due course in the Agencies annual report.

So we have the two sets of circumstances: the normal one, where Parliament will be informed as soon as may be that the direction has been given or those cases where it is not in the public interest that it should be published at that time. And in the annual report there will be a reference to this and the reason why it was not published at the time. On the third point about withdrawal—in Amendment No. 27—this is not necessary because, if a direction has been given and withdrawn, what happens is that the Secretary of State makes another direction revoking the first one. It would then be covered in the same way as the first. It would be another direction and the need to acquaint Parliament with it would be just as apparent as in the case of the one revoked.

This is a matter on which I have no disagreement at all with the noble Lord, Lord Drumalbyn. What I should like to say is that having considerable sympathy with what he has in mind—although I think that what is in the Bill and the Secretary of State's intention provide what he wants—I should like to have a look at it to sec whether we can perhaps incorporate some wording in the Bill to give effect to what I have said the Secretary of State would wish to do; but with the necessary safeguard of the national interest. If the noble Lord would be prepared to leave it with me, I will see what can be done in that direction.

Lord DRUMALBYN

I willingly leave it to the noble Lord and thank him for what he has said.

Baroness ELLIOT of HAREWOOD

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

Clause 5 [Exercise by Agency of powers to give selective financial assistance under Industry Act 1972.]:

8.14 p.m.

Lord DRUMALBYN moved Amendment No. 29:

Page 5, line 23, at end insert— ("(14) The giving of any direction under this section by the Secretary of State shall not affect his obligation under section 7 of the Industry Act 1972 to secure the consent of a company before acquiring any shares or stock therein.").

The noble Lord said: I beg to move this Amendment which stands in the name of my noble friend Lord Campbell of Croy. I think I know roughly what my noble friend had in mind with this Amendment. One could make a complicated case about this bringing in company law and all the rest. I do not propose to do that; but there are various aspects of acquiring shares or stock. You can acquire them in the open market or you can enter into an agreement with the company for the issue of further shares and stock; it may be within the limits of authorised capital or it may be outside them. I do not deal with any of that. It seems to me that this would be a valuable addition to the Bill and I do not think the noble Lord will dissent. I beg to move.

Lord CAMPBELL

I should like to—

Lord HUGHES

If the noble Lord will permit me I want to say that I am prepared to accept the principle of this Amendment and then to go on to say why we do not want to proceed with it at this point. The Government accept the principle of this Amendment since they share the intention that the giving of selective assistance through the SDA under Section 7 of the Industry Act 1972 should be subject to all the limitations and restrictions contained in that Section with the exception of those limitations which, subject to further Parliamentary consideration, will be removed under Clause 15 of the Industry Bill. The Government have already undertaken in another place in the Committee stage of the Industry Bill to table Amendments to the corresponding clause of that Bill and make it clear that these limitations and restrictions are not intended to be by-passed. The policy on this is clear but the Government acknowledge that the present drafting needs to be amended.

The present clause (as it will be on the noble Lord's copy with a line drawn alongside it) is similar to Clause 3 of the Industry Bill since the Agency will be performing a role in relation to regional selective assistance in Scotland corresponding to that of the National Enterprise Board in England. It is therefore desirable to have a consistent approach to the re-drafting to the two provisions. The Government will be tabling the necessary Amendments to both Bills in due course. I hope that the noble Lords, Lord Drumalbyn and Lord Campbell of Croy, will accept that this will prove to be a satisfactory way of dealing with the situation.

Lord DRUMALBYN

When the noble Lord comes to re-draft this, will he also consider the question of disposal of shares and stocks? It is very important that the disposal of shares should not be done in such a way as to damage the interests of the company whose shares are disposed of. If they are all shot on to the market at the same time this could be damaging. This has some relation to what we were discussing before dinner.

Lord HUGHES

Yes, I will, It emphasises the point that I have made that it is not necessarily anybody's interest, even the Agency's, to have to do everything at a given point in time. I would think that this is something which properly ought to be looked at it.

Lord CAMPBELL of CROY

I am grateful to my noble friend for moving this Amendment during the moment or two that I was not in the Chamber. I had received a message to make an urgent telephone call. Such is life in Committee stage that even at a moment when I thought I had time to spare, it was not possible. All I would add to what my noble friend has said is that I think it would be an assurance to Scottish industry if it is made clear that there will be no change in the way in which Section 7 of the Industry Act is to be carried out. I am not completely re-assured by what the noble Lord has said. He spoke about changes. If there is to be a change to the Industry Bill, as well, it may not be the kind of change which I would have wished; because the real reassurance to Scottish industry about the Agency carrying out this function is that it should be carried out in a way they are familiar with. I hope that the noble Lord in introducing the Amendments he described will have drafted something which is in the spirit of Amendment No. 29.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

8.20 p.m.

Clause 6 [Provision of sites and premises for industry]:

On Question, Whether Clause 6 shall stand part of the Bill?

Lord CAMPBELL of CROY

I should like to ask a question concerning subsection (4) of this clause which deals with the New Towns in Scotland. It appears to be the intention of the Government to give the new Agency a role in regard to the property and activities of the New Town Development Corporations when they have matured, and this is something which has been in the minds of those in Scotland who have been concerned with our New Towns for some time.

In England, New Towns reach maturity a good deal earlier than the first one in Scotland, which is East Kilbride. A New Towns Commission was established in England and the property was handed over by the Development Corporations to that Commission. The Corporations are due to go out of existence when they have completed their job. In Scotland, so far as I know, there is no equivalent of the New Towns Commission of England and Wales, and East Kilbride has almost finished its job. The Corporation there has done an excellent job over a period of more than twenty years. The Corporation is busy, because, when I was Secretary of State I gave it another job to do. I asked it to deal with the starting up of another New Town near by, so the Corporation, which has a lot of experience and has done a good job, is engaged in another task. But the time will come when that Corporation and the Corporations of other New Towns in Scotland which started up later, will have completed their main tasks and this subsection gives the impression that the new Agency will be the repository of what functions and property there may be for Corporations to hand over when they are wound up.

My question is whether that is so, and whether this is where the New Town Corporations will hand over their property and functions such as still exist, or whether it is only industrially related property which is involved. There is an argument that the ownership of houses and other property should be handed over to local authorities. If the noble Lord can give me some information about this, it will be of interest to all those who have this problem in mind. When the New Town Corporations have finished their tasks, what is to happen to the property and any residual duties which they still have at that stage? It is clear that arrangements are being made here for some property to be handed over, but is this indicating the intention that all property should be handed over to the new Agency?

Lord HUGHES

The noble Lord, Lord Campbell of Croy, has touched on what is intended here. This subsection enables the Secretary of State to transfer to the Scottish Development Agency any property of a New Town which has been wound up under Section 36 of the New Towns (Scotland) Act 1968. Section 36 of that Act is to apply to the Agency as it applies to local authorities. The purpose of this provision is to give the Secretary of State the option, when it comes to winding up a New Town Corporation, to transfer its industrial estates and other industrial and commercial assets, which are, or could be, of strategic significance to the economic development of a region, to the Scottish Development Agency which will have appropriate skills to develop the property concerned. Section 36 of the 1968 Act enables the Secretary of State to make an order winding up a New Town Corporation when its purposes have been substantially achieved and thereafter, with the consent of the Treasury, to make an order transferring all or part of the undertaking to the relevant local authority or, where appropriate, to a statutory undertaken.

The clause would apply to the Scottish Development Agency in the following way. When the Secretary of State proposed to make a transfer to the Agency, he would first consult them as well as the local authorities for the area concerned, and any statutory undertakers having an interest in the undertaking being transferred. He would give the Agency 28 days' notice of the proposed terms of transfer and of payments which they would be required to make in consideration of the transfer. If they objected to the terms, the order specifying them would be subject to the special Parliamentary procedure. It would also be open to the Secretary of State to extend or modify the powers and duties of the Agency, where he considered that necessary or expedient in consequence of the transfer. What came to the mind of the noble Lord, Lord Campbell of Croy, in casting back to his experience in connection with East Kilbride and Stone-house has been a good remembrance by him, and his anticipation of this relation to industrial and commercial transfers to the Agency was a correct one.

Lord CAMPBELL of CROY

I am grateful to the noble Lord for having given us an explanation of the Government's intentions. It is clear that it is left to the Secretary of State to decide what property belonging to a New Town Corporation shall go to this new Agency, and what shall go to a local authority. It is clear that it will be industrially related property, which I expected. I would not expect the Agency to become the owner of housing estates which had nothing to do with industry. I am grateful to the noble Lord for his explanation. It is the only point in the Bill where the New Towns are mentioned and discussed. It is exceedingly important for the future of the New Towns.

Clause 6 agreed to.

Clause 7 [Development and improvement of the environment]:

8.28 p.m.

Lord CAMPBELL of CROY moved Amendment No. 30:

Page 6, line 20, at end insert— ("provided that the local authority, body or person consents to being so appointed.").

The noble Lord said: The intention here is that the local authority, body or person mentioned in this clause should not be appointed unless that body consents; that it should not be coerced but should be a willing co-operator. The reason for this is clear. If the Agency were to appoint a body, such as a local authority, which was unwilling to act as an agent it would produce the kind of clash which would not be in the best interests of industry or the development in which the Agency were interested. The noble Lord may say that this does not need to be put into the Bill, because it is understood; but I feel in this case that there is a good reason for putting it in, as I do not think it is understood that this will normally be done willingly only if it is made clear in the Bill. It could otherwise, quite understandably, be interpreted as a power of the Agency to tell a local authority or, indeed, a person, to get on with some job for them, even though the Agency had not obtained agreement first. I beg to move.

Lord HUGHES

I wish I could accept the Amendment, simply because it is a long time since I accepted one, but this Amendment is unnecessary. I cannot visualise a circumstance when any body, Scottish development agents or otherwise, would be so foolish as to force an agency on somebody that did not want it; there is no likelihood of that happening. What is much more likely is that a local authority wants to be an agent of the Scottish Development Agency, and does not achieve that.

