Lords Sitting of 17 March 1980

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Truro.

NAMIBIA: UN/SOUTH AFRICAN DISCUSSIONS
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what conclusions were reached at the renewed discussions at Cape Town between representatives of the United Nations and of the South African Government regarding the future of Namibia.
The SECRETARY of STATE for FOREIGN and COMMONWEALTH AFFAIRS (Lord Carrington): My Lords, officials of the United Nations Secretariat held four days of useful and wide-ranging discussions with South Africa. The United Nations team then went to
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Botswana, Angola, Zambia and Tanzania for further consultations. Dr. Waldheim will report the conclusions of these talks to the Security Council in due course.
Lord BROCKWAY: Yes, my Lords, but is it not the case that very little progress was made? In view of the fact that the United Nations Security Council as long ago as August 1969 called on South Africa to withdraw immediately from Namibia, is it not now time that strong pressure were exerted upon South Africa to meet the proposals of the United Nations Mission?
Lord CARRINGTON: My Lords, I understand that some progress was made, but, as the noble Lord knows, Her Majesty's Government were not directly involved in the consultations, which were confidential, and I think that we had better wait to hear what Dr. Waldheim has to say.
Lord GORONWY-ROBERTS: My Lords, before I put a supplementary question to the Foreign Secretary, may I say how delighted we are to welcome back home the noble Lord, Load Soames, who is looking so well—unaccountably well—after a very trying, yet very successful time spent in the service of this country in Zimbabwe. May I also say how much we appreciate the way in which

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he has responded to, and encouraged, the new Prime Minister of Zimbabwe, who by word and deed has given a very good example to everybody in Africa as to how to proceed in the future?
That leads me to the point that I wanted to put to the noble Lord, Lord Carrington, who has been such a tower of strength to the noble Lord, Lord Soames, in his difficult task. Would the noble Lord agree that what the Prime Minister of Zimbabwe has done by word and deed, since he was appointed by the Queen's Governor-General, should serve as an encouragement to the South Arican Republic to be considerably more forth- coming about co-operating in the emergence of Namibia to an independence similar to that of Rhodesia? Would the noble Lord also agree that, similarly, the new Zimbabwe, in co-operation with this country and others, could exercise a beneficial influence on the leadership of the Namibian people, including SWAPO, so that a movement to peaceful, orderly independence in that country, similar to that which the noble Lord has promoted in Zimbabwe, could take place in South-West Africa?
Lord CARRINGTON: My Lords, I think that it must be rather easier to be Governor of Rhodesia than to be Leader of your Lordships' House. My noble friend has not had to deal with the unilateral declaration of independence which your Lordships declared last week. With regard to the supplementary question that the noble Lord has asked me, I think that one must recognise that events in Rhodesia need a little time to be assimilated in South Africa, and I believe that it would be as well if both countries in Africa, and in the United Nations, showed a little patience about events in Namibia.
Lord BARNBY: My Lords, may welcome back the Foreign Secretary from his latest, effective journey to the Middle East. In view of the fact that Russian-sponsored SWAPO is regarded by the United Nations as the true representative of the people of South-West Africa, is it not confusing, or perhaps even regrettable, that we continue to have a representative on the Committee of Five appointed by the United Nations, which appears contemporaneously to put us into direct
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conflict with the South African Republic, which of course could not accept SWAPO as it is considered to he Russian-dominated?
Lord CARRINGTON: My Lords, Her Majesty's Government do not recognise SWAPO's claim to he the sole representative of the Namibian people; that is for the people of Namibia to decide—and no one else. The Contact Group of Five has, in my judgment, as well as in the judgment of the previous Administration and that of this Administration, proved a very useful way in which to seek and attain peace in Namibia.
Lord HATCH of LUSBY: My Lords, is the noble Lord aware that I myself returned with the United Nations officials on the same plane on Friday of last week, and that there is very deep despondency in Central Africa over the prospects in Namibia, for two reasons: first, that there appears to have been a strengthening of resistance within Namibia by the Turnhalle alliance since the Rhodesian elections, in the fear that elections in Namibia might follcw the same course; and, secondly, that the Western nations appear still to be encouraging the export of minerals from Namibia despite its being in contravention of the United Nations resolution on this matter? While I am on my feet, may I belatedly congratulate the Foreign Secretary on his success in Rhodesia? I was not able to do so previously because I was otherwise engaged.
Lord CARRINGTON: My Lords, I am obliged to the noble Lord. No, I was not aware of what the noble Lord has said; nor do I agree with it.
Lord BROCKWAY: My Lords, may I ask the Minister this question: Is not the situation in Namibia very dangerous, as was the situation in Zimbabwe before the successful meeting at Lancaster House and the elections in Rhodesia? Is not the recalcitrant feeling of South Africa and white economic interest in Namibia itself due to the fact that there is fear that in an election SWAPO would win, just as Mr. Mugabe has won in Zimbabwe; and, in view of the fact that we have 7,500 monitoring troops there—many more than there were in Zimbabwe—

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can we look forward to an election which will be carried out freely and fairly?
Lord CARRINGTON: My Lords, I agree with the noble Lord that it is very necessary that there should be a settlement in Namibia, and we have gone some way along the way towards finding one. What I was saying to the noble Lord, Lord Goronwy-Roberts, and also in answer to the question asked by the noble Lord, Lord Hatch of Lusby, is that I think the events in Rhodesia of the last few weeks have made it necessary for the time being, at any rate, to exercise a little patience.

THE PALESTINE LIBERATION ORGANISATION
2.45 p.m.
Lord SH1NWELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper. In doing so, may I join in the congratulations to the noble Lord the Leader of the House and comment on his remarkable statesmanship (which we would of course expect from him) during his sojourn in Rhodesia? It is only fair to say, however, that during his absence the noble Earl, Lord Ferrers, has proved a very efficient substitute.
The Question was as follows:
To ask Her Majesty's Government whether they have received any representations from the Israeli Government, the Israeli Embassy in the United Kingdom or from the British Board of Deputies about the Foreign and Commonwealth Secretary's recent declaration on the objectives of the PLO, and whether they will make a Statement.
Lord CARRINGTON: My Lords, I know that my noble friend, who has to go to the dentists, would, were he in the position at the moment of being the active Leader of the House, forgive the noble Lord for being outside the Rules of Order, and thank him warmly.
My Lords, the Israeli Government have made known to us their views on self-determination for the Palestinians and the Palestine Liberation Organisation. Representatives of Anglo-Jewish organisations will be calling on me shortly. There has
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been no change in our attitude to the Palestine Liberation Organisation. We continue to believe that the PLO is an important factor, and will have to be involved at some stage in the peace process. At the same time we urge them to accept Israel's right to live in peace within secure and recognised boundaries.
Lord SHINWELL: My Lords, while thanking the Foreign Secretary for that Answer, may I ask him whether he is aware that one of the primary objectives of the PLO is to continue the war against the State of Israel, and that indeed they have repeatedly declared their intention of driving the State of Israel out of that area altogether? What comment would he make about that? Furthermore, has he in mind the possibility that, if there is too much encouragement of the PLO, it might revive the conflict in the Middle East; and that, if it does, the conflict might be more serious and more devasting than anything we have witnessed before?
Lord CARRINGTON: My Lords, I do not think that any progress in Middle East peace efforts is possible without an acceptance and a recognition by the Palestinians, and therefore by the PLO as well, of the State of Israel as a State. That is absolutely essential. Equally, I do not think it is possible to get peace in the Middle East without some recognition on the part of Israel of the rights of the Palestinians.
Lord GORONWY-ROBERTS: My Lords, may I very briefly but very strongly endorse what the noble Lord the Foreign Secretary has said? It is necessary to get everybody in the Middle East into peaceful, orderly discussion. At the same time, it is the policy of this country, whichever Government are in power, to sustain and secure a free, independent Israel.
Lord JANNER: My Lords, may I ask the noble Lord to realise that, from the point of view of anyone who has any interest at all in the sovereignty of Israel, the PLO is one of the biggest dangers which not only Israel but the Middle East and we ourselves have to face? Is he aware that as recently as February 9th (I think it was) a categorical statement was made by Arafat in a Venezuelan newspaper that he is determined to

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destroy Israel whatever happens and no matter how long it takes? Surely, the statements which are being made day by day in respect of the PLO are encouraging the PLO in this kind of action, even though expressions are used to say that we will wait until they recognise Israel? Surely, the line of action which is being taken by us and, with our guidance, by the EEC, is, with the greatest respect to the noble Lord, encouraging the PLO to make the kind of statement which, as I said before, only last February declared categorically that it will not rest until Israel is destroyed by violence? Surely one cannot expect Israel to accept a situation like that.
Lord CARRINGTON: My Lords, I do not believe—and I repeat this—that peace is possible in the Middle East until such time as the Palestinians and the PLO recognise the State of Israel; nor do I believe it is possible until the Israelis recognise the rights of the Palestinians. simply do not believe that one can ignore the PLO in this question. I would only say about the speeches to which the noble Lord referred that, if one looks objectively at what has been said on both sides about this issue in the Middle East, one sees that there have been some incautious remarks on both sides.
Lord SHINWELL: My Lords, is the Foreign Secretary aware that I have never at any time condemned the PLO because of its existence? I recognise that it is a fact of life. On the other hand, I object to its primary objective. I am not at all satisfied that either the Foreign Secretary in his recent declaration about the Middle East or the attitude of some members of the EEC, arc being satisfactory in the sense of recognising, definitely and emphatically and without any qualifications, the right of the State of Israel to exist in that area and not to be constantly under threat. Could I obtain from the noble Lord the Foreign Secretary an explicit statement that, so far as he and Her Majesty's Government are concerned, they will not agree to any change in the situation as long as it appears to impinge upon the sovereignty of the State of Israel?
Lord CARRINGTON: My Lords, if the intention of the PLO is the destruction of the State of Israel, I condemn that, also.
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I think that I have made abundantly plain the position of Her Majesty's Government, which is an even-handed one as between one and the other in the hope that, if there is good sense on both sides, a settlement is possible.
Lord BYERS: My Lords, may I ask the noble Lord the Foreign Secretary whether he sees a difference between the PLO and the Palestinian problem? Will he say—Yes or No—whether he regards the PLO as a terrorist organisation?
Lord CARRINGTON: No, my Lords, I do not think that the PLO, as such, is a terrorist organisation. There are some elements of the PLO which in the past have been associated with the terrorists; but it would be a great mistake to assume that it is possible to get a settlement in the area without taking into account the PLO.
Baroness GAITSKELL: My Lords, may I ask the Foreign Secretary a supplementary question following on the recent one? Is he not aware that when I was in the United Nations a couple of years ago I heard Yasser Arafat, when asked on New York television after his spectacular debut in the General Assembly, whether he wanted to destroy the State of Israel, say,"This is the first step "? Has he retracted that remark? He was definitely asked,"Are you out to destroy the State of Israel?"He said,"Yes, this is the first step ". Has he retracted?
Lord CARRINGTON: My Lords, I am not aware of that. If that is the object of the PLO, then I comdemn it.
Lord WIGG: My Lords, would the Foreign Secretary be embarrassed if I said that I wholeheartedly endorse the policy which he is following?—that of holding a balance between Israel on the one hand and the PLO on the other. Both must exist. Will he bear in mind when he is under constant pressure from Israel, and from Israel's supporters, that there would have been no Israel but for the valour of British troops who fought on the plains of Mesopotamia and in Palestine and who broke the power of the Ottoman Empire; and at the time of the second battle of Gaza, there were not six Jewish settlements in Palestine? Is he further aware of the fact that this country has enfeebled itself, its influence has been

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reduced, its economic power all but destroyed, whereas at one time our sovereignty extended over large sections of the Middle East and British interests were well-regarded not only in the Middle East but on a world-wide basis? Is the Foreign Secretary not aware that that change has come about because of successive British Governments (including a Labour Government under Mr. Wilson) succumbing to the constant pressure of Israel's supporters in this country regardless of the interests of Great Britain?
Lord CARRINGTON: My Lords, I hope that Her Majesty's Government are keeping a balanced view on this subject. Certainly, what I have sought to say this afternoon is that I believe that both sides, with good will and with good sense, could settle this. I do not pretend that this will be easy, but it seems to me that if the Palestinians will recognise the State of Israel and if Israelis will recognise that the Palestinians have rights, too, then there is, in that equation, the possibility of a settlement.
Lord SEGAL: My Lords, is the Foreign Secretary aware that the assumption of executive ruling powers by the PLO might well lead to a repetition of the regime of the Ayatolah Khomeini in Iran; and is not one Ayatolah Khomeini quite enough to be going on with?
Lord CARRINGTON: My Lords, we seem to be crossing a few bridges before we come to them.

COMPETITION BILL
2.57 p.m.
Read 3a, with the amendments.
Clause 3 [Preliminary investigation by Director of possible anti-competitive practice]:
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 1:
Page 4, line 43, at end insert ("; but nothing in this subsection shall prevent the Director from proceeding with a subsequent investigation, notwithstanding that it relates wholly or partly to the same matters.").
The noble Lord said: My Lords, it has been noticed—admittedly rather late in the
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day; and for that I apologise—that the provision of Clause 3(5) which enables the Secretary of State to veto a preliminary investigation by the Director General could he open to an unintended interpretation. It is the intention that the Secretary of State should be able to cancel a particular investigation but not that his veto should prevent all subsequent investigation of the same matters, however far into the future. Circumstances change and Governments have been known to change their minds. We therefore would not want a veto to prevent all future investigation. Unfortunately, on one reading of Clause 3(5), it would have this effect. This interpretation would be strengthened by contrast with Clause 7(2) where such an interpretation is explicitly ruled out where references to the MMCs are concerned. Therefore, we think it necessary to remove the ambiguity by making a similar explicit provision in Clause 3(5). I beg to move.
On Question, amendment agreed to.
Clause 11 [References of public bodies and certain other persons to the Commission]:
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 2:
Page 15, line 38, leave out from first (" reference ") to (" is ") in line 40 and insert (" including any question whether, in relation to a matter falling within paragraph (a), (b) or (c) above, the person ").
The noble Lord said: My Lords, once more on behalf of my noble friend, this is a technical amendment which is intended to improve the drafting of Clause 11(1). As drafted, the clause permits the Secretary of State to require the commission to consider the public interest in relation to the subject of the reference generally—that is, in relation to the efficiency and costs the service provided and the possible abuse of a monopoly situation in the supply of goods or services by the person concerned. We have come to the conclusion that, in certain circumstances, this could impose too heavy a burden on the commission in the light of the timetable which they are required to meet under Clause 11(9). This amendment therefore provides that consideration of the public interest, may, if the Secretary of State so wishes, be confined to the specific questions which will be put to the commission in the terms of reference

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rather than to the general issues of efficiency and costs, et cetera. I beg to move.
On Question, amendment agreed to.
Clause 12 [Order following report under section 11]:
3.4 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 3:
Page 18, line 32, leave out (" which ") and insert (" whom ").
The noble Lord said: I rise to move Amendment No. 3 and, at the same time to speak to Amendment No. 4. These are both minor technical amendments made necessary by amendments made by the Government on Report in connection with the references to the Monopolies and Mergers Commission of bus undertakings specified in Clause 11(3)(b) of the Bill. Amendment No. 3 merely corrects an error in grammar in Clause 12(4) by substituting"whom"for"which"in line 32. Amendment No. 4 reflects in the Long Title the effect of Amendment No. 15 made on Report, which substituted"person"for"body corporate"in Clause 11(3)(b), thus bringing partnerships and sole traders within the scope of investigation under that part of the Bill. I beg to move.
Lord PONSONBY of SHULBREDE: My Lords, I am slightly confused by the noble Lord because Amendment No. 4 is in the name of the noble Earl, Lord Caithness, and others, and is not in his name.
On Question, amendment agreed to.
The Earl of CAITHNESS The Earl of CAITHNESS moved Amendment No. 4:
Page 21, line 42, at end insert—
(" () Before carrying out an investigation under section 3 above into any course of conduct being pursued by a person falling within section 11(3)(d) above the Director shall give notice as required by section 3(2)(a) above also to the relevant Minister and on making any competition reference arising from that investigation or varying such a reference under section 6(6) above the Director shall send a copy of the reference or, as the case may be, the variation to the relevant Minister.").
The noble Earl said: My Lords, I am
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grateful to my noble friend for speaking to this amendment and referring to it as a drafting amendment. That precisely sums up what I feel about it, too. As has been explained to your Lordships at length at both Committee and Report stages of this Bill, the relevant Minister—at the moment the Minister of Agriculture, Fisheries and Food—has extensive powers under the Agricultural Marketing Act 1958 to make investigations into agricultural marketing boards.
Without wishing to repeat what has already been said, and as the Government have at no stage indicated their disapproval of this Act, it seems logical that the relevant Minister should at least be told by the Director of Fair Trading that he is about to investigate an alleged malpractice. The relevant Minister could be looking into the situation himself under the powers conferred upon him by the 1958 Act. The amendment therefore is one which seeks only to enable the existing legislation to work in closer harmony with this Bill. It reinforces the consultation procedure at an early stage to avoid duplication, increased bureaucracy and interdepartmental antagonism. On an agricultural matter, it must make sense for the relevant Minister to be advised of what is in the minds of those who have powers overlapping his specialist field. I beg to move.
Lord TREFGARNE: My Lords, the purpose of Amendment No. 4, and the other two amendments which follow it, is to give the relevant Minister, as my noble friend has explained, equal status with the Secretary of State in relation to various functions in the Bill. The first amendment, as my noble friend said, requires the Director General to give notice of investigations and references into anti-competitive practice by an agricultural marketing hoard to the relevant Minister as well as the Secretary of State. There is no provision in the Bill for that at present, although it would be normal administrative practice for all concerned.
I hope that your Lordships will agree that we can discuss these three amendments at the same time because they all address similar points. Perhaps my noble friend disagrees?
The Earl of CAITHNESS: No, my Lords
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, without the consent of the House, I do not think that my noble friend is entitled to speak to the three amendments together. I thought that I heard a note of dissent from those sitting behind him.
Lord TREFGARNE: My Lord, my noble and learned friend is right and I shall therefore confine my remarks to the first amendment. I shall in due course ask your Lordships to resist the second and third amendments in the name of my noble friend. As for this amendment, it is not positively objectionable on its own; it would save the Secretary of State for Trade and his officials from having to inform the relevant agricultural Minister and his officials of the fact that the Director General has initiated an investigation. It would place this task directly upon the Director General. The Government are satisfied that Clause 15 would work adequately as it stands; but, if my noble friend feels that it is the task of Parliament to define who should see every piece of paper, then the Government would have no particular objection if my noble friend decided to press his amendment.
Lord STANLEY of ALDERLEY: My Lords, is my noble friend accepting this amendment?
Lord TREFGARNE: No, my Lords.
Lord STANLEY of ALDERLEY: Then, my Lords, I am afraid you will have to be bored by me again. The purpose of the amendment is consumer-orientated. As the Bill stands, complaint could be made by the Director General of Fair Trading to the Secretary of State about an agricultural marketing board's uncompetitive action. Having submitted the complaint, the Secretary of State can, in his wisdom, decide to take no action and the matter will end. The effect of our amendment would be that the Director General of Fair Trading would have to consult the Minister of Agriculture as as well as the Secretary of State, which would mean that the Minister of Agriculture could advise the Secretary of State on the best method to adopt, perhaps, as we have suggested to the House before, through the Agricultural Marketing Act. Moreover, the Minister of
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Agriculture is much more experienced in investigating——
Lord TREFGARNE: My Lords, my noble and learned friend the Lord Chancellor very rightly said that I should speak only to the first amendment in the name of my noble friend, which I did; but my noble friend Lord Stanley of Alderley is now speaking to the others. That is what it sounds like.
Lord STANLEY of ALDERLEY: My Lords, I am sorry and I will take the advice of the House on this. I am speaking to this amendment. I will speak to the other two in a moment, altogether as your Lordships wish. The Minister of Agriculture has more experience in investigating complaints and that is why we wish him to be consulted. He has more experience through the workings of the 1958 Act. As the Bill stands, the Minister of Agriculture could be totally unaware of a complaint made about the agricultural marketing boards, which are his concern. He should realise it if there is a complaint going about. I have some more to say about what has happened in this Bill but I shall leave that to the next amendment. I hope my noble friend will accept this amendment.
Lord CLEDWYN of PENRHOS: My Lords, I should like to support the noble Lord, Lord Stanley of Alderley. I am extremely disappointed with the response that the Minister has given to noble Lords who have raised the matter and with the response of the Government generally. It is an extremely important point. If the noble Lord informs the House that the Minister of Agriculture will be aware of what takes place, I would tend to be rather less discontent than I am now. The thought that the agricultural marketing boards are going to be subjected to this procedure without the immediate and direct knowledge of the Minister of Agriculture seems very unreasonable indeed. If we are going to get co-operation in the agricultural industry, and if the country is going to get the co-operation of the agricultural industry—and that seems very important indeed—the Government must be more reasonable. After all, if the agricultural marketing boards are responsible to anyone, they are responsible to the

