INDUSTRY BILL

HL Deb 16 October 1975 vol 364 cc1004-18

3.28 p.m.

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

My Lords, I beg to move that this Bill be now read a third time.

Moved, that the Bill be now read 3^a.—(Lord Beswick.)

On Question, Motion agreed to.

Lord BESWICK moved Amendment No. 1: Page 2, line 8, leave out ("or joint chief executives").

The noble Lord said: My Lords, I wonder whether we could take twice as many Amendments at once and deal with Amendments No. 1 and No. 2 together! It was put to me during the previous stages that it was inconsistent with best thinking on the structure of a board to provide for two chief executives. I thought there was much in the argument that was made, and I said that I would have a look at it. There was also the point that many noble Lords the noble Lord, Lord Nelson, I recall particularly, and I think the noble Lord, Lord Aberdare, as well—suggested that it would be wrong to leave the chief executive off the board. I therefore put these two Amendments to your Lordships. The first is to rule out the joint chief executives, and the second ensures that no reference at all is made as to whether or not the chief executive is on the board. I thing it is better to leave the matter open for the board themselves to decide. I beg to move.

Lord ABERDARE

My Lords, I should like to thank the noble Lord, Lord Beswick, very much for having considered this point. As he said, it was pressed very strongly by your Lordships that it was wrong to have joint chief executives, and I am very grateful to him for having taken out the reference to joint chief executives by Amendment No. 1. Amendment No. 2, which we are discussing at the same time, does not really seem to get us any further, because it simply says nothing. The old subsection (6) really did not say anything, either—it said that he could either be a member of the board or he need not be a member of the board—so I am sure there is no need to have this subsection. It does not really advance the case much further as to whether he is or is not to be a member of the board.

Lord BESWICK

My Lords, I thought that the general feeling was that we should not legislate in this sense for or against. It is now completely left out, which is the right and proper way of handling it.

On Question, Amendment agreed to.

Lord BESWICK

I beg to move Amendment No. 2.

Amendment moved— Page 2, line 10, leave out subsection (6).—(Lord Beswick.)

On Question, Amendment agreed to.

Clause 2 [General purposes and functions]:

Lord RAGLAN moved Amendment No. 3: Page 3, line 7, leave out subsection (3).

The noble Lord said: My Lords, I must begin by apologising for bringing this back again, having raised it on Report; but since raising it then I have had the opportunity of consulting with my noble friends, including my noble friend Lord Houghton, and of reading through the Reports of the Standing Committees on the Welsh and Scottish Agencies where this point was much discussed. I have been reinforced in my belief that this matter is no ordinary one of policy but is something which should make every democratically-minded person exceedingly uneasy at the direction the Government is taking and the powers assumed by it—powers which in my view are in any case totally unnecessary.

I agree that there can be two interpretations of this subsection. One is that the powers it confers are no more than those possessed by an ordinary individual or those which may be contained in the Articles of a private company. Yet these powers are not spelt out for the ordinary person and the Articles of a company do not have the same impact as those of a Statute setting up a Government board. I must say that one of the continual criticisms which the Labour Party have rightly had of private industry in the past has been its lack of public accountability. It seems to me that we are in very great danger of building up a public sector which will be even more difficult to hold to public account than was the private sector; because our newly-created public industry has behind it not only the power of Statute but the power and prestige of the Government.

I am aware that this Third Reading is not the moment for a long debate on a complex subject of that importance; but sometimes people ask me: "Why do you talk about this and that? Do you ever get anything done? "My answer is that, surprising though it may seem to the questioner, one often does get things done because, contrary to what one is sometimes led to believe, there are many sensible people about and if you choose something sensible to say they will listen. I am pleased to say that, due at least in part to my agitation, the equivalent subsections in the Welsh and Scottish Agency Bills appear, at first sight, to have been slightly more tightly drawn in the Commons. There was much debate on this subsection in the Committees and the Government Minister kept saying that he would look at it again, but I am sorry to say he kept doing very little.

The general point has still not been taken by the Government or their advisers; and the point is that if you insert into a Statute that a Government agency can do anything it likes so long as it is legal, then you are asking for trouble. Even if, as I have said, the subsection is read in the way which I believe my noble friend would wish, I doubt whether the Board would be held accountable in the way that they should be. We are not simply dealing with a private company where the shareholders are not particularly concerned about how the firm is run or what it does, so long as the money comes in. We are trying to get away from all that; yet we are putting it into a Government Bill, into a Parliamentary Statute.

