HL Deb 16 July 1979 vol 401 cc1178-206

5.10 p.m.

Report received.

Clause 5 [Re-registration of private companies as public companies]

Lord LYELL moved Amendments Nos. 1 and 2:

Page 5, leave out lines 38 and 39 and insert— (" (i) that the special resolution mentioned in subsection (1)(a) above has been passed and that the conditions specified in subsection (1)(c) above have been satisfied; and").

Page 6, line 6, leave out from ("evidence") to end of line 7 and insert ("that the special resolution has been passed and the said conditions have been satisfied").

The noble Lord said

My Lords, at the outset I should like to say a few words of apology to the House. The House will note a series of Government amendments in the names of my noble friends Lord Trenchard and Lord Cullen of Ashbourne and myself. My noble friend Lord Trenchard is unavoidably prevented from assisting and partaking in your Lordships' deliberations because, as noble Lords may be aware, he has responsibilities for one or two other matters besides the Companies Bill. I hope that the House will accept his apology that he is unable to be here this afternoon to move some of the amendments standing in his name. However, he intends no discourtesy at all. Having said that, I hope that the House will permit me to speak to Amendments Nos. 1, 2, 4 and 5.

The first two amendments with which we are dealing—Nos. 1 and 2—are purely drafting amendments. They are exactly parallel amendments to those in Clause 8. In Clause 8 we find Amendments Nos. 4 and 5. With your Lordships' permission, I shall deal with them all. These amendments are needed in this Bill to cure some confusion which at present exists in Clause 5 and in Clause 8 between "conditions" and "requirements". Your Lordships willl see that Clause 5(3)(e)(i) refers to the requirements of sub-section (1)(a) and (c) of Clause 5, whereas in fact those provisions do not impose requirements but lay down conditions. The amendments recognise this small point of drafting and I hope that what I have said will satisfy the House. I beg to move these Amendments en bloc.

On Question, amendments agreed to.

Lord LYELL moved Amendment No. 3: Page 6, line 11, at beginning insert ("subsection (1) of").

The noble Lord said: My Lords, this is a purely drafting amendment, which I beg to move formally.

On Question, amendment agreed to.

Clause 8 [Old public companies]:

Lord LYELL moved Amendments Nos. 4 and 5: Page 11, line 8, leave out from second ("the") to end of line 10 and insert ("resolution mentioned in subsection (3)(a) above has been passed and that the conditions specified in subsection (11) below were satisfied at the time of the resolution."). Page 11, line 12, leave out from ("evidence") to end of line 13 and insert ("that the said resolution has been passed and the said conditions were so satisfied").

The noble Lord said: My Lords, I have already spoken to these amendments. I beg to move Amendments Nos. 4 and 5 en bloc.

On Question, amendments agreed to.

Clause 13 [Registration of joint stock companies as public companies]:

5.15 p.m.

Lord LYELL moved Amendments Nos. 6 to 8:

Page 17, line 7, leave out ("this section") and insert ("subsection (4) below").

Page 17, line 13, leave out ("(1)(a)").

Page 18, line 8, leave out ("subsection") and insert ("paragraph").

The noble Lord said: My Lords, with the approval of the House, I seek to speak to and deal with Amendments Nos. 6, 7 and 8. These are all simple drafting amendments. I hope the House will agree that I may deal with them formally. I beg to move these amendments en bloc.

On Question, amendments agreed to.

Clause 14 [Authority of company required for allotment of certain securities by directors]:

Lord CULLEN of ASHBOURNE moved Amendment No. 9: Page 19, line 36, leave out from ("on") to ("the") in line 37 and insert ("conviction on indictment to a fine and on summary conviction to a fine not exceeding").

The noble Lord said: My Lords, during the Committee stage I undertook to your Lordships to bring forward amendments to Clauses 14 and 34 to increase the penalties for breach of these provisions. Amendment No. 9 amends Clause 14, as I undertook, and Amendment No. 17 makes a similar amendment to Clause 34. Both amendments increase the penalty from a fine of £200 on summary conviction alone to an unlimited fine on indictment and a maximum fine of £1,000 on summary conviction.

During the Committee stage the noble and learned Lord, Lord Elwyn-Jones, indicated that the approach in these amendments seemed reasonable, and he said he would like to see the colour of these amendments on Report. I hope that he will find the colour to his liking—neither too strong nor too weak. I beg to move.

Lord ELWYN-JONES

My Lords, happily I am not colour-blind. I am grateful to the noble Lord for tabling these amendments. They make the penalties realistic and more fitting to the offending conduct complained of.

Lord LLOYD of KILGERRAN

My Lords, I should also like to support the noble and learned Lord, Lord Elwyn-Jones, in saying that these penalties are more realistic than they were in the original Bill. If it is not improper, I should like to take the opportunity to congratulate the noble and learned Lord, Lord Elwyn-Jones, upon his election to one of the highest offices in the legal hierarchy; that is, Treasurer of Gray's Inn.

Lord ELWYN-JONES

My Lords, I thank my noble friend, who has the benefit of being a member of that great establishment.

On Question, amendment agreed to.

Lord CULLEN of ASHBOURNE moved Amendment No. 10: Page 20, line 2, after ("re-registration" insert ("or registration").

The noble Lord said: My Lords, Amendment No. 10 to Clause 14 is a technical amendment. There are parallel amendments to other clauses—Amendments Nos. 16, 20, 21 and 24. With your Lordships' permission, I shall take them all together. The amendments all deal with what might be called transitional arrangements for the introduction of new rules and provisions. Therefore, they apply to all existing companies. However, in one case it does not work quite as intended. For old public companies and private companies which are re-registered as public the phrase "re-registration" is appropriate, but there will be companies which became public companies under Clause 13 and they have never been registered before, and therefore the phrase "re-registered" is not appropriate to them. In that case the appropriate phrase is "registration" and this is what the amendment seeks to achieve. I beg to move.