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Minister of Agriculture, Fisheries and Food and not to any other Minister.
It does appear that it is tempting providence and also insulting to the agricultural industry and to the Minister concerned to disregard him. I may be mistaken: it may well be that the noble Lord who replies will be able to inform the House that the Minister of Agriculture will be informed, and informed forthwith. But if he is unable to tell the House that, then I am bound to say that this is a very important matter which the House must think about very carefully. Otherwise, the agricultural marketing boards, upon which we all depend for the efficient organisation of the commodities for which they are responsible, will not be doing their job as effectively as they should. I hope that the noble Lord can give a rather more satisfactory answer than he has given hitherto.
Baroness SEEAR: If I understood him aright, the Minister said rather contemptuously that it was being suggested in this amendment that there was being written into the Act where every bit of paper was to go. I would say: surely this is not a question of where every bit of paper is to go, but where this particular very important piece of paper should go. After all, some of the most important legislation that goes through this House could be described as"bits of paper ".
Lord MOTTISTONE: My Lords, I think that we ought to look at this from a rather broader position than just from the point of view of the Milk Marketing Board. It seems to me that there are a great many other public bodies covered by Clause 11(3) of the Bill to which the same arguments could very well apply. I find it difficult to see why the Milk Marketing Board should particularly seek the custody and safe treatment of their own Minister when, for instance, other public boards that are in competition with other sources—as, for instance, the railways who arc in competition with other forms of transport—have not sought to have their Minister covered in this respect.
Lord CLEDWYN of PENRHOS: The answer, my Lords, to the noble Lord is that they are not the responsibility of the Minister of Agriculture.
Lord MOTTISTONE: Yes, my Lords, indeed; but there are other sponsoring ministeries who deal with other people, and it seems to me that what is being lost sight of—and this is the important point—is that the Milk Marketing Board are in competition with other traders and it seems unreasonable, under the heading"competition in a Competition Bill. that one particular group of traders, to wit, the Milk Marketing Board, should have any preferential treatment—if it is preferential treatment—in being able to involve their own sponsoring Ministry. You can say that it is not preferential treatment: in which case what is the point of the amendment? Therefore, my Lords, I wonder whether this amendment and the following ones are really necessary.
Lord ROBBINS: My Lords, I should very much like to support the noble Lord who has just spoken in what he has said. It seems to me that this Bill involves principles which should apply to the whole economy. I think it is quite unnecessary to write into the Bill what may be a matter of courtesy, having regard to the administrative arrangements in Whitehall, that any particular Minister need be informed as regards the implications of this all-embracing Bill. I am reminded in this connection of something which I heard at a very high official meeting during the reconstruction period after the war. It was said by Lord Keynes. In regard to agriculture, he appealed to the Permanent Secretary of the Ministry of Agriculture and said:"All Ministries of Agriculture are a little bit of a racket, aren't they?"
3.14 p.m.
Lord TREFGARNE: My Lords, I had not intended to deploy my full arguments on this amendment, but the attitude of my noble friends clearly requires me to say a little more. The Bill, as far as anti-competitive practices are concerned, enables the Director General to do certain things and the Secretary of State to do certain other things. We have said before that wherever it is appropriate the Secretary of State will consult the appropriate sponsor department. This applies as much to agricultural questions as to those involving industry, commerce and local authorities.
As far as the powers in Clauses 11 and 12 are concerned, the Secretary of State

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has certain power to make references and to act following upon references. In addition, sponsor Ministers also have certain powers to act on a report of the commission. The only exception that is made to these general provisions has been for agricultural marketing boards which, in the opinion of the Government, merit a degree of special treatment in view of the agricultural marketing legislation itself. That is why Clause 15 of the Bill makes a number of special provisions to allow the order-making powers of the Agricultural Marketing Act to be used following a report on a board which is subject to that Act. This is because the Agricultural Marketing Act already contains provisions which allow order-making powers to be used in certain circumstances. Equally, because of the existing agricultural marketing legislation, Clause 15 has been extended to provide for consultation between the Secretary of State and the relevant agriculture Minister before the Secretary of State exercises his powers. In addition, in relation to undertakings under Clause 9, again because of the agricultural marketing legislation, there is special provision for the Secretary of State and the relevant agriculture Minister to act jointly.
I would remind your Lordships that in addition to these provisions in the Bill we have repeatedly made it clear that the normal process of consultation between Ministers and between departments will take place for agricultural marketing boards, as for every other section of industry or commerce. I hope that, with this further explanation, my noble friend will not press his amendment.
The Earl of CAITHNESS: My Lords, I think the point was nicely put by my noble friend on the Front Bench. He said that the 1958 Act had similar powers to the powers under this Bill. It is for this reason that at this very early stage, and in order to save any duplication and bureaucracy, the Minister of Agriculture, who can quite easily initiate investigations under the 1958 Act, is told of the wish of the Director General of Fair Trading, and to put the responsibility on to the Director General of Fair Trading rather than the Secretary of State seems to me to be eminently logical in this context. Therefore, I cannot fail to disagree with my noble
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friend and those who spoke against the amendment. I think this is something which the House ought to consider again, because I believe it to be both logical and in the best interests of the Bill.
3.18 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
The LORD CHANCELLOR: My Lords, Tellers for the Not-Contents have not been appointed, pursuant to Standing Order No. 50. A Division therefore cannot take place and I declare that the Contents have it.
3.22 p.m.
Lord STANLEY of A LDERLEY Lord STANLEY of A LDERLEY moved Amendment No. 5:
Page 21, line 42, at end insert—
(" ( ) In relation to every investigation under section 3 above into any course of conduct being pursued by a person falling within section 11(3)(d) above, every competition reference which specifies such a person as the person whose activities are to be investigated by the Commission and every variation of such a reference under section 6(6) above the powers conferred on the Secretary of State by section 3(5) or, as the case may be, section 7(2) or (3) above shall be exercisable also by the relevant Minister who in the exercise of those powers shall observe the requirements of sections 3(6) and 7(5) above.").
The noble Lord said: My Lords, in the absence of my noble friend Lord Caithness who is in the Lobby, perhaps I should start on this amendment. The main reason for supporting this amendment is the same reason as the Government gave when they considered it necessary to add subsection (3) to Clause 15—a point just made by my noble friend Lord Trefgarne. Again, like the last amendment, this one will avoid unnecessary bureaucracy between the Ministry of Agriculture and the Department of Trade and will enable an investigation to be held under the Agricultural Marketing Act, if that Act is thought to he a better vehicle for investigation.
I am not going to be robbed of my little story again this time, and I am afraid that I must relate to the House what has happened to this Bill since it started in another place, because it makes quite interesting reading. I am still convinced that, as a result. the. Government have

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not appreciated the role and the particular position of the agricultural marketing boards under the Agricultural Marketing Act 1958. My noble friend Lord Mottistone has not done so. That is an Act which a Conservative Government proposed and it has stood the test of time since 1958.
Perhaps I may enlighten your Lordships, and say that when this Bill first appeared in another place no order-making powers were included in it. It might have been better, certainly from my point of view, though perhaps rather less than honest, if that had not been noticed. However, it was noticed and, having been noticed, the Government tabled amendments to have order-making powers made under the Fair Trading Act 1973.
The next chapter in the story came when it was pointed out that such order-making powers could be better made under the Agricultural Marketing Act and, in fairness, the Government graciously accepted such an amendment. However, the effect of the amendment was that the Minister of Agriculture had powers to make orders, but the Secretary of State had to seek undertakings. I am glad to say, once again, that the Government accepted that such a situation was, in my language, plain crazy and in the Report stage in another place they again amended the Bill to have a power to seek undertakings jointly shared between the Secretary of State and the Minister of Agriculture.
I hope that I have shown your Lordships the moral of my story. I would call it a bureaucratic fairy tale. Unfortunately, it is a true comedy of errors which, in fairness, the Government have appreciated and rectified as they spotted the problem. I therefore hope that your Lordships will support this amendment and Amendment No. 6—or this one if I must speak to it alone, although what I am saying applies to both—in order to make sense and to cut bureaucratic and time-wasting clerical time. I am encouraged that the story that I have related shows the Government, by their attitude to the last amendment, to be flexible enough to accept amendments and alterations to improve legislation. I hope that a similar spirit will continue throughout. My Lords, I beg to move.
Lord CLEDWYN of PENRHOS: My Lords, I support all the arguments advanced by the noble Lord, Lord Stanley, and I say again that I am extremely disappointed at the Government. Their obstinacy is even greater than I thought it was. This is a reasonable case. What we are saying is that it is wrong for the agricultural marketing boards to be subjected to two procedures. They are already subject to the procedures of the 1958 Act. This Bill would make them subject to an additional procedure.
From everything that the noble Lord the Minister has said, it appears that there is no great anxiety that the Minister of Agriculture should be brought into this; or should, at least, be brought into it as little as possible. The attitude of the Government throughout has been that there is something out of place in the operations of the agricultural marketing boards.
When the point was made in Committee when we last debated this matter, I asked whether there was any evidence to support the conclusion that the agricultural marketing boards should be subjected to these additional procedures. The Minister, in his reply, said that there was no evidence, but he asked me whether there was evidence to the contrary. This introduces a very alien doctrine to this House—the European doctrine that the defendant is guilty before he is proved innocent—and it is on that basis that the Minister is now making his case.
I am bound to refer to the short speech made by the noble Lord, Lord Robbins. I was surprised at it, because I have always had great respect for him and for his fairness in argument. But at the very end of the short debate, he quoted some words and said that the Ministry of Agriculture was, in fact, a little bit of a racket. That was the case of the noble Lord, Lord Robbins. He diminishes considerably in my eyes if that is the way he seeks to prove the case. I am not aware that the Ministry of Agriculture is a little hit of a racket, nor, I hope, is any Member of this House on either side; nor are the agricultural marketing boards a little bit of a racket.
This country owes a great debt of gratitude to the agricultural marketing boards and, not least, to the Milk Marketing

21
Board. A good deal of rubbish has been spoken about the Milk Marketing Board being a monopoly of some kind or other. The fact is that of all the boards, organisations, companies or firms in this country, it is the only one, to my knowledge, that has kept the level of prices down to a reasonable figure, contrary to every other commodity that I am aware of. I repeat what I said earlier, that the debt of this country arid of Parliament to the agricultural marketing bards is very substantial indeed. Therefore, I strongly advise the House that it should not subject the agricultural marketing boards to this additional machinery. It is unnecessary, there is no case for it, and the Government have not made a case. They have not produced one tittle of evidence to support their argument. If the House is honest it will vote against the Government on this amendment.
Lord ROBBINS: My Lords, I deeply regret that I have lowered myself in respect of the noble Lord, Lord Cledwyn. I do not intend to say anything in my defence, save to point out that some of the deepest problems with which the world economy and the European economy are now confronted flow from the extravagant petting given to agriculture. I speak, and I am proud to do so, as the son of a farmer.
Lord CLEDWYN of PENRHOS: My Lords, with the leave of the House, I wish to point out that the noble Lord, Lord Robbins, is being grossly unfair. By implication, he has condemned British agriculture because of the faults of European agriculture. The fact is that, compared with European agriculture, British agriculture, of which he is representative as the son of a farmer, has performed magnificently in the last 25 years. Indeed, from the point of view of production, productivity and efficiency, it has performed superbly compared with any other British industry. I must take the noble Lord to task in the unfair advantage he has taken in what he knows to be an illogical argument.
Lord PEART: My Lords, I strongly support my noble friend Lord Cledwyn. I am surprised that the agricultural boards should be challenged as they have been. I go back, in theory, to the days of Dr. Addison.
Lord TREFGARNE: My Lords, what is the noble Lord debating?
Lord PEART: My Lords, I ask the noble Lord, Lord Trefgarne, not to worry. I know that his father was once a Socialist Member of this House, but that is another matter. I am making the point that my noble friend Lord Cledwyn has made a reasonable and sensible case
The Milk Marketing Boards of this country are the admiration of farmers throughout the world, including Europe. Therefore, let there not be any challenge in a bitter sense. I was surprised that the noble Lord, Lord Robbins, who normally is so objective, should have spoken as he did. Agriculture owes so much to the marketing structure, and I hope that it will always be strengthened.
Lord MOTTISTONE: My Lords, perhaps we may come back to the general picture rather than to the pure farming picture. The main point relates to fairness to all. We are in the competition business. As the Milk Marketing Board is a trader, it competes with other traders. We are asking for the same system for all. I shall not redeploy my other argument. All I shall say is that I am sad that the Government shot my fox on the last occasion—and at the end of the hunting season, too.
Lord TREFGARNE: My Lords, the effect of this amendment is to give the relevant Minister the right to veto an investigation on his own initiative and, by implication, regardless of the views of the Secretary of State for Trade. The doctrine of collective ministerial responsibility renders this amendment not only unnecessary, but thoroughly objectionable. This point emerges strongly from this amendment. We have one Government —not a Government for agriculture, a Government for industry and a Government for the consumers. The implication of the amendment is to enable one Minister to exercise a power of veto where another Minister would not be prepared to exercise that power.
Therefore. I very much hope that my noble friend will say that he does not wish to cast doubt on the principle of ministerial responsibility, which I am sure lie both understands and accepts. If he does not do so, the only arguments in

23
favour of this amendment relate to administrative convenience. I assure your Lordships that from that point of view the Government are satisfied that Clause 15. as it stands, fulfils this purpose.
The Earl of CAITHNESS: My Lords, I am grateful to my noble friend Lord Trefgarne, because I appreciate that there is collective responsibility. On the other hand, I do not think it is the job of the Secretary of State for Trade to he totally au fait with the agricultural global package.
Lord TREFGARNE: My Lords, may I ask the House to allow me to ask my noble friend whether the Minister of Agriculture is wholly au fait, as my noble friend puts it, with the principles of competition and fair trading?
The Earl of CAITHNESS: I think with the help of his right honourable friend the Secretary of State for Trade, yes; and I am sure that he is in his own right, too. I think that in this case the Minister of Agriculture should be given the right to say: No. this is the wrong Act under which to make any investigation or reference to the Monopolies and Mergers Commission. The right Act is the 1958 Act because it is more comprehensive and covers the extra points with which I wish to deal. If that power is not given to the Minister of Agriculture, there could be great duplication of work, and perhaps the wrong type of investigation when the time comes.
However, as the Government were so kind on our first amendment, perhaps we can he equally kind to them on this one in the hope that they will be kind to us on our third one. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.36 p.m.
Lord STANLEY of ALDER LEY Lord STANLEY of ALDER LEY moved Amendment No. 6:
Page 21, line 42, at end insert—
(" ( ) The Secretary of State shall not make a reference to the Commission under section 11(1) above of any question relating to a person falling within section 11(3)(d) above nor vary such a reference under section 11(6) above except acting jointly with the relevant Minister.").
The noble Lord said: My Lords, I am afraid that we got rather out of schedule because of the trick played by the Government in not nominating tellers on the previous amendment that came up for Division. However, it seems that we are now three-all and doing rather better than the team which I suspect the noble Lord, Lord Cledwyn, and I supported on Saturday. The main purpose of this amendment is to cut out unnecessary and wasteful bureaucracy between Government departments. The simplest solution would have been to remove boards from Clause 11, but the Government, for reasons unknown, would not accept such a solution. I am afraid that this amendment is a compromise.
The effect of the amendment would be that before an agricultural marketing board was referred to the Monopolies and Mergers Commission, it would be necessary for both the Secretary of State for Trade and the Minister of Agriculture to take such action jointly. This would mean no unnecessary duplication of research by either the Department of Trade or the Ministry of Agriculture. It would make possible an early decision on whether the agricultural marketing boards should be investigated under the Bill or under the Agricultural Marketing Act. Therefore, it would involve only one Ministry instead of two departments doing their own thing, completely oblivious of what the other was doing. There is exactly similar wording on joint action in the Fair Trading Act. Far be it from me to try to improve on the wording of a Conservative Act of Parliament.
Finally, I wish to adopt the point made in a leader in the Daily Telegraph on Saturday, a newspaper which my family does not normally allow me to read. It made the point that the great problem facing the Government was to eliminate unnecessary bureaucracy. Here is a start, albeit a small one, that might save some time and money—or is it just the private sector and industry which have to contract and not central Government?
Lord CLEDWYN of PENRHOS: My Lords, I support the noble Lord, Lord Stanley, in the reasonable case he has made. I do not think I have ever been in a position of losing such a good case as in

25
respect of this matter. The case for the agricultural marketing boards and against the Government's action under the Bill is overwhelming. It is a great tragedy that the Government have seen fit to persist in their obduracy up to this very last point in this legislation. I feel that on this amendment I stand in the last ditch, to coin an agricultural phrase. Here I propose to stand without retreating any further, but I hope that the Government will see reason. If the Government do not concede this point, it will mean that the agricultural marketing boards will be subject to the 1958 Act and its machinery, which was set up by a Conservative Government in 1958. It is their machinery that we are by implication criticising by introducing this provision. A reference to the Monopolies and Mergers Commission, on top of that, would be highly unsatisfactory and something which should be resisted at all costs.
Lord DRUMALBYN: My Lords, as one who had something to do with agriculture in Scotland at the time the marketing boards were being set up, may I say a word about this. Nobody impugns the good intentions of marketing boards; they are given, by and large, responsibilities and they carry them out very well. But people become accustomed to certain types of organisation and certain practices and they go on with them after they have ceased to have the effect that they were designed to have. In other words, they have become outdated. This can more often be perceived from outside the organisation than from within it. It is for this reason that it is a good thing that the Secretary of State should have the power to have these practices investigated at a given point. It may not always be right, for example, to fine people for growing more potatoes than they are allowed. That is a very restrictive practice and it is one which it might be quite proper at a certain stage for the Government to look into.
I do not in the slightest mind this amendment, provided that it means only that the agriculture Minister should be aware of what is happening. if he disagrees, obviously the matter will go to the Cabinet and the Cabinet will decide. Then the agriculture Minister, if he loses in the Cabinet, jolly well has to agree, and that will be done jointly. If it works
26
like this—fine. But if, as my noble friend said, it means that the agriculture Minister is going to have a veto, then I would not agree with it at all. At that stage I will leave it to my noble friend to explain.
Lord TREFGARNE: My Lords, I have already deployed broadly the same argument for the last two amendments and will now proceed further along the same line in connection with this amendment. If noble Lords think that this Government or their predecessor would not follow the principle of collective ministerial responsibility in respect of agricultural marketing boards, I must ask them to consider the implications of these doubts. If collective ministerial responsibility does not operate as it should, then the Government would have to revise wholesale the legislation which they administer to ensure that every Minister who has a legitimate and direct interest in a particular problem is entitled to be consulted or to act separately or jointly with the Minister who has the prime responsibility.
Let me give an example. The agricultural marketing legislation contains provisions for the protection of consumers, but it makes no provision for the Minister with general responsibility for consumer affairs to be consulted, let alone to exercise independent powers in relation to marketing boards. I do not hear the noble Lords moving the amendment clamouring for the Agricultural Marketing Act to be amended to allow this. Indeed, I must make it clear that I do not think it should be, because I believe in collective ministerial responsibility and co-operation. I am satisfied that where the interests of other Ministers are directly affected, this system will operate to ensure that their views are sought and that a decision acceptable to the Government as a whole is arrived at. I hope that my noble friend will not press his amendment.
The Earl of CAITHNESS: My Lords, may I ask my noble friend why it was that in the Fair Trading Act the words"joint action"were inserted and not just the word"consultation "? If the reasons that he has just given to us apply now, surely they applied then. If a matter is raised under the Fair Trading Act, joint

