AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL

HL Deb 01 November 1976 vol 376 cc978-1065

Further considered on Report.

Earl FERRERS moved Amendment No. 21: Page 4, line 18, after ("promote") insert ("omnibus").

The noble Earl said: Now we return to the problem of industrial democracy. At the Committee stage we had a fairly formidable debate on industrial democracy and the part that it should play. We had a considerable discussion as to what was meant by industrial democracy as such, and what was meant by the phrase in the Bill as to whom those people who should take part in the consultations should be. There was a difference of opinion over this. We were anxious to find out what was meant by "industrial democracy" and we discovered it was indefinable. To repeat the words of the noble Lord, Lord Melchett, we know in general what is meant, although we may disagree in particular what is meant. It: is wrong that we should put words on the Statute Book which are indefinable.

We had a long debate about who was to take part in industrial democracy and, in the process of discussion, how industrial democracy should come about. The Government had it firmly in their minds that the people who should be consulted would be the relevant trade unions. We pointed out that this was too restrictive a measure because there ought to be consultation with all employees in industry. We accepted the fact that in consultation you do not negotiate with a lot of individual people but with some bodies of people. We pointed out that one of the troubles with the Bill, as it then existed, was either you encourage a lot of people into trade unions, often against their will, or you excluded from the negotiations a lot of people who wanted to be included and who had a right to be included, who were concerned about the future of their industry and had the right to be approached in these matters.

The Committee stage saw an Amendment moved into the Bill allowing this consultation to go further. We believe it is wholly right that all sections of the industries should be consulted on how industrial democracy is going to come about. Obviously industrial democracy should be for everyone. It may be that the Government feel the correct people with whom to carry out discussion are only the relevant trade unions. I know that noble Lords opposite will accept that, whoever is going to be consulted, industrial democracy is going to apply to all people, otherwise the very word "democracy" is absurd. I hope the Government will also agree that, if industrial democracy is going to be undertaken, it should be undertaken by all the people.

In order to underline this point, we have put down this simple Amendment which puts the word "omnibus" in front of the words "industrial democracy". Subsection (6) will read: In carrying out its functions under this a Act, it shall he the duty of each Corporation to promote omnibus industrial democracy". Your Lordships may feel that that seems a funny word to put in the Bill. It is not; it is a simple word that explains exactly what we mean. It means it should be for all people, not just trade union people or shopfloor people, but managers, executives, accountants, designers and everyone. The noble Lord, Lord Melchett, will be perfectly aware that the word "omnibus" comes from Latin, and the Latin ablative form means "by all the people". If you are going to have industrial democracy by all the people this must be a reasonable suggestion. It is possible that the noble Lord, Lord Melchett, may say, "We cannot accept that because, in the Government's view, we do not want industrial democracy to be by all the people, but only by all the relevant trade unions. If we put in this word this might be too restrictive."

I would only suggest that he then turns to the dative form. "Omnibus" is the same in both the dative and the ablative. If he turned to the dative he would realise that it meant "for all the people". There cannot be any dispute that industrial democracy should be for all the people. I would hope that the noble Lord would accept the word "omnibus" as meaning that it should be both for all the people and by all the people. If we put in this simple word it clarifies the whole issue succinctly, so that everyone will know what industrial democracy means and to whom it should apply. I must, of course, tell the noble Lord that that simple word had nothing to do with what one of my noble friends suggested when he saw this Amendment—that is, one of those familiar objects we sometimes see and which was planted in memory by those nice words of Michael Flanders and Donald Swann when they referred to— The 30 foot long by 10 foot wide, The monarch of the road, The observer of the Highway Code, The big six-wheeler, scarlet-painted, London Transport, diesel-engined, Ninety-seven horsepower Omnibus As I say, it has nothing at all to do with that. It is just a simple word that makes it clear that "industrial democracy" should be for all the people and by all the people. My Lords, I beg to move.

7.52 p.m.

Lord MELCHETT

My Lords, I am not sure whether the noble Earl has left me very clear about whether he actually wanted the ablative or dative form in the Bill. It seems that we might have to qualify "omnibus" to make that clear at least—

Earl FERRERS

Both, my Lords.

Lord MELCHETT

Then I think it probably ought to be made clear in the Bill that it is both, as the noble Earl has now told me. On first seeing this Amendment I had marvellous visions of organically run omnibuses charging all over the place. I accept that there might he some justification for the insertion of the word "organic" in the Bill, but "omnibus" is not necessarily a great deal more helpful than that word: indeed it is possibly less so.

As the noble Earl explained, the word "omnibus" is apparently intended to qualify the words "industrial democracy" as they appear in the Bill. Though, as I say, I am not at all sure that the Amendment makes clear exactly what its meaning would be, I can see that it is consistent with the approach noble Lords opposite have taken throughout our discussions on industrial democracy. In particular, it is consistent with the approach adopted in Amendment No. 22 to which we shall come very shortly. As the noble Earl said, I regret to say that we do not think the Amendment is necessary. Indeed, I would go further and suggest that it might be positively harmful. I should have thought the lack of clarity, in itself, would not he particularly helpful. Also, as the noble Lord has said, we have taken a consistent view, on which I shall expand when we come to Amendment No. 22, as to the role the relevant trade unions should play in carrying forward industrial democracy in these two industries. I would hope that we might be able to have a substantive debate on that issue when we come to the later Amendment.

It seems to me, as the noble Earl said, that this is a small word but it raises bigger issues which we have covered in great detail during the Committee stage and which no doubt will continue to occupy our attention throughout the considerable number of Amendments which have still to come. I should be quite happy to go into those substantive issues now but, if I did so, it might not leave me anything to say on the later Amendments. Therefore, having given the noble Earl some idea of my difficulties over the word which, to be fair, he himself appeared to share, perhaps we could agree that while it might possibly give some people a better idea of what was intended by the Bill, it would confuse just as many as it helped.

The Earl of HALSBURY

My Lords, I must apologise to the House for not having heard the first words of the noble Earl, Lord Ferrers. I made my way back to my seat as closely as I could calculate to 7.45, but found the House already busy on this subject. I must say that, although I have gone into the Division Lobby with the Opposition on a number of occasions connected with this Bill, this is one occasion when, if the House is divided, I shall certainly follow the Government. It seems to me that the noble Lord's Amendment turns nonsense into still obscurer nonsense. The whole concept of industrial democracy is utterly undefined in the sense that the "cracy" in "democracy"—I am now making a translation from the noble Earl's Latin into my own rather archaic Greek—means the way in which you exercise absolute power.

Democracy is one of the ways in which you can do it: that is, the power given over to a popular assembly, which Socrates said was the worst form of Government in the world. I am sure we do not want to inflict that on industry. In any case, it is an entirely false analogy—and here I tilt a lance against the Government—because industry exercises no power in any sense of the word at all. It is a subject: it is subject to law and to the Constitution of the country and so on. "Industrial democracy" is a totally meaningless phrase, and merely to put the word "omnibus" in front of it not only conserves the meaninglessness of it but, in fact, obscures the meaninglessness of it. I remember Godley's poem about the motor bus in Oxford where he said: What is this that roareth thus, Can it be a motor bus? … Implet in the Corn and High Terror me motoris bi … Apparently it is the noble Earl, Lord Ferrers, who is issuing roarings at the Government on the implication of the words "industrial democracy" and making it even more obscure by putting in the word "omnibus". Although I am all in favour of apposition of one thing to another as the essence of language, I do not believe this is an improvement on an already very bad phrase. In the event of a Division of the House I shall certainly follow the Government into the Division Lobby.

Earl FERRERS

My Lords, I am delighted to know that the noble Earl, Lord Halsbury, agrees with me that this is the most appalling phrase and is indefinable. Even the Minister of State said that "industrial democracy" was indefiable. I must say, however, that I should have thought his condemnation, if he was going into the Greek, would have been directed to the fact that by the insertion of this word "omnibus" one would have been confusing the Greek with the Latin since, of course,, "democracy" comes from the Greek and "omnibus" comes from the Latin. But I must say I really cannot see where any confusion whatever arises. I should have thought it was perfectly clear. The noble Lord, Lord Melchett, said he did not want to shoot off all his guns at once over "industrial democracy" on this simple Amendment, but I am bound to say that I thought it was perfectly clear that in the dative form it would mean that industrial democracy would be for all the people. I tried to explain to the noble Lord, Lord Melchett, that if he could think back a few years to the time he left school that dative meant "to" or "for" and if omnibus—

The Earl of HALSBURY

My Lords, if the noble Earl will allow me—by, with, or from; to, for or at. There is a great deal of ambiguity.

Earl FERRERS

My Lords, I was always led to believe that the dative was "to" or "for" and the ablative was "by", "with" or "from", and I am suggesting that the dative form of "to" or "for", in other words industrial democracy, would be "for all the people" only acceptable to the Government. They might have found some difficulty in accepting the ablative form which should be "by all the people". But as the word "democracy" must mean by all the people if it means anything, I thought that the noble Lord, Lord Melchett, might have swallowed the word "omni-bus" which is the same in the dative as it is in the ablative. However it is not something on which I would give the noble Earl, Lord Halsbury, the pleasure of going into the Division Lobby against me. This is not a point of quite such substance as that. Had the noble Lord, Lord Melchett, felt obliged to accede to this helpful and constructive Amendment, which it is, it would have put into one simple word what everyone really believes; that is, that industrial democracy should be both for the people and by the people. I am sorry he feels that this is not an improvement. To some extent it might have muddled some people, but on the whole it might have been considered to be an improvement and a clarification of the Bill. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Viscount SIMON has given Notice of his intention to move Amendment No. 22: Page 4, line 19, leave out ("in a strong and organic form") and insert ("through the effective participation of employees in the process leading to management decisions")

The noble Viscount said: My Lords, we put down this Amendment for the purpose of trying to put some kind of gloss on the meaning of industrial democracy", but having read the alternative Amendment No. 23 suggested by the noble Lord, Lord Carr, and his friends, my noble friends have decided that we should not move this Amendment and have the discussion on Amendment No. 23.

8.3 p.m.

Lord CARR of HADLEY moved Amendment No. 23: Page 4, line 19, after ("form") insert ("in which all employees have the right to participate")

The noble Lord said: My Lords, I must confess that we have come on to this Amendment rather sooner than I had expected, but the arguments are well known to us and I want to take this one very seriously indeed. If I may say to the noble Earl, Lord Halsbury, I had a scientific and not a classical education and therefore would have been quite out of my depth in the debate on the previous Amendment. While I agree with the Government that when we are seeking to introduce whatever is meant by "industrial democracy" we should not lay down hard and fast lines on which it must be developed, if we are going to introduce this phrase into an Act of Parliament at this stage of our industrial development there are one or two principles about industrial democracy which we must make clear.

I make the distinction about being clear about principles and laying down methods because I think there is a clear distinction between them. Some of your Lordships may remember that at the Committee stage I had resort to the Oxford Dictionary to try to get some guidance as to what the Government might mean by the phrase "industrial democracy" of a strong organic kind. To be honest, I found that the Oxford Dictionary did not help me much more than the Government's own explanation. It is quite clear that the Government have not a clue what they mean by it. One thing that came out clearly from consulting the dictionary was that one of the essential elements of the word "democracy" was that it is something in which the whole of the community about which you are talking should be able to partake.

Our great complaint about the Bill at the moment is that having set out the very high sounding ideal of industrial democracy, it restricts the number of people to whom that shall apply. It restricts it to those described as "relevant trade unions". Whatever it means, I do not begrudge it in any way, to "relevant trade unions". It is clear that they must have a very important part in the future development of this industry. The relevant trade unions must be fully consulted; they must have a very important and probably the chief part in collective bargaining. But in our submission it is not right to exclude at least from the consultative part of industrial democracy—whatever the Government mean by it—large numbers of people who are excluded by the Bill as it is worded at the moment.

In both the shipbuilding and the aircraft industries there are a considerable number of people, mainly technical, managerial, administrative and clerical staff, who are not members of the relative trade unions as at present defined who quite genuinely and understandably do not believe that the relevant trade unions are well suited to meet their particular requirements. It is not in any way a criticism of the relevant trade unions. They simply are not sufficiently widely developed to represent the views and needs and aspirations of the sort of people I have been mentioning. That is why a large and increasing number of these people have been forming their own organisations or joining other bodies which may already be in existence but which are not at the moment included in the definition "relevant trade unions" as indicated in the interpretation clauses of the Bill. Therefore there are large numbers of people who are denied the legal right to consultation which must be implicit if we are going to talk about industrial democracy in any meaningful sense at all.

That is why in the Committee, and again now, we are doing all we can from this side of the House—I am sure with the support of the Liberal Benches and I hope with the support of those on the Cross-Benches as well—to see that at least so far as consultation is concerned all employees of all the constituent parts of the new Corporations shall have this legal right to consultation. I know that we have been told by Ministers in the Committee stage that there is nothing in the Bill which prevents the Corporations from consulting people other than relevant trade unions, but I do not think that is good enough. Why should we separate the sheep and the goats or, as I put it in Committee, the citizens and peasants. These other people are employees of equal right with anyone else in the Corporation. They do not believe that the existing relevant trade unions are satisfactory bodies for them to join, but they hold passionately that they should have this right to consultation. They fear that if they do not have the legal right they will not have the right in practice. If anybody is going to have the legal right, all should have it.

There are already signs, of which I gave some evidence towards the end of the Committee stage, that some of the employees who are not in relevant trade unions but belong to other respectable bodies certified as being independent by the certification officer are being denied consultation. A body of managers in the shipbuilding and ship repairing industry wrote to me last week and said that they had been promised a meeting with the Organising Committee but that that meeting still had not taken place. They understood that it was because the relevant trade unions were objecting to its taking place.

It is quite clear to us that there are large numbers of employees in these two industries who will not really have faith that their view will be properly listened to, and properly taken into account, if they are not given the same legal right as everybody else in their industries. If that is so, not only is it unfair on paper, but I suggest to the Government that these new Corporations will start off containing within themselves a source of trouble and grievance from the very beginning. So I repeat what I said on a number of clauses in the Committee stage, that, in our view, it is absolutely essential that we make clear that all have a legal right of consultation.

To make sure that there is no misunderstanding, I want to repeat again that we draw a distinction between consultation and collective bargaining. Collective bargaining is more difficult, and, if we are to get reasonable order in industry, those organisations recognised for collective bargaining are more limited and, probably for some time at least, will have to remain more limited. But those entitled to consultation ought not to be limited. That is the reason for our Amendment. We believe that by inserting these words, "in which all employees have the right to participate" immediately after the phrase, "industrial democracy in a strong and organic form" we are establishing an essential principle, without in any way putting rigid definitions on the method by which that principle shall be worked out in the two Corporations by their constituent members. My Lords, I beg to move.

8.12 p.m.

Viscount SIMON

My Lords, we on these Benches should like to support this Amendment. We withdrew Amendment No. 22, which was very much on the same lines, except that we wanted to strike out the words "in a strong and organic form" merely because we did not know what they meant. If they mean something, I do not suppose they do any harm, and perhaps when the noble Lord replies he will tell us what they do mean. I must say that I am in agreement with the noble Earl, Lord Halsbury, that the phrase "industrial democracy" is an abominable one. He reminded us, very properly, that the word "democracy" comes from the Greek. I think it is worth recalling that, if my memory of Greek history is any good at all, in Greek democracies—and they founded the idea—the Helots or slaves were not at all involved; they were right outside the democracies. So that our present views are very different from theirs. We believe that everybody should be included, and that is why I like the words suggested by the noble Lord, Lord Carr, in this Amendment that it is "industrial democracy in a strong and organic form, in which all employees have the right to participate".

As he rightly said, this does not lay down how it will work. It can be worked out in each organisation in a way that best suits that organisation. The important thing is that every employee has the right to participate. Of course, those employees who have no kind of organisation, individual "mavericks", will no doubt find it very difficult to participate effectively. That is understandable, and I think we encourage people to enter into agreements with their fellow workers in different fields. But I believe that to confine consultation to the relevant trade unions is making it much too tight.

Noble Lords opposite have said that there is nothing to prevent consultation with everyone, and I believe that the noble Lord, Lord Mottistone, pointed out, very rightly, in an intervention during the Committee stage that any good employer would make whatever effort he could to consult with everyone. But the feelings which have been expressed by some employees, who are not represented by what are likely to become recognised as relevant trade unions, that they are left out in the cold, could be so easily met by accepting these words. As the noble Lord, Lord Carr, said the relevant trade unions will no doubt get most of the consultation. They will, perhaps, be continuously in consultation with the management on many issues. But when the matter is being looked at, we should make it clear to everybody that they all have a possibility of having their say.

When I was once at the top of a fairly large business, we had a convention, which did not mean very much, that the chairman's door was always open. That meant that anybody who wanted to see the chairman could always come in. They did not very often come, but I was always delighted when they did, and it was more a gesture to say to everybody in the organisation, "You are part of it, and you have the same right to be consulted as everyone else."

Lord SHINWELL

My Lords, I have delayed my departure from this assembly, because I was anxious to take part in this debate. I regard the subject as, perhaps, the most essential element in the future restructuring of the aerospace and ship-building industries. The term "democracy" comes trippingly to the tongue. I have the impression that it comes from Shakespeare, but for the moment I cannot offer the exact location. But it is subject to various interpretations. The term is used in the political arena and it is certainly misunderstood.

