HL Deb 09 March 1978 vol 389 cc946-75
Lord McCLUSKEY

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, that the House do now resolve itself into Committee.—(Lord McCluskey.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 1 [Payments to redundant workers in the shipbuilding industry]:

Lord CAMPBELL of CROY moved Amendment No. 1: Page 1, line 22, after ("Shipbuilders") insert ("or any other body corporate which has its principal place of business in Great Britain and which, between 1st January 1976and 31st December 1977, has in Great Britain—

  1. (i) completed a metal-hulled ship with a length of not less than eighty feet; or
  2. (ii) repaired, refitted or maintained such ship in a dry-dock or graving dock in which that body corporate has had during that period an interest in possession or a licence to occupy that dry-dock, graving dock for a period of not less than one hundred and fifty days").

The noble Lord said: I suggest that, if the Committee considers it convenient, Amendment No. 2, which is also in the names of my noble friend Lord Trefgarne and myself, be discussed with Amendment No. 1. I should explain that, today, Amendment No. 1 bears a star against it because some very small changes in wording have been made to improve it, but it is in fact aiming at the same purpose now as when it was previously on the Marshalled List. I should also point out that, unfortunately, overnight the printer has omitted a word, so that, in the fourth line of sub-paragraph (ii), after "dry-dock" there should be the word "or". It makes no difference to the sense, but, of course, it makes it read correctly. I saw this at half-past nine this morning, and I have endeavoured to make sure, through the Clerks of the House, who agreed that a printing error had occurred, that the Government and others should, if possible, be told.

With this Amendment and all the others on the Marshalled List—because the subsequent Amendments are consequential—we on these Benches are dealing with a single point. We had a wide-ranging debate on the Second Reading of the Bill, during which I and my noble friends drew attention to what we described as a serious defect in the Bill. The noble and learned Lord, Lord McCluskey, pointed out that the Government's position was as it had been publicly stated, without repeating it all in detail; and we quite understood that that was not necessary. We hoped that, between then and now, he would be able to elicit a change of attitude on the part of the Government after the very strong case for fairness which had been made in your Lordships' House, and in particular by my noble friends. That fairness is between men working in the shipbuilding industry doing precisely similar work and being made redundant for exactly the same reasons. As the Bill is at present drafted, it is unfair between man and man doing the same kind of job in the same industry if they are made redundant for the reasons which have caused this Bill to be brought before this House.

I will explain this again, briefly. First, the process of nationalisation seldom, if ever, encompasses 100 per cent. of an industry. For example, take the steel industry. The British Steel Corporation is not the whole of the steel industry; there are several private companies as well, at least one of which is a very well known company. Even with the coal industry all the mines were not nationalised; some remained in private ownership. Indeed, there was one near my home in the North of Scotland, at Brora, which remained in private ownership for many years. So, also, in shipbuilding. This has happened in only the last year; but the Government's Bill which was before your Lordships' House a year and a half ago did not seek to place every shipbuilding company in public ownership. For reasons best known to the Government, some were deliberately left out. A small private sector was contemplated and planned by the Government, and it now exists. What is strange is that this Bill provides for special redundancy schemes, additional to the statutory redundancy schemes, in shipbuilding and ship repairing, but as now drafted they are restricted entirely to the public sector.

There is a private sector, and it employs about 10 per cent of the labour force. That private sector and that 10 per cent. are just as vulnerable to the world recession in shipbuilding as the public sector. Men belonging to the same unions—for example, the Boilermakers' Union—and who are carrying out similar work, will be similarly affected. Why should the Bill, and why should your Lordships, discriminate against 10 per cent. of them? I use the word "discriminate" because that was the word used by the noble and learned Lord during the Second Reading debate. He said at column 104: I acknowledge that that is a serious point. I acknowledge that there is discrimination".—(Official Report, 21/2/78.)

In the short period of a few months which has passed since the shipbuilding industry was nationalised, the Government have not discriminated in such a way against the private sector. Far from it: the action which they took to introduce the intervention fund—that was the £65 million which was specially contributed by the Government to the industry for last year because of the difficult situation they were in—was not confined to the public sector; it was for the whole industry. A further amount for the intervention fund has recently been announced for the current year, and again it is for both the public and the private sectors of the industry. So, in the eight months that the shipbuilding industry has been nationalised, there had not been discrimination until this Bill appeared.

Then, if we return to special redundancy schemes in another nationalised industry, in the steel industry, there is a scheme under which payments are made in addition to the statutory redundancy scheme in the Redundancy Payments Act for the steel industry. Cash sums are paid and also there are make-up-of-earnings payments when men have to move to lower paid jobs. These are not restricted to the public sector and those employed by BSC. That system applies to the private sector in the steel industry; and it does so under the aegis of the European Coal and Steel Community and, therefore, has the blessing of the EEC. So that there is equality of treatment being practised now in a special redundancy scheme of the kind we are discussing in another nationalised industry; namely, the steel industry. I would emphasise that this is an enabling Bill, as the noble and learned Lord said when he introduced it on Second Reading. What we are doing is giving the Government virtually a blank cheque to bring forward schemes and those schemes must come to both Houses of Parliament in orders attached to Affirmative Resolutions.

The Government can formulate any scheme they like depending upon future developments and the circumstances in shipbuilding areas. But if, as they now propose, intentionally or unintentionally, the Government were to restrict the scope of the schemes to the public sector, they would be confining their own flexibility; they would be removing their flexibility in relation to the whole of the industry. The orders which would come forward with the schemes, I would remind your Lordships, can only be accepted or rejected by this House; they cannot be amended. By the time such orders come forward—and the Bill provides for the extension of its duration for up to four years; so that these orders could be coming before us in a period of four years ahead—the unions concerned may be inundated with complaints from members in the private sector of the industry. They then may be making strong representations to the Government of the day as to why men were being left outside the scheme just because they happen to work for companies which, under the Government's own arrangement, were left in the private sector. We are foreseeing a situation in which we in this House (and our colleagues in another place) may find that we are persuaded to vote against an order and to reject what would otherwise be a sensible scheme for redundancy payments, simply because it was being grossly unfair by excluding men doing similar work who are being made redundant for the same reasons of worldwide shortage of shipping orders.