Secondly, my Lords, I am in charge of a Government agency which spends several million pounds of public money every year; and I hope and believe that in so doing we add to the sum of human happiness; but we have not got such powers as are specified in this Bill, nor do we need them, nor do I want them, nor would I be happy to have them and nor do I feel in any way fettered by not having them. It is in my experience untrue to say that this Board needs these powers and could not work without them. They are superfluous. If the Board feel that they cannot do something and really must have the power to do it, then they can go to the Minister or to Parliament. That is what they are there for. Surely that is our very purpose in setting up a public agency.

My Lords, lastly, it has been implicit as well as explicit in all that I have said on this subject during the passage of the three related Bills that I believe—and with the passage of time have become more convinced—that the powers conferred in this subsection are dangerous. If the Government are not aware of that and do not soon become aware of it and do not cease to insert provisions of this kind when promoting Government agencies, they are storing up a lot of potential trouble for the future. I know that there are precedents for these powers. There is the Post Office Act 1969 and various Acts under the Conservative Government, including the Civil Aviation Act 1971, and so on. These precedents are therefore fairly new. They are, none of them, my noble friends' fault nor Lord Beswick's fault, nor the fault of the last Government nor necessarily a matter of great blame for the Government before it.

Perhaps no one in this House has been less stinting in his praise of the Civil Service than myself; but I know how Governments are apt to work and the pressure of time on Ministers and civil servants. This subsection, or its approximation, would have been inserted originally in some Bill because somebody thought it would be a good idea. Nobody questioned it. The Ministers were thinking of other things; and the wretched thing passed into precedent to be inserted without question in every subsequent Bill. That is how a precedent of this kind happens. No one has queried this one before.

My Lords, when I first read this subsection or its equivalent in the Welsh Development Agency Bill I could not sleep for wondering what things were coming to. If you read it as I did, it can largely vitiate the need for any other legislation than that necessary to set up the Agency and define its composition and functions. In this Bill, this is doneunder Clause 1, Clause 2(1) and Clause 2(2). My fears in this respect have been substantiated in learning of the comments of a Scottish Minister that to insert the words which are here printed: … specified in subsection (2) above as in this subsection, is widening the powers of the Bill; because it then relates the unrestricted powers conferred by the subsection to the functions of the Agency laid down in the previous subsection and it leaves the Agency less restricted by the duties and functions asset out in later clauses of the Bill. In other words, on the say so of a Government Minister, this subsection has a significant meaning. It confers powers. It is not a harmless way of saying something of no great significance. It confers powers of a wide nature which, if they are specifically related to subsection (2) makes matters worse and not, as I first imagined, better.

My Lords, the least the Government can do is to remove the words "specified in subsection 2 above". But there is altogether something very wrong indeed here, something which needs to be given deep, serious and full reflection and consideration. If I thought that dropping this subsection would cripple the agency and prevent it from being effective I would not be raising the matter. I have doubts about the eventual efficacy of the agency; but those thoughts are not for now. I believe that it should be given as good a chance as possible. The presence of this subsection (and its equivalent in Bills of a related kind) raises the fundamental question of how much power should be conferred on a Government agency. It raises questions of accountability, of democracy, of the protection of the public from the arbitrary action of a public agency which might become as great a threat as the ones suffered by the public from private companies in the past.

My Lords, I apologise for raising the matter again. I shall not press the Amendment. I shall be content with having raised the point. I think that in fact it would not be proper to press the Amendment because the terms of the subsection are common to several other Bills. The Government, the Civil Service and Parliament must have serious regard to the type of creature which is being created in these Government agencies, and do all in their power to ensure their public responsibility and accountability. That means taking more care with the powers allotted to them than seems hitherto to have been the case. I beg to move.

Lord HOUGHTON of SOWERBY

My Lords, I beg to support the Amendment moved by my noble friend. He has moved it in terms of deep concern and sober reflection upon what this clause implies. I regard a constant challenge to bureaucracy as one of the conditions of democracy, and this is one of the things I have always told bureaucracy it has to put up with. The moment one yields too freely to bureaucracy, the more certainly we are moving towards the authori- tarion State. All power yielded is a curb of the liberty of somebody somewhere, and that is why we have to look with care at a sweeping clause of this kind. This clause concedes powers to the Board, not to the Government, and the Board will be an institution of bureaucratic activity in the field of industry.

One wonders what it is that this clause is supposed to provide for. It would be interesting to have a list of the conceivable possibilities that this clause might be regarded as desirable or necessary to cover. I firmly believe that if this clause were deleted from the Bill nobody would know the difference in the powers and activities of the Board, and they would be able to do their job without any substantial let or hindrance. This is a kind of long-stop clause: "We provided for everything. Now let us provide for something more and do it in an undefined way. Do not let us be specific. Let us say that the Board may do any mortal thing calculated to facilitate the discharge of the functions specified."