On Question, amendment agreed to.

Clause 31 [Application of ss. 20 to 30 in special cases.]:

Lord LYELL moved Amendments Nos. 11 and 12:

Page 39, line 35, after ("resolution") insert ("to be re-registered").

Page 39, line 37, after ("resolution") insert ("to be re-registered").

The noble Lord said: My Lords, I hope it will be for the convenience of the House if I deal with, and speak to. Amendments Nos. 11 and 12 together. These are once again drafting amendments, I hope that the noble and learned Lord, Lord Elwyn-Jones, will accept that this is indeed the case. I assure him it is, and I beg to move.

Lord ELWYN-JONES

My Lords, the noble Lord, Lord Lyell, having more than once assured the House that these Amendments are drafting, he does not need to repeat the assurance too frequently.

On Question, Amendments agreed to.

5.22 p.m.

Clause 32 [Variation of rights attached to special classes of shares]:

Lord LYELL moved Amendments Nos. 13 to 15:

Page 42, line 11, after ("above") insert ("or 47 below").

Page 42, line 13, after ("members)") insert ("and").

Page 42, line 14, leave out from ("companies)") to end of line 15.

The noble Lord said: My Lords, with the permission of the House I would speak to a long list of Amendments—Nos. 13, 14, 15, 18, 19, 30, 32, 33, 36, 38 and 41. This collection of amendments appertains to what is now Clause 47 because at Committee stage this new clause was added to the Bill. It was to provide better protection for minority shareholders. Section 210 of the 1948 Act, together with Section 35(2) of the 1967 Act, is therefore to be repealed since both these provided a lower level of protection than is envisaged in the new Bill. The amendment I have just moved, Amendment No. 13, together with the long list of other amendments, replaces references in the Bill that your Lordships are discussing today, and indeed in other Acts, to Sections 210 and 35 with references to Clause 47. The other amendments which, with your Lordships' permission, I shall not go through individually, are the numbers I dealt with.

There is a further point on Amendment No. 13 in that Schedule 3, paragraph 4 of the Bill in front of us—I think we find it on page 103 of the Bill, as reprinted—amends Section 5 of the 1948 Act by adding three new subsections. Section 23 of the 1948 Act refers to this Section 5 that we are adding to today, and Section 23 applies to many of the provisions of Section 5 of the old Act. Thus, it is now necessary to refer also to those new provisions which are added to Section 5 of the 1948 Act by the present Bill. This is what Amendment No. 30 does. That is a little less technical than the other amendments, but they all stand together.

Lord ELWYN-JONES

My Lords, these amendments flow from the acceptance by the Government of the Opposition's proposal that a number of the provisions included in the Labour Government's Companies Bill should be included in this Bill. Unhappily we were only able to persuade the Government on three items in the Labour Bill, if I may call it that for short, and some of the more important items in the Labour Bill they have presistently refused to embody in this; such as insider dealing, loans to directors, and many other matters that are notoriously needing urgent attention. But I shall not repeat that argument. However, it will be repeated most vigorously, I am quite sure, in another place when it comes along, particularly at a time when, I understand, Her Majesty's Government are contemplating highly controversial legislation in the field of industrial relations.

I have no doubt that the stark contrast between their refusal to deal with these company scandals compared with the eagerness with which they go into the field of industrial relations is going to cost them a great deal of trouble. We warned them about it. They have taken no action (which they could have done on this Bill) to prevent that criticism, and here we are. For what it is worth, we must be thankful for this modest accept- ance of what was proposed. It is rather like the pea which St. Anthony is supposed to have had presented to him by the devil, about which he said, "It is good, so far as it goes." That is about as far as this goes. But I should like, if I may, to thank the draftsmen and officials who had to translate into the minutiae of the Bill the effect of the inclusion of Clause 47. They have not had much time to do it, and least of all have we had much time to absorb what they have done, but I am sure that they have pretty effectively given effect to the inclusion of Clause 47.

Lord LYELL

My Lords, I would suggest to the noble and learned Lord that never could I have received such reprobation and a word of caution with such charming demeanour. I should like to thank him, and also take careful note of what he has said. Although, if the noble and learned Lord believes that legislation is dealt with in another place with more contumely, perhaps he will recall some of the later stages of the Committee stage of this Bill in your Lordships' House, when some of us on the Government Front Bench felt—I seem to remember myself quoting—something like a rabbit in a shooting gallery as the points rained down. We fielded some of them. We moved three amendments. I take note of the pea of St. Anthony, so carefully put forward by the noble and learned Lord. I hope we can suggest that this is a mere pod of peas, but at least that this is a start to the stew.

On Question, amendments agreed to.

Lord CULLEN of ASHBOURNE moved Amendment No. 16: Page 42, line 20, after ("re-registration") insert ("or registration").

The noble Lord said: My Lords, this amendment is consequential. I beg to move.

On Question, amendment agreed to.

Clause 34 [Obligation to convene extraordinary general meeting in event of serious loss of capital]:

Lord CULLEN of ASHBOURNE moved Amendment No. 17: Page 43, line 35, leave out from ("on") to ("the") in line 36 and insert ("conviction on indictment to a fine and on summary conviction I to a fine not exceeding").

The noble Lord said: My Lords, this also is a consequential amendment. I beg to move.

On Question, amendment agreed to.

Clause 35 [Acquisition of company's shares by the company]:

Lord LYELL moved Amendments Nos. 18 and 19:

Page 44, line 23, after ("above") insert ("or 47 below").

line 24, leave out from ("objects)") to second ("of") in line 25.

The noble Lord said: My Lords, Amendments Nos. 18 and 19 are consequential to Amendment No. 13, to which I have already spoken. I beg to move.

