HL Deb 19 June 1975 vol 361 cc1002-41

3.21 p.m.


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

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


My Lords, at this stage may I make a short comment in the hope that it will also enable the Government, if necessary, to make a comment about the position that we have reached. The Government are propelling this Bill within a very tight timetable there has been only a week between the Committee stage and this Report stage. The noble Lord, Lord Hughes, and the noble Baroness the Government Chief Whip have helped me and my noble friend Lord Drumalbyn, who has been concerned with this Bill, with information, but I think it has been very difficult for other noble Lords to find time to consider Government Amendments and themselves to table Amendments.

I understand that the Government are aiming to use the opportunity of the Third Reading of this Bill on Tuesday next, if they can, to table more Amendments arising from points which the noble Lord, Lord Hughes, said he would reconsider at the Committee stage. I wish to thank the noble Lord, Lord Hughes, for his personal help over the difficulties which this programme has entailed and his efforts to deal with the points in time, but I think your Lordships would be helped to know that at this Report stage we are attempting to consider only a few of the matters raised at the Committee stage which the Government said they were prepared to look at again. For our part we have had time within the week available to table some Amendments for today on the two or three points on which the Government invited us to withdraw previous Amendments and to table new wording.


My Lords, as the noble Lord, Lord Campbell of Croy, has indicated, in the interval I have had meetings with those Peers on the Opposition side who are principally involved with the Bill, although I recognise that that does not include all of those who may be particularly interested in the Bill; and I have indicated to those noble Lords not only the Amendments which were to be submitted today but the ones which will be tabled by the Government on Third Reading. I indicated both verbally and in correspondence the points which we did not feel able to take further so that, in time for Third Reading, noble Lords with whom these discussions took place would have the fullest opportunity of putting forward any further Amendments which they felt were still desirable but which the Government were not pursuing, and I understand that advantage has been taken of that.

I accept that the timetable on the Bill is tight—no tighter, however, than precedents set for many years under various Governments at this time of year; and of course it has been especially complicated by matters not of the seeking of your Lordships but in the way in which the original Bill failed to make progress in another place. I think it is reasonable that we should dispose of the Bill on Tuesday next and the Government are most grateful, as am I, for the cooperation that has existed in getting the fullest consideration of those Amendments which were considered essential for discussion while the Bill is in your Lordships' House.


My Lords, I should like to make the same point on behalf of those of us who are engaged in the Welsh Development Agency (No. 2) Bill. We have also had considerable co-operation from the noble Lord, Lord Hughes, the noble and learned Lord the Lord Chancellor, and the noble Lord, Lord Lovell-Davis. But it really is almost impossible to run these things so quickly together. We who are concerned in the Welsh Development Agency (No. 2) Bill have had only six days since the discussions at the Committee stage and I really think this is pushing us a bit.


My Lords, I should like to support my noble friend Lord Campbell of Croy. This is an industrial Bill affecting a multitude of industries in Scotland, and it has been practically impossible to consult industrialists in Scotland about the Amendments, unless one happened to be in the House at the time and knew what they were. It can be said that virtually no industrialist in Scotland has been consulted about these Amendments, nor has an industrialist's advice been sought.


My Lords, I should like to ask about the subsequent handling of this Bill. Am I right in thinking that it is this No. 2 Bill which will go down to the Commons for consideration and come back to us in the ordinary way?


Yes, my Lords, that is so.

On Question, Motion agreed to: Report of Amendments received accordingly.

Clause 2 [General purpose and functions]:

Lord MACKIE of BENSHIE moved Amendment No. 1:

Page 2, line 33, at end insert— ("( ) establishing and carrying on jointly with experienced persons or companies industrial undertakings; ")

The noble Lord said: My Lords, I must apologise for the lateness in tabling this Amendment, but I was encouraged to do so when I came down to the House yesterday to find that I had support from the Cross-Benches in the form of a letter from the noble Earl, Lord Perth, who expressed the view that it would be valuable if I were to table an Amendment for today. Unfortunately he is not able to be here today, but I think that this is a highly practical Amendment and one which this House should put into the Bill before it goes to another place. At the moment the Bill is deprived of an essential clause and we have been promised —or threatened—by the noble Lord, Lord Hughes, that it will be put back in another place—or that is the intention. At present the Bill is in an incomplete form and I believe this Amendment is a practical one which would be of great use to the people of Scotland. As it now stands, the £200 million which is being allocated to the Scottish Development Agency can be used only for the cleaning up of the environment—in various places very necessary and very useful—and for lending money and supporting enterprises. But one of the things that is wrong with Scotland is that far too many of our industries are branches of international or British firms. As a result, when any cutting back is to be done the first thing to go is the branch.

This Amendment is the very stuff of capitalism and private enterprise, and noble Lords on this side of the House might well support it because we have this £200 million of capital available and I am making the very sensible suggestion that the Government should enter into joint enterprises with experienced and practical people who have ideas. This ought to be the start of capitalism. We do not want to support only the established firms which are there; we do not want to shelter them from competition. We want to promote the "up and comer ", the energetic, the chap who really believes in private enterprise—or on the other side of the House you might like to call it private greed, but I prefer to call it getting on and doing a great deal of good for all the people working in an industry.

The Agency can use this money far better for promoting new industry and new enterprise with advantage than—as we have seen in too many cases in the past—by bolstering dying industries which have lost their zest and, very often, their purpose. If you have a joint enterprise—for example, BP—set up under commercial circumstances, I cannot see what the believers in a mixed economy on the other side of the House and believers in private enterprise on this side of the House can have against it. I think it is a far better use of the £200 million of available capital than any other.

I agree with noble Lords on this side that it would be bad practice for the Agency to set up industrial enterprises on their own. I cannot believe that without the impetus and the whip of commercial practice they would succeed. I think that any joint venture, whether large or small, promoted under normal commercial circumstances, would be an excellent thing for Scotland. It is the sort of thing this Agency should be set up to encourage. It is the sort of thing that is happening with acceptance in Scotland today under the Highlands Development Board, which takes equity capital in firms. This is acceptable. The Government ought to accept this Amendment, because the Bill will then mean something when it goes to the other place. It is in line with thinking on a mixed economy and, as I have said before, it would be a practicable step which I am sure the other place would find it reasonable to take. I beg to move.


My Lords, I welcome this Amendment from the noble Lord, Lord Mackie of Benshie, which I recognise goes some way to restoring the position after the unfortunate and misguided action by noble Lords opposite during Committee stage, when they used their strength in the Lobby to delete from the Bill the fundamental power to enable the Agency to establish and carry on industrial undertakings, either by themselves or jointly with others. At that time I said, and the noble Lord has just reminded us, that the Government regard that power as a vital part of the armoury of the Agency for the regeneration of the Scottish economy. My right honourable friend has confirmed that he will seek to restore the power to the Bill when it gets to the other place.

When I say that I welcome the Amendment, I do so because it shows that the noble Lord, Lord Mackie, is much closer to the thinking of the Government in this matter than are other noble Lords opposite, and that he has a much better appreciation of how engagement by the Scottish Development Agency in industrial undertakings can work for the positive benefit of the people and economy of Scotland. However, I regret that he has not gone the whole way with us in our original concept of the Agency not only being able to act jointly in business, but also being able to act on their own account. The full range of powers and freedom of action open to private entrepreneurs is essential if the Scottish Development Agency is to work to maximum effect. While on general grounds I agree with a lot of what the noble Lord has said, there could well be circumstances where the impetus of the Agency acting on their own might clearly bring others in, although there could be circumstances when nothing would be done. So this is a halfway house in the thinking of the Government.