I am advised that in its terms this clause is common to other Acts of Parliament, but that is no reason why we should not question it whenever we see it. The common form must be under challenge, too. Do not noble Lords on the Benches opposite realise what this Government have been able to do with powers of a sweeping character taken by the previous Government. They have grumbled that Labour are doing things with the powers which the Conservatives never intended them to do. These powers have been used for purposes for which they were never envisaged by those who created them That should surely be a warning to all concerned.

My Lords, I am afraid that I was a moment late in arriving at your Lordships' House as I was at another meeting. I am sure my noble friend has made it clear that we do not propose to turn your Lordships' House inside out, to upend the Constitution, to create a crisis or anything of that kind with this Amendment. But it will be enough, at least for the present, if by moving this Amendment we can elicit from my noble friend—who was so eager to rise a moment ago—a full and comforting explanation of the powers of this clause. I am sure we all await his reply with great interest.

3.45 p.m.

Lord LOVELL-DAVIS

My Lords, I recognise that the noble Lord, Lord Raglan, has extended what he has said over a rather wide area and, like the noble Lord, Lord Houghton of Sowerby, I accept his obvious concern over this matter in the general sense. But I should confine myself to the effect that this Amendment would have on this Bill. The provision which this Amendment seeks to delete is a standard one. Comparable provisions giving public corporations the power to do all things necessary, incidental or conducive to the discharge of their functions, are to be found in all Statutes setting up nationalised corporations—for example, the Gas Act 1972, Section 6(1); the Post Office Act 1969; the Civil Aviation Act 1971, as the noble Lord, Lord Raglan, said, a Conservative Act; the Iron and Steel Acts of 1949 and 1967. The Coal Industry Nationalisation Act, as long ago as 1946, for example, said: The Board shall have power to do anything and to enter into any transaction calculated to facilitate the proper discharge of their duties … or is incidental or conducive thereto. The purpose of the provision is to ensure that the Board have the right to pursue any appropriate action—within the law—calculated to facilitate the discharge of their functions in fulfilling the purposes which they have been given. Subsection (3) does no more than that, and it does not in any way exempt the Board from the general law of the land. Without this general provision, it would be necessary to devise an exhaustive list of specific powers to govern all the possible things which the Board might need to do—a task which I am sure noble Lords will agree would be extraordinarily difficult. The Board would be in danger of acting ultra vires if they did something which was not specifically listed.

It was because doubts were expressed in Committee in another place that the Government introduced subsection (5) of Clause 2 which says: For the avoidance of doubt it is hereby declared that the foregoing provisions of this section relate only to the capacity of the Board as a statutory corporation, and nothing in the said provisions shall be construed as authorising the disregard by the Board of any enactment or rule of law". Subsection (5) makes it clear beyond doubt that although the NEB are free to do anything which it is lawful for any person to do in pursuit of their functions and purposes, no special privileges have been conferred.

The National Enterprise Board are in fact in very much the same position as a private sector company. The general law with regard to Companies Act companies, to which the noble Lord, Lord Raglan, referred, is that they have power to carry out the objects set out in the Memorandum of Association, and also to do anything which is reasonably necessary to enable them to carry out these objects. In the case of the NEB, the functions set out in Clause 2(2) are equivalent to the objects of a Companies Act company. Clause 2(3) is intended to do no more than give the NEB the comparable power to do things necessary, incidental or conducive to the discharge of those functions. I hope that what I have said will dispel any uneasiness which the noble Lord may have felt, if in this specific case he was of the opinion that this clause conferred any new or special powers on the NEB.

Lord RAGLAN

My Lords, I thank my noble friend for his explanation. I thought that that was what he would say. I am not at all satisfied, of course, because it does not cover the wider points which I raised. It passed through my mind, when the noble Lord mentioned that if the provision was not put in there was danger of the Board being ultra vires by doing something not specifically listed, to ask: what is the point of specifically listing anything if the Board can do anything? Also, I hope that the Government will take proper note of what my noble friend Lord Houghton of Sowerby said about precedent. Because something has been in being without question for a very long time, it does not mean to say it is immutable. For a radical Party to adopt that stance would not get them very far. Their whole raison d'être is that they challenge precedent and keep altering things as they go along. I must ask my noble friend whether I may come to see him and consult his advisers at some other time, regarding whether we can do something about reducing the absurdly wide powers which this provision confers upon this Board and upon other Government agencies. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

3.50 p.m.

Lord ABERDARE moved Amendment No. 4:

Page 3, line 30, at end insert— ("( ) It shall be the duty of the Board to have regard to guide lines set out for them by the Secretary of State.")

