Lords Sitting of 30 October 1975

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Ripon.

HOSPITAL CLOSURES
Lord SEGAL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government which hospitals are being considered for closure during the next three years.
Lord WELLS-PESTELL: My Lords, information of the kind requested is not available centrally. The responsibility for considering possible closure or change of use of hospitals rests primarily with the Area Health Authority concerned.
Lord SEGAL: My Lords, while thanking my noble friend for that reply, so far as it goes, may I ask whether it would be possible to keep these buildings on a maintenance basis so that they may be reopened when happier times arrive? In cases where closure is inevitable, could not these buildings be retained for community use, as hostels for old people or for the mentally handicapped, instead of being sold to the highest bidder?
Lord WELLS-PESTELL: My Lords, in general, hospitals would not be permanently closed unless it was clear that they had no future place in the long-term plans for the Service. If temporary closure was decided upon, a hospital could, as my noble friend suggests, be placed on a care and maintenance basis, and this is often done. With regard to the second part of his question, the rules for the disposal of National Health Service property provide that they are first considered for other NHS use. If none is foreseen, they are then offered to local authorities, with whom there is already close co-ordination through the joint consultative committees, for possible use in the personal social services. Only—and I
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want to stress this—when these aspects are cleared, are premises first offered to other Government Departments, then to local authorities for use other than in the personal social services and then, finally, for disposal on the open market.
Lord WADE: My Lords, can the noble Lord give an assurance that, in considering these matters, no bias will be shown against small hospitals merely because they are small?—since there are many which are valuable to the National Health Service and arc much appreciated by some patients.
Lord WELLS-PESTELL: My Lords, I think the first acid test is their contribution to the needs of the community, and, secondly, there is a cost-maintenance test. I do not think there are any other considerations that would militate against them.
Lord AUCKLAND: My Lords, would not the noble Lord agree that his statement will give widespread concern to a number of workers in the National Health Service? Would he give an undertaking that cottage hospitals, which serve an enormous need in the community, particularly in rural areas, will get special priority when it comes to keeping open hospitals which really matter?
Lord WELLS-PESTELL: My Lords, I do not accept what the noble Lord says; that is, that any statement that I made will cause widespread alarm or concern. I went so far as to say that hospitals are not closed unless there is a very good reason, and there are a number of procedures that have to be gone through before they can be closed. If I may deal with the matter relating to staff which I think the noble Lord touched upon, all closures involve a planning process with extensive consultation at all stages with those who are concerned, including the staff; then there is a considerable gap of something like six months before any action is taken, so that the needs of the staff and those who serve the hospital can be fully explored.
Lord INGLEWOOD: My Lords, would not the noble Lord agree that, so far as cottage hospitals are concerned, the important thing is not only the convenience of the staff but also the convenience of the patients, frequently elderly and not acutely ill but to whom

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visits from their families are very valuable. While it may be a great deal more convenient for consultants to have all patients where possible put into ambulances and carried long distances to a few centres, it is extremely unfortunate for many elderly people whose relations have neither the transport nor perhaps the time to go a distance to visit them. This can add greatly to the loneliness and unhappiness of old people.
Lord WELLS-PESTELL: My Lords, I find it very difficult to believe that noble Lords feel that there is such indifference to the needs of the patients and their relatives that we just shut down cottage hospitals and other hospitals simply because we have a whim to do so. All these matters are considered very carefully.
Lord INGLEWOOD: My Lords, following on that point, may I ask whether the noble Lord is aware that I would not have put it so forcefully if he had not laid all the stress on the convenience of the staff but not mentioned once the patients?
Lord WALLACE of COSLANY: My Lords, is my noble friend aware that the opening of a large, modern, fine new hospital involves the closure of some smaller units which are either uneconomical or not necessarily able to give the finest possible service. Although I disagree with the reorganisation of the Health Service, is he also aware that considerable consultation is had with community health councils and their views obtained before any attempt is made to draw final conclusions about closures?
The Earl of CROMARTIE: My Lords, would the Government agree that we are talking only about England? I am talking about the North of Scotland where one may have to bring a mother who is going to have a baby hundreds of miles to Inverness. Our local hospitals —what other noble Lords may call cottage hospitals—are extremely valuable—
Several Noble Lords: Question!
The Earl of CROMARTIE: —and give excellent service.
Viscount HANWORTH: My Lords, I should also like to support what has been said—
Several Noble Lords: Question!
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, may I suggest that we stick to questions? It might be for the convenience of the House if my noble friend the Minister were enabled to answer them occasionally.
Lord SEGAL: My Lords, could my noble friend say how many beds are likely to be lost to the National Health Service through closure of the hospitals which are now under consideration?
Lord WELLS-PESTELL: My Lords, that is another question, but, frankly, I do not know the answer.
Baroness MACLEOD of BORVE: My Lords, is the noble Lord aware that there is a village in Sussex which does not subscribe to the criteria set out today by the Minister? Is he further aware that they have disagreed with the Ministry, and have now bought back the cottage hospital for their own use?
Lord WELLS-PESTELL: My Lords, if the noble Baroness, Lady Macleod of Borve, is in any sense aggrieved by the situation and she will let me have particulars, I will try to let her know the reasons for the action that was taken.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, would the noble Lord, Lord Wells-Pestell, be good enough to answer the question posed by my noble friend? Even though it was not in interrogatory form, it could easily be translated into the words, "are not" instead of "are".
Lord WELLS-PESTELL: My Lords, if I understood correctly the noble Earl, Lord Cromartie, what he was saying was that cottage hospitals in his part of the country are of supreme importance to the community. I was not aware that he was complaining that any of them had been closed.
Viscount HANWORTH: My Lords, is my noble friend really certain that full weight is given to the importance of these local cottage hospitals, whether or not they are viable?
Lord WELLS-PESTELL: My Lords, I am certain, and for this reason. A hospital cannot be closed unless the Community Health Council approves. If the Community Health Council disagrees after going into every aspect the matter then has to be referred to the Secretary of State.
Lord PARGITER: My Lords, would it not be desirable to take into account the expressions of sympathy opposite on the question of the Health Service and, equally from the same side, demands for cuts in public expenditure?

POST OFFICE: CHRISTMAS POST STATISTICS
3.15 p.m.
Baroness BURTON of COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of discussions with the Post Office, they will state the number of letters handled during the Christmas period for 1972, 1973 and 1974 respectively, and what proportion of these it is estimated were greeting cards; and what was the value of the relevant postage stamps sold in each year.
Lord BESWICK: My Lords, the Post Office Report and Accounts show that during the 3-week Christmas period in 1972 some 904 million letters were posted. That figure fell by about 5 per cent. in 1973, when mail circulation was disrupted by an industrial dispute on the railways, but rose again in 1974 by 3 per cent. The Post Office cannot tell how many of these letters were greetings cards. Average revenue per working day from the sales of postage stamps during the month of December was £1.16 million in 1972; £1.21 million in 1973 and £1.45 million in 1974.
Baroness BURTON of COVENTRY: My Lords, while thanking my noble friend the Minister for the figure for 1972, may I say it would be helpful—as I am sure he will realise—if he could confirm that the figure for 1973 was 781 million, and for 1974, 806 million. It is easier than having a percentage figure. My
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noble friend has told us that the Post Office are not able to estimate what proportion of these Christmas letters were Christmas cards, so perhaps I may ask him something else. If it is not making it too difficult for my noble friend, because I know he has to accept the information he is given, is he aware that, really and truly, I do not believe that information which he has given to be true? Does he recall that on 14th October in this House, he said that 40 million additional Christmas cards would have to be sent if the postage costs were to be reduced by and 350 million additional items would have to be added if the cost were reduced by ½p? If the Post Office is unable to estimate, as he has told me now, how can they make those original statements?
Lord BESWICK: My Lords, in answer to the first part of the question, my arithmetic does not enable me to work out the percentages, but no doubt my noble friend Lady Burton of Coventry is accurate. However, I will check. As to the second part of her question, the noble Baroness is under a misapprehension. I was talking about the number of additional units of postage required to compensate for the reduction in postal rates. Whether those additional items are Christmas cards or something else is immaterial; it still requires that additional number of letters posted to recoup the losses caused by the reduction in postage rates.
Baroness BURTON of COVENTRY: My Lords, I do not know whether the noble Lord has with him a copy of Hansard of 14th October, but I think he will find that he stated categorically that it was 40 million Christmas cards.
Lord BESWICK: My Lords, the noble Baroness is quite right. That was true when I said it, and it is true now. It is equally true to say that if 40 million calendars extra were posted it would have given the necessary increase in revenue. So far as the Post Office is concerned, there is no difference between a greetings card or any other item of communication.
Lord IRONSIDE: My Lords, has the noble Lord the Minister taken into account all the Christmas stamps sold to collectors which do not go through the franking system?
Lord BESWICK: No, my Lords. I was taking into account the number of letters sorted and posted.
Baroness BURTON of COVENTRY: My Lords, does my noble friend realise —andI think he does—the great concern this attitude on the part of a large nationalised corporation is causing to many individual people? Does he realise that it seems to us quite impossible for any individuals, even in this House, to get an answer from a public body if it does not wish to give it? Does he not think some help might be given on this matter?
Lord BESWICK: My Lords, if I may say so to the noble Baroness, in all kindness and friendliness, I should have thought per head of the population in this House she gets more information than anyone else. As to what I said on the 14th October this year, according to the Official Report I said there were 300 million extra items.
Baroness BURTON of COVENTRY: Forty million Christmas cards.
Lord BESWICK: My Lords, if the noble Baroness will read on, she will see that we shall require
"300 million extra items posted before even the revenue was maintained …".—[Official Report; 14/10/75;col. 768.]
"Extra items" will include anything.
Baroness BURTON of COVENTRY: My Lords, I am sorry to seem rude about this, but further down does it not say, "40 million Christmas cards"?
Lord BESWICK: My Lords, as I have said, if the noble Baroness will read on, she will see that I referred to 300 million extra items, which included Christmas cards.
Lord BROWN: My Lords, is the noble Lord aware that it is extremely probable if statistics were available that it would be shown that a very high proportion of the Christmas card sales is sent by commercial firms? Would the noble Lord agree with me that the growing practice of commercial firms using Christmas cards as a form of advertisement is deplorable, and that the increase of postage in this respect will produce a very beneficial result?
Lord BESWICK: My Lords, I am not sure that I do agree.
Lord SAINSBURY: My Lords, would not my noble friend agree that a very high proportion of Christmas cards are sent to help very deserving charities?
Lord BESWICK: Yes, my Lords, I do agree, and I was always taught that charity should be something which comes out of one's own pocket, and not out of the Post Office account.
Lord WALLACE of COSLANY: My Lords, will my noble friend try to arrange with the chairman of the Post Office Board that a suitable Christmas card is sent to the noble Baroness from the Post Office Board?
Viscount BARRINGTON: My Lords, in view of the noble Baroness's statement that the Post Office must believe something, is the inference to be drawn from the Answer today that the Post Office believes that a Christmas card should be a calendar, or that there should be no difference between them? Is that really justified?
Lord BESWICK: My Lords, I do not believe that the noble Baroness is being invited to agree with that at all. I say further to my noble friend that her argument about the revenue that will be received if the rate of postage is reduced is not invalidated at all, whether you call an item a Christmas card or otherwise. An item happens to include a Christmas card. Her argument, which she has put so often, still stands.

SAUDI ARABIA: ARMS SUPPLIES
Lord SHINWELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it has been arranged to sell the Government of Saudi Arabia a large number of modern aircraft and other weapons; and whether it is understood that in the event of a resumption of conflict in the Middle East such weapons can be transferred to Arab countries involved.
Lord WINTERBOTTOM: My Lords, it has been the policy of successive Governments not to give details about the

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sale of British defence equipment. The Government's policy on arms sales to the Middle East was explained to the noble Lord on 20th June by my noble friend Lord Goronwy-Roberts. All equipment supplied by the Ministry of Defence to an overseas Government is for the sole use of the customer country. Where it is considered appropriate manufacturers in the private sector are required to include a similar clause in their contracts.
Lord SHINVVELL: My Lords, is my noble friend aware that the conventional reply which he has given about the need for maintaining security is now completely outmoded, and that we expect a little more open government and disclosure of the facts? Will he agree that the provision of a vast quantity of arms to Saudi Arabia cannot possibly make any contribution to peace in the Middle East? Is he aware that there is serious apprehension about a recurrence of the trouble, which was contributed to by President Sad at before the United Nations Assembly when, instead of preaching peace, he indulged in language which savoured of fire and brimstone?
Lord WINTERBOTTOM: My Lords, I can only repeat the policy of successive Governments which is not irrelevant, but very relevant indeed.
Lord SHINWELL: My Lords, is my noble friend aware that almost every reputable newspaper has reported that in the course of the discussions between the representatives of Saudi Arabia and Her Majesty's Government the subjects of the supply of arms and trade were discussed? It was not a social event. Therefore, why should there be any concealment about it? Is there any special reason why, or is this an ambivalent attitude of Her Majesty's Government, pretending to be friends with Israel and at the same time using a dagger to stick into the back of the Israelis? Is that the kind of attitude we expect from Her Majesty's Government?
Lord WINTERBOTTOM: My Lords, the friendship of Her Majesty's Government is surely towards the British people.
Lord ALPORT: My Lords, will the noble Lord draw the attention of some of his noble friends behind him to the
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fact that the supply of arms to another country gives to the supplying nation an influence over the policies of the countries to which the arms are supplied, which is far greater than it would be if some other country supplied them with arms? In fact, it is most important that we should not allow all the arms used in the Middle East to be supplied by Russia or China, or some Power of that sort.
Lord WINTERBOTTOM: My Lords, I think that that remark is true and relevant.
Lord JANNER: My Lords, may I ask a simple question—perhaps too simple for my noble friend to answer? What fear has Saudi Arabia at the present time of anyone attacking her? Why does she need arms? Is she afraid that somebody in her own territory is going to attack somebody or other? If not, why on earth should we supply arms, when we are in the process at the present time of endeavouring to find ways and means whereby disarmament should take place?
Lord WINTERBOTTOM: My Lords, the fact of life in many areas is that if we are asked to supply arms and refuse other people will supply them. Arms are a standard unit of trade, and what we supply will be guided by the general rule for British goods laid down by Her Majesty's Government—namely, that our overriding objective in the Middle East is a just and lasting settlement between the Arabs and Israel—and by the points made in reply to my noble friend.
Lord PAGET of NORTHAMPTON: My Lords, arising out of the question asked by the noble Lord opposite, is the noble Lord aware that the supply of oil is giving a formidable influence to the oil suppliers on the policies of the countries receiving oil, and that this flow of arms to the Middle East is a dangerous symptom of that oil influence? Has the noble Lord considered the situation of a nuclear nation, such as France, if Saudi Arabia says that it will only accept nuclear arms as currency in exchange for oil?
Lord WINTERBOTTOM: My Lords, that is spreading the Question far too wide.
Lord BARNBY: My Lords, reverting to some of the earlier replies of the Minister in which he referred to the

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limitation of further ownership of any items, as it is possible to have any number of units of a prototype for a certain purpose from two or three countries, how would the suggestion that arms are supplied specifically on condition that they are not transferred apply? If they retain what is received under those conditions, they can equally easily transfer prototypes received from elsewhere, with the same amount of fighting power.
Lord SHINWELL: My Lords, in view of the question put by the noble Lord, Lord Alport, which seemed to me somewhat biased, can he produce any evidence of any country over which we have exerted influence after the provision of arms?
Lord ALPORT: My Lords, if it would help the Minister in any way, I should be glad to give the evidence to the noble Lord, Lord Shinwell, afterwards.
Lord SHINWELL: My Lords, may I have an answer to my question? Since the question was put by the noble Lord, I asked whether there was any evidence to justify what he said. That is all. Can the Minister reply?
Lord WINTERBOTTOM: My Lords, this is a subject of many facets, and I suggest that if the noble Lord wishes to discuss it in depth he should put down either a Motion for a debate or an Unstarred Question.
Lord WIGG: My Lords, is my noble friend not aware that a perfect example of one country controlling the policy of another, or influencing it in a major respect, is the spate of equipment which is supplied by the United States to Israel?
Lord BESWICK: My Lords, perhaps we could now proceed to the next Question?
Lord JANNER: Before doing so, my Lords, may I ask my noble friend whether he is aware—
Several Noble Lords: No!

ENGLISH CHANNEL: OVERFISHING
3.30 p.m.
Lord CLIFFORD of CHUDLEIGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps they propose to take to prevent the Russian and Eastern bloc fishing fleets from hoovering the English Channel bed to the ruination of the South-West inshore fishing industry.
Lord BESWICK: My Lords, Russian and Eastern bloc fishing vessels are free to fish beyond our 12-mile fishery limit in international waters, subject to the agreed conservation regulations of the North-East Atlantic Fisheries Commission. The Commission has not yet agreed a system of quota control for mackerel stocks, which we believe are of the greatest interest to these fleets. The scientific evidence shows that these stocks are not endangered.
Lord CLIFFORD of CHUDLEIGH: My Lords, I thank the noble Lord for that reply, especially in view of its similarity, with a slight difference, to the reply he gave to the noble Baroness, Lady Vickers, last week. Is he aware that when the ordinary bloke, especially if he is connected with inshore fishing, hears of a claim by other countries to a limit of 200 miles, he cannot see why the comparatively narrow confines of the Channel are not shared between, say, ourselves and France? Is he further aware that the Russian method of fishing is totally efficient and is ruinous to breeding grounds and conservation, and that when the spirit moves them they do not mind dumping that fish on markets to the economic disruption of the local population? Is he further aware that, being under the command of the Russian Navy, their "fishing" is not always sub-aqua?
Lord BESWICK: My Lords, we wish to see an internationally agreed limit. We are trying to get the limit extended but it is not right to take unilateral action, as has been done by other countries. As for Russian fishing practice, we

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have no reason to believe that the Conventions into which they enter are not observed by the Russians. As for the mackerel fleet, scientific evidence shows that stocks are not endangered, although there are, I understand, vessels going out next week to sample the stocks in the area concerned and it will be interesting to see what evidence they secure.
Lord WYNNE-JONES: My Lords, my noble friend refers to scientific evidence. May I ask him to say where this is published?
Lord BESWICK: My Lords, I will write to my noble friend about that.
Lord MERRIVALE: May I ask the noble Lord to say how the Russian and Eastern bloc fishing fleets "scientifically hoover" the English Channel seabed?
Lord BESWICK: That is not language that I employed, my Lords.
Lord DERWENT: My Lords, is it not particularly important to get this international agreement, because although the Russians have this enormous fishing fleet there are other countries, particularly those operating in the North Sea, which are equally at fault—if any one is at fault?
Lord BESWICK: My Lords, there are two questions here. One is the limit imposed—and that is the subject which we are pursuing at the United Nations —and the other is the restriction on certain fish. There are already agreements with other countries in connection with certain fish and, as I said, we have every reason to believe that these are being observed. There is no agreement on mackerel because, hitherto, the stocks have been thought to be ample.

BUSINESS
3.34 p.m.
Lord DRUMALBYN: My Lords, may I ask the noble Baroness the Chief Whip a question about tomorrow's Business? Is she aware that the third item on the Order Paper is the Children Bill, and that that Bill was brought from the Commons only a couple of days ago? Is she further aware that all that is available of the Commons Amendments to that Bill is what is termed an advance proof of
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some of them, but that the sum of those Amendments runs to over 34 pages of foolscap? May we be told how the noble Baroness proposes to handle this Bill tomorrow and in future days? Is she also aware that this Bill started in your Lordships' House and that it is a measure in which noble Lords have shown a particular interest?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I am grateful to the noble Lord for raising this matter, particularly, as although this is a nonpolitical Bill it is very close to the hearts of noble Lords in all parts of the House. It is true, I am afraid, that there are only 165 Amendments from the Commons available; they have been available since this morning in the Printed Paper Office. We had, knowing the interest of your Lordships, made inquiries earlier this week and were quite confident that we should have all the Amendments in their proper form by this morning, and I had assured noble Lords opposite that this would be so. Owing to production difficulties this has not, unfortunately, come about, so noble Lords have the 165 for the moment. Perhaps it would be useful if I went on to explain what we propose to do about this. Knowing of the great interest of noble Lords in this matter, we have decided, through the usual channels, that we should take the first two parts of the Bill tomorrow —that is, the parts on adoption and custody, which absorb about 114 of the Amendments available—and that we should then take the rest of the Bill next Wednesday, the 5th, at a quite late hour, say, 7 or 8 o'clock; though the time is not yet finally settled. The rest of the Bill will, therefore, be taken then and thus your Lordships' House will have the maximum time to discuss what is a very important Bill indeed.
Lord CARRINGTON: My Lords, the noble Baroness is, as usual, very conciliatory to the House and I do not think any blame rests with her, but this occasion should not pass without it being set on record that your Lordships are being treated in an almost impossible fashion. There are 365 Amendments down for this Bill, which is of the very greatest importance. It is, as the noble Baroness said, not a Party Bill and it affects everybody in the country. It really is important that a measure of this magnitude and

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importance should go on the Statute Book in the best possible form that we can, all of us, devise. This is very difficult for noble Lords who are interested in the Bill, with only half of the manuscript Amendments having arrived and with no opportunity of any kind to consult with people outside who arc interested in this matter because, as noble Lords are aware, half the work that is done on Bills of this kind is done in conjunction with societies and organisations which are interested in the subject of the Bill concerned.
On this occasion there will be no opportunity for that because they have not seen the Amendments; there are only duplicated copies of them in your Lordships' House and, as I understand it, not very many of those. This is putting the House in a very difficult position. I know that the noble Baroness is doing her best, but may I urge her to agree that if it becomes apparent tomorrow that it is getting late and there has not been sufficient time to consult about any Amendments which come up, we shall postpone any further discussion of the Bill either to Wednesday or a date later than that? It is the duty of this House, as a revising Chamber, to make sure that Bills get on the Statute Book in good shape.
Lord BYERS: My Lords, I endorse what the noble Lord, Lord Carrington, said. We on these Benches are desperately worried about the legislative programme which is being put before this House at the present time. I understand that seven of the new clauses which are to be taken tomorrow are totally new. It is not fair that this House should have to deal with these at something like 24 hours' notice. We did not get the last Children Bill right—we all know that—and we cannot afford to put half-baked legislation on the Statute Book. I understand that the major parts of this Bill will not come into operation until about 1977. Ought we not to have a look at this and take more time over it? Let the Government roll it over to the next Session if necessary, but let us get it right this time.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, no one is more worried about the legislative programme than the Chief Whip; I take that point very much to heart. May I remind your
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Lordships that so important do we here feel this Bill to be, that in fact it began in this House; rightly so in my view because we have experts here who have given it the most careful consideration. However, as usual of course the experts all disagree, and that is partly why we have had such interesting debates. To answer the noble Lord, Lord Carrington, copies of the rest of the Amendments will be available tomorrow morning in duplicated form and they will be available in printed form on Monday. Almost all the outside organisations—indeed, I believe all—have been consulted though out the whole of the long process of the Bill through both Houses and I believe that it is an exaggeration to say that there will not be time to consult them between today and Wednesday.
Lord CARRINGTON: Tomorrow, my Lords.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, it is tomorrow for the first part of the Bill and, of course, if anyone wants to make representations tomorrow about the proceedings, I shall be here to listen to them. However, in my view the time allowed will be perfectly adequate, and I should like to add that there were a good many copies of the Amendments available this morning, not just a few. I feel confident that it will be perfectly adequate to discuss the first two Parts of the Bill on what is available now and to deal with the rest next Wednesday.

MALLAIG HARBOUR ORDER CONFIRMATION BILL
Brought from the Commons; read la; and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.
PORT ASKAIG PIER ORDER CONFIRMATION BILL
Read 3a and passed.
ROYAL COLLEGE OF SURGEONS OF EDINBURGH ORDER CONFIRMATION BILL
Read 3a and passed.

INDUSTRY BILL
3.43 p.m.
Lord BESWICK: My Lords, I beg to move that the Commons Amendment to a Lords Amendment, Commons Amendments to words restored to the Bill, Commons Amendments in lieu of certain Lords Amendments and Commons reasons for disagreeing to certain other Lords Amendments be now considered.
Moved, That the Commons Amendment to a Lords Amendment, Commons Amendments to words restored to the Bill, Commons Amendments in lieu of certain Lords Amendments and Commons reasons for disagreeing to certain other Lords Amendments be now cons idered.—(Lord Beswick.)
On Question, Motion agreed to.
COMMONS AMENDMENT TO A LORDS AMENDMENT, COMMONS AMENDMENTS TO WORDS RESTORED TO THE BILL, COMMONS AMENDMENTS IN LIEU OF CERTAIN LORDS AMENDMENTS AND COMMONS REASONS FOR DISAGREEING TO CERTAIN OTHER LORDS AMENDMENTS.
[References are to Bill (266) as first printed by the Lords. Commons Amendments are printed in italics.]