The Government should give themselves the elbow room, the wider scope, within which schemes can be fair to all at present employed in the industry. To make the situation as it is today Gilbertian as well as, apparently, callous, under the Bill as it stands, men in those subsidiaries of British Shipbuilders, the nationalised body, who are not engaged in activities remotely connected with shipbuilding, activities like house building and motor cycles, are eligible under this Bill. That makes the anomaly even worse.

Our Amendment does not presume to add to the total expenditure. I must make this clear. We in this House are not proposing that extra money should be produced by the Government. The Government are unable to make any estimate of the total amount which may arise under this Bill. I can understand their difficulty because they do not know at present how many redundancies there may be—from 200 to 20,000. What they have done in the Financial Memorandum is to give an estimate per 1,000 men; but even that is very vague because when the Bill appeared in another place three months ago the estimate was £0.9 million per thousand and, when it came to us, it had gone up to £.1.5 million. If there can be that degree of vagueness in a period of three months, one can see how difficult it is at the moment for the Government to make an estimate of what will be the total amount—far less for 1,000 men who are made redundant.

Our claim is that, whatever amount of money is set aside for this purpose or whatever limit may be imposed, we are not trying to add to it by this Amendment. We are simply trying to arrange that in the schemes which the Government bring forward, the money shall be fairly distrbuted among all the men in this industry who are in similar situations. The individual payments would vary according to the length of service and other criteria, as foreshadowed in the Bill.

We have tried also in these Amendments to meet points of objection which have been raised by Ministers. First, in this Amendment that I am moving, we have restricted the ships that are being built in the shipbuilding firms by a length of 80 feet and to metal hulls; and we have tried to use the technical terms to describe that. This is to exclude the builders of small craft and pleasure boats who might otherwise, according to the Ministers have appeared to qualify. Also, we have included a qualifying period during which companies in the private sector have had to be building ships. This is to make sure that they are genuine companies and not what were described in the other place as "fly-by-night" companies who came in in order to collect the redundancy money—though that seems a strange thing to do.

Then it was suggested in the other place that it might be difficult for the Government to identify the companies in the private sector concerned. I can assure the noble and learned Lord that there is no difficulty. There are only about 20 companies and it will be up to them, under our Amendments, to apply if they consider that what is happening to them and their workforce is similar to what is happening to other sectors of the shipbuilding industry and that they are eligible for the additional payments under this Bill. There is a precedent for this; I can give one at once. That was for the scheme of construction grants under the 1972 Industry Act. That was far more difficult because there were a great many firms all over the country which might have been eligible for that; but that was administered on the basis that the companies themselves applied. So there is no difficulty about that.

Also, it has been argued by Ministers that some private companies might make men redundant after making less than all-out efforts to obtain business. But there is a safeguard against that; because under the statutory redundancy scheme, the employer must pay 59 per cent. and, therefore, the employer, with the additional scheme as well, is having to produce a high proportion of the total redundancy payments and is most unlikely to be making men redundant without first trying to compete as hard as he can for such business as is available in the world.

The second Amendment which is being discussed with Amendment No. 1 contains a definition of the length of ship such as has been already used in legislation. The aim is to include shipbuilders as understood for the purpose of this Bill and not to include boat builders whom the Government are not proposing to cover in the Bill.

There arises the question of the privilege of another place because we are dealing with a financial scheme; although, as I have indicated, we are not proposing from these Benches that additional money should be spent. We are considering how it should be distributed. Through this enabling Bill, the Government will be left to bring forward whatever schemes they think fitting. The other place can waive a privilege if they decide to accept these Amendments or similar Amendments so that there is no technical difficulty about improving the Bill by Lords' Amendments concerning a financial scheme of this kind. There is also the technical question of the Money Resolution which is dealt with in another place. It is likely that new wording would be required for that Money Resolution with these Amendments; but, again, there is no difficulty. My experience of the other place is that there is no difficulty at all for a Government bringing forward overnight a newly-worded Money Resolution if an Amendment like this is adopted.

To sum up, the purpose of these Amendments is to be fair to everyone working in this industry; to be fair to those who are engaged in the same activities and not to cater for part of the industry alone, albeit the largest part. Unfortunately, in this industry there are many men who are facing the same imminent hazard of redundancies. We believe that they should all be treated in the same way in order to be fair to them.

4.30 p.m.

Baroness WARD of NORTH TYNESIDE

I should like to support the point of view so adequately put forward by my noble friend Lord Campbell of Croy. For very many years when I was in another place I had a great deal to do with shipbuilders, both in my first constituency of Wallsend-on-Tyne and because at that time I had a certain amount of industrial knowledge of shipbuilding in the whole of the North-East. It will not be surprising to the noble Lord who is to reply if I say that I am against nationalisation of any kind. But it is even worse when the Government which brings forth these schemes do not seem to understand how to be just. I like to speak my mind very clearly and to be very straight. I need not add anything to the adequate way in which my noble friend moved the Amendment.

Having enjoyed representing my former constituency, and having been retained for quite a long time in that area for my Party—which was not necessarily accept- able to many people in the part of the world that I represented—I wonder how the Government, who do not seem to understand the situation and who put forward proposals which we and many shipbuilders do not like, dare to put forward a scheme which contains so many injustices. I always think that the Government are mad anyhow, and I think that they will go on being mad. I only hope that before long we will get rid of the whole lot of them. I shall then say "Three cheers!" from the seat I am now occupying. I beg to support my noble friend in his Amendment.

4.32 p.m.