The noble Lord said: My Lords, I beg to move Amendment No. 4, which will be only too familiar in its terms to noble Lords opposite, because we have put down this Amendment at every stage of the Bill in an endeavour to extract from the Government some news about these guidelines which are to be given to the National Enterprise Board. In view of what was said at Report stage, may I make it quite clear that this is not something which we have sought to get out of the Government. These are guide lines which the Government themselves promised as far back as the 9th June, when the then Secretary of State for Industry, Mr. Wedgwood Benn, said in another place at col. 14 in answer to a Question: The Government will consider the publication of a further White Paper on the working of the proposed Industry Act in the course of the review of the Bill which we have undertaken to carry out. It has since been confirmed to us throughout the consideration of this Bill by your Lordships that these guide lines were being prepared. I still hope that we may get some assurance that the guide lines will be available to Parliament before the Bill is enacted, because in many other instances there have been cases of Bills going through Parliament in connection with which there have been documents of immense importance to the interpretation of the Bills and such documents have been pressed for and usually provided to Parliament before the Bills have been enacted. For example, I can think of the Code of Practice connected with the Industrial Relations Bill. There have also been other documents of a similar kind. I should have thought it only reasonable to ask the Government to produce these guide lines to the National Enterprise Board, in order that Parliament may fully understand what the Board are expected to do and how they are expected to act, because although the Bill gives them very specific powers, it is in the interpretation of those powers that so much good or harm can be done. It is therefore very much in the interests of the economic future of the country that industry should gain confidence in the Government which at the moment they sadly lack. I should think that these guide lines would be of the greatest importance, and so I hope that on this occasion the noble Lord will be able to give us some indication of when they will be available. I hope he will be able to say that they will be available before the Bill becomes an Act.

I know that on previous occasions the noble Lord has reproached this side of the House for asking for guide lines too soon because Amendments have been accepted and the Government wish to see what the Bill looks like when it finally emerges. But I do not think that can be accepted as an excuse in the present case, because in the case of the Community Land Bill the Government have found it possible to produce a document in advance, incorporating Amendments which they themselves wished to put into the Bill—and that was done before the Report stage. If it was possible for that to be done in that instance, I should have thought it would be perfectly proper and easy for the Government to produce their draft guide lines relating to the Industry Bill as they would like to see it emerge. I beg to move.

Lord BESWICK

My Lords, it crossed my mind, when the noble Lord said that he had raised this matter at every stage of the Bill, to query whether it was appropriate to raise it yet again on Third Reading. If we reach decisions at earlier stages, we do not normally return to them on Third Reading, but I raise that simply as an academic point.

The Amendment which is down on the Marshalled List today does not quite represent the argument put by the noble Lord, who is asking for regard to be taken of the guide lines. I would put to him that the wording in the Amendment would not be satisfactory either to him or to us. It is not sufficient to say that the Board should have regard to the guide lines. I suppose many of us have said before in this House that we should have regard to what has been said, and have then found that it would be unnecessary to actually carry out what was said. We would wish to have something rather stronger than that, and in fact the Bill itself now goes further than the noble Lord is suggesting in his Amendment. The Amendment does not require any guide lines to be made public. It makes no provision for guide lines ever to be changed. In Clause 7 of the Bill we spell out some of these things more clearly. The powers of direction in Clause 7 permit guide lines to be given binding effect. They require that they should be reported promptly to each House of Parliament; and in Clause 37 there is explicit provision for any direction to be varied or revoked. That is the course we are pursuing and I should have thought it would have commended itself to the noble Lord opposite.

As to whether the guide lines should be published before the Bill reaches the Statute Book, I must say to the noble Lord that the argument I have advanced before gets stronger at each stage. At each stage we have had a different Bill. It would have been quite absurd for guide lines to be presented to the House on Second Reading when we now have a Bill, following the Committee and Report stages, which is completely different. The powers of the Board and the parameters of action laid down by the present wording of the Bill are quite different from what we originally intended. The guidelines we might have put before the House earlier would have been quite irrelevant, and so it was sensible to wait to see what sort of Bill will eventually reach the Statute Book. When we see that, I give an assurance that we shall draw on the points which have been raised in discussion in both Houses of Parliament, and shall put the draft guide lines before this House for their approval in due course—but this cannot be until after the Bill gets on to the Statute Book.