I am somewhat surprised at the noble Lord, Lord Carr, who somewhat grudingly accepted what is contained in the Bill; in other words, the Government's offer. I should have thought that every Member of your Lordships' House, particularly on the Conservative and Liberal side, where there are many prominent industrialists who are concerned about the future of British industry, would be as anxious as I am about confrontation in the future, because if we are to have a viable industry in the future—whether it is nationalised or contained in private enterprise, as it is called, under the control of private ownership—we must ensure that we can avoid industrial strife. Indeed, I would say that the avoidance of industrial strife is the prerequisite of a viable British industry in the future. I do not want to impose what may be called an academic lecture on Members of your Lordships' House, but this is a subject which I have tried to understand for a long time. Indeed, if I may dare to digress—although it is not really a digression—I would say that in the political arena true and just democracy is essential.

I am now going to indulge in what may almost be regarded as a fulsome compliment to the Liberal Party. Perhaps they need something of the kind. I am not suggesting that I am an appropriate person to indulge in compliments. I have never been regarded as a person who throws compliments about. But when the Liberal Party decided some time ago to elect a new leader, they did so by injecting into the operation, for the first time, the principle of democracy. In other words, they may not have done it completely. There may have been defects here and there, for geographical and other reasons, but they sought to consult the membership of the Liberal Party and they elected a leader.

May I suggest to my noble friends on the Front Bench—the few who remain there, but they are people with influence—that they should take note of this point because in the future the method that has been adopted by the Liberal Party will be forced upon the Labour Party, and even upon the Conservative Party. In other words, there should be thoroughgoing consultation. I mean by that not merely consultation with Members of Parliament or with Members of your Lordships' House—that is all very well and I accept it—but consultation with everybody who can be consulted and has a right to he consulted. For obvious reasons, it is not always possible to consult everybody, but that is what I mean by democracy. I am not suggesting that we shall telescope our Parties and that no longer will there be any confrontations or disputations and that we shall all be happy and contented, but when we reach a situation of that kind in the political arena it will make for a much more interesting and effective Parliamentary situation. That is a digression, but it is related to the subject itself. I cannot understand why the noble Lord, Lord Carr of Hadley, boggles at the offer that the Government have made. It is a very good beginning.

Lord CARR of HADLEY

My Lords, if I sounded grudging about participation, I must have expressed myself wry badly because all my life—I made my maiden speech upon it in another place—I have fought for greater participation. I want greater participation and, like the noble Lord, Lord Shinwell, I believe that participation is vital. My concern is that we shall not get it if something like 30 per cent. of the employees in one industry feel that they are legally excluded from it, or at least are not given the legal right to it.

Lord SHINWELL

My Lords, I accept the principle underlying the observations of the noble Lord, Lord Carr of Hadley. I had something to do with this question a long time ago when a nationalisation Bill came before another place. There was not adequate preparation of the legislation sufficiently far in advance, but that is another story. However, I produced an Amendment along the lines of participation, although it was not in the precise language that has been used in the course of this discussion, in which I suggested that the workers in the industry must have some say in its administ ration—in other words, that they should be consulted. The extraordinary result was that the miners' leaders would have none of it.

They said, "We represent the interests of our members and we want nothing to do with administration". That surprised me. Indeed, when it came to the election of members to the first National Coal Board I wanted members of the Miners' Federation executive to participate, but after they had considered the matter they decided that they would rather stay out of it and look after the interests of their members. As a result, I had to appoint somebody who was an ex-miners' leader and other people who were not necessarily interested in the industry. However, they had big names in the Civil Service and in my innocence I selected some of them, sometimes with not very happy results. But let us not speak about that.

The noble Lord, Lord Carr of Hadley, equally wants effective participation but he wants it all round. Therefore he raises a distinction between those who are associated with the relevant trade unions and those who are on the sidelines—the sideline, perhaps. They may be members of other organisations or they may not be members of any organisation at all, but the noble Lord wants them all to be consulted. I think that the noble Lord, Lord Carr of Hadley, should understand this point. It is a practical point and we are concerned about the practicalities, if it is to be effective. The reason that we must consult the relevant trade unions is because they are organised. For the purposes of negotiation they are essential. The remainder are not organised. If an industrial firm has 1,000 employees and 900 of them are organised in a relevant trade union, or relevant trade unions, and can be consulted expeditiously in order to avoid industrial strife, or for some other purpose associated with the operations of the industry, all the better. As for the remainder, you cannot consult individuals so easily or so readily; you do the very best you can.

However, I want to impress upon the noble Lord, Lord Carr of Hadley, and those who are associated with him and support him in this Amendment that it is essential to make a beginning. If we can persuade industry to understand what democracy really means and how effective it can be in the industrial operations, that will be good. Even if we do not get the whole hog to begin with, at least we should make a beginning with some part of the animal, although I shall not specify which part. That is what we ought to do. Therefore I suggest that the Government's terminology should be accepted for the time being. Then let us see that it becomes effective.

That is all I want to say about the matter, but I thought it was necessary to say it. I might have said it better if I had prepared it carefully by sitting down at a typewriter and getting the semantics right. However, I have done my very best to convey my ideas about what I think is a very important element in industrial operations. In those circumstances, I should accept the language that is offered and make the very best of it.

8.28 p.m.

The Earl of ONSLOW

My Lords, I have been listening carefully to the debate and I have noticed some supreme ironies in it. The ironies have come from a Party whose egalitarianism wants to exclude 30 per cent. from consultation by law; it comes from a Party—

Lord MELCHETT

My Lords, with great respect to the noble Earl, Lord Onslow, his noble friend Lord Carr of Hadley was careful in the way that he put it. The noble Earl was less careful. It is not that people are being excluded by law. The noble Lord, Lord Carr of Hadley, said that they were not necessarily being given legal rights. There is quite an important difference upon which we have laid great emphasis.

The Earl of ONSLOW

My Lords, I should have thought that the difference between exclusion by law and not being given legal rights is very similar to the filioque argument during the time of the split of the two Churches. However, we will leave that point. The irony is that the Party opposite have introduced the hereditary principle into the Agriculture (Miscellaneous Provisions) Bill. Now we have the argument of the Party opposite which is almost exactly the same as that of those who opposed the Second Reform Bill. This was perfectly personified by the noble Lord, Lord Shinwell, who said, "Yes, we think that this is right but …". The final irony is that it is interesting to note that it was a Tory Government which passed the Second Reform Bill and that it is a Tory Party which is pressing for the inclusion by Statute of everybody to have the right to be consulted. The noble Lord, Lord Kirkhill, said: we do not consider it right to prescribe a particular form of industrial democracy. … But our firm hope and expectation is that it will enable all employees to play their part in the future of these industries."—[Official Report, 14/10/76; col. 521.] He then used almost exactly the same words later when he said, all employees to play their full part". It seems to me wrong that we should give an exhortation in Parliament that something should be the case when we are legislating on the subject and not in fact include it in this legislation. In that way you are giving less force and creating unfairness, and the noble Lord, Lord Shinwell, was absolutely right—and it is perhaps impertinent for me to say so as I am probably nearly 60 years younger than he is—when he said that it is vital that industrial relations shall be smooth and not bothersome, and 1 cannot conceive of a way that will cause more ill feeling than by Act of Parliament forcing 70 per cent. to be consulted and leaving it to patronisation for the 30 per cent. I very much support this Amendment.

The Earl of HALSBURY

My Lords, the noble Lord, Lord Carr, expressed the hope that he had the support of the Cross-Benches. There are only two of us here at the moment, but that justifies a comment I made last Tuesday when I said that whatever hour of the day or night it might be there would always be a Cross-Bench presence on these occasions. Whatever minor educational differences in the sphere of classical languages there may be between myself and the noble Lord are completely overweighted by our mutual experience on the shop floor. I think we have both been works managers and we both know that the man on the shop floor wants three things: he wants a good job, a good boss and a good shop steward, and he wants to know that his boss and the shop steward are working together and not at cross purposes. That is a perfectly simple, straightforward state of affairs which the noble Lord and I are quite familiar with, and I am quite sure that he ensured that when he was a works manager just as I did when I was a works manager. I have always given myself a small pat on the back to think that I had made a success of it, and I believe the noble Lord did too, so I will give him a small pat on the back—indeed a big pat on the back.

The question of whether this Amendment is a good one or a bad one is a question of whether or not what it seeks to amend is viable. If it is a thoroughly bad phrase that he is seeking to amend the Amendment only makes confusion worse confounded. What worries me about the whole business of writing moral sentiments into Statute law is that there is a doctrine in the courts that every word of an Act of Parliament must be there for a purpose. If it is totally meaningless, the courts have to search for the purpose which it is supposed to incorporate and they probably get the answer wrong.

I am sorry to keep the noble Lord on tenterhooks while I make up my mind whether I am coming down on one side of the fence or the other, but I must turn to the noble Lord, Lord Melchett, and ask him to elucidate in his reply to my remarks exactly how he would grade our nationalised industries—the Coal Board, the railways, the gas undertakings, the electricity undertakings, and now the undertakings which we are seeking to add to this long list: to take a spectrum between extremes of those which are strong and organic and those which are weak and inorganic, and to give us the rank order in the spectrum where he would arrange them. If he cannot, then the phrase is meaningless and therefore the modification to the phrase proposed by the noble Lord, Lord Carr of Hadley, only makes confusion worse confounded. For that reason, and that reason only, I could not support it.

Viscount ROCHDALE

My Lords, I think I heard the noble Lord, Lord Shinwell, say that we must be pragmatic in this. I will try to be pragmatic and support my noble friend Lord Carr, based on certain small experience I have had which leads me to support very strongly the emphasis in this Amendment on the point that all employees have the right to participate. I should like briefly to make two points. I can call to mind examples where, for one reason or another, probably reprehensibly, consultation has taken place by the senior management with what would be regarded in the Bill as the relevant trade unions, but where the management at various levels have either been forgotten or overlooked. As my noble friend Lord Carr said, this has caused grievances, but management is apt to be very loyal and it will sit on its grievances for quite a long time—probably too long, and damage is done. If all employees have the right and it is written into the Bill, that should assist the position.

My second point is this. Some noble Lords have said that all good employers would automatically consult. I have no doubt that they probably would, or that it would be their intention so to do, but I can equally recall occasions—and this is not being hypothetical—where pressure on the senior management by trade unions might deter him from making the consultations that he ought to make. That being so, if it is written into the Bill and into the Statute, that will relieve the senior management a good deal. When he has these pressures put upon him he will be able to point to the Act—as it will then be—and say, "This is what I have to do by law", and he will therefore consult. Therefore, whatever the correct interpretation of the rest of the clause may or may not be, I would still prefer to have this Amendment in, to make it absolutely clear in order that it may help the management.

Lord TREFGARNE

My Lords, the Government's protestations about this matter would be more convincing if we did not know the facts. The facts seem to he that these provisions were written into the Bill originally on the representation of the TUC, and that it is only unions approved by the TUC which should be consulted in future. The Government have never said that, of course, but it is obvious to most of us that that is what is intended. It is for that reason—I cannot speak for all of us—that I personally find this Amendment so attractive. I said that the difficulty was that the facts dissuaded us from accepting the Government's view. There are further facts like those mentioned by my noble friend Lord Carr just now, and also those mentioned by my noble friend Lord Ferrers during the Committee stage, which confirm our worst fears that consultation has so far at least not taken place with all sorts of people who really ought to have been consulted. For that reason, I hope my noble friends will press this Amendment.

Earl FERRERS

My Lords, I have never hesitated to mention my apprehensions of the provisions of industrial democracy. I may be alone in this, but do not think I am. The utterly commendable requirement to consult with people is totally different from what could be the concept of industrial democracy where by some form of election, selection, or something of that sort, the running of industries will be in the hands of people who are not necessarily equipped to run industries. The part of the Bill with which we are now dealing is not that part which says what form industrial democracy shall take; it is the part which says who shall be involved in discussing what form it shall take.

I was struck by two observations, one made by the noble Lord, Lord Shinwell, who said, in effect, "Let us make a start, and the Bill as it stands is a start without the Amendment". The other remark was made by the noble Viscount, Lord Simon, who said that if people are left out of these consultative processes it will be a disaster. I must say I believe the noble Viscount, Lord Simon, is right. If you are going to consult as to what form your industrial democracy should take—and, after all, this could end up by being a consultation as to how the industry in the end should be run and who should run it, and that is a colossal undertaking—then it must be that all the people should be consulted. I sought to achieve this by a very simple little Amendment earlier, an omnibus, which was rejected by everyone. The noble Earl, Lord Halsbury, says he is not quite certain whether he is going to come down in favour of this, but at least this has the merit of being neither Latin nor Greek, but English. Everyone can see that what it really means is that all employees have the right to participate.

Lord SHINWELL

My Lords, I am not sure whether I have misunderstood the noble Earl, Lord Ferrers. There is nothing in the Bill which prevents those who arc not members of a relevant trade union from being consulted. Indeed, there is a provision in this clause with which we are now dealing by which those who are not members of the relevant trade union are entitled to be consulted. There is no difficulty about that at all. It is a question of the method.

Earl FERRERS

My Lords, that is absolutely right. That last provision was put in at Committee stage. I think it is a point of principle—after all, we are talking about vague things like industrial demoracy; no one quite knows what it means—that it should be indicated that all people have the right to participate. Of course, the noble Lord, Lord Shinwell, is absolutely correct, because you cannot discuss and negotiate with individual people; of course you cannot; somehow they have to get themselves into bodies suitable to he consulted with. This is one of the great drawbacks of the Bill as it is—that it has resulted in a precipitation of people into, not necessarily unions, but staff associations, and so forth, as a result of the Bill, which they would not have otherwise done. This has a drawback in so far as it has dragooned people who would not wish to be dragooned into joining associations. It also has had the problem of providing a proliferation of bodies who could be consulted. But, with respect, that is the kind of problem you get into if you are going to have suggestions of this kind put into the Bill.

I should like to reiterate what was said by my noble friend Lord Carr of Hadley. There is a world of difference between those who should be consulted from the point of view of collective bargaining, and those who should be consulted from the point of view of how industrial democracy should emerge. It is the latter point with which we are dealing. I hope that the noble Lord, Lord Melchett, will be able to accept this Amendment on the basis that it is putting into clear words what most people think, which is that if you are going to have industrial democracy everyone has the right to be consulted, even though that right may be in the form of being a member of some body which should be consulted in the place of the individual.

8.45 p.m.

Baronesss WARD of NORTH TYNESIDE

My Lords, I should like to support the Amendment of the noble Lord, Lord Carr of Hadley. I have listened with great interest to all the speeches that have been made, and to a great deal of what has been said about industrial democracy. I find it absolutely fascinating that, up to the moment, nobody has referred to a fact that I have raised once before. It seemed odd that I should have to raise it, but at the moment there is a committee, appointed by the Government of the day, which is considering industrial democracy. Presumably they are to advise, it being thought, of course, that the Government of today will still be in power, which Heaven forbid! But a committee is sitting on industrial democracy. I raised the matter at the time and I will not continue on this, but no woman has been appointed to the committee.

I should have thought that before the committee report—and Heaven knows how long they will be before they do report—the Government could find out how they were getting on. In this debate on the Amendment of my noble friend Lord Carr, my noble friend, as I shall call him, Lord Shinwell, made a contribution, to which we listened with great interest, as we did to all the contributions made by many other noble Lords. All this will be reported, and there is not the slightest doubt, even if none of them is in the Gallery now, that the Committee on Industrial Democracy will now be in a position to sort out the problem, which is that it is very necessary that everyone in industry shall have the right to be consulted.

In the discussion tonight we have given guidelines to the Committee on Industrial Democracy. It surprises me that no one has ever mentioned this committee. I should like to ask whoever is going to reply whether they will see that the views of this House are sent to the committee without delay, so that they will know the problem, and will know that we feel that it would be right that everyone in an industry should have the right to be consulted. Of course, if one has had any connection at all with industry one knows that in some industrial establishments only the recognised trade unions are consulted. I am not against the trade unions at all, but I think that very often they have been very narrow in their approach. I want to see everybody getting themselves into groups, and if they have not done so, and if we pass this Amendment, which I hope we shall, they will then see the way that we are thinking and they will get themselves into groups.

My Lords, I hope we pass this Amendment and that it goes at once to the Committee on Industrial Democracy. In fact, noble Lords opposite can say to the committee, "Please hurry up with your Report", so that when the Bill finally becomes law it will cover the point so adequately put by my noble friend Lord Carr of Hadley, that all people shall have the right to be consulted in certain circumstances. I hope we are going to divide on this and I hope that we get a large majority, so that the committee can know that the majority of people from the House take the view that somehow or other we must provide for all people to be consulted.

The LORD CHANCELLOR

My Lords, the Question is—

8.50 p.m.

Lord MELCHETT

My Lords, grateful as I am to my noble and learned friend for trying to save me from the difficulties I shall have in replying, it would be appropriate if I said a brief word on behalf of the Government, if only to tell the noble Baroness, Lady Ward of North Tyneside, that there are two committees sitting on this subject at the moment. There is the Bullock Committee dealing with private industry, and there is an internal committee looking at industrial democracy in the nationalised industries. I have no doubt that the second committee will be aware of the views expressed in your Lordships' House which are, indeed, in line with the views expressed by the Opposition in another place on the subject of industrial democracy. I think it might be a little late to send evidence to the Bullock Committee, because my understanding is that they are nearing the completion of their report and it might only serve to delay matters (something which both the noble Baroness and I would not wish to do) if we provided them with a rather voluminous number of Hansards. We have discussed this matter at great length and I have no doubt that the points raised by the noble Baroness, Lady Ward of North Tyneside, and her noble friends may well have been put to the Bullock Committee before now.