LORDS AMENDMENT
[Nos. 1 and 2]
Clause 2, page 2, line 35, leave out ("establishing")
The Commons disagreed to this Amendment for the following Reason:
Because the Amendment would prevent the National Enterprise Board from establishing an industrial undertaking.
Lord BESWICK: I beg to move that this House doth not insist on their Amendment No. 1, to which the Commons have disagreed for the Reason numbered 2. It may be for the convenience of the House to deal at the same time with Lords Amendment No. 7, to which the Commons have disagreed for the Reason numbered 8.
These Amendments are concerned with the establishment of enterprises in this country. It was the purpose of the National Enterprise Board that they should have power to establish such enterprises and the White Paper speci-
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fically said that the Board would be an instrument through which the Government would directly create employment in areas of high unemployment. This was announced at the last Election and was translated directly into the Bill itself and I hope that noble Lords opposite will not seek to reinstate the Amendments.
Moved, That this House doth not insist on their Amendment No. 1, to which the Commons have disagreed for the Reason numbered 2. (Lord Beswick.)
Lord ABERDARE: My Lords, I believe that it is correct to suggest that we should consider Amendments Nos. 1 and 7 together. They both have the same effect, in principle, of allowing or not allowing the National Enterprise Board to set up companies of its own. This is a matter which we have discussed at great length both in considering this Bill during its various stages and also in dealing with the Scottish and Welsh Development Agency Bills when the same point arose. In each case, we have argued that the National Enterprise Board or the relevant Agency should not have this power to establish companies in competition with private sector companies. We believe it to be wrong in principle and we certainly do not think that it will contribute to building up that industrial confidence which we think so necessary. I believe that here is a clear-cut difference of opinion between my Party and the Party opposite. Nevertheless, I shall not be advising my noble friends to insist on these Amendments. The Government are clearly determined on them and I can only say that a great deal will depend on the wisdom with which the Board and the Secretary of State exercise the very considerable powers bestowed on them by the Bill.
May I, however, make one general comment? It has been said by members of the Party opposite both in this House and elsewhere that this House is a revising Chamber and that we have been extending our role and putting forward and carrying Amendments such as the present Amendment that are, in their view, beyond what we should be doing. It is true that we are a revising Chamber and I believe that we do a lot of very useful work in revising Bills when we are given the time to do so. However,

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under the present Constitution, the fact is that we are also a House of Parliament, though with restricted powers. Were our function simply one of textual revision, I suggest that that function could equally well be performed by a body of civil servants. I cannot imagine that so many of your Lordships would come so often and be so loyal in your attendance for such a limited role. Therefore, while we remain one of the two Houses of Parliament, we have to carry out the duties in such a manner as seems right to us within our strictly limited powers. That is what we have attempted to do in the Amendments which we put forward in the present Bill. My noble friend Lord Carrington put our position with his usual clarity when he was speaking on the Housing Finance (Special Provisions) Bill on 23rd October last.
We try to carry out our duties responsibly as an Opposition, and in this case we sought to amend the Bill in such a way that those who are running British industry might have found new confidence in the Government's intentions. Of course, we accept that the Commons have disagreed with our Amendments, albeit with a small majority in the cases of the Amendments which we are considering at the moment; that is, with majorities of twelve and seven respectively. But we do not accept in any way that we were not right to make those Amendments in the first place.
Baroness WOOTTON of ABINGER: My Lords, I regard the Bill as the most important piece of legislation that the Government have put forward in this Session and, while the noble Lord, Lord Aberdare, is, constitutionally, undoubtedly right to say that this House is entitled to make Amendments which amount to much more than textual revisions, I am very glad to hear that he is not advising the House to stick to the present Amendments. The great importance of the Bill is that it lays the foundations of what may well be a new order in British industry, whereas, if the Amendments are insisted upon, the effect would not merely be to revise the Bill; it would be virtually to emasculate it. If only for that reason and because there is a real division of principle, I hold very strongly that we should not insist on these Amendments, and I am glad to
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hear what the noble Lord, Lord Aberdare, has said.
Lord BESWICK: My Lords, in rising again, it is not my purpose to follow the noble Lord, Lord Aberdare, into the constitutional argument, except to say that I have great sympathy with him when he says that all those experienced and quite busy people very often come along here, sometimes to discuss matters other than the purely textual revision of a Bill. But the fact is that the results of the Division were not a reflection of the merits of the Amendment but of the unbalanced character of this House. While we have a built-in majority here it is quite impossible to accept the verdicts of the Division Lobby when we come to questions of principle like this. Like my noble friend Lady Wootton of Abinger I am happy that the noble Lord is not pressing this particular Amendment.
Lord DRUMALBYN: My Lords, I should like to say a word on this matter. Obviously, I agree with my noble friend Lord Aberdare that this is the right course at present, but one must remember that the balance of voting in another place does not involve an absolute majority for the Government and is not based on an absolute majority of the votes in the country. Therefore it falls to us to look very carefully at legislation which is making changes that are proclaimed to be fundamental and long-lasting. I think that we have been fulfilling our task in this and I hope that we shall continue to do so.
There is perhaps a special plea in the case of this Amendment because it has been made fairly plain that no far-reaching changes in respect of setting up new companies are expected in the near future. Quite clearly, the NEB will have a great deal on its hands without doing that. The reason why we have been paying so much attention to this is simply because we believe that this Bill is making extremely far-reaching changes, which, if allowed to remain on the Statute Book for ever, will have great and, we believe, prejudicial results for the economy. However, as my noble friend said, we have done our duty here. We have drawn attention to the dangers and we will leave it at that.
On Question, Motion agreed to.
3.52 p.m.

LORDS AMENDMENT
[Nos. 3 and 4]
Page 2, line 40, leave out paragraph (c).
The Commons disagreed to this Amendment for the following Reason:
Because it is wrong that the National Enterprise Board should be prevented from extending public ownership into profitable areas of manufacturing industry.
Lord BESWICK: My Lords, I beg to move that this House doth not insist on their Amendment No. 3 to which the Commons have disagreed for their Reason numbered 4. This Amendment would have deleted the National Enterprise Board's function of extending public ownership into profitable areas of manufacturing industry. I think it can be said that we have taken to heart what has been said by noble Lords opposite that it would be good occasionally for publicly-owned industries to be able to point to their profitable experience; and because we take that to heart we think it would be quite wrong to prevent the National Enterprise Board from operating in a profitable area.
Moved, That this House doth not insist on their Amendment No. 3 to which the Commons have disagreed for the Reason numbered 4.—(Lord Beswick.)
Lord ABERDARE: My Lords, again this is a matter in which we are in total disagreement in principle. Although we are the first to wish to see national enterprises making profits and the first to encourage private enterprise to make profits, we do not think it right that if private companies are making profits they should then be liable to be taken over by the National Enterprise Board. That is the matter in a nutshell. As I said on the first Amendment, we feel that we were right to make this Amendment and to make our position perfectly clear. We very much regret that our Amendment has not been accepted, but in the circumstances once again I am not advising my noble friends to insist upon it.
Lord DRUMALBYN: My Lords, it is of course one thing to extend public ownership into profitable areas of manufacturing industry on a partnership basis; it is quite another thing to take over 100 per cent. of the shareholding, as was suggested might well be done. If the
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noble Lord will read what Mr. Varley said in another place be will see that this is specifically what he suggested. He gave reasons that it might be desirable to do that in order to locate industry in particular parts of the country where private industry might not itself wish to do so. But we should make it very clear that, while we ourselves have not been opposed to the conception of joint enterprises, we should look with very great disfavour on the taking over of an industry which was doing well from the profit point of view, and taking it over lock, stock and barrel.
Lord LEATHERLAND: My Lords, we have to take a broad view of this whole question. In the past those industries which have been taken over by the State have almost invariably been industries that were losing money, but were socially desirable for the nation on the other side of the consideration. I do not see that it is any more wrong for the State to take over an industry that is prospering and showing profits than it is for Slater, Walker to take over an industry that is prospering and making profits. To my own certain knowledge, a number of companies which were prospering and which were happy were taken over by Slater, Walker and have had a most undesirable time ever since.
I think that we are talking sense when we say that it is not right in the interests of the nation that the mere fact that a company is prosperous should prevent it or debar it from being taken over in the national interest.
On Question, Motion agreed to.
3.56 p.m.

LORDS AMENDMENT
[Nos. 5 and 6]
Page 2, line 42, leave out ("industrial democracy in") and insert ("good industrial relations and the involvement of employees in the affairs of")
The Commons disagreed to this Amendment for the following Reason:
Because the Amendment would prevent the promotion of industrial democracy by the National Enterprise Board.
Lord BESWICK: My Lords, I beg to move that this House doth not insist on their Amendment No. 5 to which the Commons have disagreed for their Reason numbered 6. This Amendment was rejected on a Division in the other place.

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It would have left out the words "industrial democracy". Reverting to what the noble Lord, Lord Aberdare, said at the beginning about the purposes of this House, I wish to point out to him that there is another purpose to which he did not refer; namely, the purpose of discussing, debating, amplifying and possibly clarifying, a concept; and I believe that a very useful purpose can be served there. Although in this case I invite the House to reinstate the words "industrial democracy", I cannot say that everyone is absolutely agreed as to what we mean by this concept: what it means; how it will work out, or how it will be achieved. This is a process which will go on. In the meantime, I hope that we can agree that the words should be included in the Bill.
Moved, That this House doth not insist on their Amendment No. 5 to which the Commons have disagreed for the Reason numbered 6.—(Lord Beswick.)
Lord ABERDARE: My Lords, I am grateful to the noble Lord for what he said at the end of his few remarks. The fact is that we are not in the least opposed to the principle of participation in industry. All we were seeking to do in this instance was to get rather more definite words into the Bill. Throughout the discussions we have had—covering not only this Bill but also those Bills dealing with the Scottish and Welsh Development Agencies—we have pointed out that we are considering a legal document which will become an Act of Parliament and will be subject to interpretation in the courts. We did not think that it was good legislation to put in such a vague term as "industrial democracy". The noble Lord, Lord Taylor of Gryfe, was the first person in this House to draw attention to the vagueness of the term and to the fact that it could be interpreted as leading to workers' control. Some of the debates that took place on this matter in another place made it quite clear that a number of members of the Party opposite meant just that by these words. We foresaw that danger, and that is why, in our Amendment, we sought to tighten up the definition.
I am sorry that we have not had more co-operation from the Government in trying to find a fuller and better description of what I think we are all desirous of
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achieving. I am also sorry that the noble Lord, Lord Cooper of Stockton Heath, did not come into our debates, because I have since discovered that he is the deputy chairman of the Industrial Participation Association. I am astonished to find the amount already going on in industry within the field of participation. I believe it would be so much better if we could build on all that experience which already exists, and be sure that in interpreting what is now in the Bill we work with the maximum flexibility.
It will go a long way if the noble Lord is able to assure us that in interpreting this power to encourage industrial democracy the National Enterprise Board will work with maximum flexibility and will allow different firms to develop and to build upon what they have already done within their own firms along the way that suits them best, but in the general direction of what we all, I think, desire.
Lord SHINWELL: My Lords, is my noble friend aware that there are some submissions made by the other side with which some of us—I can speak only for myself—have great sympathy, and that this is one of them? This subject of industrial democracy has been a subject of controversy for many long years. Indeed, even before the First World War it was debated, but then it was described as Syndicalism—workers'control; the workers not only participating in industry, whether privately-owned or nationally-owned, but exercising complete control. I have never at any time accepted that interpretation; neither do I now. I understand what participation means, and I think it is a very desirable objective. But if "industrial democracy" is interpreted by some people as meaning the exercise of control exclusively by those engaged in manual production, I reject it.
There is another reason why I object to it; that is, that if there is to be participation in industry by which it might be interpreted that the workers should exercise some measure of control, should be consulted, then obviously the consumer element in the country is also entitled to be consulted and to exercise a measure of control. Perhaps I could explain the matter in another form. When we speak of Socialism, what do we really mean? In so far as it relates to public ownership, we mean that the workers should exercise

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their discretion, should exercise some measure of control and should be fully informed about transactions undertaken by those in authority, but we also mean that the consumers should be consulted. That is what we mean, not only the producers but the consumers. That is my interpretation of industrial democracy; it sometimes happens that when Members of your Lordships' House on the Opposition Benches express an opinion which evokes a certain measure of sympathy, if not among all my colleagues at any rate among some of them, and particularly myself, then it makes it very difficult for us to decide what course of action to adopt.
I want to say only one further word. Of course, this is a revising assembly. It is also a forum for expressing opinion. That may be an opinion that is wholly, or at any rate partially, accepted by the public. There is no reason why it should not be expressed; nor is there any reason why the Government should not take note of those opinions when they are expressed, whether in this Assembly or outside. I say this only in order to suggest to my noble friend, for whom I have a great regard and who has a considerable understanding of these problems, that it must not always be assumed (I put it this way) that when the other side propose an Amendment affecting some piece of legislation it is not also accepted by some Members of your Lordships' House on the Government side.
Viscount AMORY: My Lords, I was interested in what the noble Lord, Lord Shinwell, said. It is quite true that over the past 60 years a great deal of thought has been put into this question of a move towards more industrial democracy. I have a great deal of sympathy with the aim, but one has to be very careful, and therefore experiments in this direction arc to be encouraged and welcomed to see what can be learned from them. There are dangers that one may think that just by the adoption of those two words, "industrial democracy", many difficulties can be smoothed away. If they can, well and good, but the mere adoption of a policy called industrial democracy will not solve many of these problems. I am very much in favour, as I have said, of experimentation and of seeing whether we can gradually work towards some advance
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in this field; but the criterion must be that, at the end of the day, or when the policies have been worked out, the concern in question should be in effect more efficient and not less efficient than it was to start with.
Baroness WOOTTON of AB1NGER: My Lords, while I have much sympathy with what my noble friend Lord Shinwell has said, I still feel that the words, "industrial democracy", though vague, can be potentially developed into something which is new; and the words which they replace could beread as very restrictive. Everybody wants good industrial relations; and as for the involvement of employees in the affairs of the firms by which they are employed, they could hardly be more involved in one sense than they arc at present, because their livelihood depends upon the affairs of the firms by which they are employed. Therefore, we are proposing to substitute a term which may take us forward for a phrase which is really static and does not mean anything new.
Baroness GAITSKELL: My Lords, I should like to support my noble friend Lord Shinwell, and particularly the point he has made about the consumers, because how can the phrase, "good industrial relations" be applied to the consumers? It cannot be applied to the consumers, so the new phrase which we have here is obviously much more pertinent and much more appropriate.
Lord DRUMALBYN: My Lords, may I again add a brief word here? The reason why I, at any rate, originally put down this Amendment concerning industrial democracy was because, as soon as I got to that point in the Bill, I immediately looked for a definition of it, as one generally does if one has read a Bill or two before, and of course I found none. The noble Baroness, Lady Wootton, may be right. This is what I think is called, grammatically, a proleptic use of the word. In other words, it is looking forward and does not discuss a concept which is fully formulated at the present time. In that sense I would not disagree with the noble Baroness. I would hope, as she would, that the development of industrial democracy would go the way that we want to see it go, and I think we would have a good deal in common as to the way in which we do want

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to see it go. For my part (I speak entirely for myself here) my objective would be that, so far as industrial democracy is concerned, it should be mainly on a unit basis—that is, it should be based on the firm or even the plant—and that the objectives should be that, while there are obviously distinctive interests within that firm, the firm itself should stand as one. You cannot have industrial democracy, you cannot have any kind of democracy, if you have several Governments at the same time. This must be the objective: that the firm should reach a common policy through participation and then stand as one vis-à-vis the Government and everybody else.
Lord BESWICK: My Lords, I had not expected that I should be proven correct quite so completely and so soon when I said that the debate would go on, but I am certain that when the Bill goes on the Statute Book there will be a continuing discussion about this concept, problem or possibility. My noble friend Lord Shinwell asked me to accept that there may sometimes be an element of truth in what is said by noble Lords opposite. I hope that it becomes clear that I conceived that to be possible in the course of the debates we have had here. Of course, I accept it. The noble Lord, Lord Aberdare, asked whether I could give him some assurance about the National Enterprise Board and its attitude towards industrial democracy. I shall be most surprised and disappointed if the NEB attempt to impose some rigid pattern on all those companies for which it has responsibility. It will depend entirely on the human beings who happen to work within the particular company or industry.
On Question, Motion agreed to.

LORDS AMENDMENT
[Nos. 7 and 8]
Clause 2, page 3, line 11, at end insert ("when this would be incidental to the reorganisation of any of their subsidiaries or in the course of the exercise by the Board of powers derived from the provisions of section 3 of this Act or in pursuance of the operation of a partnership made in accordance with paragraph (c) of this subsection").
The Commons disagreed to this Amendment for the following Reason:
Because the power of the National Enterprise Board to form bodies corporate should not be fettered.
Lord BESWICK: My Lords, we dealt with this on Amendment No. 1. 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.
Moved, That this House doth not insist on their Amendment No. 7 to which the Commons have disagreed for the Reason numbered 8.—(Lord Beswick)
On Question, Motion agreed to.

LORDS AMENDMENTS
[Nos. 9 to 12]
Clause 9, page 9, line 11, at beginning insert ("Subject to subsection (1A) of this section")
Page 9, line 13, after ("or") insert ("in the circumstances described in subsection (IA) of this section")
Page 9, line 22, at end insert—
("(1A) The circumstances referred to in subsection (1) of this section are that the Board has applied to the Secretary of State for a general authority for one of its subsidiaries to make a series of acquisitions of the share capital of specified bodies corporate, or bodies corporate of a specified class, some or all of which acquisitions would entitle the Board to exercise or control the exercise of 30 per cent. or more of the votes at any general meeting of the respective bodies corporate; provided that in the case of no such acquisition shall the value of the consideration exceed £250,000, nor would the total value in the series of acquisitions exceed £10.000,000.").
The Commons disagreed to these Amendments for the following Reason:
Because the restriction proposed by the Amendments on the acquisition of the share capital of bodies corporate by the National Enterprise Board or their subsidiaries is inappropriate.
Lord BESWICK: My Lords, I beg to move that this House doth not insist on their Amendments Nos. 9 to 11 to which the Commons have disagreed for the Reason numbered 12.
My Lords, this was a matter that we discussed at considerable length at various stages of the Bill. I hope that I dealt with the arguments fairly and I am not certain that I can add anything to what I then said. I am bound to say that I was a little surprised when the Opposition in another place did not press this Amendment to a Division. I hope it will not be thought necessary to press it here.
Moved, That this House doth not insist on their Amendments Nos. 9 to

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11 to which the Commons have disagreed for the Reason numbered 12.—(Lord Beswick.)
Lord DRUMALBYN: My Lords, I am grateful for what the noble Lord has said and also for what he has not said. In the other place their Amendments were subject to the guillotine; the whole proceedings were subject to the guillotine. Perhaps the Commons made out a list of their own priorities. They had a lot of Divisions in a very short time; there was an exceptionally long debate on Amendment No. 1 and the associated Amendments and perhaps it is not surprising that they did not pay much attention to this Amendment particularly as it resulted—and this may have confused the issue a little—from Amendments made to the original Government Bill in another place.
I find myself bound to disagree with the Commons Reason for disagreeing with us simply because I do not believe that these Amendments do impose a restriction. All that they do is to say that before you do something you must get the consent of the Secretary of State. This is accepted in principle. All that we were arguing about was: in what cases are you to get the consent? We were not arguing about the principle. We were arguing that to make Parliamentary control adequate in this case some Amendment of this kind was required. I said at the time that I was not at all certain that the Amendment as I drafted it was even viable. I did not expect everyone to agree with the figures that I put in the Amendment. All the same, I must express my disappointment that this matter was not considered further in another place; but having done that I can only express my hope that the Secretary of State will operate this clause in the kind of way that the Amendment indicates. I do not expect that I shall be very far wrong.
Viscount AMORY: My Lords, I do not want to delay your Lordships, but I should like to say to the noble Baroness, Lady Wootton, that while I share many of her enthusiasms on other matters I do not share her optimism about the future of the NEB. I can easily understand why Socialists are keen on the NEB for doctrinal reasons as an instru-
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ment for the extension of public ownership. I do not want to be a Jeremiah, but I have a personal horror of conglomerates. Their record is a dismal one. I should like to prophesy that the NEB is going to find itself in a few years with as amazing a rag bag of assets as one could possibly imagine or visualise. Without being too much of a Jeremiah, I should like to prophesy that the NEB, within a short number of years, will require radical reorganisation.
Baroness WOOTTON of ABINGER: My Lords, I should not expect the noble Viscount, Lord Amory, to agree with me on this for there is obviously a profound difference in principle. But I do notice the modern tendency that when there is a disagreement one refers always to one's opponent's arguments as doctrinal. The ground of my argument, which is implicit in what I have already said, is practical and not doctrinal. I think that it is a simple way of dismissing something to refer to it as doctrinaire or doctrinal. My reason is not doctrinal.
Viscount AMORY: My Lords, may I invite the noble Baroness to call my remarks doctrinal, too; and then we will be quits.
Lord BESWICK: My Lords, may I save time in the future by reminding noble Lords that we have a right to speak only once at this stage.
On Question, Motion agreed to.

LORDS AMENDMENT
[Nos. and 14]
Clause 14, page 15, line 31, leave out from ("Parliament") to end of line 38.
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment would result in all compensation under a compensation order having to be paid out of moneys provided by Parliament, and the Commons do not offer any further Reason trusting that this Reason may be deemed sufficient.
Lord BESWICK: I beg to move that this House doth not insist on their Amendment No. 13 to which the Commons have disagreed for the Reason numbered 14. I quote this Reason in full because it is of some interest. It is:
"Because the said Amendment would result in all compensation under a compensation order having to be paid out of moneys provided by Parliament, and the Commons do not

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offer any further Reason trusting that this Reason may he deemed sufficient."
My Lords, I understand that the somewhat arrogant terms of this Reason rest upon the question of privilege. I suppose that we are not intending to question that doctrine of privilege and I hope it will he considered satisfactory.
Moved, That the House doth not insist on their Amendment No. 13 to which the Commons have disagreed for the Reason numbered 14.—(Lord Beswick.)
On Question, Motion agreed to.

LORDS AMENDMENT
[Nos. 15 and 16]
Clause 16, page 16, line 26, leave out ("may he not") and insert ("shallf not be").
The Commons disagreed to this Amendment for the following Reason:
Because the said Amendment would remove the discretion of the Secretary of State in respect of grants under Part I of the Industry Act 1972, and the Commons do not offer any further Reason trusting that this Reason may be deemed sufficient.
Lord BESWICK: My Lords, I beg to move that this House doth not insist on their Amendment No. 15 to which the Commons have disagreed for the Reason numbered 16, which is similar to the Reason which T quoted on the last Amendment, because it is considered by the authorities there to be a privilege Amendment.
Moved, That this House doth not insist on their Amendment No. 15 to which the Commons have disagreed for the Reason numbered 16.—(Lord Beswick.)
On Question, Motion agreed to.

LORDS AMENDMENTS
[Nos. 17 to 24]
Clause 22, page 19, line 34, leave out from ("and") to ("with") in line 35 and insert ("employee representatives")
Page 20, line 9, at end insert—
(""employee representative" means a person who is employed by the company or companies concerned and who is elected to represent employees, or any group or class of employees, of the company or companies concerned.")
Page 20, line 19, leave out from second ("to") to ("he") in line 20 and insert ("employee representatives").
Page 20, line 23, leave out from ("give") to ("a") on line 24 and insert ("employee representatives").
Page 20, line 29, leave out from first ("of") to ('to") in line 30 and insert ("employee representatives")
Page 20, line 45, leave out from second (" to") to end of line 46 and insert (" employee representatives")
In the Title. line 13, leave out ("trade unions") and insert ("employee representatives")
The Commons disagreed to these Amendments for the following Reason:
Because trade union representatives should receive information on behalf of employees.

LORDS AMENDMENT
[Nos. 25 to 55]
Page 21, line 2, leave out from ("and") to ("an") in line 3 and insert ("employee representatives")
The Commons disagreed to this Amendment hut proposed the following amendments in lieu:
Page 21, line 2, leave out ('a") and insert ("the authorised").
After Clause 22, insert the following new clause—
Meaning of representative and authorised representative.
(" —(1)In this Part of this Act—
" authorised representative" means a representative of a relevant trade union to whom the company or companies concerned give—

(a) a notice of service of a preliminary notice, or

(b) a notice under subsection (2) below; and

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

(a) ceases to be a representative of the relevant trade union of which he is the authorised representative, or

(b) gives the company or companies concerned notice that he desires to be discharged from acting as authorised representative of that union, or

(c) ceases for any other reason to be available to act as that union's authorised representative,

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

(i) to give another representative of the relevant trade union notice that he is to be the authorised representative of that union, and

(ii) to give the Minister a notice requesting him to insert the name of the new representative in the list of authorised representatives in place of that of the old representative.")

LORDS AMENDMENT
Clause 23, page 22, line 8, leave out from ("to") to end of line and insert ("employee representatives")
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 22, line 8, leave out ("a") and insert ("the authorized").