Lord CAMPBELL of CROY

My Lords, the noble Lord, Lord Beswick, has told us that because of the changes which have been made to the Bill during its passage through your Lordships' House it has not been possible for the guide lines to be issued until the Bill reaches the Statute Book. But, of course, this Amendment enables us to ask the Government about the latest situation, which the noble Lord has just given to us. Therefore I do not think he should have been surprised to see the Amendment on the Marshalled List again on Third Reading, because we have at various times given notice of our desire to know when the guide lines on particu- lar aspects would be available. The one I wish to touch upon concerns the relationship between the National Enterprise Board and other Agencies acting in the same field, because during our debates concerning the Scottish and Welsh Development Agencies, and on this Bill, we have been promised guide lines which would indicate how these various bodies would be expected to collaborate with each other.

Therefore, I should like to ask the noble Lord whether he could take this opportunity of telling us more about that; whether these guide lines which are to be published will help in that direction or whether separate guide lines will be issued. The noble Lord, Lord Hughes, when on the Front Bench, gave an undertaking that guide lines concerned with the overlapping functions and operations of all the various bodies would have been available by now. The bodies I am referring to are not only the Scottish and Welsh Development Agencies, but also the British National Oil Corporation, whose area of activity will overlap with the National Enterprise Board. Then in the North and West of Scotland there is the existing Highland Development Board, so some indication to the public, to industry and to Parliament is required of the kind of guide lines which are to be given on the separation of functions. I must mention the British National Oil Corporation, because it is only recently that your Lordships' House has been able to consider proposals for that; and we were considering them again yesterday.

If the noble Lord, Lord Beswick, has been following the debates on the Petroleum and Submarine Pipe-lines Bill he will know that the British National Oil Corporation is by no means concerned only with activities in the oilfields at sea. It has powers to take part, for example, in the petrochemical industry and plastics and a whole range of substances which will be used increasingly by industry as oil from our own oilfields becomes available. To quote from the Petroleum Bill, BNOC will be able to buy, sell and otherwise deal in petroleum and anything derived from it". That means that both the National Enterprise Board and the Oil Corporation are likely to be getting involved with the same companies in work related to petroleum and its derivatives; for example, the chemical industry. It is therefore important that the guide lines that we were promised earlier on, on the question of separation of functions between these various bodies, should become known at an early date. Perhaps the noble Lord can tell us whether these will be part of the general guide lines which he has been talking about, or whether they will be coming sooner.

I should just remind your Lordships about the situation in Scotland because the Highland Board is already operating there and its area and functions are widely understood—the Highland Board is the Highland Development Board; its main purpose is to inject money into industry through grants and loans, so it has very similar functions. Not only that, but there are to be three other statutory appointed bodies working in the same field: that is, the National Enterprise Board, the Scottish Development Agency and the British National Oil Corporation. I would remind your Lordships that the new oil activities have their main impact on the North of Scotland. So in that area there is a great danger of bureaucracy getting completely out of hand. What the noble Lord, Lord Houghton, was saying on the last Amendment about the dangers of bureaucracy will certainly apply when there are four agencies there, all likely to be tripping each other up or overlapping in their activities. Can the noble Lord tell us whether these guide lines will clarify and regulate the fields and functions of the National Enterprise Board in relation to these other bodies, or are there to be separate guide lines on that point which we have discussed in earlier debates, and, if so, will they be issued earlier or later?

Lord BESWICK

My Lords, in reply to what has been said I am afraid I cannot go into the question of what the guide lines would be for the Scottish Development Agency or for BNOC. I can only say what relates to this Bill. The guide lines were indicated on 3rd July. They were spelt out; they have been before the House. I know that the noble Lord has very carefully read what was said because he referred to them on other occasions. All I am enabled to do now is to put before this House a draft in detail of points that were summarised in that statement of 3rd July. I assure the House that a draft will be laid before the House as soon as possible. It will not necessarily be a matter for amendment, but it will be before both Houses of Parliament as soon as is possible. The topics covered are stated in that summary given on 3rd July.

Lord ABERDARE

My Lords, I of course have no intention of pressing this Amendment. I think what the noble Lord said in reply to me at the beginning of his remarks was unnecessary. He knows perfectly well that this Amendment was not intended to do more than to find out what the situation was with regard to the guide lines. I still think it is very unsatisfactory that no guide lines, even in draft form, have been available to this House in the course of the passage of the Bill through the House. As I said, these guide lines were foreshadowed in June, and it is now October and nothing has been forthcoming. Regardless of the fact that the Bill has admittedly been amended in the sense that we think it is greatly improved, I still think that the Government could have published draft guide lines on the basis that they have already said that they will not accept many of our Amendments, and we could have seen the kind of thoughts that were in their mind in regard to the National Enterprise Board before we ceased to deal with the Bill. I think it very unsatisfactory, but in the circumstances I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.