The noble Earl, Lord Halsbury, asked me some questions. I must say I was slightly surprised to hear him say so categorically what he felt people on the shop floor were after. From my very limited experience—and I immediately admit to having a great deal less experience in these matters than he has, or the noble Lord, Lord Carr, has—from the time I was at the Department of Industry and spoke to people working in industry, I would have said a great many people had rather higher aspirations than those the noble Earl suggested they had. Indeed, I met several people who are already wholeheartedly involved in running the undertakings for which they work, which would certainly do a great deal for the noble Earl's suggestions. He has said on two Amendments that he feels the statement in the Statute is meaningless. We discussed what I felt it meant, and noble Lords opposite did not feel it meant, at considerable length during Committee.

I will not go over that again, but it may help if I remind the noble Earl that the words will not cause the court problems in the way he suggested they would because there is a provision in subsection (8) of this clause which makes them non-justiciable in front of the courts, simply because of the worry that it might be difficult for the courts to interpret them. That is something we discussed at length during Committee stage, although it obviously came as a surprise to at least one noble Lord on the Liberal Benches.

The Earl of HALSBURY

My Lords, would the noble Lord give way? I am greatly obliged. If the thing is not binding in the courts, what is the point of putting it into an Act of Parliament. Surely, Acts of Parliament are not here to write moral essays into.

Lord MELCHETT

My Lords, I am not sure that moral essays are that bad a thing, even in an Act of Parliament. The Act will be something which both Corporations will look to see the way that Parliament intended them to run their businesses.

Lord BYERS

My Lords, is the noble Lord not confusing an Act of Parliament and a code of conduct? It seems to me this is a very important point.

Lord MELCHETT

My Lords, I accept that it is an important point, but it is something which we discussed at great length during the Committee stage when an Amendment was moved to alter this provision. It may be that noble Lords are not satisfied with the fact that it is still in the Bill, but we discussed it at length. I have spent some time dodging round the edges of this issue, and 1 ought to get to the point. If noble Lords on the Liberal Benches wish to put down another Amendment, so that we can again have the discussion about the words being interpreted by the courts, they can.

My Lords, it is, of course, the Government's intention that employees should be effectively involved in the decisions which affect them. As I see it, the only difference between us is on how this can best be done. We firmly believe that employee interests are best represented through their trade unions. This is not a question of dogma but of facing up to present-day industrial realities, and there I am echoing something which my noble friend Lord Shinwell said in, if I may so, one of the few speeches he has made in support of the Front Bench during the course of this Bill, and all the more welcome for that. It is unreal to suppose that in an industrial landscape increasingly dominated by large conglomerates employee interests can be adequately represented other than by the trade unions, who alone have the resources and the ability to convey the collective views of their membership to management and to ensure that these views do not go unheeded. This view is, of course, reflected in Government policy on proper employee representation throughout industry and explains why independent and recognised unions have been given such a key role in all our industrial relations legislation.

The noble Lord, Lord Carr, said that without the Amendment which he and his noble friends have moved this would be a source of trouble and grievance in these two industries. When he raised this point during the Committee stage I said, and I repeat, that I accepted that there are very strong differences of view on this in the industries and between Parties and many people. But it did seem to me that there was some force in the argument that if in this Statute we followed the consistent line which this Government have adopted in all our industrial relations legislation it would be less likely to lead to particular trouble in these two Corporations than if we changed course, in the Government's view, at least, and gave a statutory right of consultation to people not in recognised trade unions. Although I do not put that as a conclusive argument, I think it is at least a point which should have some force with noble Lords opposite.

The Earl of ONSLOW

My Lords, would the noble Lord give way for a moment? Does he not realise that the argument he has just produced, for the big battalions, that only the big conglomerates can do it properly, is i he most depressing thing we have heard on the issue of individual liberty, and really must be a betrayal of Socialist principle when you consider that the Socialist Party was founded for the protection of the weak, the poor and the minorities.

Lord MELCHETT

My Lords, we fight for the protection of the weak and the poor, but we fight for adequate, realistic and effective protection. My firm belief, and 1 believe it is the experience of other countries with a great deal more experience and a long way ahead of this country in industrial democracy, is that without working through organised and independent trade unions the employee participation can occasionally be a sham; it is not effective representation of employees' views, nor an effective way of giving employees some say in the taking of management decisions or the running of the firms for which they work. I do not think that it is a denial of individual liberty to take the line the Government have taken, because, as I said at Committee stage, the Organising Committees for both British Aerospace and British Shipbuilders have made clear that they are prepared to talk to all the employees in their industries. We are saying that the way we see as going forward is going to be the most effective for all the people in the industries.

Baroness SEEAR

My Lords, before the noble Lord calls in evidence foreign countries whose experiences are in advance of ours, I think it would be fair to point out that in Germany, to which I imagine he is in part referring, employee representation is not dependent on trade union membership.

Lord MELCHETT

Yes, my Lords, and the noble Baroness will remember that during the Second Reading debate when this came up I referred to some research papers which had been published by the Bullock Committee, to which the noble Baroness, Lady Ward, referred, analysing the experience of West Germany, among other European countries. The firm conclusion which I, at least, drew from reading those very interesting papers was that, unless independent trade unions had been involved in carrying forward industrial democracy, the fact of the matter had been that the employees had not been able to influence the direction that the management of the companies had taken. As I said, management of companies, particularly large international conglomerates, are extremely powerful people. This is not necessarily a bad thing, but it is important that the employees should have equally powerful bodies to represent their interests.

Lord BEAUMONT of WHITLEY

My Lords, the noble Lord is not being entirely logical. Is it not true that you can have independent trade unions having representation and also have other representation as well? He is trying to bedevil the issue by putting two opposites which are not opposites against each other, that either you have independent trade unions or you have other representation. The point, surely, is that you should have both.

Lord MELCHETT

My Lords, we are not ruling out the fact that these two Corporations can consult with people who are not in recognised trade unions. We are merely saying that, if a statutory duty is to be placed on the Corporations to consult, it should be in line with the rest of industrial relations legislation, with those bodies which we consider to be most able to represent the interests of employees in the firms; that is, the independent trade unions.

I have not touched on the other difficulty which my noble friend Lord Shinwell did touch on—and I think he made the point very forcefully—that of consulting with a very wide range of people, the difficulty that may well occur when there are a large number of small organisations all claiming to represent different interest groups, the impossibility of deciding whether or not they represent particular interest groups.

My Lords, the trades union movement has a long and impressive record of representing the interests of those in industry. It has the organisation in existence to obtain and then effectively put forward their views. Recognised unions by definition must have the support of a significant proportion of the workforce. I am sure that noble Lords on all sides of the House would also agree that where an organisation is to represent those working in the industry it is important that it should be independent, otherwise the employers could put pressure on its members to take decisions that would run counter to their own best interests.

We want to build on all these strengths. We believe that the trades union movement provides a workable way for those in the industry to participate in industrial democracy. That is in contrast to the approach in the noble Lord's Amendment, in which the end is clear that rights are conferred but without any practical means of expressing them. I suggest that our approach provides a more effective means of promoting industrial democracy and I therefore commend it to noble Lords opposite in preference to that suggested in the Amendment.

Lord CARR of HADLEY

My Lords, it was the noble Lord, Lord Melchett, who said that he was dodging round the edges of this issue. I do not want to press that point too far, but I am afraid that many of us still feel that he went on dodging round the edges of the issue throughout the whole of his speech.

There is one point he made tonight which he made on a previous occasion; that is, that the line that the Government were taking in this Bill towards relevant trade unions and others was only consistent with our normal established practices of industrial relations in this country and that it would be a mistake to change course now, suddenly. There would be some reason in that argument if the Government were not changing course; but the trouble is that they are changing course. For the first time and in advance of the report of the Bullock Committee and the other Committee looking at the parallel problems within the Public Service, the Government are introducing into this Bill as a pilot experiment this concept of industrial democracy of a strong and organic kind which even they themselves cannot define. They are not pursuing the old course but are putting forward a new concept. They are raising new hopes.

One of the things that I and others have said when we have discussed this matter before is that it is dangerous in this life to raise people's expectations and then to disappoint them, which is exactly what the Government are in danger of doing. at least so far as some 30 per cent. of the employees in the aircraft industry are concerned. Why create, as the Government are doing, two classes of employee? Labour Governments always talk about the wrongness of class divisions and yet here by Statute they are creating two classes of employees—first-class citizens and second-class citizens. The first-class citizens have the legal right to be consulted but the second-class citizens, although no one will prevent them being consulted, we are told, are not entitled to any legal right to be consulted. What on earth can be the justification for creating these second-class citizens? I should have thought it was impossible to justify.

The noble Lord says that they can be consulted, but I have just made the point that that is not the same as having a legal right to be consulted. Let us put that on one side for the moment, however, and ask the noble Lord whether he really believes they will be consulted, because they do not believe it. Large numbers of them do not believe they will he consulted and some of them are already writing with evidence that they are not being given the meetings with the organising bodies in these two industries that they should be getting and would be getting if indeed they are to be consulted despite not having a legal right.

A senior manager in one of these two industries whom I know said to me the other day that he had been talking to a shop steward in his works who had very strong views on this matter and who said quite bluntly that anybody who did not belong to one of the relevant trade unions as defined in this Bill was a non-person. That was the phrase used, a "non-person". They did not count and should not be considered. I am not suggesting for one moment, nor was my manager friend suggesting, that such an intolerant, uncivilised attitude is the policy of the unions concerned. Of course it is not, and I am sure the leaders of the unions concerned would do their best to prevent such an intolerant attitude ever becoming their policy. But anybody with any experience of industry knows that there are within the ranks of these trade unions small, totally unrepresentative groups of people who, alas! have that extremely intolerant and intolerable attitude to anybody who does not think as they do and is not prepared or does not feel it is apt to belong to the same organisation as they do. We in Parliament must realise, therefore, that there are large numbers of people in these industries who see this new concept of industrial democracy being injected, who see that they are being used in a pilot experiment and who see themselves being denied the legal rights under this experiment. It is not surprising, therefore, that they are unhappy. Can we wonder that they have these fears, and genuine fears, and can we wonder, if we allow this to happen, that these industries start with this core of suspicion, distrust and fear, souring employee relations within them from the very beginning.

The noble Lord, Lord Melchett, says that the Government want employees to be effectively involved in matte's which affect them and that they want all employees to be so involved. He went or to say that they also believe that the employees are best represented through their trade unions. I for one would agree with that—although I know that not everybody behind me would believe that perhaps. I do agree with that but with this important proviso, that there are genuinely appropriate trade unions for them to join.

The trouble is that as relevant trade unions are defined in this Bill there are not appropriate trade unions for large numbers of these people to join within the definition of what constitutes a relevant trade union. There are many and increasing numbers of other associations, some of which have already been certified as genuinely independent. Please let me say that no one, least of all from this side, is advocating that legal rights of consultation should be given to unions that are not independent. We are not advocating that. Let me repeat that and let there be no misunderstanding about it. Of course an organisation that is not independent is not what we are talking about. However, there are organisations that are not relevant in the meaning of the Act, though they have already been certified as genuinely independent. I am not suggesting that they should be treated as relevant for collective bargaining purposes. I keep on making this point. However, I am suggesting that they are properly relevant for the purposes of consultation.

The noble Lord, Lord Shinwell, said that we should make a start. He did not use the words but I think that what he was really saying to us was, "Half a loaf is better than no bread; let it all develop from here". The point that I am putting to your Lordships is that we should ask ourselves whether it will really all develop from here. Is it not at least likely that the very purpose of the wording is to prevent matters from developing from here and is to freeze the position exactly as it is? Is it not likely that the purpose is to prevent this flexibility and growth?

I believe that the noble Lord, Lord Shinwell—and I say this with great respect in view of his very long experience in the Labour Party and the trade union movement and of his great knowledge of these affairs—may not realise that it is the case now (and those of us who work in industry are aware of this) that some of the great organisations which in the past have fought for this right of organisation and of association and have fought battles that we all admire against great odds have now themselves become rather like the tyrants against whom they themselves once fought. They now want to keep the monopoly to themselves. I repeat: we cannot open the floodgates to everybody to take part in collective bargaining because that would be a recipe for chaos. On the other hand, I really do believe that any worthwhile organisation ought to have a legal right to be consulted. That is what we are pressing for and that is what I believe we must continue to press for.

Finally, may I say to the noble Earl, Lord Halsbury, that, while I agree with him that the conditions that he mentioned are indeed fundamental, I am also bound to say to him that I agree with the noble Lord, Lord Melchett, that increasingly—and I hope that this trend will continue—people are looking for more. The fundamentals of which the noble Earl spoke are fundamentals and must be there, but I believe that people are now looking for more. I agree with the noble Earl in that I wish these words were not in the Bill, though not because I do not want to further the cause of joint consultation and ever increasing participation and involvement. I do, as I said in an interruption of the noble Lord, Lord Shinwell, and I think I can honestly say I have fought or at least argued for this all my life and I made my maiden speech in another place on this subject some 26 years ago. So I do not object to these words because I do not want the concept in the Bill. I object to them only because of their imprecision in a Statute.

I agree with what the noble Lord, Lord Byers, said in his intervention. Injunctions of this kind are better in a code of practice rather than a Statute. My judgment, alas! is that, whether 1 or your Lordships like it or not, the Government will insist and that these terribly vague words will appear in the Bill. If so, I submit to your Lordships that it is important to clarify them and that, in principle, if we are to have the word "democracy" in a Statute, we must make it clear that it applies to everyone so far as consultation is concerned. Therefore, I am afraid that I must press the Amendment and ask your Lordships to support it in the Division Lobby.

9.13 p.m.

On Question, Whether the said Amendment (No. 23) shall be agreed to?

Their Lordships divided: Contents, 73; Not-Contents, 40.

CONTENTS
Amory, V.	Greenway, L.	Rochdale, V.
Auckland, L.	Halsbury, E.	Ruthven of Freeland, Ly.
Beaumont of Whitley, L.	Hampton, L.	St. Aldwyn, E. [Teller.]
Belstead, L.	Hanworth, V.	Sandford, L.
Blakenham, V.	Harcourt, V.	Sandys, L.
Bolton, L.	Harmar-Nicholls, L.	Seear, B.
Byers, L.	Hornsby-Smith, B.	Selkirk, E.
Campbell of Croy, L.	Inglewood, L.	Selsdon, L.
Carr of Hadley, L.	Kinnaird, L.	Sharples, B.
Cathcart, E.	Lauderdale, E.	Simon, V.
Clifford of Chudleigh, L.	Lindsey and Abingdon, E.	Skelmersdale, L.
Cork and Orrery, E.	Lloyd of Kilgerran, L.	Stamp, L.
Craigmyle, L.	Long, V.	Strathclyde, L.
Cullen of Ashbourne, L.	Lyell, L.	Trefgarne, L.
de Clifford, L.	Monck, V.	Trevelyan, L.
Denham, L. [Teller.]	Monson, L.	Tweedsmuir, L.
Drumalbyn, L.	Morris, L.	Vickers, B.
Dundee, E.	Mowbray and Stourton, L.	Wade, L.
Elles, B.	Nelson of Stafford, L.	Waldegrave, E.
Elliot of Harwood, B.	Newall, L.	Ward of North Tyneside, B.
Elton, L.	Northchurch, B.	Wigoder, L.
Exeter, M.	Northesk, E.	Windlesham, L.
Falmouth, V.	Onslow, E.	Young, B.
Ferrers, E.	Rankeillour, L.
Gowrie, E.	Redesdale, L.

NOT-CONTENTS
Ardwick, L.	Houghton of Sowerby, L.	Peddie, L.
Birk, B.	Jacques, L.	Pitt of Hampstead, L.
Blyton, L.	Kirkhill, L.	Popplewell, L.
Castle, L.	Llewelyn-Davies of Hastoe, B.	Shackleton, L.
Champion, L.	McCluskey, L.	Shinwell, L.
Collison, L.	Maelor, L.	Stedman, B.
Crowther-Hunt, L.	Melchett, L.	Stewart of Alvechurch, B.
Davies of Leek, L.	Morris of Kenwood, L.	Stone, L.
Davies of Penrhys, L.	Murray of Gravesend, L.	Strabolgi, L. [Teller.]
Donaldson of Kingsbridge, L.	Northfield, L.	Taylor of Mansfield, L.
Elwyn-Jones, L. (L. Chancellor.)	Oram, L.	Wallace of Coslany, L.
Fisher of Camden, L.	Pannell, L.	Wells-Pestell, L. [Teller.]
Greenwood of Rossendale, L.	Peart, L. (L. Privy Seal)	Winterbottom, L.
Hale, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

9.20 p.m.

Viscount SIMON moved Amendment No. 24: Page 4, line 20, at end insert ("incorporated in the United Kingdom").

The noble Viscount said: My Lords, this Amendment and Amendment No. 62 repeat an Amendment which we moved in Committee. The noble Lord, Lord Winterbottom, was good enough to say that he would look into it, and I am wondering whether he will be able to tell us something about it. I beg to move.

Lord WINTERBOTTOM

My Lords, I suspect that when we discussed this last week it was at some late hour, and I may not have been able to grasp fully the exact implications of the noble Viscount's proposals. As he has said, he moved an identical Amendment in Committee, when he explained that its purpose was to relieve the Corporation of a task—and this is the important point—which it would be impossible for it effectively to carry out. I think that was the argument. He said, we were trying to impose on it a task which it could not effectively carry out; namely, to promote industrial democracy in wholly-owned subsidiaries operating overseas—say, in a subsidiary of a British aircraft company operating in Saudi Arabia. It was argued by the noble Viscount that it would be impracticable in countries where the legal position was quite different from that in this country.