LORDS AMENDMENT
Clause 24, page 22, line 22, leave out from second ("to") to ("within") in line 23 and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 22, line 22, leave out ("a") and insert ("the authorised").

LORDS AMENDMENT
Page 22, line 28, leave out from ("on") to end of line 29 and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 22, line 28, leave out (" the representative of each relevant trade union") and insert ("each such representative").

LORDS AMENDMENT
Page 23, line 14, leave out from ("to") to end of line and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 23, line 14, leave out ("a") and insert ("the authorised").

LORDS AMENDMENT
Page 23, line 20, leave out ("representative of each relevant trade union") and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 23, line 20, leave out ("the representative of each relevant trade union") and insert ("authorised representatives").

LORDS AMENDMENT
Page 23, line 25, leave out (" representatives of relevant trade unions") and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 23, line 25, leave out ("representatives of relevant trade unions") and insert ("authorised representatives").

LORDS AMENDMENT
Clause 25, page 24, line 1, leave out from ("by") to ("where") and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 24, line 1, after ("the") insert ("authorised").

LORDS AMENDMENT
Page 24, line 3, leave out from second ("to") to ("for") in line 4 and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 24, line 3, leave out ("representatives of relevant trade unions") and insert ("authorised representatives").

LORDS AMENDMENT
Page 24, line 7, leave out from ("to") to ("for") in line 8 and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 24, line 7, after ("to") insert ("authorised").

LORDS AMENDMENT
Page 24, line 11, leave out ("each relevant trade union's representative") and insert ("any employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 24, line 11, after ("unions")insert ("authorised").

LORDS AMENDMENT
Page 25, line 35, leave out from ("and") to ("at") and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 24, line 35, after (" unions") insert ("authorised").

LORDS AMENDMENT
Page 24, line 41, leave out from second ("to") to end of line 42 and insert (" employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 24, line 41, leave out ("a") and insert ("the authorised").

LORDS AMENDMENT
Clause 26, page 26, line 3, leave out from ("to") to ("under") in line 4 and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 26, line 3, leave out ("the representative of each relevant trade union") and insert ("authorised representatives").

LORDS AMENDMENT
Schedule 5, page 44, line 7, leave out from ("by") to ("that") and insert ("employee representatives").
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 44, line 7, after ("by") insert ("the authorised representative of").
Lord BESWICK: My Lords, I wonder whether I might suggest for the convenience of the House that I take Amendments Nos. 17 to 23 and Amendments Nos. 24, 25, 28, 30, 32, 34, 36, 38, 40, 42, 44, 46, 48, 50, 52 and 54 together for the Commons' Reason numbered 24. It might be noted that the Commons have moved Amendments in lieu of Amendments Nos. 26, 27, 29, 31, 33, 35, 37, 39, 41, 43, 45, 47, 49, 51, 53 and 55. All these Amendments cover the one area of discussion.
The simple point which is at issue in all these Amendments we have debated on several occasions. I think we debated it more extensively than any other issue in the Bill. As it is two or three months since we went over it, may I just say what is involved. It reflects the existing reality of industrial relations in almost every large company. The very large proportion of workers in such companies are, by their choice, represented by trade unions. This idea is strongly based and it is an idea which I hope we shall not seek to suppress. I am certain this is a matter which will continue to be discussed both inside and outside Parliament, and I shall follow the discussions myself with great interest.
It ought to be realised that the consequence of the Amendment which we are seeking to change would be the exclusion of trade union representatives. It is unfortunate that noble Lords opposite wish to define the persons to whom consultation should be afforded simply as employee representatives. I pointed out on Third Reading that that would rule out the possibility of a professional union representative. The noble Lord, Lord Aberdare, said today, and on a previous occasion, that we do not want to have rigidity in our approach to industrial relations. Throughout these Amendments, noble Lords were enforcing a rigidity which I do not think is intended. On occasions, it will be the case that the representative to whom the employer will extend consultation will be an employee, but on occasions it will be a professional trade union representative. I am sure it is right that this should be so. I am sure that we should have this degree of flexibility. It is a simple issue that is involved and I hope that on reflection noble Lords will accept the Motion I am moving.
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May I say briefly that the Commons Amendments in lieu of our Amendments 25 onwards, which we are also discussing, restore to the Bill with very few minor drafting changes the clariticatory Amendments which we made to the Bill at Committee stage, and which this House subsequently deleted as part of the sweeping changes made at Report stage when it decided in favour of "all employees". With trivial exceptions, therefore, the words "in lieu" are words already approved by this House. I beg to move.
Moved, That this House doth not insist on their Amendments Nos. 17 to 54 en bloc to which the Commons have disagreed, and that this House doth agree with the Commons in their Amendments Nos. 24 to 55 in lieu thereof en bloc.—(Lord Beswiick.)
4.22 p.m.
Lord CAMPBELL of CROY: My Lords, I think it would be very convenient for your Lordships' House to consider this large number of items together. We on this Bench regret that the Government should have found it necessary to revert to what we believe is a more restrictive version. The noble Lord, Lord Beswick, spoke about rigidity and I think there is an argument between us as to which is the more rigid version which would be in the Bill. The version which the Government are again commending to us is that there should be representatives taking part in the disclosure of information system who would be trade unionists, and that the representatives would be restricted to trade unionists. They would be the only people who could receive information to be disclosed for the purposes of this Bill, in a system where compulsion is being introduced to disclose certain information.
The Government's version takes no account of the large number of people working in industry who are not members of trade unions. The Amendment which your Lordships' House proposed—that is to say, that there should be employee representatives rather than trade union representatives—did not exclude trade unionists. It provided for representatives of employees, whether or not they were trade unionists. As the noble Lord, Lord Beswick, indicated, our Amendment excluded people who were not employees of the manufacturing company concerned.

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The noble Lord objected to the fact that a full-time trade union official who was not employed by the company could not be a representative for the purposes of this Bill, but I must explain that there is a very good reason for that where this Bill is concerned.
I would remind your Lordships that disclosure of information in this Bill is for special purposes set out in Clause 22,
"to form or to further national economic policies, or needed for consultations …on the outlook for a particular sector of manufacturing industry …".
There are other provisions elsewhere, not in this Bill, on the general flow of information within companies for collective bargaining and other purposes, notably in the Employment Protection Bill which is still under consideration in Parliament.
In this Bill we are not dealing with the general provision of information to trade unions for collective bargaining; we are dealing with the limited purposes which I have just quoted from the Bill. There is a good reason why it is not appropriate in this Bill for a full-time trade union representative, who is not an employee of the company, to be one of the special representatives. Where the Industry Bill is concerned, if a full-time trade union representative who is not an employee of the company were engaged, the following situation could arise.
Under the compulsory disclosure system, that official would learn the plans of one company which was in competition with another in which he also had union members. He could conclude that the plans of one company were going to damage the interests of the other—perhaps cause redundancies. Will the noble Lord the Minister take this opportunity of telling us where the union official's first allegiance should lie? He has had access to the plans of two or more companies in the same field. He is a man of great personal integrity. If that information is to be used by him in furthering what he sees to be the best interests of all the trade unionists concerned, should he be supporting the plans of the company employing the largest number of members of the union? If so, it would mean that the first company, which might be a small one, would suffer. Will the Government tell us the answer to this question?
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There is no reflection on the official of a trade union who is placed in this difficult position. The plans of a company to be disclosed compulsorily under this Bill are a matter for the employees of that company. Indeed, their interests could be endangered if the company was in competition with a much larger company. The interests of the greater number of union members in the larger company may be thought by a full-time union official to be his legitimate top priority. We have had no reply from the Government on this point. There was a reason as it was put very fully in another place, but the guillotine fell at midnight before the Minister even had time to start his reply. There is this last opportunity for the Minister to explain, if he can, how this union official is to operate in those circumstances, and whether the employees of the first small company will find their interests suffer, because, legitimately, the full-time official trade union representative feels that the interests which he has to defend are those of the larger number of members of his union. I am not suggesting to my noble friends that we should insist upon our own Amendment, but I think that the debate on this whole series of Amendments gives the Minister an opportunity to explain that point, which is his main objection to the original version and which raises difficulties under this Bill.
Lord DOUGLASS of CLEVELAND: My Lords, I do not think it is fair of the Opposition to ask a question which they know is incapable of being answered. Every case will depend on its merits. You will have to take into consideration whether a small firm supplies goods to a large firm where thousands might be thrown out of work if the small firm closed down. You will have to consider whether or not one firm is getting grants for certain purposes; and a host of other matters will have to be considered. When I was in the trade union movement we had Neddies working from the top. The top body had to solve many problems of this kind, and it got its little Neddies to do that.
They are all composed of trade unionists because there could not possibly be an organisation throughout the country with an apex but with no communications going down to the bottom. The very

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men the Opposition are talking about at the present time have to convey the opinions of Neddy—and that is not only trade union opinions, but those of the employers and Government as well as the trade unions—and the only line of communication from the top to the bottom is the trade union movement. If that is the situation when dealing with matters of that particular character, how can that situation be avoided when you are dealing with information? It is only on the information one gets from the companies that decisions are made anywhere—the bottom, the middle or the top.
I do not want to spend a long time on this and make a Second Reading speech, but the argument is clear: the only means of communication to the bottom from the top, so far as Government machinery is concerned, is through the trade union movement. The full-time trade union officials have been a tower of strength in dealing with the difficulties which have confronted the country in the past decade in respect of getting productivity where problems have arisen because of modern conditions. I think that is a full and sufficient answer to the Opposition as to the duties and responsibilities of the full-time officials of the trade unions.
Lord WIGODER: My Lords, what disturbs my noble friends on these Benches about the Government's proposal is that the information to be disclosed is necessarily of a highly confidential nature. The unauthorised disclosure of that information may do untold harm to the company concerned, and therefore it is likely to be less dangerous that such information should be disclosed to someone who is an employee of the company and has a primary loyalty to the company, rather than to somebody who may not be employed by the company at all. There is no intention whatever of cutting out the disclosure of information to trade unionists. It is anticipated under the definition clause, which was included, that employee representatives would, in almost every case, be trade unionists. I would not want to take the matter any further, other than to ask the noble Lord, Lord Beswick, whether he would agree that there is a potential danger here and, therefore, the development of the system of disclosure of confidential information outlined in the Government's proposals ought
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to be scrutinised with the greatest care when they begin to take effect.
Lord LEATHER LAND: My Lords, the noble Lord, Lord Campbell of Croy, seemed on the surface to make out a logical and eloquent case on the interpretation he wants to put on this legislation. I am wondering whether he has overlooked another factor; that is, whether his proposal would do more harm than good. He wishes the employer to disclose this information—which may be of a very confidential nature—to a member of his own staff and not to an outside full-time trade union official. Let us see how that will operate. Imagine that I am an employee of the noble Lord. He regards me as one of the employees' representatives and discloses some information to me. I, being a man of honour —and let us say I am a man of honour for the purposes of the argument—regard that information as given to me in confidence. But perhaps I am not a man of honour. What do I do? I run away to the full-time district trade union official (who is not bound by that pledge of confidence which is more or less being forced upon me) and that full time trade union official has every right to use the open information which has been given to him by his members when he is arguing with a rival firm. The theory of the noble Lord, Lord Campbell of Croy, as to how this might work out may do more harm than good and cause considerable mischief.
Lord DRUMALBYN: My Lords, may I ask one question? I am not sure whether we are discussing Amendment No. 27 at the same time as these other Amendments, because this is a new clause and defines what "authorised representative" means and what "representative" means. On two occasions the word "representative" is used unqualified by the word "authorised representative". The Amendment says:
" representative' means an official or other person who is authorised by a relevant trade union to carry on negotiations about one or more of the matters specified in section 29(1) of the Trade Union and Labour Relations Act 1974."
I wonder whether this is too general. Am I not right in thinking that there is obviously not only one person who would fall within that category regarding each

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trade union? I hope I am right in thinking that. There may easily be a local trade union representative and a person, or one or more persons within the company, who are authorised to negotiate. I may be wrong; there may be only one person authorised. In that case, the word "a" ought to be "the" if this is the general rule. It is an important question in its effect, because as the Bill stands the employer is given a choice as to whom he passes this information. It says "a", which means he has a choice; it does not say "the". Obviously, this choice will he exercised in consultation with the trade union, but at what level I know not.
My information is that different employers take different views on this matter. I came into this issue because I thought it desirable to make certain that there was representation in every firm concerned; yet it seems that in some cases there maybe no representation at all and everyone employed should be covered by some representative. This is obviously not going to be so now except in a totally closed shop with no conscience at all—I beg your pardon, no religious beliefs at all. I hope I may be forgiven for that levity; I put it in an extreme form.
This matter is important, because I foresee the possibility of difficulty in the employee nominating the particular trade union. It may be there are rivalries within the trade union. There will be difficulties involved. If the wrong person is nominated, there will be trouble. I do not know whether the noble Lord can answer that point; it is one which has been worrrying me all along.
4.39 p.m.
Lord BESWICK: My Lords, with permission, I will endeavour to answer some of the questions which have been put to me. May I say to the noble Lord, Lord Drumalbyn, that we are dealing with Amendment No. 27. Regarding highly confidential information which the noble Lord, Lord Wigoder, thinks it would be a mistake to give to a trade union representative or official, we are in danger of creating divisions between us which are not really there. There is a good deal of unnecessary apprehension here. If the information is highly confidential, the Minister will not require it to
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be given to a trade union official or anyone else. There are ample safeguards in the Bill to cover that point. I suggest that, the noble Lord having conjured up that "bogey", he wipes it out straight away because we cover that in the safeguards in the Bill. Supposing the information was not as highly confidential as that but could, as the noble Lord, Lord Campbell of Croy, said, probably be damaging to one company if it was given by the trade union official to another company. He asked me what were the safeguards against that happening.
Let us be sensible about this. Men in a works who employ—and that is, in effect, what happens—a representative to act for them will expect him to act for them only if he is reliable. I would go so far as to say that all trade union officials of this kind are reliable people. They would certainly not tolerate for one moment having a man speak on their behalf if they thought he was going to go down the road and disclose sensitive information to a competitor and thereby damage their job prospects. Of course, they would watch their own interests in this case.
Lord CAMPBELL of CROY: My Lords, will the noble Lord give way? I am grateful to him, but that was not the point. It was not that the full-time trade union official who was not an employee would disclose the information. It was that if he had this information about one small company's plans, and he also knew the plans of a much larger company and thought that the plans of the first company would damage the second, then in his further work as a trade unionist—it is not a question of disclosure—where does his allegiance lie? Does it lie with the large number of members of his own union? It is not a matter of his disclosing. Of course he would not. I said that he was a man of integrity and would not disclose the information. But, having the information, which is for the purposes of furthering the interests of the people working in the companies, to which one does he give priority?
Lord BESWICK: My Lords, it is not a question of giving priority. It is not a question of conflict, any more than there is a conflict of interest, necessarily, if a lawyer acts on behalf of more than one client. I am asked where allegiance lies.

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It will lie with the people whom he represents for that particular purpose. If there is a clear conflict of interests, then this will be known to the men whom he represents and they will obviously make their own dispositions. Although I can see that theoretically the situation might arise, I feel the noble Lord is imagining a problem which in practice would not arise.
Here again, one criticism made is not that information would be given where the employer does not wish to give it; but I was also criticised because the provisions of the Bill require information to be given to particular types of people, or to the trade union representative. There is nothing in the Bill which would prevent other sections of persons employed in a company from being given information as well. I hope that this answers what the noble Lord, Lord Drumalbyn, says. There is absolutely no inhibition upon a firm to give information to two or three different individuals if they think it will assist the good working of their companies. There is no restriction here. We are only saying that a person who represents a body of people shall have such information as is deemed not to be highly sensitive. That does not mean to say that it is exclusively given to him; it may be given to others. I thought I made it quite clear in other debates that we shall have cases where there are works councils, maybe. I personally know examples where not all the members of works councils are members of trade unions. If the employer wishes to give them the knowledge and plans ahead, he is perfectly entitled so to do and there is nothing in this Bill which even tries to stop him.
Lord DRUMALBYN: My Lords, I wonder whether I might interrupt. I do not think I can have explained the point quite clearly enough. The point is: is there more than one person who answers the description of "a representative of each relevant trade union", on page 20, line 26? That is the person to whom the employer, the manufacturer, is obliged to give notice within 14 days of the date on which the notice is served. Is there more than one, or has the employer a choice? This is the point I was asking. Has the employer a choice between several people all of whom are authorised by a relevant trade union to carry on negotiations about one of the matters specified?
Lord BESWICK: My Lords, I should not like to be dogmatic about this, but how it would work in practice is that the employees in a company, being members of a trade union, appoint, elect or select a shop steward or whoever it may be; or there may be an outside official who speaks for them. He is their authorised representative and is so nominated, and he will be the person who in a particular case would receive the information. The noble Lord may have in mind the fact that in any company there will beneed to give information to more than one person: there will be more than one relevant trade union in many situations and there will therefore be more than one individual to whom information is given. But to any one trade union there must be one authorised representative. That is what the Bill says. We are not going to have a list of authorised representatives from which the employer will say: "I should like so and so, but I do not like B and C." This would be quite wrong. The person to whom he gives information is the person appointed, selected or in some way nominated by the men themselves as the authorised representative.
I wished to comment to the noble Lord, Lord Campbell of Croy, about the point he made dealing with very limited matters as against wages and conditions of employment. I beg of him again—and I remember I raised this point with him during earlier stages of the Bill—not to minimise the area of consultation we envisage here. These are very wide and very important matters—national policy, sectorial policy. These are matters on which the men will wish to have the very best possible advice from their side and are precisely the matters on which they will wish to turn to their professional trade union advisers.
Lord DOUGLASS of CLEVELAND: My Lords, with leave of the House, may I put a question on this point which seems to me extremely valid? We are dealing here with negotiations in which this information is needed. They are carried on in every industry and in every trade union by the branch official working inside the particular works in the first instance. When the negotiations break down the next step is to bring in the full-time official. Is the noble Lord, Lord Campbell of Croy, suggesting that when

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the negotiations are held with the local officials and the management certain information shall be available, but when the negotiations have broken down and the full-time official is brought in to solve the problem, which was not solu-able by the local branch officials, information which was available in the elementary stages of negotiation shall be withheld in the secondary stage of negotiation?
Lord BESWICK: My Lords, I think I had better advise the noble Lord, Lord Campbell of Croy, that he is being asked to breach the Standing Orders of the House. I was able to speak by—
Lord ABERDARE: My Lords, the noble Lord, Lord Douglass, himself was breaching the Orders of the House.
Lord BESWICK: My Lords, I thought I would deal with the matter more effectively this way rather than directly. As the mover of the Motion I am, by leave of the House, able to speak a second time but it is not possible under the Standing Orders for other noble Lords to speak twice. I hope, therefore, that my noble friend, whose attention I did not call to the Standing Orders, will not insist on noble Lords opposite breaking the Rule.
On Question, Motion agreed to.

LORDS AMENDMENT
[Nos 56 to 58]
Clause 24, page 22, line 23, after the words last inserted insert ("and to the members of the company or companies")
Clause 25, page 24, line 42, at end insert ("and to the members of the company or companies concerned")
The Commons disagreed to these Amendments for the following Reasons:
Because it is unnecessary to provide for the furnishing of information to members of companies.
4.49 p.m.
Lord BESWICK: My Lords, I beg to move that the House doth not insist upon their Amendments Nos. 56 and 57 to which the Commons have disagreed for their Reason numbered 58.
Here, again, is a matter which we dealt with at some length. I gave my reasons at the time. I cannot add to what I said then, but if noble Lords feel there are some points which need
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to be clarified I shall be glad to try to do so. I beg to move.
Moved, That this House doth not insist on their Amendments Nos. 56 and 57 to which the Commons have disagreed for the Reason numbered 58.—(Lord Beswick.)
Lord CAMPBELL of CROY: I accept entirely what the noble Lord, Lord Beswick, said just now. In accepting his suggestion that Amendments Nos. 17 to 55 should be taken together I realised that I would be able to speak only once. That is why, considering the importance of the subject, I tried to condense all that I had to say into one fairly short speech. I recognise that it is not helpful to the House if we keep asking for leave to speak a second time. In the course of dealing with these Amendments I shall probably be able to give my view on the point that was raised just now by the noble Lord, Lord Douglass of Cleveland.
An important side effect of the Bill, if it is passed in the form in which it came to this House, is that price-sensitive information, in the Stock Exchange sense of that word, might be passed to a small group of persons. Price-sensitive information is share sensitive information; information about a company which, if it became public, would cause the value of the shares to go up sharply, or else to go down. Therefore, the Amendment which your Lordships' House suggested to another place was not political and was not disturbing the purposes of the Bill. It dealt with a technical point which the Government seemed to have overlooked. The Amendment would not in any way restrict or reduce the disclosure of information. I must make that clear because I believe that one or two noble Lords think that it would mean less disclosure. Its effect is slightly to increase the dissemination of information, not to restrict or to reduce it.
So that there is no misunderstanding of the intention of the Amendment, may I briefly remind your Lordships that it would ensure that the market for a company's shares could not be distorted by one party to a transaction on the Stock Exchange possessing information which was not available to another party to that transaction. That is the aim of the listing agreement which companies quoted on the Stock Exchange have to accept.

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This Bill introduces compulsory disclosure of information to a small group, and that could include share sensitive information. If the information would have the effect of sharply increasing the value of a company's shares, it ought to be made available at the same time to the Stock Exchange information points. That was the effect of the Amendment. It is not enough to say, as Government spokesmen have, that there is nothing to prevent a company's directors from making available the information. They may not want to do so. They may think that the information ought not to be disseminated any further than it has to be if they have resisted disclosure and are being made to disclose information as a result of the system that is built into this Bill. The company's directors could defend not doing so by invoking an Act of Parliament—this Bill—and saying that it overruled the listing agreement.
Also, it is not enough to say that in future this matter will be dealt with in a Companies Bill. Many of us consider that two or three years are likely to elapse before the Government can have enacted a Bill on companies after its passage through both Houses of Parliament. In the meantime they ask what is to regulate the situation. Only a small number of companies would be affected by the Industry Bill but they are important manufacturing companies. I agree entirely with what was said about that by the noble Lord, Lord Beswick, when he dealt with the last group of Amendments. The Amendment of your Lordships' House would be the appropriate and simple way to solve this problem. It appears to be a problem which the Government have not recognised and I think that they must bear the responsibility if there are incidents in the next two or three years.
May I point out that this Bill does not provide for the disclosure of information for the purpose of negotiations. This is the point that the noble Lord, Lord Douglass of Cleveland, had not realised because he kept using the word "negotiations". If he looks at Clause 22 he will see that it is for purpose of consultations about planning the economy and various matters affecting the sectors of certain manufacturing industries. It is for consultations. It is not for negotiations
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on conditions and other matters. These are dealt with separately in other legislation.
I hope that the noble Lord, Lord Beswick, will realise that the question of share sensitive information is a side effect of this Bill. One of my noble friends who has personal experience and knowledge of these matters may also wish to speak on this Amendment. The Amendment that your Lordships put forward would have had no effect by disturbing the purposes of the Bill or restricting any information which would be disclosed under it. It inserted a safeguard merely to ensure that the Stock Exchange markets were not upset unintentionally by the effects of the Bill.
Lord CULLEN of ASHBOURNE: My Lords, as my noble friend has said all that I was going to say and a great deal more, I should like to add only a very short general point. My friends on the Stock Exchange are mystified that this Amendment has not been accepted, for in no way would it have upset any of the intentions of the Bill. Year in and year out the service industries produce a very large surplus for the country known as our "invisible earnings", and every help that the Government are able to give to them—they are certainly not lame ducks but very game ducks—should be given. The rejection of this Amendment appears to be unnecessary. One would like to feel that the Government are fully supporting the City in all that it is trying to do.
Lord DOUGLASS of CLEVELAND: My Lords, may I apologise for having offended the Rules of the House and say quite briefly to the noble Lord, Lord Campbell of Croy, that negotiation and consultation are so intermingled that it is often difficult to differentiate between them. If you are talking about productivity, at the end of the day both sides have an interest, and negotiation becomes intermingled with consultation.
5.8 p.m.
Lord BESWICK: My Lords, the noble Lord, Lord Campbell of Croy, made a very clear statement of the anxieties which he said had been created by this Bill. I think that both the noble Lord, Lord Torrington, and the noble Lord, Lord Cullen of Ashbourne, would probably agree that what has been said by

