LORDS AMENDMENT (Hansard, 3 November 1975)

§ Lord JACQUES
My Lords, I beg to move that this House doth not insist on their Amendment No. 7 to which the Commons have disagreed for the Reason numbered 8. The effect of this Amendment was that it required an employer to disclose according to Stock Exchange rules any information which the Bill requires him to disclose to a trade union and which could have a significant effect on the assets or profits of the company. The safeguarding of the investing public is a matter for Stock Exchange rules. If these rules require amendment or more rigorous enforcement, that is a matter for the Stock Exchange. If they require a legal backing that is a matter not for an Employment Protection Bill but for a Companies Bill. Consequently, we feel that this Amendment is irrelevant to this Bill.
I hope that nobody will tell me that there is a matter of urgency about this and that we cannot await a new Companies Bill in order to deal with it; because I would point out that employers for a very long period had been voluntarily giving information to the trade unions in the course of negotiations and, indeed, since 1971 have been doing so in accordance with the Industrial Relations Act 1971. This Bill, as far as information is concerned, is substantially the same as the1971 Act and on this issue I have a most impeccable source. The right honourable Member for Lowestoft, Mr. Prior, leading for the Opposition at the Second Reading debate on this Bill said in another place: I now turn to the information clauses to which we have no objection. They are the same clauses with perhaps a little elaboration as were contained in the Industrial Relations Act."—[Official Report;28/4/75; col. 54.] I think we can say therefore that the information clauses in this Bill are no different in substance from those in the 1971 Act.
This kind of Amendment was not needed to the 1971 Act and there is no reason why we should need this Amendment to this Bill. The noble Lord, Lord Terrington, moved a similar Amendment in 1971 to the Bill, but it was unacceptable to that Administration. That Administration had an inbuilt majority in this 875 House and was able to resist the Amendment which was withdrawn. On this occasion, the Government of the day did not have an inbuilt majority in this House; the Amendment was not withdrawn and it was carried against the Government.
My Lords, the information which is normally given to the trade unions is not price-sensitive and in so far as it might be price-sensitive it is too fragmented and too detailed to be of interest to the Stock Exchange. Furthermore, the Amendment is vague and uncertain as to its effects. It provides that where there will be a significant effect upon the assets or profits there shall be the communication with the Stock Exchange. Who is to determine when the effect is significant? Each company will decide that for itself. Under the Stock Exchange rules a company is allowed to discuss price-sensitive information with both its managers and advisers. Some companies will regard the shop steward who is in their service as their adviser on labour matters; others will not. There would be therefore a considerable measure of inconsistency as far as the company is concerned. Then it would be vague and uncertain whether the Stock Exchange ever received any information at all. There is no sanction in the Amendment if a company fails to give information to the Stock Exchange in accordance with the Amendment. Nothing happens; there is no sanction at all.
My Lords, finally there is the constitutional point. Is it right that Parliament should give legal backing to rules over which it has no control? It certainly has no control over the Stock Exchange rules. I would suggest that it would be entirely wrong for Parliament to give that kind of backing to rules over which it has no control. The elected Chamber resisted this Amendment by a majority of 52; I recommend to your Lordships that we should not insist on it. I beg to move.

§ Lord CULLEN of ASHBOURNE
My Lords, I doubt if you will want to hear very much more about this subject that we have now debated a great deal 876 but I should like to make one or two brief points. The purpose of the Amendment was to ensure that information given to trade union representatives which was price sensitive should be given simultaneously to the public via the Stock Exchange. Despite what the noble Lord, Lord Jacques, says, the Amendment was entirely innocent of any Party political bias; it was of a purely technical nature. It in no way restricted information to be disclosed and I regret its rejection. But I am not surprised.
In spite of all that has been said on the subject, I can only think that the Government do not understand the point we have tried so hard to make. No doubt the Stock Exchange will do their utmost to try to ensure that the risk of creating insiders by the enlargement of the circle of those privy to price-sensitive information will, so far as possible, be minimised. Presumably the matter will be put right when a new Companies Bill comes before your Lordships' House. In the meantime, if and when an insider scandal occurs, the fault will not be with the City but with the Government. I would ask the Minister what steps can be taken in the event of price-sensitive information being leaked—no doubt quite involuntarily—by a trade union representative? What, if any, sanctions are there? This person may not be in the employ of the undertaking at all; he may even be employed by a rival undertaking. Is the employer to be powerless in such a case?
My Lords, finally I should like to make it clear that I and my Stock Exchange colleagues are in favour of the maximum disclosure of suitable information to all those employed in any undertaking, be they trade unionists or not; but regarding price-sensitive information, I am apprehensive of the effect of trade union representatives being placed by Statute in a privileged position vis-à-vis shareholders.

§ Lord WIGG
My Lords, I have not the slightest doubt that the noble Lord who has just spoken believes all he says. It is a grave reflection upon the intelligence of the Conservative Party if what he says is true, that there was no political motive behind the Amendment. When one examines the arguments which were produced on a previous occasion in this House and in the light of the case made by my noble friend Lord Jacques, there 877 is obviously no case for this provision within the Bill. If the Stock Exchange are concerned about price-sensitive information being revealed, all they have to do is to deal with it within their rules. There is nothing in the world to stop them doing that. The safeguards are there.
As my noble friend Lord Jacques said, a Conservative Administration chose to proceed in exactly the same way as the Government are now doing. Why then, except for Party political purposes, should the Conservative and Liberal Parties go out of their way to combine to vote down the proposals which were put forward by the Government? Of course they were doing it for Party political purposes. They are here today for no other purpose than to embarrass the Labour Government. Those are perfectly good political tactics; but do not let us be humbugs and pretend this is not happening. They use those tactics very effectively on occasions. The noble Lord sitting on the Conservative Benches does not do himself or his Party any good by pretending that they are actuated by noble impulses. Of course they are not. The noble Lords on the other side of the House are there, and their families have been there for centuries, to protect their privilege and power; and I am here to take it away. I hope very much, as a result of some of their actions today, they are going to give me arguments to hasten the process. Let us cut out the humbug.