On Question, amendments agreed to.

Clause 38 [Charges taken by public companies on own shares]:

5.30 p.m.

Lord CULLEN of ASH BOURNE moved Amendments Nos. 20 and 21:

Page 47, line 24, after ("re-registered") insert ("or registered under section 13 above").

Page 47, line 26, after ("re-registration") insert ("or, as the case may be, registration").

The noble Lord said: These are both consequential on Amendment No. 10. I beg to move.

On Question, amendments agreed to.

Lord CULLEN of ASHBOURNE moved Amendment No. 22: Page 47, line 30, leave out ("in accordance with section 8(7)") and insert ("under section 8").

The noble Lord said: This is also a drafting amendment, but to remove an error. Clause 8 has been redrafted in the Bill and the reference to Clause 8(7) in Clause 38, which was carried forward from the previous measure, is incorrect. I beg to move.

On Question, amendment agreed to.

Clause 40 [Restriction on distribution of assets]:

Lord LYELL moved Amendment No. 23: Page 49, line 12, leave out from ("articles") to end of line 15.

The noble Lord said: This is a drafting amendment. The provision contained in the words of the amendment seeks to leave out words already provided for by Section 394(2) of the Companies Act 1948. Noble Lords will find that the words we are seeking to leave out are an unnecessary duplication of Section 394(2), and if these words were left in the Bill there would be serious doubt as to the effect of the subsection in the 1948 Act, and for that reason I beg to move.

On Question, amendment agreed to (Clause 45 [Ancillary provision]:

Lord CULLEN of ASHBOURNE moved Amendment No. 24: Page 56, line 36, after ("re-registration") insert ("or registration").

The noble Lord said: This is consequential on Amendment No. 10. I beg to move.

On Question, amendment agreed to.

Clause 47 [Power to court to grant relief against company where members unfairly prejudiced]:

Lord LYELL moved Amendment No 25: Page 57, line 14, leave out ("of the members (including") and insert ("part of the members (including at least").

The noble Lord said: This amendment deals with Clause 47, which we think is a important provision, and indeed noble Lords have recognised it as such; I eschew the comment of the noble and learned Lord about a pea in a pod, but I hope this is a starting point. It has been put to us that the clause as drafted could not be used by one single member of a company whose complaint was that his interests alone had been unfairly prejudiced. The argument put to us was that the words in the subsection: unfairly prejudicial to the interests of some of the members (including himself) necessarily imply that the interests of two or more members must be in question. Having considered the matter, we have come to the view that such an interpretation is indeed possible, and since that was not our intention the amendment makes it clear that we are not arbitrarily excluding from the clause cases where acts complained of prejudice just one member of the company.

Lord ELWYN-JONES

I recognise that the amendment is an improvement to the clause as originally drafted, and I say the same—perhaps it is a little out of order but it will save time—about Amendments Nos. 26 and 27 which will follow in respect of the same clause.

On Question, amendment agreed to.

Lord LYELL moved Amendment No. 26:

Page 57, line 38, leave out paragraph (b) and insert— (" (b) require the company to refrain from doing or continuing an act complained of by the petitioner or to do an act which the petitioner has complained it has omitted to do;").

The noble Lord said: Subsection (4)(b) of this Clause describes one of the orders which the court may make if it, the court, is satisfied that the petition is well-founded. The court is limited in the present draft to ordering a company not to do something, but it has been pointed out to the Government that a petition may be on an unjustified omission, and the amendment seeks to substitute a new paragraph which covers cases of commission and of omission, and for that purpose I beg to move.

On Question, amendment agreed to.

Lord LYELL moved Amendment No. 27: Page 58, line 15, after ("order") insert ("or such longer period as the court may allow").

The noble Lord said: This follows on from the previous amendment, still dealing with Clause 47. When the court wishes to make an order, an office copy of the order is drawn up. Where this order alters or adds to or gives leave to alter or add to the company's articles and memorandum, subsection (6) will require an office copy to be delivered to the Registrar of Companies within 14 days of the court making that order. The Registrar of the Companies Court has suggested that it could in difficult cases present some problems to comply with this timetable and the Registrar has suggested that the court should be empowered to set a somewhat longer period for delivery to the Registrar of Companies. This seems sensible, and that is what the amendment would achieve. I beg to move.

On Question, amendment agreed to.

5.38 p.m.

The Earl of LAUDERDALE moved Amendment No. 28: Before Clause 48, insert the following new clause:

Directors' Report to include particulars of consumption of fuel and electricity and of energy conservation measures

.—(1) In this section the directors' report" means the report by the directors of a company attached to a balance sheet of the company prepared under section 1 of the Companies Act 1976 (or under that section taken with section 150 of the principal Act).

(2) There shall he contained in the directors' report—

  1. (a) particulars of the consumption of fuel and electricity in the course of the company's business during the financial year to which the report relates; and
  2. (b) a statement of the measures, if any, taken by the directors in that year to further the conservation of fuel and electricity in relation to such consumption.

(3) The Secretary of State shall have power by regulations made by statutory instrument to prescribe the extent of the particulars to be given under subsection (2)(a) above and the methods according to which they shall he given, and such regulations may make different provisions in respect of different categories of company specified in the regulations.

(4) The Secretary of State shall have power by regulations made by statutory instrument to exempt any company or any category of company specified in the regulations from the requirements of this section.

(5) A statutory instrument containing regulations made under subsection (3) or (4) of this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(6) This section shall not apply to the directors' report in respect of a financial year ending before this section comes into operation.

The noble Earl said: My Lords, I should first apologise to the Committee that this amendment went down for the Report stage rather than for the Committee stage. That was due to a series of circumstances; I was away and my attention had not been drawn to this opportunity. I therefore hope noble Lords will accept my sincere apology for any discourtesy in advertising this matter so late on in the progress of the Bill.