27
action has to he taken. I can foresee that there will be arguments as to whether it should come under that Act—joint action where the Minister of Agriculture puts his name to the same bit of paper—or under this one where it is only the Secretary of State. Perhaps my noble friend could answer that question.
Lord TREFGARNE: My Lords, I think I did answer my noble friend—I am speaking, I hope, with the leave of the House—when I spoke to an earlier amendment. The circumstances are not quite the same. Probably I had better rest my case on that. The circumstances are indeed different because the point at which the consultation takes place under the Agricultural Marketing Act is different.
Lord CLEDWYN of PENRHOS: My Lords, before the noble Lord sits down, may I put a final question to him which I think will assist the House in coming to a conclusion? If the 1958 Act is as unsatisfactory as he now seems to imply that it is, why has it taken 22 years for the noble Lord and his Government to decide to introduce these new additional measures?
Lord MOTTISTONE: My Lords, I intervene only briefly, because I have said it before. What we want is equal treatment for all. Why should there by anything special for the farmers? The 1958 Act is 22 years old. Maybe it is a bit old. That seems to me to he the answer.
Lord CLEDWYN of PEN RHOS: My Lords, with respect, the answer to that is that the other companies——
Several noble Lords: Order, order!
Lord DENHAM: My Lords, we are getting a little bit out of order. There is a very firm rule that no noble Lord may speak more than once at any stage other than at the Committee stage unless he is asking a question of my noble friend before he sits down.
Lord CLEDWYN of PENRHOS: My Lords, I am obliged to the noble Lord for his assistance. Before he sits down, will the noble Lord, Lord Mottistone, agree that the other companies, boards and
28
organisations to which he refers are not subject to the provisions of the 1958 Act?
Lord TREFGARNE: My Lords, if the noble Lord, Lord Cledwyn of Penrhos, would like me to answer that point—why we have not done it for 22 years—the answer is that this Bill is to promote competition and to regulate anti-competitive practices which are found to be against the public interest. I could ask the noble Lord why his Government did not bring it in.
Lord STANLEY of ALDERLEY: My Lords, as I moved the amendment, I think I am in order to finish it. My noble friend Lord Drumalbyn pointed out that outside organisations should look at our affairs, if one calls the agricultural marketing boards my affairs. May I ask him to look very carefully at what the committees of investigation or at what the consumers' associations on those boards do. When he has a chance to do so, perhaps he will look at them. They are very powerful bodies; certainly they arc not puppets. Therefore, I think that we are getting outside organisations to look at our affairs.
The other point I want to make is that we are not asking that the Minister of Agriculture should have a veto. I accept entirely that, at the end of the day, if there are comings and goings, it will be a Cabinet responsibility or a ministerial responsibility. What I am trying to do by moving this amendment is to stop all the palaver beforehand. Obviously when something comes up for investigation or for any action to be taken it does not go straight to the Minister; it goes to somebody much further on. If they know that, at the end of the day, this is there, the whole process will be simplified. I am afraid that on this occasion I cannot accept the Government's answer. I shall have to follow my little parable and try to"convert the try"which my noble friend started earlier on. My Lords, I beg to move.
3.50 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 70; Not-Contents, 77.

CONTENTS

Airedale, L.

Foot, L.

Noel-Baker, L.

Airey of Abingdon, B.

Gaitskell, B.

Oram, L.

Amherst, E.

Glasgow, E.

Peart, L.

Aylestone, L.

Gordon-Walker, L.

Ponsonby of Shulbrede, L.

Balogh, L.

Goronwy-Roberts, L.

Ritchie-Calder, L.

Banks, L.

Granville of Eye, L.

Sainsbury, L.

Barrington, V.

Hampton, L.

Seear, B.

Birk,B.

Harris of Greenwich, L.

Segal, L.

Blyton, L.

Hatch of Lusby, L.

Sempill, Ly.

Boothby, L.

Henderson, L.

Sharpies, B.

Boston of Faversham, L.

Henley, L.

Shinwell, L.

Brockway, L.

Houghton of Sowerby, L.

Stamp, L.

Bruce of Donington, L.

Hylton-Foster, B.

Stanley of Alderley, L.

Byers, L.

Janner, L.

[Teller.]

Caithness, E.

Kennet, L.

Stedman, B.

Cledwyn of Penrhos, L.

Kilmarnock, L.

Stone, L.

[Teller.]

Kirkhill, L.

Strabolgi, L.

Collison, L.

Leatherland, L.

Strauss, L.

Craigavon, V.

Lindsey and Abingdon, E.

Taylor of Mansfield, L.

Crook, L.

Listowel, E.

Wallace of Coslany, L.

David, B.

Llewelyn-Davies of Hastoe, B.

Wedderburn of Charlton, L.

Davies of Penrhys, L.

Lloyd of Kilgerran, L.

Wells-Pestell, L.

De Freyne, L.

Lovell-Davis, L.

Wigoder, L.

Elwyn-Jones, L.

Mishcon, L.

Wynne-Jones, L.

NOT-CONTENTS

Adeane, L.

Effingham, E.

McFadzean, L.

Alexander of Tunis, E.

Emmet of Amberley, B.

Mancroft, L.

Allerton, L.

Energlyn, L.

Margadale, L.

Alport, L.

Exeter, M.

Merrivale, L.

Ampthill, L.

Ferrers, E.

Morris, L.

Auckland, L.

Fulton, L.

Mottistone, L.

Avon, E.

Gainford, L.

Mowbray and Stourton, L.

Balfour of Inchrye, L.

Galloway, E.

Newall, L.

Barnby, L.

Gisborough, L.

Norfolk, D.

Bellwin, L.

Gowrie, E.

Nugent of Guildford, L.

Belstead, L.

Grimston of Westbury, L.

Redmayne, L.

Bessborough, E.

Grimthorpe, L.

Renton, L.

Birdwood, L.

Hailsham of Staint Marylebone,

Robbins, L.

Caccia, L.

L. (L. Chancellor.)

Roberthall, L.

Campbell of Croy, L.

Halsbury, E.

St. Davids, V.

Carrington, L. (A Principal

Han worth, V.

St. Just, L.

Secretary of Stale.)

Hives, L.

Sandford, L.

Clancarty, E.

Hornsby-Smith, B.

Sandys, L.[Teller.]

Clvvyd, L.

Ilchester, E.

Smith, L.

Cottesloe, L.

Kinloss, Ly.

Spens, L.

Cullen of Ashbourne, L.

Kinnaird, L.

Trefgarne, L.

Daventry, V.

Lloyd, L.

Trenchard, V.

Davidson, V.

Long, V.

Trumpington, B.

de Clifford, L.

Loudoun, C.

Vickers, B.

Denham, L. [Teller.]

Lucas of Chilworth, L.

Vivian, L.

Derwent, L.

Lyell, L.

Waldegrave, E.

Drumalbyn, L.

Resolved in the negative, and amend-merit disagreed to accordingly.
3.58 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 7:
Page 22, line 8, leave out (" in ") and insert (" for ").
The noble Lord said: My Lords, this amendment is consequential upon an earlier amendment. I beg to move.
On Question, amendment agreed to.
Clause 26 [Suspension of declarations under Section 1(3) of Restrictive Trade Practices Act 1976 pending revision of agreements]:
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 8:
Page 28, line 7, after (" after ") insert (" which ").
The noble Lord said: My Lords, the purpose of this minor technical amendment is to amend Clause 11(4)(b) of the Bill so that the relevant department described there

31
is the Department of Agriculture for Northern Ireland. I beg to move.
On Question, amendment agreed to.
Clause 30 [Exemption of copyright agreements from Restrictive Trade Practices Acts]:
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 9:
Page 31, line 18, after (" subsists ") insert (" or will subsist ").
The noble Lord said: My Lords, this amendment is, I hope, uncontentious. It renders Clause 26(4) of the Bill as drafted grammatically correct and ensures that the clause has the meaning that it was intended to have. The amendment does not affect the intended operation of the clause. I beg to move.
On Question, amendment agreed to.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 10:
Page 31, line 27. after ("subsists ") insert ("or will subsist ").
The noble Lord said: My Lords, with your Lordships' permission, I will speak to Amendments Nos. 10, 11 and 12 together.
Lord AIREDALE: My Lords, the noble Lord is one out.
Lord TREFGARNE: My Lords, I have got my numbering out of order. I apologise for this disorganisation, which is due to the printing difficulties we suffered this morning with regard to the Marshalled List. Amendments Nos. 10 and 11 are clearly consequential on Amendment No. 9. They are technical amendments. It is intended that Clause 30 of the Bill should confer exemption from the restrictive practices legislation on all agreements relating solely to copyright whether such agreements relate to existing works or works yet to be be produced. I am advised that there is some doubt whether paragraph (2) of paragraph 5A actually achieves this object. The amendment is designed to remove that uncertainty. I beg to move.
Lord PONSONBY of SHULBREDE: My Lords, these three amendments are
32
uncontentious, and I am glad that the noble Lord has removed any ambiguity that may surround them.
On Question, amendment agreed to.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 11:
Page 31, line 45, after (" subsists ") insert (` or will subsist ").
On Question, amendment agreed to.
Clause 33 [Short-title, interpretation, repeals, commencement and extent]:
4.2 p.m.
Lord AIREDALE Lord AIREDALE moved Amendment No. 12:
Page 32, line 35, after (" provides ") insert (— and subject to section 23 of this Act ").
The noble Lord said: My Lords, Clause 33 is the interpretation clause and it operates by reference to the interpretation sections of two earlier Acts. It says, among other things, that if you want to know the meaning of the"supply of services ", you are to look at Section 137 of the Fair Trading Act 1973. But what it omits to say is that that definition of"supply of services"has already been amended by Clause 23 of this Bill.
The purpose of this amendment is to insert a signpost to warn the reader that this is so. When I moved a similar amendment on Report I was told that the amendment was not strictly necessary, and I agree with that in the sense that without it the clause is not defective. But this Bill, like many Acts of Parliament, is full of useful signposts. Take, for instance, subsection (6) of Clause 12, which refers to four different sections of an earlier Act, and after each reference it gives in brackets an explanation of what each section referred to is about. The draftsman could have said:"I am not going to clutter my subsection with a lot of descriptive matter about sections of earlier Acts; people can look that up for themselves ". But Parliament says:"Let the Statutes be readily intelligible and let signposts be inserted where they are useful to the reader ". This signpost, warning people about this definition having been amended by an earlier clause of the Bill, is in my submission a useful signpost, bearing in mind that people do not read Acts of Parliament from begin-

33
ning to end; they dart about among the sections, and it is very easy to fail to remember what an earlier section said when you are reading the interpretation section at the end. The Government did not see fit to accept one single Opposition amendment, either in Committee or on Report, and there were a great many of them. This is their last chance. I beg to move.
Lord TREFGARNE: My Lords, once again I want to assure the noble Lord that the Government sympathise with his aim of improving the clarity and intelligibility of legislation. We recognise that the amendment is intended to help the layman, and even perhaps the practising lawyer, to avoid pitfalls in the interpretation of the Bill. I hope, therefore, that the noble Lord will accept that we are not just being obstinate if we see difficulties in his proposal. As he said, his amendment is a slight variant on the earlier version that he put forward at an earlier stage. I am afraid the change is not for the better. The new wording of the amendment implies that Clause 23 of the Bill qualifies the application of Section 137 of the Fair Trading Act. This is misleading, since Clause 23 in fact makes a textual amendment to that section which applies without qualification. The noble Lord's original wording was actually better.
I turn to the main point at issue. Our problem is that we must be concerned
not only with the immediate effect of the amendment on the intelligibility of a particular provision, but also with its effect on the interpretation of the Bill as a whole. Ultimately, what matters is the interpretation of the Bill when enacted by the courts. The courts will not read our debates; they will read the Act itself. If they find that the Act gives a different treatment to points which might be expected to receive identical treatment, they may well read a quite unintended significance into the distinction.
In this case there is a general rule in the Interpretation Act 1978 that any reference to an earlier enactment is to be taken to be a reference to that enactment as amended by subsequent legislation, including the legislation in which the reference itself appears. This general rule applies unless there is some indication of a contrary intention. As the noble Lord said, the Interpretation Act does not
34
prevent the use of cross references of the kind contained in his amendment. It merely makes them unnecessary. But we have to consider the implication of a departure from the general rule. If in this one provision we explicitly point out that we are referring to an enactment in its amended form, this might be taken by the courts as an indication that in other cases, where we make no such explicit cross references, we intend to refer to the enactment in its unamended form. I cannot say whether it is likely that a court would take this interpretation, but we cannot be sure that they would not; we do not think it worth taking this risk. I regret, therefore, that I must advise the House against accepting the amendment, or perhaps the noble Lord will not press it.
Lord AIREDALE: My Lords, I am most grateful to the Minister for having taken a great deal of trouble over this. I shall have great pleasure in studying in Hansard what he has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
In the Title:
4.9 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 13:
Line 5, leave out (" bodies corporate ") and insert (" persons ").
The noble Lord said: My Lords, this amendment is consequential upon Amendment No. 3, which I inadvertently moved as Amendment No. 4. In the Long Title it reflects the effect of Amendment No. 15 made on Report, which substituted"persons for"body corporate"in Clause 11(3)(b), thus bringing partnerships and sole traders within the scope of investigations under that part of the Bill. My Lords, I beg to move.
On Question, amendment agreed to.
4.10 p.m.
Lord TREFGARNE: My Lords, I beg to move that the Bill do now pass. May I just make one observation. I do not wish to go again into the detailed provisions of the Bill. With regard to the Price Commission, there is one point which should be placed on record: the Government are aware that some disquiet

35
has been expressed about the continuing confidentiality of records still in the hands of the Price Commission. When the Commission is abolished all its remaining files will become the property of the Secretary of State. They will not be available for public inspection until 30 years have elapsed, in accordance with the provisions of the Public Records Acts. During that period it is not the intention of my right honourable friend the Secretary of State for Trade to allow the material to be made available to the public or to the Office of Fair Trading; nor is it his department's intention to requisition any of these files for its own use or to let other departments requisition them. If, exceptionally, these arrangements need to be modified, the CBI will be consulted beforehand. I trust that that explanation will set at rest any fears which have been raised on this subject. I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.— (Lord Trefgarne.)
Lord BARN BY: My Lords, the Bill will doubtless receive the agreement of the House. I should like to raise a matter with the Minister and if he cannot answer today perhaps he will be good enough to write to me. I should like to know at what stage in the previous progress of the Bill the following point, which I am informed is not now included in the Bill, was raised. I am referring to a matter which affects every shareholder in every public company that publicly reports its figures. It is within the knowledge of all of your Lordships that there is not infrequently reference in percentage figures to the performance of the year reported on by comparison with the previous year. Often those percentages are in low figures. It is obvious that, in times of high inflation and the debasement of the currency, such low figures mislead the shareholders. Indeed, there are many shareholders who are relatively ignorant of the arrangements with regard to public company accounting, in spite of the fact that there must have been many references in the course of the Bill to revision of accountancy practice. If a shareholder sees a 4 per cent. or a 6 per cent. increase in a period of 18 per cent. inflation, and a debasement of the currency to that degree, it is obvious that what appears to be an
36
improvement is, in fact, a deterioration of the conditions of the company. I claim that that is misleading to all shareholders. I am perplexed about the point at which that matter was raised and rejected in the course of the Bill.
Lord WALLACE of COSLANY: My Lords, I have a sad duty to perform because I have to scatter a handful of earth on the coffin of price control. The Bill not only abolishes the Price Commission, but effectively removes from the Secretary of State and the Government any responsibility for price control. Only under extreme conditions can the Secretary of State give directions for a price increase to be investigated.
The relevant clause, Clause 13, is so tightly drawn that the possibility of the Secretary of State giving a direction is remote. Like a group of political Pontius Pilates the Government wash their hands of responsibility, although by their own financial policies they have helped almost to double inflation in 10 months.
It is particularly to be regretted that, although during the passage of the Bill we have had soothing bromides from Ministers, no specific reference is made in the Bill to the right of consumers or approved consumer organisations to make representations on prices or anti-competitive practices to the Secretary of State or the Director General of Fair Trading.
Great faith in the virtue of competition is displayed by the Government in this Bill. Competition, I agree, can reduce prices in a situation of reasonable supply. Competition, on the other hand, increases prices in a situation of short supply. Therefore, there is not a complete answer. The growth of supermarkets and hypermarkets is already creating difficulty and will spell doom to the small trader facing, as he does, high interest rates and increased rates and rents. I see little help or hope for the small trader ill the Bill.
Today inflation is near 20 per cent. and prices are still rising. Many wage settlements are near or above 20 per cent., are still rising and may get higher. Due to high interest rates bank profits are enormous and unemployment is rising. Sooner or later the Government must have an incomes, prices and profits policy—not to do so will provoke economic disaster.

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This little Bill, which I accept is commendable in parts, will do nothing to ease the serious situation facing Britain today.
Lord MOTTISTONE: My Lords, I am sure that all those companies who were investigated by the Price Commission will be very pleased to have heard what my noble friend had to say about the very rigorous security that will be applied to the records of the Price Commission. I note also, and with pleasure, that any reason for changing that arrangement will be relayed to the CBI at the appropriate stage.
Perhaps my noble friends will allow me to talk to my noble friend on the Front Bench because I wish to ask him a question. I noticed that when my noble friend told us who would not be allowed to see the records of the Price Commisson he mentioned the Director General of Fair Trading—and that, of course, we welcome —but he did not mention the Monopolies and Mergers Commission. Will the records of the Price Commission be kept from them? If my noble friend does not know at this stage, perhaps he could write to me and we shall get the matter on to the record somehow, perhaps through a Question. This is quite an important point. We would prefer—and I make this point seriously and authoritatively—that the Civil Service should not see the records of the Price Commission, though I think that that is probably asking a little too much under the existing legislation. However, they are records which deserve to be buried as swiftly as possible.
Lord TREFGARNE: My Lords, I can assure my noble friend Lord Mottistone that the records of the Price Commission will be equally as unavailable to the MMC as they will be to the Director General of Fair Trading, except, of course, in accordance with the provisions which I mentioned. I hope that your Lordships will now agree that the Bill should pass.
On Question, Bill passed, and returned to the Commons.

DIN NERS
Lord DENHAM: My Lords, it was agreed through the usual channels that, as the House will probably not sit unduly late tonight, dinners should not be
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available. In accordance with the usual practice I did not make a statement about that negative decision. But it has been represented to me since that there has been a certain amount of confusion among your Lordships as to what services will be provided tonight. So I thought that I would just make it clear that there will be no dinners available in the dining room, although, of course, the grill room will be operating.