As noble Lords know, I visited all the new regions some time before they took up their new functions on the 16th May; and one of the things which cropped up in more than one region, particularly where they had been very active in carrying out a policy of improving derelict land, was that they were most anxious to be allowed to carry on the work themselves. They greatly hoped that they would be entrusted by the Agency, at least in the early stages, with the opportunity of continuing to do this work on their behalf. So there are circumstances in which local authorities will be chasing the opportunity of getting this, rather than declining it. But there may be circumstances when a local authority or any other body or any other person did not wish to be appointed.

Quite obviously, when we are searching for people to become members of the Development Agency we are not prohibited, for example, from looking at the possibility of appointing Peers to membership of that body, but we are not going to go out of our way to look for people in one of the other categories who are not given a right to vote in a General Election, that is, seeking to put lunatics on the Board; and there would almost need to be at least one lunatic on the Board before they would go out of their way to appoint as their agent somebody who does not want to do the job. So it rather makes nonsense of a piece of legislation to put into it something which clearly does not need protection unless the people to be given the powers are so mad that they really ought not to he given any powers at all. I hope that the noble Lord will feel that what he wants is absolutely certain to be accomplished without making rather a nonsense of putting it into the Bill.

8.32 p.m.

Lord CAMPBELL of CROY

The noble Lord has answered this from one point of view, but he has not answered another point that I made. I entirely agree that if a body or a local authority were to be appointed on a long-term basis as an agent of the Agency to carry out a succession of tasks, what he indicated of course would apply. Members of the Agency consisting of people like the noble Lord himself would act extremely reasonably and would not try to coerce anyone into being an agent if he did not wish to become one. But there is the other point; namely, that there could be a certain action which the Agency want carried out, perhaps concerned with environment which, I need hardly remind the noble Lord, is an extremely controversial matter. Very often in planning questions or those concerned with environmental improvement of derelict land, and so on, while everyone agrees that something needs to be done they are frequently violently at odds as to the best way of doing it.

I was considering the situation where the Agency wished certain action to be carried out and the local authority was against it or against the particular way in which it was proposed to be carried out. Under this subsection it is possible for the Agency to say, "You will carry out our instructions and we appoint you as the agent for doing this work." So they could use this subsection for one particular purpose by appointing a body or a local authority to be agents for one particular purpose, not necessarily as a long-term prospect. That is one thing which worries me, because certainly if a local authority were faced with that kind of ultimatum (which I agree with the noble Lord would not be a satisfactory way of proceeding, but none the less it is something to which the Agency might resort) they might feel they were being compelled to do something which was necessary in the area concerned but which was in conflict with the authority's environmental interests in another direction. This subsection could be used to coerce a local authority to do perhaps one particular act which they themselves may disagree with. I wonder whether the noble Lord can be quite happy in leaving the subsection as it is in that situation.

Lord HUGHES

Yes, because one can visualise the local authority being appointed to act as agent in two ways. It may be a continuing process, whereby they had been doing a general type of job and were asked to go on doing it because the Agency were content that they should continue to do the job in the way they had done hitherto. In such a case there would be no conflict; but there could be a case of a more limited nature where the Agency wished a local authority to do a certain thing for them and the local authority are willing to do it but when they get down to discussing the details—whioh they perhaps may not have done in the very beginning, although quite frankly I should expect such discussions to take place—they subsequently found they were being asked to do something which turned out to be in conflict with their own policy. I see no difficulty. All that the local authority have to do in these circumstances is to say, "We do not wish to continue as an agent." Any agreement of this kind must obviously enable an agency to he terminated in one way or another. The one thing which is quite certain is that if the Scottish Development Agency wanted to get themselves into difficulties they would be able to do so by asking a local authority to do something in that local authority's name which the local authority did not want to do. In that case the local authority would almost certainly say to the Agency, "We are not prepared to do that. If that is the way the job is to be done, you will have to do it yourselves."

There is nothing in the Bill which would enable the Development Agency to compel a local authority to continue in that position. It would be a voluntary agreement between the local authority and the Agency, from which either side can withdraw at any appropriate time in case of difficulty. One must accept that you could not have the local authorities terminating an agency in the middle of a job or having it withdrawn in the middle of a job. But they need not start something which they did not want to do in the first place; and the noble Lord's experience of local authorities will have shown him how difficult it is to get local authorities in Scotland to do things which they do not wish to do. If the Scottish Development Agency are able to compel them to do that, then they have more power to their elbow than any Secretary of State for Scotland ever had.

Lord CAMPBELL of CROY

I am grateful to the noble Lord for giving that information; but of course I would also point out that an agent may be a body or a person. An individual could be placed in this position too, and if this subsection were interpreted in the sense that the Agency could appoint that person to carry out a particular task, perhaps involving their own land or the demolishing of something they did not wish demolished but which the Agency felt was in the interests of the area, I believe this subsection might be used by the Agency—they would be incorrect to do so, but they might think it was in the best interests of the area—to force a person to carry out something against his will by appointing him to do a certain job. So I am still rather worried about the lack of provison for any consent. However, the noble Lord has indicated that consent is understood here and that the Agency would not be expected to use this subsection against the wishes of any person, body or local authority. For that reason, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

8.39 p.m.

Lord HUGHES moved Amendment No. 31:

Page 6, line 36, at end insert— (" ( ) Section 267 of the Town and Country Planning (Scotland) Act 1972 shall apply to a local inquiry held by virtue of subsection (6) above as it applies to a local inquiry held by virtue of that section.")

The noble Lord said: I beg to move Amendment No. 31. To avoid any doubt arising about what arrangements should apply to local inquiries held to consider representations about Agency environmental developments under Clause 7 of the Bill, this Amendment applies the procedure laid down in Section 267 of the Town and Country Planning (Scotland) Act 1972. That section provides for the Minister to appoint a person to hold an inquiry and report back to him, and for the publicising of the time and place of the inquiry, for requiring witnesses to attend, for producing documents and arranging for the swearing in and examination of witnesses, et cetera. So I take it that this is the kind of provision which the Committee would find it desirable to include in the Bill. I beg to move.

Lord CAMPBELL of CROY

This Amendment put down by the Government and appearing a short time ago, anticipated a point I was to raise on this clause in any event. Presumably for convenience, it is proposed that planning permission should be deemed to have been sought, and also given, by the Secretary of State as part of his functions in carrying out this clause. In subsection (6) it was indicated that the Secretary of State would carry out the normal processes of consulting authorities, advertising the development which was suggested, and considering written representations. It also said that he could cause a local inquiry to be held. It is the local inquiry point which I think will concern most people in the planning field regarding this clause. Certainly we would not wish to object to planning procedures taking place at the same time, if possible. I will not remind the noble Lord of occasions on another Bill when I drew his attention to some of the great delays that can happen on planning procedures. So long as the various stages of the planning procedures are thorough, and everyone has a right to promote a project or to raise objections and has full opportunity and enough time to put his case, then we are perfectly satisfied that time should be saved by the procedures running concurrently with other functions of the Secretary of State.

However, the question arises: when does the Secretary of State cause a local inquiry to be held? The objectors may well consider on a certain case that an inquiry should be held, but the Secretary of State, if it was just left to his discretion, could decide not to have one. The Amendment which the noble Lord, Lord Hughes, has just moved, as I understand it, simply indicates the procedure which would be used under Section 267, which I have with me here, and which lays down all the various things that have to be done as part of a local inquiry. But it still does not indicate when the Secretary of State would decide to hold an inquiry. It seems to be left entirely to his discretion.

We have discussed recently, also, the occasions when the Secretary of State has this discretion and the occasions when he must have an inquiry. One of those occasions is when there is a proposed amendment to a development plan. If that is the proposition, then under the 1972 Scottish Planning Act, which is the consolidated legislation, the Secretary of State is obliged to hold an inquiry. So I would ask the noble Lord whether, if the planning proposal that came forward as part of a scheme under Clause 7 included a proposed Amendment to a development plan, the Secretary of State would be obliged, as he would in normal circumstances, to hold an inquiry willy-nilly if there were objections. Will that requirement still stand or is it to be overruled by this subsection (6) which appears to give him complete discretion as to whether or not to hold an inquiry?

There are other occasions under the Planning Act when the Secretary of State has such discretion, and then he usually has to decide the matter on the basis of the strength and kind of objections which have been raised to a proposal. So as to this planning procedure which has been inserted in this clause in order, as I understand it, to save time, and to make sure that, so far as possible, it can run concurrently with the development and improvement of the environ- ment plan which is being considered in other ways as well, we want to make sure that this does not overrule the present system; or, if it does and there are any changes, we want to know exactly what they are. We want to know whether the Secretary of State has been given a new discretion which overrules the previous provisions of the 1972 Planning Act.

Lord HUGHES

I think I can quickly satisfy the noble Lord. As he said, the Secretary of State will hold an inquiry where in his view it is appropriate. What I should like to confirm is that the Secretary of State will apply the same tests and standards in these cases as he would if a Planning Act inquiry were involved. Therefore, the circumstances of consideration will be exactly the same.

Lord CAMPBELL of CROY

I am very glad to have that statement. It will be a reassurance to many that the noble Lord has said, quite categorically, that this provision does not change the occasions on which the Secretary of State is obliged to hold an inquiry, or the considerations in other cases when he has to decide himself whether or not to have one. I am grateful for that categorical statement.

Clause 7, as amended, agreed to.

Clause 8 [Derelict land]:

8.47 p.m.

Lord DRUMALBYN moved Amendment No. 32:

Page 7, line 25, at end insert— ("Provided that in the case of land other than the derelict land, the Agency shall first obtain the approval of the Secretary of State, who before giving his approval shall consider any representations made by a person having an interest in the land to the effect that the land is not reasonably required for the said purpose").