Nevertheless, if the alternative to this Amendment were the void which is left at present, I would go for the Amendment every time. But that, of course, is not the alternative because, as I have said, at a later stage the Government will seek to reinstate the full and flexible powers of the original subsection. I should say that during the Committee stage, it was not only those Members of Parliament who are Labour Party Members in another place who were anxious to see the full provisions of this Bill being put into effect. I can reasonably anticipate that the Government have fairly comfortable support in an endeavour to replace the full powers which so far have been deleted. Therefore, if we can reasonably expect to get the full loaf of bread, these are not circumstances in which it is desirable to accept the half loaf. If it was a matter of an alternative between half a loaf or nothing, then I would welcome with enthusiasm the half loaf offered by the noble Lord, Lord Mackie. However, I cannot invite your Lordships to accept this Amendment.

3.35 p.m.


My Lords, arising from the short debate we had on this matter in Committee I quite understand why the noble Lord, Lord Mackie of Benshie, has put down an Amendment in order that we should have further discussion after having time to look at this matter. He said, I think inadvertently, that a clause had been taken out of the Bill; in fact, it is simply a subsection. If we had been seeking to delete the whole of Clause 2, that would have been entirely different. My first criticism of the Amendment is that it is ambiguous. I understand the intention of the noble Lord, but during the course of this morning—and we saw the Amendment only first thing this morning—I have had the benefit of receiving expert legal advice on the drafting of the first point. It is that the Amendment would enable the Agency to establish industrial undertakings as well as to carry on jointly with experienced persons. Therefore, on the question of drafting, although I think the intention of the noble Lord was that the word "jointly" should qualify both "establishing" and "carrying on ", the Amendment could be interpreted as allowing the Agency on their own to establish industrial undertakings.

In introducing this Amendment, the noble Lord, Lord Mackie, said that that is something he does not wish to see happen. I recognise the intention behind the Amendment, but it does not carry it out. It would virtually put back into the Bill one of the important matters which was taken out at the Committee stage. I can inform your Lordships that the disappearance of the subsection has been welcomed by representatives of Scottish industry. Senior representatives of the Scottish Council for Industry and Development and the Scottish Office of the Confederation of British Industry have expressed relief that the subsection is no longer in the Bill.

My Lords, still on the drafting point, the word "experienced" is an arbitrary term which is inappropriate in a clause of this kind. The noble Lord can be reassured. We have been doing our homework during the past week on the point raised during Committee stage about the purpose of carrying on undertakings jointly with another body or person being covered by other parts of the Bill. Every conceivable and suitable situation is provided for elsewhere in the Bill. For example, under Clause 2(4)(b), the Agency can form partnerships with other persons; and under Clause 2(4)(a) the Agency can acquire, hold and dispose of securities.

The noble Lord, Lord Mackie, spoke about the Highlands Development Board being able to hold equity capital in firms. Under a subsection here which we are not seeking to delete, the Agency can also do that. Under Clause 2(2)(b) the Agency can promote or assist establishment, reorganisation and development among other things. If that were not enough, there is the omnibus subsection (3) of Clause 2, which we would have preferred elsewhere and in different language, which enables the Agency to do anything, anywhere "calculated to facilitate the discharge of their functions", and so on. I have been assured by the experts that these four provisions in themselves would enable the Agency to do everything that the noble Lord is seeking.

We must consider this against the background of Clause 2 as a whole. The changes which we made to Clause 2 last week during Committee removed the main threats in the Bill to Scottish industry, about which their representatives had been understandably apprehensive. The powers and role of the new Agency are now directed to stimulating industrial development and assisting Scottish enterprise, rather than unnecessarily insisting on public ownership as a matter of policy, which meant that all the powers originally proposed in Clause 2 for the Agency were similar to those in the Industry Bill which is now in another place. The equivalent is Clause 2(2)(a) of the Industry Bill; and, again, British industry has been apprehensive about that. Last Friday, Ministers apparently discussed changes to the Industry Bill at Chequers. It seems that the right honourable gentleman the Prime Minister has therefore been moving in the same direction, and that we have anticipated alterations which should affect this Bill and also the Welsh Bill.

My Lords, we believe the Government would be wise to accept the sense of the Amendments already made, rather than try to reverse them as the noble Lord, Lord Hughes, has indicated they might. For to succeed in overcoming the country's grave economic crisis, the good will and full co-operation of British industry will be needed. We cannot afford to make things even more difficult for Scottish firms by expensive adventures and new systems of nationalisation. I feel sure, also, that the arrival of a new Secretary of State for Industry is a propitious moment for such changes.

Ministers should recall a similar situation in the late 1960s when objectionable parts of the Transport Bill, also threatening damage to industry, were dropped after Mr. Marsh succeeded Mrs. Castle as Minister of Transport. I remember that occasison well because I was taking part in the record-breaking marathon of the Committee stage in the other place, where we succeeded in getting eliminated no fewer than 23 pages of the Transport Bill. I am not suggesting that that amount of change should be made in this Bill, but it was a useful precedent. For these reasons, I hope that in the circumstances in which we find ourselves today, with imminent announcements about changes to be made in the Industry Bill—and the noble Lord, Lord Hughes, at Committee stage, told us of some where equivalent clauses exist in this Bill—I hope the noble Lord, Lord Mackie, will not feel that he need press this Amendment, since there is enough in the Bill already to cover his point.


My Lords, I find myself a little confused, in that the noble Lord, Lord Campbell, has just said that the Bill provides everywhere for the kind of thing I want, the use of capital in joint enterprises guided by experienced people. If it provides for this, I do not see any reason why we should not say so. I accept that my drafting, which was taken from the previous Bill, may be quite wrong with the addition of the word "experienced ", but I fail to see the force of the noble Lord's argument because I do think it is necessary to say that this capital will be available to the entrepreneurs of Scotland to go into joint ventures.

On the other side, the noble Lord, Lord Hughes, appears to object to receiving half a loaf at a time. I would have thought it wise, if you are to get the other half, to take the one half in hand. There are various sayings about birds in the hand being worth two in the bush. However, with both sides of angels against me, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.42 p.m.

Lord HUGHES moved Amendment No. 2:

Page 2, line 37, leave out paragraph (c) and insert— (" (c) providing or adapting sites and providing, adapting, modernising or reconstructing premises for industrial undertakings, or assisting any other person to do any of those things, and providing or assisting in the provision of related services or facilities; ").

The noble Lord said: My Lords, this drafting Amendment. The subsection as at present drafted refers to "provision and adaptation" and does not make it absolutely clear that the Agency may also modernise or reconstruct industrial premises. A power is available to the Scottish Industrial Estates Corporation at present under the provisions of Section 13(2) of the Local Employment Act 1972 which empowers the Secretary of State, for whom the Scottish Industrial Estates Corporation act, to modernise adapt or reconstruct building or works on land. The Amendment clarifies the point that all the activities covered by the Local Employment Act provision are included. The Agency will, in addition to building new factories, have the task of modernising existing factories which are too outdated or crowded to cater efficiently for existing industry. This is an important task. The unsuitability of premises can represent a real obstacle to the expansion of a firm by making it less viable. I beg to move.


My Lords, this appears to be an unexceptionable change in the drafting of the paragraph, and by spelling out what the Agency can do I think it makes it plainer for all those concerned. For my part, I see no objection to the Amendment.

On Question, Amendment agreed to.

Lord CAMPBELL of CROY moved Amendment No. 3:

Page 2. line 41, at end insert— ("( ) promoting, or helping to promote, good industrial relations in, and appropriate means of employee involvement in the affairs of, undertakings with which the Agency are associated; ").

The noble Lord said: My Lords, this is the first of the three or four new formulations following the debates at Committee stage where we noted the Government's objections to Amendments we had tabled and where we were encouraged to find alternative wording to improve the Bill. I think the main aim in this part of the Bill is to avoid the undefinable term "industrial democracy ". We have, therefore, put forward wording to describe what we felt most, perhaps all, the noble Lords who took part in the debate on this at Committee stage would regard as a useful and appropriate function. The noble Lord had found fault with one of the Amendments at Committee stage because it ceased to be a function. Therefore, we have kept the concept of a function and kept the Government's word "promoting".