NATIONAL HERITAGE BILL
4.19 p.m.
Bill read 3a;with the amendments.
Clause 1 [Establishment of National Heritage Memorial Fund]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 1:
Page 1, line 8, leave out (" hereinafter referred to as the"Heritage Fund"").
The noble Lord said: My Lords, I beg to move Amendment No. 1. There are two separate loose ends to tie up as a result of the amendment moved to Clause 1(1) on Report. The first concerns the way in which we refer to the fund in the Bill. As regards that matter I should like to speak to my Amendment No. 1; and Amendments Nos. 2, 5 and 7 to 15 and 17 and 18 by my noble friend Lord Reigate. The second matter concerns the corporate name of the trustees. As regards that matter, I should like to speak to my Amendments Nos. 4 and 16 and Amendment No. 3 tabled by my noble friend Lord Reigate. I apologise to your Lordships for bringing up these points at this stage, but we are dealing with a very complicated piece of drafting which was tabled as a starred amendment, which our legal advisers had little opportunity to study before the debate; and one of the purposes of Third Reading is to get this sort of matter put right.
The statement, which is embodied in Clause 1(1) as amended, which says that the fund is referred to in the Bill as the"Heritage Fund ", is incorrect. My noble friend Lord Reigate seeks to cure this blemish by adding the word"Heritage"before"fund"wherever the word"fund"appears. The alternative is to dispense,

39
as we suggest in our amendment, with the words"hereinafter referred to as the Heritage Fund ". We think our amendment is the more elegant and economical. We lose the benefit of having a shorter name for the fund on the face of the statute, but I should stress, however, that the Bill provides only that this shorter name is for use in the Bill itself.
I am not sure how much of a loss that would be. There are other examples of bodies in the arts world whose formal names are shortened in common parlance. For instance, the Arts Council of Great Britain, as it is described in its charter, is always known in ordinary discourse as the Arts Council; and the Hall of the Arts and Science is always known as the Royal Albert Hall, or even the Albert Hall. Do we really need to legislate for ordinary discourse?
There is a further small problem if we follow my noble friend's amendments. If we leave in the statement that my Amendment No. 1 seeks to delete, then, in the next subsection, we have a reference to the fund which is in strictness a reference to the name of the trustees. I will come back to this point later, but it leaves an ambiguity in the Bill which it would be desirable to get rid of.
If we wanted to go into this seriously, it would be possible to tackle the matter by means of more drastic redrafting, but I do not think we should attempt that at Third Reading. So far as this point is concerned, it is largely a matter of taste whether our Amendment No. 1 is preferred to my noble friend Lord Reigate's Amendments Nos. 2, 5, 7 to 15, 17 and 18, though his amendments would leave us with this minor logical blemish in the first few lines of the statute.
My Amendments Nos. 4 and 16 and my noble friend's Amendment No. 3 raise a different matter. We are here dealing not with the name of the fund, but with the corporate name of the trustees; the name by which they are to be known. The Bill says quite firmly that the fund is to be known as the National Heritage Memorial Fund, and I put it to your Lordships that it would be decidedly odd to provide that the body corporate of the trustees was to be known by a name different from that by which the Bill provides for the fund itself to be known.
To summarise the position, as regards the name of the trustees, I strongly advise your Lordships to accept Amendments Nos. 4 and 16 standing in my name, and I hope my noble friend will withdraw his Amendment No. 3. As regards the other references to the fund in the Bill, in the light of what I have said, my noble friend may wish to withdraw his other Amendments, Nos. 2 and 5, and 7 to 15, 17 and 18, but if not, as I have said, this is a matter of taste and I am content to abide by the wishes of your Lordships. I beg to move.
Lord REIGATE: My Lords, my noble friend has been kind enough to give me some elucidation of what he was about to say. The issue seems to be a fairly simple one. I thought that on the Report stage the amendment which I put forward met the sentiments of all sides of the House and provided the fund with what might be termed a convenient, short, corporate name under which it could act and have its being. Afterwards, it was pointed out to me that I had made a technical error in not referring to it as the"Heritage Fund"throughout the Bill, and all my amendments are consequential on the fact that it is clearer to refer to it as the"Heritage Fund ".
My noble friend leaves me in a dilemma, because as I understand it, it would now be illegal for the fund to use the name"Heritage Fund ". Unless it is, in some form, given legal authority by this Bill, it would become simply a nickname. This is what I was initially advised, which is one of the reasons that I have included the reference:"… hereinafter referred to as the"Heritage Fund "
It is a little unfortunate—and I am not sure whose fault it is—that we must have these rather petty arguments on drafting points at this late stage in the Bill. I should like my noble friend to satisfy me as to whether, in fact, the body can usefully operate as the"Heritage Fund ". I raised the rather flippant reference to the telephone operator having to answer the telephone every time it rings with,"National Heritage Memorial Fund ". I am sure that that could be overcome without anything ensuing, but in legal documents and in the publications the fund might have—for instance, its annual report—would it be in order to refer to it as the,"Heritage Fund "? Can my

41
noble friend answer that? I should have thought not. Therefore, I think that this becomes rather important.
However, I am in some difficulty. This is all having to be done in rather a hurry, which I deplore. I should like to have the opinion of the House as a whole as to whether what I might call the"Reigate system"is or is not better than the"Mowbray system ", or should I say correctly the"Mowbray, Segrave and Stourton system "?
Baroness BIRK: My Lords, I also find myself in a dilemma here. Being eminently reasonable, I find that I like parts of the amendments in the name of the noble Lord, Lord Mowbray and Stourton, and parts of the amendments in the name of the noble Lord, Lord Reigate. There have been occasions when I have been very ready to criticise the drafting of officials. We had the Report stage of this Bill last Monday and Tuesday, and at the end of that stage it was not altogether clear quite what had been accepted or what was happening. The feeling or the House at that time was that first and foremost Members wanted what is in the Bill—what it is a memorial for and about.
My feeling was that it should be the"National Heritage Fund ", because that would involve a smaller change than changing it to the"Heritage Fund ", but I do not feel very strongly about that. I take the point made by the noble Lord, Lord Reigate, that it would be possible to use this as a working title. It would be rather heavy going, for instance, if writing paper were headed the"National Heritage Memorial Fund ". 1 wonder whether there is a way in which we can get round this. I take the point about," hereinafter referred to as the Heritage Fund '"and the question of the vesting in trustees—that is a problem. But on page 9 of the Bill I am quite happy for it to be spelt out as it is, that:
" Her Majesty may by Order in Council provide for the transfer to the Trustees ".
I should hate this Bill to be held up any further. Indeed, perhaps one way of tackling this problem could be for a manuscript amendment to be tabled immediately. If the drafting which the noble Lord, Lord Reigate, has attempted to amend is incorrect—and it seems to me that there is some substance in that—
42
and if we go along with the amendment of the noble Lord, Lord Mowbray and Stourton, and call it the"National Heritage Memorial Fund ", would it be possible to insert in the correct place in the Bill:
"…hereinafter known as the Heritage Fund or the National Heritage Fund "?
If it is possible to do that, I have a feeling from what was said last time that it would probably suit us all because the genesis of it is included. We have the spelt-out title where it should be so far as the trustees and the fund are concerned. All we lack is the legal or statutory permission to be able to use a shorter working title for the operation of the fund. I think there that either the"Heritage Fund"or"National Heritage Fund"makes rather more sense once it gets under way and starts working than this rather long title. Whether that is a possibility, I do not know.
Lord ROBBINS: My Lords, in this difficult semantic problem I feel some considerable sympathy with the noble Lord, Lord Mowbray. It seems to me that as regards legal documents and letter headings The National Heritage Memorial Fund"is a suitable title. I cannot believe that in ordinary speech it will be referred to as other than the"Heritage Fund ". But that does not seem to me to matter very much. The important thing is the legal status and the letter headings. As regards the letter headings, on the whole I think that it is rather more important and conveys exactly what your Lordships have wished to be the spirit of the Bill throughout.
Lord MOWBRAY and STOURTON: My Lords, I think the noble Lord, Lord Robbins, has really made the point that I should like to make. The fund is not able to act under its shorter name in legal parlance. It is only a name to refer to it by in the Bill. In fact, it would be a nickname, as my noble friend Lord Reigate said. I do not think there is any matter of great import in this. It is a matter of elegance and neatness. I should like to leave it like that. I should like your Lordships to prefer my Amendment No. 1 to my noble friend's Amendments Nos. 2, 5, 7 to 15, 17 and 18.
On a more important note, I take grave issue over my Amendments Nos. 4 and 16

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to my noble friend's Amendment No. 3. But as regards the first set, I hope your Lordships will take Lord Robbins' advice and my advice, and that my noble friend might see fit in the circumstances not to move his amendments. It is not a matter of grave import. It is just a matter of how we phrase it.
On Question, amendment agreed to.
4.32 p.m.
Lord REIGATE Lord REIGATE moved Amendment No. 2:
Page 1, line 13, after (" the") insert (" Heritage ")
The noble Lord said: My Lords, my noble friend will note that I did not even say"object ", or anything else, on the last amendment, so it will be obvious that I am going to withdraw this amendment. I accept what the noble Lord, Lord Robbins, says. I just think that it is a pity that we have had to do all this in such a hurry. If the draftsmen had been locked up together for a little while they could have produced something that would have satisfied everybody. But there it is, we have reached this stage, and therefore I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 4:
Page 1, line 14, at end insert (" Memorial ").
The noble Lord said: My Lords, this has been spoken to. I beg to move.
On Question, amendment agreed to.
[Amendment No. 5 not moved.]
Clause 2 [Payments in to the Fund]:
4.35 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 6:
Page 2, line 13, leave out (" Ministers ") and insert (" Secretary of State and the Chancellor of the Duchy of Lancaster (in this Act referred to as"the Ministers ") ").
The noble Lord said: My Lords, this is a consequential amendment to the amendment moved on Report by the noble Lord, Lord Reigate, to provide for appointment of the trustees by the
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Crown on the advice of the Prime Minister instead of by the Secretary of State and the Chancellor of the Duchy of Lancaster. We still need this clarification as to who the Ministers are who are referred to in this Bill, and this is the appropriate point to insert it. I beg to move.
Lord REIGATE: My Lords, I find that this is totally illogical and unnecessary. My noble friend will have noticed that Clause 18 says who the Ministers are. It says:
"the Ministers ' means the Secretary of State and the Chancellor of the Duchy of Lancaster ".
I see no reason to put it in at an earlier stage. My noble friend said that this was consequential on my amendment stating that the trustees should be appointed by the Crown on the advice of the Prime Minister. It is nothing of the sort. I fully realise that throughout the text of the Bill"the Ministers"are there, but I satisfied myself that who the Ministers were was stated clearly in Clause 18. Therefore, I see no reason whatsoever for this amendment.
My noble friend may be aware that Clause 18 is what is sometimes known as an interpretation clause. There are plenty of occasions when, for example, the Treasury is referred to, and to find the reason why"the Treasury"means the Chancellor of the Duchy of Lancaster—the Chancellor of the Exchequer (your Lordships will see why I got a little obsessed with the Chancellor of the Duchy of Lancaster), you have to go back, to, I think, 1880. I think it is unnecessary.
Lord RENTON: My Lords, I must"come clean"to your Lordships. After my noble friend Lord Reigate had carried his amendments giving the responsibility for the appointment of the trustees to the Crown on the advice of the Prime Minister, I rose and mentioned that I thought that a consequential amendment might be needed on the lines now proposed, but I agree with my noble friend Lord Reigate that this amendment does not seem to be necessary atfer all. it brings us to the strange position which, so far as I know, is unprecedented, that we shall have in this fairly short Bill two identical definitions of the expression"the Ministers ", as my noble friend Lord Reigate has pointed out. It is unnecessary and it is tauto-

45
logical to have such a situation. Therefore, perhaps my noble friend Lord Mowbray would reconsider whether his amendment really is necessary.
Baroness BIRK: My Lords, I am inclined to agree with the last speakers over this. I can see how the problem has arisen, because in this case the Minister for the Arts is the Chancellor of the Duchy of Lancaster. This is explained in Clause 18, but by spelling out earlier in the Bill the Chancellor of the Duchy of Lancaster, it seems to me that one is building that into a statute. I think that this is rather strange. This is nothing to do with the present incumbent of that office personally, but there is no reason for us to believe that this situation going on in perpetuity, or that it will always be the Chancellor of the Duchy of Lancaster. One day there may be a Secretary of State for the Arts, or it may be decided to rearrange the whole order of Ministers who have responsibility for the Arts and the heritage.
I am a little worried about building it in there at that point when this is not something just for this Parliament; it is something to go on the statute book. I see people in the future looking at this and wondering what it is all about. While they can turn to Cause 18, I should have thought that here it should still be"Ministers "; then one turns to Clause 18 to see what the present position is. I am not convinced by what the noble Lord, Lord Mowbray and Stourton, has said to US.
Lord COTTESLOE: My Lords, if there are two definitions in different parts of the Bill it may be unnecessary but does it do any harm so long as they are identical, which they are?
Lord MOWBRAY and STOURTON: My Lords, my noble friend Lord Cottesloe's last question has me wondering. My noble friend Lord Reigate's amendment to provide:hat the trustees are appointed by the Crown on the advice of the Prime Minister had the effect of deleting from Clause 1(2) the words explaining that the Ministers in the Bill were the Secretary of State and the Chancellor of the Duchy of Lancaster. The amendment reinstates this clarification at the earliest possible moment. It is important to indicate who the Ministers
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are; it is no good having"Ministers"in the Bill without the point being clarified and it is not good practice to rely entirely on an interpretation clause. This is a matter of drafting style and the parliamentary draftsmen have advised us specifically that the Bill should be drafted in this way.
Lord ROBBINS: My Lords, having regard to the existing Ministerial hierarchy and the relationships of the persons concerned, I am inclined to agree with what has been urged by the noble Lord, Lord Mowbray and Stourton, but I would ask the noble Lord, in his other capacity of being mixed up from time to time with the usual channels, whether, in the event of responsibility for the arts departing from the Chancellor of the Duchy of Lancaster, whoever he may be at the time, an alteration could be made in the legal position nullifying this reference in the Bill?
Lord MOWBRAY and STOURTON: My Lords, I do not think there is any intention of nullifying the interests of my right honourable friends the Chancellor of the Duchy or the Secretary of State for the Environment.
Lord ROBBINS: That was not my intention, my Lords. My intention was simply to ask whether, if responsibility for the arts ceased to adhere to the Chancellorship of the Duchy of Lancaster, an amending Bill could be rushed through in order that the rest of the measure should not be illegally orientated.
Lord MOWBRAY and STOURTON: My Lords, I should have said that there is no statutory title"Minister of the Crown with Responsibility for the Arts ". This is merely a factual description of the Ministers who from time to time have that responsibility.
Baroness BIRK: My Lords, unless I have missed it, it seems that nowhere does the Bill say that the Secretary of State referred to is the Secretary of State for the Environment; it simply refers to the Secretary of State, and there are lots of them. Then, in Clause 18, it defines the duties of
" the Chancellor in his capacity as a Minister of the Crown with responsibility for the Arts "

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but, nevertheless, it says that"Minister"means"Secretary of State ". Should it not at some point refer to the Secretary of State for the Environment, if we are going to spell it out?
Lord MOWBRAY and STOURTON: My Lords, I am certain that if one looks at the Bill in its entirety the Secretary of State for the Environment and the Chancellor of the Duchy of Lancaster are spelt out in full, and I am not worried on that point.
Baroness BIRK: My Lords, I do not want to press the noble Lord unnecessarily, but if, as he says, it is spelt out—and I am sorry to be stupid about it—may I ask him to bring to my attention where it is spelt out? I am informed by some of my noble friends that they, too, are unable to find it. I cannot find any reference to the Secretary of State for the Environment.
Lord MOWBRAY and STOURTON: My Lords, a note has just come to my hand saying that it is standard practice not to refer specifically to particular Secretaries of State but to refer to"Secretary of State"at large. That may explain the point the noble Baroness is worrying about.
The DEPUTY SPEAKER (The Earl of Listowel): My Lords, the Question is that this amendment be agreed to. As many as are of that opinion will say"Content "; to the contrary,"Not Content ".
Lord MOWBRAY and STOURTON: Not-Content.
The DEPUTY SPEAKER: I think the"Not Contents"have it.
Lord MOWBRAY and STOURTON: My Lords, could the Question be put again?
The DEPUTY SPEAKER: My Lords, your Lordships have decided that you are Not-Content as regards Amendment No. 6.
Lord MOWBRAY and STOURTON: I am sorry, my Lords; I should have said"Content ".
The DEPUTY SPEAKER: My Lords, from my knowledge of the procedure of
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the House it is not possible to go back on a decision of the House once it has been taken.
Lord MOWBRAY and STOURTON: Perhaps the Question could be put again.
The DEPUTY SPEAKER: As I say, my Lords, my experience of your Lordships' House is that it is not possible to go back on a decision, once taken.
Lord MOWBRAY and STOURTON: My Lords, this is a matter which, I think, is dependent on the wish of the House and I ask the House for its indulgence. It was a very complicated set of amendments to which we were speaking and they were very confused. I would ask the indulgence of noble Lords to allow the Question on the amendment to be put again. Unless anybody specifically objects, I suggest that the Deputy Speaker puts the Question again.
The DEPUTY SPEAKER: If I take that to be the the wish of the House, my Lords, I will do that.
Lord DAVIES of LEEK: Go ahead, put it again.
The DEPUTY SPEAKER: If no member of your Lordships' House objects, I will put the Question again.
On Question, amendment agreed to.
[Amendments Nos. 7 to 15 not moved.]
Clause 14 [Transfer of Ministerial functions]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 16:
Page 9, line 2, leave out (" Heritage ") and insert (" National Heritage Memorial ").
The noble Lord said: My Lords, I have already spoken to this amendment; I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 17 and 18 not moved.]
4.48 p.m.
Lord MOWBRAY and STOURTON: My Lords, I beg to move that this Bill do now pass.

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I think few here will disagree with me when I say that this was a good Bill even when it was first introduced. Since then, of course, it has received thorough consideration in another place and a number of major improvements have been made, not least in the extension of the indemnity proposals in Part III. I would like once again to acknowledge the role played by my honourable friend Mr. Hector Monro in steering this Bill through another place.
Today we near the end of our own consideration of this draft legislation. Your Lordships have also been extremely thorough in your deliberations and, though the Government have not been able to accept all the amendments tabled, I believe you, too, have secured significant improvements. As a result, we now have a Bill which has been tuned very finely to the views of those who are closely concerned with the preservation of our heritage. I must also express the Government's gratitude to your Lordships for your co-operation in helping the Government keep to their rather tight deadline on this Bill. I, too, had to forego my dinner hour on Monday and Tuesday last week, so I am well aware of the sacrifice in which we have all been involved. In particular, I thank the two Front Bench Opposition peers, the noble Lord, Lord Donaldson of Kings-bridge, and the noble Baroness, Lady Birk, to whose work the Bill owes so much.
I should like to take this opportunity to reiterate and stress a number of points which I regard as important and to expand slightly on others which we did not have an appropriate opportunity to discuss fully. First, the new fund, the Heritage Fund, will have enormous advantages over its predecessor, the National Land Fund. Perhaps chief among these will be its independence of government, an independence which has been increased by your Lordships' House through the removal of the clause which required the trustees to obtain Treasury approval for loans. And, of course, unlike Government departments which have responsibility for separate parts of the heritage, the trustees will be dealing with the heritage as a whole. Furthermore, the Government have always been concerned to give the trustees the widest possible
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powers to preserve the heritage, which are consistent with adequate parliamentary control over expenditure. It has always been our intention that the trustees should be able to help, wherever and however they wish, without recourse to long debates over whether they have power to do so. I think we have now succeeded in giving the trustees wide powers in this way.
Having said that, my Lords, I think it is worth stressing again that the Heritage Fund will primarily be a source of assistance to the very wide range of bodies, listed in Clause 3(6), who are concerned with the preservation of the heritage. It will be for these bodies to approach the trustees when they have an item in mind which they wish to acquire, and, for the most part, the trustees will wish to provide only a proportion of the cost of acquisition and preservation. So, it will still be necessary for the acquiring body to shoulder some of the cost, either through its own funds, or by public appeal.
Above all, I think we must recognise that the Fund is a"safety net"to prevent the loss of the most important parts of our heritage. The Government are satisfied that it will have sufficient resources at its disposal to fulfil this role. But it cannot provide, and was not designed to provide, for the vast range of items—land, houses, paintings, manuscripts, and other works of art—which individuals will regard as part of the heritage. Only those items which can be considered outstanding—and it will be left to the trustees themselves to define that term—will be given assistance. This is not to say, of course, that the Government underestimate the importance of the contribution that the new Fund will make to the preservation of the heritage, and we hope that as it becomes established and attracts private funds, this contribution will steadily increase.
I should like now to say a few words about Part II of the Bill, which deals with acceptance in lieu. We believe that the amendments tabled by the Government on the question of keeping items in their historic locations where appropriate arc a major step forward. It does not mean, of course, that all items accepted in satisfaction of tax will automatically be loaned back to their former owners for display in historic houses. That was never