The object of the amendment would be to require companies to produce energy as well as financial accounts, and at a time when we are dominated today, of all days, after President Carter's speech, by the problems of energy pricing and the need to conserve, I should have thought that the principle of this amendment required very little advocacy. Speaking broadly, Britain's energy use is roughly about 28 per cent. in buildings, largely housing; about 20 per cent. in transport; and about 44 per cent. in industry. Thus industry are really the largest group of energy users in the country, and that goes for industry using energy either as feedstock or as a necessary support supply. It is instructive that the chemical industry, which is highly capital-intensive, has actually over the last 11 years cut its energy consumption per unit of output or per hundred units of output by some 30 per cent. It is a very considerable achievement, which has gone largely unremarked in the media and elsewhere, but of course it means that the chemical industry still accounts for about 30 per cent. of all industrial use. So it may be said that there is no need of a physician here, and I do not think that there is where the capital-intensive chemical industry is concerned.

But what about the rest of industry? If the rest consumes about 30 per cent. of all energy use, the physician here is very urgently required. How many factory managers know as much about the boiler fuel consumption in their plants and about its heat and power generation as they do about miles per gallon of their company-supplied motor car? The fact is that every factory manager, every factory foreman, every factory workman knows all about miles per gallon in his car, but very few of them know, and still fewer of them care at all, about the energy consumption of the factory as a whole.

The amendment as drafted might be said to be defective: I have no doubt that my noble friends on the Front Bench will say that and other things. But the short point is that unit cost is a familiar notion to production managers; it is a familiar notion to sales managers; and it is a familiar notion to purchasing managers in regard to the input of materials. But the energy unit cost is another matter altogether. I think that the concept of the energy unit cost in any particular product is a relatively new one, speaking generally.

With the indulgence of the House (which I must ask for) it may be to the advantage of your Lordships, and later to that of those who will read the report of the debate, if I quote a very remarkable report produced last year by the Watt Energy Committee, which is a group of professional persons in all walks of life who have assembled themselves voluntarily and unpaid to look at aspects of our energy problem.

In a large and rather expensive document on the Rational Use of Energy they include a chapter on instrumentation, motivation, and human relations. This was composed by representatives of the Institution of Plant Engineers, the Royal Aeronautical Society, the Institute of Cost and Management Accountants, and the Institution of Mechanical Engineers. There are some passages in this document which struck me so forcefully when they were drawn to my attention that I believe they are worth quoting here.

The report points out that comprehensive instrument panels are most often found in the energy intensive industries where professional fuel engineers supported by instrument engineers are employed. It does not follow, however, that such industries employing competent staff are always provided with comprehensive instrumentation. Indeed many engineers are very frustrated because of the lack of instrumentation or because a system of instruments, once effective, has become worn out or no longer applicable to the work in hand. In this area"— the report goes on — the obsolete panel or partly effective panel is now very common so that decisions are often based on incomplete data". The report goes on to say that by law all boilers need a pressure gauge and, where applicable, a water level gauge as well for safety. Has not the time come, the report asks, for equipment which assists in the reduction of waste also to be made a compulsory feature—and I stress the word "compulsory"—of all new installations?

The report continues: Many energy systems … are still being installed with a complete lack of appreciation of the need for measurement of vital parameters … The lack of thermometers in offices is just one example of … a measuring device which could assist to conserve energy. The reliance of many processes on rule of thumb methods shows a disregard for the maintenance of production standards as well as waste of resources including energy. The over-drying of materials is a good example … In one case it was found that only 5 per cent. of metal purchased was sold as final product but the remaining 95 per cent. had been heated and cooled during processing to no ultimate effect. Furnaces of all types are operating on gas or oil firing with no individual meter to give vital data of day to day and hour to hour performance. There is nearly always the instrument which is due for a visit from the Service Engineer—usually the CO2 recorder—and the inevitable instrument whose chart has not been changed for weeks—or whose chart is missing altogether. On the other hand there are cases where instruments are well maintained but whose readings are never consulted, the charts being stacked, as is the custom, in neat but useless piles. The calibration of many instruments leaves a great deal to be desired and it is not uncommon to find that an inferential type flowmeter has been moved from one position to another with no attention being paid to the basic calibration conditions of temperature, pressure and orifice to pipe ratio".

Then the report continues with regard to maintenance: Most instruments … are delicate machines; however they are frequently required to operate under conditions of corrosion, vibration, heat and/or cold, in dirty or humid atmospheres. Great stress is therefore laid on the need to provide a maintenance service which ensures that the instrument is available and accurate at all times.… The object of instrumentation … is to measure energy usage not only at the boiler or at the process plant but in terms of 'Energy per unit of production per unit of time'.

The report concludes—and I come within sight of the end of my quotation: It is not enough to change charts and file data regularly, but the daily chart change, where carried out, should be the start of a daily question time, e.g. Why are the charts showing the same readings? Was the weather the same? These are the basic questions from which other relevant questions can arise to point the way to optimum fuel usage per unit of production. The ideal, of course, is to planimeter the charts to obtain average daily readings as a base for daily costings but rarely is this seen to happen. My Lords, the House will be relieved to know that that is the end of my quotation.

I am told by my friends in industry there are many furnaces using gas or oil, and yet they carry no meter on day-to-day, let alone hour-to-hour, performance. So the object of the amendment is to lead to managers facing up to the need for energy accounting, to face up to an area of critical responsibility. It would not surprise me if my noble friends on the Front Bench, despite their enthusiasm for the new, the novel, and the revolutionary, somehow find that their hearts quail a little at the introduction of this notion into a Bill of this kind at this stage. They may say that my amendment is defective in drafting. It may even be considered that such an amendment is rather out of place for such an important issue to be started up as a kind of fudge among miscellaneous provisions at the tail end of a Bill like this.