The noble Lord said: I beg to move the Amendment standing in my name. We are here dealing with derelict land. The first point to notice in this clause is that the Agency themselves decide when land is derelict. Clause 8 begins: Where it appears to the Agency that land is derelict, neglected or unsightly and that steps should be taken for the purpose of enabling the land … to be brought into use or of improving its appearance, the Agency shall, in accordance with arrangements approved by the Secretary of State, exercise the powers conferred by this section. The clause continues: The Agency may acquire, by agreement or compulsorily, the derelict land and any other land, whether or not adjacent to the derelict land, whose acquisition is reasonably required for the purpose of bringing into use or improving the appearance of the derelict land …".

The first point to notice is that the Agency have already made up their minds what land is derelict, neglected or unsightly. So the any other land, whether or not adjacent to the derelict land, does not come within that category. Yet they are also given powers of compulsory acquisition over that, as I understand it, without any right of appeal against compulsory acquisition. I think I am right in saying that this is the only occasion in the Bill where no right of appeal is given against compulsory acquisition, if I read this clause and the next clause correctly.

I hope I am wrong, but in case I am not wrong I have put down this Amendment, which says: Provided that in the case of land other than the derelict land, the Agency shall first obtain the approval of the Secretary of State, who before giving his approval shall consider any representations made by a person having an interest in the land to the effect that the land is not reasonably required for the said purpose. I do not think anyone could object to that provision. It provides for the absolute minimum of appeals that one could possibly imagine. So I hope that the Amendment will be accepted. I beg to move.

Lord HUGHES

The Amendment would oblige the Agency when they acquire land associated with derelict land although not itself derelict to obtain the prior approval of the Secretary of State. He, before giving his approval, would be obliged to consider any representations made by a person having an interest in the land to the effect that the land is not reasonably required for the purpose of treating the derelict land. In our view, this would lead to unjustified work—I almost feel inclined to say "unjustified bureaucracy".

Even when, as is usually the case, the person concerned was perfectly happy for the Agency to purchase this associated land, the case would have to be referred to the Secretary of State. I can see no need for this. If for the purpose of the working of derelict land the Agency wish to acquire another piece of land and the owner of that land is perfectly willing to sell to it, with a willing purchaser and a willing seller why should the consent of the Secretary of State have to be obtained? If this were done, it would prevent the landowner from freely selling his land to the Agency if any other person, with however peripheral an interest in the matter, objected.

I cannot think that this is the kind of infringement of the rights of landowners which would normally commend itself to noble Lords on the Benches opposite. However, we come to what the noble Lord is concerned about, not the person who is willing to sell but the person who does not want to sell. We have pointed out that where the Agency seek to acquire land by compulsion, the ordinary procedures apply. If a compulsory purchase order is being sought for this land and the owner still does not wish to sell, then the ordinary procedures will follow.

Let us examine what would take place if the Amendment were accepted. If it were accepted it would not deprive the owner of his right to object to a compulsory purchase order, but it would bring about the rather ridiculous situation that the Secretary of State, who is supposed to consider quite impartially what comes out of a compulsory purchase order inquiry on the evidence that is placed before him as a result of that inquiry, will be doing so after he has already said to the authority, "Yes, I approve of you going ahead with it". One can well imagine the owner saying, "What is the point of having an inquiry into this compulsory purchase? The Secretary of State has already made up his mind". In these circumstances, it seems to be quite proper and in the best interests of the owner concerned that he should rest on his ordinary right to object in the way laid down generally in relation to the acquisition of land; namely, to object in the way in which he would object if it were anybody other than the Development Agency. I do not see any reason, therefore, why the Secretary of State should be brought into the matter at this early stage of the proceedings rather than going through it in the ordinary way. It was not intended that this should be a method of short-circuiting the compulsory purchase order procedure.

Lord DRUMALBYN

I am very much obliged to the noble Lord. I have tried to find my way through the Bill and it seemed to me that Clause 7 dealt with provisions for the development and improvement of the environment; that Clause 9 dealt with the acquisition and disposal of land for industrial undertakings; and that Clause 8, which deals with derelict land, stood entirely on its own. If the noble Lord can show me that Clause 8 does not stand on its own and that the rules relating to compulsory acquisition apply to the clause, naturally I shall withdraw the Amendment. The noble Lord is quite right in saying that there is a defect in my Amendment; it was intended to apply only to compulsory purchase where there was an objection. If, however, the noble Lord can show me where the provisions of appeal, the holding of an inquiry and everything else apply in the case of Clause 8, I shall be obliged. However, it seems to me that Clause 8 does not apply.

Lord HUGHES

Certainly I wish to emphasise what I have said before. On the question of compulsory powers, I have stressed time and time again that the only compulsory powers in this Bill are in relation to the acquisition of land and that in relation to such acquisition the normal procedures will apply. May I confirm that this will apply to Clause 8 as well as to Clause 9. If there is any doubt about the way that the Bill has been drafted, I will undertake to ensure that there is a necessary Amendment to make it quite clear that the ordinary procedures apply in relation to Clause 8 as well as to Clause 9.

Lord DRUMALBYN

I am obliged to the noble Lord. On that understanding, I will willingly withdraw the Amendment.

Amendment, by leave, withdrawn.

8.55 p.m.

Baroness ELLIOT of HARWOOD moved Amendment No. 33: Page 7, line 27, after ("may") insert ("dispose of or grant a lease of the land for a consideration not less than the best that can reasonably be obtained or may, at their discretion")

The noble Baroness said: This Amendment is designed to ensure that the Agency do not lose money on what will be a very expensive job. It is to empower the Agency not only to dispose of derelict land which has been reclaimed as a public open space but to dispose of, or grant a lease of, such land for a consideration not less than the best price or rent which could be obtained for it. The clause is founded upon and imports much of the phraseology of Section 8 of the Local Employment Act 1972. Reclaimed land could be used for a variety of purposes, including forestry and agriculture. The scope for the disposal and use of such land should not, therefore, be limited to its use only as a public open space. Reclamation costs will be heavy, with no provision for any return on such expenditure. If the land could be disposed of for any use—by "use" I mean something which is of value to the community, with provision for charging a price or rent and a discretion only to be given for disposal free of charge for use as an open space—some of the less desirable features of subsection (3) would be removed. Otherwise this subsection is an open-ended commitment, with no return on the expenditure, which would be public expenditure. It would involve a certain amount of criticism from people who naturally do not want to see more money spent than is necessary if there is to be no return whatsoever. If. however, there is to be a return, then it will be a very much wiser thing to do. I understand that some land will not be able to be used except for an open space, but if the land which one sees in and around towns and villages were to be retained and put to more fruitful use, the Amendment which I am proposing would enable that to be done. I beg to move.

Lord HUGHES

The Government accept the spirit of this Amendment which attempts to deal with an ambiguity which has arisen from the drafting of this subsection and Clause 9(1). It was not the Government's intention that the Agency should be able to dispose of derelict land after treatment only when they were disposing of it free of charge to a local authority or a New Town for use as public open space. The intention is that their general powers to dispose of land should extend to land acquired under Clause 8(2), and the Government have tabled an Amendment to Clause 9(1)(c) to make this intention clear. That intention also applies to all disposals, other than the special type of case with which Clause 3 at present deals—the requirement in Clause 9(2) that land shall not, except with the consent of the Secretary of State, be disposed of or leased for a consideration less than the best that can reasonably be obtained. That Government Amendment secures precisely the same effect as the Amendment which the noble Lord has moved.

May I elaborate on the purpose of Clause 8(3). Its purpose is to ensure that local authorities are no worse off financially under the new provisions than under the present grant arrangements under Section 8 of the Local Employment Act 1972. The present situation is that the value of derelict land after treatment is generally deducted from the grant for which a local authority is eligible, but land which is to be used as a public open space is, under the present arrangements, assumed to have no "after value" and no deduction is therefore made from the grant. If the Scottish Development Agency were, in the absence of this provision, to sell public open space land to local authorities, the authorities would be liable for an expenditure which they do not incur at present. Through the arrangements made under subsection (1), the Secretary of State can ensure that the Agency will obtain a right of reversion to such land if it is turned to some use other than public open space, thereby preventing a positive benefit accruing to a particular authority from the provision.

If I am right in thinking that at the present time the local authorities get a grant of 85 per cent. towards the cost of work on improving derelict land, it might turn out to be less advantageous to them if the Agency undertook the full cost of developing the land and then charged them a price for the resulting land which might amount to more than 15 per cent. of the cost of doing the work. Under the present procedure this reclaimed land which is to be used as public open space is regarded as having no resulting value—in other words, continuing the position under the 1972 Act—but we accept that the noble Baroness has drawn our attention to something which required to be dealt with and we have dealt with it in the Amendment to Clause 9 to which we shall come.

Lord CAMPBELL of CROY

If I may intervene for a moment, I do not think the noble Lord answered the point made by my noble friend Lady Elliot of Harwood, that reclaimed land could be used for a variety of purposes, including agriculture and forestry. It would be helpful if the noble Lord could tell us that this is something which the Government regard as being within the scope of what is proposed in the Bill. I cannot help noticing that the Chairman of the Forestry Commission, the noble Lord, Lord Taylor of Gryfe, is with us, and although I know that he would not wish to intervene as such he must be as interested as any one in this Committee about the Government's views on whether forestry and agriculture can play their part as industries, as I believe they can, in improving reclaimed land and making the best use of it, particularly if it is land which happens to be more suitable for either of those uses than industrial use of another kind.

Lord HUGHES

I thought that was implicit in what I said, that it was only where it was going to be used as open land by a local authority that it would go to them without charge. The effect of the Amendment is to make quite certain that this land can be disposed of for any purpose, and, obviously, if it is being used by a local authority for a purpose other than that of open space, it will have a value and it will be disposed of for that other purpose—for example, forestry—according to what would be a reasonable price for the land concerned. I should say that my noble friend Lord Taylor of Gryfe will have an interest in this subject, but if his interest leads him to expect that he will get such land for nothing he is backing a loser!