As I promised on that occasion, we have carefully considered both the Amendments put down by the noble Viscount and we have asked ourselves whether we should seek to achieve the result he intended. The Amendments as drafted do not do this, because the Corporation might carry out activities abroad itself, and not through a subsidiary. That is an important point. But these are technical points. Our reason for rejecting the noble Viscount's proposal is that after very careful consideration we have concluded that the potential conflict which he fears could not in fact arise. The duty to promote industrial democracy is not enforceable in a court of law, particularly in a court of law overseas. Nevertheless, we believe it is still a duty, and a duty in the self-interest of company concerned. We therefore do not think that, so far as this duty is concerned, there could be any legal conflict, either with a Corporation or a wholly-owned subsidiary, arising from differences in the situation here and abroad.

As to Clause 6, which I believe is now Clause 7, the reference to a United Kingdom Act colours the clause, and the obligation would therefore, in effect, be limited to undertakings carried out in the United Kingdom and would not put any impossible legal obligation on a company based in this country. My Lords, I hope that this explanation will satisfy the noble Viscount that his points have been carefully considered, but we believe that an Amendment on the lines that he has suggested is simply not necessary.

Viscount SIMON

My Lords, I am much obliged to the noble Lord, Lord Winterbottom, Quite frankly, I should like to read in Hansard what he has said, and perhaps consult those with whom we have been in touch, because I cannot quite grasp the position at the moment. So if I may withdraw this Amendment, I shall perhaps bring the matter up again on Third Reading.

Amendment, by leave, withdrawn.

Lord LLOYD of KILGERRAN moved Amendment No. 28: Page 4, line 30, leave out subsection (8).

The noble Lord said: My Lords, the purpose of this Amendment is to remove a subsection from Clause 2 which purports to exclude the rights of persons and firms to apply to the courts. In my submission, as I pointed out at Committee stage, any part of the Bill which purports to exclude rights of individuals or firms going to the courts is worthy of consideration. It may be said that such a clause as this, prohibiting people from going to the courts for any reason will be helpful in that there may be persons and firms associated with these Corporations who might go to court on minor matters and therefore cause considerable and unnecessary litigation. But the words of subsection (8) at present in the Bill are: Nothing in this section"— that is, Clause 2— shall be construed as imposing upon either Corporation, directly or indirectly, any form of duty or liability enforceable by proceedings before any court. Therefore, in considering the scope of such a subsection one must question the terms of the clause.

Clause 2 is headed, "General duties of the Corporations" and applies in subsection (1)(a) to a very large number of fundamental attributes in the activities of the companies, such as design, development, production, sales, repair and maintenance. Therefore, as I indicated in Committee, there may be technical matters in relation to confidential technical information which may be imparted to the Corporations and, as a result, certain rights of individuals owning know-how, or intellectual or industrial property in patents, designs, trademarks, might be infringed as a result of the action of the Corporation.

I carefully considered the lucid reply given by the noble Lord, Lord Kirkhill, in this matter at Committee, where he assured the Committee that the exercise of rights in relation to industrial property and intellectual property would not be affected by the prohibitions in this subsection. He also went on to say that this subsection purporting to prevent firms and persons going to the courts was directed to the aspects of industrial democracy which are to be found in subsection (6) of this clause. If that is so, I would go a considerable way with the Government in this because, as I have said before, matters in relation to purely industrial democracy are matters to which the courts should not possibly be involved.

Lord McCLUSKEY

My Lords, will the noble Lord please furnish me with the Hansard reference to the remarks of my noble friend Lord Kirkhill?

Lord LLOYD of KILGERRAN

Lord Kirkhill's remarks are to be found in the Official Report for Friday, 15th October, at columns 601–603. The noble Lord, Lord Kirkhill (in column 603), in reply to my rather long speech on Committee, kindly said that he would reflect on the matters which I had put before the Committee. The noble Lord, Lord Redesdale, in the course of the Committee stage expressed considerable sympathy with my point of view, but felt that in view of the great uncertainty associated with various factors in the Bill this was another matter of uncertainty and he could not go all the way along with me. I did not understand that point of view for if there was uncertainty as to what could he clone with the courts I felt that this was a matter on which I would have expected him to give me more than merely his sympathy.

The noble Lord, Lord Byers, indicated earlier this evening that there were certain matters in this Bill that might be more appropriate to a code of conduct. Subsection (8) might be more appropriate to a code of conduct rather than be included in the Bill. Since the Committee stage, the noble Lord, Lord Melchett, has introduced an Amendment (No. 30) to this subsection which I am suggesting should be deleted. With the leave of the Committee, I should like to speak to this Amendment now. The noble Lord, Lord Melchett, is proposing that the words "directly or indirectly" should be deleted from the subsection. That limits the scope of the Bill to some extent. Before I decide what should be done about Amendment No. 28, I should like to hear what the Government have to say regarding Amendment No. 30. I beg to move.

9.31 p.m.

Lord TREFGARNE

My Lords, I hope that the noble Lord, Lord Lloyd of Kilgerran, will press Amendment No. 28. If he does, I will support him, unless some convincing reasons are adduced by the Minister. Listening to these proceedings and the Committee stage earlier, I have, for some reason, acquired a suspicious mind. I have come to the conclusion that one needs to view the Government's proposals in this Bill with considerable circumspection. That applies to this one, too. How odd when one is enacting a major piece of legislation that one of its novel but none the less fundamental provisions has a subsection at the end to prevent it from being enforced in any court of law. My mind is carried back to the various pieces that one has read about how this Bill came to be produced in the first place; how the TUC, we are told, insisted that these provisions were enacted as their price for agreeing to the Social Contract. Whether or not that is the case, I am not able to say. It seems to me remarkable that this provision should be included.

I am convinced that the effect of this subsection is not to prevent the Secretary of State from achieving what he wants, not to prevent the trade unions achieving what they want, not even to prevent the Corporations achieving what they want, but it is to prevent those who have no other recourse but the courts from achieving what they think is their entitlement. Who are these people who have no other recourse than the courts? It is simply the individual people who have no other means of seeking redress for any grievance they may think they have under this clause but going to court and asking for a declaration or a judgment in their favour.

It is likely that the Secretary of State does not need the courts because he has other levers. The TUC and the trade unions do not need the courts because they, too, have all sorts of other levers. The Corporations can achieve their will without necessarily resorting to the courts. By agreeing to this subsection, we shall be depriving the individual of the right of audience where it may be most effective. For that reason, we should agree to this Amendment. I will most certainly support the noble Lord, Lord Lloyd of Kilgerran, unless the Government have a very good answer to put forward why I should not do so.

Lord REDESDALE

My Lords, after the noble Lord, Lord Lloyd of Kilgerran, in his usual charming way, caught me slightly unawares on that one point, I have to admit that on a previous occasion 1 offered him sympathy and nothing else. Perhaps the eloquence of the noble Lord, together with that of my noble friend, has swayed us a little bit more, so that instead of just giving sympathy and tea we would now come back and give tangible support to the noble Lord. I will not detain the House any longer by talking about this, but we feel that this is an Amendment which should be supported.

Viscount SIMON

Before the noble Lord replies, I wonder whether I might put another point. My noble friend covered one field and the noble Lord, Lord Trefgarne, dealt with another matter. I should like to get some guidance from the noble Lord on a simple case. Looking at subsection (3), your Lordships will see that among other things it is the duty of British Shipbuilders to promote the sale of ships. Let us assume that in the course of promoting sales of ships, a company offer a ship to a client at an agreed price and then somebody comes along and offers them a higher price and the company sell the ship to the second buyer. Would this mean that the man on whom they reneged over the original contract is denied the right to sue them in the court? Perhaps it does not mean that, but it looks to me as though it might.

Lord McCLUSKEY

My Lords, first, I should like to say that, with the leave of the House, I will take Amendment No. 30 along with Amendment No. 28 and deal with them together, as did the noble Lord, Lord Lloyd of Kilgerran. I believe that what my noble friend Lord Kirkhill said in response to this point in Committee is a correct and accurate statement of the position. I would invite your Lordships' attention to the precise terms of subsection (8), because I think it is important that it should not be misunderstood. I got the feeling from some of the observations that fell from the noble Lord, Lord Trefgarne, that he had not properly grasped the limitations of this clause. It says: Nothing in this section shall be construed as imposing upon either Corporation, directly or indirectly, any form of duty or liability enforceable by proceedings before any court. It is the corollary of that that nothing in the clause will detract from any right that the person has independently of the clause. In other words, if there is a duty or liability which the Corporation have by reason of anything else, either in this Bill or in some other enactment, or by reason of some common law right or some other branch of the common law, or by reason of some agreement which has been entered into, then subsection (8) does not touch that at all. The right of recourse to the courts is still there in respect of the right, the obligation or whatever, which exists independently of Clause 2.

In my submission this is really a very limited clause. I would invite your Lordships' attention to a precedent for that which is to be found in the Iron and Steel Act 1967 in Section 3, which deals with the general duty of the Corporation which was set up under that Act. Section 3(4) provided—and I quote: Nothing in subsection (1) above shall be construed as imposing upon the Corporation, either directly or indirectly, any form of duty or liability enforceable by proceedings before any court. One of the duties laid upon the Corporation under that section was the duty to secure the safety, health and welfare of persons employed by them. Plainly, the duties that arise in the field of safety, health and welfare are not touched by that. People's right to recourse to the courts is not affected by the clause in the Iron and Steel Act and the position is the same here. If there are rights independent of Section 2 or liabilities independent of Section 2, then the courts are not deprived of any right to adjudicate upon them that they have by reason of the enactment of Clause 2(8).

Lord WIGODER

My Lords, did I understand the noble Lord to say that there is a section in the Iron and Steel Act similar to this which says that nothing in subsection (1) shall be construed as imposing … I am sure I ought to have it at my fingertips but I have not. Would the noble Lord be kind enough to read subsection (1) to us?

Lord McCLUSKEY

My Lords, I can do that. Section 3(1) is rather lengthy because there are four paragraphs. It reads: It shall be incumbent on the Corporation—

1. (a) to promote the efficient and economical supply by the Corporation and the publicly-owned companies of iron and steel products, … to satisfy the reasonable demands of the persons…
2. (b) to secure that neither the Corporation nor a publicly-owned company shall show undue preference to, or exercise unfair discrimination against, any such persons … in the supply and price …
1017
3. (c) to take such steps as appear to the Corporation to be practical and desirable for the promotion of the export of such products …
4. (d)to take such steps as appear to the Corporation to be practical and desirable for the promotion of research into matters affecting or arising out of, the carrying on of iron and steel activities …"

and so on. The noble Lord, Lord Wigoder, will appreciate that I have read this short in order to give the general indication; but they are not totally dissimilar. If the noble Lord, Lord Lloyd of Kilgerran, would like to have the precise section before him I am sure it could be passed. I merely direct attention to it because it is a precedent in 1967 covering this kind of thing. Noble Lords opposite may know, but I do not know that it has given rise to any difficulty of the kind which is feared.

The second point arises in relation to Amendment No. 30. I refer to what was said in Committee by the noble Lord, Lord Lloyd of Kilgerran. It may be that the use of the words "directly or indirectly" would appear to give an ambit to the section which it is not intended to have. For that reason it has been decided that it would be desirable to make the position quite clear and it is proposed to remove the words directly or indirectly "by moving Amendment No. 30. I hope that what has been said has allayed any fears that noble Lords had on this matter. The inclusion of the words, "directly or indirectly" was originally designed to help clarify the effects of the subsection, but their inclusion did not in fact have that effect. Accordingly, I would propose that these words should be deleted and at the appropriate moment will move the deletion of these words by moving Amendment No. 30.

Lord CARR of HADLEY

My Lords, I am not quite sure whether I understood the noble Lord. Not being a lawyer myself perhaps I am finding it more difficult than I should. I am interested in the effect of subsection (8), which we are discussing at the moment, on subsection (6), the one we were discussing a little while ago. Supposing a body of workers organised in some association which has been declared to be independent by the certification officer feels that the Corporation is not carrying out the duty placed upon it to promote industrial democracy in a strong organic form, would that organisation have a recourse to the courts, or is it one of the objects of this clause to prevent it having such recourse?

Lord McCLUSKEY

My Lords, I think it is quite plain that one of the objects is to prevent it having recourse to the courts for that purpose. As the noble Lord, Lord Carr, will appreciate, it is clear that one could not properly have the courts adjudicating upon a matter of that kind.

Lord LLOYD of KILGERRAN

My Lords, I am grateful for that explanation, but I have had some difficulty in under-standing how the matters which the noble Lord raised, such as contracts, in relation to the general duties of the Corporation could be, as it were, inviolate and therefore that anybody who was aggrieved could go to the courts. I, too, prior to this stage, had read the relevant sections in the Iron and Steel Act, because they were referred to by the noble Lord, Lord Kirkhill, in his reply to me. But I found very considerable differences between the wording in that section and in this clause. Clause 2(1) of the Aircraft and Shipbuilding Industries Bill imposes very wide general duties upon the Corporation as to what it should promote and secure the promotion of. In fact, the scope of the duties is even wider at this Report stage, because during the Committee stage a further aspect of the general duties of the Corporation was introduced into this subsection by the Amendment moved by the noble Lord, Lord Kings Norton, which added "guided weapons and of space vehicles and systems" to the duties to be promoted by the Corporation. Therefore, I support the observations of the noble Lord, Lord Carr of Hadley, in regard to the scope of subsection (6), and in these circumstances it seems to me that this is a matter upon which we should move to a Division.

9.46 p.m.

On Question, Whether the said Amendment (No. 28) shall be agreed to?

Their Lordships divided: Contents, 65; Not-Contents, 34.

CONTENTS
Amory, V.	Greenway, L.	Redesdale, L.
Auckland, L.	Hanworth, V.	Rochdale, V.
Belstead, L.	Harcourt, V.	Ruthven of Freeland, Ly.
Blakenham, V.	Harmar-Nicholls, L.	St. Aldwyn, E.
Bolton, L.	Hornsby-Smith, B.	Sandford, L.
Byers, L.	Inglewood, L.	Sandys, L.
Campbell of Croy, L.	Kinnaird, L.	Seear, B. [Teller.]
Carr of Hadley, L.	Kinnoull, E.	Selkirk, E.
Cathcart, E.	Lauderdale, E.	Sharples, B.
Colville of Culross, V.	Lindsey and Abingdon, E.	Simon, V. [Teller.]
Cork and Orrery, E.	Lloyd of Kilgerran, L.	Skelmersdale, L.
Craigmyle, L.	Long, V.	Strathclyde, L.
Cullen of Ashbourne, L.	Lyell, L.	Trefgarne, L.
de Clifford, L.	Morris, L.	Trevelyan, L.
Denham, L.	Mowbray and Stourton, L.	Tweedsmuir, L.
Drumalbyn, L.	Nelson of Stafford, L.	Vickers, B.
Elles, B.	Northchurch, B.	Waldegrave, E.
Elliot of Harwood, B.	Northesk, E.	Ward of North Tyneside, B
Exeter, M.	Onslow, E.	Wigoder, L.
Falmouth, V.	Orr-Ewing, L.	Young, B.
Ferrers, E.	Pender, L.
Gowrie, E.	Rankeillour, L.

NOT-CONTENTS
Ardwick, L.	Halsbury, E.	Pitt of Hampstead, L.
Birk, B.	Houghton of Sowerby, L.	Segal, L.
Blyton, L.	Jacques, L.	Shackleton, L.
Castle, L.	Kirkhill, L.	Stedman, B.
Champion, L.	Llewelyn-Davies of Hastoe, B.	Stewart of Alvechurch, B.
Collison, L.	McCluskey, L.	Stone, L.
Davies of Leek, L.	Melchett, L.	Strabolgi, L. [Teller.]
Davies of Penrhys, L.	Morris of Kenwood, L.	Wallace of Coslany, L.
Donaldson of Kingsbridge, L.	Murray of Gravesend, L.	Wells-Pestell, L. [Teller.]
Elwyn-Jones, L. (L. Chancellor.)	Oram, L.	Winterbottom, L.
Fisher of Camden, L.	Peart, L. (L. Privy Seal.)
Hale, L.	Peddie, L.
Resolved in the affirmative, and Amendment agreed to accordingly.

9.56 p.m.

Lord LLOYD of KILGERRAN moved Amendment No. 34:

Page 5, line 20, at end insert— ("( ) No consent or general authority shall be given in pursuance of the preceding subsection unless a draft of the document containing it has been laid before Parliament and approved by a resolution of each House of Parliament.").

The noble Lord said: My Lords, the purpose of this Amendment is to render greater accountability to Parliament over certain actions of the two Corporations. It is necessary not to misunderstand the scope of the powers of the Corporations given under Clause 3(3). The purpose of the Amendment is that wherever the Corporation is to dispose of an interest in any of its wholly-owned subsidiaries, unless the disposal is to another such wholly-owned subsidiary, then this is a matter which should be put to Parliament to consider. As at present drafted, subsection (3) is introduced by the words: Except with the consent of, or in accordance with the terms of any general authority given by, the Secretary of State, neither Corporation shall have power to discuss all these matters.

It seems to me that there could be disposal of interests of very great significance and of great national importance arising under this subsection, where it would be necessary, in my view, to have the approval not only of the Secretary of State but also of Parliament. During the Committee stage the matter was discussed very fully and, if I may say so, the noble Lord, Lord Melchett, gave a helpful reply, but it seemed to me that he was concerned with avoiding the delays that he said might arise if my Amendment were accepted and that these matters should be put to Parliament. It seems that in view of the wide range of activities of both these Corporations the disposal of certain aspects of their interests should be considered by Parliament before such disposal takes place. I beg to move.