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the noble Lord, Lord Campbell of Croy, represents very much the contents of the Press release which was issued by the Stock Exchange. We considered very carefully that Press release to find out whether there was any substance in the fears which the Stock Exchange had expressed. We came to the conclusion—I hope honestly and in an informed fashion—that there were no grounds for the kind of fears they were expressing. Probably I ought to explain how we came to those conclusions. The Press release and the noble Lord, Lord Campbell of Croy, make two points. The Press release argued that:
"The Bill introduces a new situation, in that a company may be required by law to divulge to persons not being shareholders information which could be price sensitive".
I think that the noble Lord, Lord Campbell of Croy, said much the same thing. In law it is true that that may be the case, but noble Lords opposite are putting an interpretation on the effect of the Bill which is not justified.
For many years, as the Stock Exchange recognise in their Press release, many enlightened companies have disclosed information on a voluntary basis to trade unions on behalf of their work force. That is agreed, is it not? The only effect of this Bill is to make it possible to require what we all hope will be a small, unenlightened minority to do the same. All we are saying is that those companies which have not followed good practices in the past should come up to the standard of the other good companies. No difficulties were experienced then why should they be experienced now? Why is it a new situation in any sense that the noble Lord is suggesting?
Lord CAMPBELL of CROY: My Lords, if the noble Lord will give way I shall be most grateful to him. It is a new situation, because there is compulsion. In the past, the voluntary system might be said to have operated quite well, and if a company's directors decided that certain information should not be passed on then, it would not be passed on. If they decided that it should be passed on, it would have gone to all the shareholders as well. Under the voluntary system, the kind of information to which the noble Lord is referring would not have been passed on, but
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under the machinery of compulsion they will be forced to pass it on.
Lord BESWICK: My Lords, we are in danger of going back to square one. I have already said that if there is highly sensitive information which could be damaging to the interests of the company—
Lord CAMPBELL of CROY: Not damaging.
Lord BESWICK: What then, my Lords? What are we afraid of? If it is not damaging to the company, what is there to fear?
Lord CAMPBELL of CROY: My Lords, I shall be very glad to answer that. This is information which is good information about the company. One example that comes to mind is where if the information came out the shares would suddenly go up. It is not damaging to the company, but it is damaging to the machinery of transactions on the Stock Exchange, because a small group of people would have the information weeks before it became public.
Lord BESWICK: Let me try to deal with that, my Lords. If it is not damaging, there would seem to be no reason why it should not be given. The noble Lord is trying to construe an increase in the share price as being damaging. The noble Lord is putting it in two parts: First, that it might in some respects be damaging and, secondly, that it is giving an unfair advantage to one group of people. That is the other side of the argument. I am saying that there is absolutely nothing in this Bill which prevents the company from giving the same information to other people in the future as they could have done in the past. It will be their judgment as to whether it is sensitive in that sense. They could decide to disclose information to trade union representatives or to a body of their work force who may not he trade unionists, but if they felt that information gave an unfair advantage to that group of people, then it would be for them to judge whether it ought or ought not to be made generally available.
On the other hand, I should have thought there would be cases—and I know it to have been so in the past—where one could say to a body of responsible trade

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unionists, "These are our plans. We do not want our competitors to know. We are all in this together. Your interests are the same as ours. We give you this information on a confidential basis". In that case, it is true that an individual might run around the corner, and ask his broker to buy, but that is the kind of situation about which there are already safeguards.
Lord CAMPBELL of CROY: My Lords, if the noble Lord would give way again I should like to ask for clarification, because the case which I was putting was rather different from the one described by the noble Lord. He says that there is nothing to prevent a company's directors from distributing the information more widely than the trade union representatives. The point is that there is nothing in the Bill to compel it, and the company's directors, having reluctantly been made to pass to the representatives the information which is not damaging to the company, but which they think is share-sensitive and ought not to be passed, then decide that they do not want to pass it any further. There is nothing in the Bill to compel them. The Bill compulsorily provides, after going through the machinery, for the disclosure of the information to the trade union representatives, but it does not compel them to make it available more publicly. Therefore, the situation would arise where a small group of people would have information which puts up the shares of the company. It is not information that is damaging to the company. That is what the whole system of the Stock Exchange is there to prevent; a small number of people with share-sensitive information, not damaging to the company—indeed, the opposite. Of course, there is nothing to stop the company's directors from issuing the information further, but there is nothing in the Bill to compel them, and that is why we thought this should be included if there was any compulsion at all.
Lord BESWICK: My Lords, I am in danger of not being able to curtail the interventions of my noble friends behind me, if the noble Lord opposite extends his interruptions.
Lord CAMPBELL of CROY: I am sorry, my Lords.
Lord BESWICK: My Lords, the noble Lord, Lord Cullen, and indeed other noble Lords in this House are greater authorities on some of these matters than am I, but the position is surely this. Information can be given to trade unions; it is not damaging to the company so the company is prepared to give it to the trade union representative. The noble Lord now fears that we are in danger of creating a category of "insiders". If there is no reason why the information given to the selected body should not be given to others, I quite agree that the Bill—when it becomes an Act—will not compel the employer to give the information to the shareholders. But surely it will be in their interests to give to their shareholders information of this kind, unless it be information which could be damaging to them if it went outside a certain circle. On the assumption that this is so, we want to confine it to a body of people within the company, and do they not have to conform to other regulations? Would they not be breaking other restrictions if they used this information as insiders?
Lord CAMPBELL of CROY: My Lords, no doubt they would.
Lord BESWICK: Of course they would, my Lords, and we should then see a situation which would have to be dealt with. The noble Lord is conjuring up a situation which I do not believe would arise at all.
Lord CULLEN of ASHBOURNE: My Lords, I should like to ask the noble Lord why this Amendment cannot be accepted. It would not do any harm at all to the Bill. I have had endless conversations with Stock Exchange authorities about this, and they are all absolutely determined that this is what should happen. I am not a very technical person and I cannot bore the House with endless details of exactly how it would work, but the Council of the Stock Exchange have the job of maintaining an orderly market. This is their view, and I cannot see what harm it would do to the Bill if it were accepted.
Lord BESWICK: My Lords, the noble Lord asked me a question and I would ask him another, which I hope he will not answer owing to the Rules of the House. He asked: what damage would

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it do? I ask: what good would it do? I cannot see, with the safeguards now in the Bill, that it could do anything to prevent the sort of practice which I can understand the noble Lord is fearful about. It would not do anything more to prevent that practice than is now the case under the law of the land.
Baroness WARD of NORTH TYNESIDE: My Lords, may I intervene, with great trepidation, because I am not particularly interested in stocks and shares but have listened to the arguments and, if I may say so, I do not think the noble Lord, Lord Beswick, really answered the point of view that was put forward by experienced people. He was nice enough, and modest enough, to say that those who spoke on this matter knew far more about it than he did. If he feels that way, then I cannot see why he should not say that the Amendment can be accepted, because it is coming from experienced people.
All my political life I have tried to support experience. With great respect to the noble Lord, he first of all went right off the point of view put forward by the noble Lord, Lord Campbell of Croy, and went back to arguing about a general reason for the Bill, a matter which was not being argued at that time. What was being argued by the noble Lord, Lord Campbell of Croy, concerned a specific Amendment. After all, we on this side of the House know perfectly well that opposite us there are Members who know far more about certain matters than noble Lords on this side. I hope that every now and again we shall accept the experience of those on the Cross-Benches and from experienced people who sit on the Government side. The noble Lord Lord Campbell, has a lot of experience —which the noble Lord, Lord Beswick, modestly said he himself had not got. I doubt very much whether the Members in another place who spoke have as much knowledge as those in this Chamber who have spoken.
I was most interested when one noble Lord referred to invisible exports. Coming from my part of the world and knowing what the shipping community contributes to the country by way of invisible exports, and naturally, being interested, I got very excited about it. I have not got
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any experience, but when I listen to both sides, I say to myself, "If I had to choose, I would choose to adopt the views of the experienced people".
My Lords, so far as I understood it, part of the objection to this particular clause was that, sooner or later, there is going to be a new Companies Act. I think the noble Lord rather indicated that this particular issue would come into the new Companies Act. If that is what the noble Lord said, then it seems all the more extraordinary that we should leave a gap. It would not hurt anybody if he, or another place, accepted this Amendment, to cover the gap. If I may say so with respect, the noble Lord seemed to make a perfect argument for accepting what my noble friends have put forward.
My Lords, I have not been long in this House, so I know I can easily find myself out of order. But cannot the noble Lord go to the other place, tell them he has listened to some brilliant people who have great knowledge, much more knowledge, probably, than anyone in the other place, and tell them—since he has said this point could be included in a new Companies Act—that they have made such a good case, that he would like the other place to accept it. Is that suggestion completely out of order?
Lord BESWICK: My Lords, with the permission of the House, I will have another go! It would seem I have given too much information and have confused the issue. So let me go over it again very briefly. In the course of the consultations with trade unions a good deal of information will be given. My noble friend Lord Douglass of Cleveland knows the volume of information that might well be given, and the consultation about work progress. If this Amendment were agreed to, all that information, every time, without exception, would have to be sent to every one of the shareholders of the company.
Baroness WARD of NORTH TYNE-SIDE: My Lords, that is not so.
Lord BESWICK: My Lords, of course it would go to the members of the company concerned. It will not be relevant or of any other interest to all of them, and all it will do is to help solve the problem of the gap in the accounts of the Post Office, which we were talking

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about earlier this afternoon. If the information would be of interest and is really relevant to the members of a company, then the company will be obliged to give it to the members of the company by its listing agreement with the Stock Exchange, about which the noble Lord, Lord Cullen, knows more than I.
5.15 p.m.
Lord DOUGLASS of CLEVELAND: My Lords, I hope I shall he in order if I ask two questions. First, is the purpose of this rule that we are now going to enable the two sides of industry—the employers and the employees—to get a better working arrangement and not just to operate on the old style; for instance, if the trade union does not like what the management is doing, it goes on strike. Instead of that, this will enable the management to understand the workers and the workers to understand the management. They will be able to come to conclusions for the good of the company, and therefore for the good of all. Is that the purpose of it?
Baroness WARD of NORTH TYNESIDE: No, my Lords.
Lord DOUGLASS of CLEVELAND: My Lords, perhaps the noble Baroness will be good enough to be quiet while I ask my second queston. I have listened to the attractive arguments so far as the Stock Exchange is concerned, and I accept some of the validity within them. However, if I accept the validity within that situation, where do we stop? If the bank has loaned a company a considerable amount of money, surely it is of interest to the Stock Exchange, which would have a right to know. Suppose the company is a small company supplying components to a large company; for instance British Leyland. Would British Leyland have a right to this information, because they would be equally affected as would the Stock Exchange? There are thousands of small components companies. Would not all those thousands of small companies have the same right as the Stock Exchange to information? If we have a situation like this, can we not see that we are going to throw the information around, left, right and centre, willy-nilly? If I may add a third brief question—does not company law
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and common law deal adequately with information divulged legally?
Lord DRUMALBYN: My Lords, I am afraid there is some misunderstanding here. We are talking about information likely to be opposed; in other words, information which the companies are reluctant to give to the representatives of the trade unions. That may be because there are special reasons, and the Government may think there are no special reasons. What my noble friends have been "going on about", if that is the right phrase, is to make certain that where that is price sensitive information—and in this kind of case it will often be price sensitve nformation—then it should be passed on to the members of the company.
My Lords, it depends what you mean by "necessary" and "unnecessary". The Commons stated their disagreement in terms:
"Because it is unnecessary to provide for the furnishing of information to members of companies".
For the purposes that the noble Lords opposite have been mentioning, that would be unnecessary. It is unnecessary for the good of the company, and unnecessary for the good of the representatives of the trades unions. It is unnecessary for the Government. It does not concern the Government, either, but it is necessary for the shareholders. It is necessary that they should have this information, not in the sense that in every case it will be essential for them to have it, but that there is a risk that if they do not have it there will be trouble.
The question we are really asking is whether it is necessary, or whether it is desirable, to cover that risk in the Bill. It is not covered. It should be. That is why this Amendment has been put down. I venture to think that unless the Government cover this in future company legislation, there will be trouble. Our view has been that it should be covered now to avoid trouble in the meantime.
Lord HUGHES: My Lords, I am reluctant to enter into this debate, but I was involved in the same argument in relation to the Scottish Development Agency Bill. The reason the other place have given for not accepting this Amendment in my view is completely sensible. If I may repeat the reason it is,

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"Because it is unnecessary to provide for the furnishing of information to members of companies".
We have to treat that in relation to the Bill, and when it is said that it is unnecessary to give information we must read that as meaning that it is unnecessary to provide for this in legislation.
What are the duties of a director of a company? One of them is to look after the interests of the shareholders, and in the giving of certain information to members of the trade unions—which they will be compelled to do by law—it is obviously part of their duty, in this field of price-sensitive information, to which the noble Lord, Lord Drumalbyn, has just referred, to make that information available to their shareholders. There is nothing in this Bill which will prevent them from doing so, but it is their ordinary practice which should require them to do so. It may be that there would be directors or companies who would not do this, and the suggestion in the Amendment, therefore, is that we should legislate and compel them to give information that they would otherwise withhold.
There have been references, particularly by the noble Baroness, to the expert opinion on Stock Exchange matters. I would go the other way and say that there is probably no one in this House who is more ignorant of Stock Exchange matters than I am. But during these discussions I have heard about certain things, and one is the Code of Practice of the Stock Exchange, and the way in which they operate in certain directions. If the Stock Exchange authorities are so determined that this is the right thing to do, could they not deal with this in the same way as they have required good business practice to be operated by companies in other directions? They have not required an Act of Parliament to enable them to do that, and it is carried out. They can bring the force of moral compulsion to bear on companies to give this information, if this is what is wanted. But it is certainly quite correct, as is said in the Commons Reason on this Amendment, that it is unnecessary to do this in an Act of Parliament.
On Question, Motion agreed to.
5.22 p.m.

LORDS AMENDMENTS
[Nos. 59 to 61]
Clause 24, page 23, line 7, leave out ("substantial")
Clause 24, page 23, line 9, leave out ("substantial").
The Commons disagreed to these Amendments for the following Reason:
Because the Amendments would unduly restrict the furnishing of information.
Lord BESWICK: My Lords, I beg to move that the House doth not insist on their Amendments Nos. 59 and 60 to which the Commons have disagreed for the Reason numbered 61. The Reason which motivated the other place in disagreeing with the Amendments we put forward was that they would unduly restrict the information which would be given to employees. The point at issue is whether it would be a ground for withholding information if its disclosure would cause substantial injury to the undertaking or a substantial number of its employees, or simply injury.
My noble friend Lord Melchett dealt with this, and he explained that the word "substantial" was necessary to ensure that disclosure was not prevented by some insignificantly small injury. I think he had a discussion with the noble Lord, Lord Wigoder, about this. It is the Government's view that the power should be capable of being used to require disclosures in circumstances when they result in some injury to the undertaking, or in some injury to some employees. There may be circumstances in which this is justified, where the gains from disclosure of information outweigh the injury the disclosure would cause. I understand the point which the noble Lord was putting forward earlier, but I hope that on reflection he will feel that the anxiety he expressed about this would probably not be realised in practice. I beg to move.
Moved, That the House doth not insist on their Amendments Nos. 59 and 60 to which the Commons have disagreed for the Reason numbered 61.—(Lord Beswick.)
Lord CAMPBELL of CROY: My Lords, I hope the noble Lord will not regard it as any discourtesy that I did not reply to the points he made at the end of the last debate. I had already

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exhausted my right to speak on that set of Amendments; also the noble Lord, Lord Beswick, had graciously allowed me to intervene two or three times in the interests of clarification of a particular situation, so that 1 could not try to answer his points.
On these Amendments and the Reason given, I should like to remind your Lordships that the proposals of the Government for a system of disclosure of information envisage that the very large majority of companies will be acting voluntarily; it is only where a company sees objections with regard to certain information that the compulsory system is engaged. It is clear to us—this applies only to certain manufacturing companies —that the number of companies likely to get involved with the procedure and to have their case considered by the advisory committee is likely to be only one or two a year. Indeed, the noble Lord, Lord Beswick, said in our earlier stages that he hoped there might be none. So I think we must recall that the system proposed in the Bill envisages most of the information being passed on a voluntary system, and that the element of compulsion which is being introduced—which is, of course, a very important new element—will come in on only one or two, or a handful of cases a year.
So we now turn to the question of injury or substantial injury. We regret that the Government propose to reverse the Amendments which we made in your Lordships' House. We do not believe that this will give British industry confidence in this new system of disclosure, because it means that when they see objection to passing information voluntarily they have then to prove not just that there will be injury to the company or to the employees—because that is where the word "substantial" had been removed—but substantial injury. Then it is left to the Minister to decide what "substantial" injury means.
I will not rehearse the debates we had in your Lordships' House at the earlier stages as to what "substantial" could mean, but we regret that this change should now be made. Companies could understand that if they had to prove under the procedure laid down in the Bill that injury would be cause to them, or the employees of a company, then they could go forward and make their case, but trying
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to prove substantial injury, whatever that may be, will be difficult; simply to prove injury will be difficult. While I do not suggest to my noble friends that we should resist this, I think the leaving out of "substantial", which is what we were suggesting, would have been a great improvement; it would then have meant that companies could come forward knowing that they had to prove that injury would be suffered by the company or employees, and they would have a good chance of proving their case before the Minister and the advisory committee.
Lord BESWICK: My Lords, I wonder whether I may put to the noble Lord the point that the Secretary of State or the Minister referred to in the Bill has an element of discretion here. He will have to consider whether the damage, if there be such, to a small number of people is outweighed by the benefits to the majority. I am sure the noble Lord will take this point into account.
On Question, Motion agreed to.

LORDS AMENDMENTS
[Nos. 62 to 69.]
Clause 25, page 23, line 36, leave out ("advisory") and insert ("appeal").
Page 24, line 5, leave out ("advisory") and insert ("appeal").
Page 24, line 33, leave out ("advisory") and insert ("appeal").
Clause 26, page 25, line 33, leave out ("advisory") and insert ("appeal"),
Schedule 5,page 43, line 25, leave out ("ADVISORY") and insert ("APPEAL").
Page 43, line 43, leave out ("for the purpose of advising him").
Page 44, line 17, leave out ("settle its advice") and insert ("give a direction").
The Commons disagreed to these Amendments for the following Reason:
Because the Committee should be an advisory Committee.
Lord BESWICK: My Lords, I beg to move that this House doth not insist on its Amendments Nos. 62 to 68 to which the Commons have disagreed for the Reason numbered 69. I wonder whether with Amendments Nos. 62 to 68 and the Commons Reason numbered 69we could also take Amendment No. 70 and the Commons Amendment No. 71.
My Lords, all these Amendments arise on the issue of whether the independent committee considering whether disclosure of information would cause injury to the

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undertaking concerned should be an advisory committee, or a committee with the power of decision. It is a matter which was debated at some length at Committee stage in another place. The view which the Government now take, that the committee should be advisory rather than one of decision, is the opposite of the view that they first took. It was in large measure as a result of views strongly pressed by the Opposition in that Committee that the Government moved to the view that it should be an advisory body. I recognise, of course, that the noble Lords who pressed this Amendment were concerned about independence of judgment. But this solution brings grave drawbacks.
It would be a quite unusual constitutional arrangement, to give an administrative tribunal such as is provided for in Schedule 5 power to overrule a Minister. The tribunal would be answerable to nobody for its decisions. When the Government originally proposed that the Minister should have no power of decision on this point, and that it should be wholly the province of a tribunal, there was the very strongest pressure for provision for rights of appeal to the courts against the decisions of the tribunal. We then came back to the idea of an advisory committee.
The Amendment, in lieu of our Amendment No. 70, which we are also discussing, broadly restores the Bill to the form in which it was at the end of our Committee stage, and also incorporates a few further minor drafting Amendments which I had tabled for Report stage, but which I was not able to move because they conflicted with the decision of the House on that occasion in favour of an appeal committee. I hope that on balance noble Lords will think that we have come back to the right solution. I beg to move.
Moved, That this House doth not insist on its Amendments Nos. 62 to 68 to which the Commons have disagreed for the Reason numbered 69.—(Lord Beswick.)
5.33 p.m.
Lord CAMPBELL of CROY: My Lords, I agree that it would be convenient to have one debate on all these Amendments, and I recognise that that
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means that we can only speak once upon them. The effect is that the Minister is to retain a final decision after the procedure has been engaged when an objection has been raised by a company (which all of us will hope will occur only on rare occasions), but it means that the Minister virtually has the last word. We were worried about this, and we thought that the series of Amendments that we put forward with the noble Lords, Lord Rochester and Lord Wigoder, would have been a better system, particularly as we know that the safeguards that were introduced by the Government were introduced hurriedly in another place at the Report stage, and there was no real opportunity for the other place to go into this.
For example, the only check on the Minister, when the Committee is to be an advisory one and not an appeals committee, is to be the Negative Resolution procedure. As I understand it, the effect of the Amendments is to bring that back again. That is a procedure which is well known to both this House and another place, but we believe that it is out of place here as a Parliamentary check on a Minister because the subject matter is confidential. The dispute is about whether or not certain information should be passed to trade union representatives and for reasons that arc given in the Bill, either because of injury to the company or because of breach of confidence, the company is objecting. Therefore, the debates that would take place in this House and in another place would be on information which is still protected as confidential, and quite rightly. Therefore, it is exceedingly difficult to see how orderly or informed debates could take place under the Negative Resolution procedure.
While that procedure is a traditional one, which we know and accept in appropriate cases, it seems wholly incongruous in the context of this Bill. That is why we, and other noble Lords, devised what we thought would be a complete and rather better system for an appeals committee, because this seemed the kind of subject where a trusted independent body should be given the job of going into all this behind closed doors, because the appeals commitee would have been privy to the information, they could discuss it all behind closed doors, and if

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they were not given all the information they could be given quite a bit of it because that was not making it public.
We had hoped that the disturbance to the Government's Bill was minimal in devising the set of Amendments. We had that in mind. The original suggestion which we made from the Conservative Benches here for a tribunal we dropped, because we recognised that although that was based on other legislation it would have caused more upheaval to the Bill. I must express our regret that something which was quite nonpolitical, and entirely an effort to help the Government with something they did hurriedly at Report stage in another place, should not have found favour, because we think that when cases come up before the advisory committee, and when the Minister takes a decision and we then have debates in this House and another place, we shall find it exceedingly difficult when we do not know what the information is, and only told broadly the nature of it. It would have been better to have had an appeals committee who could be trusted to go into all this and then give a verdict.
Lord WIGODER: My Lords, this group of Amendments in their present form emanated from these Benches. They were put forward in an entirely non-partisan spirit. They were supported by the noble Lord, Lord Brown, from the Government Benches when the House was in Committee, and supported by various noble Lords on the Cross-Benches when the Division was taken on Report stage. They were simply an attempt to deal with an extremely cumbrous piece of machinery and to try to improve it. It seemed to us that there was something quite preposterous about the proposal that the final decision as to whether information would cause substantial injury to an undertaking should be taken on the Floor of your Lordships' House, or on the Floor of the other place, after a debate in which nobody was allowed to know the nature of the information concerned.
I can say no more than that we are deeply concerned that the proposals which your Lordships' House approved have now disappeared. I hope that the noble
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Lord, Lord Beswick, will forgive me if I say that we are even more concerned about the way in which they have disappeared, because, having met with support from all parts of your Lordships' House, they went back to the other place, they were taken under the guillotine, and there was no debate or discussion of them at all. It seems to be quite deplorable that the legislative chaos in another place should be such that they are beginning to equal their unrepresentative nature by the inefficiency in the way in which they conduct their proceedings.
Lord BESWICK: My Lords, I am sorry that towards the end of our deliberations the language is getting stronger. I do not believe that the word "preposterous" is merited here. Both the noble Lord, Lord Campbell of Croy, and the noble Lord, Lord Wigoder, were saying that the discussion in Parliament on a matter of this kind would be inadequate, but it would be far more adequate than discussion in camera before an appeals committee which had the final say. There is no chaos here. I can imagine that there may be other parts of the Bill, even other Amendments, which are so complicated and so inadequately discussed that the noble Lord might mount a case, but not here. The issue is quite simple: with whom should the last word lie. We believe it should lie with the Minister, who can be challenged in Parliament. Although some of the details will not be available to the House, I think that the House has a sufficient sense in these matters to realise whether or not a Minister of the Crown is behaving in an impartial fashion. I beg to move.
On Question, Motion agreed to.
5.40 p.m.

LORDS AMENDMENT
[Nos. 70 and 71]
Clause 25, page 24, line 14, leave out subsections (6) to (9) and insert:
("(6) The appeal committee shall consider any representations made under subsection (5) above, shall give a direction whether or not all or any part of the information which is the subject of the reference shall he furnished to employee representatives and shall make a report to the Minister giving their findings.