Lord McCLUSKEY

The noble Baroness has put her case forward with that moderation to which we are accustomed. The noble Lord, Lord Campbell of Croy, in the course of his Second Reading speech, used slightly different words from the words he used today. In particular, he drew attention to what he described as … the serious defect in the Bill". That is at column 84 of Hansard for 21st February. He did not say "a serious defect". What he said was: The Bill does not apply to all shipbuilding firms", and pointed out that there were a number of independent shipbuilding firms which the Government never set out to nationalise and which were not nationalised. He asked—and he repeated the same kind of question today— Why on earth have they been omitted from the Bill? These observations and others he made in support of them then and today foreshadowed an Amendment to bring the "independent" shipbuilding corn-panics into the Bill. Indeed, the noble Lord asked the Government to think again about this matter and spoke of an Amendment to put this matter right. The Amendment which he now moves is somewhat surprising. Perhaps the most striking thing about it is that it applies to ship repairers as well. That is both striking and surprising because in the course of the Second Reading debate the noble Lord was at pains not only to restrict his remarks to shipbuilding companies but to relate his argument to the fact that it was the Government which selected certain companies for nationalisation and said that others were not to be nationalised, and he said in terms when my noble friend Lord Lee of Newton raised the question of repair yards (at col. 99 of Hansard): My Lords, I am sorry to interrupt the noble Lord again, but I did not mention the words 'ship repair' in the whole of my speech". He certainly gave me and, I believe, my noble friend Lord Lee the impression that he was seeking to draw attention to an injustice done to shipbuilding firms which, through no fault of their own, had not been nationalised, and that he was not prepared to do battle on behalf of the ship repairing companies, some of which at least, with the support of the noble Lord and his friends, fought against being nationalised and succeeded in their aim.

The other feature of the Amendment to which I would draw attention is that in paragraph (i) words are chosen—as the noble Lord made clear—in order to restrict the scheme to companies which have completed a ship which has a metal hull and a length of at least 80 feet. What is noticeable there is that the wording both as to the character and as to the length of the ship has changed from the corresponding Amendment which was moved by the Opposition in Committee and at Report in another place. I shall comment on the significance of that later.

These are not technical criticisms of the Amendment. These are observations upon matters of substance. May I throw back at the noble Lord the question that he asked at Second Reading: Why on earth have they been omitted from the Bill? and ask him in relation to ship repairers: "Why on earth were they omitted from his speech at Second Reading?".

The noble Lord was kind enough to give me ample notice of the terms of his Amendments as originally drafted, and that allowed Ministers to consider the whole matter again. I am obliged to him for helping me in that regard. In particular, it allowed me to draw the attention of the immediately responsible Ministers in the Department to what was said by the noble Lord and others in the course of the debate on Second Reading. Thus the matters at issue were carefully reconsidered. The Government remain convinced after that reconsideration and after the full exchange of views that took place between the Minister of State and the SSIA last week and in the light also of the prolonged exchange of argument on the Bill in another place that their decision on this matter is correct. I hope that I can explain it.

The origins and character of the world market crisis facing the shipbuilding industry were discussed fully on Second Reading and there is no doubt that the Bill is, in principle, acceptable in this House. But if there is agreement on that, then I would suggest that the logic of the policy enshrined in the Bill is inescapable.

This Bill has its origins in a unique crisis of world shipping and world shipbuilding. The oil crisis led to millions of tons of tankers being laid up throughout the world. At that time, tankers made up some 60 per cent. of the gross tonnage on order or under construction throughout the world. Almost overnight, no one wanted them; and, given the huge surplus oil carrying capacity, no one is likely to want them again in significant quantities before at least the early 1980s.

This market collapse coincided with an extensive and, I believe, ill-judged expansion of facilities for building the very ships that no one now wants. The result has been that competition for other types of ocean-going ships to meet the insatiable appetites of the huge yards has been intensified to a frightening degree.

In this country, these yards are in public ownership. They belong to two undertakings which alone will have to face the direct consequences of this world crisis for British shipbuilding. The problems they will encounter are of the worst possible kind; they will be struggling on the one hand to win orders against fierce world-wide competition from other ship builders who are also fighting to survive, while they will on the other hand be trying to cope with the effects on manpower and productivity of an insufficient work load. Moreover this is a situation which, as I have said, is likely to continue for some years.

It was this situation and this situation alone which the Bill was designed to meet: it is intended to soften the blow for those engaged on building ocean-going ships who will be forced out of employment by this state of affairs. They will not be the only ones to suffer, however. Our shipbuilding industry is located in areas where unemployment is already a problem. In many of these areas, as the noble Baroness knows, shipbuilding accounts for a very substantial proportion of the workforce in the area. The closure of a shipyard in such an area would have a devastating effect on the entire community, not just those engaged in the shipyard. It would affect many small businesses. A reduction in the activity of British Shipbuilders will affect the suppliers of marine equipment, too, and they can claim to be far more directly affected by the world crisis than the builders of the small ships or the repairers whom the noble Lord would seek to bring in by this series of Amendments.

It was argued at Second Reading that the Government's proposals were unfair. It has been said today that they are unjust because the Bill was confined to the public sector. I have never sought to conceal that the Bill is discriminatory. Any special-sector scheme is bound to be discriminatory in that it favours those within its ambit and not those who are not within its ambit. In this respect, the Amendment also proposes a similar discrimination. It would take some com-panics into the Bill but leave others out. It extends the boundary, of course, but only some way. It would do nothing for any company in the shipbuilding business which had not, within the two-year period, completed a metal-hulled ship with a length of not less than 80 feet. It is impossible to see the logic of drawing the line in that particular place and, as the noble Lord, Lord Campbell of Croy, will acknowledge, when similar Amendments were discussed in another place, the length chosen was 60 feet and I believe there was no reference to metal hulls. These changes merely serve to indicate that there is no particular logic in drawing the line with regard to the length of the ship. The Amendment would also bring in some, but not all, ship repairers but would leave out persons in the private sector who are wholly dependent upon the shipbuilding industry as subcontractors, whether in marine engineering, ship joinery or the like. I would repeat and seek to emphasise that the Bill is related to the world crisis. That crisis may force major shipyard closures in this country and the Bill is designed to help those who are most directly affected by the crisis. The problems of those who build or repair small ships in the private sector are relatively quite remote from the crisis with which the Bill is concerned.

I accept that this Bill will plainly not benefit every worker in this country who may suffer indirectly and at some remove from the consequences of the world shipbuilding crisis. That would indeed be an impossibility. It does no more than the practicable minimum in the circumstances, and I. am sure that the Committee will appreciate that it would not be practicable to cover the many small businesses I have mentioned which are directly dependent upon shipbuilding and upon the major yards, and which are much more closely affected by the crisis than those who build small ships. The Amendment does not seek to do that either.