I hope that the noble Lord can accept this. He indicated at the Committee stage that he could accept without dividing an Amendment on these lines, if we were able to combine the function with appropriate activities of the Agency without using the words "industrial democracy ". If the noble Lord can accept this at this stage, we have no need to pursue it at Third Reading. Can I just indicate that it would be convenient if this Amendment and Amendment No. 4 could be considered together. I beg to move.


My Lords, this Amendment is welcome in the sense that it goes some way to improving on the Amendments which were tabled at the last stage by noble Lords opposite. But from the Government's point of view I fear it is not sufficiently welcome. The phrase "industrial democracy" is well understood by those to whom it most matters—the managers and workers—as a guide to what needs to be done. We do not want to tie down the role of the Agency in this respect. The Agency will have a wide range of powers, and under good direction from their Board they will want to adapt themselves to their many responsibilities; hence the flexibility of the phrase "industrial democracy" is what they need.

Moreover, it seems to me that the Amendment is defective in drafting in so far as it relates to "undertakings with which the Agency are associated ". I said on Tuesday, 10th June, in relation to Committee Amendment No. 9, that it was not really appropriate to give the Agency a duty to promote good industrial relations in relation to undertakings which the Agency do not actually control. That earlier Amendment referred to undertakings for which the Agency provided finance. It wos argued that before giving finance the Agency should need to be satisfied that companies pursued good industrial relations practices and should do what they could to foster these. But that is not what the Amendment sought. The present Amendment relates to undertakings with which the Agency are associated. This could be interpreted as being an even wider group than those for whom the Agency provide finance. For example, it could include undertakings which occupy premises on Agency industrial estates, though I would not suspect that that is what the noble Lord. Lord Campbell of Croy, has in mind. The advice I have is that, if a provision were put in the Bill along the lines of the Amendment we are now considering, that is the reasonable interpretation that might be put upon it.


My Lords, in dealing with the last criticism the noble Lord has made, I should imagine that would be fairly easily resolved. If that were the only objection that the noble Lord had made, I am sure we could have resolved that at the next stage. The noble Lord has said that the term "industrial democracy" is well understood by those—I think he said—immediately concerned. I wonder whether the Government have obtained opinions from those immediately concerned as to what they think "industrial democracy" means. I am quite sure that they would get widely different views as to the connotation of that phrase. I perfectly understand that this term "industrial democracy" is an aspiration rather than a description of a state of things or of a condition of organisation. I believe that it will be a grave mistake to put this in, and I suggest to the noble Lord that if the term is as well understood as he suggests, then the only proper thing to do is to define the term in the Bill and say exactly what you mean by it in order to avoid a variety of interpretations.

I imagine that the noble Lord feels that this description that we have put in the Amendment goes a long way, at any rate, to synthesise the various attitudes, the various interpretations, that people have as to the meaning of this phrase. What I am trying to say is that the vast majority of us have a common objective in this matter, but the one thing we do not want to do is to leave doubt as to a common objective of that kind. If the noble Lord can define the objective in the Bill, that is fine; if not, let us come as near as possible to the aims for which we are hoping, and what we hope the Scottish Development Agency will do in this respect, and put that in the Bill. That is what we have tried to do here.

I should have thought that this was a consensus view which would not really conflict with anybody's ideas, but it would eliminate some ideas, some undertones or overtones (I do not know what you call them) of the phrase "industrial democracy" as being something different from democracy—otherwise you would not call it "industrial democracy "—that could be offensive. There are some of us who think that" industrial democracy "is a term which aims at the ultimate supersession of democracy by something called "industrial democracy" where the industrial side would be pre-eminent in the State and would wield the power over the whole State. This is not a desirable state of affairs from our point of view on this side of the House. I should have thought that the phrase that we have here: …promoting, or helping to promote, good industrial relations in, and appropriate means of employee involvement in the affairs of, undertakings with which the Agency are associated was a very good description of the consensus view of what the Government seem to have in mind. If the Government have something different in mind, it is up to them to put in the Bill what they have in mind, and not leave this vague phrase about which there can be so much strife and dissension in the future.


My Lords, I am sure that my noble friend Lord Drumalbyn is right on this. How are the courts to interpret the words "industrial democracy" in a Bill? Industrial democracy is just what people's opinions are. My opinion of industrial democracy is that workers elect their leaders by secret ballot, and that they do not come out on strike without holding a secret ballot. Other people's opinion of industrial democracy may be something widely different. I believe that a phrase of this nature, which really means absolutely nothing and is completely woolly, ought not to appear in legislation passed by our House.

3.53 p.m.


My Lords, the Liberal Party has probably done more work on this than either of the other two Parties. There is a range of opinion from the young Liberals, who think of industrial democracy as total worker control in certain sections of industry, to others on the right of the Party who think that consultations are as far as we could go. To put this in is a grave danger for the Agency, because it says: promoting industrial democracy in undertakings which the Agency control; which probably means that some people might say they ought to give them away, and the Agency would no longer control them. It leaves open a tremendous field. I support the noble Lord, Lord Drumalbyn, that there must be a rather more close definition than simply saying "industrial democracy".


My Lords, I should like to say that I think that to go against what my two noble friends and the noble Lord, Lord Hawke, and the noble Lord, Lord Mackie of Benshie, have said, would be absolutely stupid. We are in a time of crisis. Many of you will have heard a distinguished foreigner, the Shah of Persia, only the other day complaining that this country does not seem to be aware that it is in a state of crisis. We are seen to be not putting our shoulders fully to the wheel. The more you explain why you are doing what you are doing must be a reasonable thing to do. Is it wise to give an "x" factor—and it is an "x" factor—to industrial democracy "according to who is the Secretary of State at the time, and to have an unknown "x" factor in an Act of Parliament? Why not take the advice of my noble friends and explain what you mean?


My Lords, may I ask the noble Lord, Lord Hughes, whether there is any precedent in an Act of Parliament for the use of this phrase industrial democracy "? I am much taken by my noble friend Lord Drumalbyn's description of it as an aspiration, and it strikes me that it is as woolly an aspiration as the phrase "Social Contract ".

The Earl of HALSBURY

My Lords, may I reinforce the point of view that the Amendment does little more than substitute one piece of undefined fluff by another. Speaking as an ex-works manager, may I say that there was once upon a time a relationship between myself as works manager and the convenor of shop stewards, who was my friend. The relationship was not industrial, it was personal. I do not believe that industrial relationships either exist, or that the phrase has any meaning whatsoever. You either have good relations between the management as persons, and the union movement, as persons, or you do not have any relationship at all except a bad one. How you can put the difference between fluff and reality on to the Statute Book, I simply do not know.


My Lords, it seems that the noble Lord, Lord Hughes, is not going to speak again.


My Lords, with permission, may I respond to what the noble Lord, Lord Drumalbyn, has said? I think that he is right when he talks about the term "industrial democracy" as an aspiration. If I am right in assuming that he was associating himself and perhaps, by inference, his noble friends with that as an aspiration, then we have made a certain amount of progress in this matter. But there are a number of phrases which it is most difficult to define. How, for instance, does one define "social democracy"? Is it something to be regarded as undesirable because it cannot be capable of one precise definition?

The noble Lord, Lord Drumalbyn, said that it could be defined in a number of different ways, and in fact this was one of the reasons why I did not wish to accept this particular definition. The Agency are perhaps going to have a considerable variety of enterprises, and what might be a particularly suitable way of attempting to put industrial democracy into effect in one enterprise might be totally unsuitable in another, and something quite different. So as soon as one attempts a definition of this kind one ties the hands of the Agency.


My Lords, would the noble Lord give way? I think he said that we were proposing to put a definition of "industrial democracy" into the Bill. That was certainly not our intention. We were intending to put down reasonably precise objectives that were worth pursuing.