However that may be, it is essentially an enabling amendment. It requires directors to report once, and only once, the Government have prescribed the data that need to be collected, analysed, and published, and once the Government have decided how consumption of energy is indeed to be measured. It leaves it to the Government to prescribe the particulars required, and it leaves it to the Government to prescribe the categories of company to be subject to such obligations.

At this time, when we are literally engulfed by a frightening problem of energy shortage, on the one hand, and public resistance to or an anxiety about rising energy costs, on the other, here, surely, is a simple and modest contribution to the start of a campaign, which we trust the Government will further and prosecute, to enable the country to conserve energy in every possible way, but especially in industry. With that purpose in mind, I beg to move.

5.51 p.m.

Lord LLOYD of KILGERRAN

My Lords, may I strongly support the general principle behind the amendment which has been moved by the noble Earl, Lord Lauderdale, that company reports should include particulars of the progress, at least, of energy conservation measures which they have introduced during the previous year. It really is about time that many companies, apart from those in the chemical industry, applied their corporate minds to this important question of the conservation of energy. It is in my view a matter of corporate social conscience, to preserve our national assets in energy. The question comes: How can any progress be made in this important matter?

Of course, exhortations by Ministers and Government departments are helpful; and public announcements on the television are obviously a part of the educative principles in relation to assisting towards the conservation of energy. But in my view it would be very helpful if, ill this part of the Bill, relating, as it does, among the miscellaneous matters, to certain assets, the Government were to support in statutory form some general expression as to how energy could be conserved by companies. There is no need to introduce any kind of clause saying, "If you do not do this you will be fined", or something; but a general indication to companies in a Bill of this kind would in my view be very helpful in this important matter.

Of course, as the noble Earl, Lord Lauderdale, has indicated—and I am sure he will not be offended if I say so—there are certain drafting difficulties in introducing a provision of this kind, and I am sure he would agree with me that this is not an amendment in its final form. But I ask most earnestly of the Government that, in the present circumstances of the conservation of energy and the conservation of our national assets, they should think about this amendment, even though it has been introduced at this rather late stage—and the noble Earl has expressed his apologies and indicated the reasons why it is late in its introduction.

Lord MOTTISTONE

My Lords, I hope my noble friend Lord Lauderdale will forgive me if I say that I think that this clause is unnecessary. The fact of the matter is that things have been happening very fast in industry during these last two or three months. I have a lot of contact with several companies, and it is quite remarkable how they have reacted to the fact that their fuel costs have gone up by something of the order of 50 per cent. The fact is that the hard economics of life are being a much more effective disciplining weapon, if you like, to persuade people to take the very measures that my noble friend so rightly says should be taken; and it is happening so fast that, unless you are quite closely in contact, which I have to be, you are not aware of precisely what is happening.

The fact of the matter is that this sort of extra "Auntie Government tells you what to do" attitude is not really necessary in this regard, as it is not in many other regards, with great respect to noble Lords opposite—but that is another point. The fact is that companies are taking all sorts of measures, and are seeking ways of taking even more, in just the way that my noble friend said they should. There are difficulties. My noble friend mentioned the importance of having, in offices, thermometers which work, and of reading them. I know of a case where a thermometer in a warehouse had the reverse effect to that which might be intended because of a thing called the Offices, Shops and Railway Premises Act 1963, which says that warehouses must be kept at 60 degrees Fahrenheit, or some such temperature. In this case, when the temperature was below that, the Government inspectors insisted on this temperature even though the chaps working there were given Fearnaught clothing, and the like, and there was no need for it.

So there are in fact times when it is perhaps better to have a thermometer which suffers from the same sort of defect as Nelson's eye; and one cannot be sure that all the things mentioned in the report that my noble friend react out to us should be taken absolutely at face value. Therefore, my Lords, I hope that my noble friends on the Front Bench will find some way to persuade my noble friend Lord Lauderdale not to press his amendment.

Lord LLOYD of KILGERRAN

My Lords, before the noble Lord sits down, may I ask him whether he would be prepared to disclose to this House those companies which, within the last two or three months, as he said, have taken very active measures, because of the increase in the cost of fuel, to pursue a course in relation to the conservation of energy? My experience, which is not too bad in relation to industry, is that many companies are not worrying about the conservation of energy. They are not prepared to consider, at board level, how to conserve energy. I have had that experience. We have had from the noble Lord, Lord Mottistone, a generalisation, trying to persuade us to leave companies to do what they like. I am not prepared—

Lord LYELL

My Lords, I should like to remind the noble Lord, Lord Lloyd, that this is Report stage. Perhaps he could ask a question. If he could draw his remarks to a conclusion, they ought to be in the form of a question.

Lord LLOYD of KILGERRAN

My Lords, I am very grateful to the noble Lord on the Government Front Bench for having reminded me that, in my enthusiasm for supporting, this most important matter, I was not conforming to the traditions of this House but was making a second speech. I apologise to the House. The only question I should like to ask the noble Lord, Lord Mottistone, therefore is: Would he disclose the names of those companies which are doing such wonderful work in the conservation of energy?

Lord MOTTISTONE

My Lords, with the leave of the House, no, I am afraid I cannot tell your Lordships. No, do not laugh. I cannot tell the House publicly the names of the companies because I know them confidentially; but I am very prepared to tell the noble Lord, Lord Lloyd, at any time privately, and on his promise not to disclose these names, exactly what I am talking about. I can tell your Lordships that, of the companies with which I am closely in touch, I know for a fact that 25 per cent. of them are talking very active measures, and another 25 per cent. are starting to do so. I cannot go further than that.