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the intention. But what those amendments have secured, is the clarification of existing legislation. It is now crystal clear, both that items may be considered pre-eminent because of a significant association with a particular historic setting, and that, in appropriate cases, such items should be left in those settings.
Few who have experienced the lack of atmosphere in a country house, bereft of its family heirlooms and furniture, would deny the logic of this policy. As perhaps the first fruits of this new and enlightened attitude I would draw your Lordships' attention to the decision announced by the Treasury to accept, in lieu of tax, some portraits at Arundel. These, whilst becoming the property of the National Portrait Gallery, are to be loaned back for display at Arundel. Since these are portraits of my ancestors and ancestors of my noble cousin the Duke of Norfolk, the decision gives me personally very much pleasure.
Since no opportunity presented itself in Committee or on Report, perhaps I might take this chance to reply briefly to those noble Lords who, on Second Reading, questioned whether reimbursement of the Inland Revenue for property accepted in lieu of tax could properly be regarded as public expenditure. The answer, my Lords, is yes. When a work of art, or other heritage property, is accepted in lieu, the Government are denying themselves the opportunity of deciding to spend in a different way the money which would otherwise have been collected in tax. In effect, they are deciding to spend that money on acquiring pre-eminent properties, in just the same way as I should be doing if one of your Lordships owed me £10 and offered me his watch instead of the cash. The effect on the Public Sector Borrowing Requirement would be the same, whether the Government spent a million pounds, or decided to forego tax revenue of a million pounds.
Resources devoted to acceptance in lieu should be subject to the same controls as apply to other forms of Government spending. The present arrangements, and those which will apply after the provision of Clause 8 comes into effect, ensure that this is done in conformity with the general principles of parliamentary and Government accounting and expenditure control. I accept that this procedure is not a simple
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matter to grasp, but I am not persuaded that a system of notional credits, as my noble friend Lord Vaizey suggested, would be any simpler.
Lastly, I should like to reassure the House once again about Clause 14. As I have explained, this clause is designed to provide flexibility for the future by enabling the Government to transfer responsibility to the trustees of the Heritage Fund without recourse to primary legislation. The Government recognise that there is divided opinion among heritage interests as to whether such a transfer would be a good thing. I can assure your Lordships, and all those concerned with preserving the heritage, that the Government are committed to retaining acceptance in lieu in its present form, save for the need to transfer responsibility to the arts departments. However, if after, say, two years, we find that the revised system is not working satisfactorily, we will have the option of bringing in the trustees. But we would do so only after we had had the fullest consultations with both the historic houses and arts interests.
I believe that one of the most gratifying things about this Bill has been the all-party support it has received; it shows how deeply concerned we as a country are about the preservation of the heritage. This Bill, when enacted, will, I think prove to be the most important piece of legislation in the heritage field since the Second World War, and will form a strong framework on which this, and future Governments, will wish to build. My Lords, I beg to move.
Moved, That the Bill do now pass.—(Lord Mowbray and Stourton.)
4.57 p.m.
Baroness BIRK: My Lords, this is a happy day for the heritage field and for those of us who feel very strongly about it. I find it impossible for my mind not to go back several years to the events at the time of Mentmore, and as we know it was then that there started this whole chapter which has culminated in the Bill receiving its Third Reading and being passed here today; and I hope that it will remain as it is when it goes back to the Commons. If we take our minds back to those years we can recall all the turmoil about Mentmore and the National Land

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Fund, which had to be explained time and time again. Not only did I have to explain it to the House and to heritage bodies outside; it had to be explained to me again and again, rather like a puzzle. I referred to it as a series of Chinese puzzles; it simply was not working at all. Had this new body been in existence at that time—I do not know what descision or recommendation it would have made about Mentmore—we would have had an independent body making a recommendation to the Government, or indeed if funds had permitted, perhaps deciding to buy the property. This body is a tremendous step forward, and the noble Lord was absolutely right when he said—indeed, it was an understatement—that it has enormous advantages over its predecessors.
I was especially delighted by some of the amendments made in your Lordships' Chamber; in particular the one mentioned by the noble Lord, Lord Mowbray and Stourton, regarding the trustees' ability to give loans. I absolutely agree with the noble Lord that the redefinition of preeminent objects is a tremendous step forward. We now have written into statute the more recent procedures which will mean that if an object is pre-eminent it will be subject to a wider interpretation than previously. There is now also the possibility in certain cases of the object remaining in the place where it belongs, and above all, its pre-eminence can depend on its situation, which is extremely important.
I very much hope that Clause 14 will be activated as soon as possible. I think it is a great pity that these functions should not be transferred to the trustees, but I am fairly optimistic about that, and I believe that once the fund begins working and becomes settled down, a number of the worries and anxieties which are probably felt at the moment will disappear, and it will be found that it is better all round to give the trustees more independence, and indeed more responsibility.
I think that its sojourn in this House has been of great benefit to the Bill's health, as has been proved. Although it is based very largely (and I feel very warmly about it, as does my noble friend Lord Donaldson, who unfortunately is unable to be here today) on the White Paper for which I and my department were mainly responsible at the time, I must congratulate the
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Government on getting it into Bill form as quickly as they have and in expediting this legislation. I should also like to thank the noble Lord, Lord Mowbray, for his unfailing courtesy throughout the Bill's proceedings. I think there have been some complications and technicalities about it which have been difficult to sort out. We have probably all got our ideas, even now, of what we should like the Title to be, and how we would like it to be incorporated, but I think we shall have to learn to live with that for the time being, because it is very much more important that this Bill should be on the statute book by 1st April, so that the fund can get to work.
Finally, I think we have to realise and accept that, even with the residue of the National Land Fund topped up by around £5 million a year going into this new fund, this is not going to be a tremendous fortune with which to guard and save our heritage. We shall need, as soon as it is possible, to top this up as much as we possibly can. I join completely in the hope that it will attract more private money. I think the loans part will enable money to be stretched very much further; but I do not think that the fact that this Bill sets up the fund means that anybody should let go of their interests or reduce their pressures for the heritage, because this is something which will need a great deal of care and many more increased resources as time goes on. I only hope that the next time we see this Bill will be at Royal Assent.
5.3 p.m.
Lord REIGATE: My Lords, your Lordships will forgive me if I elect to say a very few words at this stage of the Bill. It has in my view been greatly improved during its journey through this House. It is an admirable Bill. To me, the nub of the Bill is, and always has been, in the independence of the trustees. This, really, in a way, was the mistake of Hugh Dalton, when he first initiated the Land Fund. If there had been trustees then, what happened in 1956 would never have occurred; what has happened since then would not have occurred; and we should have seen this fund a flourishing and established part of the law of the land. I must admit that when I first introduced the National Land Fund Bill, as it was then called, I was deeply moved by the trauma that the noble Baroness, Lady Birk, was suffering on the subject of Mentmore, and

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the difficulties she was in. I thought then, and I still think, that it is impossible for Ministers of the Crown, who are beset by all the current problems of the nation, to be able to take an independent judgment on issues of this sort; and that is what I had in mind.
I think this is an excellent Bill, and I hope (perhaps I might express a word of caution which my noble friend might pass on) that when it goes to another place the other place will be reminded that the genesis of this Bill was here; that then came the Select Committee and the other proceedings; that our opinion on these issues is really of great importance; and that what happens in this House should be given much and real attention.
Lord DAVIES of LEEK: My Lords, as the president of a mining museum, which is one of the first full-scale experiments of its kind in Europe, I should like to say thank you to the Government, and to this House, particularly, for the meticulous care they have taken to try to build this up. The noble Lord, Lord Reigate, and myself were in the other place during the period of office of Hugh Dalton as the Chancellor of the Exchequer and during the introduction of the Land Fund, and if today he happens to be looking over the ramparts of heaven, or maybe somewhere else, I am sure he will be pleased with the congratulations which have been expressed to him and with the sense of independence which has been introduced into this.
Before I sit down, my Lords, our mining museum shows systems of mining from stall and pillar methods right up to modern machinery, and among the 30,000 people who have already gone down in the last nine months there have been people from other parts of Europe, and even the USSR (I do not know whether we are going to put a block on them going down the mines), who have been down. I hope that, ultimtely, an intelligent use of the Heritage Fund may mean that a mining museum can approach it occasionally. Finally, I should like to say thank you to the noble Lord who has guided the Bill through your Lordships' House.
On Question, Bill passed, and returned to the Commons.

PREVENTION OF TERRORISM (TEMPORARY PROVISIONS) ACT 1976 (CONTINUANCE) ORDER 1980
5.6 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead)The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead) rose to move, That the draft order laid before the House on 19th February 1980, be approved. The noble Lord said: My Lords, I beg to move that the draft order laid before the House on 19th February be approved. The purpose of this order is to continue in operation for a further period of 12 months the Prevention of Terrorism (Temporary Provisions) Act 1976, which will lapse, unless renewed, on 25th March.
I should first like to say something about the need for the Act. During 1979 terrorist action led to the loss of public figures, which saddened us all. One consequence was that the Irish National Liberation Army was proscribed throughout the United Kingdom, in Great Britain by my right honourable friend the Home Secretary exercising his powers under this legislation. These losses illustrate more clearly than any statistics the nature of the terrorist. He does not scruple to bomb and shoot the unwary and the unarmed, and does not care if his victims are children or bystanders, or friends and colleagues whom we have known and admired.
These tragedies were not the only examples of terrorist activity by the Provisional IRA or the Irish National Liberation Army. There were letter bombs in Birmingham in June which injured four people, and it is only through good luck and the vigilance of postal workers and those to whom they were addressed that the recipients of the letter bombs posted just before Christmas escaped serious injury. Ten days ago the Irish National Liberation Army admitted its responsibility for the placing of two bombs outside an Army barracks at Netheravon in Wiltshire; and, again, it was only by good fortune that no-one was killed. As it was, two servicemen were injured in the fire which resulted. The brunt of the terrorists' attacks is still of course borne by the security forces in Northern Ireland. Eighteen soldiers were murdered at Warrenpoint on the same day as Lord Mountbatten died. By its very

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scale, that outrage underlines the continuing need for temporary provisions to strengthen the law to prevent acts of terrorism.
I have mentioned these matters because it is the Government's duty, it is Parliament's duty, to protect our citizens against the attacks of terrorists, and this is where I believe that the Prevention of Terrorism legislation, which I am today asking the House to renew for a further year, plays an important part. First of all, there is, as your Lordships know, the power of arrest and detention under the Act. The police can detain a person for up to 48 hours on their own authority, and for a further five days if my right honourable friend agrees. This exceptional power, which has no equivalent in the powers available to the police to deal with crime generally, is necessary because of the nature of the problem with which we are faced.
This period of seven days gives the police time to question the arrested person, to test his or her story, to check fingerprints against those on record from the scenes of terrorist crimes, to discover if there arc any traces of explosives, and to establish identity and record. As a result of this extended period of detention, it may be possible for the police to charge the person concerned. In the past 12 months (between 1st March, 1979 and 29th February this year) 51 people have been charged following detention under the Act. A person who is not charged following detention may be excluded if the Home Secretary is satisfied that the person has been involved in terrorism or is trying to enter the country for the purpose of becoming so involved.
Finally, my Lords, may I turn to report on the use which has been made of the Act during the past year. One of the recommendations made by the noble Lord, Lord Shackleton, in his review of the operation of the Act, was that statistics about its use should be published on a regular basis. Thus, quarterly bulletins are now produced by the Home Office Statistical Department and I think all those concerned about the Act have found these statistics to he of value. In that period (1st March, 1979, to 29th February, 1980), 724 people were arrested and detained under the Act. One hundred and seventy applications for extensions
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of detention were approved and, of these, the vast majority were either excluded or charged. Only one application was refused. My right honourable friend made 54 exclusion orders and refused four applications from the police for exclusion. The Act provides that a person against whom an exclusion order is made may make representations against that order, and that such representations must be referred to an independent adviser appointed under the Act.
In the period in question, 14 made representations against exclusion orders, and these representations were considered by the two advisers who at the present time are my noble friend Lord Alport and Mr. John Newey, Q.C. The Home Secretary is most grateful to both advisers for the very valuable work that they do, and has decided to appoint a third adviser under the Act. The burden of work for advisers has increased during the last year and my right honourable friend has therefore asked the noble Lord, Lord Underhill, if he, too, will take on the responsibility of advising my right honourable friend on some of these cases. I am glad to be able to tell your Lordships that Lord Underhill has agreed to do this. Incidentally, five of those who made representations against their exclusion orders had their orders revoked.
A further recommendation which was made by Lord Shackleton was that there should be a review of exclusion orders. On 18th June last year in another place, my right honourable friend announced that those who indicated a willingness to have their exclusion orders reviewed would have them reviewed three years after their making. Up to 29th February, 83 people were eligible to have their orders reviewed, of whom 23 had indicated a willingness to have them so reviewed. Of these, 12 have been reviewed and, as a result, one order has been revoked. The balance, some 11 cases, are still under consideration. The decision to revoke an order is not an easy one to make; my right honouable friend needs to be satisfied that the person has ended his involvement in terrorist activities and that it would be safe to allow him free access to this country.
My right honourable friend also considered whether to accept Lord Shackle-ton's recommendation that Section 11

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of the Act which makes it an offence to withhold information about terrorism, should be dropped. Thirteen charges have been brought under the section since it was introduced in 1976, and the police believe that it is still of considerable use to them. My right honourable friend has therefore decided that Section 11 should be retained. This means that no changes are proposed in the substance of the Act.
However, my right honourable friend has approved a procedural change which will come into effect on 25th March. At present, the Prevention of Terrorism (Places of Detention) Direction 1976 provides that, prior to removal, a person subject to an exclusion order may be detained in police custody for a maximum of seven days from the time of his arrest. The new direction provides that an excluded person who consents to his removal can be held for a further 24 hours in police custody if arrangements are being made for his removal within that time. This does not affect the total time that a person can be detained; it simply deals with the place in which he is held and will avoid people having to be sent to prison while arrangements for their removal are being made. In recent weeks, we have had the attacks on servicemen in Germany, accompanied by IRA boasts that they will repeat this kind of attack wherever and whenever they can. The time for dispensing with this Act has not yet come, and I ask the House to agree to renew the Act for another year.
Moved, that the draft order laid before the House on 19th February 1980, be approved.—(Lord Belstead.)
5.17 p.m.
Lord BOSTON of FAVERSHAM: My Lords, this order, like the similar one that I happen to have moved from the position of the noble Lord, Lord Belstead, last year, and the Act upon which it is based are distasteful and, indeed, obnoxious measures. They are objectionable because they infringe our civil liberties, but they are also repugnant because of the acts of those who have compelled us to resort to legislation of this kind—cowardly acts of terrorism in which innocent people have been brutally and callously murdered or maimed, fami-
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lies have suffered and property has been destroyed. What we have to do in considering this order is try to form a judgment on whether it is better somewhat to curtail civil liberties and human rights by passing it or to risk still further outrages, loss of life, tragedy for bereaved families, injuries and damage by refusing to pass it.
We last debated a similar order on Thursday, 22nd March last year, the very day on which our Ambassador to the Netherlands, Sir Richard Sykes, was shot dead in The Hague. Little did we know that before the following week was out a murder would have taken place here in the Palace of Westminster, the monstrous murder of Mr Airey Neave on Friday, 30th March. Nor did we know that before the summer was out, as the noble Lord, Lord Belstead, also has reminded us, the horror of the 27th August would have taken place with the murder of Earl Mountbatten of Burma, members of his family and their young friend whilst on holiday in Ireland and, indeed, the other murders to which the noble Lord, Lord Belstead, referred of 18 soldiers at Warren Point in Northern Ireland. And, of course, there have been other tragic happenings over the past year.
My Lords, if we felt unable last March to remove from the armoury of our forces of law and order the powers in this Act which help prevent terrorism becoming worse, it is hard to see how we can possibly deprive them of these powers this March.
I have no hesitation in urging your Lordships to accept this Motion. Even so, it is right that the Minister, Lord Belstead, and his right honourable friend the Home Secretary in another place, should come to Parliament to justify the renewal of these powers. They are, indeed, harsh. I should like to thank the noble Lord for his thorough and comprehensive review of the working of the Act over the past year.
In his report the noble Lord has reminded us that on 3rd July 1979 the Irish National Liberation Army was added to the list of proscribed organisations under powers in Part I of the Act. I have no doubt that that decision was right. The benefits of proscription are always hard to evaluate precisely; but, quite apart from other considerations, in view of the activities (claimed or otherwise) of that particular body over the past

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year, many people would have found it odious not to have made it illegal. It has claimed responsibility, as we know, for a number of murders, including admission of guilt of shootings and bombing attacks in Northern Ireland in which members of the security forces were killed; and indeed the happening here in Westminster.
Proscription is useful in a variety of ways. Not only does it impose a legal bar on recruitment, on seeking publicity and on raising funds, but it should also help—and it is not without importance to stress this point, too—to make it perfectly plain to people outside the United Kingdom what we think of those organisations and of those associated with them: the revulsion and abhorrence with which people here regard them. That is important both because of the way these bodies have become active abroad in terrorism, as the noble Lord has mentioned, and to help to counter fund-raising activities abroad. The increased efforts in the United States to counter fund raising activities there are certainly encouraging.
When we debated the order last March, we also discussed the immensely valuable report of my noble friend Lord Shackleton on his inquiry into the workings of the Acts. My right honourable friend the then Home Secretary, Mr. Rees, and I announced the Government's decisions on the recommendations of my noble friend, and we were able to accept all but two of his recommendations. One of those we felt unable to accept; the other we said that we wanted to look into further. The one which we found ourselves unable to accept was the suggestion that Section 11 of the Act should be dropped. As the noble Lord, Lord Belstead, has explained, this is the one which makes it an offence to withhold information about terrorism. Noble Lords will no doubt recall that this was a section which was introduced as an amendment to the Bill in 1976 in another place as a result of being moved by one of my honourable friends; and, although the then Government did not at first think it was necessary, they were persuaded by the arguments that it was.
Last year we felt that it should be retained, that more time was needed to see how effective it really was, but we said that if the Act was renewed we would look at it again within the following year. I am
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pleased that the present Government took upon themselves the commitment that we had taken on to re-examine this section. The Minister has assured us that that re-examination has taken place, and he has given us the considerations why the Government have felt that it should remain in the Act. I have little doubt that we would have come to the same conclusion on this matter, for the time being at least.
I might just mention this point here. In our debate last year, in reply to a suggestion from the noble Lord, Lord Wigoder, I said that if your Lordships passed last year's order, the then Government might consider reintroducing the Act as a Bill this year. I am wondering whether the present Government gave any thought to that point. I should emphasise in fairness that we gave no absolute commitment but we said that we might consider the matter.
To return to Lord Shackleton's recommendations, apart from the Section 11 proposal, the only other suggestion that he made which has not been implemented is his recommendation that financial assistance should he considered for relatives and friends of excluded persons for the purpose of making visits. He particularly emphasised that exclusion could cause inconvenience and suffering to relatives. I had to admit to having doubts about providing financial help, and felt that it would not be possible to contemplate it for friends of excluded persons. However, we did recognise that the family of an excluded person could suffer hardship; but while help for visits might not be appropriate—partly because of the risk that by providing help for that purpose we might be in danger of encouraging members of the family to act as couriers—we did nevertheless feel that it might be of greater practical value to offer the family some financial help towards their removal costs. They could then join the excluded person in his new home, especially where he was the breadwinner. We announced that we were looking into this to see whether it was feasible.
The present Government also decided to examine this, as we know. I was pleased to see that they decided to do that. Eventually, they rejected the idea. We have, however, not been given any