Baroness ELLIOT of HARWOOD

I thank the noble Lord for his reply and I am glad that my Amendment has stirred the Government into doing something which will enable the Amendment to be incorporated in the Bill in another way. I therefore have pleasure in asking leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.5 p.m.

Lord DRUMALBYN moved Amendment No. 34: Page 7, line 34, at end insert ("other than those contained in subsection (3).").

The noble Lord said: I think the noble Lords explanation in regard to the last Amendment may enable me to be extremely brief on this one. One of my worries was that under subsection (4) the Agency could appoint a local authority or other public body to act as their agent for the purposes of the clause, and under Clause 3 the Agency could dispose of the land free of charge to a local authority. So it seemed to me to follow that they could appoint a local authority which could dispose of the land free of charge to itself, which seems to be somewhat inappropriate. But if it is going to be disposed of free of charge then it does not seem to matter very much, and this may be a convenient thing to do. Perhaps the noble Lord will be able to explain to me whether this is correct. That is the purpose of my Amendment. It seemed to me that, by and large, it was not a very good plan for the Agency to appoint somebody else to dispose of the land. It is all right for them to bring the land into proper repair, but surely the Agency have a responsibility as to whom the land is to be disposed of. and then there is the additional point of land being disposed of free of charge. I beg to move.

Lord HUGHES

The noble Lord, Lord Drumalbyn, has given us furiously to think on this Amendment. He is certainly on to something which must be dealt with. We are not satisfied that this Amendment is necessarily the right way to proceed, but we have to safeguard the situation and I should like a little more time to consider what is the best way of dealing with the matter. We certainly accept that something must be done here.

Lord DRUMALBYN

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

Amendment, by leave, withdrawn.

Baroness ELLIOT of HARWOOD moved Amendment No. 35:

Page 8, line 9, at end insert— ("(8) For the purposes of this section "derelict land" means land which is incapable without improvement of being put to beneficial use.")

The noble Baroness said: In rising to move this Amendment, I should like to point out that there is one small error in the Marshalled List. It should be, "page 8, line 19", and not, "line 9". In this Bill so far there does not seem to be any definition of what constitutes "derelict land", and it is because I want to get some sort of definition that I hope the Government will be able to do something. One is conscious of land which occasionally looks absolutely appalling, covered with every kind of horrible scrap metal, and one feels that it cannot possibly be reclaimed. But a great deal of it can be reclaimed, and there is a tremendous amount of land which could be designated as derelict and it might be better if it were called derelict land. If the Government can give us a definition of the term "derelict land" it will be a great help. I beg to move.

The DEPUTY CHAIRMAN OF COMMITTEES (Viscount Hood)

I must point out to the noble Baroness that it is, in fact, line 9.

Lord CAMPBELL of CROY

I should like to support my noble friend. I am afraid that I misled her by suggesting that it is line 19, because that is another Amendment on the same page. It is indeed line 9. I think it is necessary to have a definition of "derelict land". I hope the Government are proposing to put one in, if not at the end of Clause 8 then in the definition clause later in the Bill. If there is no definition, there could be difficult cases when people either claimed that land was derelict or that it was not. Indeed, there may be marginal cases of that kind. It may be difficult to define, but it is all the more important that it should be defined if possible.

Lord BALERNO

I should like to support the noble Lord in this matter. If we do not make this amendment, then we are heading for another Crichel Down, but in Scotland instead of in England. Therefore, I suggest that the Government should consider this matter very carefully indeed.

Lord HUGHES

I hope to be able to satisfy the noble Lord opposite that these fears, particularly of any possibility of a Crichel Down, are quite groundless. The clause uses the words "derelict, neglected or unsightly", which for convenience only are referred to thereafter as "the derelict land". If any one of these descriptions is appropriate, the land to be treated will be land within the scope of the clause. The definition proposed by this Amendment tends to concentrate too much on the first half of the phrase and, by coupling this with "being put to beneficial use", may exclude the visual improvement of neglected or unsightly land which is not actually derelict, or derelict land for which there can be no practical after-use.

I am a little surprised that a former Secretary of State should find difficulty about this, because the term "derelict land" has not hitherto been defined in any of the Statutes under which the Secretary of State at present grant-aids local authority derelict land clearance schemes—the Local Employment Act 1972, Section 8; the Local Government (Scotland) Act 1966, Section 10; and the Local Government (Development and Finance) (Scotland) Act 1964, Section 2 all make use of this. There is no definition of "derelict land". The beauty of this arrangement, and the way in which it has worked effectively over a period, is that it allows the definition to be changed from time to time as circumstances or priorities alter, without the need to amend existing legislation. So far as I am aware, there has never at any time in the past been any difficulty caused by this lack of statutory definition. Therefore, I ask the noble Baroness, Lady Elliot of Harwood, not to seek to fetter the discretion of the Agency in an operation which I am sure, of all the parts of this Bill, is least likely to result in any objection; that is, in regard to the powers to get on with the clearance of dereliction in Scotland.

The worst dereliction that we have in Scotland is on land damaged by past industrial or other development; for example, pit bings, old railway sidings and warehouses. It is on this land that the Agency will concentrate initially. Some of this land may by some interpretations be capable of some beneficial use, but is not environmentally up to the standard we should like to see, or capable of the most effective use. Here, therefore, there would immediately be some frustrating difficulties if the Amendment were accepted. Furthermore, the definition "land incapable without improvement of being put to beneficial use" would also include, for example, natural swamp land, scrub, felled woodland, and so on, which although not in the main beneficially used, or not as offensive to the eye as pit bings, should not be the first priority of the Agency, and would in any case require careful consideration from the land development point of view.

The Agency will, of course, be able to clear derelict land for agricultural use, but assistance for the reclamation or improvement of land already used for agriculture is available from other sources. In hill and upland areas, for example, the reclamation of land normally forming part of a farm or croft for agricultural use is encouraged by assistance under the Farm Grants (Scotland) Scheme, and for crofters under the Crofting Counties Agricultural Grants (Scotland) Scheme. The assistance offered under these Schemes is usually for the clearance of felled woodland, or the removal of boulders or other obstruction to cultivation.

The arrangements made under Clause 8(1), which will be made in consultation with the Agency to regulate their exercise of their derelict land powers, will include a working definition of "derelict land". It will not be as broad as the one suggested by this Amendment, but it will be sufficiently wide to allow the Agency a great deal of scope for furthering the improvement of the environment. Most important, it will be flexible. If, in practice, the definition is found to be too restrictive or too wide, we will change it. If the definition is not in the Bill, this is a simple matter because a statutory definition is less easily changed.

The present administrative definition of "derelict land" used by the Secretary of State in grant-aiding local authorities—and I believe we inherited that—is land, so damaged by past industrial or other development as to be incapable of beneficial use without treatment". The definition which will apply to the Agency's work will be decided nearer the appointed day in consultation with the Agency themselves or the organising committee. I hope that this gives all the assurance which the noble Baroness finds is necessary, and that she can take com- fort in the fact that this sort of procedure has now been carried out with complete satisfaction to all concerned for more than a decade without any difficulty ever having arisen.

Lord CAMPBELL of CROY

It is satisfactory and reassuring to hear that without a formal definition the various schemes in which local authorities have been involved in the past have worked apparently without misinterpretation or argument. What is proposed in this clause seemed to us to be going a good deal further and giving one Agency in Scotland a task to which we have no objection and in which we would encourage them, and in these circumstances it did seem to us that a definition of what constituted derelict land would be helpful to everyone concerned. What the noble Lord has said, if I understood him correctly, is that there is a system of having a definition at this moment, but it is administrative and not contained in a Statute, that there is an advantage in that because the definition can be changed from time to time and this makes it flexible.

The question I should like to ask is this. When a change takes place, if it is amended, how is that information communicated, how is it published, how do local authorities or members of the public know that the definition has been changed administratively? I would be one of the last people who would wish Parliament to be burdened with changes of definition every so often unless it was really necessary, but I think it is important that there should be a system whereby, when administrative definitions are changed, all those concerned should be informed quickly, and the public should also have access to it.

Lord HUGHES

I would need time to find out exactly what is done at the present time. I must admit that if I had not had this note and the noble Lord had asked me what is the definition of derelict land I, as a Scottish Minister, would not have been able to give the answer. It is quite obvious that if I had asked him that question a couple of years ago he would not have been able to give me the answer. But it seems to work to the satisfaction of the people giving out the grants, the Department concerned, and those who have been receiving the grants, the local authorities carrying out the work. I will look into the arrangements. It would certainly always be open for any Member of Parliament to inquire as to what is the current definition of derelict land. As I say, there ought to be some way for people concerned to find out what the current arrangements are. I should like to look at what has been done and find out if any change is necessary.

Lord BALERNO

With all respect to the answer the noble Lord, Lord Hughes, has given, I feel that there is a matter which still needs to be cleared up here and one in which my noble friend Lady Elliot of Harwood is particularly interested. It is the case where land was acquired and was in good condition when it was acquired and became derelict owing to the action of some Department of the Government. In those circumstances I cannot but see that it is right that that land should be made available, if he so wishes, to the original owner of the land. He may want it to round off his estate; he may want it for sentimental reasons. Even though it is derelict he may be able to do something with it himself. In so far as this does give him the right of pre-emption, this Amendment ought to be supported by your Lord ships.

Lord HUGHES

I cannot really think of the sort of circumstances the noble Lord, Lord Balerno, is indicating, that land which is not in the possession of an owner and has subsequently been made derelict should go back to him after it has been improved. I can visualise even less circumstances where land in the possession of somebody has been made derelict by a Government Department and then that action should be taken. If it remains his land and the Government have made it derelict, presumably he will have received some compensation under existing legislation for what has happened to his land. I cannot, therefore, see why, if he has been compensated in the first place for what has been done to his land, he should have the right to get it back after the dereliction has been cleared. It may be that I am not following what the noble Lord is getting at, but it seems to me that that is what he is after.