The point was also made in another place at Second Reading that the Bill would give British Shipbuilders some competitive advantage. There is no such intention and, indeed, I would suggest that it would be absurd to suppose that British Shipbuilders can enjoy any competitive edge over the smaller companies at a time when the company is going to be fighting for its very life as a result of the prospective loss of a huge section of its major product. It may well be true that some small shipbuilders are feeling competitive pressures at present and that to some unquantifiable, but small, degree that may be due, however remotely, to the side-effects of the world crisis; but in the main that can only represent the effects of a cyclical downturn in the demand for small ships. That, as I have sought to make clear, is not what this Bill is about.

As I have pointed out, the noble Lord, Lord Campbell of Croy, did not seek at Second Reading to make out a case in respect of the private sector ship repair companies which fought bitterly, successfully and perfectly properly against being brought into the public sector. No doubt he had good reason for that omission and I have no doubt that he will explain his change of mind in relation to that. I hope I shall be forgiven for going back to the important point. I do not think anyone can deny that, in a scheme of this kind, a clear boundary has to be drawn, and the boundary we have drawn is very clear indeed and will create no legal problems in implementation. Where a boundary line has to be drawn, there will always be those just outside who feel that they have been unfairly treated. That will happen regardless of whether the boundary is drawn where the Bill says or where the Amendment would draw it. Given the underlying purpose of the Bill, we believe we have drawn this boundary line fairly, reasonably and in an administratively practical way.

The noble Lord, Lord Campbell of Croy, suggested that the situation was somewhat Gilbertian because persons not remotely connected with shipbuilding who happened to come within the ambit of the Bill would receive redundancy payments. I would say in connection with that that we can and shall discriminate between those employees of British Shipbuilders who are engaged, on the one hand, in shipbuilding, ship repair, marine engine building and associated activities and those, on the other hand, whose work has no connection with shipbuilding. That can be done, of course, under the provisions of the Bill but, beyond that, discrimination inside British Shipbuilders would present insuperable problems of demarcation.

To conclude, I suggest that this Amendment is not justified. It would simply shift the line of discrimination. The further away from the epicentre of the world shipbuilding crisis we extend the boundaries of the scheme, the less easy does it become to defend the exclusion of those who can claim to be indirectly affected by that crisis. As I have said, in the Government's view, the logic of this argument is inescapable and though they have given the matter the most careful consideration and, within the last fortnight, reconsideration, they do not propose to retreat from their position. For those reasons, I ask your Lordships to reject the first Amendment.

There is one matter I should like to add in view of what the noble Lord said about the matter of privilege and the Money Resolution. What he said is entirely correct as to what is possible; but the Government do not intend to ask another place to waive its privilege or to alter the wording of the Money Resolution. I suggest that if this Amendment were carried it could only cause delay in the bringing into effect of a scheme which everyone accepts ought to be brought into effect—

Several Noble Lords: Oh!

Lord McCLUSKEY

That delay would be utterly pointless because there is no prospect whatever that the Amendment, if carried in this Chamber, would be accepted by the Government in another place. If this Amendment is moved into the Bill, this House will simply risk causing delay for the sake of a gesture which noble Lords opposite wish to make. I do urge noble Lords to reconsider this particular matter before they press this Amendment.

Lord MOTTISTONE

Before the noble and learned Lord sits down, may I ask him to clarify one point? He said that people who were not involved in shipbuilding would be able to be excluded from getting the redundancy payments within the provisions of the Bill. Could he point out to us where within the Bill that discrimination can be exercised?

Lord McCLUSKEY

It occurs in Clause 2, and I will read the first two lines: (1) A scheme under this Act shall provide for the making of payments to or in respect of employees of any prescribed class". Subsection (2) reads as follows: In subsection (1) above, 'prescribed' means prescribed by the scheme in question.". I believe that answers the point raised by the noble Lord.

Viscount MASSEREENE and FERFARD

I feel I must rise to support this Amendment. I was very surprised to hear the noble and learned Lord say that this Bill did not discriminate against private shipbuilders, or the few that are now left—

Lord McCLUSKEY

May I, with permission, just intervene to say that I have acknowledged from the start, and I repeat it now, that there is discrimination. I am merely making the point that there always has to be discrimination. I can see that others may differ on where the line is to be drawn, but I do not seek to conceal the fact that the Bill does discriminate.

Viscount MASSEREENE and FERRARD

I thank the noble and learned Lord for his clarification, but may I say that if in future British Shipbuilders are to get orders, as they have just done, by using the taxpayers' money to give the customer money to buy the ships, the few private shipbuilders who are left will, of course, be faced with dismissing a great number of their workers. It therefore seems extremely unfair that those few private shipbuilders who are still left cannot share in this redundancy scheme for their workers. I once had cause to be very interested in the building of a 10,000-ton tramp ship in Sunderland, so that I have some slight knowledge of this subject. I shall not delay the Committee, but I should like to make the point that, if the nationalised British shipbuilding industry is to get orders by using taxpayers' money, as it appears to be doing, it will be extremely discriminatory and very unfair to the few private shipbuilders left.

Lord McCLUSKEY

If the noble Lord, Lord Boyd-Carpenter, will allow me to reply to that point before he makes his intervention, the noble Lord, Lord Campbell of Croy, very clearly acknowledged that the shipbuilding intervention fund, which is taxpayers' money, was made available to the private sector as to the public sector. So I am sure—I think that the noble Viscount is now agreeing with me—that the general thrust of the argument is unsound. In that respect, there is no discrimination. Of course, it is a double-edged point. The noble Lord, Lord Campbell, said "There is none there. Why is there some here?"

Lord BOYD-CARPENTER

I, also, do not want to delay the Committee. I had not intended to take part in this debate, because I thought that my noble friend Lord Campbell of Croy had demonstrated with the utmost clarity the unfair discrimination of the Bill as it stands, and I feel that such discrimination is something that one must resist by vote, if not by word. But I was moved to make a brief intervention by the concluding sentences of the noble and learned Lord on the Government Bench. I understood him to say that, whatever this House does, the Government in another place—and he no doubt said this deliberately—would not move for privilege to be waived, and that, therefore, the effect of carrying, this Amendment would be to delay the coming into operation of the Bill and the schemes under it. I understood that to be his contention. I can only say that I think that was—I believe I am using the right word—a somewhat improper argument to use.