Lord MELCHETT

My Lords, as the noble Lord said, I did my best to explain in detail during the Committee stage why we were opposed to this Amendment and I regret to have to tell the noble Lord, Lord Lloyd of Kilgerran, that I am still opposed to the Amendment although I have considered very carefully what he said during the Committee stage. We believe that the Amendment would have an effect which we would regard as entirely unacceptable; namely, introducing procedures which would make the Corporation commercially impotent. During the Committee stage the noble Lord, Lord Lloyd of Kilgerran, thought that we would not resist this Amendment (if I remember aright) because there was a similar provision, which was then subsection (6) of Clause 2, which was deleted during the Committee stage. However that subsection referred to the power to make an order altering the duties of the Corporation. Certainly we considered it right that this power, to which noble Lords opposite were so opposed, should be subject to direct Parliamentary control through the Affirmative Resolution procedure. However, I hope the noble Lord will accept that there is a difference between the procedures appropriate for changing the duties of a Corporation and those controlling the exercise by it of normal commercial operations, which is what we are dealing with here. In the case of duties, the Corporation is being required to undertake some activity, or to substitute for an existing activity a new one, as the case may be. All we are suggesting here is that, with the consent of the Secretary of State, the Corporations should be able to expand their activities to take advantage of commercial opportunities. The private sector companies enjoy this sort of freedom. The noble Lord is proposing that the power to take shares in companies or to participate in establishing new ones, say a connection with a new international collaborative project, should only be exercised with the specific approval of both Houses.

My Lords, I have said on Committee, and I still firmly believe, that that would be an impossible restriction on the Corporations' freedom of action and, more important, their speed of commercial response. Indeed, I cannot believe this is really a restriction noble Lords would wish to place on the British aircraft industry, however it is owned. The essential problem is one to which I drew attention way back on Second Reading. If they are to have any chance of commercial success, public corporations need scope to exploit market opportunities. At the same time, because of their role in the economy and their source of finance, they must be properly accountable. We believe these objectives are potentially in conflict and give rise to considerable difficulties. I would not attempt to hide that for a moment. We believe these objectives are best achieved and the right balance struck between them by the arrangements in nationalised industries legislation pursued by Governments of both Parties.

These objectives combine Ministerial control at strategic level with accountability by Ministers to Parliament for their responsibilities. This leaves the Corporations a reasonable degree of freedom while ensuring Parliamentary control. I would emphasise that our main objection is in the area where we believe the Corporations should have the ability to react very quickly if the need arises. That simply would not be possible if they had to come to both Houses of Parliament for a Resolution to be passed. Aside from the broad principles of the way in which we see the relationship between Government and the nationalised industries operating, which I accept is a difficult area and one, indeed, in which neither Party is entirely right—again, that is something I have made a point of saying during the proceedings of the Bill, because I do not want to hide the difficulties which undoubtedly exist in this area—the speed of reaction to exploit commercial opportunities is important. This Amendment would deny the Corporations that freedom.

The Earl of ONSLOW

My Lords, there is one thing about this Amendment which commends it quite enormously to me. A week or so ago, we went through a long process of debate and argument on the Second Reading of the Felixstowe Docks Bill. We had the Third Reading, and, finally, the Bill was rejected by this House on the grounds of nationalisation by the back door. As I under-stand this Clause 5, without this provision in it, the Secretary of State may nationalise what he likes by agreement.

My Lords, because nationalisation is not just a normal commercial transaction—it is something which affects the right of us all and it affects Parliament above all—it would seem to me absolutely right that something along these lines is put into the Bill. The noble Lord, Lord Melchett, says that the speed of reaction is important; but the inhibition on the British Transport Docks Board if it wants to take over another set of docks is that it has to proceed by the admittedly cumbersome procedure of the Private Bill. It seems to me very much less than that of the Affirmative Resolution procedure of each House of Parliament.

There is a difficulty in adopting this Amendment as it stands completely, in that it makes it impossible either to sell off or to buy something very small. Obviously, I do not think we want the whole procedure of affirmative act of Parliament; but it would seem right—and I hope we will come back to this on Third Reading—that we should get something which will stop nationalisation by the back door without the express approval of both Houses. If that is the view of both Houses of Parliament, so be it, and so it is right. But we do not want it to be done just on the ukase of the Secretary of State. I sincerely hope that my noble friend Lord Carr and my noble friend (in a non-Parliamentary sense) Lord Lloyd of Kilgerran can get together and sort out something for Third Reading which will overcome my fears and still not hamper the perfectly reasonable arrangements of wanting to sell or buy something very small.

Lord MELCHETT

My Lords, may I ask the noble Earl a question for clarification. There is no hidden motive in this. I think the noble Earl is quite clear that there is no power of compulsory acquisition here. If that is the case, is he defining nationalisation—we have had a great deal of talk this evening about what particular words mean—as being the perfectly voluntary selling of shares to a publicly owned corporation by a private company? That is not what I have ever understood by nationalisation.

The Earl of ONSLOW

My Lords, nationalisation does not have to be forced; it can be voluntary. It may be that both Houses of Parliament would think it is against the wider public interest to have even voluntary nationalisation, and it certainly states in this clause that that is what can happen.

Lord Carr of HADLEY

My Lords, I accept that this is a difficult point. I take the point made by the noble Lord, Lord Melchett, that if we wish these Corporations to succeed, to be profitable, economical and efficient and all the other things we have said, it is important for them to be able to react quickly to commercial opportunities. On the other hand, the Government, for their part, have to accept the fact that, whatever benefits they may see in nationalisation, one of the penalties of nationalisation is that it puts the activity under the Corporation's control outside the realm of normal commercial operation. This indeed is one of the claims that is made for nationalisation: that it sets different objectives, different standards, and altogether puts that previously commercial undertaking into a different—and the Socialists would say a higher—sphere of human endeavour. I do not believe we can have it all ways.

What concerns me is that if one looks at the whole of Clause 3, one starts off with subsection (1) which says what activities the Corporations may carry on, and paragraph (a) of subsection (1) says that they can carry on, any activities which were carried on, immediately before the date of transfer, by a company which, by virtue of this Act, becomes the Corporation's wholly owned subsidiary.". At least we know where we stand. We know what all these companies being nationalised are doing at the moment. If we were being asked to say that these Corporations should be free, merely on the Secretary of State's say so, to exploit commercial opportunities which may present themselves to them in those spheres of activities of which we are aware, then I think that although some of us might have some fears, we should nevertheless have to concede to the noble Lord that probably it was a reasonable request that the Government were making. But, unfortunately, from our point of view, there is a paragraph (b) to subsection (1) and that says that what each Corporation may do can "with the consent of … the Secretary of State" be extended to "any other activities". That is really taking them into the field of the unknown. I know that we are talking here about powers and not duties and that makes a difference. But here we come back to what I christened my "paper bag" point in relation to powers.

It seems to me that without any rhyme or reason or accountability to Parliament the Secretary of State could lay down that these Corporations could go into the manufacture of paper bags and that thereafter they could set about an active takeover policy offering high prices for the shares of paper bag manufacturers and be able to go into the paper-bag manufacturing industry without any Parliamentary control of any kind. I am again taking an absurd example. But there is a fairly respectable mode of proof by reductio ad absurdum. If they can do it, it is something which even though Ministers may say that the Government would never think of such a thing, they have the power to do such a thing—not just this Government and this Secretary of State, but all Governments in future and all Secretaries of State in future. That seems to be going too far. In other words, if we had only Clause 3(1)(a) without (b) as well I might go along with the noble Lord, Lord Melchett, and say that the Liberal Amendment which we are discussing is perhaps unnecessary. I do not feel I can take that view because of the existence of Clause 3(1)(b) which opens up entirely unknown and much wider possibilities.

I am inclined to say, therefore, that this is an Amendment which ought to be supported. Against that, however, I wonder whether the Affirmative Resolution procedure is necessary in all such cases. This might in itself be going too far and 1 am in rather a difficult position, therefore, of believing that something is needed but not wholeheartedly being able to recommend that we should press the Amendment proposed by the noble Lord, Lord Lloyd of Kilgerran.

What I should like to say to my noble friends is that I would not advise them to support this particular Amendment, but I should like to consider whether or not at Third Reading we could get an Amendment in place of this one which could give us some Parliamentary control to ensure that great new departures outside the field of activities which we know these Corporations can take on at the moment under Clause 3(1)(a) should be subject to Parliamentary control. If we could be satisfied that they could not depart into wholly new fields without some form of Parliamentary control, then we might be satisfied. But at the moment I cannot wholeheartedly support the Amendment as it stands. I should like to advise my noble friends, if they can be so persuaded, that we should see whether before Third Reading we can agree on some more limited form of words which might perhaps impose control on any activities under Clause 3(1)(b) and leave Clause 3(1)(a) as the Government wish.

Lord LLOYD of KILGERRAN

My Lords, I am very grateful to the noble Lord, Lord Melchett, for having considered what I said in Committee, he having read Hansard. I know how busy he is, and I do not propose to delay the House very much further. I was delighted to hear the noble Lord, Lord Melchett, use phrases like, "speed of reaction", "freedom—for—commercial—activities", desirability of expansion of activities and "speed of commercial response" in relation to the activities of these Corporations.

I take the point raised by the noble Earl, Lord Onslow, and also accept that we are in a difficult area. Having heard the noble Lord, Lord Carr of Hadley, it may be that the affirmative position which has been taken up in this Amendment is not the right course and, therefore, with the leave of the House I should like to withdraw this Amendment while reserving my position for Third Reading.

Amendment, by leave, withdrawn.

10.15 p.m.

Lord CAMPBELL of CROY moved Amendment No. 41: After Clause 3, insert the following new clause: None of the functions conferred by this Act upon the Secretary of State or British Shipbuilders shall be construed as authorising or requiring British Shipbuilders to repair or maintain ships except by or through the companies referred to in Schedule 2 to this Act.

The noble Lord said: My Lords, this is the first of the Amendments to delete the ship repairing companies from the Bill and it enables us to debate now the whole question of the removal of the independent ship repairers from this Bill. There are two principal reasons why the removal of these firms would make a significant improvement to what is a bad and a damaging Bill whose only relevance to the state of our economy is that it reduces confidence in the Government's ability to tackle the real task facing the country.

The first reason is that it is clear that ship repairing was included in the Labour Party's nationalisation proposals for shipbuilding on the mistaken assumption that it was part of the same industry, and was engaged in similar activities. It is not. It is a separate service industry, not a manufacturing industry, and it operates on entirely different lines.

The second reason for its removal is the arbitrary way in which firms have been picked out for nationalisation. Part of the industry is included in the Bill, the remainder being left out. Out of over 100 companies which comprise the industry, 12 are named for nationalisation in Schedule 2. That this selection has been manipulated by the Government is plain from the fact that the criteria for inclusion have been altered several times since the original proposals were published. The companies in the list to be nationalised have changed during that period as the Government have juggled with the criteria. This absurd division of the industry according to a crazy formula—one that was still being tinkered with by the Government while the Bill was proceeding—has naturally generated strong feelings that injustice was being done. The best and quickest way of putting this situation right is to carry out a neat excision and delete ship repairing from the Bill. Nothing the Government have yet said on the subject has advanced any serious or relevant argument in favour of nationalising the ship repairers named in the Schedule.

One pretext put forward is that the Labour Party had committed itself to take ship repairing into public control. That is not a reason in itself on the merits of the case. It is only a reminder of recent history and of the fact that those who drew up the programme of the Labour Party were suffering under the misapprehension that repairing ships and building ships constituted the same Industrial activity. That was the same kind of mistake as that made by Transport House and Labour's National Executive Committee over nationalising selected insurance companies and banks. Even the Prime Minister has described that as an electoral albatross. It is of course the second albatross: the first is the present Bill, as the Government will discover in the by-elections on Thursday.

So much for the feeble argument that the Government are committed to nationalising these ship repairing firms whether or not it makes sense. There is a further identifiable excuse for this folly that has been employed in your Lordships' House. The noble Lord, Lord Melchett, said that a coherent strategy was needed for these 12 companies out of the 100 or so in the industry. Let us look at other industries that are nationalised. What about steel? The last Chairman of the Steel Corporation tried to work out a coherent strategy in his 10 year development plan. His difficulty was that the Government tried to change it and have seriously delayed it together with the investment in modernisation which was entailed.

Next, let us consider the railways. I invite noble Lord opposite to study the statements by the last Chairman of British Rail, Sir Richard Marsh, since he retired and to decide whether he was allowed to pursue a coherent strategy for British Rail. Ship repairing is a service industry that has to be available in various different places round our coasts to undertake many small tasks at short notice. Of course the same firms have to be able to perform major repairs also.

To be successful, these companies must have a close relationship and good understanding with their individual customers, the shipping firms. Decisions have to be taken quickly on the spot, and business depends also on reliably swift action to follow. The shipping industry, consisting of the customers, has made it clear through its representative body, the General Chamber of British Shipping, that it is opposed to nationalising ship repairers. It predicts loss of efficiency and knows that its own interests will suffer. The ship repairing industry cannot be condemned for its performance; the British industry has been doing well compared with its neighbours. In North-West Europe it has, in the past two years, been increasing its share of the business as a whole. It has been enterprising and successful and has not placed burdens on the taxpayers.

No one can contend that we on this Bench have not given the Government plenty of time to explain their proposals or to withdraw them. The extraordinary way in which a line is being drawn between the companies to be nationalised and those not to be nationalised has prompted apprehensions about possible hybridity. Again, we have given the Government ample time to try to clarify the criteria and their application to individual companies. There is always Parliamentary concern if it seems that unfairness may arise because companies in the same category are being treated differently without recourse to the proper procedure, including opportunities of providing evidence to a Select Committee. My noble friend Lord Colville of Culross has addressed himself particular; y to this subject and is eminently well qualified to do so. Questions have been put to the Government, but each reply—and there is yet another one available this evening—with its interpretations of the terms in Schedule 2, and the circumstances of individual companies, has simply raised yet more points of ambiguity.

The idea of nationalising part of the ship repairing industry simply because the Government wished to nationalise shipbuilding was misconceived. The attempt to apply the idea in this Bill has shown itself to be a mistake. It was suggested earlier today that there is no difference between taking the ship repairers out of the Bill and the aircraft industry, except in degree. With respect, I submit that there is. The Labour Party did not decide to nationalise the ship repairers on their own. The Labour Party policy people did not wake up one day and announce that they had decided to nationalise the ship repairers. They were included in the original proposals only because of the Labour Party's policy on shipbuilding and their mistaken assumption that ship repairing was inseparable from shipbuilding. Even then, only a part of ship repairing is to be included on an arbitrary basis. Ship repairing was thus dragged into the Bill on the coat tails of shipbuilding. The Labour Government now need help in saving themselves from the result of this misconception. It is very different from the aircraft industry, where unfortunately the Labour Party took a definite decision to nationalise the industry and made this a policy matter, and it is now indeed half the purpose of the Bill.

I hope that your Lordships will see fit to agree with the Amendment and to remove the ship repairers. Indeed, the Government may well benefit later this week, when the IMF team are here, from the disappearance of these particular proposals from the Bill. They may interpret this as a sign that the country is coming to its senses. Of course, the confidence of the IMF and the value of the pound would both be fortified dramatically overnight if the whole Bill were to be dropped, but this at least would be a significant step to indicate that in Britain we have not completely lost our heads or our sense of proportion.

Lord LLOYD of KILGERRAN

My Lords, I rise briefly to support this Amendment on behalf of those on these Benches. Noble Lords have heard argument over many hours as to why the ship repairing business should not be included in the scope of this Bill. If I may say so, I have listened with very great care to what has been said from the Government Benches, but I must say that I agree with the noble Lord, Lord Campbell of Croy, when he says that no relevant argument has so far emanated from the Government Benches. I have heard no argument of industrial, commercial or technical significance to justify the ship repairing business being included within the scope of this Bill, and I therefore rise briefly to associate my Party with the noble Lord, Lord Campbell of Croy, in the submissions he has made to this House.

10.26 p.m.

Lord MELCHETT

My Lords, this Amendment, together with what I take to be consequential Amendments to Schedule 2 to the Bill but which the noble Lord, Lord Campbell of Croy, did not mention in particular, seeks to delete ship repair from the Bill. The noble Lord, Lord Campbell of Croy, mentioned at least twice in his speech, if not more, or at least implied, that ship repairing had been included in the Bill because the industry was put in the Labour Party Manifesto by mistake. The noble Lord said that it had been dragged into the Bill on the coattails of shipbuilding. During the Committee stage, on the 11th October, at column 187, I went to some length to disprove that very allegation, and I am sorry that the noble Lord does not appear to have taken in what I said then. However, I should like to repeat what I said at the Committee stage because it makes absolutely clear that, whatever else is the case about the inclusion or exclusion of ship repairing, it is not true to say that it is included in the Bill by mistake or has been dragged in on the coattails of some other industry.

As I said at Committee stage, there were two specific commitments to nationalise the ship repair industry in both of the Election Manifestoes of this Party in 1974. The commitment was quite distinct from the commitment to nationalise shipbuilding. That commitment arose from the report of a joint Labour Party/CSEU/TUC Working Party report which was published in 1973, when we were in Opposition. This joint Working Party recommended that the proposed Corporation should acquire control of all significant companies in the shipbuilding, ship repair and marine engine industries; and that recommendation was endorsed by the 1973 conferences of all three bodies. So at that stage, in 1973, there was a quite separate and distinct mention of the ship repairing industry, and that has been the case in my Party's policy ever since. I hope that, whatever other arguments we may have about ship repairing being in or out of the Bill, people will not say that it simply slipped in at the last minute by mistake.