I agree, and I was not saying that the noble Lord had so suggested, but that the burden of his remarks, unless I totally misunderstood him, was that the Amendment was something which some people could, as a definition, regard as industrial democracy. If I have misunderstood him on this point I apologise, but I thought he was putting this forward as a reasonable definition or, alternatively, as something which could be done and which would be accepted by other people as being a practical demonstration of industrial democracy at work. But if it is a question of disagreeing on the actual desirability of industrial democracy as such, then we must of course rest on cur differences.

I was asked whether there was a precedent for this. No, there is no precedent, unless we accept that it is in the Industry Bill, which is now going through another place, or that it is in the Welsh Development Agency Bill, which received a First Reading before the Scottish Development Agency Bill. But I do not regard the absence of a precedent in existing legislation as anything which matters in this concept. Almost everything which is worth while in this country had to start sometime, and if always we did not take action because there was no precedent for desirable change we should not have reached even the concept of the Middle Ages.

As for the contribution of the noble Lord, Lord Mowbray and Stourton, frankly I did not understand what a good deal of it had to do with the Amendment we are considering. I agree that if we were to ask His Majesty the Shah of Persia for a definition of "industrial democracy" we should probably get a quite different one from that of the Secretary of State for Trade and Industry; but of course if we were to ask the same Imperial gentleman for a definition of "democracy" we might get a quite different one from that of the noble Lord, Lord Mowbray and Stourton. I therefore very much doubt whether His Majesty's views on the matter are of much importance in the context of this Amendment.


My Lords, the purport of my intervention was to say that my noble friend's Amendment was practical as opposed to what the noble Earl, Lord Halsbury, described as woolliness in the Bill.


My Lords, I must ask the noble Lord, Lord Hughes, to consider whether it is right to ask this House to include words in a major piece of legislation when he cannot tell us what those words mean. Is it not possible that at some time in the future these words may become the subject of consideration in a court of law? Just recently I heard of a section in an Act which nobody could understand. On appealing to authority for information as to what it did mean, we were told, "The House of Lords will tell you when you take a case before them ". Is this the kind of legislation we are putting through this House a present? If it is, then it is absolutely wrong and unjustified in every way.


My Lords, I have great sympathy with the noble Earl, Lord Halsbury, in what he said, but I would of course refer him to the second Amendment which stands in my name, Amendment No. 4, which we are also considering at this time. I assure him that the Marshalled List in Committee also had that Amendment to delete this subsection. We wanted to remove the "fluff", as he described it. However, when we found that the Government were determined to have something in on this subject we were concerned to ensure that it was not confusing and did not cause more trouble by being in than if there were nothing there. As noble Lords in all parts of the House have said, the words "industrial democracy" mean one thing to some people and something quite different to others. That is really the root of the problem, and I agree with what my noble friend Lord Drumalbyn and others have said about it.

I want to deal with only one point which the noble Lord, Lord Hughes raised, and that is about the words in my Amendment: …with which the Agency are associated. He pointed out that the Bill is related to undertakings which the Agency control, but in my Amendment I have as well as "promoting" the words "or helping to promote" which do not appear in the Government's text, the point being that if there is only a tenuous association, then the Agency would be helping to promote but would not be in a position to lay down the law; whereas if it were controlling an undertaking then of course it would be in a position to promote. This Amendment was carefully drafted to try to cover the points which were raised in Committee, because it was pointed out at that stage that one of the Amendments would give the Agency the power to interfere in the business of an undertaking even though its only connection was the giving of some minor grant to it. It was to meet those sort of points that we produced this wording which, as I say, has been carefully worked out and which we hoped would meet the Government's point if they wish to have in Clause 2 something which the noble Earl described as "fluff". I hope that on second thoughts the Government will feel that they can accept this Amendment rather than our seeking to take out this subsection altogether.


My Lords, is the noble Lord sure he is right in suggesting that the Government would have the power to enforce what is termed here as "industrial democracy"—vague or precise, whichever it may be—in a company to which it is merely making a grant? It looks to me from reading this provision—


My Lords, may I interrupt the noble Lord, because he seems to have misunderstood me? I was referring to an Amendment which was tabled at the Committee stage, but which is not on the Marshalled List today and is not in the Bill. One of the objections to one of the alternative Amendments which we considered in Committee was that it would have produced the situation I described. I am not suggesting that the Bill now does.


Then, my Lords, the noble Lord is not arguing that merely giving a grant to a company would enable the Government to impose industrial democracy on that company?


My Lords, perhaps I should clarify what I said. I was referring not to what is

in the Bill or what is on the Marshalled List today, but to a debate we had in Committee last week on this issue. It was a very full debate and in order to save time I have carefully not made again the rather long speech on consultation and so on which I made on that occasion. I do not know whether the noble Lord was here at that time, but one of the Amendments which we had down then and to which the Government took objection contained the point—I think the Amendment was in the name of my noble friend Lord Drumalbyn—that the Agency would be able to promote. Then there were various words concerned with industrial relations in any body to which it had given a grant or to which it had made some minor contribution, and it was the noble Lord, Lord Hughes, who pointed out that that Amendment was faulty. That is why we discarded it. I was referring to that and not to anything that is before us today.


My Lords, I gather that the noble Lord is not arguing that the mere giving of a grant would enable the Government to impose industrial democracy, and, if he is not arguing that, I have no objection to raise.

4.8 p.m.

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

Their Lordships divided: Contents, 90; Not-Contents, 49.

Aberdare, L. Daventry, V. Hatherton, L.
Alport, L. de Freyne, L. Hawke, L.
Amherst, E. Denham, L. [Teller.] Henley, L.
Amherst of Hackney, L. Derwent, L. Jessel, L.
Amulree, L. Drumalbyn, L. Killearn, L.
Balerno, L. Ebbisham, L. Lauderdale, E.
Balfour, E. Eccles, V. Lindsey and Abingdon, E.
Balfour of Inchrye, L. Effingham, E. Lloyd of Kilgerran, L.
Berkeley, B. Elliot of Harwood, B. Long, V.
Boothby, L. Elton, L. Lyell, L.
Bridgeman, V. Emmet of Amberley, B. Mackie of Benshie, L.
Brock, L. Erroll of Hale, L. Mansfield, E.
Brooke of Cumnor, L. Erskine of Rerrick, L. Monck, V.
Brooke of Ystradfellte, B. Falkland, V. Mowbray and Stourton, L. [Teller.]
Campbell of Croy, L. Ferrers, E.
Cathcart, E. Goschen, V. Newall, L.
Chelwood, L. Gowrie, E. Northchurch, B.
Chesham, L. Greenway, L. Nugent of Guildford, L.
Clitheroe, L. Gridley, L. Ogmore, L.
Clwyd, L. Grimston of Westbury, L. Onslow, E.
Cork and Orrery, E. Hailsham of Saint Marylebone, L. Platt, L.
Cranbrook, E. Porritt, L.
Cromartie, E. Halsbury, E. Powis, E.
Rankeillour, L. Sandys, L. Strathcona and Mount Royal
Rathcavan, L. Savile, L. L.
Rathcreedan, L. Sempill, Ly. Strathspey, L.
Reigate, L, Somers, L. Sudeley, L.
Robbins, L. Stamp, L. Vickers, B.
Sackville, L. Strang, L. Wade, L.
St. Helens, L. Strange, L. Wigoder, L.
St. Just, L. Strathclyde, L. Young, B.
Arwyn, L. Houghton of Sowerby, L. Ritchie-Calder, L.
Aylestone, L. Hughes, L. Samuel, V.
Blyton, L. Jacques, L. Segal, L.
Brockway, L. Janner, L. Shackleton. L.
Buckinghamshire, E. Kilbracken, L. Shepherd, L. (L. Privy Seal.)
Champion, L. Leatherland, L. Stewart of Alvechurch, B.
Chorley, L. Lee of Newton, L. Stow Hill, L.
Clancarty, E. Llewelyn-Davies of Hastoe, B. Strabolgi, L. [Teller.]
Elwyn-Jones, L. (L. Chancellor.) Lloyd of Hampstead, L. Summerskiil, B.
Faringdon, L. Lovell-Davis, L. Taylor of Mansfield, L.
Feather, L. Maybray-King, L. Wallace of Coslany, L.
Gaitskell, B. Noel-Buxton, L. Wells-Pestell, L.
Geddes of Epsom, L. Paget of Northampton, L. White, B.
Gordon-Walker, L. Phillips, B. Wigg, L.
Goronwy-Roberts, L. Popplewell, L. Winterbottom, L.[Teller.]
Hale, L. Raglan, L. Wootton of Abinger, B.
Henderson, L.