If this House decides that the Bill should be amended as my noble friend has suggested, then it is plainly the duty of this House to do that. We are a revising Chamber, we have here a perfectly clear-cut issue which was very fully debated on Second Reading and I do not think that we should be deterred because subsequent action, lying within the Government's discretion, might make the Amendment a further and indirect cause of delay. If the Government see fit to act as the noble and learned Lord suggested, responsibility for delay will lie solely with the Government. The Government can perfectly well, under the Rules of Procedure of another place, with which I am, perhaps, as familiar as the noble and learned Lord, move to waive that privilege. The noble and learned Lord is quite right in saying that if they do not do so there will be delay, but the responsibility will be solely the Government's. If I had needed any incentive to urge my noble friend to press this matter, it would be that I thought it a most unfortunate argument of the Minister on the Government Bench.

Lord McCLUSKEY

I wonder whether I may be allowed to reply to that. I am sorry that the noble Lord should characterise the argument with that adjective, but I felt that it was my proper duty to make the intention of the Government clear. I have sought to do so, and the words that I used were: The Government do not intend to ask another place to waive the privilege Amendment. I have made the Government's intention clear, and the Government are not going to change that intention. It is, therefore, a matter for consideration whether, that being the Government's intention, and this being a matter of ways and means and a Money Resolution, this House, acknowledging the history of constitutional privilege in these matters, feels it right to insert into the Bill this Amendment which, necessarily, may cause some delay.

Lord MOTTISTONE

How far removed would the noble and learned Lord say that was from straightforward blackmail?

Lord McCLUSKEY

Is the noble Lord saying that it is, before I answer his question?

Lord MOTTISTONE

I am putting it in the form of a question, in order to elicit from the Government whether this is a threat or a practical move. Or what is it? Why is the noble and learned Lord saying that the Government have made this decision and will adhere to it?

Lord McCLUSKEY

I have sought to give the reasons lying behind the decision. I have sought to be frank by saying that the decision has been taken. May I counter the noble Lord and say this? He asks whether it is far removed from blackmail. What kind of pressure is being put upon the Government by his noble friends, who have brought large numbers of their huge, built-in majority here today to vote for this Amendment? What is that, if it is not something akin to blackmail, and what right do noble Lords think they have to move such an Amendment, standing the constitutional position about privilege, in the face of a clear statement of the Government's intention?

Lord KINNAIRD

May I ask this question? We are always being accused of having a built-in majority, but why are the opposite Benches so empty? They can be called just the same.

Lord BOYD-CARPENTER

I hope that the noble and learned Lord will at least reflect for a moment. The description of a possible decision of one House of Parliament as blackmail would be serious from any Minister, but coming from a Law Officer of the Crown it sounds quite extraordinary. Secondly, when the noble and learned Lord said that delay will be a necessary consequence of such an Amendment being carried, I was not sure whether, on reflection, he was withdrawing the word "necessary". Perhaps he would make it clear whether he was doing so.

Viscount SIMON

I wonder whether we can move back to the merits of this Amendment. I did not express a view earlier, because I wanted to hear what the noble and learned Lord would say in reply to the very able presentation of this Amendment by the noble Lord, Lord Campbell of Croy. As your Lordships know, on Second Reading, on behalf of my noble friends, I supported the idea which is now embodied in this series of Amendments, that it was wrong for employees in the private sector of the shipbuilding industry not to have the same benefits as employees in the public sector. I want to emphasise, particularly, that we were looking at the matter from the point of view of the employees. The noble and learned Lord, in replying to the Amendment in the first place, kept talking about the firms. I do not want to say that I do not care about the firms, but it is not the interests of the firms that I am concerned with; it is the interests of their employees.

It seems to me wrong, in spite of all that the noble and learned Lord has said, that employees in these, admittedly, smaller firms should not have the same benefits under this Bill, if it becomes an Act, as employees in larger firms that are included in British Shipbuilders. If it is true that smaller firms are not subjected to the same competition as the larger firms, arising from the crisis in shipbuilding, that is a very good thing, and perhaps they will not have to make anybody redundant, so that the question will not then be a matter of any importance at all. But we ought to put employees in small firms in the same position as those in larger firms in the public sector. So if, unfortunately, they are rendered redundant during a crisis which goes very wide—much wider than just the building of very large ocean-going ships—they will have the same opportunities of securing redundancy pay.

I do not think that there is very much else I want to say, because the noble Lord, Lord Campbell, expressed the feelings so very clearly. I certainly will not enter into an argument as to whether his Amendment differs from what he suggested on Second Reading; that is for him to explain, if he has to do so. But on the question of the privilege Amendment, I wonder whether I may say this, which I think was implicit in what the noble Lord, Lord Campbell, said.

The Bill itself does not establish any specific claim upon the Exchequer. The result of including what we understand is about 10 per cent. more people among the beneficiaries of the Bill—but 10 per cent., as the noble and learned Lord has said, who are probably less likely to be redundant so that the claim might be much less than 10 per cent.—could surely be met, even if a figure had already been established, which it has not, by very slightly reducing the amounts of the compensation paid to everybody. One could still accommodate that number of people within whatever figure had been agreed. As has been pointed out, no figure has as yet been agreed.

Regarding the question of delay, quite often we hear this argument from the Government—and probably from Governments of any Party, including a Liberal Government when we have one—but I do not think that it is a very substantial point. If your Lordships' Committee decides to pass this Amendment, it will go back to another place. I should have thought that the whole matter could be put right by the other place either accepting the Amendment or rejecting it, the Amendment then having to come back to this House. How long would that procedure take? It would take one or two days after the Bill had been passed.

I realise that the Easter Recess is coming, but even that will be a matter of only a week or 10 days. I cannot believe that this procedure will delay the bringing into force of these orders by any appreciable amount of time. Furthermore, the orders will be effective retrospectively from July of last year. If the orders were delayed for three or four days or even for three or four weeks, I should not have thought that it would make very much difference. I shall advise my noble friends to support this Amendment.

5.2 p.m.

Lord CAMPBELL of CROY

Points have been put to me by the noble and learned Lord and I should like briefly to reply to them. Both at Second Reading and again today the noble and learned Lord was frank with us in stating that he considers that there is discrimination in this Bill against the workforces in the private sector of the industry. As a good advocate, I can say that he has made the best he can of what must be a very difficult brief.