Baroness PHILLIPS

My Lords, I know that the noble Earl will forgive me for saying that it seems to me as a layman, perhaps, though I do have to work under the control of the Companies Act, that this is not quite the right place to put this new clause. Nevertheless, I should like to congratulate him on raising this very important point and perhaps draw his attention to another path along which he could pursue it. Undoubtedly some of the greatest sinners—even more than industry, I would suspect—are the public corporations. I know for a fact that schools, hospitals, and so on, have a totally arbitrary period of the year in which boilers are stoked up, irrespective of the weather, or damped down even though you may well be freezing. So it seems to me that an intelligent approach to the use of fuel in our public corporations would also be very worthy of the attentions of the noble Earl. This is not only to support him in this, but indeed, to thank him most cordially for bringing forward this very important point.

Lord CULLEN of ASHBOURNE

My Lords, my noble friend Lord Lauderdale apologised for raising this matter on Report and not at the Committee stage. I think that he did us rather a good turn, for we have had a most interesting and informative period in the middle of a lot of rather dull drafting amendments. I think he has done very well to raise the matter. The Government have considerable sympathy with the purpose underlying his amendment. Whether it is appropriate in a Companies' Bill or not is a matter of opinion. The Government recognises the importance of the need to conserve energy and to support measures designed to give a fresh impetus to creating public awareness of the need for efficient use of finite energy resources.

However, for the reasons which I shall give, the Government do not believe it would be profitable at this stage to pursue in legislation the idea of mandatory reporting by companies in their annual reports on energy usage and conservation. In July 1977 the then-Government published a Green Paper, The Future of Company Reports. One of the suggestions aired in the Green Paper was that a statement on energy usage might be made a requirement in the company report. The Department of Trade consulted widely on the Green Paper proposals and found that the vast majority of those organisations specifically commenting on the energy suggestion was strongly opposed to any mandatory requirement. Commentators on the Green Paper recognised that the intention behind such a requirement was to highlight energy usage and therefore to focus the attention of companies on the need to avoid wasting fuel, but pointed out that in practice the likely impact would be marginal. Companies by their nature were concerned with cost saving wherever possible and energy saving was a matter of day-to-day discipline and the operation of technical developments at operating unit level. Furthermore, it was considered that such a statement would not enable readers to judge how efficiently a company managed its fuel resources unless it was supported by a comprehensive and detailed energy audit. This would be time-consuming and expensive to produce, particularly in a report covering a large group of companies.

I believe that there is considerable weight in these views which were advanced by a wide spectrum of respondents to the Green Paper. Any measures which com panies may voluntarily undertake to publicise their efforts in energy conservation are fully supported and welcomed by the Government. But we do not wish to add to the legislative burden on British industry where the overall benefits of doing so are in doubt. A mandatory requirement to disclose energy usage and conservation measures would be an extra burden, and while I would wish to associate myself with my noble friend in his most worthwhile overall objective of achieving a saving in energy usage, I hope that he will recognise the merits of not proceeding by legislation in this particular matter and that he will not press his amendment.

Lord ELWYN-JONES

My Lords, I should like to echo the view that has been expressed, but it is most laudable of the noble Earl, Lord Lauderdale—and I hope I do not get too confused by those two conceptions—to express the need to emphasise energy conservation. I am bound to say that I am inclined to agree with the noble Lord, Lord Lloyd of Kilgerran, that a great deal needs to be done in many companies affairs where the saving in energy conservation is thought to be fairly minimal compared with major operative costs of a company's activities. For that reason very often that factor is not sufficiently taken into account. I think there is need for a great deal more energy—if the Government do not mind my saying so—on their part in emphasizing the crucial role that conservation should play in respect to our fuel problems at the present time. Therefore, it is excellent that they should be prodded—I was about to use an unhappy phrase—from behind (shall I say?) in this direction.

However, whether a Bill which is described as An Act to amend the law relating to companies. is appropriate for this purpose is another matter. This is not the first time that the Government have paid a high price for the Long Title of the Bill; nevertheless, I think that on this occasion I should not twist their arm too strongly myself—but this is not to under-estimate the importance and value of the point which the noble Earl has raised.

Lord LYELL

My Lords, one or two points have come to my notice. First, I would apologise to the noble Lord, Lord Lloyd of Kilgerran. I felt that his enthusiasm was approaching my enthusiasm, which may spill over, but I shall be brief. I was interested to hear the views of my noble friend Lord Lauderdale. I think that in both what I had in mind and in what he has in mind, we should pay attention to the great bard from our country, Sir Harry Lauder, who said: Though the way be long, let your hearts be strong. I would stress that the Government's hearts are strong in this matter of energy conservation and energy saving; but I would reiterate that the Government do not see the need to demand further legislative burdens and what I would say would be a costly audit to fulfil mandatory requirements which, as we heard from my noble friend Lord Mottistone, are in the forefront.

The object of any mandatory requirements, we believe, can be achieved by the soaring costs of all forms of energy. I think it was the noble and learned Lord, Lord Elwyn-Jones, who mentioned that these costs of energy might not he very great; but I think they are certainly rising significantly in percentage terms so far as energy is concerned and also that this must increase costs to be borne by the British economy and on a world scale. The comments of the noble Lord, Lord Lloyd of Kilgerran, are helpful; but he believes that we need to watch the expenditure on energy. I wonder whether he has considered the hugely expensive process involved—which I think is suggested and, indeed, laid out in the noble Earl's Amendment—in an energy audit. I think that quis custodiet ipsos custodes? comes very much to mind. Company directors are watching very carefully their energy expenditure; and I wonder whether the House would deem it necessary that there should be a further mandatory requirement and an audit to verify something in the minds of the directors themselves.

Certainly we should like to thank my noble friend for his Amendment and for his statement. He need have no fears. The Government are full of support for his objectives; but I think that the matter was put more succinctly than I put it by the noble and learned Lord, Lord Elwyn-Jones, who wondered what energy conservation had necessarily to do with a Companies Bill—although I took the noble and learned Lord's sally about the broad title of the Bill.