On Question, Motion agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.

4.17 p.m.

Lord RAGLAN moved Amendment No. 5: Page 3, line 8, leave out subsection (3).

The noble Lord said: My Lords, I put down for discussion a similar Amendment on the Committee stage of the Welsh Development Agency Bill which contains a similar subsection. I was not at all satisfied with the reply of my noble friend Lord Lovell-Davis, any more than I was when reading the reply which my noble friend Lord Hughes made to the noble Lord, Lord Campbell of Croy, on an Amendment at the Committee stage to leave out this subsection. I do not know whether my noble friend will be able to help me very much today.

Having gone into the matter more deeply than I was able to at the Committee stage, it seems to me that I shall not be able to get very far today with either the Welsh or the Scottish Bills, and that the main criticism must be reserved for the Industry Bill, which is the parent of the two Bills before your Lordships this afternoon. I understand that there are precedents for these words in this subsection. They are contained in the Iron and Steel Act 1967, the Post Office Act 1969, the Civil Aviation Act 1971 and the Gas Act 1972. Your Lord- ships can see that this is a non-Party matter, or a coalition conspiracy! There are precedents reducing the culpability of the Government on this occasion, but that does not mean that it is right that the wide powers conferred by this subsection are in any way desirable.

The Executive are demanding wider and wider powers to act independently of Parliament, and indeed it has apparently been hopefully forecast by one person—I think a Minister—that one day there will be Ministers who will, in effect, have so much power that they will make the law as they go along without reference to Parliament. This is alarming and thoroughly dangerous, and in my view the thinking in this subsection is halfway to that kind of situation. It is time that Parliament reasserted that if the Government want powers for themselves or for their agencies they should specify exactly what these powers are to be so that Parliament can identify them and scrutinise them, and, if it thinks fit, allow them. Otherwise, there will soon be no point in having Parliament as a check upon the Executive.

Although I should like to hear what the noble Lord says this afternoon if it is different in substance from what he said in Committee, should the Government not be inclined to yield I shall not press the point but shall return to it on the Industry Bill.


My Lords, I am afraid that my noble friend is reading very much more into this part of the Bill than anyone ever intended or has ever said. As the debate at Committee stage made clear, there are really two points here. The first is whether the Agency should have this type of general power and the second is whether the exercise of this power outside Scotland should he subject to the consent of the Secretary of State. In answer to the first point, I emphasise that the Agency need a power to do anything which facilitates or is incidental to the discharge of their functions because, as a creature of Statute, they require a specific power for every action. This is accepted practice and it is well precedented. There is nothing sinister about it.

General powers on these lines avoid the need to specify an exhaustive list of all the things the Agency need to be able to do so. For example, they need to have the power to receive dividends on shareholdings held by the Agency. If we had not something of this kind, it could be held that the Agency had no power to receive a dividend on their shareholdings because it was not specifically laid down in the Bill that they should do so. I am quite certain that, if the Scottish and Welsh Development Agencies eventually use their funds so well that dividends are received, the revolution will not be around the corner because of that.

The provision does not confer a special right on the Agency compared with a private person and an "avoidance of doubt" provision is included in subsection (7) to make that clear. The provision certainly does not give the Agency absolute powers. For one thing each of their powers may be used only as a way of furthering the discharge of the Agency's functions for the purposes clearly specified in the Bill. We must also assume that the Agency will exercise those powers in a sensible and responsible way. If we do not make an assumption of that kind and if we assume that these will be people who will act foolishly or irresponsibly or both, we are wasting our time in setting up an Agency of this kind.

However, if we make such a disastrous error and we get bodies of that kind, the Secretary of State will be able to step in by means of direction under Clause 4 to prevent the Agency acting outrageously. However, that will be no consolation to my noble friend Lord Raglan because his fear is not that the Agency will do what I have suggested but that the Ministers will do so.

The second point which the Amendment raises—and I realise that my noble friend did not specifically touch on this, but I must mention it because it is an important part of the provision—is the question of the Secretary of State's control over the exercise of the Agency's general power outside Scotland. There are a number of points to be noted here. The Bill gives ample powers to the Secretary of State to exercise control over the Agency's activities, whether inside or outside Scotland, through the powers of direction in Clause 4. These would, if necessary, enable him to issue guidelines covering the activities which the Agency might undertake outside Scotland. But it is not our intention that the Agency should have to go to the Secretary of State for approval every time they want to do something outside Scotland, however trivial. The Scottish and Welsh Development Agency Bills are not identical in this respect, of course. The two Secretaries of State have—I believe, quite properly—each adopted their own approach to the expression of their relationship with their respective Agencies.

I must re-emphasise that the Bill does not empower the Agency to exercise their special powers outside Scotland. They will only be able to do things which are clearly incidental to their functions and objects in Scotland. For example, if they acquire a holding in a Scottish company which happens to have a branch establishment in England, it would be possible for that interest to be retained. Also, the Agency should be able to set up offices in the rest of the United Kingdom or overseas to facilitate their promotion of Scotland as an industrial location. To give an example, if the Agency set up their headquarters in Glasgow, as I have indicated they will, and decided—as have the Scottish Council for Development Industry, the Scottish Tourist Board and the new town development corporations to have a small office in London for the convenience in operations down here, that I would be something which was incidental However, if they set up their main office in London and merely had a branch office in Glasgow, that could not be regarded as being merely incidental to their functions. So the matter can be looked at in a common sense way.

My Lords, we have had two long debates in Committee on the Scottish and Welsh Bills. I believe that it is right to say that noble Lords opposite have been reassured and that they accept the sense and sensibility of this provision. Therefore, while I understand the fears which my noble friend Lord Raglan has —though I do not share them—I am glad that he is using the Bill as an opportunity once again to ventilate those fears and that he has decided to reserve his main attack for what he regards as the relative —I do not accept that it is its parent—of the Welsh and Scottish Development Agency Bills.


My Lords, I certainly have sympathy with the Amendment and with what was said by the noble Lord, Lord Raglan, as noble Lords will realise from the Committee stage. We accept that a power is needed by the Agency to carry out incidental activities and to avoid ridiculous situations in which a minor action could be challenged though it was directly connected with some larger task for which the Agency clearly had authority. We proposed an alternative, milder form of words which has appeared elsewhere in legislation and we suggested that it should be inserted into Clause 3, which deals with ancillary powers. That would make it quite clear that this is a residual and incidental power. For the wording in the Bill as drafted and the placing of this as a separate subsection in the present clause make it appear as though the Agency have overwhelming powers to do anything, anywhere in the world, which can be connected, however tenuously, with their other functions. Of course that is the kind of wording which is bound to cause alarm, and indeed, it has done so.

The noble Lord, Lord Hughes, has, in his usual clear way, tried on two, if not three, occasions to give us reassurances that such powers are not in the mind of the Government and need not be read into this subsection. We still do not think that that is really satisfactory, because no matter how many reassur ances are given in Parliament they are forgotten, and they are not before people's eyes when the Bill is enacted and when it is later looked at by many who will be affected by it. We still dislike the way in which this subsection has been drafted —where it appears among the main powers and functions of the Agency—but we arc not proposing to press this point again.