The noble and learned Lord asked why my Amendment did not match completely a point which I had raised at Second Reading. When I spoke then, I made no reference to any Amendments. I left myself free to table any Amendments or none at Committee stage and, as I did, to concentrate on this one point. However, the noble and learned Lord referred to an exchange between me and the noble Lord, Lord Lee of Newton, who I see is not in his place. However, the noble and learned Lord did not refer to the whole of the exchange. I do not wish to read out the complete column of Hansard, but what the noble Lord, Lord Lee of Newton, had done was to fall into the trap which I was trying to help your Lordships to avoid.

In general discussions about this Bill and the schemes, both inside your Lordships' House and outside, I had found that Members on all sides of this House did not realise that a private sector was left in the shipbuilding industry. Their impression was that the only people who were outside the public sector were the ship repairers, and they, after all, were the people who had made a fuss and who wanted to stay outside. Therefore, particularly at Second Reading I surprised a number of noble Lords by saying that of their own accord and of their own choice the Government had left a private sector in the shipbuilding industry.

That was quite apart from the arguments which we had in this House, about whether or not the ship repairers should have a choice. I cannot remember whether the noble and learned Lord was a Member of this House at the end of 1976 when we had those arguments. I quite understand that he may not have taken part in them or have followed them very closely. However, the point I was making was that there was a private sector element left in the shipbuilding industry by the Government's own Bill as it was originally drafted.

During the course of the passage of the Aircraft and Shipbuilding Industries Bill we eventually arranged, through some Amendments which were first moved in this House, for the ship repairers to be given a choice. They were in effect given a choice either to remain private or, if they wished, to come into British Shipbuilders. The result has been that some ship repairers are within British Shipbuilders, while others are still in the private sector.

Therefore in order to produce a single series of Amendments which will be fair within the industry to all the kinds of people to whom the Government schemes will refer, my Amendment not only deals with the private sector in the shipbuilding industry—to which I referred in particular in my Second Reading speech, simply because I found that so many people, both inside this House and outside, did not realise that there was one—but also refers to workforces in the ship repairing industries which are similar to those in the public sector. The object is to achieve fairness so that men in the same unions and engaged on the same work in the private sector will be treated in the same way as men who are doing the same work and who are faced with the same kind of redundancies in the public sector.

The noble and learned Lord also said that these Amendments are different from those which were moved in another place. I regard that as a compliment; I do not see anything wrong with it. Certainly we looked at what had been said in another place. In drafting these Amendments I tried to take account of the objections which the Government had raised to those Amendments. The Government of course have access to technical expertise. Therefore they were able to say, "If you make it 60 feet under the definitions which are used for measuring ships you will include boatbuilders, whom you do not intend to include because they are not doing work which is similar to that which is done by the men working for British Shipbuilders".

For the same reason, we put in metal hulls. The Minister himself had indicated that one would bring in the kind of boatbuilding which neither side intended should be included in the Bill, because they are not similar activities to those engaged in by the men who are covered by this Bill if they are made redundant. Therefore the changes were improvements that attempted to meet the points which the Government had made. I believe that we have been successful in drawing a line now which accords with the comments and objections which the Government made regarding the original proposals.

The noble and learned Lord still used the argument, which has been used before, that small companies building smaller ships will not be subjected to the same pressures and difficulties, due to the worldwide crisis in shipbuilding, as the larger units in British Shipbuilders. But that is certainly not so. As I pointed out at Second Reading, the Japanese in particular and other countries are now building small ships. They are having to build whatever ships they can and to obtain whatever orders they can get. Therefore, the companies which were building large ships in the past are now building small ships. We are aiming to cover those companies which are building ships within the definition which the Government themselves indicated covers ships and shipbuilders. We are not aiming to cover those companies which build rowing boats or other small boats.

It is not simply small companies building small ships which are going to be less subject to the pressures which the world situation is creating. Shipbuilding companies, whether small or big, which are building the kinds of ship covered by this Bill, are going to be in the same difficulties. If the smaller companies are not allowed to come into this scheme, and if they are to be fair to their workforces, they will have to produce the extra money from their working capital in order to pay the additional redundancy payments which are made to the men employed in other workforces in the public sector. That could be crippling to some of those companies.

Therefore I hope that since the Second Reading the noble and learned Lord has, as I suggested, referred all of these points to the right honourable gentleman, Mr. Harold Lever, who is supposed to be specially designated to look after the interests of small companies. Here are small companies which, as the noble and learned Lord himself indicated in his speech just now, are likely to be discriminated against. It is not so much a question of competition with British Shipbuilders as a burden that will be placed upon them if they try to be fair, as I am sure many of them will, and produce the extra money to match the schemes which the Bill will produce for the public sector.

The noble and learned Lord said that, as regards the subsidiaries of British Shipbuilders which have nothing to do with shipbuilding, the Government when they bring forward their schemes will be able to distinguish between men who have been working in shipbuilding and are made redundant and men who have been manufacturing motor cycles and should not really be under the same scheme. Well, in the same way, provided the scope of the Bill is wide enough to cover the whole industry the noble and learned Lord can deal with any of the other difficulties which he has indicated in the schemes that come forward. Within the schemes that come forward the Government are free to use their discretion to be as fair as they possibly can.

The last argument the noble and learned Lord had to use I would have thought he might have dropped from his brief. He talked about the question of the constitutional irregularity of something affecting financial matters being amended here and the Amendment sent to another place. But he talked about it in terms of delay. Of course, he could not argue it any other way because it is perfecly possible for privilege to be waived by another place and for the Government to change the wording of the Money Resolution were that to be necessary. The noble and learned Lord simply argued that it would cause delay. As my noble friend pointed out in Second Reading, an Amendment from this place can be dealt with in another place overnight; it can be dealt with the next day if it can be fitted into the business.

I publicly offered at this Box at Second Reading to bring forward the stages of the Bill in this House, subject to the Rules of the House and to the Government and the Opposition agreeing to a Motion to shorten the normal time between stages. I say now that if the noble and learned Lord wants to bring forward the Report stage, which is down for a week's time, and have it on Monday, so far as I am concerned I would be delighted. This is the only point that we have under this Bill and we certainly would not wish to cause any delay. So will the noble and learned Lord please take out of his mind the idea that this is going to cause delay. We have offered publicly to bring the stages of the Bill forward, earlier than the programme the Government themselves have in mind, if this will help.