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(7) Where there has been a reference the Minister shall notify:

(a) the company or companies concerned;

(b) the employee representatives from such company or companies;

of the direction of the appeal committee; and in accordance therewith a notice under this subsection shall be treated as requiring the information specified in the direction to be furnished to employee representatives.
(8) Where there has been no reference to the appeal committee, the Minister may notify the company or companies concerned and each employee representative, at the end of the period specified in his preliminary notice under section 22 above, that this notice is to be treated as final.
(9) This section will apply with appropriate modification in any case where only part of the information furnished to the Minister falls to be disclosed to employee representatives.")
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Page 24, line 14, leave out subsections (6) to (9) and insert—
(" (6) The advisory committee shall make a report to the Minister after the close of their consideration of the reference, giving their findings of fact and their recommendations, and after consideration any representations made under subsection (5) above.
(7) Where a matter has been referred to the committee, the Minister may make a final descision relating to his proposal only after receiving and considering the committee's report on it.
(8) Subject to subsection (12) below, where there has been a reference, the Minister shall notify—

(a) the company or companies concerned;

(b) the authorised representative of each relevant trade union; and

(c) the advisory committee,

of his final decision; and a notice under this subsection shall be treated as requiring the information specified in it to he furnished to each such representative within such reasonable time as may be so specified.
(9) The Minister's notice under subsection (8) above to the company or companies concerned and to the authorised representatives shall state whether or not he accepted the committee's advice.").
Lord BESWICK: My Lords, I beg to move that this House doth not insist on their Amendment No. 70, to which the Commons have disagreed, and doth agree with the Commons to Amendment No. 71 in lieu thereof.
Moved, That this House doth not insist on their Amendment No. 70, to which the Commons have disagreed, and doth agree with the Commons to Amendment No. 71 in lieu thercof.—(Lord Beswick.)
On Question, Motion agreed to.

LORDS AMENDMENTS
[Nos. 72–80]
Clause 25, page 24, line 42, at end insert ("within such reasonable time as may be so specified").
The Commons agreed to this Amendment but proposed the following Amendment thereto:
Leave out ("so specified") and insert ("specified in the notice under subsection (10) above").
Clause 25, page 25, line 1, leave out subsections (12) to (16).
The Commons disagreed to this Amendment and proposed the following Amendments to the words so restored to the Bill:
Page 25, line 11, at end insert ("within such reasonable time as may be specifield in the order").
Page 25, line 11, at end insert—
("(12A) An order under subsection (12)above shall be laid before Parliament after being made").
Page 25, line 13, leave out ("until") and insert ("if before").
Page 25, line 14, at end insert ("either House resolves that an Address be presented to Her Majesty praying that it be annulled.
(13A) If no such resolution is passed by either House, the order shall come into effect at the end of the said period.
(13B) If such a resolution is passed by either House, Her Majesty may by Order in Council revoke the order.").
Page 25, line 15, leave out subsection (14).
Page 25, line 20, leave out ("either House is") and insert ("both Houses are").
Lord BESWICK: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 73 to the Lords Amendment No. 72 and that this House doth not insist on their Amendment No. 74, to which the Commons have disagreed, and agree with the Commons in their Amendments Nos. 75 to 80 to the words so restored to the Bill. On this group of Amendments, which are essentially drafting and tidying up, I hope there will be more agreement. Amendment No. 73 to our Amendment No. 72 clarifies where the time within which information is to be provided will be specified. This drafting change is consequential on other of our Amendments to which the Commons agreed. The Commons disagreement with our Amendment No. 74 is a necessary consequence of their wish to preserve the advisory nature of the independent committee which we have just discussed. Commons Amendments Nos. 75 to 80 do not raise any new

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point of substance, but simply bring the wording of the words restored to the Bill more closely into line with those of other legislation which establishes similar procedures.
Moved, that this House doth agree with the Commons in their Amendment No. 73 to the Lords Amendment No. 72 and that this House doth not insist on their Amendment No. 74, to which the Commons have disagreed, and agree with the Commons in their Amendments Nos. 75 to 80 to the words so restored to theBill.—(Lord Beswick.)
On Question, Motion agreed to.

LORDS AMENDMENT
[Nos. 81 and 82]
Clause 30, page 28, leave out from beginning of line 40 to end of line 4 on page 29.
The Commons disagreed to this Amendment but proposed the following Amendment in lieu:
Clause 22, page 20, line 31, at end insert—
(""relevant trade union" means an independent trade union, as defined in section 30(1) of the Trade Union and Labour Relations Act 1974, which the company or companies concerned recognise for the purpose of negotiations about one or more of the matters specified in section 29(1) of that Act in relation to persons employed in the relevant undertaking, or as to which the Advisory Conciliation and Arbitration Service has made a recommendation for such recognition under the Employment Protection Act 1975 which is operative within the meaning of section 15 of that Act;").
Lord BESWICK: My Lords, I beg to move that this House doth not insist on their Amendment No. 81 and doth agree with the Commons in their Amendment No. 82 in lieu thereof. This Amendment is very largely consequential upon Amendment No. 17 and the related Amendments. The definition of "relevant trade union" was deleted, because it was thought to be unnecessary if disclosure was to be to all employees. Having agreed not to insist on Amendment No. 17, we should agree to the restoration of this definition.
Moved, That this House doth not insist on their Amendment No. 81 and doth agree with the Commons in their Amendment No. 82 in lieu thereof.—(Lord Beswick.)
Lord CAMPBELL of CROY: My Lords, this change is necessary, of course, because of the other changes to which we have agreed. We gave a lot of thought
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to our definition of "employee representatives", as the noble Lord, Lord Beswick, realises, so reluctantly our work is being undone, but it is necessary that the appropriate definition should now appear in the Bill.
On Question, Motion agreed to.

SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL [H.L.]
[References are to Bill (182) as first printed for the Commons]
5.44 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Kirkhill): My Lords, I beg to move that the Commons Amendments be now considered.
Moved, That the Commons Amendments be now considered.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, this is perhaps the appropriate stage of our proceedings for me to deal with a point which arose in August during the Recess. An incorrect Press report appeared, apparently based on a misunderstanding of some comments from the Scottish Office, that this Bill was being held up in your Lordships' House, but a letter was published from me at the end of August pointing out that this was not the case and I should like to establish the facts again. The Bill left your Lordships' House on 24th June and went to another place, where it was when the Recess started, and, indeed, far from holding up this Bill, it appeared in your Lordships' House as a No. 2 Bill and, in that way, we were able to save the Government time because they could not find time on the Floor of the House for the Second Reading of the No. 1 Bill. Today is the first day when we have had the opportunity of considering the Bill again after 24th June, so we could have done nothing in the meantime to accelerate the passage of the Bill.
I wanted to make it absolutely clear that that Press report was completely incorrect and must have been based on a misunderstanding. We in your Lordships' House have enabled the Government to make rather quicker progress than they would otherwise have made. Even though we may not like what is proposed in some parts of the Bill and have suggested changes and improvements, none

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the less we have in no way held up the setting up of this new Scottish Development Agency. I might add that in no way could this have been the responsibility of the noble Lord, Lord Kirkhill, who had only just come into Office in August, and my object is not criticism but clarification.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 1]
Clause 1, page 1, line 13, leave out ("six") and insert ("eight").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 1. Before dealing with this Amendment, may I say in response to the intervention of the noble Lord, Lord Campbell of Croy, that I personally was aware of what I regarded as perhaps an incorrect Press statement and, of course, I duly noted the public statement which the noble Lord made about that very matter.
This Amendment seeks to increase the number of members, other than the chairman, who may be appointed to the Agency from six to eight. An Amendment was made to the Industry Bill on Report to increase the NEB's minimum membership from six to eight. The Welsh Development Agency Bill provides for between six and eight members, other than the chairman and deputy chairman, and during the discussion in Committee in another place on the size of the Agency my right honourable friend seemed to find a strong argument for putting the number up from six, rather than for changing the maximum number. He went on to say that he thought eight was a reasonable number, bearing in mind the diversity of the Agency's functions.
Moved, That this House doth agree with the Commons in the said Amendment—(Lord Kirkhill.)
On Question, Motion agreed to.
5.48 p.m.

COMMONS AMENDMENT
[No. 2]
Clause 2, page 2, line 25, leave out ("and") and insert—
("(bb) the promotion of industrial efficiency and international competitiveness; and").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 2. This Amendment would add to the purposes of the Agency specified in subsection (1) the promotion of industrial efficiency and international competitiveness. This purpose already appears in the Industry Bill and the Welsh Development Agency Bill. In my right honourable friend's view in the other place, when he gave consideration to the wording of the Bill, he felt it undesirable for the Agency apparently to have a narrower range of purposes than either the NEB or the Welsh Development Agency. Posterity may well wonder why this purpose had been omitted; whether, for instance, the SDA had been deliberately excluded from the field of improving efficiency and international competitiveness. It is for that reason that I commend the Amendment to your Lordships.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, I would say only that this is a very acceptable addition to the Bill. We had noticed that it appeared in the other two Bills, and it might have been thought odd that we in Scotland should not also have the sentence in question in the Bill.
Lord KIRKHILL: My Lords, we very much do not want to appear too odd.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 3]
Clause 2, page 2, line 30, at end insert—
"(aa) carrying on, or establishing and carrying on, whether by themselves or jointly with any other person, industrial undertakings;"
5.50 p.m.
Lord KIRKHILL: My Lords, I beg to move that the House doth agree with the Commons in their Amendment No. 3. With permission, I should like also to speak to Amendments Nos. 6, 10, 11. 31, 37 and 47, which are associated with the present Amendment.
This was the fundamental point of disagreement when previously discussed in your Lordships' House, so a great deal has been said here and another place on this matter in the context of

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the present Bill, the Industry Bill and the Welsh Development Agency Bill. I cannot expect, therefore, as a relative "new boy", to say very much of novelty.
I would merely rest on two arguments. The first is that the ability to establish and carry on businesses is the function which above all makes the Agency a vital new element in Government policies for creating jobs in Scotland. It will allow the public sector to fill the gaps left, for whatever reason, by the private sector and thus attract jobs to the most needed areas of Scotland. Without this function the Agency would simply not measure up to Scot lands needs. It would not be able to ensure the pay off in terms of jobs of all the resources and imaginative effort that go into its environmental and industrial functions. It would be able to set the scene for new industrial development, to provide the sites and factories and the environmental conditions in which industry should flourish; and to provide advice and offer capital for investment. But it would have to stop short at that vital point—the point at which, in the past, we have always had to stop short. That is precisely why all the efforts of successive Governments in the past have not been able to solve the problems. The full realisation of all the Agency's plans and the return on its expenditure would be completely dependant upon private industry having the will, foresight and enterprise to set up and develop the industries that provide the jobs in the places where they are desperately needed.
The establishment of the Agency with its task of economic and environmental regeneration is an expression of the Government's faith in the economic future of Scotland and the West Central belt of Scotland in particular. But without the power to set up industrial undertakings its efforts could go for nothing if the private sector of industry did not share the same faith. The Government believe they cannot take that risk. The second argument I would briefly deploy is related to the fear expressed earlier that the Agency's undertakings will be in unfair and subsidised competition with private industry. This is a point which my right honourable friends in another place have dealt with at length and in which they have given complete assurances. I hope your Lordships have studied closely
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what was said. It is to make our intentions crystal clear on this matter, that my right honourable friend the Secretary of State tabled an Amendment in the other place to oblige the Agency, when exercising its function of establishing and carrying on industrial undertakings, to do so only through a company within the meaning of the Companies Act 1948 or through a partnership firm. This means that any businesses which the Agency set up will be subject to the same rules of conduct and the same liabilities as are private companies. They will be regulated by the City Code and by all the legislation which governs commercial trading activities. I hope that noble Lords, recognising this as a real attempt to meet the concern which they feel over this function of the Agency, will not disagree with these Amendments.
Here, may I draw particular attention to the remarks which my right honourable friend made at the Third Reading of the Bill in another place when he said:
"It is absolutely essential for Scotland's future prosperity that the public and private sectors should work closely together, neither suspicious of the other's motives, but both dedicated to the development of the economy and the strengthening and expansion of existing firms, the stimulation of new ideas and the creation of the new job opportunities which Scotland so badly needs. One of the prime purposes of the Agency will be the provision, maintenance or safeguarding of employment. This policy will commend itself to existing firms and the people of Scotland generally."
My Lords, I believe that this Amendment will be welcome.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, this brings us to a very clear difference of view between the two sides of your Lordships' House. I believe that on both sides of the House we sincerely desire to promote the good health, vigour and competitiveness of Scottish industry, but we on these Benches believe that the method proposed by the Government is not the best way of achieving that. The power of the Scottish Development Agency to establish separate companies in competition with private firms in Scotland we believe to be likely to undermine the confidence of Scottish industry and to undermine the confidence of that very large part of industry in Scotland which

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is to be responsible for a regeneration and upon whose success exports and industrial health in Scotland depend.
I agree with the words of the Secretary of State for Scotland which the noble Lord has just quoted, and which I took down, that private industry and public industry should work together, neither suspicious of the other. However, our complaint is that we believe that the kind of power which has been given to the Scottish Development Agency might cause them to work less easily together and might indeed cause the suspicions which the Secretary of State wishes to dispel. We accept, therefore, that there is a divergence in view between the two Front Benches on the best methods to achieve the general results which I believe we all wish to see. I shall not suggest to my noble friends that we should reject the Amendment, but I must draw attention to our very clear difference of views about the way in which we feel Scottish industry can be helped forward to success in the future.
Lord TANLAW: My Lords, I should like just to follow the noble Lord, Lord Campbell of Croy, with a suggestion upon which the Minister may perhaps be able to reassure me. One way of overcoming the suspicions which apparently exist on the Conservative Benches would he to have a regional representative of the Scottish Development Agency who would be in a position to reassure the local businessman of the friendly intentions of any assistance that might be required from him. I feel that, if the point made by the noble Lord, Lord Campbell of Croy, is extended in effect, the effect of the Agency will be to create unemployment. We see clearly written here that the main objective of the Agency is to provide, maintain and safeguard employment, so we on these Benches are completely happy that these are the primary intentions of the Scottish Development Agency, and we assume that they would not undertake any commercial entity that would be competitive to the extent of creating unemployment because that would, after all, entirely undermine the objectives of the Bill.
Lord KIRKHILL: To reply first to the noble Lord, Lord Tanlaw, I can assure him that, at this stage, the membership
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of the Scottish Development Agency has not been completed. The present position is that an initial inner membership of four distinguished Scots—each distinguished in his own field—have been invited to form the nucleus of the Agency. From the discussions and deliberations of those four will emerge the membership of the Agency which will certainly be broadly based and will have regard to regional balance. I give that assurance.
Secondly, I should like to refer to the points made by the noble Lord, Lord Campbell of Croy. I have to rest on the point that there is a divergence of political philosophy between this Front Bench and the noble Lord's Front Bench. That divergence can be expressed in the creation of the Scottish Development Agency, which although not a political body when in being is an expression of a belief on the part of this Bench that unquestionably in the past the private enterprise sector of the economy in Scotland has failed in its true initiative, has failed in expansionary terms, and we feel that this is a new initiative which, given goodwill from all sides, can prove to be a real breakthrough.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 4]
Clause 2, page 2, line 41, leave out paragraph (e) and insert—
("(e) promoting industrial democracy in undertakings which the Agency control;").
6.1 p.m.
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 4. It is difficult to find new points to deploy in this argument. Therefore the points I now make consist of a summary of arguments already used, somewhat expanded in places. I see from the record that, when this Bill was before your Lordships' House earlier in the Session, there was a good deal of discussion about the Agency's role in the field of industrial relations. Noble Lords opposite felt that the phrase,
"promoting industrial democracy in undertakings which the Agency control",
should, because of its lack of precision, not appear in legislation. I appreciate that

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the wording of this Part of the Bill as it left your Lordships' House represented a genuine attempt to achieve a better definition. But I should like to make three points on this matter of definition.
The first is that the words inserted by this House are not an adequate substitute. The phrase "industrial democracy" is not restricted to the promotion of good industrial relations and appropriate means of employee involvement in undertakings. It also covers the wider question of co-operation in industry—a cooperation covering more than the matters normally employed by the term "industrial relations", which is usually meant to be discussion of wages and other conditions of service. I feel that the wording inserted by noble Lords opposite does not in full reflect what the Government propose that the Agency should do here. Secondly, the phraseology deleted in the other place is not itself fully appropriate. It attaches the function of
"promoting good industrial relations and appropriate means of employee involvement in undertakings"
to a much wider range of companies—those with which the Agency are "associated" rather than those which they "control". While I appreciate that this wording was a consequence of other changes which your Lordships made to the Bill, I think noble Lords would all agree that it would he extremely difficult for the Agency to take on this task in relation to all the many undertakings with which they are "associated" which could be very widely interpreted. Moreover, although noble Lords opposite argued that the phrase "industrial democracy" lacked definition, the same is surely true of the wording which they substituted. How, in fact, does one define "associated"?
My third—and, I think, conclusive—point on the matter of definitions is that the shape of industrial democracy, which will be applied by the Agency, will follow the policy as set out in the legislation which, since your Lordships last considered this matter, the Government have undertaken to bring before Parliament in the 1976–77 Session.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirk hill.)
Lord CAMPBELL of CROY: My Lords, we come to the matter of industrial democracy which arose in the Industry Bill earlier today and will come up again in the Welsh Development Agency Bill. The objections which we saw when this matter came out were, first, that it was a very vague term to put into legislation, and those feelings were repeated in various parts of the House; but worse, we also recognised that various people put different interpretations upon the term "industrial democracy". We felt that, anyway at this stage, it would be wrong to put it into the Bill. The Government have apparently decided none the less that they will take the risk, and the noble Lord mentioned that the Government have set up a committee to examine and report on the subject. It would have been better at least to have waited until that committee had reported and the term could then be less ambiguous than it now is. But having given the Government time to think about this point, we do not propose to pursue it now.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 5]
Clause 2, page 3, line 12, leave out ("subsection (5)") and insert ("subsections (5) and (5A)").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 5. I wish to associate with Amendment No. 5 Amendments Nos. 8, 9, 28, 29, 30, 32, 33, 34, 38, 39, 44 and 45. The reason for this is that these comprise a group of miscellaneous drafting Amendments which raise no material policy points.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, I entirely accept that the common factor in all these Amendments must be simply a matter of drafting.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 6]
Clause 2, page 3, line 14, at end insert—
("(aa) to form bodies corporate;").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment

679
No. 6. This is a consequential Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 7]
Clause 2, page 3, line 18, at end insert—
("(dd) to make grants;").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 7. This Amendment can be linked with Amendment No. 12.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 8 to 12]
Clause 2, page 3, line 21, at end insert ("any other property").
Clause 2, page 3, line 26, after ("equipment") insert ("and other property").
Clause 2, page 3, line 32, at end insert—
("(4A) The functions of the Agency mentioned in subsection (2)(b) above may only be exercised through a company within the meaning of the Companies Act 1948 or through a partnership firm.").
Clause 2, page 3, line 36, after ("(2)(a)") insert ("and (aa)").
Clause 2, page 3, line 36, at end insert—
("(5A) The power to make grants conferred by subsection (4)(dd) above may only be exercised with the consent of the Secretary of State or in accordance with a general authority given by him.").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 8 to 12 en bloc. We have already discussed these Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 13]
Clause 2, page 3, line 43, at end insert ("and to the desirability of safeguarding the environment").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the
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Commons in their Amendment No. 13. This Amendment obliges the Agency to have regard to the desirability of safeguarding the environment in the exercise of their functions. The Amendment also fulfils the undertaking which my right honourable friend gave to the honourable Members for East Fife and Kinross and West Perth shire in another place during discussion there. This Amendment, which relates to the full range of the Agency's functions, will ensure that they take full account of amenity and environmental considerations. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, I think the addition of these words to the Bill could not fail to have the support of your Lordships.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 14]
Clause 4, page 4, line 18, at end insert—
("(1) Subject to paragraph 9(3) of Schedule 2 to this Act, when the Secretary of State gives a direction under this section he shall either—

(a) lay a copy of the direction before each House of Parliament within 28 days of giving it; or

(b) lay a copy later, but lay with it a statement of the reason why a copy was not laid within 28 days.")

6.10 p.m.
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 14, and I think I could associate with this Motion Amendment No. 53, which is linked. During the Committee stage of the Bill in your Lordships' House, the Government stated the principle that their relationship with the Scottish Development Agency should be as open as possible and that therefore all directions to the Agency, both general and specific, should be reported to Parliament. However, there may be occasions on which the publication and reporting to Parliament of a direction within this time period could create serious difficulties for the SDA, especially, for example, if they were directed to acquire shares or other property. A direction to this effect is likely to be a rare event, but the result of such a direction becoming widely known could well be to force up the

681
price, to the Agency's disadvantage. The Amendment therefore provides that my right honourable friend the Secretary of State may, for suitable reasons, decide not to inform Parliament of a direction within the normal 28-day period. If he does this he must, when the direction is eventually laid before Parliament, accompany it with a statement explaining why the direction was not laid within 28 days. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, this set of Amendments, which I understand was introduced while the Bill was in passage through another place, raises the question of the responsibilities of different Ministers. Life in Scotland is getting very complicated in this respect, not only with regard to the roles of Ministers but also the new bodies being created. Here we have the Secretary of State for Industry, who is the sponsoring Minister for the large majority of industry in Scotland; but there is also the Secretary of State for Scotland, who has responsibility for administering certain grants to industry, and this Scottish Development Agency, which will also be administering grants on behalf of Ministers. The writ of the National Enterprise Board, which we were considering in the Industry Bill earlier today, also runs in Scotland, and it has certain functions there. If that was not enough, the British National Oil Corporation, which we were considering yesterday and shall be considering again tomorrow, is going to be more active in Scotland than anywhere else in Britain. That also has powers so far as industry is concerned, and is able to take part in industry; for example, it is able to be involved in the petrochemico industry.
There really is a serious danger of collisions and overlapping, with two Ministers who are able to get grants for various services and all these bodies that I have mentioned. There is one other. In a large part of Scotland the Highland Development Board is already in existence, and that is another statutory body which is giving grants and loans to industry. There is, therefore, as I have said, a danger of confusion among those in industry as to which body or Minister
682
is responsible for what, and to whom they should go when they need assistance of various kinds. I know these Amendments are designed to try to help straighten out part of that situation, but I wanted to point out that Scotland is going to suffer from a multiplicity of agencies in a way that the rest of the United Kingdom will not, or will not so much.
Lord TANLAW: My Lords, I wonder whether the noble Lord can help me here. He implied that this Amendment is needed in case of a leak in security which might affect share prices—at least, that is the instance he gave. Could the noble Lord say whether the management of the Scottish Development Agency will be asked to sign any form of nondisclosure document concerning secrecy of this kind? These people involved in management may not be covered by the Ministerial or Civil Service documents of non-disclosure which would normally apply, or indeed banking documents of non-disclosure, which are quite normal. What I am in effect asking is: will the top management of the SDA be asked to sign such a document of non-disclosure of specialised information?
Lord KIRKHILL: My Lords, if I may first respond briefly to the points which the noble Lord, Lord Campbell of Croy, made, certainly it is my conviction that it is the Government's wish to be open, to be above board, and to be seen to be clear in all Government initiative relative to the purposes of the Scottish Development Agency which leads the Government to suggest that this Amendment should indeed be supported. I am aware that not only in Scotland but generally in countries other than Great Britain, there is a tendency towards proliferation so far as central boards and bodies of a public nature and character are concerned. Nevertheless, I hold very sincerely to the view that the Scottish Office is an open door to anyone who feels that a channel of communication is not available to him, and I am myself satisfied that any request made to that Office is quickly acted upon. Furthermore, as the noble Lord well knows, the Scottish Press tends to be very clear and explicit at each hint even of minor misunderstanding at Government level. Thus I believe that this Amendment seeks to

683
keep the door widely open and should be encouraged, and should, I think, be supported by those of us who are Members of your Lordships' House.
In reply to the noble Lord, Lord Tanlaw, I would say that the members of the Agency will be expected to conform to the normal rules of business confidence, and there are ample safeguards for this. For instance, so far as I know there has never been any trouble with those who were members of, for example, the Highlands and Islands Development Board.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 15]
Clause 5, page 4, line 22, leave out subsection (1) and insert—
("(1) In any case where it appears to the Secretary of State that the powers conferred on him by section 7 of the Industry Act 1972 (power to give selective financial assistance) are exercisable and ought to be exercised, the Secretary of State, with the consent of the Treasury, may direct the Agency to exercise them; and the Agency shall not require the consent of the Treasury to the exercise of any such powers in pursuance of such a direction.").
Lord KIRKHILL: I beg to move that this House doth agree with the Commons in their Amendment No. 15.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 16]
Clause 5, page 4, line 26, leave out subsection (2).
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 16. We have already discussed this.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.
Lord CAMPBELL of CROY: My Lords. I wonder whether it would be convenient to take Amendments Nos. 17 to 23 together, as they have all been discussed.

COMMONS AMENDMENT
[Nos. 17 to 23]
Clause 5, page 4, line 34, leave out ("may") and insert ("shall")
Page 4, line 41, at end insert ("but nothing in a subsequent direction shall relieve the Agency of a contractual liability to which they are subject in consequence of an earlier direction.")
Page 4, line 41, at end insert—
("(6A) As soon as practicable after the Secretary of State has given a direction under this section he shall lay before each House of Parliament a statement specifying—

(a) the amount of assistance that the Agency are to give in pursuance of the direction;

(b) how and to whom they are to give it; and

(c) the location in which each undertaking for which it is provided is or will be situated.")