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detailed explanation of the Government's reasons for turning down this proposal, only the very brief statements which have been made by Lord Belstead's right honourable friend in another place in a Written Answer on 3rd December last year, and again during a debate in another place on this order, saying that he had come to the conclusion that such a scheme could not be justified.
As I have already indicated, we had doubts ourselves about the idea and gave no undertaking to introduce a scheme, but were examining it to see what might be done. It would be helpful to know a little more about the thinking behind the Government's conclusion that it could not be justified. Perhaps I could add that I hope it will not be said that the only reason was simply on economic grounds, because that alone I do not think would meet this particular context. The powers in this Act—and, notably, the powers to exclude a citizen from part of his own country—are acknowledged on all sides to be extremely severe. It was in this context that my noble friend's recommendation had to be seen.
Before leaving my noble friend Lord Shackleton's report, there are two other matters I should like to mention: first, his recommendation that a system should be introduced to review all individual exclusion order cases to see whether any should be revoked once it was safe to do so. That was a recommendation which we accepted, and my right honourable friend and I announced the details of this in another place and here. I think I am right in saying that those details are in fact completely in line with the scheme which the present Government have themselves decided upon and announced. I was very pleased to see that they had decided to honour that commitment which we had entered into. I also welcome what the noble Lord, Lord Belstead, said about advisers and the new appointment that he has just announced.
The only other matter that I should like to raise on my noble friend Lord Shackleton's report concerns the three recommendations aimed at improving the circumstances in which detained people are held in police custody. He noted that police cells were not designed to keep people for seven days, and suggest-
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ed that to relieve the obvious discomfort this caused special attention to be given to diet, exercise and comfort itself. He also said that there should be greater uniformity of practice in notifying detained people of their rights, and he suggested keeping the fullest possible records of interviews with people detained so as to help protect the police against allegations that questioning was in any way unfair, and indeed to reassure the person detained that if he were to make a complaint all the information would be available.
As a result of those recommendations, which we accepted, my right honourable friend decided to issue guidance to chief officers. I wonder whether the Minister can tell us whether any indication is available so far as to how this is working out in practice. The Minister has told your Lordships about the new directive which, if this order is passed, is proposed to come into effect on 25th March, providing that an excluded person may be detained in police custody for an extra 24 hours if arrangements are being made for his removal within that time. This is instead of his having to be removed to prison once the present maximum of seven days' detention in police custody has expired. I wonder whether the Minister will say how extensive this problem actually is. I know, from experience that it can be a great rush. It seems a little surprising that up to an extra 24 hours could make all the difference and I am wondering whether this is an extensive problem.
As we have seen, the violent, brutal, terrorist activities this Act is designed to help to prevent have continued over the past year, with the savage examples we all know about. Perhaps we should note, too, that one of the most disturbing features has been the incidence of attacks on victims on the continent of Europe, particularly in Western Germany. Paradoxically, this may be in part a measure of the success of the use of powers under the Act in making it more difficult for the terrorists to get into this country and to get at the intended victims or targets in this country. I am sure we can be assured that there continues to be the closest co-operation between the authorities in all the countries concerned.
However, the powers in this Act alone could never prevent terrorism here; nor

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was it ever claimed that they could. Indeed, as my noble friend Lord Shackle-ton pointed out in what has come to be regarded as the definitive view of the Act, it is not really possible to measure its effect precisely. As he said, much of its intended effect lies in the deterrent value of its provisions. What I believe is undoubtedly the case is that it has been, and is, a valuable part of the range of powers to counter this threat to life and property. I have no doubt that we have a duty to ensure that the police are provided with the powers necessary to protect civilised society. When one considers the difficulties and dangers the police and our other services face in tackling the threat from uncivilised and inhuman beings who terrorise innocent people, the remarkable thing is that the terrorists have not inflicted much greater harm than they have.
This time last year we were about to embark upon a General Election campaign. Few people, I suspect, thought after the killing of Airey Neave that we would go through that campaign without a whole series of tragedies. I believe it was a great achievement that the campaign passed off so peacefully; and that was due in a large measure to the vigilance of our forces of law and order. I am sure we all join in paying tribute to their courage, not only at that period but at other times. I include in that the Police Service throughout the United Kingdom, the Royal Ulster Constabulary, the Fire Service and other services, the bomb disposal officers and the rest of the security forces. I should like to feel that we could do without this Act, but to help preserve our most precious and basic civil liberties and human rights, the right to live and to live in freedom without fear, I am in absolutely no doubt that for the time being it is essential.
5.33 p.m.
Lord WIGODER: My Lords, may I also pay tribute to the heroism and skill of the Army and the police, both in this country and in Northern Ireland, in combating terrorist outrages. I should like in particular to praise the skill of the police in being able to clear up so many of the offences and in arresting so many of those responsible; for nothing could be easier or more cowardly than to leave an explosive device which is going to kill or
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maim scores of innocent people at a time when the person who has left it there may be hundreds of miles away, and the clearing up of offences on the scale it has been done is a great tribute to the way in which the police have been able to carry out their investigations.
I am also in no doubt that the police have been very much assisted in their successful activities by the terms of this Act. Although there is no question but that some provisions of the Act must offend against our concepts of civil liberties, it would be entirely irresponsible to seek to oppose the renewal of the Act for a further period. Whether all the parts of the Act are of equal use, I am not entirely sure. The power to proscribe, I suspect, is to some extent window-dressing. I doubt very much whether it serves any practical purpose other than to placate public opinion, to some extent.
The power of exclusion, I have no doubt, has proved of very great value. That clearly must be an administrative act: it cannot be a judicial process, and I have no doubt that the Home Secretary, aided by advisers, has done his best to operate that in as fair and wise a way as possible. The power of detention, which has been exercised, we are told, on at least 51 occasions, or which at least has led to the arrest and charging of 51 people in the last 12 months, again I have no doubt at all is entirely justified in present circumstances. Like many of my colleagues at the Bar, I have been involved in various cases in which it has been perfectly clear that people have been charged entirely as a result of the operation of these provisions as to detention.
I am not entirely convinced about the remaining provision, about which there has been some discussion; that is, the provision in Section 11 which makes it an offence to fail to give information about terrorism to the proper authorities. It has always seemed to me just a little unrealistic to expect people, particularly in the circumstances which prevail in Northern Ireland, to find that a duty which is very easy to perform. I know the noble Lord, Lord Belstead, told us today there had been 13 charges brought under that section since 1976. That is the same figure as was given by the Secretary of State last week during a debate in the other place. What the Secretary of State added

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on that occasion was that 12 of those 13 charges had taken place in one month—January 1979. I should be grateful if the noble Lord, Lord Belstead, could inform me whether those 12 arose in one case, where the case was and what range of penalties was in due course imposed. It might help us to determine to what extent Section 11 of the principal Act is in fact a deterrent section.
I should like to make two observations about the role of the media in relation to terrorism, because that matter has arisen in the course of the last 12 months. I should like first to suggest to your Lordships that the Press and the television companies are entirely within their rights. in investigating fully the phenomenon of terrorism and in analysing the motives of the terrorists, their background and why it is they have come to take up the sort of activities they now espouse. It may be that that from time to time involves interviewing terrorists. I would hope, although I would regard it as not in any way improper in itself, that the media would recognise that, in the first place, they must in no circumstances give any assistance to a terrorist in the course of carrying out those investigations. Secondly, I feel they should be particularly careful, in the course of any programme they present, not to glorify the activities of terrorists, or make them appear to be heroes. I do not believe that this is a matter for Government intervention. I think it is perhaps a matter in which one could appeal to the media to exercise their sense of responsibility. Indeed, we have seen in the last 24 hours in relation to events in Sardinia how, if they wish to exercise such a sense of responsibility, they can do so most effectively.
The other observation I wanted to make about the media concerns a small point, but I find it particularly niggling. After each outrage—each worse than the previous one—it is the custom for some terrorist organisation to notify the media that it is their activities which have caused the damage. For some reason, the phrase is always used that a particular body has"claimed responsibility "—which seems to me to give an air of pride and respectability to the activity. What the organisation is in fact doing is admitting its guilt, and I personally wish that phrase were used rather more often than the
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somewhat offensive one, as I see it, that is used on so many occasions.
The noble Lord, Lord Boston, reminded your Lordships that this time last year I suggested that perhaps the time was coming when, instead of renewing this Act en bloc each year, we should take a long, cool look at it by way of a new Bill which could be gone through line by line in both Houses in the ordinary way. The case for that has, perhaps, been rather strengthened in the last 12 months. We have now had the report by the noble Lord, Lord Shackleton, we have had the Bennett Report, we have the experience of operating the principal Act for some four years, we have seen the extension of terrorist activities to Western Europe and we have rather more experience of the links, internationally, between various terrorist organisations.
I hope that the Government might consider next year, which will be the fifth anniversary of this Act, that the proper course to pursue would be not to invite us either to take it or leave it, which is really the choice that your Lordships have on this occasion, but to produce a new Bill which will take account of the developments of the last five years, and will enable us to make sure that we are putting the fullest possible effective powers at the disposal of the police and the Army in dealing with terrorism; and, at the same time, also ensure that we are not encroaching upon civil liberties any more than is necessary. I need hardly say that, of course, we on these Benches do not oppose the continuance of this order this year.
5.42 p.m.
Lord MONSON: My Lords, I had not intended to speak on this order, but the Official Report of the debate in another place on 4th March on the renewal of the Act, which I read over the weekend, made me think again. I have never been in the slightest doubt that the 1976 Act and the annual renewal orders, which have naturally ensued, are a regrettable necessity, in view of the almost genocidal ferocity of the terrorist organisations against which the Act is aimed, with their bombing attacks upon civilians in bus stations, in restaurants and in public houses, and with their cowardly assassinations, or attempted assassinations, of

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unarmed servicemen and servicewomen, of policemen and policewomen and of police reservists. Nothing that was said in the Commons debate has made me change my mind about the general desirability—indeed, the necessity—of renewing this Act.
However, it was just a little disquieting to read of the surprisingly high proportion of individuals who were detained under the Act and then released, without any charge being preferred against them. The honourable Member for Belfast, West, Mr. Fitt, gave a figure of 91 per cent. No doubt some of these were only technically innocent—the case against them was not proven, as the Scots would put it. But, by the nature of things, there must have been others who were wholly innocent in every respect.
Could not the latter be offered some kind of financial compensation, for the wages or salaries forgone as a result of their detention, as was suggested by the honourable Member for Southampton, Itchen, Mr. Mitchell? Mr. Mitchell, it should be noted, was one of the Labour Members present who, in all other respects, were strongly in favour of the continuance of the Act for a further year.
Again, the Liberal spokesman on Northern Ireland, Mr. Ross, the honourable Member for the Isle of Wight, drew attention to the fact that, under the provisions of the Act, somebody could be detained for up to seven days without access to a solicitor, and occasionally was, in fact, so detained incommunicado. We have recently in this House had plenty of controversy—justifiable controversy—about the provisions of the Criminal Justice (Scotland) Bill, which permit people to be detained without access to a solicitor for only six hours. How much more unease one feels at the possibility of someone being detained for six days or more, without access to a solicitor.
I wonder whether the noble Lord, Lord Belstead, when he comes to reply, could give some reassurance upon those two points, because I believe that if some action were taken here it would take some of the sting out of the Act, in so far as it affects innocent individuals, while in no way weakening its effectiveness against genuine terrorists.
5.45 p.m.
Lord HARRIS of GREENWICH: My Lords, I propose to speak only briefly in this debate this evening. I thought it right to do so, as I was the Minister responsible for the passage of the original Bill through this House in 1974. It seemed to me even more desirable to speak, given the fact that, in the debate to which the noble Lord, Lord Monson, has just referred in another place on 4th March, a number of Members of my own party chose to speak against the renewal order which was introduced by the Home Secretary.
As many Members of the House will recall, the original Bill was introduced only days after the IRA's attacks on public houses in Birmingham in November, 1974. It goes without saying that in no conceivable sense could those public houses be described as military targets. When the bombings took place, they were filled with ordinary working men and women. The IRA's motive was clear and unambiguous—to create a sense of terror in this country, to cause panic among the British people and to undermine their resolve to stand firm in Northern Ireland.
Of course, that campaign failed. I do not believe that these tactics ever stood the slightest chance of proving to be successful. The IRA miscalculated, in exactly the same way as the Baader Meinhof terrorists miscalculated in West Germany. Stable democracies do not collapse, do not capitulate to the demands of dedicated fanatics, simply because of a wave of terrorist attacks.
But the price of resistance can, of course, be an exceptionally heavy one. Many scores of innocent men and women can be slaughtered, as indeed they have been in this country and in Germany; and, of course, by the Red Brigade in Italy. Although we are debating today an order which relates solely to our problems in Northern Ireland, we must recognise that this issue of terrorism is one which affects many states in the industrialised West. In the European Community, to take the obvious example, only Denmark and Luxembourg can be said to have escaped altogether the effects of terrorist action.
We live in an age in which minorities of extremists, whose views are unacceptable to their fellow citizens, withdraw from

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political activity and resort to the bullet and the bomb in an attempt to compel democratic governments to bow to their will. Their record of success so far has been extremely limited, but that does not seem, as yet, to have in any way diminished the violence of their attacks. I am afraid that we have to accept the certainty that for the rest of this decade, and possibly even longer, we will be subject to attacks of this character. In such a situation, we have to ask ourselves: How should we react?
Today I should like to discuss only two elements of our response, the one which is dealt with in the order before us, the legislative; and the second, which was touched on by the noble Lord, Lord Wigoder—the responsibility of the media. The legislative response in this country to the challenge of the IRA has, of course, been the Prevention of Terrorism Acts of 1974 and 1976. The present Act, as the noble Lord the Parliamentary Under-Secretary reminded us today, confers special and unusual powers upon the police. In particular, as he pointed out, it gives the Secretary of State power to exclude a person from Great Britain and to return him either to the Republic of Ireland or to Northern Ireland, if he is satisfied that the person concerned has been, or may be, involved in the commission, preparation or instigation of acts of terrorism. Secondly, they also gave the police power to detain a suspected person for a period of up to 48 hours and, with the consent of a Minister of the Crown, for a further five days.
Given the character of these powers, it seems to me altogether right that Parliament should be invited to consider every 12 months whether they should be prolonged. Of course, the power to exclude a person from Great Britain confers an enormous power on the executive. Two hundred and twenty of these orders have been made, and some, I am sure, have led to considerable hardship to some of those concerned. But, having accepted that, it is also our duty to consider what would be the consequences if the Home Secretary and the police did not have these powers. I must tell the House, on the basis of the four years during which I saw these powers exercised when I was a Home Office Minister, that without these powers many men and women now walking the streets
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of this country would have been dead. This legislation, I believe, played a crucially important part in defeating terrorist attacks on our cities.
In the majority of the exclusion cases which I examined as a Minister, there was little or no doubt that the person concerned was a terrorist, but the evidence fell rather short of that which would be required to ensure a conviction in a court of law. If the Home Secretary in such cases was satisfied on the basis of the evidence put before him that the case was made out for exclusion, then the person concerned was removed from this country. But if, of course, the critics now have their way—and there are critics, though not in this House but outside it—Ministers would lose this power. The consequences would, I believe, be very serious indeed. I can think of nothing more likely to encourage a new and prolonged IRA assault upon our cities. For the terrorists would return, knowing—this confirms a point made earlier by the noble Lord, Lord Wigoder—that one of the most damaging in the armoury of weapons in the hands of the police had been removed. Even with these powers, there is always the risk of a new burst of IRA activity in this country; without them, the likelihood of attacks would increase appreciably. Therefore, I believe that the House should accept this continuation order.
I should like to join the noble Lord, Lord Belstead, in acknowledging our debt to our colleague the noble Lord, Lord Alport. He has served as one of the Home Secretary's advisers on exclusion order cases since the introduction of this legislation nearly six years ago. Having read a number of his reports, I know with what degree of devotion he has addressed himself to this responsibility. I think that it is only fitting on an occasion such as this to pay tribute to his work, which goes unsung and unhonoured but which, nevertheless, is of great importance to the safety of the State.
I wish now to turn to the second matter I wish to discuss, a matter which was touched on by the noble Lord, Lord Wigoder, and that is the responsibilities of the media. In doing so, I suppose I should declare an interest in that I began my career as a journalist and I am now a non-executive director of an independent television company. It has often

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been argued that at a time of serious public concern about terrorism the media should accept some form of censorship; that a free Press is all very well in normal circumstances, but that in the special situation created by terrorist attacks, a totally different approach is required. I do not agree with this view. Nothing, in my opinion, would give terrorists a greater sense of satisfaction than to compel a democracy to suspend the right of the Press—and television—to report freely.
In this country I believe that it would be virtually unthinkable that we should adopt any such approach. The same is true, I am sure, of most of our friends in Western Europe. But having said that, I think that it is also important that the Press, and television in particular, accept that they too have obligations. They have to recognise that terrorists are common criminals. We must sweep away all this nonsense of so-called"officers"in the IRA, and so-called"courts"used by other terrorist groups to justify murder. These people, I repeat, are ordinary criminals. They are not in some mysterious way analogous to some form of political party, with certain rights under the BBC Charter or the Independent Broadcasting Act.
There have been a number of occasions on which spokesmen of some of these groups have been allowed to address a mass audience on television. The excuse of the broadcaster concerned is generally the same; it is all being done to"inform"the electorate. I am afraid I must say, as one who has spent a great deal of his career as a journalist, that I do not believe that is in any sense a satisfactory defence. Terrorist groups crave attention and status. That is true of the IRA, and it is also true of the criminals who burn down holiday homes in Wales. I believe that, unless television organisations behave with a proper sense of responsibility, they can do a great deal to boost the morale of these organisations. There is, in my view, no case in a political democracy for treating these people other than as criminals; no case for conferring some form of political status upon them; no case for treating them as other than they are—as men and women of violence, determined to punish a free society for refusing to surrender to their blackmailing demands.
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In this country there is at the moment a lull in the terrorist attacks. Yet, quite apart from the heavy toll in Northern Ireland itself, as my noble friend Lord Boston of Faversham has reminded us this evening, our Ambassador to the Netherlands was murdered by the IRA less than a year ago, so was Mr. Airey Neave, so was Lord Mountbatten and members of his family, and more recently, there have been the foul attacks made on British servicemen in Germany. At any stage as I have indicated, we face the risk that there may be a renewal of IRA attacks activity in Great Britain. I think that it is essential to give the Government these powers again.
5.58 p.m.
Lord BELSTEAD: My Lords, I do not think it can be said too often that the order before us is an exceptional measure, and it is right that it should not be renewed without critical scrutiny. It has certainly been given that scrutiny by noble Lords who have taken part in this debate. As the noble Lord, Lord Boston of Faversham said it is a repugnant measure in many ways in a free country, but it deals with acts which are repugnant to a free society. I thank the noble Lord for reaching the same conclusion as the Government and indeed all your Lordships have reached, which is that, however reluctantly we do so, this legislation should be renewed for a further year. Let us remember that in a free society we lay upon ourselves the responsibility to have to come back to Parliament to review and renew this legislation from year to year.
The noble Lord, Lord Monson, asked me whether compensation could be paid to persons who are detained under the Act. He also expressed the hope that access to legal advice could be extended to those who are detained. There is no provision for the payment of compensation to persons detained for questioning by the police. When one bears in mind what the noble Lord, Lord Harris, reminded us of; namely, the cruel nature of terrorism and the threat that terrorism intends to the very existence of our free society, then I think it would be wrong for persons detained under this legislation to be treated more favourably than persons detained under other powers.
Lord MONSON: My Lords, I referred soley to innocent persons—that is to say, to the 91 per cent. who arc detained and not charged and who are detained for a considerable period of time, unlike those ordinarily detained at a police station for lesser crimes.
Lord BELSTEAD: My Lords, people ordinarily detained at a police station can also in the end be found to be innocent of any charge brought against them. The point I am making to the noble Lord is that compensation cannot be paid in those cases.
So far as legal advice is concerned, it might be helpful if I remind your Lordships that a person arrested under the Prevention of Terrorism Act has exactly the same rights as any other person arrested under other powers. But the general question of access to solicitors is being examined by the Royal Commission on Criminal Procedure, and I am sure that the House would wish to wait to see what the Royal Commission has got to say on that and on other subjects.
The noble Lord also expressed unease—which indeed I have heard before—that the majority of people arrested and detained under the Act are released without charge and without being excluded. I think it is as well to remember that the purpose of the Act is to prevent acts of terrorism. I would suggest that rather than look at the test of effectiveness as being how many people following arrest and detention are charged, one should look at the figures of terrorist incidents, deaths and injuries in Great Britain, before and after the coming into force of the Act. This legislation was brought in when Mr. Roy Jenkins was the Home Secretary and when the noble Lord, Lord Harris, was his Minster of State.
If I may say so, the noble Lord had every right in his speech to say that, without these powers, many people who are alive today would otherwise he dead. In the two years of terrorist activity prior to the coming into force of the 1974 Act, 44 people died and 758 were injured in 203 incidents. In the five years since that Act was passed, 14 people have died and 414 have been injured in 136 incidents. Those figures, though tragic, are some encouragement that the work of the police, to which the noble Lord, Lord Wigoder,
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and other noble Lords drew attention, is having its effect. But the police antiterrorist work needs the powers which the House is being asked to renew today.
The noble Lord, Lord Boston, asked me several questions of which he very kindly gave me notice. The first one which the noble Lord, Lord Wigoder, also questioned the Government about, related to Section 11. The noble Lord was good enough to say that after looking closely at it, he felt the Opposition would have reached the same conclusion as the Government had done; namely, that Section 11 should continue to stand. All I would add is that, as I said in my speech, the police have said to my right honourable friend that they found the section to be of real value in reminding potential witnesses, who may be on the periphery of a terrorist conspiracy, of their duty to tell what they know about terrorist activity. Perhaps it is worth recalling that as a result of police investigations into the Provisional IRA bombing incidents in December 1978, 11 people were charged with offences under Section 11. The noble Lord, Lord Wigoder, asked me about these cases. There are, in fact, 12 cases now under Section 11, initiated in January 1979. Those cases are still before the courts. The charges indeed arose in connection with the bombings which took place the previous December, but as the cases are sub judice perhaps the noble Lord will understand that I feel I ought to say no more.
Both noble Lords also asked me about the reintroduction next year of the Act as a Bill. Of course, this legislation was last fully debated as a Bill in 1976 when it was introduced by the noble Lord, Lord Harris. The suggestion which noble Lords have made on this will certainly be very carefully considered before the legislation comes before Parliament again in a year's time.
The noble Lord, Lord Boston, also asked about the provision of financial assistance to the families of excluded persons and asked if l would give reasons as to why my right honourable friend had said that such a scheme could not be justified. The Home Secretary has considered this matter carefully and he reached his conclusions, I think it is fair to say, for three reasons. The first is that the family of an excluded person are

