LORDS AMENDMENT (Hansard, 16 November 1976)

§ Lord MELCHETT
My Lords, I beg to move that this House doth not insist upon their Amendment No. 27, to which the Commons have disagreed for the Reason numbered 28. This Amendment removes the power of the Secretary of State to give directions to the Corporations after considering their report. As I have explained on a number of occasions, the Government believe that the Secretary of State must have the power to give such directions as he considers appropriate for securing that the management of the activities of the Corporation and its wholly owned subsidiaries is organised in the most efficient manner. The power is well precedented in the most recent nationalisation legislation—the Iron 1186 and Steel Act 1967, the Civil Aviation Act 1971 and the Gas Act 1972—and I hope, in view of that, that noble Lords will not insist upon the Amendment.

§ Lord STRATHCONA and MOUNT ROYAL
My Lords, there is no purpose in my repeating the remarks that we have already made in connection with Amendment No. 17. Much the same general arguments apply. It is quite clear that the two sides are not going to agree about this. May I confine myself to asking the noble Lord whether he can tell us what exactly he thinks are appropriate circumstances for the intervention, as the Commons have chosen to use those words in giving us their Reasons for this?

§ Lord MELCHETT
My Lords, we went into this matter in some detail when we discussed the Amendments. I know that noble Lords opposite felt that this power would allow the Secretary of State to interfere in detail. The Government's intention is to provide the Secretary of State with the reserve power. It would certainly not be a power that would allow interference in detail. The noble Lord, Lord Carr, argued during a previous stage in the Bill that when the Secretary of State was dissatisfied with the management and organisation he should dismiss those responsible. That was the alternative to having this reserve power in the Bill. We consider that there are situations in which it would be less damaging to the morale of the Corporations for the Secretary of State to be able to give a direction on organisation after receiving a report from the Corporation. We share the view that the Corporations rather than the Government should determine their organisation, but the Government think that this reserve power could in certain circumstances provide the best way of resolving very difficult problems. For those reasons we regard it as essential.
We have provided that directions may cover only "general principles". I made the point before, but I am not sure that it has been fully taken on board by noble Lords opposite. Perhaps they have not wanted particularly to direct their minds to this point. As I said, we have made the 1187 change to ensure that directions only cover general principles, because that is a precedent from previous nationalised industries legislation, including Conservative precedents. I should have thought that that made it clear beyond all reasonable doubt that it was only intended that the power should be used on major matters. I hope that that explanation has gone some way to reassure noble Lords opposite.