Page 4, line 42, leave out ("set out any direction") and insert ("specify any direction that has been")
Page 4, line 43, at end insert ("and give the information concerning it that is required to be specified in a statement under subsection (6A) above.")
Page 4, line 43, at end insert—
("(7A) In any case where the Agency are exercising the Secretary of State's powers in pursuance of a direction under this section, section 7(4) of the Industry Act 1972 (which requires the consent of a company to the acquisition of its shares or stock) shall be construed, notwithstanding the fact that the direction has been given, as requiring the Secretary of State (and not the Agency) to obtain the consent.")
Page 5, line 4, after ("of") insert ("and incidental to")
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 17 to 23.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 24]
Clause 5, page 5, line 18, leave out subsection (13).
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 24, and perhaps I could associate with it Amendments Nos. 48 and 49. This Amendment allows all administrative

685
costs to be financed from grant-in-aid. The sums involved do not count towards the Agency's financial limit by virtue of Clause 13(2)(c). This change means that Clause 5(14) which allows the Secretary of State to meet the administrative costs of the Agency's giving of selective financial assistance on his behalf is superfluous. These expenses will be met by grant-in-aid in the normal way and the staff involved will be on the normal complement of the Agency.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 25]
Clause 5, page 5, line 19, at end insert—
("(14) In exercising their powers under this section the Agency shall not be regarded as the servant or agent of the Secretary of State.")
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No.25. We have already discussed this.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 26]
Clause 7, page 6, line 10, leave out from ("given") to end of line 11 and insert ("in relation to a specific act of the Agency or in relation to all acts of a class or description specified in the approval, and may be given subject to such conditions as may be so specified").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No.26. This Amendment allows my right honourable friend the Secretary of State to issue" class approvals" to proposed Agency environmental schemes, instead of having to approve every scheme individually. It seems to me that this is a very sensible improvement.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 27]
Clause 8, page 7, line 36, at end insert—
"(5) Where the Agency exercise or propose to exercise their powers under this section in connection with land as respects which a local authority have before the appointed day incurred expenditure in the exercise of similar powers, the Agency may, if they think fit, pay to the authority concerned the amount of that expenditure or any part thereof."
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No.27. This Amendment allows the Agency to reimburse any appropriate expenses incurred by a local authority—whose associations have raised this point with us—before the appointed day in preparing schemes which are subsequently adopted by the Agency. Again, I would commend this to your Lordships. It seems an eminently sensible improvement.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 28 to 34]
Clause 9, page 9, line 5, leave out ("section") and insert ("Act").
Clause 10, line 11, leave out ("Any") and insert ("Subject to subsection (2) below, any").
Clause 10, line 14, at end insert ("lease or").
Clause 10, line 23, after ("2(2)(a)") insert ("or (aa)").
Page 10, line 12, at end insert ("and the Secretary of State in relation to the Civil Aviation Authority").
Page 10, line 13, at end insert ("and the Civil Aviation Authority").
Page 10, line 33, at end insert—
("(8) Nothing in this section shall affect any powers or duties of the Post Office under the provisions of the Telegraph Acts 1863 to 1916 or apply to any telegraphic lines (within the meaning of the Telegraph Act 1878) placed or maintained by virtue of any of the provisions of those Acts.").
Lord KIRKHILL: My Lords, I wonder whether we could take Amendments Nos. 28 to 34 en bloc. We have already discussed them. With the leave of the House, I beg to move that this House doth agree with the Commons in their Amendments Nos. 28 to 34 inclusive en bloc.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 35]
Clause 14, page 13, line 7, leave out ("wholly owned").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 35. This Amendment and the Amendment which follows, which will be moved separately, fulfils undertakings given to your Lordships to meet the spirit of Opposition Amendments which were designed to prevent the Agency from using non-wholly-owned subsidiaries to bypass the requirement to obtain the permission of the Secretary of State before acquiring shares which would enable the Agency to control 30 per cent. or more of the voting capital of a company or which would give them more than £2 million of its shares.
The deletion of the words "wholly-owned" means that if a subsidiary, whether wholly-owned or not, proposes to acquire more than 30 per cent. of the voting capital of a company or to spend more than £2 million on such an acquisition, it must obtain the consent of the Secretary of State before doing so. As a result, the Agency will not be able to evade the requirements of Clause 14 by operating through non-wholly-owned subsidiaries. Again, I would commend this to your Lordships as being in every way an improvement.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, I recognise that the Government are here coming to meet a point that we raised when the Bill was considered in your Lordships' House. This is an improvement which will give some confidence to Scottish industry.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 36]
Clause 14, page 13, line 9, leave out ("without the consent of") and insert ("except with
688
the consent of the Secretary of State or in accordance with any general authority given by").
Lord KIRKHILL: I beg to move that this House doth agree with the Commons in their Amendment No. 36. The purpose of this Amendment is to enable my right honourable friend the Secretary of State to give his consent to acquisitions by the Agency or their subsidiaries in the form of a general authority. The purpose is to ensure that the control over acquisitions by partly-owned subsidiaries should not unduly restrict the interests of private sector participants in such subsidiaries. This Amendment is really consequential on Amendment No. 35 and I think that the need for the Amendment arises because the extension of the safeguards in Clause 14 to all subsidiaries of the Agency could have affected adversely the interests of non-wholly-owned subsidiaries and their minority outside shareholders. The private sector could have been discouraged from participating in valuable and productive joint ventures. I would commend this Amendment to your Lordships.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 37 to 39]
Clause 14, page 13, line 20, at end insert—("( ) Nothing in subsection (1) above shall be taken to restrict the power to form bodies corporate conferred on the Agency by section 2(4)(aa) above.")
Clause 15, page 14, line 3, after ("section") insert ("other than land held in security of a loan").
Clause 15, page 14, line 8, leave out ("(2)") and insert ("(3)").
Lord KIRKHILL: My Lords, with the leave of the House I should like to take Amendments Nos. 37 to 39 inclusive en bloc. We discussed them earlier. I beg to move that this House doth agree with the Commons in their Amendments Nos. 37 to 39 inclusive en bloc.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 40–41]
Clause 16, page 14, line 27, after ("Agency ") insert ("or the Agency's nominees")
Page 14, line 28, at end insert:
("(2) Publicly-owned securities and other publicly-owned property may only be transferred to the Agency or the Agency's nominees with the consent of the Secretary of State or in accordance with any general authority given by the Secretary of State.
(3) The Secretary of State shall as soon as practicable lay before each House of Parliament a copy of any general authority given by him under subsection (2) above.
(4) Subject to subsections (5) and (6) below, if—

(a) the Secretary of State has given a consent under subsection (2) above; and

(b) the consideration for the transfer has been determined; and

(c) its amount exceeds £1 million,

the Secretary of State shall as soon as practicable lay before each House of Parliament a statement specifying—

(i) the securities or other property to be transferred;

(ii) the transferor;

(iii) the consideration; and

(iv) the date of his consent.

(5) When the Secretary of State has given a consent under subsection (2) above before the amount of the consideration for the transfer has been determined, he shall as soon as practicable lay before each House of Parliament, unless it appears to him to be unlikely that the amount of the consideration will exceed £1million, a statement specifying the matters, other than the consideration, that are required to be specified in a statement under subsection (4) above.
(6) When a statement has been laid under subsection (5) above, the Secretary of State shall lay before each House of Parliament a statement specifying the consideration for the transfer as soon as practicable after its amount has been determined.")
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 40 and 41. These Amendments are drafting Amendments of a technical nature. They fulfil an undertaking given in your Lordships' House to proposals by noble Lords opposite that the Bill should include a provision to ensure adequate control by the Secretary of State over any transfer of publicly-owned securities and other property to the SDA under Clause 16 and to oblige him to inform Parliament of any substantial transfer. But simply to require that all transfers need
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his consent could mean that his permission would be required for every minor transfer of property. We believe that this would be pointlessly erroneous. The Amendment allows for the possibility of a general consent covering all such minor transfers to be given by my right honourable friend the Secretary of State. More significant transfers would require his permission individually. A copy of any general consent would have to be laid before Parliament to allay any fears that this power was being used improperly. I would commend this Amendment to your Lordships.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 42]
After Clause 16, insert the following new Clause—
("Section 9 of the Industry Act 1975 (the Board and the media) shall apply to the Agency as it applies to the National Enterprise Board with the substitution of a reference to section 5 of this Act for the reference in the said section 9 to section 3 of that Act.").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 42. This Amendment seeks to define the Agency's responsibilities in respect of the operation of the news media. It applies the equivalent clause in the Industry Bill. During the Bill's passage through this House, the noble Lord, Lord Campbell of Croy, inquired whether the Government visualised stocks and shares being taken in newspapers and television companies—which might prejudice the freedom of the Press. A similar point had been raised in relation to the Industry Bill in Committee in this House. My noble friend Lord Hughes replied that the Government's intentions would be made clear in the Bill by amendment in the Commons. I think that the Government intention is now made clear as a result of this Amendment to the Bill and I should emphasise that employment grounds would be the only justification for possible involvement by the Agency in a media concern. Even then, the involvement would only be on a direction from the Secretary of State under

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Clause 5. I think your Lordships can be confident that the Government have again recognised the difficulty.
Moved, that this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, I am glad to see this because, as the noble Lord has recorded, it was I who raised this point when the Bill was going through your Lordships' House earlier this year. The noble Lord, Lord Hughes, said then that it was something which the Government would look into and it has led to a new clause being added which I am sure has the right purpose. There would indeed be a difficult situation if the Government, in trying to assist part of the media in difficulties, found themselves in a controlling position and the question of the freedom of the Press came up. I am grateful to the noble Lord, Lord Hughes, who I am glad to see here, as well as to the noble Lord, Lord Kirkhill, for bringing this forward.
In passing may I say this. It may be for another Minister to reply to this later. I give notice that I shall raise this point on the Welsh Development Agency Bill which I find myself dealing with this evening. It has a very similar provision to that in the Scottish Development Agency Bill. The interesting difference between them is that in the Scottish Bill there is a new clause of five lines, which we are considering now, which makes reference to the National Enterprise Board and applies more or less the same provisions, whereas the equivalent clause in the Welsh Development Agency Bill is about a page and a half and I presume that the effects are much the same. I do not expect the noble Lord, Lord Kirkhill, to be able to give an answer on this, but when we come to the Welsh Development Agency Bill later on the fact that I am giving notice about this question now may enable the reply to be given to your Lordships on this interesting difference in the way in which the clauses are drafted.
Lord KIRKHILL: My Lords, I can say that it was a splendid example of the consistently superior mode of education which pertains in Scotland that we can do this in five lines instead of a page
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and a half, or something of that sort. I should say that the reason why the Amendment applies to the Industry Bill clause rather than reiterating the whole clause, which is the course of action adopted in the Welsh Development Agency Bill, and is the reply to the noble Lord, Lord Campbell of Croy, is that it does not create imbalance in the structure.
Lord HUGHES: My Lords, regarding the point which the noble Lord, Lord Campbell of Croy, has raised about the difference, might I say that perhaps it is the natural characteristic that the Welsh prefer total clarity even if at the expense of a page and a half, whereas the Scots prefer total economy in five lines.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 43]
After Clause 16, insert the following new clause:
Technical assistance to overseas countries
"The Agency may with the consent of the Secretary of State enter into and carry out agreements with the Minister of Overseas Development under which the Agency act, at the expense of that Minister, as the instrument by means of which technical assistance is furnished by the Minister in exercise of the power conferred by section 1(1) of the Overseas Aid Act 1966: and the Agency may. with the consent of both the Secretary of State and the said Minister enter into and carry out agreements under which the Agency, for any purpose specified in the said section 1(1), furnish technical assistance in a country or territory outside the United Kingdom against reimbursement to them of the cost of furnishing that assistance."
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 43. This clause has been introduced at the request of the Ministry of Overseas Development. Its purpose is to ensure that the Agency have power to make their skills and experience available to the Governments of, and other authorities and bodies in, overseas countries, if they should be invited to do so. A similar clause has been added to the Industry Bill in your Lordships' House and this seems to me to be an eminently sensible addition.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 44 and 45]
Clause 23, page 17, line 10, leave out ("(except where the context otherwise requires)").
Clause 23, page 17, line 42, leave out ("Parts III and IV of").
Lord KIRKHILL: My Lords, with the leave of the House, I beg to move that this House doth agree with the Commons in their Amendments Nos. 44 and 45 en bloc. We have already discussed these and I commend them to your Lordships.
Moved, That this House doth agree with the Commons in the said Amendnients.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 46]
Schedule 1, page 22, line 36, at end insert—
("Acquisition of holdings of minority shareholders
18A. Section 209 of the Companies Act 1948 (power to acquire shares of shareholders dissenting from scheme or contract approved by majority) shall have effect in relation to the transfer of shares or any class of shares in a company to the Agency and references to a transferee company in that section shall he construed accordingly.")
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No.46. This Amendment simply confers on the Scottish Development Agency certain benefits and obligations already enjoyed by companies under Section 209 of the Companies Act 1948. It would secure (subject to various conditions contained in that Section) that the Scottish Development Agency—like any other company—where it had acquired at least nine-tenths of the shares of a company (or a class of shares) for which it had made a takeover bid, will have a right to buy out the remaining dissenting shareholders at the price accepted by the majority, unless a court order is made to the contrary. If the Agency choose not to avail themselves of this right, then the dissenting shareholders may demand to be bought out at the price accepted by the majority or on terms agreed between the dissenting shareholders and the Agency or ordered by the courts. I commend this Amendment to your Lordships.
Moved, That this House doth agree with the Commons in the said Amendtment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nov. 47–51]
Schedule 2, page 23, line 6, after ("2(2)(a)") insert ("and (aa)").
Schedule 2, page 23, line 32, after ("Agency") insert ("(a)").
Schedule 2, page 23, line 34, after ("relates") insert ("and—
(b) in respect of their administrative expenses").
Schedule 2, page 23, line 37, at end insert ("other than functions under section 5 of this Act").
Schedule 2, page 23, line 48, after ("borrow") insert ("from him under paragraph 3(1) above").
Lord KIRKHILL: My Lords, with the leave of the House, I beg to move that this House doth agree with the Commons in their Amendments Nos. 47 to 51 en bloc. We have already been discussing these.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 52]
Schedule 2, page 26, line 7, at end insert ("being a form which shall conform to the best commercial standards").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 52. This Amendment removes the obligation from the Agency to increase the pensions of the members of the Agency, and the compensation payments which may be made to present members of the Scottish Industrial Estates Corporation and the small Industries Council for Rural Areas of Scotland by reference to the Pensions (Increase) Act 1971. As the reference in paragraph 2 of this Schedule to the Pensions (Increase) Act 1971 at present stands, the Agency would be obliged to increase pensions of their members and staff and compensation payments to members and staff of the Scottish Industrial Estates Corporation and the Small Industries Council for Rural Areas of Scotland in accordance with increases under that Act.

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But with regard to the pensions of members of the Agency, the situation could arise whereby a member negotiated continuation of very generous pension arrangements which he enjoyed in his previous employment; these might have provided adequate cover for inflation and the application of pensions increases to them would be unduly generous. An obligation on the Agency to apply such an increase is therefore inappropriate. As regards compensation for SICRAS and SIEC members, this will take the form of an immediate lump sum and would clearly be ineligible for pensions increase. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, I do not wish to confuse the issue but it seems to me that what the noble Lord has been saying applies to Amendment No. 54 rather than No. 52. As I understand it, Amendment No. 52 is a matter of accounting. I would not ask the noble Lord to repeat it and, if I am right in thinking that what he has been saying applies to Amendment No. 54, I shall be happy to regard it as having been said as applying to Amendment No. 54 when we reach that point.
Lord KIRKHILL: My Lords, I am obliged to the noble Lord, Lord Campbell of Croy. I did in fact flick over two pages and spoke to the wrong Amendment. I apologise to your Lordships for that error. If I might revert to what I meant to say regarding Amendment No. 52, the Amendment obliges my right honourable friend the Secretary of State, in determining the statement of account which the Agency must prepare and submit to him annually. to prescribe a form conforming to the best commercial standards.
In Committee in another place, my right honourable friend the Secretary of State for Scotland said during the discussion on the amendment to Schedule 2, that he would like every public body to produce accounts which are intelligible, which give the maximum amount of information, and which conform to the best accountancy standards. He undertook to see whether there was any way of putting something in the Bill which will help to
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achieve that. This Amendment is the result, and, since it is virtually identical to one tabled by noble Lords opposite during Committee, I am sure it will commend itself to your Lordships' House.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, this is an improvement and means that the best commercial standards should be observed in the accountancy involved with the Agency.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 53]
Schedule 2, page 26, line 33, at end insert—
("(3) If a report so laid sets out a direction under section 4 above a copy of which has not been laid in accordance with subsection (2) of that section, a statement of the reason why the copy was not so laid shall be annexed to the Agency's report by the Secretary of State, and the said subsection (2) shall not apply to the direction.")
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 53. We have already discussed this Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 54]
Schedule 4, page 28, line 10, leave out ("or compensation payable by virtue of Schedules 1 or 3") and insert ("payable by virtue of paragraph 10 of Schedule 1 or of regulations made under paragraph 3 of Schedule 3").
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 54. I hope your Lordships remember what I said about this Amendment just a few moments ago.
Moved, That this House doth agree with the Commons in the said Amendment.— (Lord Kirkhill.)
Lord CAMPBELL of CROY: My Lords, I am grateful for what the noble Lord said. I was listening carefully to his explanation of this Amendment.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 55]
Schedule 4, page 28, line 26, at end insert—
("The Farriers (Registration) Act 1975
6. In paragraph l(f) of Schedule 1 (Farriers Registration Council), for the words "Small Industries Council for Rural Areas of Scotland", there shall be substituted the words" Scottish Development Agency".")
Lord KIRKHILL: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 55. The Amendment substitutes the Scottish Development Agency for the Small Industries Council for Rural Areas of Scotland as one of the bodies which nominates a member to the Farriers Registration Council. This is an Amendment which is absolutely necessary and is not one upon which I need comment further.
Moved, That this House doth agree with the Commons in the said Amendment.— [Lord Kirkhill.]
Lord CAMPBELL of CROY: My Lords, I can see that this is part of the repeals necessary because of the Scottish Development Agency now incorporating the work which the Small Industries Council for Rural Areas of Scotland previously did. May I, on this last Amendment, take the opportunity of thanking the noble Lord, Lord Kirkhill, for having carried out what is always a difficult task, one which I certainly found difficult in over 15 years in the other place when dealing with your Lordship's Amendments, in dealing with Motions of this kind. The noble Lord, Lord Kirkhill, has not been concerned with this Bill in its earlier stages and therefore has had to deal with it right at its end. We thank him for the helpful way in which he has been able to put these Amendments to us. I should also like to take the opportunity of thanking the noble Lord, Lord Hughes, who dealt with all the earlier stages of this Bill.
Lord KIRKHILL: My Lords, may I say simply a sincere "Thank you" to the noble Lord, Lord Campbell of Croy, for his kind words. I hope he has borne with me, as I inadvertently turned over two pages of my brief at once at an earlier stage and became somewhat confused between the Amendments to be taken en bloc and those to be taken
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singly. Nevertheless, I have enjoyed this first experience.
Lord HUGHES: My Lords, may I express thanks to the noble Lord, Lord Campbell of Croy, for his references to me. We had differences in the earlier stages of the Bill, and the noble Lord will remember that when certain things were done I predicted the course of action which was likely to be taken in another place. These forecasts, not surprisingly, have proved to be accurate. I am grateful that the noble Lord, Lord Campbell of Croy, at the final stage has accepted that the will of the other place must prevail. I hope some of the fears which have been expressed about this Bill will prove to be as groundless as were the fears which were expressed a number of years ago when the Highlands and Islands Development Act was going through Parliament, and that for Scotland as a whole the Agency will perform as useful a function as the Highlands and Islands Development Board, in their more restricted sphere, have performed for the Highlands.
On Question, Motion agreed to.

WELSH DEVELOPMENT AGENCY (No. 2) BILL [H.L.]
6.45 p.m.
Lord LOVELL-DAVIS: My Lords. I beg to move that the Commons Amendments be now considered.
Moved accordingly, and, on Question, Motion agreed to.
[References are to Bill [183] as first printed for the Commons]

COMMONS AMENDMENT
[No. 1]
Clause 1, page 2, line 2, at end insert—
("(bb) to carry on industrial undertakings and to establish and carry on new industrial undertakings;").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 1. At the same time, I should like to speak to Amendment No. 51. It was made perfectly clear that the Government were pledged to reinstate in the Bill the Agency's function:
"to carry on industrial undertakings and to establish and carry on new industrial undertakings".

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The other Amendment, Amendment No. 51, is consequential. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
Lord CAMPBELL of CROY: My Lords, this is a similar point to the one which we were dealing with earlier today on the other Development Agency Bill. There is a difference of view between the two sides of the House about what is the best way of promoting the health and vigour of British industry and, in this case, industry in Wales. We believe that this is not the best way of doing it, that to give an agency the power to carry on industrial undertakings and establish new ones, in competition with private industry, could be counter-productive in its effect. We recognise that this is a basic difference of view on method and that our aims are the same—to try to promote a healthy, vigorous and competitive industry. I would not suggest to my noble friends that we should insist on your Lordships' Amendment, but I wanted to make clear that we have this divergence in opinion.
Lord LLOYD of KILGERRAN: My Lords, may I congratulate the noble Lord, Lord Campbell of Croy, on the ease with which he moves from Scottish affairs to Welsh affairs? If it helps the noble Lord, Lord Lovell-Davis, may I say on behalf of the Welsh Liberals that I do not propose to raise any points in relation to these Amendments. We welcome the Bill as such, and I hope that statement will be of assistance. I shall watch with care the reference to one clause in the Bill where I noticed during the course of Lord Campbell of Croy's reference to the difference in the length of clauses, there was a racialist reference to a certain amount of illiteracy in Wales; but I am sure the noble Lord is making no point about that.
Lord LOVELL-DAVIS: My Lords, I am grateful to the noble Lord, Lord Lloyd of Kilgerran, and I am glad to know I shall have his support. I hope I can satisfy him and the noble Lord, Lord Campbell of Croy, when we come to this other matter. I fully accept what the noble Lord, Lord Campbell of Croy, said; there is a difference of view. We on this side believe one answer to the problems which face us is to recognise
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that the Government can, and should, become a partner in industry. In Wales, the Agency will be able to provide new jobs, particularly in areas of high unemployment. It is therefore of fundamental importance that the Agency should be able to act not only through joint ventures with private industry, but by themselves establishing new companies.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 2]
Clause 1, page 2, line 4, leave out ("industrial undertakings") and insert ("an industry or any undertakings in an industry").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 2. This Amendment simply brings the Welsh Development Agency Bill into line with the Scottish Development Agency Bill and the Industry Bill.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 3]
Clause 1, page 2, line 6, leave out from first ("promote") to end of line 9 and insert ("industrial democracy in undertakings which the Agency control;").
Lord LOVELL-DAVIS: I beg to move that this House doth agree with the Commons in their Amendment No. 3. The Government made clear their intention to introduce this Amendment and to restore to the Bill the responsibility of the Agency to help promote industrial democracy. The Government believe in the need to extend the concept and the use of industrial democracy in both public and private sectors, and it is a tribute to the importance of the Welsh Development Agency that they will be among the first to have the opportunity to implement the Government's proposals. We discussed this matter at great length in consideration of the Commons Amendments during both the Industry Bill and the Scottish Development Agency Bill. There are parallel Amendments in both Bills.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
Lord CAMPBELL of CROY: My Lords, like the noble Lord, Lord Lloyd of Kilgerran, I do not propose to do more than speak to two or three of these Amendments because they are similar to the ones which we have discussed today on two earlier Bills. But I must on this occasion, where the definition of" industrial democracy" is lacking and yet the term is being introduced into the Bill, draw attention to what the noble Lord, Lord Beswick, said earlier today. When he was dealing with this point on the Industry Bill he admitted that industrial democracy was not at present clear as a concept; it was something that still had to be examined and, as we have pointed out, it has a different meaning for different people. So we feel unhappy, as many noble Lords in different parts of this House did, in introducing such a vague term into legislation. With that reservation, however, we do not intend to oppose it at this stage.
Lord LLOYD of KILGERRAN: My Lords, we also have some reservations about certain clauses, including this clause, but do not want to press the matter. However, I should have said in my earlier intervention that we on these Benches feel that the great defect of the Bill is that there is no reference to a Welsh Assembly. It is unity in Wales which is required if we are to deal with the economic problems with which Wales is now beset, and particularly if we are to make Wales more attractive so that the young will remain in their environment rather than leave Wales.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 4]
Clause 1, page 2, line 16, at end insert—
("(3A) In exercising their functions the Agency shall have regard to the requirements of agriculture and efficient land management.")
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 4. Because of the special importance of agriculture to Wales, the Government thought that it would be right to make this specific reference to agriculture in the Bill; and as noble Lords will know, there is a parallel in the Scottish Bill. By reason of this subsection, those whose concern is in land can be reassured that
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the Agency in exercising their functions will have proper regard to the preservation of good agricultural land and the adoption of good land management practices.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
Baroness WHITE: My Lords, I should like to mention that in the Scottish Bill at this point there is a further reference to the desirability of safeguarding the environment. I do not wish to pursue this matter because I raised it at earlier stages on the Bill, but I should like to say that in references to the environment the Scottish Bill is by and large far more felicitously phrased than is the Welsh one.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 5]
Clause 1, page 2, line 16, at end insert—
("(3B) The Agency may only exercise functions under subsection (3)(c) above through subsidiaries.")
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 5. In fulfilling its industrial investment role, the Agency will operate in exactly the same way as any other company which is starting up or running a business. They will have no compulsory powers; no special privileges. It was desirable and appropriate to put some more words into the Bill which would clarify the Government's intentions on this point.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 6]
Clause 1, page 2, line 17, leave out from ("anything") to ("or") in line 19, and insert ("whether in Wales".).
6.53 p.m.
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 6. In response to representations made in Committee in another place, the Government reconsidered this subsection and tabled this Amendment. It removes

703
the need for the Agency to obtain the Secretary of State's approval for incidental activities outside Wales.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 7]
Clause 1, page 2, line 20, after ("functions") insert ("specified in subsection (3) above").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 7. This Amendment, put forward by the Opposition, makes it clear that the functions referred to in subsection (4) are those set out in the preceding subsection (3).
Moved, That this House doth agree with the Commons in the said Amend-ment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 8]
Clause 1, page 2, line 24, at end insert—
("(aa) to form bodies corporate;").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 8. If I may, I should like to speak to No. 37 at the same time. I do not think I need to go into a great deal of detail. We have already had such discussion in both Houses on the Agency's function,
"to carry on industrial undertakings and to establish and carry on new industrial undertakings",
which has now, happily, been reinstated in the Bill. These Amendments are consequential. Now that that function has been put back into the Bill, I am sure that noble Lords opposite will perforce accept that the reinsertion of the references in these Amendments are consequential in this direction also. There are, of course, parallel Amendments in the Scottish Development Bill and in the Industry Bill. My Lords, I beg to move.
Moved, That this House doth agree with the Commons n the said Amendment.—(Lord Lovell-Davis.)
Lord CAMPBELL of CROY: My Lords, we recognise that, having decided to revert to the original text and put back into the Bill the power of the Agency to establish companies in competition with private firms in Wales, the Government would wish to give the Agency the power to form bodies corporate. But, again, from this side of the House I must make it clear that we do not think this is the best way of helping forward industry in Wales. We think it likely to cause loss of confidence in the Agency. Certainly when the Amendments were made in this House to the two Development Agency Bills we could see the reaction in industry in this country to the effect that this was an improvement and that the Agency were going to be less of a threatening, overpowering body, and more of a body to help them and to help them be efficient.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 9 and 10]
Clause 1, page 2, line 32, at end insert ("and other property").
Clause 1, page 2, line 36, after ("equipment") insert ("and other property").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 9 and 10. With interests in manufacturing industry, it is possible that the Agency will find themselves in a position where there are new products or processes which they wish to exploit by the sale of patents and know-how. The Amendments ensure that the Agency's powers in this respect are clear and that their ability to acquire, make available for hire or dispose of property goes beyond tangible assets such as machinery, plant and equipment. My Lords, I beg to move.
Moved, that this House doth agree with the Commons in the said Amendments.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 11]
Clause 1, page 3, line 4, after ("(3)(b)") insert ("and (bb)").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment

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No. 11. With the reinstatement in the Bill of the Agency's function,
"to carry on and to establish and carry on new industrial undertakings",
this consequential Amendment reinstates the cross-reference in subsection (6).
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 12]
Clause 1, page 3, line 12, at end insert—
("(8A) Subject to paragraph 9(3) of Schedule 3 below, when the Secretary of State gives a direction under this section in connection with the Agency's functions under subsection (3)(b) or (bb) above, he shall either—

(a) lay a copy of the direction before each House of Parliament within 28 days of giving it; or

(b) lay a copy later, but lay with it a statement of the reason why a copy was not laid within 28 days.")