Baroness ELLIOT of HARWOOD

With respect, I think that the noble Lord has made a mistake. He is talking to Amendments Nos. 37, 38 and 39, which I am about to move, which are on the question of reinstating derelict land which has been taken compulsorily. I think that the noble Lord, Lord Balerno, is talking to those Amendments, which I have not yet moved but which I shall move when this is over. With the assurances from the noble Lord that the definition that I suggested of derelict land in Amendment No. 35 is not necessary because you already have a definition although it is not in the Bill, I should like only to support what the noble Lord, Lord Campbell of Croy, said, in that I hope that it can be made known to people. If it is not in the Bill, you do not know what it is, but, as long as it is made known to people when transactions take place, it is all right.

Lord HUGHES

I have now had time to read this. The last part bears relevance to it. What I have been informed is that the Agency's administrative arrangements will be available to local authorities and to anybody else on request. I am not quite certain that that meets the point. I should like to see whether or not there is any way of letting people know generally what the arrangements are at a particular time.

Baroness ELLIOT of HARWOOD

With that assurance, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 8 agreed to.

Clause 9 [Acquisition and disposal of land]:

9.22 p.m.

Lord HUGHES moved Amendment No. 36: Page 8, line 17, leave out ("under this subsection") and insert ("by them").

The noble Lord said: At present, the Agency's powers to hold, manage, dispose of or otherwise deal with land under Clause 9(1)(c) extend only to land acquired under subsection (1)(a) and (b). The Agency have, however, the power to acquire derelict and associated land under Clause 8(2). While Clause 8(3) clearly allows the Agency to dispose of this land free of charge to a local authority or a New Town Development Corporation for use as public open space, it leaves a doubt as to whether the Agency are empowered to dispose of derelict land, once treated, in other ways—for instance, for use as farmland, housing, or factory building. It is obviously desirable that the Agency should have this option and the purpose of the Amendment is to remove the doubt. As I have said, this achieves the objective sought by the noble Baroness in her Amendment No. 33. I beg to move.

Baroness ELLIOT of HARWOOD moved Amendment No. 37:

Page 8, line 18, at end insert— (" ( ) In any case in which the Agency intend to dispose of land acquired compulsorily under this section they shall first offer the land for sale to the person from whom the land was acquired or to his heirs as the case may be.").

The noble Baroness said: This new subsection, if accepted, will give the owner of the derelict land which was compulsorily acquired from him—I am not talking about land which did not belong to anybody, or was given willingly—first refusal to purchase back this land. I do not mean back at the price at which it was compulsorily taken but back at the price at which it was worth. His heirs would have similar rights. If necessary this right could be made subject to conditions relating to reasonable access to land for recreational purposes. This is only fair in view of the fact that it was compulsorily purchased. I hope that the Government will see their way to accepting this Amendment.

Lord BALERNO

I apologise for jumping the gun and for being in on this clause, so to speak, ahead of time. I have nothing to add to what I have already said and I rise strongly to support what was said by my noble friend Lady Elliot of Harwood.

Lord HUGHES

What this Amendment proposes is really an extended version of the Crichel Down procedure and that that extended version should be applied to the Agency, although I am not sure that that is necessarily exactly what the noble Baroness, Lady Elliot of Harwood, has in mind. The Crichel Down procedure is administrative and has never yet been the subject of any statutory provisions. It entails agricultural land acquired by a Government Department under compulsory purchase powers, or by agreement under the threat of compulsory acquisition, when no longer required for Government purposes, and, provided that it remains usable for agriculture, being offered back to the former owner at the market value at the time of the disposal. That is all that is covered in the Crichel Down administrative procedure.

As Clause 1(8) makes clear, the Agency are not a Crown body. Local authorities, statutory undertakers and other bodies such as the Highlands and Islands Development Board are not bound by this procedure, although they follow the spirit of it wherever possible. It would, therefore, be both unprecedented and wrong for this procedure to be applied by Statute to the Agency. The proposal, if accepted, would in fact be even more restrictive than usual, since the Amendment as drafted would apply to all land acquired by the Agency whether formerly agricultural land or otherwise. If such an obligation were introduced into the Bill it would limit unduly the practical activities of the Agency, which would then become unable, for example, to sell to an industrial firm a factory erected by the Agency on land which had acquired compulsorily for factory building without first offering the land back to the original owner.

For these reasons there is no place in the Bill for a requirement to oblige the Agency to "offer back" land to former owners. But perhaps the Committee would welcome an assurance regarding the arrangements which we have in mind as being appropriate for the Agency in this connection. Having regard to the fact that everything else is administrative, I think this is appropriate. Firstly, the Agency must be able to dispose of land free of restriction for the purpose of furthering their work, and this will cover the situation I mentioned relating to disposal of a factory built by the Agency on land acquired under the Bill. Secondly, the Agency should be able to offer land to Government Departments, local authorities, New Town Corporations and other public bodies where that appears desirable; this could well be the case where derelict land had been improved by the Agency and made suitable for open space or some other use. Subject to these considerations, however, the Secretary of State will ensure that the arrangements he makes with the Agency under Clause 9(1) are adequate to ensure that in all cases involving former agricultural land acquired by the Agency and which has become surplus to their other public requirements, the land will be offered back to the previous owner or his heirs at current market value before being advertised for sale. I think that the noble Baroness and the noble Lord, Lord Balerno, will find that this adequately meets the situation which they wish to protect and I hope, therefore, that the noble Baroness will withdraw the Amendment.

Baroness ELLIOT of HARWOOD

I thank the noble Lord for that explanation. I think it covers what I had hoped for, although I was not thinking of land on which a factory had been built but of land which was agricultural or forestry or something of the kind. I therefore beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.29 p.m.

Baroness ELLIOT of HARWOOD moved Amendment No. 38: Page 8, line 23, leave out subsection (3).

The noble Baroness said: This Amendment is directed towards obtaining an explanation from the Government on the meaning and effect of subsection (3) on existing legislation. Apparently it applies to the Lands Clauses Consolidation (Scotland) Act in the case of acquisitions by agreement, with the exception of certain provisions bracketed in the clause. It seems to be of a somewhat complicated nature and, this being a probing Amendment, I should be glad to have the views of the Government.

Lord HUGHES

I am not surprised that the noble Baroness has put down a probing Amendment to find out what this means, because I am quite certain that without some simple explanation nobody could understand it. I hope that my explanation will be simple. This is a common form provision which is standard to public Acts which confer specific powers of compulsory purchase on acquiring authorities. A similar provision applies, for instance, to local authorities under the Town and Country Planning (Scotland) Act 1972, Section 109(2).

The purpose of the provision is to provide that, when an acquiring authority acquires by agreement any land for purposes for which it could have acquired the land compulsorily, certain provisions of the Lands Clauses Act apply to the acquisition as if it had been a compulsory purchase. These applied provisions deal with such matters as the forms of conveyancing and the payment of compensation, both for the acquisition itself and for "injurious affection"—that is, adverse effects arising because of the purchase or from works carried out on the land purchased. The shorter forms of conveyancing applied by this subsection which enable the land to be used for the purpose for which it is being acquired, notwithstanding any restrictions in the title and on payment of appropriate compensation, cut down the routine legal work involved and are thus of substantial advantage to any authority whose functions entail the acquisition of land fairly regularly. The Scottish Development Agency in particular will want to do so in, for example, their derelict land functions.

This power is not given to all bodies created by Statute. For instance, it is not available to the Highlands and Islands Development Board, but their land acquisition requirements operate on a much lower level and it is not thought necessary that they should have the advantage of these shortened legal proceedings. While we do not wish to be needlessly involved in legal operations and complicated conveyancing of this kind, we do not regard it as part of our business to put conveyancers out of business altogether. I hope that the noble Baroness will be satisfied with this explanation.

Baroness ELLIOT of HARWOOD

I thank the noble Lord very much for his reply. I am bound to say that I am not much the wiser, but then I am not a conveyancing expert. I have no doubt that the conveyancers on whose behalf I put down the Amendment will understand the reply. I thank the noble Lord very much and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.34 p.m.

Baroness ELLIOT of HARWOOD moved Amendment No. 39: Page 8, line 39, leave out from ("as") to ("necessary") in line 40 and insert ("they are able to satisfy the Secretary of State is").

The noble Baroness said: The purpose of subsection (4) appears to be to limit compulsory acquisition to such land as appears to the Scottish Development Agency to be necessary to secure an adequate supply of land for industrial undertakings in that area. It is not clear whether the clause relates to existing undertakings and/or to subsequent expansion under the Bill. Clarification of the scope of the clause is therefore sought. The Amendment would require the Agency to satisfy the Secretary of State as to the Agency's land requirements instead of its being within the Agency's discretion to decide what their requirements were likely to be. The clause in its present form gives wholly unnecessary discretionary powers to the Agency to build up a land bank, with all its undesirable, sterilising and inflationary effects. I hope that the Government will be able to give me some satisfaction on this point. I beg to move.

Lord HUGHES

I think that I can convince the noble Baroness that the Amendment is not necessary to achieve the objective she has in mind, because the effect is covered in subsection (5) which applies the normal safeguards over the Agency's powers of compulsory acquisition, which include applying for the authority of the Secretary of State for any compulsory purchase order, including the normal provisions for the lodging of objections and the holding of public inquiries. In these circumstances, if the Agency are unable to satisfy the Secretary of State of the rightness of their judgment that the land in question is needed to ensure an adequate supply of land for industrial undertakings, he is empowered to refuse to authorise the compulsory purchase order.

As I said on a previous Amendment, it is better that we should rely in these matters on the normal procedures relating to compulsory purchase of land. The more we seek to depart from them by making special arrangements in such a case, the more there is the indication that we are seeking to set up compulsory circumstances where the ordinary pur- chase machinery should not be applied. It is much more satisfactory to leave things as they are, so that there can be no case where the Agency can acquire land compulsorily against the Secretary of State's satisfaction that they are acquiring it for purposes which are necessary. In the event of their not being able to so satisfy him he will obviously refuse to confirm the compulsory purchase order.