The Earl of LAUDERDALE

My Lords, I think that the last 20 minutes have not been wasted. I cannot help thinking that the happy mood which has spread through the House following my intervention means that noble Lords on all sides have taken as their tag: Quis diligit deum diligat et fratrem suum. But never mind about the Latin. I thought I must cap that of my noble friend Lord Lyell. The critical argument used by the Front Bench is that mandatory requirements of this sort were rejected three years ago. May I say that they were three "OPEC years ago" and not three ordinary years.

The second point that was made just now by my noble friend, Lord Lyell, and also by my noble friend Lord Mottistone was that energy prices are rising so fast in all directions—and all energy prices are rising so fast—that these provide the motive for such conservation. I wish that were true. The point which it seems to me should be made to the House at this time is that, while our new and splendid Government are wedded to the market economy, they have signally failed to respect it in one aspect of the energy picture. There has been no mention either in the Budget Speech or since of any proposal to amend the Gas Act so that the Gas Council can sell gas at the market rate. Gas continues to be subsidised to the domestic consumer and, as a result of that, industry can only get it on an interruptable basis at an absurdly subsidised rate. So in fact the case that has been made by the Front Bench that all energy prices are rising and therefore that provides the motive, is incorrect. I have no doubt that my noble friends will take note of what I have said in that regard and pass on my message in the sweetest way they know how through their Departments to the Department of Energy and get that point home.

Having said that, may I add that there are several noble Lords who have already spoken on this subject in broad support of the idea of my amendment, and I take that to mean that there must be some demand in this House for a comprehensive Government programme in regard to conservation. I have not seen any hint of such a programme yet, no doubt it is coming, no doubt raising gas prices and amending the Gas Act will be part of that programme when it comes. I take the point made by the noble and learned Lord, Lord Elwyn-Jones, and others, that this perhaps is not the most apt vehicle for launching a conservation campaign. Therefore, with the leave of your Lordships, I beg to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 48 [Trading under misleading name, etc.]:

6.12 p.m.

On Question, Whether Clause 48 shall stand part of the Bill?

Lord MOTTISTONE

My Lords, I beg to leave out Clause 48. The object of this amendment is one of purely probing the Government. Your Lordships may remember that at Committee stage I had amendments down to what was then Clause 46, which has now become Clause 48—to be nore specific, to subsection (3) of that clause—to the effect that the six months' period that public companies will be allowed to change their name wherever that occurs—whether on stationery, packaging, vans, or on the facias of banks—really was not enough. Your Lordships will remember that the noble Lord, Lord Lyell, at the Committee stage (in column 155 of Hansard) said that there would be consultations before this present stave of the Bill. I am deeply grateful to my noble friend, and to my noble friend, Lord Trenchard, who was there too, for those consultations. It was possible for experts in this field to put the facts before my noble friends. They have, I understand, been very accommodating, and I shall be most interested to hear what they have to say. I beg to move.

Lord LYELL

First of all, I particularly should like to thank my noble friends Lord Mottistone and Lord Redmayne for raising this very important question of the time which is to be allowed for public companies to make this particular changeover from their old to their new name. The noble Lord, Lord Mottistone, has pointed out that I gave various assurances during the Committee stage, but I would stress once again that we are very anxious to ensure that the changeover should be as smooth, efficient and, above all, as economical as possible for companies which may have to make the changes to which my noble friend Lord Mottistone has referred.

He pointed out that we have between the last stage and today considered this matters of name changing further and, as a result of these considerations, it is quite clear to us that the clause as drafted, without amendment, would still cause industry significant problems and, above all, a great deal of unnecessary expense. This is certainly not the wish of the Government. Therefore we propose to suggest a number of amendments to this clause. These amendments will require very careful preparation and thus they will be introduced in another place.

With the leave of your Lordships, I should like to outline the Government's intention. First of all, we think that the actual offence which is set out in subsection (2) is at present too widely drawn. Noble Lords will see that in subsection (2) it is stated that a public company, other than an old public company, shall be guilty of an offence if it carries on any trade, profession or business under a name which is likely to give the impression that that company is a private company. However, we consider that this ought to be an offence only where the company gives such an impression to a person in circumstances where it is likely to be material to that person that the company is a public limited company and not a private company. The effect of such a change would be that public companies which continued to use their old names in circumstances where it really did not matter would not be committing an offence.

The second point that we would propose is that companies should be allowed a longer time to make the changeover from their old name to the new name. It has been pointed out to us—particularly by the noble Lords, Lord Mottistone and Lord Redmayne—that the six months' period after re-registration is too short. Even allowing a 12 months' period for durable items like containers and the packaging material that has been mentioned in the previous stage, this would not remove all the problems and the expense for industry. On the other hand, we have to ensure that the period of changeover is not so long that the use of both old and new names by public companies would lead to confusion. We hope that those who are pressing and desire a longer period of changeover recognise that it is a transitional provision which we believe has to be of limited duration.

The question to which we address ourselves is: How long a period should be allowed? I hope that we first may take Section 108 of the 1948 Act. This relates to the publication of the name of the company. In Section 108 we will find mention of the company's name on its business letters, official publications, on its seal and so forth. From the representations we have received a clear consensus has emerged, that 12 months would be about the right length of time for these purposes. Indeed, this was the period of time which was suggested by my noble friends Lord Mottistone and Lord Redmayne in their amendment at the Committee stage. The Government would therefore propose that 12 months' interchangeability should be allowed for the provisions of Section 108 of the 1948 Act which, as I referred to, deals with the company's name on business letters, publications and the seal. But it is also clear to us that this 12 months' period would not be long enough for other purposes.