Lord LOVELL-DAVIS: My Lords, I Deg to move that this House doth agree with the Commons in their Amendment No. 12. I will, if I may, speak to Amendment No. 55 at the same time. These Amendments meet points made by noble Lords opposite with regard to the publication of directions given to the Agency and follow the Industry Bill precedent.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[N o. 13]
After Clause 2, insert the following new clause:
Overseas aid
("The Agency may with the consent of the Secretary of State enter into and carry out agreements with the Minister of Overseas Development under which the Agency act, at the expense of that Minister, as the instrument by means of which technical assistance is furnished by that Minister in the exercise of the power conferred by section 1(1) of the Overseas Aid Act 1966; and the Agency may, with the consent of both the Secretary of State and the said Minister, enter into and carry out agreements under which the Agency, for any purpose specified in the said section 1(1), furnish technical assistance in a country or territory outside the United Kingdom against
706
reimbursement to them of the cost of furnishing that assistance.")
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 13. This clause was introduced at the request of the Ministry of Overseas Development. Its purpose is to ensure that the Agency are able to make their skills and experience available to the Governments of overseas countries, and other authorities and bodies in those countries, if they should be invited to do so. Parallel clauses, as noble Lords will know, were added to the Industry Bill and to the Scottish Development Agency Bill. My Lords, I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
6.58 p.m.
Lord OGMORE: My Lords, I should like to ask a question about this matter because this is a new clause and we have not discussed it here at all. It was introduced, I believe, in the Commons at a very late stage and I should like to know something more about it. I do not necessarily object to it, but it is quite an adventure, if one likes to call it such, which we had not thought of at any stage when we were discussing this Bill previously. I presume that if, we will say, there is a project in Lesotho or in Indonesia which the Minister of Overseas Development thinks might be helped by Welshmen or Welsh resources he could, with the consent of the Secretary of State, ask the Agency to deal with it. Having had experience in this field, I know that it is not always satisfactory. If you ask somebody who has no knowledge whatsoever of dealing with projects either in Africa or in Asia to deal with agriculture in Lesotho he may make a great mess of it.
All development is not necessarily good development. So much depends upon expertise. For instance, just after the war the Americans, through the UNRWA Agency, went into China and began agricultural development. They provided steam powered ploughs to the Chinese and this was an absolute disaster. So long as they were operating in the normal way it was perfectly all right, but as soon as they went wrong large parts of China were littered with ploughs because there was nobody who could repair them.

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If you provide that kind of aid to a country which is completely inexperienced in the use of such equipment you create very grave problems. If the plough is brought into a country which has never before used it, it is more likely to do more harm than good. You must have people with experience not only of the equipment with which they are dealing, but also of the country to which aid is being given and its problems.
One has to think only of the groundnuts scheme which was started with what expertise there was, but we all know that that was a great disaster. It need not have been disastrous if certain simple operational inquiries had been made beforehand—operational inquiries which, I may say, the Agency will probably be in no way competent to carry out. This might foreshadow a disaster. Of course, the Minister of Overseas Development will be only too glad to get things done. It is his job to provide ploughs somewhere or another and get things going. He will not point out the problems. It will be the unfortunate Agency and the people in Wales who will have to carry the can. If a large amount of money is expended on wild-cat schemes in Africa or Asia, less will go to the Agency. The farmers in mid-Wales will probably have to pay. They will not receive sufficient resources because of schemes that are supported in parts of Africa and Asia.
That is all I have to say. Having had a certain amount of experience in this field, I warn the noble Lord the Minister and the Department concerned that all development is not necessarily good development.
Lord LOVELL-DAVIS: My Lords, I take the point which has been made by the noble Lord, Lord Ogmore. Perhaps to some extent this is my fault. It is a late hour and we covered the substance of the matter in our previous discussion. Perhaps, therefore, I was moving too quickly. Obviously anybody going abroad will want to know what it is all about. There are areas where the Agency will undoubtedly have expertise which can be applied. I do not mean simply in medical terms. I am referring to such questions as derelict land clearance. We have a great deal of experience of this in Wales and it may be useful to other countries to profit from our know-how.
708
The clause empowers the Agency, with the consent of the Secretary of State, to enter into and carry out agreements with the Minister of Overseas Development. Technical assistance provided under such agreements will form part of the British aid programme. The cost will be met by the Minister of Overseas Development within the financial ceiling for that programme. I should point out that this will not come from the Agency's fund. It simply empowers the Agency to provide assistance outside the official aid programme by entering into and carrying out, again with the consent of the Secretary of State and the Minister of Overseas Development, agreements with overseas Governments and other authorities such as international organisations. As I say, the cost in such cases will be met by the authorities concerned. I cannot imagine that we shall enter into any wildcat schemes or that we shall adopt a cavalier approach. We shall be asked to provide these skills and assistance when it is clear that the Agency are in a position to do so.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 14]
Clause 5, page 4, line 36, leave out ("with the approval of the Secretary of State").
7.5 p.m.
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 14. The intention behind the original provision for the Secretary of State's approval was to prevent a proliferation of committees. There is always a great temptation to establish committee after committee. We were anxious to avoid this and thereby leave as much responsibility as possible clearly resting with the board of the Agency themselves. However, we accept that on one construction the provision could be interpreted as diminishing the stature of the Agency and their board, as the noble Baroness, Lady White, emphasised during an earlier stage of the Bill, if the Agency were prevented from deciding what committees they needed to organise themselves most efficiently. The Government therefore accept this Amendment. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
Baroness WHITE: My Lords, I should like to express my satisfaction that the Government have accepted an Amendment which gives to the Agency the powers which I should have thought any reputable Agency ought to possess.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 15]
Clause 6, page 5, line 3, at end insert ("and for the avoidance of doubt, it is hereby declared that planning permission shall be deemed to have been granted under section 29 of the Town and Country Planning Act 1971 in respect of any development initiated by the Corporation before the commencement of this Act.").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 15. At present, developments by the Welsh Industrial Estates Corporation are treated as being made by a Government Department and as such do not require formal planning approval. This Amendment avoids the possibility that, once the Agency take over Estates Corporation factories in the course of construction the legality of the development might be questioned on the ground that formal planning permission had never been given. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 16]
After Clause 6, insert the following new Clause:
Transfer to Agency of land held under Local Employment Act 1972
".— (1) All land in Wales which was acquired by or vested in any Minister of the Crown under an enactment specified in subsection (2) below and which is held (otherwise than as security for a loan) for the purposes of the Local Employment Act 1972 shall vest in the Agency, subject to all rights, liabilities and obligations relating to it.
(2) The enactments mentioned in subsection (1) above are the Distribution of Industry Acts 1945 to 1958, the Local Employment Acts 1960 to 1971 and the Local Employment Act 1972,"
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 16. The effect of the new clause is
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to transfer to the Agency the freeholds of all land in Wales in which the Welsh Industrial Estates Corporation, the functions of which body are to be subsumed within the Agency, have an interest. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 17]
Clause 7, page 5, line 9, leave out ("with the approval of the Secretary of State").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 17. This Amendment obviates the need for the Agency to require the approval of the Secretary of State before modernising, adapting or reconstructing buildings on industrial sites. In the light of comments made by noble Lords during the Committee stage of the Bill, we looked again at the whole clause as drafted and accepted the Amendment in another place. We believe that the clause as amended will reflect a reasonable balance between the argument for greater control of the Agency and the argument for less.
Moved, That this House doth agree with the Commons in the said Amendment.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 18]
Clause 9, page 6, line 7, at end insert—
"(2) In section 59 of that Act (compensation for exercise of special powers in relation to tenancies)—

(a) in subsection (1), after the word "sections" there shall be inserted the words "or, subject to subsection (IA) below, section 60A below", and

(b) after that subsection there shall be inserted the following subsection:—

"(1A) No compensation shall be recoverable under subsection (1) above where the certificate was given under section 60A below and either—

(a) the premises vested in the Welsh Development Agency under section 6 (property of Welsh Industrial Estates Corporation) or 7 (land held under Local Employment Act 1972) of the Welsh Development Agency Act 1975,

711

(b) the tenant was not tenant of the premises when the said Agency acquired the interest by virtue of which the certificate was given.""

Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 18. The Government have considered carefully and sympathetically the representations made both here by the noble Lord, Lord Elton, and in another place about the need to provide in some way for the rights of tenants whose landlords might dispose of their freehold interest in land to the Agency and who in consequence become in that particular way tenants of the Agency and thus subject to the application of the certificate system provided for in the Landlord and Tenant Act, a system which, I might add, is very rarely used.
A clear distinction can be drawn between the tenants I have just described who become tenants of the Agency second-hand and others, such as existing tenants of the Welsh Industrial Estates Corporation, who enter into leases with the Agency willingly and knowingly, fully aware of the provisions of the Landlord and Tenant Act and the possible application of the certificate procedure to their premises. We concluded that it would be right to provide for an entitlement to compensation in the case of "unknowing" tenants in the event that the certificate procedure was applied to them—a procedure of which they would have had no knowledge when entering into their leases. This Amendment achieves that aim.
Moved, That this House doth agree with the Commons in the said Amendment—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 19–28]
Clause 10, page 6, line 8, leave out from beginning to ("by") in line 9 and insert ("In any case where it appears to the Secretary of State that the powers conferred on him").
Clause 10, page 6, line 10, leave out ("may be exercised by the Agency") and insert ("are exercisable and ought to be exercised, the Secretar of State, with the consent of the Treasury, may direct the Agency to exercise them; and the Agency shall not require the consent of the Treasury to the
712
exercise of any such powers in pursuance of such a direction").
Clause 10, page 6, line 12, leave out sub-section (2).
Clause 10, page 6, line 28, at end insert ("but nothing in a subsequent direction shall relieve the Agency of a contractual liability to which they are subject in consequence of an earlier direction").
Clause 10, page 6, line 28, at end insert—
("(6A) As soon as practicable after the Secretary of State has given a direction under this section he shall lay before each House of Parliament a statement specifying—

(a) the amount of assistance that the Agency are to give in pursuance of the direction; and

(b) how and to whom they are to give it.").

Clause 10, page 6, line 29, leave out ("set out any direction") and insert ("specify any direction that has been").
Clause 10, page 6, line 30, at end insert ("and give the information concerning it that is required to be specified in a statement under subsection (6) above"):
Clause 10, page 6, line 30, at end insert—
("7A) In any case where the Agency are exercising the Secretary of State's powers in pursuance of a direction under this section, section 7(4) of the Industry Act 1972 (which requires the consent of a company to the acquisition of its shares or stock) shall be construed, notwithstanding the fact that the direction has been given, as requiring the Secretary of State (and not the Agency) to obtain the consent.").
Clause 10, page 6, line 34, after ("of") insert (" and incidental to").
Page 7, line 6, at end insert—
("(13A) For the avoidance of doubt it is hereby declared, without prejudice to the generality of section 2(8) above, that powers exercised by the Agency under this section are not exercised on behalf of the Crown or of any government department.").
7.10 p.m.
Lord LOVELL-DAVIS: My Lords, with the leave of the House I beg to move that this House doth agree with the Commons in their Amendments Nos. 19 to 28 en bloc. These Amendments to Clause 10 of the Bill are straightforward. They follow Amendments made to the comparable clauses in the Scottish Development Agency and Industry Bills, and most of them are designed to meet points made either in your Lordships' House by the noble Lord, Lord Elton, or in another place.
Amendments Nos. 19, 20, 21 and 26 serve a simple purpose and meet points made in this House. They make it quite

713
clear that all the restrictions and limitations on the use of the powers in Section 7 of the 1972 Industry Act which apply when the Secretary of State exercises the powers himself will continue to apply to him when he directs the Agency to exercise those powers. Amendment No. 22 safeguards the position of companies receiving selective financial assistance via the Agency by providing that subsequent directions by the Secretary of State shall not release the Agency from their normal contractual obligations. Amendments Nos. 23 and 24 ensure that directions given to the Agency to act as a channel for selective financial assistance will be brought to the attention of Parliament and public at the time they are given and that the Agency's annual report shall specify any direction that has been given.
Amendment No. 25 ensures that the Agency's annual report will contain the same information concerning a direction as has been contained in the statement which the Secretary of State has to lay before Parliament. Amendment No. 27 is a drafting Amendment designed to achieve consistency between the wording in Clause 10(9) and paragraph 7(5) of Schedule 3. Finally, Amendment No. 28 makes it clear that when exercising the power to give selective financial assistance the Agency are not to be regarded as the servant or agent of the Secretary of State. This will ensure that the Agency will have every incentive to act efficiently and prudently. My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 19 to 28 inclusive.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 29–32]
Clause 12, page 7, line 26, after ("Agency") insert ("or the Agency's nominees").
Clause 12, page 7, line 29, after ("Agency") insert ("or the Agency's nominees").
Clause 12, page 7, line 30, at end insert ("or in accordance with any general authority given by the Secretary of State.
(3) The Secretary of State shall lay before each House of Parliament a copy of any
714
general authority given by him under subsection (2) above.").
Clause 12, page 7, line 30, at end insert—
("(4) When the Secretary of State has given a consent under subsection (2) above and the consideration for the transfer exceeds £1 million, he shall lay before each House of Parliament a statement specifying—

(a) the securities or other property to be transferred;

(b) the transferor;

(c) the consideration; and

(d) the date of his consent.")

Lord LOVELL-DAVIS: My Lords, again with the leave of the House I beg to move that this House doth agree with the Commons in their Amendments Nos. 29 to 32 inclusive. These Amendments to Clause 12 are also straightforward. Again they follow Amendments to the comparable clauses in the Scottish Development Agency and Industry Bills and meet points made by noble Lords opposite. Amendments Nos. 29 and 30 are drafting Amendments of a technical nature to provide that publicly-owned securities or other publicly-owned property may be transferred to persons nominated by the Agency as well as to the Agency themselves.
Amendment No. 31 builds on the provision already in the Bill that publicly-owned property or securities can only be transferred to the Agency with the consent of the Secretary of State. But in order to prevent minor transfers each needing separate consent, this Amendment provides that a general authority giving consent for minor transfers can be given. A copy of any general consent would have to be laid before Parliament. Amendment No. 32 fulfils the undertaking given in this House that a suitable procedure for notifying Parliament of transfers of publicly-owned property would be inserted in the Bill. This ensures that Parliament will be informed of all relevant information when significant transfers take place.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 33]
Clause 15, page 9, line 5, leave out ("may") and insert ("shall").
Lord LOVELL-DAVIS: My Lords, 1 beg to move that this House doth agree with the Commons in their Amendment No. 33. The original drafting allowed the Secretary of State a discretionary power to determine the financial duties of the Agency. The Amendment meets a point made by Opposition Members in Committee in another place and imposes a clear obligation on the Secretary of State to determine the Agency's financial duties.
I beg to move that this House doth agree with the Commons in their Amendment No. 33.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 34]
After Clause 16, insert the following new clause—
"The Agency and the media
.—(1) Subject to subsection (2) below, neither the Agency nor any of the Agency's subsidiaries—

(a) shall commence a business of publishing newspapers, magazines or other periodicals for sale to the public in the United Kingdom; or

(b) enter into any contract with the Independent Broadcasting Authority for the provision of programmes.

(2) Subsection (1) above does not apply to periodicals wholly or mainly concerned with the activities of the Agency or any of the Agency's subsidiaries.
(3) Subject to subsection (4) below, neither the Agency nor any of the Agency's subsidiaries shall acquire any of the share capital of a body corporate if a substantial part of the undertaking—

(a) of that body corporate, or

(b) of a group of companies of which it is the holding company, consists of carrying on—

(i) a business such as is mentioned in paragraph (a) of subsection (1) above, or

(ii) the activities of a programme contractor.

(4) Subsection (3) above shall not prevent the acquisition of share capital of a body corporate if the acquisition is made in pursuance of a direction under section 10 above.
(5) Subject to subsections (7) and (8) below, if the Agency or any of the Agency's subsidiaries acquire any of the share capital of a body corporate which carries on any such business as is mentioned in subsection (1)(a) above, it shall be their duty to exercise their voting power with a view to securing that the
716
body corporate disposes of the business as soon as practicable.
(6) Subject to subsections (7) and (8) below, if the Agency or any of the Agency's subsidiaries acquire any of the share capital of a body corporate which has any interest, direct or indirect, in a body corporate which carries on such a business, it shall be their duty to exercise their voting power with a view to securing that the capital of the body corporate which carries on that business is disposed of as soon as practicable.
(7) The Secretary of State may direct that the Agency or a subsidiary of the Agency shall not be under any duty imposed by subsection (5) or (6) above during such time as the direction is in force.
(8) The Secretary of State may only give such a direction as is mentioned in subsection (7) above if he is of the opinion that without such a direction serious commercial injury would be caused to any newspaper, magazine or periodical concerned.
(9) If the Agency or any of the Agency's subsidiaries acquire any of the share capital of a body corporate which is a programme contractor, they shall consult the Independent Broadcasting Authority as to the steps that they are to take with regard to that share capital and obey any direction given by that Authority.
(10) Without prejudice to the foregoing provisions of this section, it shall he the duty of the Agency and of any of the Agency's subsidiaries to use any power to control or influence the carrying on of a business such as is mentioned in paragraph (a) of subsection (1) above or of the activities of a programme contractor only in relation to financial or commercial matters.
(11) In this section "programme contractor" has the meaning assigned to it by section 2(3) of the Independent Broadcasting Authority Act 1973."
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 34. As noble Lords are well aware by now this clause defines the Agency's responsibilities in respect of the operation of news media. It follows precisely the comparable provision in the Industry Bill. In particular the Agency will not be able to initiate an enterprise in the news media and it is clear that directions given by the Secretary of State to allow the Agency or their subsidiaries to retain the media interests are not intended to be permanent. Such directions will continue in operation only while there is a danger of serious commercial injury being caused to a newspaper or periodical if the Welsh Development Agency were obliged to dispose of their interests.
The noble Lord, Lord Campbell of Croy, has already given me notice of a

717
question in respect of this. The reason why we have provided something rather fuller is simply one of drafting and I think perhaps of national independence. It was felt better to set the matter out in full in our Bill without referring to or depending in any way on another Bill. So that unlike the Scottish Development Agency Bill the Welsh Development Agency Bill in this respect stand on their own feet.
I beg to move that this House doth agree with the Commons in their Amendment No. 34.
Moved, That this House both agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
Lord CAMPBELL of CROY: My Lords, I am grateful to the noble Lord for that explanation about the difference between the new clauses in the two Bills, because on the Scottish Development Agency Bill I raised the point that the equivalent clause there was only five lines, and I referred to the Industry Bill and the National Enterprise Board. My object was to find out whether there was any difference. The noble Lord has kindly replied and made it clear that it is simply another way of drafting, and of course I see no objection at all.
I am sure it is right that Welsh and Scottish legislation should go about these things in their different ways if that seems best and convenient. But in your Lordships' House I think I was the first person to raise the whole question of the Agencies and their relationship to the media, and the difficulties that there might be if there was not some provision for situations where they were trying to help companies in the media and where the control of those companies might come into question. So I think your Lordships will be as glad to see this additional clause in the Welsh Development Agency Bill, as we have been to see a similar, though differently worded, clause in the Scottish Development Agency Bill.
May I add that, when I drew attention to the difference between the drafting of these two clauses, I did not make any unfavourable comparisons about the reasons for this as between Scotland and Wales, but I should like to draw atten
718
tion to the fact that in the previous Amendment No. 33, "may" and "shall" is something that continually occurs in Scottish debates on Bills, so I am sure that also is common to both Scottish and Welsh legislative discussions.
Lord LLOYD of KILGERRAN: My Lords, may I add that I am glad we in Wales have scored over Scotland in this matter. This clause has been properly drafted in the modern sense because all lawyers and all businessmen know what a nuisance it is when a clause refers to another Bill, and what the draftsman of this Welsh Bill has done is merely to quote largely passages from the Industry Bill to make it readable to the ordinary person. I should like to congratulate the noble Lord, Lord Lovell-Davis, on the point he made about drafting.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 35]
Clause 17, page 10, line 11, leave out ("wholly owned").
Lord LOVELL-DAVIS: My Lords, I beg to move that this Horse doth agree with the Commons in their Amendment No. 35. The effect of this Amendment is to provide that the controls by the Secretary of State over acquisitions of shares by the Agency and its subsidiaries extend to all subsidiaries and not simply the Agency's wholly-owned subsidiaries. This Amendment met points which were made in this House by the noble Lord, Lord Aberdare, and also in another place.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 36]
Clause 17, page 10, line 13, leave out ("without the consent of") and insert ("except with the consent of the Secretary of State or in accordance with any general authority given by")
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 36. This Amendment provides that consents by the Secretary of State to acquisitions by the Agency or their subsidiaries may take the form of a general authority. Such an authority could be