My Lords, I hope my noble friend will accept that I am anxious to be reassured. If in this regard he were in charge of anything which the Government do, or which the Agency were to do, I am sure that I should feel considerable reassurance. But I do not accept that it is necessary for an agency to have these wide powers. As my noble friend knows, I am connected with a New Town Corporation. These corporations have been in existence since 1947 and they can do many things, but they do not have this enormous power, nor do they need it.

Furthermore, I am sure that my noble friend will accept that whatever may be the intention of the Government or of the draftsman under English law, and I believe in Scottish law, that is not relevant to this matter it is what the Bill says which is relevant. I am anxious to accept my noble friend's reassurances and I am sure that his intentions are for the best. but I do not accept that what the Bill says matches with what may happen if this subsection is allowed to go through. I shall not press the point this afternoon, but will reserve my attack for the Industry Bill. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4.31 p.m.

Lord CAMPBELL of CROY moved Amendment No. 6: Page 3, line 14, at beginning insert (" Subject to subsection (4A) below.")

The noble Lord said: My Lords, I think it would be convenient if with this Amendment I speak also to Amendment No. 8, in the name of my noble friend Lord Drumalbyn, and Amendment No. 10, which is in my name. Amendment No. 6 is a paving Amendment. When we discussed this subject at the Committee stage the noble Lord, Lord Hughes, felt that it was asking too much, that it would make life too difficult for this Agency to have an obligation to get rid of securities at the first possible moment, and that there would be circumstances in which the Agency would not sensibly be expected to do this. We thought that the wording which we used in our Amendment at that time, as soon as … it is reasonably practicable to do so which is taken from the 1972 Industry Act and with which industry is therefore familiar, would meet the case. Indeed my noble friend Lord Drumalbyn stated that in practice this has been interpreted as, "as soon as it was mutually convenient ", and that there had not been difficulties over the past three years about this section of the 1972 Act. But the noble Lord, Lord Hughes, suggested, at col. 193 of the Official Report of 10th June that we might put down something which extended the ranges of time … where the Agency was concerned so that they did not have this obligation, apparently, at the first opportunity to dispose of securities.

Therefore we have tried to help the noble Lord on this matter by adding the words: and when it is convenient for both the Agency and the company concerned. We have also inserted the word "when" rather than the phrase "as soon as ". I hone that the noble Lord will recognise that we have gone a long way to help him with the difficulties that he mentioned at the Committee stage. We believe that it will be helpful to have a provision in the Bill covering this point, rather than have nothing at all. I hope that the noble Lord, Lord Hughes, will consider the wording of Amendment No. 10, and that if he is not completely happy with it he will consider as an alternative Amendment No. 8 proposed by my noble friend and to which he himself may wish to speak. I beg to move.


My Lords, I wish briefly to support my noble friend in this matter. It is not due to any difference of opinion between my noble friend and myself that we have put down separate Amendments to attempt to meet in two different ways—only very slightly different ways—the paint put forward by the noble Lord. Personally I thought that it might be more convenient to the noble Lord to have a different formula from that in the 1972 Act, and that it might appeal to him not to have to repeat in this Bill rather much the same as appears in the 1972 Act.

Having said that, I see advantages in Amendments Nos. 6 and 10 taken together, and I would not press my own Amendment if the other Amendment commends itself to the noble Lord.


My Lords, as has been made quite clear Amendment No. 6 is an alternative to Amendments Nos. 8 and 10. But I appreciate that both these Amendments are intended—


My Lords, may I interrupt the noble Lord, because it seems that the numbers of the Amendments have come out incorrectly? I moved Amendment No. 6 which is a paving Amendment to Amendment No. 10. But the alternatives for the noble Lord's consideration are Amendments Nos. 8 and 10.


Yes, my Lords. but Amendments Nos. 6 and 10 go together, while Amendment No. 8 stands on its own and is an alternative to Amendments Nos. 6 and 10. Thus, we have two choices before us; but I accept that both types of Amendment are intended to be less restrictive than requiring the earliest practicable disposal, which would have been the effect of the Amendment tabled at the last stage. The advice I have is that Amendment No. 10 may not achieve that effect; this is because the phrase shall be disposed of when it is …reasonably practicable" could be said to imply "whenever" or "as soon as" reasonably practicable. We have had on our previous Amendments the argument about how the courts would interpret certain words. I presume that this advice which I have from my legal colleagues is based on the way in which the courts, if they were so asked, might interpret the meaning. I am told these are two ways in which they might define the matter. Therefore we are back to this business of disposing of the shares as soon as it is reasonably practicable—


And also, if I may point out, my Lords, when it is convenient for both the Agency and the company concerned. There is an "and" there, not the word or".


My Lords, Amendment No. 8 has the merit of relating the retention of shareholdings by the Agency to what is needed for performing their functions. I concede that this ought to be a good deal less restrictive than the Amendments tabled last week. None the less, it sifil carries the possibility that the Agency could be open to challenge in the courts for retaining any particular share-holding. This is out of keeping with the Government's policy on public holdings in industry. We do not believe there is any special need to justify why public holdings in industry are not being transferred to the private sector. Indeed, it could be argued with equal force that the B111 should enable the Agency to dispose of shares only when this was desirable for performing their functions. Otherwise, it might be argued, the Agency could frustrate its purposes by disposing of a holding in some undesirable way, for example, to a company which would then gain control and perhaps close down an undertaking.

I should like to elaborate on that. If the company sold its shares to a company the main functions of which were South of the Border, that company might at some time in the future decide that it was in its best interests to close down the whole of the Scottish enterprise. We have seen far too much of that in Scotland in the past; and it is still happening. I do not for a moment argue that that sort of proviso is necessary. any more than the words in the Amendment. Those are not the kind of things that need to be written into the Bill; they are the kind of things that are appropriate for inclusion in the guidelines which the Secretary of State will give to the Agency.

I am afraid I cannot go into very great detail today about what the guidelines on this matter would consist of. I will simply draw attention to one or two points. First, as I explained during our Committee discussions on 10th June, we intend that the Agency should have discretion to decide how best to use their investment funds—whether their purposes are best served by retaining a holding, or whether by realising a profit and putting their money into something else they might be able to do more to create create employment. This is implicit in the entrepreneurial role which the Agency will have.

The Secretary of State may require to have some element of control over certain categories of disposals. This would cover the obvious cases of shareholdings already in public ownership which have been vested in the Agency by the Government or shareholdings taken over by the Agency when exercising their functions under Section 7 of the Industry Act 1972 on a direction from the Secretary of State. It is clearly inappropriate that the Agency should have power to dispose freely of holdings which were not acquired at their initiative. We also think it would be desirable for the Secretary of State to have a power of approval of relatively large shareholdings acquired on their own initiative. As I said, these are matters which I shall cover in the guidelines, in the preparation of which we shall be consulting both the CBI and the STUC and which will be made known during the passage of the Bill in another place. For these reasons, I am still in the position that the Amendments tabled are unacceptable to the Government.


My Lords, may I say a word or two on this? I am sorry not to have managed to do as much homework on the subject as I would have wished but I refer to Clause 4(a) which says: to acquire, hold and dispose of securities; One of the advantages of this Amendment is that the Agency may have contributed quite a lot of finance towards some other development as is mentioned in Clause 4. Then the company is on a sound footing; and if it then sells its securities, perhaps at a profit, it may then be able to use that money to help some other industry. Government loans are not a bottomless pit. If the Agency could occasionally get capital—which, unfortunately, is something neither the Government nor local authorities ever have—to help industry by selling out from something else this could be an advantage and will allow the Agency, perhaps, to achieve rather more than they might otherwise by being restricted on sheer borrowing powers. I should like the noble Lord to consider this Amendment. I think it is sound and it gives the Agency a better opportunity of making capital monies. I feel that something like this is desperately needed.