Lord CAMPBELL of CROY

The position is that no compulsory purchase order can be made by anybody in Scotland without the approval of the Secretary of State. I hope that is still the position. Unfortunately, it is not widely enough known and people are always concerned, quite rightly, when new bodies are being set up, that they should be exempted from this, unless it is clearly written in the Bill. On this occasion the noble Lord has given us the reassurance that this Agency will be, like any other body in Scotland, subject to the compulsory purchase procedures and that means that the approval of the Secretary of State for Scotland is essential if an order is to go through. I think that that is the correct interpretation of what the noble Lord said and I am perfectly satisfied with that.

Baroness ELLIOT of HARWOOD

I now beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 9, as amended, agreed to.

Clause 10 [Powers of entry]:

9.38 p.m.

Lord DRUMALBYN moved Amendment No. 40: Page 9, line 11, at beginning insert ("Where the Agency have under consideration the purchase of any land").

The noble Lord said: This is a slightly complicated matter, and we are concerned with a wholly drafting series of Amendments. What is proposed virtually transposes paragraph (a) to the beginning of the clause, so making the meaning clear. I had some difficulty in reading this because of the imposition of paragraph (a). One can understand the clause when it says that: Any person duly authorised in writing by the Secretary of State or the Agency may, at any reasonable time, enter upon land in order to survey it … for the purpose of the erection of buildings or other structures … and so on. But if one interposes in that the point about surveying it where the Agency have under consideration the purchase of the land one's interpretation tends to be somewhat interrupted. That should come at the beginning of the sentence.

Having put forward that point I doubt whether I need move Amendment No. 42, because I think that the meaning would then be clear. But I am not clear about why it is necessary to have paragraph (b) at all. When I read this I had recourse to the Welsh Development Agency (No. 2) Bill in which there is a comparable provision in Clause 21. It says quite clearly: Any person duly authorised in writing by the Secretary of State or the Agency may, at any reasonable time, enter upon land in order to survey it for the purposes of determining whether, and if so in what manner, the functions of the Agency or the Secretary of State under any provision of this Act should be exercised in relation to the land. That covers all that needs to be said.

Paragraph (b) of Clause 10(1) of this Bill we are now considering is purely limitative. If one thought of any other purposes they would not be covered; so it is wholly limited. It would be much better to leave it out, and so leave people with the power to go in to survey the land for any purposes for which it is necessary to survey the land. I suggest that the noble Lord looks carefully at the Welsh Development Agency (No. 2) Bill, because that seems to me to be infinitely clearer and would be more satisfactory and less limited. Subsection (2) of that Bill is virtually the same as subsection (4) in the Scottish Bill, except that there is a proviso in the latter. In spite of the fact that the Welsh Development Agency Bill says a great deal more and goes on longer it is a great deal more compact. I beg to move.

Lord HUGHES

The noble Lord, Lord Drumalbyn, always makes what sounds a very reasonable case and this occasion is no exception, but Clause 10 gives three conditions under which a person may be authorised to enter upon land in order to survey it. The first of these is where they are considering purchasing the land, and then there are given two other purposes. If we did as the noble Lord suggested, this would not be one of the considerations which enabled the Agency to go on to the land to survey it. It would be a prerequisite and there might be circumstances when the Agency would want to do this, although they did not themselves contemplate purchasing the land. For example, the Agency would be unable to survey land which they did not intend to purchase, but they might be considering joining with other persons to carry out works on land owned by those persons or assisting those persons to undertake works themselves. It would be quite wrong to leave the Agency in the position of trying to decide whether an undertaking should proceed or be assisted in this way, without allowing them to examine the land for the purpose of deciding whether the expenditure of public funds was proper in the circumstances.

The powers which are sought in the clause as it stands are similar to the powers already given to planning authorities and to the Highlands and Islands Development Board by Section 265 of the 1972 Planning Act, and by Section 10 of the 1965 Act. In such cases there are, as in this Bill, appropriate limitations on the use of the powers, but in no case that I know of is there any limitation such as is proposed to cases where consideration is being given to the purchase of land. If accepted this Amendment might have the effect—though I think it unlikely—of forcing the Agency to go through the motions of considering land purchases of which they had no need, in order that they could survey it. If they were to do that it would be a device which the Bill was forcing upon them and it would be a nonsense. For these reasons, and given the fact that we are following a number of precedents which have not given rise to any difficulty, the noble Lord ought not to have any difficulty in withdrawing his Amendment.

Lord DRUMALBYN

I would not have difficulty in withdrawing the Amendment. I take the point which the noble Lord made about the Agency considering purchasing the land, but I am not at all certain that what he said is necessary, because the purchasing of land is one of the functions of the Agency. Obviously, if you are going to survey land you do it for the purpose in (b). Would the noble Lord look at the Welsh Development Agency Bill because it seems to me simpler and more readable. But I leave it to him. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.45 p.m.

Lord CAMPBELL of CROY moved Amendment No. 43: Page 9, line 29, leave out ("48 hours'") and insert ("5 days'").

The noble Lord said: I would advise the noble Lord, Lord Hughes, to take the advice of my noble friend on many of these drafting points because he himself has commended his draftsmanship. We now come to the straightforward question of whether more notice should be given to occupiers of intention to use powers of entry. I beg to move Amendment No. 43 and suggest that it might be convenient to consider Amendment No. 44 at the same time because both deal with similar points. In this clause dealing with the power of entry the Government have inserted the minimum amounts of notice to be given. The 48 hours suggested for land which is occupied and the seven days for that which is occupied residentially do not seem to us to be enough. Surely there cannot be such urgency in the sort of operations which are being considered in this Bill as to require so little notice to be given.

A few weeks ago we were considering another Scottish Bill, the Petroleum Development Bill, about which we agreed with the noble Lord that there was considerable urgency. I do not think there can be many situations, if any, under this Bill where the power of entry is required with notice of only two days. I will not give the Committee all the examples that there could be of owners being away at the time, of no arrangements for somebody to be present to enable visitors to get into the premises that perhaps are locked up. I would point out simply—I am sure the Committee will use their imagination—that two days' notice can be exceedingly short. I will not go into the question of delays in the post which can take more than two days.

What I have been saying in relation to that kind of land applies also to land which is occupied for residential purposes. Here we are dealing with private citizens and not with companies which might be expected for most of the time to have people on the spot—even if they are not responsible persons who can take decisions. Here I would suggest that the amount of notice should be increased from seven days to 14 days. I hope the Government will look favourably on this. I am sure it will make relations between the Agency and those with whom they are dealing much easier if they know that they can carry out their discussions and transactions with the Agency on reasonable lines—unless the noble Lord can give us any examples where extreme urgency is necessary. I cannot think of any.

Lord HUGHES

I find it difficult to argue against what the noble Lord has said, notwithstanding the fact that my brief starts with the familiar word "Resist", as he has seen so often during his time in Office. The difficulty I am in arises from the complications it might create in other directions. There is a precedent for these periods. Section 10(2) of the Highlands and Islands Development (Scotland) Act is in precisely the same terms as this clause. We have an even greater complication about Section 266 of the Planning Act 1972 which allows, in these circumstances, not 48 hours but only 24. So while I would find it impossible at this moment to conjure up a set of circumstances where the urgency is such that the situation would be imperilled if it were longer than 48 hours or, in the other case, seven days, there may be difficulties in the way of accepting it because of what is in the other legislation.

If the noble Lord will withdraw the Amendment, I will undertake to discuss this with my colleagues on the basis that what has been put forward seems to be a perfectly reasonable proposition unless we can find better reasons for arguing against it than that it has already been done that way. If we cannot find better reasons than that, or. alternatively, if doing so would cause complications in the existing legislation which would be undesirable, unless one or other of these circumstances is met, I accept the responsibility of tabling something else along these lines, not necessarily identical but lengthening the periods laid down in the Bill.

Lord BALERNO

For the enlightenment of the ignorant, could the noble Lord. Lord Hughes, inform me as to when the 48 hours' notice would start? Does it start with the dispatch of the letter from the Agency, or does it start from the arrival of the letter or intimation at the house of the owner?

Lord HUGHES

If I remember rightly, this question was asked before. The answer is that it starts from the time the person receives the intimation. One must not assume the only method of making an intimation is by sending a letter through the post. There are even some extraordinary devices—I do not know whether they apply in Scotland, but they apply in other parts—where something is nailed on a tree. I do not think we do it that way in Scotland. I think I am right in saying that it is from the time the person receives the intimation. Obviously it is most undesirable if the intimation is sent by second-class post and is received 24 hours after the entry has taken place.

Lord CAMPBELL of CROY

I am grateful to the noble Lord for his reply. Regarding the point my noble friend Lord Balerno raised and the noble Lord's answer to that, this illustrates the problems which can arise. If you are dealing with a period of only 48 hours, whether something has been nailed to a tree—which does not usually happen in Scotland—or an equivalent kind of serving of a piece of paper on a person or a representative of the person, has taken place, this can be a source of irritation and grievance. It does not seem necessary to have that kind of bad relationship at the beginning when all that is required is reasonable notice for someone to make an inspection on the spot. When the noble Lord is considering this, will he consider also these immediate comments of mine on the two pieces of legislation to which he referred? First of all, he referred to the Highlands and Islands Development (Scotland) Act. That applies to one area with only a small amount of the population in Scotland, and where it is much easier for the Highland Development Board to be in touch because almost every firm in the area is known to it, and many of them are in touch with the Board already. That is different from the Agency which are bound to be impersonal in their relationship with a great many of the 5 million inhabitants of Scotland.