719
used to free the Agency or their subsidiaries from the need to refer certain classes of acquisitions to the Secretary of State for approval, even though they would be technically subject to the controls of Clause 17. It follows Amendments made by noble Lords to the Industry Bill and the Scottish Development Agency Bill.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 37]
Clause 17, page 10, line 23, at end insert—
("(2A) Nothing in subsection (1) above shall be taken to restrict the power to form bodies corporate conferred on the Agency by section 1(5)(aa) above.")
7.20 p.m.
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 37.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 38]
Clause 19, page 11, line 5, at end insert—
("(3A) Except as provided by section 15(4) above, the Agency shall not, except with the consent of the Secretary of State, dispose of land for a consideration less than the best that can reasonably be obtained.")
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 38. The purpose of the Amendment is to ensure that the Agency get a proper return, except where the Secretary of State is satisfied that the circumstances justify otherwise. The Agency will be given guidance on the determination of market value, and this will be in keeping with the arrangements which currently apply to local authorities and new towns. Again, this is not a new Amendment in terms of the Scottish Development Agency Bill. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 39 to 45]
Clause 19, page 12, line 7, after ("their") insert ("statutory").
Clause 19, page 12, line 8, leave out ("Secretary of State") and insert ("appropriate Minister.")
Clause 24, page 14, line 21, at end insert (""the appropriate Minister" in relation to any statutory undertakers in relation to whom it is defined by section 224 of the Town and Country Planning Act 1971 or any other Act, has the meaning assigned to it by the Act so defining it;")
Clause 24, page 14, line 21, at end insert (""holding company" means a holding company as defined in section 154 of the Companies Act 1948;")
Clause 24, page 14, line 28, leave out from ("undertakers") to end of line 30 and insert—("means—

(a) persons authorised by virtue of any enactment to carry on any railway, light railway, tramway, road transport, water transport, canal, inland navigation, dock, harbour, pier or lighthouse undertaking, or any undertaking for the supply of electricity, gas, hydraulic power or water, and

(b) the Civil Aviation Authority, the National Coal Board, the Post Office and any other authority, body or undertakers which by virtue of any enactment are to he treated as statutory undertakers for the purposes of the Town and Country Planning Act 1971;

and "statutory undertaking" shall be construed accordingly;")
Clause 24, page 14, line 30, at end insert (""subsidiary" means a subsidiary as defined by section 154 of the Companies Act 1948: and")
Clause 24, page 14, line 32, leave out ("the Companies Act 1948") and insert ("that Act").
Lord LOVELL-DAVIS: My Lords, with the leave of the House I beg to move that this House doth agree with the Commons in their Amendments Nos. 39 to 45 en bloc. These are drafting Amendments. Amendment No. 39 makes it clear that the "undertaking" referred to in Clause 20(5) is a statutory undertaking. Amendment No. 40 is also designed to make it clear that the authority required for the carrying out of works on land held by the statutory undertakers—and to which a statutory undertaker has objected—is that of the Minister responsible for the statutory undertaking in question.
My Lords, Amendment No. 41 adds to the interpretation clause a definition

721
of "appropriate Minister" and Amendment No. 43 extends the definition of "statutory undertakers", which we found to be too restrictive. Amendment No. 42 adds a definition of "holding company". Amendment No. 44 simply adds a definition of "subsidiary" and Amendment No. 45 is a consequential drafting Amendment.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 46]
Clause 25, page 15, line 5, leave out ("this Act") and insert ("any provision of this Act other than section 19")
Lord LOVELL-DAVIS: My Lords, I beg to move that this House cloth agree with the Commons in their Amendment No. 46. Clause 25(1) provides that any power to make an order conferred by this Act shall be exercisable by statutory instrument. This Amendment excludes from this requirement the making of a compulsory purchase order. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 47]
Clause 26, page 15, line 16, at end insert("(3) Section 1(5) above and paragraphs 13 and 21 of Schedule 1 below extend to Northern Ireland, but none of the other provisions of the Act so extends.")
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 47. Northern Ireland has its own separate editions of the Statutes which apply to it and its own separate legal system, and does not wish to be troubled by legislation which does not concern it. As Westminster legislation extends to Northern Ireland unless it is stated that it does not so extend, it is necessary to spell out the position precisely. There is nothing unusual about this. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 48]
Schedule 1, page 19, line 42, at end insert—
("Acquisition of holdings of minority shareholders.
21A. Section 209 of the Companies Act 1948 (power to acquire shares of shareholders dissenting from scheme or contract approved by majority) shall have effect in relation to the transfer of shares or any class of shares in a company to the Agency; and references to a transferee company in that section shall be construed accordingly.")
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 48. This is a technical Amendment, necessery to put the Agency on a par with a company. It arises because the Agency are a statutory corporation, and therefore not a company. Section 209 of the Companies Act 1948 applies only to companies. Section 209 confers obligations as well as benefits, and includes important provisions to protect minority shareholders in companies which are being taken over by the Agency. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 49 to 50]
Schedule 2, page 20, line 5, leave out ("persons") and insert ("any person")
Schedule 2, page 20, line 7, leave out (" are") and insert ("is").
Lord LOVELL-DAVIS: My Lords, with the permission of the House. I beg to move that this House doth agree with the Commons in their Amendments Nos. 49 and 50. These Amendments are of a purely drafting nature, and were simply intended to correct the grammar.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 51]
Schedule 3, page 21, line 24, after ("1(3)(b)") insert ("and (bb)").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 51.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 52]
Schedule 3, page 22, line 7, leave out ("such sums to the Agency") and insert—
("to the Agency such sums—

(a) without prejudice to section 11(14) above, in respect of administrative expenses relating to any of their functions, and

(b) such other sums.").

Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 52. The purpose of this Amendment is to enable the Secretary of State to pay the administrative expenses incurred by the Agency in exercising their industrial investment functions from money provided by Parliament—that is, grant in aid—rather than from public dividend capital. Inadvertently, paragraph (2) of Schedule 3 precluded the Secretary of State from paying grant in aid to the Agency in this respect. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 53 to 54]
Schedule 3, page 22, line 33, at end insert—
("(4) References to borrowing in this paragraph do not include borrowing under section 10 above.").
Schedule 3, page 22, line 37, after ("borrow") insert ("from him under paragraph 3 above").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 53 and 54 en bloc. These Amendments make it clear that any expenditure which the Agency incur at the direction of the Secretary of State under Clause 10
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in giving selective financial assistance, comes from the Consolidated Fund rather than the National Loans Fund. They follow Amendments made to the Industry Bill on Third Reading in this House, and to the Scottish Development Agency Bill in the other place. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 55]
Schedule 3, page 25, line 25, at end insert—
("(3) If a report so laid sets out a direction under section 1 above which was given in connection with the Agency's functions under subsection (3)(b) or (bb) of that section, but a copy of which has not been laid in accordance with subsection (8A) of that section, a statement of the reason why the copy was not so laid shall be annexed to the Agency's report by the Secretary of State, and the said subsection (8A) shall not apply to the direction.").
Lord LOVELL-DAVIS: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 55.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Lovell-Davis.)
On Question, Motion agreed to.

SOCIAL SECURITY (CONTRIBUTIONS, RE-RATING) ORDER 1975
7.28 p.m.
Lord WELLS-PESTELL: My Lords, I beg to move that the Social Security (Contributions, Re-rating) Order 1975, a draft of which was laid before this House on 23rd October, be approved. Under the Social Security Act 1975, the Secretary of State for Social Services is required to review each year the general level of earnings in Great Britain and to consider what changes in National Insurance contributions need to be made in the light of movements in earnings and other relevant factors. This year's review has been completed and the draft Order now before your Lordships provides for increases from next April in the rates and levels of contributions. Before coming to the details of the changes, I will comment on the factors which have made these increases necessary.

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First, the Government are committed to review pensions and other benefits at least once a year. There has already been one increase this year, in April, and a second increase is being made in a few weeks' time. The money has to be found to pay for these increases. This does not take into account the cost of further increases, resulting from the 1976 review of benefit rates, which must take effect from the middle of November 1976 at the latest. And it has to be remembered that a high level of unemployment not only increases the amount paid in unemployment benefit but also reduces the income from contributions. These factors make it inevitable that there must be contribution increases for 1976–77.
I will turn now to the details of the changes which the Order would make. For Class 1 contributions (that is, the earnings-related contributions paid in the main by employed earners and employers) the lower earnings limit for contribution liability is raised from £11 to £13 a week and the upper limit from £69 to £95 a week. This means that people earning at least £13 a week will be liable for contributions on all their earnings up to £95 a week. These increases not only take account of an increase of about 30 per cent. in the general level of earnings in the 12 months up to April 1975—the period covered by the Secretary of State's review of earnings—but also of the further factors to which I have already referred. But because of these factors the additional income which will result from raising the upper earnings limit to £95 per week will not be sufficient to keep the National Insurance Fund soundly financed. It is for this reason that the draft Order also provides for the rates of Class 1 contributions to be increased by ¼ per cent. for both employed earners and employers; that is, to 5¾ per cent. and 8¾ per cent. respectively. These are the maximum increases in rates which can be effected by Order.
For someone earning £69 a week—the present upper limit—the effect of these changes will be to put up his contribution by 19p a week. For those with lower earnings the increase will be proportionately smaller. The maximum increase will be for those earning £95 or more a week. Their contribution will
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go up by £1.67 a week. There will be corresponding increases in employers' contributions. I will explain why the increase for those earning more than £69 a week is proportionately greater than that for those with lower earnings. People earning less than £69 a week this year who have had a pay increase will have begun to pay higher National Insurance contributions at the time of that increase. But those earning more than £69 a week will have escaped a contribution increase at that time no matter how large the increase in their pay. The new upper earnings limit of £95 will mean that their contributions will catch up from next April.
As regards the self-employed, my right honourable friend the Secretary of State for Social Services announced earlier this year that she was putting in hand a detailed re-examination of the problems involved in establishing for them a system of earnings-related pensions with corresponding contribution rates. Work on this study is proceeding, but it is a major undertaking to overcome the practical difficulties which, as my right honourable friend explained, had so far ruled out such a system under successive Governments. Much work remains to be done and no conclusions can be reached at this stage. But the proposed changes in self-employed contributions for 1976/77 are consistent with Government's objective; namely, a system of fully earnings-related contributions and benefits. The proposed arrangements for next year do not simply achieve consistency with this desirable objective; they also help the less well-off self-employed. This is being done by holding down the flat-rate Class 2 contribution and, as a counterpart, leaving the lower limit of profits or gains on which the earnings-related Class 4 contributions are levied at its present level of £1,600 a year, while increasing the upper limit from £3,600 to £4,900 a year.
This new upper limit is the approximate annual equivalent of the new upper limit of £95 a week for Class 1 contributions. The rate of the Class 4 contribution is to remain unchanged at 8 per cent. The effect is that there will be no increase in the total amount of contributions payable by a self-employed man on any particular level of profits or gains up to £3,600 a year. Those with profits or gains in excess of £3,600 a year

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will pay additional contributions equal to 8 per cent. of their profits or gains which fall between £3,600 and £4,900 a year. The maximum increase in these contributions is thus £104 and—I emphasise this—not £350 a year as I have seen reported in the Press. I want to make that quite clear.
It may be helpful at this point if explain that, unlike other contributions — which are normally paid weekly or monthly—Class 4 contributions are normally paid in two instalments, the first in the January of the tax year to which they relate; and the second six months later. Thus, payments for the tax year beginning April 1976 do not fall due until January and July 1977, just as those for 1975–76 fall due in January and July of 1976. I mention this because I have also seen a comment reported in the Press which may have given the impression that self-employed people who are liable for Class 4 contributions will be faced with paying two years' contributions in one year. I hope that my remarks will remove any misunderstanding that there may have been about this in some people's minds. I should perhaps mention that the lower rate of Class 2 contribution for women, which we are bringing progressively up to the rate for men, as is envisaged in the 1973 Social Security Act of our predecessor, is to be increased by 10p to £2.20 a week under a separate Order which was also laid on 23rd October.
The remaining changes under the draft Order now before us are as follows. First, the level of earnings below which a self-employed person can be excepted from liability for Class 2 contributions is raised from £675 to £775 a year. Finally, the voluntary Class 3 contribution is increased from £1.90 to £2.10 a week. I must emphasise that, large though some of these increases in contributions are, they are essential if as we would wish, and as the public would expect us to do, we are to continue to protect pensions and other benefits against the effects of inflation. I commend the Order to your Lordships, and hope that you will approve it for the reasons I have given. My Lords, I beg to move.
Moved, That the draft Social Security (Contributions, Rerating) Order 1975, laid
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before the House on 23rd October, be approved.—(Lords Wells-Pestell.)
7.38 p.m.
Lord SANDYS: My Lords, I shall open by thanking the noble Lord, Lord Wells-Pestell, for introducing this draft Order in considerable detail. It is a melancholy document, both in its contents and in the fact that it emerges so soon after the Social Security Act 1975 reached the Statute Book. As your Lordships are aware, the Social Security Act became law on 6th April this year, and now, only a few months later, this draft Order has been brought before your Lordships' House in the name of the Secretary of State varying the terms of the Act and altering contributions. It is symptomatic of the situation in which we find ourselves today, a situation of high inflation. I am sure the noble Lord, Lord Wells-Pestell, will not demur from the fact that this has been brought about by the effects of inflation which it must be the aim of all Parties to reduce as far as possible. However, we cannot close our eyes to the fact that some of the decisions contained in this Order must, to a greater or lesser extent—and naturally one hopes to a lesser extent—feed the fires of inflation. We in your Lordships' House can only approve this Order in present circumstances.
The only comments I would wish to make upon it are these, and they relate largely to Class 4 contributions in regard to self-employed. In paragraph 5 of the Order, we note that under Sections 9(2) and 10(1) of the Social Security Act 1975 Class 4 contributions recoverable under the tax Acts and regulations, are to be changed from the limits which the noble Lord described, and the upper limit is to be changed from £3,600 to £4,900. I am glad that the noble Lord stressed what the increase is to be; that is 8 per cent. on the extra £1,300 by which this bracket is enlarged. This has made it clear, and it is of benefit universally.
Nevertheless, one should not close one's eyes to the fact that a £104 additional increase for a Class 4 self-employed person is a substantial extra contribution. It is £2 a week. Taken with further tax increases in other sectors and with the increase in rates, and putting oneself in the mind of a self-employed person, this will be a most lamentable increase and will undoubtedly have serious effects on

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the finances of many self-employed people who manage shops, offices or small businesses, or direct their affairs towards that end. This is a large increase. We naturally hope that the Secretary of State will not bring a further Order before your Lordships' House within so short a time as a matter of six months. This is a matter of regret for your Lordships, and we note that the passage of time has been so small between the passing of the Act and the bringing in of this Order.
7.42 p.m.
Lord BANKS: My Lords, I should like to join with the noble Lord, Lord Sandys, in thanking the noble Lord, Lord Wells-Pestell, for his thorough explanation of the implications of this Order. He referred to the fact that there have been two increases in benefits during 1975, and he said that the money must be found for these increases. But where one has an earnings-related scheme, a scheme which is based on earnings-related contributions, any up rating to match an increase in average earnings should automatically be provided for by increased contribution income, and this increased contribution income comes from Applying the same percentage to the greater earnings. But, of course, we have been only on a full earnings-related system since April. It may be suggested that the previous estimates of contribution income were too optimistic, but when we look at the Government Actuary's Report we find that that is not the case. On the contrary, the Government Actuary says that previous estimates of contribution income proved too cautious.
The noble Lord mentioned unemployment as another reason, and when he mentioned that he got to the root cause of these increases, because the Government Actuary makes it clear that while he was instructed to work on the basis of 850,000 unemployed, he has now been instructed to work on the basis of 1 million in 1975–76, and 1,200,000 in 1976–77. Also, he points out that a variation of 100,000 in the level of unemployment means a difference of £120 million in costs, and it is £230 million, as I understand it, which is raised by the increase in contributions proposed in this Order. If there are other factors, they seem to me to be counter-balancing, and my conclusion is that this increase is part of the price of unemployment.
730
As to the increases themselves, as the noble Lord, Lord Wells-Pestell, explained, it is 0.25 per cent. extra of a man's income that he has to pay up to the limit of the former top limit of £69 per week. But, as the noble Lord pointed out, over and above that up to the new top limit of £95 the percentage increases all the time throughout that period, and those people must pay 0.25 per cent. on their income up to £69 a week, and 5.75 per cent. on all income between £69 and £95 a week. This means that someone on £95 a week, the new limit, is faced with an increase of 1.8 per cent. of income—something like seven times greater than the percentage increase. I am not talking about amounts of money, but the percentage increase is seven times greater for the person at £95. But, and this is a point which the noble Lord did not mention, after £95 it begins to run down again until you get to the point of an income of something like £50,000 with a 0.17 per cent. increase. It goes up to the point of £95, and then runs down.
The noble Lord used the phrase—and it was used also by the right honourable lady the Secretary of State—that people getting around £69 to £95 had escaped increased contributions, but that is a very arbitrary sort of statement. Anybody over the top limit, as it was, has escaped further contributions, and why it should be said that we must recoup from people up to the limit of £95 and not above it, and allow the people above it to have a declining percentage of increase as their income increases, I do not know. I do not know whether that is Socialist economics, but it is not the kind of economics of which I would approve. It does not seem to me to be very fair. It seems to suggest that the Government ought to consider having no target rates, but a rate that runs right throughout the band; no limit at all, but a lower rate running right throughout income, and this could be both for the employer and the employee. I imagine we shall be told that you cannot do that, because if you have a ceiling on benefits you must have a ceiling on contributions. But this is to pretend that there is some connection between the contributions and the benefits, yet we know that that is not the case. The scheme is a pay-as-you-go scheme.
If we had a tax credit scheme, whereby the national insurance benefit, other benefits and allowances against tax on what

731
are now allowances against tax, were paid as cash credits, and all income were taxed from the first pound, then we could have a personal tax rate of, say, 39 per cent., or 40 per cent.—which would be the present income tax rate of 35 per cent. plus 4½per cent. to 5 per cent. social security tax—and the employer would pay social security tax in the same proportion as he pays now to the employed contribution. The formula for pensions which is planned under the Social Security Pensions Act would be kept precisely the same, and the percentage reduction for contracting out would also remain precisely the same. There would be no interference with any of that, or with all the protracted negotiations and so on that we have been through.
For the self-employed, to whom the noble Lords, Lord Wells-Pestell and Lord Sandys, referred, the previous Government decided to keep the basic contribution level, not to increase the flat rate contribution, and to levy 5 per cent. of income between £1,150 and £2,500. The present Government decided to alter the limits to £1,600 and £3,600 and to levy 8 per cent. Now they propose under this Order to increase the level from £3,600 to £4,900. I understand why they say that there should be an increase; because the contribution of the self-employed has fallen behind as a proportion of the contributions paid on behalf of the employed person. I understand why it has been done in this way by successive Governments; to protect the position of the self-employed person at the bottom end of the scale.
As the noble Lord, Lord Sandys, said, the increases for some people are very steep. For the person on £3,600 in the current year—and I take the noble Lord's point about its being in two stages—it is £160, which is a 4.5 per cent. increase. Imagine suggesting to that person that his income tax rate should be increased by 4.5 per cent. to 39 per cent. Imagine what we would say if it were applied to us. It would be a severe income tax rate increase, but if it were the income tax rate we should have all sorts of allowances to set off against it, which is not the case when we are dealing, as we are here, with National Insurance contributions.
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The person on £4,900 has, over two years, had increases of 3.2 per cent. and 22 per cent., and for the employed person the highest rate is the one I mentioned, of 1.8 per cent. Thus, over two years this person has had an increase of 5.4 per cent. or £264. A man earning £4,900 a year, if he has two children and a mortgage, is probably paying tax at between £750 and £800 a year, so we are really saying that his tax bill is increased by one-third, so these increases for some people have been extremely steep. One understands why it has been felt necessary to have an increase for the self-employed and why it is done in this way —and, of course, one is glad that the possibility of earnings related benefits, which they do not get at the moment, is being investigated. But one is bound to ask whether it would not have been wiser to phase in these increases over a longer period of time and more gently.
7.52 p.m.
Baroness GAITSKELL: My Lords, I will not delve into either the figures or the percentages; I leave that to the men who are taking part in this debate. I have not had time to examine them and, in any event, when I look at figures I have to take a great deal of care. The noble Lord, Lord Sandys, called this document melancholy and I wondered why, as I listened to him and the noble Lord, Lord Banks, neither of them had any constructive alternatives to put forward. The noble Lord, Lord Sandys, spoke more in sorrow than in anger, which was rather pleasant, although he was somewhat strong on condemnation. The noble Lord, Lord Banks, was very strong on analysis but, like the noble Lord, Lord Sandys, did not have any constructive alternatives.
Lord BANKS: My Lords, would the noble Baroness not regard it as a constructive suggestion, even if she did not agree with it, that there should be, for example, a contribution which runs right throughout, which was the basis of the earlier part of my remarks?
Baroness GAITSKELL: My Lords, I often hear that sort of argument from my Liberal friends and I find that mostly they like the best of all possible words, but unfortunately we cannot have that in this life. We are going through a very difficult time and the only suggestion to

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come from the Conservative Benches is that we should have higher unemployment.
Lord SANDYS: I really protest, my Lords, I do not think that has ever been suggested from these Benches. What we have suggested repeatedly—it was a matter for our Manifesto, and I remind the noble Baroness that we have equal interest in Manifesto affairs—is a tax credit scheme, which the Government decided to set aside. That was a positive contribution and I totally disagree with the noble Baroness.
Baroness GAITSKELL: My Lords, I am sorry if I have offended the noble Lord; I did not mean it in that sense. I have read comments about inflation and how we should tackle it, and there is no doubt that an increase in unemployment always underlies the arguments of Conservative noble Lords opposite. Here is a document—I do not know how good or perfect it is—which is trying to tackle the problem of inflation in a way that falls less heavily on the lower income groups than on the higher ones. We must try to do something about this problem. Here we are trying to do something which does not seem to be drastic, although I shall have to examine the document carefully. We have tried to be fair, and just to have it dismissed as impossible or not practicable, even with the Liberal Benches putting various suggestions forward, slightly saddens one.
7.56 p.m.
Lord WELLS-PESTELL: My Lords, I will not delay the House by speaking at length. We have entered a fascinating field but I have to remind myself that this is an Order and be content to deal with it on that basis. In the ordinary way I would be tempted to deal with a good many of the things the noble Lord, Lord Sandys, said. Of all the Members of your Lordships' House, I think the noble Lord, Lord Banks, might well agree that it is very difficult to find a satisfactory yardstick to deal with these matters. It is difficult to find it in the sphere of taxation and equally difficult in the field of contributions. I shall draw the attention of my right honourable friend the Secretary of State to the fact that we are not taking enough from those earning
734
£50,000 a year. I hope we will be able to do something about that and that we can give the authority of the noble Lord, Lord Banks, on that matter.
It is difficult to find a satisfactory yardstick which will meet the approval of all sections of the community. It may be that one must have a rough and ready way of dealing with it, and the rough and ready way is to look at what people are earning and to say, "This group is infinitely better off than that group"—I know they may have more commitments but commitments are to be found in every group, in terms both of income and age— "and this will be the yardstick; those earning less will pay less than those on the middle and top rungs."
Until we can find a more satisfactory method, this seems to be the right way, and we should say that those who are in a position to make a greater contribution in our society should be prepared to make it. I believe that many of them are so prepared in order to ease the burden of those less fortunately placed and to let society aid those who are less fortunately placed. Increases are often steep for some people and I do not know how we are to iron this out.
I have read a booklet by the noble Lord, Lord Banks, and I say sincerely that I look forward to the day when he will initiate a debate on this matter in your Lordships' House. There is enough competence and expertise in this House to make it an interesting debate. There are many of us who are not expert in this field and who would welcome just sitting back and listening to people like the noble Lord, Lord Banks, give us some indication of what goes on in his mind, and, of course, of what I have seen in his writings. I thank noble Lords for their comments and, as I say, I had hoped that someone would have said a word of appreciation to the Government for at least doing something to help, regardless of what has been said, the position of the self-employed.
Lord SANDYS: My Lords I regret to say that, although the noble Lord has invited gratitude, there will be remarkably little gratitude from the self-employed. The reason is as follows: in order to earn a sufficient amount to pay this new impost probably over £200 would

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have to be earned to cover the £104 increase over the existing amount. It goes further than that, however. I want to refer your Lordships to one particular problem before we finish. That is the problem of inflation accounting. The Sandi lands Committee reported a short time ago. Owing to the pressure of other business in this House, regrettably it has been impossible to debate the Report, but it bears very closely indeed on the method of accounting throughout the country and, furthermore, it bears very closely on what the self-employed derive from their income.
I am not able to quote from The Times article because I think it inappropriate to do so on an Order. Nevertheless, The Times is on record as saying, "Real profits, nil after tax". This is the whole question of the cost of restocking goods in business.
Lord STRABOLGI: My Lords, I am sorry to interrupt the noble Lord, but I believe him to be out of order. Under Standing Orders, no noble Lord is allowed to speak more than once to any Motion when the House is not in Committee and when he has not moved a Motion. I hope that he will forgive me for interrupting him but I thought it best, for the sake of the House, to point that out.
Lord SANDYS: My Lords, I naturally accept the noble Lord's rebuke in this matter. I was provoked.
On Question, Motion agreed to.

EMPLOYMENT PROTECTION BILL
Returned from the Commons with an Amendment to the Bill consequential on a Lords Amendment; with certain other Lords Amendments agreed to with Amendments; and with certain other Lords Amendments disagreed to with Reasons for such disagreement; the said Amendments and Reasons to be printed.