As the noble Lords, Lord Mottistone and Lord Redmayne, are aware, there are regulations on the labelling of goods which require the correct name of the company to be shown. There are a number of products which are covered by these regulations which are nothing to do with the Bill we have before us. These regulations deal with such items as medicinal and pharmaceutical products. Especially in these cases there is a fairly long lead time for production. It is some time before the product is actually sold or put on the retailers' shelves. The Government will need to consult further, but it is clear that a significantly longer period is necessary for these purposes. We wonder whether a period of perhaps three years of interchangeability of names would be justified in the bulk of these cases.

These questions are very important and need careful consideration and, above all, preparation. We are, therefore, during the summer going to consult with interested persons who will, of course, include the noble Lords who have put their names to this amendment. The Government will be introducing amendments to this clause on the lines I have indicated, when the Bill reaches another place.

I must apologise for this lengthy and detailed statement, but it is an important matter and such a statement is the least that my noble friends Lord Mottistone and Lord Redmayne deserve. I hope your Lordships will see the reason for it and will accept it.

Lord MOTTISTONE

My Lords, I am most grateful to my noble friend for the statement, which goes as far as we could have hoped for in our happiest moments. I can speak also on behalf of my noble friend Lord Redmayne, who most unfortunately had another appointment at this time and has asked me to apologise to your Lordships for his absence. I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

In the Schedules.

Schedule 3 [Minor and consequential amendments]:

6.22 p.m.

Lord LYELL moved Amendment No. 30: Page 103, line 44, at end insert—

("In section 23 (alteration of memorandum)—

  1. (a) in subsection (1) for the words "two hundred and ten of this Act" there shall be substituted the words "47 of the Companies Act 1979"; and
  2. (b) in subsection (3) for "(3), (4)" there shall be substituted the words "to (4C).").

The noble Lord said: My Lords, I spoke to this amendment with the group of amendments earlier. I beg to move.

On Question, amendment agreed to.

Lord LYELL moved Amendment No. 31: Page 104, line 34, at end insert ("(within the meaning of the Companies Act 1979)").

The noble Lord said: My Lords, I think it would be for the convenience of the House if I were to speak to Amendments Nos. 31, 34 and 35 together. These three amendments are purely drafting amendments. I beg to move.

On Question, amendment agreed to.

Lord LYELL moved Amendment No. 32: Page 106, line 12, leave out from ("section") to ("after") and insert ("394 (effect of registration under Part VIII)— (a) in subsection (2)").

The noble Lord said: My Lords, this amendment is consequential on Amendment No. 13 and I have already spoken to it. I beg to move.

On Question, amendment agreed to.

Lord LYELL moved Amendment No. 33:

The noble Lord said: My Lords, this amendment is also consequential, and I beg to move.

Page 106, line 15, at end insert— ("(b) in subsection (6) for the words from "this Act" to "thereof" there shall be substituted the words "the Companies Acts 1948 to 1979 (apart from those of section 47(5) of the Companies Act 1979)".").

On Question, amendment agreed to.

Lord LYELL moved Amendments Nos. 34 and 35:

Page 108, line 15, leave out ("value") and insert ("amount").

Page 109, line 21, leave out ("within the meaning") and insert ("for the purposes").

The noble Lord said: My Lords, with the leave of the House I should like to move Amendments Nos. 34 and 35 together. They are consequential on Amendment No. 31, and I have already spoken to that. I beg to move.

On Question, amendments agreed to.

Schedule 4 [Repeals]:

Lord LYELL moved Amendment No. 36:

The noble Lord said: My Lords, this amendment is consequental on Amendment No. 13, to which I have already spoken. I beg to move. Page 111, column 3, line 10, at end insert ("Section 210").

On Question, amendment agreed to.

Lord CULLEN of ASHBOURNE moved Amendment No. 37: Page 111, column 3, line 26, at end insert ("Section 440(1)").

The noble Lord said: My Lords, at Committee stage what is now Clause 51 was, together with Schedule 2, added to the Bill. Clause 51 introduces certain amendments to the law apart from providing the authority for Schedule 2. These changes call for certain consequential amendments to other provisions, and Amendments Nos. 37, 39, 40 and 42 make the necessary technical and drafting changes. I beg to move.

On Question, amendment agreed to.

Lord LYELL moved Amendment No. 38:

The noble Lord said: My Lords, this Amendment is consequential on Amendment No. 13: I have already spoken to it and I beg to move. Page 112, column 3, line 8, at end insert ("and subsection (2)").

On Question, amendment agreed to.

Lord CULLEN of ASHBOURNE moved Amendment No. 39:

The noble Lord said: This amendment is consequential, and I beg to move. Page 112, column 3, line 8, at end insert ("Section 49(1)").

On Question, amendment agreed to.

Lord CULLEN of ASHBOURNE: moved Amendment No. 40:

The noble Lord said: this Amendment is consequential and I beg to move.

Page 112, line 26, at end insert—

("1977 c. 45. Criminal Law Act 1977. In section 63(2), Act 1977.the words "Companies Act 1967". In Schedule 12 the entry relating to the Companies Act 1967.").

On Question, amendment agreed to.

Lord LYELL moved Amendment No. 41:

The noble Lord said: My Lords, this is consequential upon Amendment No. 13, and I beg to move.

Page 112, line 28, at end insert— ("( ) The repeal by this Schedule of section 210 of the 1948 Act and section 35(2) of the 1967 Act shall have effect subject to the saving in section 47 (10) above;").

On Question, amendment agreed.

Lord CULLEN of ASHBOURNE moved Amendment No. 42:

The noble Lord said: My Lords, this is consequential and I beg to move.

Page 112, line 30, at end insert— ("( ) The repeal by this Schedule of section 49(1) of the 1967 Act (and the consequential repeals made in the Criminal Law Act 1977) shall have effect subject to the saving in section 51(5) above").

On Question, amendment agreed to.