If this Amendment and the consequential Amendments are passed it will enable the other place to have second thoughts about this very important question, and it will also allow the Government to reconsider it. I hope that noble Lords in all parts of the House will support me in pressing this Amendment.

Resolved in the affirmative, and Amendment agreed to accordingly.

5.22 p.m.

Lord CAMPBELL of CROY moved Amendment No. 2:

5.13 p.m.

On Question, Whether the said Amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 109; Not-Contents, 42.

CONTENTS
Aberdeen and Temair, M. Emmet of Amberley, B. Onslow, E.
Ailsa, M. Faithfull, B. Oxfuird, V.
Alexander of Tunis, E. Falkland, V. Porritt, L.
Alport, L. Ferrers, E. Rankeillour, L.
Amherst, E. Foot, L. Redesdale, L.
Amory, V. Fraser of Kilmorack, L. Reigate, L.
Arran, E. Glenkinglas, L. Rochdale, V.
Auckland, L. Granville of Eye, L. St. Aldwyn, E.
Balfour of Inchrye, L. Gray, L. Saint Brides, L.
Banks, L. Greenway, L. St. Davids, V.
Beaumont of Whitley, L. Gridley, L. Sandford, L.
Belstead, L. Hanworth, V. Selkirk, E.
Bessborough, E. Harvey of Tasburgh, L. Simon, V.
Birdwood, L. Ilchester, E. Skelmersdale, L.
Boyd-Carpenter, L. Killearn, L. Somers, L.
Brookeborough, V. Kilmarnock, L. Spens, L.
Caccia, L. Kinnaird, L. Stamp, L.
Cairns, E. Long, V. Strathcarron, L.
Campbell of Croy, L. Lucas of Chilworth, L. Strathclyde, L.
Cathcart, E. Lyell, L. Strathspey, L.
Clancarty, E. McFadzean, L. Sudeley, L.
Colville of Culross, V. Mancroft, L. Swinton, E.
Craigmyle, L. Mansfield, E. Tanlaw, L.
Croft, L. Masham of Ilton, B. Tenby, V.
Cullen of Ashbourne, L. Massereene and Ferrard, V. Terrington, L.
Daventry, V. Merrivale, L. Teynham, L.
de Clifford, L. Monck, V. Torphichen, L.
De Freyne, L. Montgomery of Alamein, V. Trefgarne, L. [Teller.]
Denbigh, E. Morris, L. Tweeddale, M.
Denham, L. [Teller.] Mottistone, L. Vickers, B.
Drumalbyn, L. Moyne, L. Vivian, L.
Ebbisham, L. Northchurch, B. Waldegrave, E.
Ellenborough, L. Nugent of Guildford, L. Ward of North Tyneside, B.
Elles, B. Nunburnholme, L. Ward of Witley, V.
Elliot of Harwood, B. O'Hagan, L. Wardington, L.
Elton, L. O'Neill of the Maine, L. Wigoder, L.
NOT-CONTENTS
Aylestone, L. Henderson, L. Peart, L. (L. Privy Seal.)
Boston of Faversham, L. Houghton of Sowerby, L. Ponsonby of Shulbrede, L.
Brockway, L. Jacobson, L. Segal, L.
Bruce of Donington, L. Jacques, L. Shepherd, L.
Castle, L. Kirkhill, L. Shinwell, L.
Collison, L. Leatherland, L. Stedman, B. [Teller.]
Cooper of Stockton Heath, L. Listowel, E. Stewart of Alvechurch, B.
Donaldson of Kingsbridge, L. Lloyd of Hampstead, L. Stone, L,
Douglas of Barloch, L. Lovell-Davis, L. Strabolgi, L.
Elwyn-Jones, L. (L. Chancellor.) McCluskey, L. Thomson of Monifieth, L.
Gaitskell, B. Melchett, L. Wallace of Coslany, L. [Teller.]
Gordon-Walker, L. Murray of Gravesend, L. Winterbottom, L.
Hale, L. Northfield, L. Wootton of Abinger, B.
Harris of Greenwich, L. Oram, L. Wynne-Jones, L.

Page 2, line 11, at end insert— "length", in relation to a ship, has the same meaning as it has for the purposes of the Merchant Shipping (Load Lines)(Length of Ship) Regulations 1968;

The noble Lord said: I beg to move Amendment No. 2. This Amendment was discussed with Amendment No. 1 and is simply the definition that is associated with Amendment No. 1. I beg to move.

On Question, Amendment agreed to.

On Question, Whether Clause 1, as amended, shall stand part of the Bill?

Lord McCLUSKEY

After the Second Reading debate, I looked at some words that I used in column 106 where, in relation to the 1965 Act, I said: There is support from the taxpayer and some contribution from the employer". That was an attempt, in response to an intervention from, and exchange that I had with, the noble Lord, Lord Boyd-Carpenter, to précis a rather complicated situation; on reflection it did not seem to me to be entirely successful. Therefore, I wrote to all noble Lords who had taken part in the debate and I received a kind acknowledgement from the noble Lord, Lord Boyd-Carpenter. However, it is only proper that I should correct the record in this respect, and perhaps the simplest way to do so is to repeat now what I wrote to the noble Lords.

The true position is as follows. Employers are required to meet the full cost of redundancy payments in the first instance, but they may recover part of the cost, at present 41 per cent., by way of rebate from the redundancy fund. That fund is financed by an allocation from the Department of Health and Social Security equivalent to .2 per cent. of the total earnings on which the National Insurance contribution is payable by employers in respect of employed earners—that is, the secondary Class 1 contribution. In other words, given a contribution rate of 10.75 per cent. of earnings, within specified limits, the Department of Health and Social Security effectively transfers .2 per cent. to the redundancy fund, leaving 10.55 per cent. for other purposes.

Thus, benefits under the Redundancy Payments Act 1965 are financed wholly by employers, with part of the cost being met by the individual employer concerned, and the remainder by employers collectively through the medium of the redundancy fund. However, this fund is, by accepted definition, public money and is, for example, taken into account in the public expenditure forecasts. If the fund is in deficit it may borrow from the National Loans Fund. Sums paid out of the redundancy fund are, therefore, not direct from the taxpayer or direct from the industry concerned, but they do come not too indirectly from the generality of employers.