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eligible for social security benefits if they stay in the United Kingdom. Secondly, of course, an excluded person can send money to his family here. Thirdly, I really do feel bound to say that there are higher priorities for new Government expenditure than the provision of assistance to those families who, as I say, can draw public assistance in the same way as other people living in this country.
The noble Lord also asked me some more detailed questions about the improvement in circumstances of people who are detained in custody. Of course, it is a fact that the noble Lord, Lord Shackleton, recommended that more thought should be given to improvements in the diet, exercise and comfort of detained persons. He also recommended that the fullest possible records should be kept of interviews with people detained under the Act and that there should be greater uniformity of practice in the way in which people are informed of their rights when taken into custody. Advice on each of these three points was given to chief officers of police in June of last year. Their attention was drawn to the benefits of a varied and adequate diet, the provision of exercise facilities and the cleaning of cells. Officers were advised to take full notes during interviews with detained persons and to write up a full record immediately after-wards. They were also advised to inform detained persons of their rights as soon as they arrive at the police station, and Her Majesty's Inspectors of Constabulary have been asked to bear all these points in mind in making their inspections.
Finally the noble Lord asked me about the extent of the problem to which the making of the direction, to which I referred at the end of my speech, has been addressed. It is not, as we understand it, an extensive problem, but the odd case from time to time occurs, has been brought to our attention and has led us to make this change. As I sought to explain, the change does not in any way extend the length of time that a man or a woman can he kept in detention. It simply means that for the last 24 hours, instead of having to go to prison if they are then going to be excluded and removed from the United Kingdom, they can be kept in police custody; and I am advised that in many cases an extra 24 hours is very often sufficient for this purpose.
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If your Lordships will forgive me for not doing so, I will not add anything to the remarks which the noble Lord, Lord Wigoder, and the noble Lord, Lord Harris, made about broadcasting, except to say that I think their words were well chosen. I am sure that I speak for all your Lordships, having listened to the speeches, when I say that I wish we could dispense altogether with this legislation, but as I indicated earlier the Government do not believe that the time has come. While acts of terrorism continue to take place in this country, we must give the police the support they need to catch the perpetrators or, better still, to detect them before they have a chance to act. I ask your Lordships to join me therefore in approving this order.
On Question, Motion agreed to.

BRITISH AEROSPACE BILL
6.10 p.m.
Lord TREFGARNE: 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 Trefgarne.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD DERWENT in the Chair.]
Clause 1 [Vesting of property, etc. of British Aerospace in a company nominated by the Secretary of State]:
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 1:
Page 1, line 18, leave out from"1948"to end of line 2 on page 2 and insert—
(" Provided that—

(a) on the appointed day the company in question shall be a company limited by shares which are wholly owned by the Crown; and

(b) the memorandum of the company shall state that the objects of the company are to promote and secure the promotion by its wholly owned subsidiaries of—

(i) the efficient and economical design, development, production, sale, repair and maintenance of civil and military aircraft, of guided weapons and of space vehicles; and

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(ii) research into matters relating thereto;

(c) a majority of the directors shall be appointed by the Secretary of State.").

The noble Lord said: We now commence on the Committee stage of this Bill and I might say, in prefacing my remarks on my initial amendments, that one of the problems about this Bill is that there is very little detail in it and many of the amendments which I have tabled are an attempt to try to get in more detail. The second subsection of Clause 1 as it is at present worded provides for the transfer of the assets in British Aerospace to any company formed and registered under the Companies Act 1948, but on the appointed day the company in question must be a company limited by shares which are wholly owned by the Crown. This is the so-called private company into which the assets of British Aerospace will be transferred and not the eventual public company in which the public as a whole will be invited to buy shares.
As this clause stands, the assets can be transferred to any company, and one would have thought that the company to which the assets of British Aerospace should be transferred should surely be a company with the specific objectives in its memorandum and articles of association needed by British Aerospace. This amendment attempts to describe in short detail the sort of objectives which would be included in the memorandum of the private company. One has the feeling from the memorandum and articles of association of British Aerospace Limited, prepared by a leading firm of solicitors, and which has been placed in the Library, that in fact the company concerned already exists, and of course at the present time the shares in the company are held by two civil servants who have subscribed to its articles of association on behalf of the Secretary of State. If that is so, one is tempted to ask why in fact the assets of British Aerospace could not immediately be transferred to British Aerospace Limited, of whose memorandum and articles of association we know in part from the documents which have been placed in the Library.
This amendment is in three parts. The first part merely repeats what is already in the clause. The second proviso arises in part from the concern of the
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workforce of British Aerospace. They are concerned that the Bill, which makes much reference to what will happen to British Aerospace in financial terms concerning the transfer of capital property and so on, makes no real statement about what the new company will do in the areas that concern them most. For example, they are anxious that when the new company is established it shall address itself to the efficient and economical design, development, production, sale, repair and maintenance of civil and military aircraft, and shall not seek to reorganise itself in such a way that the company can cease to be responsible for some of these activities, with consequent problems for the workforce as a whole and consequent problems for industrial relations within the industry. Reference in the memorandum is also made to research. Many millions of pounds will be needed each year to keep the company in the forefront of research and development.
The third proviso reflects our views that the company should remain a company in which the Government should have a major say about its activities and should direct its progress. Indeed, I should say that on Second Reading of the Bill the noble Lord, Lord Trefgarne, gave an undertaking that the initial directors of the private company would all be appointed by the Government, but that the Government would not appoint the subsequent directors of the company, other than two non-executive directors. What I think we need to be assured of is that a majority of the directors in the long term will be working in the interests of the nation and not in the interests of any particular group of shareholders in the company which may happen to put them there.
I should remind your Lordships that this is to be a public company on which our own national defence will rest very heavily, and it is one in which we shall need to be assured that it is working in the national interest. This I know the Government accept. Therefore it would seem that this amendment would be in the interests of the company and of the nation. I beg to move.
Lord TREFGARNE: As the noble Lord, Lord Ponsonby of Shulbrede, explained, this amendment falls into three parts and raises three important matters.

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Therefore, it may be helpful to your Lordships if I explain the Government position in each of these three matters.
First, the amendment refers to the company being, on the appointed day, a company limited by shares which are wholly owned by the Crown. This is very similar to a provision, which the amendment seeks to replace, already included in Clause 1(2) of the Bill. The company nominated for the purpose of vesting will indeed be a company limited by shares, formed and registered under the Companies Act 1948 and on the appointed day all the shares in the company will be owned by the Crown. Furthermore, as the noble Lord pointed out, the company already exists. It was formed on 31st December 1979 and its name is British Aerospace Limited. It is at present a private limited company, having a share capital of £7, all of which is owned by the Crown. The memorandum and articles of association of the company are, as noble Lords will be aware, available for inspection in the Library of this House. The company is merely a shell, awaiting the appointed day on which the whole of British Aerospace's undertaking will vest in it. The noble Lord asked why they could not be vested in it right away. The answer is of course that the Bill with which we are now dealing has first to get through Parliament.
Lord PONSONBY of SHULBREDE: If I may interpose for a minute, my proposal was why in fact the Bill could not say that the assets should be transferred to British Aerospace, not that they should be transferred straight away
Lord TREFGARNE: I apologise to the noble Lord. I misunderstood what he said and I will come in a moment to the point that I now know he raised. At vesting day it will be turned from a private to a public company, new articles will be adopted, its capital structure will be altered to accommodate whatever capital structure is thought appropriate for the successor company, and the board members of British Aerospace will he elected as its directors.
Second, the amendment mentions the memorandum of the company. The objects set out in the amendment reflect the duties which are imposed on British
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Aerospace, the statutory corporation, by Section 1(1) of the Aircraft and Shipbuilding Industries Act 1977. But these are duties. As I am sure noble Lords are aware, the memorandum of association of a company does not impose duties upon the company. It is a permissive document which sets out what a company may do, not necessarily what it must do. In tabling this part of the amendment, I imagine that the noble Lord was seeking an assurance that the successor company will continue to do all those things which British Aerospace now does. What I can say is that on the appointed day the whole of the undertaking of the corporation will vest in the successor company and the company will be able to perform all those actions which the corporation and its predecessors formerly performed.
The memorandum of the company, whose objects clause will remain unchanged, will permit this. It has been drawn up in full consultation with the board of British Aerospace and is based upon the memoranda of the pre-nationalisation companies. Indeed, the new memorandum will permit the company to do other things too, so that it is actually more widely drawn than the duties of the corporation. To limit the company, as the duties set out in the amendment would, would be to restrict its ability to respond to the stimulus and challenge of the private sector as we believe it should.
Thirdly, the amendment refers to the majority of the directors of the company being appointed by the Secretary of State. As the sole shareholder in the first instance the Government will appoint the first directors of the company. However, thereafter, with the exception of the two Government directors which the Secretary of State will have power to appoint, it will be for the company as a whole, acting in general meeting, to decide who should be directors. To this end the articles of association of the fully-fledged company will require the directors to offer themselves for re-election, in rotation, as is the normal practice with any company. Once the company ceases to be wholly Government-owned the Government will not exercise control over it, nor intervene in its commercial decisions. It will not be a creature of Government. It will be a private sector company, free of Government interference and able to act without

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restraints on its commercial judgment. It would therefore be quite inappropriate for the directors to be appointed by the Secretary of State.
Lord GRANVILLE of EYE: Before the noble Lord leaves the point on directors, may I ask him this: If British Aerospace is going to be designing, researching, manufacturing military aircraft which may be on the secret list, surely those directors themselves would have to be subject to the Official Secrets Act?
Lord TREFGARNE: I think anybody who deals with public information is subject to the Official Secrets Act. Perhaps I can look into that point, and if I am wrong I will let the noble Lord know.
As I said, the company will be a private sector company free of Government interference and able to act without restraints upon its commercial judgment. It would therefore be quite inappropriate for the directors to be appointed by the Secretary of State. I hope that your Lordships will agree that the principles behind this amendment are contrary to the Government's approach and would serve only to hamper the successor company. I hope this explanation will persuade the noble Lord, Lord Ponsonby, not to press his amendment.
Lord WYNNE-JONES: The noble Lord, Lord Trefgarne, has put the case for the Government very clearly, but he has suggested that the purpose of the amendment is to impose restrictions and to create a sort of straitjacket in which the company is to operate. On the contrary, the purpose of this amendment is really to ensure that the company will operate in a way which is clearly defined by national interests. This is not an unimportant matter in an industry like the aerospace industry. As the noble Lord knows perfectly well, having been associated with the industry, the industry has played an extremely important part in the whole post-war development in this country. In fact if one looks at this industry and compares it with certain other industries one is really amazed at the success that the industry has had. And it has had this success because even when it was under private enterprise the industry was still under a considerable amount of govern-
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mental control; it has been important all the time that the needs of this country should be borne in mind.
The purpose of the amendment is not to defeat the purpose of the Bill—which is to bring private capital into the aerospace industry—but rather to try and make sure that when this is done the company which is produced will be able to do its work as efficiently as the present board has done, as the noble Lord himself has agreed, and as efficiently as very often previously the private industry did. It is important to emphasise that there is a national purpose behind the whole of our aerospace industry, and unless there is a way of ensuring this I think there is a danger that the aerospace industry could be fragmented and turned in a way
that failed to satisfy national requirements.
Lord PONSONBY of SHULBREDE: IF I may support my noble friend Lord Wynne-Jones, the noble Lord, Lord Trefgarne, said that he assumed that a purpose of this amendment was to ensure that British Aerospace would continue to do all it now does. He turned it round and said it was a restrictive amendment. In fact we never got from him an assurance that British Aerospace would continue to do all it now does.
Lord TREFGARNE: The amendment may well seek to avoid imposing a straitjacket upon British Aerospace, but I am afraid the fact is that that is what it does, and that is what we think is wrong. Of course, British Aerospace is going to remain in the aerospace business. If it were not, we should not be troubling your Lordships with this legislation. I think I should rest my case on the assertion which I competently advance to your Lordships that the provisions of the memorandum and articles, which the noble Lord wishes to circumscribe by his amendment, are really best left to the shareholders of the new company, as indeed was the case before British Aerospace came into public ownership, and that is the situation we now seek to restore. It is indeed the situation with every other major and minor company in British industry and has served us well and will, I believe, continue to do so.
Lord PONSONBY of SHULBREDE: I shall not press this amendment to a

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Division, but the point of concern here is that, for example, British Aerospace might decide to sub-contract repair work or something like that, and not carry out certain work itself. This is an element of concern among the workforce. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 agreed to.
Clause 3 [Initial Government Shareholding in the successor company]:
6.29 p.m.
Earl AMHERST Earl AMHERST moved Amendment No. 2:
Page 3, line 36, at end insert (" The successor company shall have the right to issue shares not held by the Secretary of State to employees of the Company on such terms as the Board may direct.").
The noble Earl said: At the Second Reading of this debate the noble Lord, Lord Cullen of Ashbourne, made it perfectly clear that the Government were sympathetic to the idea that employees should have an opportunity of owning shares in the company which employs them. He said it was hoped that an announcement would soon be made which would explain various ways in which this could be done. He also said that provision for this would be included in the memorandum and articles of association of the new company.
We on these Benches have long advocated that, as part of the programme for industrial democracy, workpeople should have an opportunity of acquiring such shares, which would not only give them a continuing stake in the business of the company but also allow them to participate in such dividends as may accrue from their shareholdings. We do not think that such a provision should rely only on this being included in the memorandum and articles of association which can be altered at any time by the board and which—as the noble Lord said if I did not misunderstand him—lists the things which can be done but not the things that must be done. Therefore, we think that this is of such importance that it should be covered and clearly stipulated in the Bill. With that objective in view, I beg to move.
Baroness SEEAR: I wish strongly to support the amendment put forward by my noble friend Lord Amherst. At present it is surely most important that the opportunities for employee share ownership should be spread as widely as possible throughout the country to give people a greater stake and a greater understanding of how industry operates and so that they can share in profits where there are profits and dividends where there are dividends, and not rely entirely on their pay packet. This seems to me a first-class opportunity for the Government to take a lead to show that they really believe—as I understand they do—that the principle of employee share-ownership is one to which they give support. They will do that in the most practical way if they write into the Bill the right of the board to issue shares in this form.
Lord CULLEN of ASHBOURNE: I think that the noble Lord has tabled this amendment in a probing spirit because we do see eye-to-eye on this matter. Perhaps it would be helpful if I explained the procedure for the issue of shares on flotation adumbrated in Clause 3 and how the arrangements will relate to employees and to the successor company.
Of course, the precise arrangements for employees will depend upon the scheme which the Government decide to adopt to permit them to acquire shares in the company. No decisions have yet been taken on this important matter but, as
noble Lords are aware, it is the Government's declared intention that such arrangements should be made. One scheme the Government are considering would involve two stages: an allocation of free shares to all employees who satisfied a given service qualification, and an opportunity to purchase further shares which would be matched with an equal number of free ones. This second part of the scheme would be comparable to the arrangements adopted in the recent BP issue. All three categories of shares—those allocated completely free, those bought and the matching free allocation—would have to be vested in a trust established in accordance with the provisions of the Finance Act 1978. This would confer tax reliefs, provided the shares are not sold for a number of years.
In the first instance, all the shares in the successor company will be allotted to the

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Secretary of State as Clause 3(1) so provides. He will then renounce a proportion of those shares and it is these shares which will be offered for sale to the public. Anyone will be able to apply for shares, but preferential arrangements will be made for employees. Shares will then be allocated to the people whose applications are successful. In due course the company will—as it is bound to do by Clause 3—issue the shares to its various subscribers whose names will be entered on the company's share register. In short then, the Bill provides that the company will issue shares as directed by the Secretary of State and, as I have explained, this will involve some of the shares being issued to the Secretary of State and the rest to those who acquire them as a result of the flotation—including employees.
Of course, what I have said applies only to the initial flotation because on that occasion, all the shares in the company will be at the disposal of the Government. British Aerospace intend to establish continuing arrangements to enable employees to acquire shares and I hope they will be able to build on the arrangements adopted for the flotation—for example, by establishing a profit-sharing scheme under the provisions of the 1978 Finance Act. But I must stress that these arrangements will be for the company to determine in consultation with its employees—it is really not for the Government to dictate what should happen in the future. Similarly, when the company ceases to be wholly-owned by the Crown it will be free to determine for itself what shares to issue and on what terms. I hope that the noble Lord will find my explanation helpful. I have made it clear that the Government will indeed make arrangements that permit employees to acquire shares on flotation.
Lord WYNNE-JONES: The noble Lord, Lord Cullen of Ashbourne, has put the Government's case on this matter. I must confess that I find it a little like asking for a bowl of water so that their hands can be washed and a towel so that they can be dried, so that they may be able to say that their intentions are good. But they do not take any steps themselves; they leave it to the company that is formed.
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One of the points about the Bill which disturbs me is the way in which we are asked to sign a blank cheque. There is absolutely nothing put down in the Bill which specifies what is to be done. I should have thought that this was a reasonable amendment, trying to do something which could be of great value in the future to the company which is set up, and to the aerospace industry.
I have received a memorandum from the Amalgamated Union of Engineering Workers who play an important part in this industry. It is a carefully reasoned memorandum which discusses the Bill—it does not like the Bill—and argues against it in clear and reasonable terms. It shows a great interest in the industry. In other words, one is dealing with a group of workers who feel themselves committed to this industry—a group of workers who are not casual"cowboys"who come in one day and do a bit of contracting work and move out the next day. They are not people like that at all: they are people committed to the future of the aerospace industry.
Surely it would be worth while for the Government to pay a little attention to the suggestion put forward in the amendment that it should be written into the Bill—and not left to what may happen in the future—that the employees in this industry (people who have given, many of them five, 10, 15 or more years to the industry) should have the first opportunity, as the industry is now to have private capital put into it, of having some shares in this industry. I ask the Government to look at the matter again and not to turn it down so abruptly.
Baroness SEEAR: I must say that I was very unhappy about the reply by the noble Lord, Lord Cullen. When an industry is being denationalised in this way, it is no ordinary company which is being established. The Government have the right to lay down certain conditions which are appropriate for a company of this type in an industry of this kind. If the Government believe in the principle of employee share-ownership, this is surely an opportunity to make it plain that, in this particular case, such a scheme is to be introduced. If that is so, it should surely figure in the Bill. I cannot understand why the Minister says that it

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will not, in fact, be written into the Bill. After all, all that is asked in this amendment is that the company has the right to issue such shares. We might well have gone further and have asked that the company has an obligation to issue such shares. It is a very mild amendment as it stands and if the Government cannot concede this, one cannot believe that their interest in employee share-ownership is very profound.
Lord WIGODER: Will the noble Lord, Lord Cullen of Ashbourne, consider looking again at this part of the Bill in order to see whether it is possible to write into the Bill some encouragement to the Company to issue shares to its employees?
Lord CULLEN of ASHBOURNE: I am afraid that I cannot look at this again because I am absolutely certain that we are doing exactly what we should do. We are making arrangements for all employees to have shares on the flotation, and it is entirely up to the company at any time—maybe annually—to make shares available to employees on terms satisfactory to them. I should have thought that there was little more that we could do. Directors will be appointed to the company and it will be entirely up to them to make suitable arrangements. Everybody knows that we are absolutely in favour of schemes for employee participation. I would not wish to tie the hands of the directors in any way—either the hands of those directors or the hands of the directors of ICI or any other public company.
Lord HARMAR-NICHOLLS: Is my noble friend aware that what he has just said is exactly what this amendment says? He has just said that he agrees with it. If we are all of one mind on this, why cannot it be written into the Bill? I intervene on this particular point only on, if you like, party political grounds. The grounds are these. It has been wrongly said that the party which at present forms the Government is not interested in doing this sort of thing. I know that to be untrue. I know that what my noble friend has said is the general outlook of the people who want to make a success of the private enterprise system. We get all sorts of distortions, and one
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is that we drag our feet and are not really interested in doing this sort of thing.
I was waiting to hear my noble friend say that there were some technical or good strong reasons why it would weaken the Bill or that if it was written into the Bill it would be against what they have already said, but he did not say that. Therefore, as a good party man, I ask him to reconsider it in order that the true face of a Conservative Government can be written into one of the statutes. I do not see why, if we are in agreement, it cannot be written into the Bill, which will set the whole process on its way and make it possible in any case.
Lord PONSONBY of SHULBREDE: This underlines the whole problem of the Bill. We shall come to many amendments with which the Government will agree in principle and say that they are a good idea but that they cannot write the particular points into the Bill because they are matters for the articles of association. That is the problem. This is a very important national industry, and it is one of our national industries which is being passed into private ownership. There are a good many suggestions, with which the Government agree, which we think should be adopted by the new public corporation when it comes into being.
Lord CULLEN of ASHBOURNE: I have no doubt at all that sensible arrangements such as this will be adopted by the sensible directors on this company. But the Government have no intention of tying the hands of the directors in this or any other matter which is not absolutely vital.
Earl AMHERST: I am not happy with the explanation that has been given by the noble Lord or the fact that he thinks that this company should be treated the same as an ordinary commercial company. It is not the same; it is a special company. In that case, I must ask the opinion of the Committee.
6.44 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 35; Not-Contents, 69.