Secondly, on the planning legislation, which he mentioned, if there is a planning proposal for a certain area, that is already known. Because of it being advertised people in the area should know that something is afoot and affects their property. Many of us agree that planning procedures, as I have said before, should not be unnecessarily delayed. One would not seek extra long notice in those cases. People would have been alerted already to the fact that something was happening, whereas the kind of request for power Of entry in this clause could come out of the blue to persons who did not necessarily expect to receive such a notice. The noble Lord will find it easier to make an exception in this case, which should not necessarily then become a rule for other legislation.

Lord HUGHES

I am grateful to the noble Lord for providing me with additional ammunition.

Lord CAMPBELL of CROY

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Baroness ELLIOT of HARWOOD moved Amendment No. 45: Page 9, line 37, at end insert ("and the amount of such compensation shall, in the case of any dispute, be determined by the Lands Tribunal for Scotland").

The noble Baroness said: I beg to move Amendment No. 45. Subsection (3) provides for the payment of compensation for damage caused as a consequence of entry, but it makes no provision for dealing with disputes as to the amount of compensation. The Amendment therefore provides that such disputes should be referred to the Lands Tribunal for Scotland. I hope very much that the Government will agree that this body is a good arbiter and is the right body to which to refer all these questions of compensation. I beg to move.

Lord HUGHES

I agree and I accept the suggestion.

9.57 p.m.

Lord Hughes moved Amendment No. 46: Page 10, line 20, leave out ("£20") and insert ("£100").

The noble Lord said: This Amendment increases the penalty for wilful obstruction of the Agency's powers of entry. The existing penalty of £20 follows the precedent of the Highlands and Islands Development (Scotland) Act 1965. With the passage of time it is felt that the penalty of £20 is no longer adequate, and we have therefore put in the figure of £100. May I say that I shall use this departure from the precedent of the Highlands and Islands Development (Scotland) Act as justification for talking about previous Amendments.

Lord CAMPBELL of CROY

I do not think, in view of the inflation that has occurred, we can say that this is too much. I would only say that we shall support everything the Government can do in the economic field in future to try to make sure that inflation is curbed, in order that we do not need to make Amendments of this kind in the future.

Lord HUGHES

I am very grateful for that assurance and no doubt I shall have opportunities in the future to remind the noble Lord of that rather wide undertaking.

On Question, Whether Clause 10, as amended, shall stand part of the Bill?

The Earl of DUNDEE

Before we agree that Clause 10 shall stand part, I hope I may be allowed, on behalf of my noble friend Lady Elliot and myself, to thank the noble Lord for the consideration he has given to the series of Amendments moved by my noble friend. Most of them have resulted from a consideration of this Bill by my noble friend and the Scottish Landowners' Federation, of which she is a very active member and of which I am Vice-President. We have always found the noble Lord to be a Minister who is very helpful, sympathetic and fair in considering the matters which we put before him. I should like to acknowledge this, now that we have come to the end of this series of Amendments. Both my noble friend and I, together with the noble Lord, have tried to act in a non-partisan way for the good of the country, and I hope that this mutual understanding and co-operation may continue throughout subsequent stages of the Bill.

Lord HUGHES

I am very grateful to the noble Earl for what he has said. I am sure the noble Baroness, Lady Elliot, knows that I try not to disagree with her, if possible.

Clause 10, as amended, agreed to.

Clause 11 [Power to obtain information]:

10.0 p.m.

Lord HUGHES moved Amendment No. 47:

Page 11, line 6, at end insert— ("(3A) Where an offence under this section committed by a body corporate or a Scottish firm is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of, any director, partner, manager, secretary or other similar officer of the body corporate or firm or a person who was purporting to act in any such capacity, he as well as the body corporate or, as the case may be, the firm shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly. (3B) Where the affairs of a body corporate are managed by its members, subsection (3A) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.")

The noble Lord said: I beg to move Amendment No. 47. These two subsections parallel provisions in the Industry Bill and the Welsh Bill which relate to the Secretary of State's and the Welsh Development Agency's powers to obtain information respectively. Subsection (3A) provides that where an offence under this section is committed by a body corporate or Scottish firm and is proved to have been committed with the consent or connivance of, or through the neglect of, an officer in the company, or by someone purporting to hold such office, the individual as well as the body corporate would be guilty of the offence and punished accordingly. This is a common form provision which deals with the case of an offence committed by a body corporate, a company, or other legal person, for example, a Scottish firm —which is not a body corporate but is a legal person distinct from the partners who compose it—which is managed by separate natural persons. Thus, the affairs of the company are managed by its directors, and they could be the persons at whose instigation the offence was committed. It is therefore proper that they, as well as the body corporate, should be liable for the offence. Similar provisions are made in the Town and Country Planning (Scotland) Act 1972. Subsection (3B) provides that when a body corporate is managed by its members, a member shall be treated for the purposes of subsection (3A) as if he were a director of the body corporate. This again is a common form provision relevant to the responsibilities of the members of the boards of nationalised industries. Similar provisions are common in recent legislation—the Town and Country Planning (Scotland) Act 1972 and also the Industry Bill and the Welsh Development Agency Bill. I beg to move.

Lord CAMPBELL of CROY

What the noble Lord has told us is really that this provision ought to have been in the Bill originally, as I understand it, because he said it was in a 1972 Act in an equivalent place and has been used elsewhere in legislation. As I understand the words on the Marshalled List and the noble Lord's explanation, this provision makes sure that if the offence is tracked down to some individual in a company, then the company cannot be absolved from the offence simply by saying: "Well, it was our Mr. Smith who was responsible for this"—or perhaps two people. This seems to be a reasonable provision, but I would just ask the noble Lord whether I am correct in that assumption, and secondly, why, if in fact it is normal procedure, it did not appear in the Bill originally.

Lord HUGHES

I do not know why it did not appear originally, other than perhaps it has given us the opportunity of admitting that we are not infallible.

Lord HUGHES

I beg to move Amendment No. 48. This Government Amendment corrects a drafting deficiency. The latter half of the provision already achieves the addition of the Secretary of State to those persons who may disclose to an officer of the Agency certain official information about the structure and location of employment in individual establishments. The Amendment simply rectifies the omission of a reference to the Secretary of State by name. I beg to move.

Amendment moved— Page 11, line 9, after ("by") insert ("the Secretary of State").—(Lord Hughes.)

Clause 11, as amended, agreed to.

Clause 12 [Financial duties of the Agency]:

10.4 p.m.

Lord DRUMALBYN moved Amendment No. 49:

Page 11, line 39, at end insert— ("(3) The Secretary of State shall forthwith lay before each House of Parliament a copy of any such notice as is mentioned in subsection (2) above.")

The noble Lord said: Clause 12 deals with determinations of financial duties of the Agency. It is stated: The Secretary of State shall give the Agency notice of every determination and may vary it by subsequent determinations. The different determinations may be made in relation to different functions and activities of the Agency.

May I ask two questions. First of all, what is the nature of these determinations? Are they purely technical? Secondly, ought not they to be referred to somewhere? If they are like financial standing orders, ought they not at least to appear in the first annual report, and then ought not subsequent amendments to be recorded? Or else, should they not be laid before Parliament? I am not sure what their importance is. Their importance may vary quite considerably. I wonder whether the noble Lord could enlighten us about this. It seems that they could be quite important, and if they are they should be laid before Parliament. I beg to move.

Lord HUGHES

The Government accept that there must be arrangements for Parliamentary scrutiny of the performance of the Agency and that particular interest will naturally focus upon their industrial activities. The Government would like to make as much information available to Parliament for this purpose as can reasonably be justified without prejudicing the interests of the activities concerned or raising other problems of commercial sensitivity. However, as was explained in the discussion of a somewhat similar Amendment to the Industry Bill in another place, which was taken to a Division and defeated, there are genuine difficulties about the proposition that each and every financial determination should be notified immediately to Parliament. It may be necessary to set a large number of different objectives for different types of activity or for different subsidiaries or holdings in individual companies—for example, the kind of return they are expected to get on their money. Different objectives may be needed for assets acquired at the Agency's own initiative and those vested in them by the Secretary of State—for example, under Section 7 of the Industry Act. Account will have to be taken of the time scale over which particular investments are likely to prove viable and the extent to which particular investments are wholly, or only partly, under the Agency's control.

It follows that matters of considerable commercial sensitivity, which could affect the future prospects of the Agency's holdings and those private sector interests which are involved with them, will be involved in determining particular objectives. The Government could therefore be inhibited from giving the full explanation necessary for an understanding of a determination. Thus, in the interests of safeguarding the Agency's investments themselves, the Government are unable to undertake to make available the full information which the Amendment seeks. The financial duties to be established for the Scottish Development Agency and the National Enterprise Board differ from those of conventional nationalised industries which receive public dividend capital, in that in the case of the latter there is only a single overall financial duty determined. And in none of these cases is there a statutory requirement to notify Parliament, although they are frequently published in annual reports.

Nevertheless, I should be willing to have a look at the extent to which we could meet the spirit of the Amendment—for example, by publishing details of the overall financial duty imposed on the Agency's industrial activities, and possibly some of the principal individual duties, in the Agency's annual report. However, until the Government see how things develop, I could not make a more than general undertaking that it is desirable that any information which can be made available without being harmful should be made available and that we should look at it from that point of view rather than seek ways of concealing information. Certainly it would not be the Government's intention to do the latter. However, we must be able to act on a commercially sensible basis in fields such as those I have indicated. Therefore, having moved his Amendment and having received this information, I hope that the noble Lord will feel that this is the purpose which the moving of the Amendment serves and that it is not necessary to take it further.

Lord DRUMALBYN

I am obliged to the noble Lord and I am grateful to him for having said that he will look at this to see how far he can meet the Amendment and in what way. I quite understand that it may be appropriate to meet different interpretations in different ways. On reflection, I think it will probably be desirable in any case that there should be some kind of provision for the targets, the determination or whatever they are, to be set out side by side with the results in annual reports, and if it is a question of standing orders for different functions they could possibly be set out altogether as and when they are made in the annual reports. I am not sure that they are in the same categories of directions that they need to be published right away, but I feel that they ought to be published in some form or another.