My Lords, I am sorry that the noble Lord, Lord Hughes, seems unable to look with favour either on Amendment No. 8 in the name of my noble friend or on Amendments Nos. 6 and 10 which are the alternatives. We still feel that something should be in the Bill here. The noble Lord has indicated that there are still guidelines to come and that on a number of points in the discussion of this Bill and in a number of places in the Bill he has said there are statements to be made later. I sympathise with him; I know that so much depends on what happens to the Industry Bill in another place. I only assume here again that we are having to wait until decisions are taken about the Industry Bill and then announced.

This is unsatisfactory from the point of view of your Lordships' House, because this Bill leaves us on Tuesday and it looks as though we shall not be able to get the Government's full reaction to suggestions we have made when the Government may prove to be sympathetic to the points that we are putting forward. I must consider this further, possibly with a view to my noble friend or myself putting down an Amendment for the Third Reading on the subject. However, in view of what the noble Lord has said, I will not press it further now and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4.45 p.m.

Lord CAMPBELL of CROY moved Amendment No. 7: Page 3, line 14, after (" acquire ") insert (" by agreement ")

The noble Lord said: My Lords, I beg to move Amendment No. 7 and I think it would be convenient to discuss Amendment No. 9 with this as it deals with a similar proposition. We put this point in another form at the Committee stage when we moved an Amendment which provided that nothing could be done by the Agency under this clause without the consent of the persons entitled thereto. Naturally, many people outside this House are very concerned that the Agency should not have powers of compulsion to make acquisition, in particular, of various forms of property and also of securities. The noble Lord, Lord Hughes, made it clear previously that that is not the intention of the Government. The Government's intention is that nothing in Clause 2 shall be done except with the consent of those concerned—nothing by compulsion.

We feel that this ought to be clarified by a clear statement in the clause. The suggestion that we made at Committee stage was for a form of words at the end of the clause which would remove all doubt and clarify the situation for everyone concerned with the Bill later on. The noble Lord, Lord Hughes, said in effect that that is the position and it does not need to be stated. This, I think, is the difference between us; because we feel it ought to be made clear.

I have now resorted to an alternative which has a good precedent, because these words "by agreement" were accepted by the Labour Government in 1965 to a similar clause in the Highlands Development Bill soon after it was introduced in another place. Clause 6 (which was the equivalent clause) of only seven lines, provided somewhat similar powers for the Highlands Development Board. It had nothing in it to indicate that this could be done only with the consent of those concerned; and the Government accepted the words "by agreement" which were inserted in a similar place. That Clause 6 in the Highlands Development Bill had qualifications, because nothing could be done except with the approval of the Secretary of State and the Treasury, That does not appear in this clause.

The Highlands Development Bill was dealing with only a very small section of Scottish industry; it was not concerned with agriculture, forestry and the main industries of the Highlands. I am putting, forward this suggestion for the noble Lord to consider because it has this precedent. The Government in 1965 wanted to make it clear beyond any doubt that the similar clause should not give the Highlands Development Board powers to carry out these functions compulsorily and against the wishes of those concerned. Again, in the case of the Highlands Development Board, it was given separate powers of compulsory purchase for land only. That is what is happening in this Bill, also.

Therefore I commend to the Government a repetition of what happened in 1965 and hope that in the two places where "acquire" occurs (on page 3. line 14 and on page 3, line 20) the Government will consider there is no harm in using the words by agreement "which would clarify the situation for many people when the Bill is enacted.


My Lords, as noble Lords will recall, I said that a similar Amendment discussed in Committee was unnecessary. The Agency is a creature of Statute and will have powers to do only what the Bill specifies. The Bill confers no powers of compulsory acquisition on the Agency, except that of acquiring land compulsorily. I draw your Lordships' attention to the fact that in relation to the acquisition of land by compulsion the Government have tabled Amendment No. 16 to make one aspect quite clear: that it goes through the whole of the Bill and is not confined to a particular section. In the absence of specific powers, it is perfectly clear that the Agency must acquire shares, and so on, by agreement.

I appreciate that to the general public this legal distinction may be unclear, and the Government certainly would not wish the relationship between the Agency and Scottish industry to be in any way strained merely because of a misunderstanding on this point. But we would argue that this kind of amendment to the Bill is not the best way of giving reassurance. In fact, the Amendments themselves are liable to raise doubts in the minds of those without detailed knowledge. it is not made perfectly clear whose agreement has to be obtained before the Agency may acquire shares. Is it to be the agreement of the shareholders, of the company in general meeting or of the board of directors? It is not specified.

In our discussions the other day when the noble Lord, Lord Campbell of Croy, the noble Lord, Lord Drumalbyn, and others went over some of the points on which I have given undertakings to reconsider, I think the noble Lord, Lord Drumalbyn, put the matter of the acquisition of shares very clearly. He indicated three possible ways in which the Agency might acquire shares. They might do so in the open market from individual shareholders; quite obviously, that could be done only by agreement. They might acquire shares by the company proposing to issue part of its authorised but unissued capital and, depending on the company's own arrangements, that would either have to be by agreement with the board of the Company or by agreement with its shareholders in general meeting. They might be acquiring a shareholding in a company by the company's increasing its capital. In almost every case the acquisition could be brought about only by the company accepting in general meeting a resolution put before its shareholders. I think that exhausts the possible methods by which the Agency could acquire shares. In all these cases the agreement of somebody is necessary, but it is not the agreement of the same person in each case— and I use the word "person" in the legal sense, as including companies, boards or individuals—and yet we are talking about "agreement"

In short, the Government would not wish to incorporate in the text of the Bill an Amendment which was legally unnecessary particularly if, as I have indicated, the Amendment does not make the situation absolutely clear. We think we can achieve the objective in a different way. I am sorry to have to refer once again to guidelines, because I appreciate the point put by the noble Lord, Lord Campbell of Croy, that we are taking no action on guidelines, which will appear only after the Bill has left your Lordships' House for another place. But the guidelines which will regulate the Agency's activities will lay down the arrangements which the Agency will follow in acquiring shares.

I said in Committee that this will mean abiding completely by the City Code. The guidelines will be in a document which is publicly available and has a much wider readership among industrial interests than the Bill itself. Furthermore—and I am sure your Lordships will have no difficulty in accepting this as a likely statement of fact—it will be written in language rather more comprehensible than we usually manage when drafting Bills. So it will be better, as a matter of reassuring Scottish industry, to place reliance upon the publication of the guidelines rather than upon the inclusion of unnecessary and debatable Amendments in the Bill. I am certain that when these guidelines are issued they will be found to be totally acceptable to the people who need to be reassured.

Therefore, I hope that the noble Lord, Lord Campbell of Croy, will not find it a weak argument to say that something should not be written into the Bill as it is legally unnecessary and has no effect, because I am quite certain that during his time at the Scottish Office he must have used this argument against unnecessary verbiage in a Bill on more than one occasion. I was asked on a previous occasion whether there was a precedent for doing a certain thing. In this case, the noble Lord has given a precedent, but we happen to think that it is not necessarily a very good one.


So it seems, my Lords, because what the noble Lord has said is, in effect, a criticism of the previous action by the Labour Government in 1965 in accepting the words "by agreement ". The criticism he has made is one of which I was aware that is to say, there is no indication of whose agreement is necessary. That is why we tabled a different Amendment at Committee stage, and we thought this to be a superior Amendment. Perhaps I might just read an extract from the 1965 Act. It says: The Board may, with the approval of the Secretary of State and the Treasury, acquire by agreement—". Those words "by agreement" were written in at that time and accepted by the Labour Government. If I remember correctly—and I was leading for the Opposition at the time—this was actually a Government Amendment that went down. So while I accept that there is a defect in this wording, it is really a criticism of the acceptance of the original defect in the past. That is, as I have explained, why this Amendment is put forward as an alternative today.