I should like to add, on a personal note, that having re-read the exchange between myself and the noble Lord, Lord Boyd-Carpenter, I felt that in the course of it I treated the noble Lord with less than the courtesy which he unfailingly shows to me, and I hope he will accept my apology for that.

Lord BOYD-CARPENTER

I should like to thank the noble and learned Lord, Lord McCluskey, for the statement he has made and also for the very agreeable personal reference that he made at the conclusion of his remarks. I am very much indebted to him for the full letter that he sent to me on the point arising at an earlier stage of the Bill, and I hope he will allow me to say on the Floor of the House what I have already said in a letter to him; namely, that I do not think that his summary answer at the Dispatch Box was at all misleading. In the past, I have had some experience of the problems of answering off-the-cuff quite complex questions that were asked by tiresome Members of the other side, and I know how difficult it is. From comparing the full and detailed analysis which the noble and learned Lord has just read out, and which he sent to me in writing, with his short and summary observation at the time, if he will allow me to say so, I think he did very well at the time. It is typical of his care and caution that he has very properly tidied up the record in this way and I am extremely grateful to him.

I, too, should like to add an apology. On one or two occasions in the past few days I have not given him the prefix "learned". I did so, not out of ill manners, but because I was advised by an extremely senior Member of this House, that that epithet was not attributable formally—although it would be undoubtedly true in fact—to Law Officers of the Crown. That advice has now been revised so may I tender to the noble and learned Lord my gratitude for the explanation that he has just given.

On Question, Clause 1, as amended, agreed to.

Clause 2 [Supplementary provisions relating to schemes]:

Lord CAMPBELL of CROY moved Amendments Nos. 3 to 6:

Page 3, leave out line 9 and insert— ("(a) in the case of a person employed by, or by a relevant company of, British Shipbuilders, by British Shipbuilders; and (b) in the case of a person employed by any other relevant company, by that relevant company.")

Page 3, line 16, at beginning insert ("(i)")

Page 3, line 18, after ("company") insert ("of British Shipbuilders")

Page 3, line 20, after ("Shipbuilders") insert— ("or (ii) any other relevant company to authorise any of its officers or employees to determine on its behalf any such question which falls to be determined by it").

The noble Lord said: I beg to move Amendments Nos. 3 to 6 en bloc. When I was speaking on Amendment No. 1, I indicated that Amendments Nos. 3 to 9 were consequential changes which would need to be made to the Bill if Amendment No. 1 was passed. These are perfectly clear drafting Amendments, and as Amendment No. 1 has been passed I do not think that they need further explanation. I beg to move.

On Question, Amendments agreed to.

On Question, Whether Clause 2, as amended, shall stand part of the Bill?

Lord McCLUSKEY

I should like to make a few comments in relation to this clause. During Second Reading the noble Lord, Lord Campbell of Croy raised the question of the basis for estimating the 30 or 40 computer staff and I said it was really just a guess. As the noble Lord will not be surprised to know, that caused hackles to rise in certain quarters. I want to assure the House that the figure was not simply plucked out of the air. The Coal Board's Computer Agency already handles the iron and steel and the miners' redundancy payments schemes—each of which provides work for a number of people—on which we could base an estimate for the scheme. So, perhaps that is a sufficient explanation of the basis.

Viscount SIMON

As the noble and learned Lord has mentioned the computer staff, can he tell us whether, in fact, the cost of computer staff will be recovered from British Shipbuilders and Harland and Wolff?

Lord McCLUSKEY

I understand the answer to that to be, No. If I am wrong, of course I shall make it clear, but I think that I am right.

Lord CAMPBELL of CROY

Perhaps I can acknowledge the noble and learned Lord's revision of his earlier explanation, on Second Reading of the computer staff. I would still say that, in a situation where the Government literally do not know whether the number of redundancies under the Bill is to be 200 or 20,000, it seemed rather strange that they could say that a definite number—and as many as 40—might be needed for the schemes, whatever they are. I am glad that the noble and learned Lord has been able to give us a little more information today.

Clause 2, as amended, agreed to.

Clause 3 [Financial provisions]:

Lord CAMPBELL of CROY moved Amendments Nos. 7, 8 and 9:

Page 3, line 36, at end insert ("or to any other relevant company not being a relevant company of British Shipbuilders, as the case may be")

Page 3, line 40, at end insert ("or the other relevant company in question")

Page 4, line 2, at end insert ("or the other relevant company in question, as the case may be").

The noble Lord said: As I indicated, Amendments Nos. 7, 8 and 9 are consequential. They simply produce the drafting changes resulting from Amendment No. 1 having been agreed to. Again, if the Committee finds it convenient, I propose to move them en bloc.

On Question, Amendments agreed to.

On Question, Whether Clause 3, as amended, shall stand part of the Bill?

Lord McCLUSKEY

I think that this is the appropriate moment for me to comment upon the suggestion made by the noble Viscount, Lord Simon, on Second Reading, that the schemes might be financed by a loan to British Shipbuilders and to Harland and Wolff. It would, indeed, as the noble Viscount suggested on Second Reading, be too late to begin to consider financing these schemes by way of loans to the two undertakings concerned. It would, as, again, he suggested, be hanging an impossible burden around their necks. These companies have enough difficulties to face without this extra burden.

However, that apart, taking British Shipbuilders, it must be remembered, first, that they came into existence only eight months ago with no past profits or accumulated capital to their name, and facing an immense slump in demand, which as I have said, is likely to last for some years yet. In the Government's view, it would be both wrong and pointless to ask British Shipbuilders to repay this money to the Government. It needs to be remembered that, in any case, they will have to bear the employers' share of the payments made under the 1965 Act.

Furthermore, we should not overlook the fact that, although these additional payments will be of help to the undertakings in the industrial sense in easing their contraction, they are really designed to help the unfortunate workpeople concerned and the local communities whose prosperity depends upon their employment. In these circumstances, I would judge it inappropriate to require the undertakings concerned to shoulder the full burden of payments, even by means of a long-term interest-free loan.

Clause 3, as amended, agreed to.

Clause 4 agreed to.

House resumed: Bill reported with the Amendments.