Lord CAMPBELL of CROY

My Lords, I am grateful to the noble Lord for giving way. I was not suggesting that it was slipped in at the last minute. I was suggesting that, if it had not been for shipbuilding, ship repairing would not be in. I do not think there was any stage where the Labour Party put forward a proposal that ship repairing should be nationalised. It was simply when shipbuilding, as he has just mentioned, was to be nationalised that the marine engine industry and the ship repairers were dragged in, too.

Lord ORR-EWING

My Lords, I have the Manifesto here. I wonder whether the noble Lord could draw my attention to how it occurred. From what he has just said there was apparently a behind-the-scenes agreement among the TUC, the NEC (was it?) and someone else. Was this published, and was it verbatim in the Manifesto? Because I cannot find it in the Manifesto. It says, "take into public ownership"; but I may have missed it in a rather long document.

Lord MELCHETT

At Committee stage—and it is at column 187 of Hansard of 11th October, if the noble Lord wishes to refer to the detail—I quoted from the joint working party report. That Working Party report was not quoted verbatim in the Manifesto; I am not sure that Working Party reports very often are. But, as the noble Lord has said, the commitment to take the industry into public ownership was contained in both Election Manifestoes, and that is something which I am now repeating.

Lord ORR-EWING

But I did not think it said ship repairing, which is what we are on at the moment. I thought it spoke in the Manifesto of shipbuilding and aerospace being taken into public ownership. We are now discussing ship repairing. I may have missed it; it is a complicated document.

Lord MELCHETT

I think that the noble Lord has missed it. I do not have a Manifesto in front of me, and I do not have the time to read it to find a particular reference. There might be time for some noble Lord who in a particular corner of the Chamber happens to have a Manifesto and it would be admirable if he were able to find the reference. However, I have the joint statement drawn up by the Working Party to which I referred. The noble Lord will see that it was published; and that is, at least, an answer to one of the questions he has asked me.

May I go on to make absolutely clear the reasoning behind the Government's proposals to nationalise ship repair. The Government's intentions are to take into public ownership the major ship repair companies situated on the main estuaries. The definitions in the Bill were drawn up with this objective in mind. I should like to come back to definitions in a moment.

Our reasons for nationalising ship repair are clear. Ship repair in many cases is closely integrated with shipbuilding. Let me give your Lordships some examples. Vosper Thornvcroft has a separate ship repair division but here, as in many other cases, shipbuilding and ship repair complement each other. At Vosper's, there is interchange of labour in that the ship repair division has done outfitting work on ships built in their building yards. At Hall Russell, a new ship repair dock has been provided alongside the shipbuilding facilities. At these yards and at others there is close integration between shipbuilding and ship repair. It is therefore illogical to treat the two as separate entities. That is why it is included in the nationalisation Bill. It was done for sound industrial reasons and not, as the noble Lord, Lord Campbell of Croy, has suggested, simply because it was pulled in on somebody's coat tails. As I have said before to your Lordships at least twice and perhaps on three or four occasions, this close link is evident in many of our major competitors, and I have given evidence of this and mentioned it again in connection with Japan, one of the world's leading shipbuilding nations.

There are also sound industrial reasons for nationalising ship repair. The Industry is urgently in need of rationalisation as on some rivers there is wasteful competition. This means that, although as the PA Consultants' report pointed out, new investment is needed, as the industry is now structured that investment will not be forthcoming as it would not produce an adequate return. Nationalisation will enable new investment to take place and at the same time enable some restructuring of the industry on a more coherent basis. Already our nationalisation plans have stimulated one logical proposal for greater integration of facilities. The consultants report also referred to the poor labour relations in the industry. I believe that as nationalisation results in a more efficient, better organised industry, labour relations will improve. Certainly without modernisation, employment in the industry is likely to continue to decline as it has over the last ten years.

A great deal has been said about the definitions of ship repair companies used in Schedule 2 to the Bill. I have said that this was something to which I would return because the noble Lord, Lord Campbell of Croy, mentioned it in some detail. Some people say the definitions include companies that are too small to be nationalised. Others say they do not include enough companies. There have also been some allegations that the criteria have been deliberately framed to include particular companies for vindictive reasons on the part of the Government. This last allegation is complete nonsense.

The criteria used in Schedule 2 for the nationalisation of ship repair companies were drawn up with one objective in mind. That was to nationalise the major ship repair companies situated on the major estuaries. The public ownership proposals embraced these major companies because they were the companies necessary to plan a coherent strategy for the industry.

The selection of the companies listed in the Schedule was therefore made for good industrial reasons and the definitions were framed to include these companies and to omit others which were not relevant to the Government's proposals. For example, the shiprepairing subsidiaries of British United Trawlers Group (one of whom, Humber St. Andrew 's Engineering Company Limited, has already been mentioned in the course of these debates) were mainly engaged in carrying out repairs to the Group's own trawler fleet and their facilities consisted of slipways used for this purpose. It was decided that public ownership of these companies would not be appropriate or relevant to the strategy for the ship repairing industry as a whole. Although the companies met the turnover definition, they were excluded from the Bill as they did not meet the definition on drydocks. On the other hand, Scott Lithgow Drydocks Limited, which owns a large and important drydock facility on the Clyde and which is closely integrated with the shipbuilding activities of the Scott Lithgow Group was considered an essential part of the nationalised ship repair division and the turnover definition was therefore set to include this company.

Another example is given by the two Merseyside shiprepair companies, J. B. Howie Limited and Western Shiprepairers Limited. Again, these companies own and operate major drydock facilities on Merseyside, and together with other associated ship repairing companies in the Laird Group, they constitute a major shiprepairing activity. But because neither company on its own made the turnover definition, the concept of aggregation of turnover with associated companies was brought in to include these companies in the scope of the Bill.

My Lords, the Government remain convinced of the strength of the case for nationalising the shiprepairing industry. We believe it is necessary in order to maintain the close links which already exist between shiprepairing and ship building and that it will only be under public ownership that we can create a strong ship repairing industry providing good prospects of employment for the future. We will strongly resist this Amendment.

10.37 p.m.

Baroness VICKERS

My Lords, I should like to add a few words to this Amendment. Noble Lords may ask why I should take a particular interest in this, having represented Devonport for nearly 20 years, which was a national industry. When it came to Elections I generally had to point out that it was not a nationalised industry, it was a national industry. In other words, like the Fire Service or police, there to protect our country. We had to have ships ready all the time. I should like to make it clear that I consider this to he a complete difference. I realise that they have had an excellent record, over 300 years. I should also like this to be remembered: they are there for the protection of the country, not to make a profit, whereas we wish that the nationalised industries would pay their way. What worries me is the fact that ship repairing yards will now get into the category of the political arena. I know perfectly well that when there was an Election, or when there was a change of Minister, there was anxiety in the dockyards, and there will be anxiety in many of these yards. I will give an example. When 1-EMS "Ark Royal" was having a £33 million refit, we had great anxieties about whether this would continue. One Recess I was rather worried, so I sent a telegram to the then Minister, Mr. Healey, and asked him to send a reply by 2 o'clock because I wanted to go out. At 1.59 I received a reply: No decision made. No cows are sacred". Honestly! That was not very helpful to the hundreds of men who were working there from day to day, wondering whether they had any work to do in the future.

I have in the course of 20 years travelled round and seen a great many dockyards, both naval and private, in Malta, the Far East, Northern Ireland and in Britain, too. I should like to suggest that ship repairs are completely different from shipbuilding. Refits and repairs are considerably more difficult. The repairs need a great deal of patience, initiative and sometimes imagination in order to get the pieces back in the right place. I remember seeing some repairs being carried out with pieces taken out of ships which had been in place for 13 years. They were made as good as new. This is not the kind of work which is done by the shipbuilders. In all yards, whether private or naval, the men were extremely helpful, teaching me about their work. I took a great interest in what they were doing and I made it a special interest in my Parliamentary work in another place.

On 2nd December, in column 1461 of the Official Report in another place, the Minister stated: Our proposals … are part of the Government's programme to instigate and encourage new investment, to restore British industry to a competitive position in world and home markets. I should like to suggest that we do not need the Government to do that. The ship repairing yards are getting on extremely well on their own. I do not think they will do as well when they are nationalised, and they are certainly un-likely to make a profit. Nor do I think they are likely to be happier places for the workers. The Minister added in column 1462: … the Bill helps to fulfil our aim of bringing about a fundamental and irreversible shift of povier"— and I particularly want to emphasise this— in favour of working people and their families. My Lords, has that happened in any other nationalised industry? It will be a miracle if it happens in this one. I remember, when the railways were nationalised, going to Waterloo Station and seeing lots of people there about to be moved on by the police. They protested and said, "But we own this place now. "Of course, they found that was a great mistake. And, of course, one also has to realise that the current loss on nationalised industries at the present time is about £1,000 million a year.

In view of the fact that thousands of employees have shares in the firms where they work and the compensation to be offered to them will affect their pensions adversely, I suggest that in terms of the Bill they would lose rather than gain. As I understand it, there are about 140,000 people who may be transferred from the private to the public sector. They will not know what their future is to be, because they will be controlled politically.

I should like to ask noble Lords: does this part of the Bill contravene Article 102 of the Treaty of Rome? That Article advises, as I understand it, that a member State, before enacting any legislation which is likely to cause distortion compared with conditions in the EEC, must consult the Community's governing body. I should like to ask whether that has been done. In 1964, the Commission ruled that State monopolies were acceptable only so far as they applied to service industries, although I understand that there are widely differing interpretations of the EEC clause. However, there is an indication that this United Kingdom legislation might contravene that Article.

When the Minister talked about the shift of power to the working people, did they get it in steel, in the railways or in coal, for example? I have visited a great many yards and found that a great many people in them supported the present Government. But the Government will not be making themselves any more friends if they take this action, because those people are now worried about what is to happen to their future. I think in most places there is a tremendous spirit of working together and they are happy at the present time. Strikes are few. In one yard I understand that there has been no individual dispute for eight years.

I think some of the independent yards will be lost if all goes to the headquarters on the Tyne. Some yards are small and will probably close, because this large enterprise that is to be created probably will not want to be bothered about the small yards. I do not think that Welshmen or Cornishmen will ever want to leave their homes and go elsewhere. The Welsh, for example, have seen steelworks, coal mines and railways closed under nationalisation and they will not wish for another take-over. Private yards send experts who have been thoroughly trained in how to market their wares. In other words, there are many ships in our yards now that come from overseas.

Special training is needed for these jobs. Recently, against competition from the Dutch farmers, Silky Cox & Company Limited announced conversion work of £1 million for four gas turbine powered container ships chartered by Seatrain of New York. This is going to employ 1,200 workers. How will the people of Cornwall, for example, fare when they are taken over? On 25th June the Minister in another place said: A ship repair capacity will be retained at all major estuaries including the Severn. I can give an assurance that the construction of the two industries resulting directly from acts of nationalisation will not lead to losses of jobs. However, on 5th July, a junior Minister, Mr. Huckfield, said: We cannot give specific guarantees about the yards.". Who are we to believe, the Minister or the junior Minister?

I suggest that the workers will not be better off; they will not have any more power and they may lose their jobs. As I said before, they will come into the political arena which will not make for future security in this work. Any ship repairing firm which wants to continue to be independent should be allowed to do so. It must be remembered that in a great many of these yards there are many trade unions. I know one yard in which there are 17 different trade unions. I should like to know what consultation has been given to all these trade unions. They have members whom they wish to look after, and therefore I hope that due consideration will be given to accepting the Amendment so ably moved by my noble friend.

Lord GOODMAN

My Lords, I had not intended to take part in this debate, but there is something of importance which I think needs to be said. Some very intelligent and persuasive arguments have been presented on behalf of the Opposition in a very reasoned and moderate fashion, and I do not believe they are getting the respect and attention they ought to receive. In my view this is for the rather unhappy reason that the people engaged in presenting the Bill do not have the expert knowledge of this matter which is essential if they are to deal with this in a proper and informed fashion. I believe that the Government spokesman probably knows a shade more about ship repairing than I do, which is almost nothing, but when one comes to serious matters of this kind it is of the greatest importance that the arguments should be presented and be heeded to by people with informed knowledge. It is disrespectful to this House that parrot cries should be uttered about good industrial reasons. We have not heard a single good industrial reason advanced as to why this nationalisation should take place.

I should like to put the matter on a rather broader basis. I believe very firmly, as I think most of the Members of this House believe, in a mixed economy. We are not averse to nationalisation. I do not think that any sane man believes that government can be conducted successfully without a measure, even a large measure, of nationalisation, but if we are to live contentedly together so that our philosophies are not at war there must be recognition that you do not nationalise for its own sake; you nationalise for the sake of efficiency. There is no evidence to suggest that the nationalisation of the ship repairing industry is a matter of efficiency. There is nothing to suggest that it is, remotely in need of capital that cannot be provided in the ordinary way or through the Government agencies that already exist.

There is obviously a feeling here that this must be included for some doctrinaire reason. This is extremely unfortunate. We ought to nationalise when nationalisation is necessary. A cogent case can be made for nationalising shipbuilding. I do not know about the aircraft industry because I know very little about it. I am satisfied that no cogent case has been made out for nationalising ship repairing. There may be one, but I have not heard the faintest suggestion of it yet emerging from the Government Benches. I would continue to urge the Government to think again. It is most important that the impression should not get about that they are nationalising for the sake of netting the lot. It is of the greatest importance that the impression should get about that, where there are reasoned cases made out to them, they are prepared to defer to them. If this House is to serve any purpose at all, I think that it can serve a purpose only if the arguments that are addressed to the Government are heard by informed ears, listened to respectfully and considered with respect as well.

10.51 p.m.

Lord ORR-EWING

My Lords, may I support this Amendment? I declare an interest again, I think for the sixth time in these debates, in that I am a director of Richardsons Westgarth, one of whose subsidiaries is the Humber Graving Dock, which is one of the listed ship repairing units. Therefore, for that reason I shall not vote if one occurs. But I speak from the heart and with some knowledge of this subject, having been closely connected with it for many years.

Ship repairing is a totally different industry from shipbuilding. It is a service industry, and is a very personalised industry. It depends utterly on the relationship between the firm which is operating the ships, and the firm which is to repair the ships. That relationship underlies everything, and the confidence with which people deal with you. It is interesting that the North-East coast ship repairers have already gone "bust" a nationalised industry—in the last two years, because they did not attract customer confidence. This is, therefore, basic to the viability of this industry. We are concerned with an industry which will cost another £50 million of public money, 12 companies with 15,000 people, none of whom appears to wish to be nationalised, with a turnover of £100 million. It is not a big industry, with only 15,000 people, is smaller than many individual firms and is scattered around our coastline, as any study of geography will show.

In the Second Reading debate, Mr. Varley, the Minister, made a grave error which showed just how little the Government know about what is going on, when he said that six out of 12 of those ship repairers listed in Schedule 2 were closely integrated with shipbuilders, which just is not true. The noble Lord, Lord Melchett, the Minister, tonight named, I think, three that might be closely integrated. But because 25 per cent. of the industry might be allied with some shipbuilding, why should the whole industry be taken over in what is clearly a dogma attitude?

It is believed, whether rightly or wrongly—and I must say that I find it very strange—that because a collection of Labour people get together and publish a pamphlet, it is right many years later, in a totally different situation, when public expenditure is under grave pressure, when the IMF are about to arrive on our shores to ask how we can reduce public expenditure and not have to go on borrowing from overseas, for them to stick to saying, "Well, it was written. There were some people who got together and published a pamphlet." Is that not right?

Lord MELCHETT

My Lords, that is so. But that is not the reason why the ship repairing companies have been included in the Bill. I merely gave the instance today, and did the same in the Committee stage, to counter the argument which the noble Lord, Lord Campbell of Croy, used, that we had done this by mistake in some way, that these firms had been dragooned into the Bill, because somebody muddled them up with shipbuilding and got them in by mistake. I merely gave that little history on Labour Party policymaking to get it clear to noble Lords, if I could, that this had not happened by mistake.

Lord ORR-EWING

My Lords, it seems to me strange, because I have examined and reexamined the Manifesto, which, presumably, is the result of all these studies behind the scenes by various Fabian groups and the like, that the Manifesto said that there would be no incomes policy, but there would be free collective bargaining. Have the Government ever heard of that? They turned a bloody somersault on it! "But ship repairing? No, we cannot change that. That is the pure Gospel being handed down in the Tablets from above". Abolition of the nuclear deterrent—I remember that being mentioned in previous Manifestos. Thank God!, that has gone down the drain. They really should not be tied to certain dogma which is put into Manifestos at various times, and which is totally inapplicable and inappropriate to the present industrial position of our country, and, above all, to the present financial position of our country.

We are told that restructuring is necessary for good industrial reasons, and I am so glad that the noble Lord, Lord Goodman, took this up. What are the industrial reasons which make it necessary to take over 12 firms with a total employment of 15,000 people? These are scattered in small numbers all over the country, are very flexible and are meeting the needs of the industry. Is this a good industrial reason? I am afraid that most of us will be sceptical about that. We shall think that the reason for the takeover is dogma and prejudice.

Ship repairers are extremely flexible. At times they are overloaded; many people are trying to get into their docks and are asking for service. At other times they are lightly loaded. In my own instance, Humber Graving Dock takes on maintenance work for the oil refineries which are close by. Apparently this maintenance work is also to be nationalised. It has little to do with ship repairing, by the way, but the Minister has said, "No, we must take over the whole lot; of course we shall extend it". Recently I was looking at ship repairers in Florida. What did they do? When they were lightly loaded they were making refuse machinery for churning up hundreds of tons of refuse which arrived every day because they wanted to level out the load on their manpower and capital investment.