The noble Lord, Lord Hughes, has said that we must await the guidelines, though these will not be seen until well after this Bill has left your Lordships' House. This must be unsatisfactory, as I am sure all your Lordships would agree, and it is not the sort of situation which anyone would wish for. I recognise that there is this problem regarding the Industry Bill and that the consideration of the parent Bill is of immense importance to our economy at present, and to the question of confidence between the Government and industry. I recognise that these guidelines, like others, may have to wait until certain decisions are taken; but in view of what the noble Lord has said, although we have an unsatisfactory situation at present, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

4.58 p.m.

Baroness ELLIOT of HARWOOD moved Amendment No. 11:

Page 3, line 40, at end insert— ("( ) In exercising their functions the Agency shall have regard to the requirement of agriculture and efficient land management.").

The noble Baroness said: My Lords, we had a discussion during Committee stage about whether or not there should be a mention of agriculture in the land being taken over by the Agency. I was unfortunately unable to be here for the complete discussion but the noble Lord, Lord Campbell of Croy, put forward certain suggestions at that time and the noble Lord, Lord Hughes, very kindly said he would consider the proposition I had put forward on this subject. I now formally beg to move this Amendment, and I may say that I have had the benefit of a very kind and friendly letter from the noble Lord, Lord Hughes, in which he indicated that an Amendment on these lines at this juncture and at this place in the Bill might meet with his approval. So without further ado I beg to move Amendment No. 11.


My Lords, for the reasons indicated by the noble Baroness, Lady Elliot, it will be no surprise to your Lordships to hear that the Government are prepared to accept this Amendment.

Clause 3 [Ancillary powers of Agency]:

Lord HUGHES moved Amendment No. 12: Page 4, line 4, after ("gift") insert ("or grant")

The noble Lord said: My Lords, I beg to move Amendment No. 12 and I should like to speak also to Amendment No. 13, which is similar in effect. What the Government have primarily in mind here is that the Agency should be clearly empowered to receive grants from the European Economic Community. The work that the Agency will do in both the industrial and the environmental fields may be eligible for grant from the Regional Development Fund; and we want to make it quite clear that they have the power to accept these grants if they are offered to them. I beg to move.


My Lords, I beg to move Amendment No. 13.

Amendment moved— Page 4, line 6. after ("gift") insert ("or grant").—(Lord Hughes. )

Clause 7 [Development and improvement of the environment]:


My Lords, I beg to move Amendment No. 14. This is simply a drafting Amendment. Section 19 of the Interpretation Act 1889 provides that "person" in any Act includes, unless the contrary intention appears, any body of persons corporate or unincorporate. This definition includes local authorities and other bodies, and the reference to them in this subsection is therefore superfluous, I beg to move.

Amendment moved— Page 6, line 15, leave out ("local authority, body or").—(Lord Hughes.)

Clause 8 [Derelict land]:

Lord HUGHES moved Amendment No. 15. Page 7, line 34, at end insert ("other than the power of the Agency to acquire land compulsorily or to dispose of land under subsection (3) above")

The noble Lord said: My Lords, I beg to move Amendment No. 15. In Committee the noble Lord. Lord Drumalbyn, in his Amendment No. 34. drew attention to the fact that this provision as it stands is rather too sweeping. We agree that the Agency should themselves retain responsibility for disposing of land, once treated, under subsection (3), rather than delegating this to an agent.

It is also our opinion that it is inappropriate for a body which does not already possess the power of compulsory purchase of land for the purpose of this clause to be given that power by virtue of its appointment as the agent of the Scottish Development Agency. This would be undesirable because of the special procedure applying to compulsory purchase and the many sensitive issues which the exercise of the power can raise. In point of fact, I am quite confident that the Agency would never have delegated either of these powers to an agent since they are clearly activities which they would wish to perform in their own right. But we accept the desirability of putting the position beyond doubt. I beg to move.


My Lords, may I thank the noble Lord for the consideration he has given to this problem, and thank his advisers for devising an Amendment much more elegant than the two Amendments I put down; it is much neater.

Clause 9 [Acquisition and disposal of land]:

5.5 p.m.

Lord HUGHES moved Amendment No. 16: Page 8, line 44, leave out ("section") and insert ("Act").

The noble Lord said: My Lords, I beg to move Amendment No. 16. Again, this is an Amendment which the Government tabled in response to a point made by the noble Lord, Lord Drumalbyn. The Government's intention is that the normal authorisation procedures should apply to any compulsory acquisition of land under the Bill. It may be that doubt has arisen from the wording of Clause 9(5), which says the authorisation procedures in the 1947 Act apply "as if this section "—that is, Clause 9—were in force immediately before the 1947 Act came into force,. The Amendment applies the 1947 Act procedures as if the Bill as a whole, including Clause 8, were in force just before the commencement of the 1947 Act, therefore making it absolutely clear that all compulsory purchase under the Bill is covered by the normal procedures. I beg to move.


My Lords, again I am obliged to the noble Lord and thank him very much.

Clause 10 [Powers of entry]:


My Lords, I beg to move Amendment No. 17. This is a consequential Amendment made necessary by the deletion of a paragraph in Clause 2 during the Committee stage. I beg to move.

Amendment moved— Page 9, line 23, leave out ("or (b)").—(Lord Campbell of Croy.)


My Lords, the Government accept that the deletions in Amendments Nos. 17 and 19 follow logically on the Opposition's misguided removal of the Agency's power to form and carry on industrial undertakings, or join with others in so doing. We will not oppose the deletions, but we have of course added them to the lists of deletions which we will seek to reinstate in another place.


My Lords, I entirely understand the Government's position. We shall no doubt have other consequential Amendments at Third Reading. I recognise that the Government reserve their position to reintroduce these Amendments, but I very much hope that they will not do so after they have had their major consideration of the Industry Bill.

Clause 11 [Poster to obtain information]:

Lord HUGHES moved Amendment No. 18: Page 10. line 43, leave out ("fails") and insert ("refuses or fails without reasonable cause").

The noble Lord said: My Lords, I beg to move Amendment No. 18. In view of the kind of information which the Agency would require in relation to the ownership of land, the Government take the view that it is objectionable that a person who is without fault should be liable for criminal conviction. It is quite conceivable, for example, that a person required to supply information might have a perfectly reasonable explanation for failing to produce it. This Amendment makes this form of defence available. In this case we are following a similar Amendment which was made on the Welsh Development Agency Bill at Committee stage. I beg to move.


My Lords, I must take this opportunity of thanking those noble Lords from Wales who have listened to a great part of our debates because their debates have followed, for doing something which has apparently assisted the Government with the Scottish Bill.

Schedule 2 [Financial and Administrative Provisions relating to the Agency]:


My Lords, Amendment No. 19 is another consequential Amendment arising from the deletion of a paragraph at the Committee stage. I beg to move.

Amendment moved— Page 23, line 6, leave out ("and (b)")—(Lord Campbell of Croy. )

Lord HUGHES moved Amendment No. 20: Page 23, line 24, leave out ("statement of").

The noble Lord said: My Lords, I beg to move Amendment No. 20. In speaking, I would join with it Amendment No. 21, which relates to part of the same pattern. Payments of public dividend capital paid to the Agency, and payment by the Agency of dividends on public dividend capital, are intended to be recorded in the account prepared by the Secretary of State, which is also to cover transactions on money lent by the Secretary of State to the Agency. That account is referred to in paragraph 4(3) of Schedule 2. However, the Bill as it stands wrongly refers to the statement of account at paragraph 8. That is the normal financial statement prepared by the Agency and submitted to the Secretary of State and is not what was intended, since the purpose of the provision is to provide for accountability by the Secretary of State. The provision of course does not prevent the Agency from detailing in their own account any sums received and paid in in respect of both public dividend capital and borrowing from Government, and no doubt they would do so. I beg to move.

Lord HUGHES: I beg to move Amendment No. 21.

Amendment moved— Page 23, line 25, leave out ("8") and insert 4(3)").—(Lord Hughes.)