Lord HUGHES

One thing that I appreciate in connection with the moving of this Amendment is that it really only has validity if in fact the power to carry on business is restored to the Bill; and if in any way it is taken as an assumption that that power will be restored to the Bill, then I am grateful. If of course the Bill remains in its present form this will not have very much effect, but I am satisfied that the Bill will inevitably be restored to something like its original form and from that point of view the noble Lord's point is a valid one and I will certainly look to see how effectively it can be implemented.

Lord DRUMALBYN

In fact this Amendment was drafted before we carried the former Amendment, although I should have thought that it would have some bearing, even with the leaving out of the paragraph, in so far as no doubt there would be investments in some companies, although they were not wholly controlled. However, I am grateful to the noble Lord and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 12 agreed to.

Clause 13 [Finances of the Agency.]:

10.13 p.m.

Lord CAMPBELL of CROY moved Amendment No. 50: Page 12, line 4, leave out ("wholly owned")

The noble Lord said: I think it might be convenient if with this Amendment No. 50 we considered Nos. 51, 53, 54 and 55. Those are the Amendments to this clause standing in my name, and they have been tabled in order to indicate that as drafted the intentions of this clause do not appear to be watertight. The first Amendment simply seeks to take out the words "wholly owned", and there are other Amendments of the same kind to subsequent parts of the Bill which are all related. Both Clause 12, which we have just considered, and Clause 13 are virtually the same as Clauses 5 and 6 of the Industry Bill. We are dealing with the provisions which have already been considered in another place applying to the National Enterprise Board.

The object of this clause appears to be to limit the borrowing by the Agency to a certain figure. On Second Reading we discussed whether the limit to the amount of money meant very much, but my point today is whether the clause carries that out. I have two reasons for querying it. First, I do not think any of us in Parliament likes passing a provision which sets out to do something but which can then palpably be got round and will not be effective. Secondly, it seems that the Agency will in many circumstances be competing with private industry in their borrowing. Moreover, they will have the advantage of a Treasury guarantee. So it is of some importance to private industry that if the Government are seeking to limit the amount of borrowing it should bite on the Agency. We can consider the figure later. But that is the main point; whether this clause carries out, and will carry out, its purpose.

The first point is that by referring only to "wholly owned" subsidiaries, there is an easy loophole for the Agency to borrow more if they wish, because there is nothing, apparently, to stop borrowing through partly owned subsidiaries. For example, the Agency might own 99 per cent. of a subsidiary, but it would still not be a wholly owned subsidiary for the purpose of this clause. In that way the borrowing can be carried out through a subsidiary, which would drive a coach and horses through this clause. That is the reason for Amendments Nos. 51 and 53, which take out the words "wholly owned".

Amendment No. 54 puts forward a way in which the borrowing could be permitted by a partly owned subsidiary. I am not suggesting these Amendments are perfect. I am not suggesting we should adopt them this evening, but I think they illustrate the defects in this clause. This is one way in which the purpose of the clause can be carried out, by allowing and taking into consideration the borrowing by a subsidiary of the Agency in terms of the ratio of the ownership by the Agency of that subsidiary.

In Amendment No. 55, I am seeking to carry out the intention of the Government; that is, to control the total amounts outstanding which are owed by the Agency and all its subsidiaries. That again seems to be necessary in order to carry out the purpose of the clause. The figure here of £300 million, which I put in as an arbitrary figure, is not related to the £200 million in this clause, or to the later limit of £300 million to which it can be raised with the approval of Parliament. This Amendment seeks to control the total amounts which can be outstanding. That is the main purpose of these Amendments. I hope that the noble Lord will tell us that there is a defect in this clause, in that although it seeks to limit the borrowing to a certain degree, there are ways in which the Agency can get round that. I hope he will agree that something should be done to improve the clause to make it carry out its real purpose. Alternatively, perhaps the noble Lord will be able to tell us that we have misinterpreted what is possible under the clause, and explain how it is that the Agency would not be able to exceed its borrowing powers by using partly owned subsidiaries. I beg to move.

Lord HUGHES

I must admit that I have fairly lengthy and complicated briefs on the subjects of these Amendments Nos. 50, 53 and 54, which all add up to the fact that the Government do not think it desirable that the Amendments should be made. However, having regard to the hour, I have another simpler speaking note from my technical experts, which draws my attention to the fact that Amendments Nos. 50, 53 and 54 are related to the powers of the Agency to engage in business, which have been deleted from the Bill. Therefore I do not think I am asking the noble Lord, Lord Campbell of Croy, to give away very much if I suggest that it is hardly worth while discussing these at the moment as they do not now refer in the main to something which is any longer in the Bill.

Similar Amendments have been extensively discussed in another place on the Industry Bill, and have been defeated there. Perhaps the noble Lord would care to have a look at whether or not he finds it necessary to proceed with these Amendments, having regard to the substantial alterations which have been made to the Bill at this stage. If he feels so, and if he felt a useful purpose would be served by having a talk with me in the interval, I could tell him what I was to say in any event. It may help him to decide whether he wants to put them down again on Report stage, or to let the matter rest until it goes to another place. I certainly do not wish to tie the noble Lord's hands as regards procedure at this stage, but I do not think that much of what I had to say is relevant at the present stage because of the Division which took place earlier.

Lord CAMPBELL of CROY

I do not think the noble Lord has understood the main purpose of these Amendments, because although he is right to take into account the change made to the Bill earlier today, that does not affect the total limit on borrowing powers which either should be effectively imposed by this clause or should not. I would certainly not wish to burden him at this hour of the night, on top of the very long afternoon and evening—and, again, I congratulate him on his stamina. I do not think he has understood the purpose of these Amendments. It is to draw from the Government an explanation either of how the clause effectively places a limit on borrowing powers or of what alternative Amendment the Government will move if they really want the Agency and their subsidiaries to be limited to a certain figure.

They have put £200 million in the Bill. I am sure the Chancellor of the Exchequer would expect that to be the limit of borrowing powers. Certainly in these circumstances where new bodies like this are being set up, Parliament has put limits on borrowing powers. The Agency will be competing with companies and other institutions for loans and, as I mentioned earlier, they will have the advantage of a Government guarantee. So we understand that the Government are inserting a limit, but what I am saying is that the clause is so worded at the moment that it will not in fact impose a limit, because it is so easy for the Agency, through their subsidiaries, to get around it. I hope that the noble Lord will at least be able to reply to that point, even if he does not go into all the details tonight. May I say that I have just had a message to indicate that we are no longer dealing with the same Secretary of State for Industry as we were dealing with earlier this afternoon, so mention of the word "Bennery", according to the tapes, is now out of date.

Lord HUGHES

It is still out of order.

Lord CAMPBELL of CROY

This is what has appeared on the tapes. I hope this may mean a change of emphasis where this Bill is concerned. I would refer to a previous occasion when I was in the middle of a Committee stage in another place, with many all-night sittings, when a change of Minister, the Minister of Transport, led to considerable changes in the Bill and no less than 23 pages of that Transport Bill were dropped during the rest of that Committee stage. There are not a large amount of Amendments to this Bill. I hope the ones we have made—very few in comparison to that—will be accepted by the new Secretary of State for Industry.

Lord HUGHES

As I indicated, I have a very satisfactory but lengthy and complicated brief. My difficulty is in disentangling from that brief what remains relevant to the Bill as it stands and what relates to parts of the Bill which have been deleted. Therefore, it would be much more useful if I were to talk to the noble Lord between now and the next stage. It will in no way inhibit his freedom of action, and it will enable him without delay to get out to look at the tape and see what other joyful tidings are there for him. I think we will all be anxious to know who is the de'il who is replacing the de'il we know, to use a Scottish term. Would the noble Lord agree to that in the circumstances?

Lord CAMPBELL of CROY

If the noble Lord is suggesting that the time has now come for this Committee to adjourn—I see his noble friend nodding—then I certainly think that this is a good moment. The noble Lord has my sympathy (and I think I can speak for all my noble friends) when he says that at this hour he finds it difficult, on what I admit is a complicated clause, to be able to absorb the voluminous brief which he has, and be able to reply to the points that I have raised on Clause 13. I would not have wished to have reached this clause, which is a difficult financial clause, at this hour of the night.

As the noble Lord would like to pause in which to discuss this with me, and understand we are due to continue with this the day after tomorrow, I would be glad to have a discussion with him about this before Thursday. Therefore, what I intend to do is to withdraw the Amendment we are now discussing, and that would still leave the other four Amendments for us to consider when we start again on this Bill. This would give the noble Lord plenty of time to read what I have said, disentangle his briefs, have a discussion with me, as he suggested, and perhaps we could deal with this in a much better way on Thursday.

Before sitting down, I should like to say that I admire the way in which the noble Lord, Lord Hughes, has, single-handed, coped with this Bill since about three o'clock this afternoon. We have been willing to go on because we know that the Government wanted to get on with this Bill, and I know they have a difficult legislative programme ahead, but this has meant far more work for the noble Lord, Lord Hughes, than anyone else, and I sympathise with him and congratulate him on the way he has been able to answer all our points, even if he has not been able to satisfy us on all of them. In those circumstances, this would be a convenient moment for the consideration of this Committee stage to be adjourned. If so, I shall of course bring the discussion of this Amendment to an end.

Lord HUGHES

I think that in these circumstances this is a reasonable way to proceed. As we are going to adjourn the debate, it gives us an opportunity of having a look at things. Unfortunately it will not be until Thursday morning, because I have to go North tomorrow to Scotland for a commitment, but we could talk on Thursday morning Therefore, there is no need for him to withdraw this first Amendment. We shall just proceed to continue the discussion on the group of Amendments when we resume on Thursday. My noble friend will now deal with what he is so anxious to get on with.

Lord STRABOLGI

This may be a convenient moment to halt the Committee stage, and I beg to move that the House do now resume.

House resumed.