It is true to say that many years ago ship repairing was an offshoot of shipbuilding, but the two industries have steadily and remorselessly diverged in their techniques and technology and in their application and type. Very often shipbuilding takes four years from conception to delivery. Ship repairing, on the other hand, can take four hours from the order arriving and the ship being turned round and despatched from the dock. It is a totally different concept. I cannot understand what are the good industrial reasons for the takeover. These are the industrial facts of life.

I am sorry for the Minister; I suppose that they will go on dishing up this information to him in his brief, but I wish he would take an opportunity to go out and look at some of these little ship repairing firms. The report of PA Consultants suggests that United Kingdom ship repairers are losing trade. It is true that over the years 1968 to 1973 they lost over 3½ per cent., but our competitors in Western Europe lost not 3½ per cent. but 6 per cent. every year; so our ship repairers are doing almost twice as well as Western Europe. The PA Consultants report also states that our prices are lower than those in Western Europe. Is that any justification for taking over and disturbing this little industry? The United Kingdom has steadily expanded its work for overseas customers. It was 14 per cent. a few years ago; now it is 26.8 per cent. Therefore, whatever criteria you look at you will find that this small, flexible industry is doing extremely well by European standards.

Sometimes it is argued, "Ah, but you have had Government support". Even this argument will not run. The industry has received no special support whatsoever and many of these small companies are not in development areas and have not even had the premium that is payable in those areas. I regret to say that this is the one aspect of the Bill for which there is no justification whatsoever. The people working in those companies do not want it; the industrial strategy does not want it. These companies are flexible and small and the longer they remain that way the more likely they are to retain the confidence of their customers both at home and overseas.

I hope that after all the hours we have discussed the different aspects of the Bill the Government will not be so prejudiced that they will not give way on this point, since all logic demands that these companies should be left out of the Bill, thus saving public money. They should go on servicing the industry to which they are dedicated. At the same time it would delight most of the people who are working in that industry.

10.59 p.m.

Lord AUCKLAND

My Lords, the importance of ship repairing is that the jobs should he done quickly. As has been said several times in the debate, these are small companies largely employing local labour, often in relatively rural areas where labour relations are exceptionally good. I wonder how much consultation has taken place with the ship repairing industry itself. We seem to have had very little in the way of answers to that from the Government in either House. Also I happen to have had some personal experience of management consultancy. I do not wish to run down management consultants—many do a good job—but one wonders how long P.A. Consultants, Booth-Allen and other management consultants spent with the ship repairing industry. It is no use spending two or three days with an industry like this. It is an industry which needs very careful study, and careful study by those who are well versed, not only in the industry but in the area concerned. The hour is late and it is time a decision was taken on this, but it is quite clear that the vast majority of people in this country, and certainly those concerned with the shipping industry, wish to see this provision deleted from the Bill.

The Earl of HALSBURY

My Lords, I support the Amendment, arising out of a deep conviction based upon experience. This is not an issue where an Independent like myself can listen to both sides of the case and sometimes incline one way and go into one Lobby and at another time go into the other Lobby—and I have done both in the course of this evening. I have spent 10 years in a nationalised industry—the gas industry. I know its strengths and its weaknesses. I am not in principle opposed to the nationalisation of public services. The nationalisation of the gas industry is a logical consequence of modern technology in gasmaking, and during my 10 years the industry went through two revolutions. First, the substitution of coking processes by hydro-carbon forming, and secondly the exploitation of natural gas, and it could not have been carried through on less than a national scale.

Also in the course of my industrial experience I have been responsible for the affairs of a dynamo and motor repair organisation, and nothing in greater contrast with a nationalised industry producing a public service like gas could be imagined. The degree of private initiative and the capacity for improvisation that one needs in running a repair business is not comparable with the qualities necessary to run what of necessity is a large bureaucratic organisation like a nationalised industry. Although in a homogeneous industry like the gas industry one can hold the degree of bureaucracy to a certain extent within limits, I must at this stage remind the noble Lord, Lord Melchett, of a Fabian essay written by his right honourable friend Mr. Anthony Crosland, in which he said that the private sector is the public's guarantee against bureaucracy. That is why I support the Amendment and shall be prepared to follow into the Division Lobby if the House is divided.

11.3 p.m.

Lord STRATHCONA and MOUNT ROYAL

My Lords, there are one or two things I ought to say. First, I said earlier that we want to see British Ship-builders flourish and this Amendment does not seek to preclude British Ship-builders from going into the ship repairing business. What it is doing is seeking to stop them from coercing the independent shipbuilders from being swept into the maw of the public sector.

The noble Lord, Lord Melchett, made much play of the close links which exist between the shipbuilding and the ship repairing industries and he spoke about the Government's desire to maintain close links, but what he did not do was to deal with the question of those companies which do not have such links at the present time. A number of my noble friends, and indeed noble Lords from all sides of the House, pointed out that some of the more successful parts of the ship repairing industry are small companies; it was said a number of times, and in particular by the noble Earl, Lord Halsbury, who uttered a striking phrase, contrasting the difference between the private initiative and improvisation that is needed for this type of industry with the bureaucratic type of organisation. It is possibly unfortunate that the word "bureaucratic" has become a rude word because it need not be. That is typical of what is required for a major industry like the gas industry.

Secondly, we have spoken about the time-scale; a number of noble Lords have spoken about that, notably the noble Lord, Lord Orr-Ewing. It is true. At this time of night I do not think it is worth labouring the point. Anybody can understand that if a ship comes in in a damaged condition, it is simply not the same kind of situation as if you are quoting for building a supertanker; to compare the two seems quite irrelevant.

The noble Lord made much play of industrial relations. Some of us believe that there is at least one company in the ship repairing industry which is notable for industrial relations. I have to ask the noble Lord the question: Is he honestly going to stand up and say that the industrial relations record of the shipbuilding industry is all that admirable a record that he would necessarily want to impose this on the small intimate companies engaged in the ship repairing industry? I simply cannot believe he would want to lumber them with that kind of burden. The noble Lord then referred to the need for investment. Here again, one of the reasons why some of us are against sweeping the small independent ship repairing industries into this vast organisation is that they do in fact make profits. Earlier on in the debate my noble friend Lord Lauderdale was seeking to praise profits, and I hope we shall continue to do so. I would respectfully suggest that the best way of getting investment in an industry is to make it profitable. If it is profitable, is it not a pity to "clobber" it by sweeping it into a large bureaucratic organisation?

Then the noble Lord referred to the major ship repairing companies in the major estuaries. We are possibly in danger of getting into the area of hybridity, but I would have to ask the noble Lord this. Is he really sure that in all cases we are talking about major companies? And if he is, is he absolutely certain that some equally large companies have not been excluded from the Bill? Is this really sensible? Do we not come back to saying, as (I would so call him) my noble friend Lord Goodman said, that we have not had a single good industrial reason, such as that we should be nationalising for the sake of efficiency? If the noble Lord could convince me that he was nationalising for the sake of efficiency I honestly believe, despite the prejudice I freely admit to, he might even persuade me that it would be a good idea; but he has not produced a single argument which leads me to believe this is right.

The noble Baroness, Lady Vickers, when talking about the question of industrial relations, emphasised the enormous number of trade unions which are involved, particularly in the shipbuilding industry. If the noble Lord wants to deploy the argument that industrial relations would he better, and this is wanted by the unions, do we not come back to the kind of argument we had on the Felix-stowe Bill? Is it not surely self-evident that at least in some cases—and certainly the evidence I have supports this—the unions in these small businesses do not want to be brought into British Shipbuilders? Therefore, it seems to me not respectable to mount the argument that either this is wanted by the unions or that it would improve industrial relations. It seems to me that the onus of proof for bringing this section of the industry into the Bill must lie with the Government, and so far they have totally failed to make the case.

Lord CAMPBELL of CROY

My Lords, as I moved this Amendment, perhaps I may say in reply to the noble Lord, Lord Melchett, that he said this was the first of a number of Amendments. When I moved it, I said it was the first but when we reached the later ones I would indicate how they fitted in. The Amendment seeks to remove the independent ship repairers from the Bill. The noble Lord mentioned Vosper Thorney-croft. But in Committee I pointed out that that happened to be a company with a large ship repairing dock which is completely separate on the other side of the Itchen, and where the management and the workforce are entirely separate. Again we will return to that in a later Amendment, so I will not go into it now. As various noble Lords, including the noble Lord, Lord Goodman, in particular, have pointed out, we have had no real reason given why this industry is included in the Bill. I would ask the House to support me in this Amendment.

11.11 p.m.

On Question, Whether the said Amendment (No. 41) shall be agreed to?

Their Lordships divided: Contents, 73; Not-Contents, 34.

CONTENTS
Amory, V.	Greenway, L.	Redesdale, L.
Auckland, L.	Halsbury, E.	Rochdale, V.
Belstead, L.	Harcourt, V.	Ruthven of Freeland, Ly.
Blakenham, V.	Harmar-Nicholls, L.	St. Aldwyn, E. [Teller.]
Bolton, L.	Henley, L.	Sandford, L.
Brougham and Vaux, L.	Hornsby-Smith, B.	Sandys, L.
Byers, L.	Inglewood, L.	Seear, B.
Campbell of Croy, L.	Kinnaird, L.	Selkirk, E.
Carr of Hadley, L.	Kinnoull, E.	Sharples, B.
Carrington, L.	Lauderdale, E.	Simon, V.
Cathcart, E.	Lindsey and Abingdon, E.	Skelmersdale, L.
Colville of Culross, V.	Lloyd of Kilgerran, L.	Stamp, L.
Cork and Orrery, E.	Long, V.	Strathcarron, L.
Craigmyle, L.	Lyell, L.	Strathclyde, L.
Cullen of Ashbourne, L.	Monson, L.	Strathcona and Mount Royal, L.
Denham, L. [Teller.]	Morris, L.	Trefgarne, L.
Drumalbyn, L.	Mowbray and Stourton, L.	Trevelyan, L.
Elles, B.	Nelson of Stafford, L.	Tweedsmuir, L.
Elliot of Harwood, B.	Newall, L.	Vickers, B.
Elton, L.	Northchurch, B.	Waldegrave, E.
Exeter, M.	Northesk, E.	Ward of North Tyneside, B.
Falmouth, V.	O'Hagan, L.	Wigoder, L.
Ferrers, E.	Onslow, E.	Young, B.
Goodman, L.	Pender, L.
Gowrie, E.	Rankeillour, L.

NOT-CONTENTS
Ardwick, L.	Harris of Greenwich, L.	Peddie, L.
Birk, B.	Houghton of Sowerby, L.	Pitt of Hampstead, L.
Brimelow, L.	Jacques, L.	Segal, L.
Castle, L.	Kirkhill, L.	Shackleton, L.
Champion, L.	Llewelyn-Davies of Hastoe, B. [Teller.]	Stedman, B.
Collison, L.		Stone, L.
Davies of Leek, L.	McCluskey, L.	Strabolgi, L. [Teller]
Davies of Penrhys, L.	Melchett, L.	Wallace of Coslany, L.
Delacourt-Smith of Alteryn, B.	Morris of Kenwood, L.	Wells-Pestell, L.
Donaldson of Kingsbridge, L.	Murray of Gravesend, L.	Wigg, L.
Elwyn-Jones, L. (L. Chancellor.)	Oram, L.	Winterbottom, L.
Fisher of Camden, L.	Peart, L. (L. Privy Seal.)

Resolved in the affirmative, and Amendment agreed to accordingly.

Clause 5 [Corporations to give effect to directions of Secretary of State]:

11.20 p.m.

Viscount SIMON moved Amendment No. 43: Page 7, line 7, after ("or") insert ("any direction of a general character given to it").

The noble Viscount said: My Lords, we have now come to Clause 5 and when we were discussing this clause in Committee it was generally agreed that the Secretary of State's directions would be directions of a general nature only. But I pointed out at the time that the drafting of Clause 5(1) does not make that clear because subsection (1) reads: Each Corporation shall give effect to any direction given to it under subsection (2) below or under any of the following provisions of this Act …". Subsection (2) in turn states that, The Secretary of State may give directions of a general character", and I feel that we ought to introduce a similar provision into the second part of subsection (1). That is why I propose that in line 7 after the word "or" we should insert the words: any direction of a general character given to it", so that the subsection will read: Each Corporation shall give effect to any direction given to it under subsection (2) below or any direction of a general character given to it under any of the following provisions of this Act …". This is simply to clarify what I understand was stated to be the intention of 1 he clause. I beg to move.

Lord MELCHETT

My Lords, the noble Viscount, Lord Simon, suggested in Committee that this subsection should refer only to general directions. Once again, we considered the points made then very carefully and I have carefully considered the Amendment, but I regret to say that I cannot accept it for it would undermine the essential purpose of this subsection. I hope that my explanation will satisfy noble Lords both that Clause 5(1) has no sinister significance and that this Amendment would have no undesirable consequences. It may be that my explanation in Committee did not achieve that, but I hope to do better tonight.

It is the normal form in nationalised industry legislation, where a Secretary of State has power to give directions (whether general or specific) to a Corporation, to have a requirement on the Corporation to give effect to those directions. Otherwise there would, as a point of law, be no obligation on the Corporation (other than an inference that where he directs, the Corporation must obey) to give effect to directions. In some legislation this is done separately for each kind of direction; in other cases, the obligation to give effect to all directions is laid down once in the Act and applies to all powers of direction in that Act. By way of example of this latter form, I would cite Section 40(2) of the Electricity Act 1957 and Section 58 of the Civil Aviation Act 1971.

In this Bill, as a matter of drafting convenience and conciseness, it was decided to put the obligation to give effect to all forms of directions into Clause 5(1); in other words, it follows the two previous Acts in having one single place when this is done. It is put immediately before the provision allowing the Secretary of State to give general directions in the national interest. But of course the Secretary of State has, in this Bill as in other legislation, certain other powers of direction; for example, on disclosure of information in Clause 9. Others are given in Clause 6 on organisation (this was unfortunately deleted by the House in Committee); in Clause 8 on omission of certain matters from the Corporate Plan; Clause 13 on terms of repayment and interest rates on loans; Clause 18 on accounting years; and Clause 48 on fair trading by British Shipbuilders. There needs to be a general obligation on the Corporations to give effect to all these, and this is the purpose of Clause 5(1), as indeed the side note to the clause itself suggests.

We could not accept any suggestion that the only effective power of direction the Secretary of State should have should be the power of general direction. In the first place, as my noble friend Lord Kirkhill—explained—in—Committee, "general" has been interpreted by the courts, as a result of its appearance in previous legislation, in such a way that it is likely that the Secretary of State could not exercise the powers of direction which the Bill expressly confers on him. That is because of the point we made at the Committee stage of the very narrow definition which the courts have imposed on the word "general". Some of the powers of direction explicitly given to the Secretary of State in the Bill would certainly not be regarded as general.

This would leave him without powers which in other contexts noble Lords opposite, certainly on the Conservative Benches, have regarded as desirable. The Secretary of State would not, for example, he able to require the omission of certain matters from the corporate plan in Clause 8, the terms of repayment and interest on loans under Clause 13, and perhaps most important to noble Lords opposite, he would not be able to direct the Corporations to stop unfair trading practices under Clause 48. The effects of this Amendment then would include preventing the Secretary of State from exercising a power conferred on him by the clause inserted following representation from the Opposition in another place.

I hope that this rather expanded explanation will satisfy the noble Viscount on the need for the clause and for the clause to refer to directions, and that to insert a reference to "general" in Clause 5(1) would relieve the Corporations from an explicit obligation to give effect to any directions under any provisions of the Bill except those that are general, and I think that noble Lords on all sides of the House would not consider that to be a desirable result.

Viscount SIMON

My Lords, I am greatly obliged to the noble Lord, Lord Melchett, for that explanation. I confess that I should like to read it in Hansard before I decide whether to do anything on Third Reading. The only thing that I was able quickly to pick up was that he referred to Clause 9(1) as an example of when the Secretary of State gives specific directions, but Clause 9(1) says that each Corporation shall furnish him with information. Therefore, another clause is not needed to say that the Corporation has to comply with his direction, because it says so in the clause itself. But I shall read carefully what the noble Lord said and, if necessary, I shall trouble your Lordships again on Third Reading. In the meantime, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 6 [Duties of the Corporations to review and report on management of their affairs]:

11.29 p.m.

Lord CARR of HADLEY moved Amendment No. 49: Page 8, line 16, leave out ("and").

The noble Lord said: My Lords, I think that it would be to the convenience of the House if we were to take Amendments Nos.49, 50, 52 and 53 together, because I think that they all bear on exactly the same point. They all affect Clause 6 of the Bill. Your Lordships will know that Clause 6 requires both British Aerospace and British Shipbuilders to undertake a review of their affairs for the purposes of determining particularly how the management of the activities of each Corporation and its subsidiaries can be most efficiently organised, taking account of certain desirable objectives, such as the promotion of the largest degree of decentralisation, and to determine what steps are necessary in order effectively to promote the Industrial democracy which we have been discussing on earlier Amendments today and on previous days in the Committee stage.

That seems to us to be all right so far as it goes. What we are saying in these Amendments is that one of the other things which ought to be reviewed is the machinery of the industrial relations in both these industries. I think that it is well known that one of the problems in British industry is the complicated structure of industrial relations which many of our industries suffer. It is a complication and difficulty arising, not out of or deliberate trouble-making by anybody, but principally out of the age of our industrial system, the age of our managerial structures and, above all, the age of our trade union movement.

The main way in which that shows is that we in this country suffer in a way which most other countries do not suffer, and that is from the problems arising from the multiplicity of unions in each particular industry, and indeed in each particular factory. I think that both sides, if they were honest, would say that this produces very great problems indeed, and puts us in Britain at considerable disadvantage compared with similar industries in other countries. li leads to complication of negotiating structure. It also leads to the sort of leapfrogging claims and counterclaims with which so much of British industry has been beset.

When one has an established industry, custom and practice become very deeply engrained and is very hard indeed to change; and one of the advantages of making a fresh start is that it provides an opportunity for looking at all these things anew. It seems to us that the Government are seeking to take advantage of that opportunity in one or two important aspects of the affairs of these industries, and, speaking for myself at least, that I certainly welcome. But they are missing the opportunity to seek at the outset to get agreement on how we might modernise the basic industrial relations machinery in these two industries. That is why we believe that this, too, should be part of the initial review which both these Corporations are charged to undertake within a very short time (it is three months, is it not?) of being set up. Certainly they are charged to do it forthwith, I think, and possibly subsequently from time to time in the future. I hope the Government will consider this matter very carefully indeed. If the review reveals that steps are necessary to improve the machinery of industrial relations in this industry, then the details would be the subject of consultations under Clause 7; but we think it would be right and helpful for the future good health of these industries if the consultations which are to take place under Clause 7 should, as it were, be given an agenda to bite on resulting from this fundamental review of the whole of their affairs which the Corporations are charged to make under Clause 6.

Perhaps I may indicate the scale of the problem we have here. I think I am right in saying that in the shipbuilding and ship repairing industries there are now 12 recognised trade unions; that is, 12 trade unions with which collective bargaining has to be undertaken. That is a slight reduction from the 15 listed by the Geddes Committee in 1966, but it is still a formidable number, even though all are members of the Confederation of Shipbuilding and Engineering Unions, which of course now provides some co-ordination; and it is admittedly true to say that inter-union disputes, which used to be such a menace in this industry, have been much less frequent and trouble-some since the 1969 national agreement on procedure for dealing with these matters. So there has been some improvement in the shipbuilding and ship repairing industries in this area brought about by the co-operation, good will and determination of both sides—and I should like to stress both sides: both management and employees. But I think anybody on either side looking at this situation dispassionately would say that a good deal of further improvement could be made, and that is why we believe that it should be looked at.

If you turn to the aircraft industry—I have not got the precise numbers but I do not think I am far wrong in saying this—there are probably about 15 recognised trade unions in the aerospace companies which are going to be incorporated in British Aerospace. This, too, is an unwieldy number. How is one to deal with this? In other countries this problem does not arise. In West Germany, for example, it does not arise because their whole union structure is of recent creation. Paradoxically it was largely created on the advice of British trade unionists who saw how it should be done if only one could start from the beginning. We, thank goodness! having won the war, did not have to start from the beginning. We were able to continue in the way we had carried on for so long before. As a Conservative, I like continuity. I think, however, that we have had a little too much continuity in the structure of our industrial relations. So a country like Germany gets over it in that way.

A country like the USA gets over it in a different way. They have bargaining agent elections. A bargaining unit is set and each of a number of different unions competes for negotiating rights. They have a secret ballot and the employees in each company have the chance to choose which of the competing unions they wish to have negotiating on their behalf. When that is done, that union has inalienable rights for a certain fixed time although it can be challenged periodically. That is how they obtain the structure in the USA.

In Britain I do not believe we can attempt either of those methods. It is inconceivable that one can suddenly come down to the sort of union structure West Germany has. It is also inconceivable that one can apply the American practice here, because the number of unions competing with each other in each industry is much too great to have the possibility of getting the majority of the employees in most of the companies that we are talking about to give a clear majority to one particular union at the expense of all the others.

When I had to face this problem in drafting the Industrial Relations Bill, I and my advisers conceived the idea of a bargaining unit, as in America, but giving all the multiplicity of unions a right to form a joint negotiating committee so that all the unions would continue being able to exist but there would be one joint committee with whom the bargaining would he done. The constituent unions would give that committee a mandate to be able to negotiate on their behalf. That was another way of dealing with it. As your Lordships know, that way has been rejected along with the rest of the Industrial Relations Act. Naturally that disturbs me because I believe that this hit of it, at least, was going to the root of one of the most fundamental problems of British industrial relations. It is all very well to reject that method, but nobody so far has tried to put any alternative method in its place. If I am certain of one thing, it is that that is one of the most urgent problems needing attention in the whole of British industry in general and in British industrial relations in particular.

My Lords, I think that I have said enough to show there is a real problem here. It needs to be solved by inquiry and good will. I am saying to the Government that as these new Corporations come into being and are in a formative stage, one has what I believe it is not an exaggeration to say is a unique opportunity that will not occur again. Once these Corporations have come into being and have hardened into certain ways of doing business it will be almost impossible to change. But at the very moment of their coming to birth, it is possible, if an inquiry was gone into in an impartial, relaxed manner, that both sides could find some agreement on how they might strive to improve the machinery.

I want to stress that I am not in anything I am saying either antiunion in general or "anti" the particular 12 unions of the shipbuilding industry or the 15 unions of the aircraft industry. I am not against those unions or unions in general. I am saying, for the benefit of the unions themselves and their members and management, for the prosperity of the industries and good of the country, that here is an opportunity to get both sides to have a careful look at this and put down some yardsticks which when they come to operate Clause 7(3) will provide a useful agenda for those detailed discussions. I hope that the Government will accept the Amendments in the spirit in which they are moved, and agree that this fundamental review of their affairs, which each Corporation is charged to undertake, should include a fundamental review of the machinery of their industrial relations. I beg to move.

11.41 p.m.

Lord MELCHETT

My Lords, I have to say frankly to the noble Lord, Lord Carr of Hadley, that when l saw this Amendment it appeared to be calculated to undermine the relevant trade unions working within these two great industries, and undermine the existing long-established and carefully balanced negotiating arrangements in these industries. I accept that that is very far from the noble Lord's mind; he made that clear. In particular, he made it clear that he was not wishing to attack either the particular trade unions in this industry, or the trade unions in general. It might have been helpful if he had added to that—and no doubt he would have done so if he had thought of it—the CSEIJ, because the Amendment seems directed at the role which that organisation plays in two industries.

By specifying that the organisation review must take into account problems arising from the number of trade unions which are relevant trade unions and which are involved with each Corporation, the Amendment appears not only to assume that the current position and activities of the relevant trade unions within the industry are cause for concern, but also fundamentally, and in our view completely unjustifiably, to criticise the work and role of the Confederation of Ship-building and Engineering Unions. I was surprised that the noble Lord, Lord Carr, with his considerable knowledge and experience of these problems, should set his name to an Amendment apparently calculated—and certainly this would be its effect—to disrupt established and effective industrial relations arrangements in these industries. He would agree with me that, if the Amendment had that effect, it would not be in the interests of the industries themselves. The CSEU has a vital role to play in both industries, and has played it with considerable success. I was delighted to hear the noble Lord acknowledge the role which the organisation has played.

We accept that there is a large number of relevant trade unions involved in the industries, but the existence of the CSEU provides co-ordination at both the national and local level. Furthermore, its work alleviates potential problems that might arise from the number of relevant trade unions, for the CSEU has an effective internal disputes procedure which helps resolve disputes between affiliated unions. Furthermore, the CSEU has been playing a major and forward-looking role, in consultation with the Organising Committee, in formulating the future strategy and structure of the industry. Noble Lords will agree, I hope, that the CSEU has and should have a vital part to play in the future of these industries, and I can assure them that their participation so far has been most constructive.

I am sure both noble Lords opposite and my noble friends can agree about the need for good industrial relations within these industries. We have made clear, on numerous occasions, that it is the Government's view that the identification of the "relevant trade union", as defined under the Trade Union and Labour Relations Act 1974 and the Employment Protection Act 1975, is essential for good industrial relations. It would be fair to say—if it is not getting the noble Lord in trouble with his colleagues—that we have much in common between us on this issue, although there have been other issues on consultation in particular where we have not been able to agree. We believe that this approach provides the basis on which the industrial relations can develop. I have indicated some of my worries about the practical effects of the series of Amendments to which the noble Lord has spoken. I accept without hesitation that the noble Lord did not move them with the intention of causing difficulties, but I have to say that I think the Amendments will have an effect that neither of us would wish to see. I hope that, on that basis, the noble Lord will not press the Amendments tonight.

Lord CARR of HADLEY

My Lords, I am bound to say I find that a most disappointing reply. The first obvious comment one is driven to make is this. Why must these very powerful, and rightly powerful, union organisations be so ridiculously hypersensitive? It is perfectly right that management should be looked into. We have the managements, certainly of the two aircraft companies, running a highly successful show: yet their activities have got to be looked into in this review as to how they organise themselves, and all the rest of it. I wonder what we would all be saying in this House if they said, "Don't come near us. You must not upset us, or ask what we are doing. We must not be questioned. We must just be allowed to get on with it."

It seems to me most depressing to think that in 1976, with the unions established as well and as strongly as they are, and with nobody wishing to attack them in any way, we have to say they are so hypersensitive that any suggestion that anything they do might have to be reviewed would cause disruption and trouble in the industries concerned. It really is a pathetic situation to have got into, and I very much doubt whether these unions are as un-adult as the Government seem to indicate in this matter.

If we were asking in this Amendment—which we were not, and I think the noble Lord recognised that fact from what he said—that the definition of "relevant trade union" should be reopened for this purpose, I can see that might he a very explosive thing to do. That is why I have been at pains in all these debates to distinguish between consultation and collective bargaining. In theory I might not wish to, but I think anybody would he an idiot if he did not do so in practical reality. But, accepting the definition of "relevant trade union" from the point of view of collective bargaining, there really is a great deal to look into. On the shipbuilding side there are a fairly large number of individual companies coming together for the first time under a single holding company, and although they are going to be run—we hope this will be so in practice as well as in theory—in a highly decentralised form, for the first time the collective bargaining machinery for the industry could be looked at as a whole in a way that has not been possible before. In the aircraft industry we have these two very big companies coming together. That, too, will create a new situation.

One of the first things to be decided is, what are the appropriate bargaining units to be which will be concerned in the negotiations taking place? It may be the same union for each different unit, but there are certain grades of workers which could he negotiated for together, while others are the subject of separate negotiations. I suggest that after all these years the present differentiation of very ill-defined bargaining units which has grown up is really in need of review. That has nothing whatever to do with the composition of those who would do the negotiating.

Much good could come out of this, and I think the Government are making a very serious mistake when they forget, for example, all the work done by the Donovan Commission on trade unions, which had a great deal to say about this subject. Some of my colleagues and I may not have agreed with the Donovan Commission in some of their recommendations about the role of law and how to achieve certain changes that they wished to see achieved, but they paid enormous attention, industry by industry, to the need to reexamine the negotiating machinery, the contents of agreements, the sort of things to be included in agreements and areas of workers covered by each settlement. I believe that if the noble Lord, Lord McCarthy, who, if I remember correctly, was the Research Director or Research Secretary to the Donovan Commission, was present to-night he might be agreeing with me and giving the Government from behind some expert advice on this matter, which might not he far from what I am pressing upon them.

The moment when these new organisations are formed is a heaven-sent opportunity to look at all this matter again, without challenging which union shall have the authority to negotiate but simply the structure in their negotiating pattern for the future, which ought to be covered in agreements. I repeat to the House this is an opportunity which probably will not recur in these industries. If the Government do not see that the opportunity is taken now we shall go on in this way suffering the relative inefficiency which we suffer in relation to other countries because of the complication of our union structure. We cannot simplify it by coming down to single unions. History is against us in that. It needs to be done in a more inquiring, reporting and agreeing sort of way. I suppose the noble Lord, who is now not even in this Department, is in a difficult position. It is a great pity if the Government miss this opportunity.

The noble Lord will see the way we are moving in this Amendment and that there is no political edge or partisanship in this. I believe that if the noble Lord, Lord McCarthy, were here, though he may not agree precisely with me, he would wish to urge the Government to find some way of taking advantage of this opportunity. To say that is not in any way to criticise the work done by CSEU. This is the only opportunity which is likely to arise to make things better for a long time to come. If the Government let this slip they will rightly be to blame if our negotiating structures in these industries are not as good as they should be and if they allow these industries to harden into ways that are then difficult to change.

At this time in the evening and at this stage of the Bill I cannot ask the House to force this Amendment through. I can only try to drive into the Government the importance we attach to this matter. It is our genuine wish that the Government, on behalf of the country, should not lose this opportunity when they are reorganising these industries to make sure that the industrial relations machinery is brought up to date at the same time. I shall not ask your Lordships to divide on this Amendment, but even if the Government cannot bring this formally into the Bill I beg the Minister to talk seriously to his more senior colleagues and at least try to bring influence to bear behind the scenes in order that this matter will be dealt with in this review. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

11.55 p.m.

Viscount SIMON moved Amendment No. 56: Page 9, line 14, leave out ("consult") and insert ("seek consultation with").

The noble Viscount said: My Lords, this is the same as the first of three Amendments put down in Committee to leave out the word "consult" and to insert "seek consultation with". Noble Lords will remember the discussion we had in Committee. Curiously, the third of the Amendments which we put down then was, by misadventure, carried by the Committee, because I was not here and my noble friend Lord Lloyd of Kilgerran, in perfectly good faith, moved an Amendment on my behalf and said in the early hours of 19th October: The wording of this Amendment was fully discussed in relation to Amendment No. 84, on which there was a Division. No doubt, in those circumstances, the Amendment will be acceptable to the Committee".—[Official Report, col. 973.] My noble friend Lord Lloyd spoke in good faith but was quite wrong, because there was no Division. But the Government then—I know it was rather early in the morning—let that Amendment go through. I am hoping, in the circumstances, that they may be prepared to accept this Amendment which I now beg to move.

Lord WINTERBOTTOM

My Lords, the noble Viscount has underlined a problem that faces one, if one goes on too late at night or into the following morning. One often makes slight slips in procedure. This is a case in point, because, if my recollection is correct, I, speaking on behalf of the Government, resisted Amendments identical to that which we are now discussing. But I promised to pass on to the Secretary of State the Committee's feeling that the words "seek consultation with" were more appropriate than simply to "consult". I gave that undertaking. If the noble Lord, Lord Lloyd, misunderstood me at that hour, I can appreciate his position. But what I did do was to promise to pass on to the Secretary of State the Committee's view on identical Amendments discussed during the Committee stage, and at that time I tried to explain our reasons for the present drafting.

I hope that noble Lords will not think that I am being obstinate or pedantic, if I stick to what I said originally. I am equally sure that the noble Viscount and his noble friends are also not being obstinate or pedantic. We are trying to find the best wording. But it is a simple question of semantics. Our view is that to "consult", bluntly, has the same meaning as "seek consultation with" or "to enter into consultation", and would be so interpreted by the courts, in the unlikely event of the unions declining to be consulted. We are talking of a situation where I might say to the noble Lord, Lord Carr, "You are the appropriate union. I seek to consult with you" and he says, "Go away and play". That situation is highly unlikely, because, by and large, the unions are taken to be most responsible bodies of people and if the Government, the Organising Committee or a Corporation chairman said, "I want to consult with you", of course they would consult. So that we are talking about a hypothetical situation. But if the Government send a consultation document to an interested party and that party refuses to comment, reply or even acknowledge the document, it is still perfectly clear that the Government have consulted that party. For that reason we prefer the more direct form "to consult" for two reasons.

First, as I said at Committee stage, we want this requirement to be very clear and not permit of any coyness. Secondly, we think that it is better for the Bill to be consistent. Throughout the Bill, and throughout previous legislation, there are obligations: for instance, on the Secretary of State to consult the Corporations, or the chairman, or it is specified that the Secretary of State may do something only after consultation with the Corporations. There has been no question whatever in other areas of our discussion that the Secretary of State should be obliged to "seek consultation with" the Corporations, nor, in both the Gas Act 1972 and the Civil Aviation Act 1971, did members of the Party opposite feel it necessary to spell out similar provisions as "after having sought consultations with". "To consult" is clear-cut and, if I may use an Americanism, "meaningful". For this reason I hope that noble Lords will accept that the balance is in favour of the wording as it now is in the Bill.

Viscount SIMON

My Lords, I am very disappointed with that reply from the noble Lord, Lord Winterbottom. The noble Lord said that he had undertaken to seek to consult the Secretary of State but he has not told us whether he did so and what response he had.

Lord WINTERBOTTOM

I did, my Lords.

Viscount SIMON

Then, my Lords, what was the response?

Lord WINTERBOTTOM

My Lords, the response was the one I have given: that the Government do not want to change the wording.

Viscount SIMON

My Lords, I find myself in a real difficulty. It seemed to be such a reasonable suggestion and I thought that it was one which had been taken up by the noble Lord, Lord Winter-bottom. Your Lordships may remember that in Committee the noble Lord quoted an amusing conversation between a certain gentleman and a certain lady, to the effect that it takes two to kiss. This was indeed very apposite. It takes two to consult. Now the noble Lord is apparently asking that one of the parties should kiss the other without the permission of the other, which I believe technically is an assault. This seems to me to be rather unnecessary. The noble Lord has said that "consult" means the same as "seek to consult". If it means the same, why should the noble Lord object to our putting "seek to consult" into the Bill?

It seems to me that it is a more accurate wording. When the noble Lord said that it was almost impossible that anybody should refuse to consult any trade union, I think he had forgotten the kind of case I mentioned to him which I do not think is at all out of the range of possibility: the case where a dispute is going on and the trade union has refused to have any consultation with the management until that dispute has been disposed of. I do not quite know what to do. Certainly I do not want to divide the Committee at two minutes past midnight. I had better take away the Amendment and look at it again before Third Reading.

Amendment, by leave, withdrawn.