CONTENTS

Amherst, E. [Teller.]

Gregson, L.

Ritchie-Calder, L.

Ardwick, L.

Hampton, L.

Seear, B. [Teller.]

Beaumont of Whitley, L.

Hanworth, V.

Segal, L.

Blyton, L.

Harmar-Nicholls, L.

Stone, L.

Boston of Faversham, L.

Harris of Greenwich, L.

Taylor of Mansfield, L.

Brooks of Tremorfa, L.

Houghton of Sowerby, L.

Underhill, L.

Chitnis, L.

Jeger, B.

Wade, L.

Cledwyn of Penrhos, L.

Kilmarnock, L.

Wallace of Coslany, L.

Collison, L.

Kirkhill, L.

Wells-Pestell, L.

Davies of Leek, L.

McGregor of Durris, L.

Wigoder, L.

Davies of Penrhys, L.

McNair, L.

Wynne-Jones, L.

Granville of Eye, L.

Ponsonby of Shulbrede, L.

NOT-CONTENTS

Ailesbury, M.

Exeter, M.

Mottistone, L.

Airey of Abingdon, B.

Ferrers, E.

Mowbray and Stourton, L.

Allerton, L.

Gainford, L.

Moyne, L.

Amory, V.

Galloway, E.

Newall, L.

Ampthill, L.

Gisborough, L.

Norfolk, D.

Armstrong, L.

Glasgow, E.

Nugent of Guildford, L.

Atholl, D.

Glenkinglas, L.

Onslow, E.

Avon, E.

Gowrie, E.

Rawlinson of Ewell, L.

Balfour of Inchrye, L.

Hailsham of Saint Marylcbone,

Redmayne, L.

Bellwin, L.

L. (L. Chancellor.)

Reigate, L.

Belstead, L.

Henley, L.

Renton, L.

Bessborough, E.

Hives, L.

St. Aldwyn, E.

Brougham and Vaux, L.

Hornsby-Smith, B.

St. Davids, V.

Caithness, E.

Killearn, L.

St. Germans, E.

Carrington, L. (A Principal

Long, V.

St. Just, L.

Secretary of State.)

Lucas of Chilworth, L.

Sandys, L. [Teller.]

Cottesloe, L.

Lyell, L.

Selkirk, E.

Cullen of Ashbourne, L.

McFadzean, L.

Sharpies, B.

Davidson, V.

Macleod of Borve, B.

Trefgarne, L.

de Clifford, L.

Margadale, L.

Trenchard, V.

Denham, L. [Teller.]

Masham of Ilton, B.

Vivian, L.

Digby, L.

Minto, E.

Waldegrave, E.

Drumalbyn, L.

Monk Bretton, L.

Wise, L.

Enniskillen, E.

Morris, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.52 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 3:
Page 4, line 4, at end insert (" provided that no such disposal shall be effective unless authorised by an affirmative resolution of both Houses of Parliament ".).
The noble Lord said: This Amendment deals with the question of Parliamentary control. As I have already said, this Bill is very inadequate. On the one hand, the Government believe that British Aerospace should remain under British control, and on the other hand they want to sell off as much of British Aerospace as they can at the best price they can get. The result is that we have the merest skeleton of a Bill before us today without a great deal of the detail which is to be decided later when the memorandum and articles of association of the public company are finally decided upon and drawn up.
This Amendment seeks to put some semblance of parliamentary control into the Bill. Parliament should be asked each time the Secretary of State seeks to dispose of shares allotted to him. This will not of course be a daily occasion. We know that initially the Secretary of State intends to dispose of about half of the company. We also know that at some later date he intends to dispose of a further 25 per cent. of the company. What we do not know is what set of circumstances will lead him to make that further disposition. In the Second Reading debate, I asked whether in fact this would come about because the company had been particularly successful, and he thought that that was the time to dispose of them, or for some other reason.
We do not know in what sort of circumstances it will happen that the Secretary of State wishes to dispose of shares in the company, but it seems only right, in view of the great importance of the company, that the Secretary of State should come to Parliament and seek approval when he

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wishes to dispose of any further block of shares in the company. I beg to move.
Lord TREFGARNE: The purpose, and indeed the effect, as the noble Lord, Lord Ponsonby, said of this amendment, is to prevent the Secretary of State from disposing of any shares—and I emphasise"any shares even one—allotted to him as a consequence of vesting unless the disposal has been authorised by an affirmative resolution of each House of Parliament. The effect of the Amendment is that the disposal of one share would, as I understand it, need affirmative resolution from both Houses of Parliament.
Lord PONSONBY of SHULBREDE: The noble Lord is quite right in his supposition, but of course the Secretary of State will not be disposing of just one share.
Lord TREFGARNE: I am glad for confirmation of that. I knew it to be the case. The noble Lord's intervention did not take us much further forward. The fact that the Government intend to sell shares is, however, well known: indeed it is the very essence of the Bill. I think your Lordships will therefore agree that there really is no need for any further Parliamentary procedure simply to approve the fact of a disposal.
It has been suggested that parliamentary approval is needed because the Government have not yet decided what proportion of shares they propose to sell. This was not suggested by the noble Lord just now; but it has been suggested and will no doubt be so in a moment. I think that this places an undue significance on the precise size of the Government's holding. We have announced our intention to sell about half the shares. We have stressed repeatedly that we shall not exercise detailed control over the company, and will not intervene in its commercial decisions, whatever shareholding we retain. In these circumstances, the precise size of the shareholding to be offered for sale is not a significant decision from the policy point of view: it will be influenced by a number of factors, including financial advice nearer the time and the number of shares that are taken up by employees. A decision to sell a particular number of shares will not involve any new policy departure and will not have any significant effect on the future of the company.
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Looking further ahead, the position in principle remains the same. The Government have made clear that they will retain a shareholding of more than 25 per cent. in order to be able to protect the article of association dealing with foreign control. Subject to that minimum, the Government may in the future wish to sell further shares if this is financially desirable and if it is in the interests of the company as a whole. Such sales would not change the nature of the Government's relationship with the company in any way. I hope, therefore, that the noble Lord will not press his amendment.
Lord PONSONBY of SHULBREDE: am not satisfied with the noble Lord's answer, but it is not my intention to press this particular amendment to a Division. There are other amendments later which deal with the question of the size of the shareholding, some of which I may feel inclined to press to a Division. I beg leave to withdraw this particular amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
[Amendment No. 4 not moved.]
Clause 4 agreed to.
Clause 5 [Government investment in shares and securities of the successor company]:
7 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendments Nos. 5 and 6 en bloc:
page 5, line 30, leave out (" or ").
page 5, line 31, at end insert ("; or
(d) make loans to the successor company for such period not exceeding twelve months and otherwise on such terms as may he agreed between the Secretary of State and that company.").
The noble Lord said: These amendments propose to allow the Secretary of State to make short-term loans to the new company. It is in the nature of the British Aerospace business that short-term finance may be required especially during the early days of the successor company's operations to tide the company over a difficult period while it arranges its borrowing facilities from more conventional sources. Such a situation could arise through no

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fault of the company if, for example, there was an unexpected call on bank guarantees furnished by the company in support of its export business, or if that coincided with a time of lending restraint imposed on the clearing banks.
Normal commercial terms would have to apply to any such short-term borrowing, but it would seem right that such a facility for the Government to make loans in such circumstances should be provided for in the Bill. It is certainly not unusual for such a major shareholder—and the noble Lord, when speaking to an earlier amendment, agreed that in all circumstances the Government would remain a shareholder as to 25 per cent. in the company—to provide funds in such a situation, and the successor company should be in no worse a position than a conventional company. But without the specific statutory power, it appears that the Government could not make short-term finance available in these special circumstances.
Lord TREFGARNE: Before coming to the specific point put by the noble Lord, Lord Ponsonby of Shulbrede, I should like to explain briefly the purpose of the powers in Clause 5. The clause empowers the Secretary of State, with Treasury consent, to make certain subsequent investment in the successor company. I stress the word"certain"for not all types of investment are permitted under this provision. In broad terms, the Government, under this statute, will be able to advance finance when the purpose in so doing is to acquire, either directly or indirectly, equity in the successor company. This limitation is explained quite simply by the purpose behind the clause. It is that the Government should have the means of maintaining a particular proportionate shareholding in the company—for example, a holding of over 25 per cent.—in order to protect the foreign control article. It is not the purpose that the Government should be in a special position relative to the company as a general provider of funds. That would be quite contrary to our repeated concern that it should be recognised that the Government will not stand behind the successor company in the way they stand behind a nationalised industry. The company will and must stand by its own
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efforts, without special treatment from Government.
I think noble Lords will understand why we believe it would be quite inappropriate for the Government to provide short-term loans to the company when we have said that we expect it to meet its requirements from commercial sources. It would put British Aerospace Limited in a privileged position, whereas the essence of our policy is that it should be in the same position and be subject to the same pressures as any private sector company. Nor would it be comparable with other private sector companies with a large shareholder: institutions which own shares in a company do not expect to act as that company's banker; no more should the Government. Indeed, not even British Aerospace as a nationalised industry receives short-term funds from the Government; it obtains all its overdraft facilities from the market. I hope the noble Lord will not press the amendments.
Lord PONSONBY of SHULBREDE: I do not intend to press the amendments to a Division. The proposal was not that the company should be in a privileged position, but that the normal sort of commercial relationship which might exist between a company and a major shareholder should appertain in this case. However, in view of what the noble Lord said, I beg leave to withdraw the amendments.
Amendments, by leave, withdrawn.
7.5 p.m.
Lord BALFOUR of INCHRYE Lord BALFOUR of INCHRYE moved Amendment No. 7:
Page 5, line 44, at end insert—
(" Provided that at the time of disposal to the public by the Secretary of State with Treasury consent of any shares, there shall be reserved for employees of the Company with three years continuous service with British Aerospace at the time of the passing of this Act such proportion of the issue as may be determined by the Secretary of State after consultation with the Treasury and the Board of the Company.").
The noble Lord said: I had two purposes in drafting this amendment. The first has already been fulfilled and I need spend no time on it; that is, the matter of how the shares to employees will be issued. I need only remind the Committee, which has been reminded once already, of some

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words used by the noble Lord, Lord Cullen of Ashbourne, when he said:
" I should emphasise that no decisions have been taken. The scheme I have outlined is only one of the possibilities that we are considering.".
I thought I might as well try to put forward a little more than the generalisation which the Minister quite naturally indulged in. However, the second purpose of the amendment is much more serious. It is a matter entirely relevant to the Bill and one which, I hope, will be welcomed by the Opposition, and to which they will reply. I assure noble Lords that I raise this matter in no party spirit. My question is simply this: Where do the Opposition stand in relation to employer shares? It is a simple question which deserves a simple reply.
All the three main parties believe in worker participation and, therefore, I ask: Does the Labour Party believe in worker participation entirely or does it stop short at investment in the company in which they are working, British Aerospace? The Government, and the Bill itself, are thinking about employee shares, but before the Bill becomes an Act, all those people affected should know clearly and definitely where they stand in relation to workers' investment and the Opposition position. Hitherto, the policy of the opposition has been nationalisation without compensation.
Lord PONSONBY of SHULBREDE: The noble Lord made a very odd remark,"nationalisation without compensation ". Full and fair compensation has always been paid by any Labour Government since Labour Governments have been in existence.
Lord BALFOUR of INCHRYE: Let us pursue that for a moment. If it is not nationalisation without compensation, then noble Lords opposite accept workers' investment in the companies with which the Bill is dealing, and accordingly they must he ready to counter the recommendations made by their party at various party conferences, and I shall come to that shortly. If they reject worker participation, they should say so honestly now. My search for an answer to the question I asked about where they stand on this matter included searching the columns of the House of Commons Hansard debates of what was said by Mr. Silkin and Mr.
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Smith, and I could find no denial of the policy of nationalisation without compensation except this comment by Mr. Smith:
" We have a working party on this particular problem ".
What is the working party for? Is it to see how shares can be nationalised without compensation? I do not know. Let me explain why I put this matter to the Committee, and to the noble Lord who is speaking for the Opposition. I look to the last Labour Party Conference and to the words of Mr. Clive Jenkins, speaking from the platform, on this issue——
Lord PONSONBY of SHULBREDE: I think that he would be speaking from the rostrum, not from the platform.
Lord BALFOUR of INCHRYE: I am sorry, did the noble Lord say——
Lord PONSONBY of SHULBREDE: I must apologise, but Mr. Clive Jenkins is not a member of the National Executive Committee, and he would have been speaking from the rostrum, not from the platform.
Lord BALFOUR of INCHRYE: I am sorry that I did not differentiate between the rostrum and the platform. However, Mr. Clive Jenkins had the whole of the conference with him; a report that I have says that the conference was fully behind him; no vote was taken on the issue. These are his words:
" This is a serious warning to all of you. When we take power, your fingers and your wallets will have been burned …
He said that that was a warning to insurance companies, pension funds, and investors in the City. I am sorry to say this, but I want to hear that the extremists are repudiated by the Labour Front Bench here. I am sure that it would he a great comfort to all of us, if we can have that repudiation from the noble Lord who is to speak for the Opposition.
Let us assume that a man has £500 and he invests it in shares. He also has the issue of free shares. Is he quite safe in his investment upon renationalisation if, and when, the Labour Party come to power? If his share has increased in value, partly through his own efforts in

99
making a success of the enterprise to which he has devoted his working life, will he be considered a wicked capitalist, taking an unearned increment—or will he be allowed to take any profit accruing to him from the increase in his investment?
These are serious questions—and I have tried to put them in a reasonable way—which should be answered before the Bill passes. Can we have a clear Yes or No on workers' investment in principle? Do noble Lords approve of trade union members taking a financial interest in their enterprise, or do they stand with the extremists, as expressed in the positive voice of the whole of the Labour Party Conference, as I have quoted, under the leadership of the speech of Mr. Clive Jenkins?
It is no good our trying to pass over this question. It is no good our party, the party opposite, or anyone trying to pass over this question without facing the possible issue which the extremists in the Labour Party are advocating. That is why I welcome the opportunity to hear from the noble Lord who is to speak for the Opposition that they are all for worker participation, including the financial aspects and that they do not agree with extremists of their own party. I beg to move.
7.14 p.m.
Lord WYNNE-JONES: The noble Lord, Lord Balfour of Inchrye, has been trying to trail his coat and at the same time twist tails, and undoubtedly he hopes that he will elicit some absolutely revealing remarks which he can quote on some other occasion. The noble Lord speaks with persuasion and interest. He tries to tell us that because a particular speaker at a Labour Party Conference—who was not speaking officially for the Labour Party—made statements which were well received by perhaps a number, an unspecified number, of delegates, he is therefore able to use these as an absolute argument as to what is Labour Party policy. But Labour Party policy has been stated again and again; and not only has it been stated but it has been practised when nationalisation of industries has taken place. The noble Lord knows perfectly well that on no single occasion has there been confiscation; on every occasion there has been compensation.
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Of course, everyone argues as to whether or not they have been compensated adequately. I remember when the coal mines were nationalised; I suppose it was in 1947. I had moved to Newcastle. I lived there and I knew quite a number of people in the coal industry. I became associated with that industry indirectly, and there was of course much argument as to whether or not the owners of the coal mines received the right compensation. Yet so far as I could see, most of the coalmine owners did rather better out of nationalisation than they would have done had the mines not been nationalised. I believe that this kind of thing has happened more than once, where people with a virtually bankrupt industry, or a bankrupt section of an industry, have been able to obtain more money than they would have done had they continued in business themselves.
It has never been the policy of the Labour Party to take over anything without compensation. That has never taken place. So I find it a little surprising that the noble Lord, Lord Balfour of Inchrye, should raise this matter under the pretence that he is moving an amendment. It seems to me that he is using your Lordships' Chamber in order to trail his coat gently across it——
Lord BALFOUR of INCHRYE: May I interrupt the noble Lord. As I said, I considered it my duty to raise this great question. I tried to do so not at all in a political spirit, but in a spirit of asking for facts.
Lord WYNNE-JONES: Of course I do not at all reply in a political spirit. The fact that I happened to mention the Labour Party is irrelevant. I am not quite certain whether this situation is like Alice Through the Looking Glass or Alice in Wonderland. It seems to me that the noble Lord is asking a question which is not merely rhetorical, but is a question which has no sense at all, because it bears no relation to anything that has happened in the past, not so far as one can see, to anything that is likely to happen in the future.
Of course, it is quite impossible to say what would happen if there were a revolution in this country. I cannot predict what would happen under such conditions,

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but we are speaking about policies put before the country, and there is not a vestige of evidence, nor any reason, to suppose that the Labour Party would confiscate without compensation. There is no reason at all to suppose such a thing, In fact, I, who probably stand rather further to the Left in the Labour Party than the noble Lord would like to see anyone stand, might at times wish that the Labour Party would go rather farther; but it has always been the policy of the Labour Party—and I think a sensible policy—to say that you do not use indiscriminate confiscation if you want to get money; you raise the money by taxation. Consequently, if you are buying something you pay the fair price for it; but you raise the money by taxation or in any other suitable way and not by confiscation. I think that this is bringing before your Lordships the strangest form of fish for which, even under the conditions of Common Market tyranny, our fishermen have to fish; that is, this very odd red herring.
Lord HARMAR-NICHOLLS: My noble friend did not succeed in getting what he was after. He was after a reply from the Front Bench opposite which could give some sort of——
Lord PONSONBY of SHULBREDE: I am waiting for the noble Lord, Lord Trefgarne, to spell out his attitude to this amendment before I reply.
Lord HARMAR-NICHOLLS: Then I amend what I said by saying that so far he has not succeeded in getting what he wanted, which is a reply from the Front Bench opposite, which makes it so much more official. I must say that the only two amendments which interested me personally were No. 2, on which I went into the same Lobby as the noble Lord, and this amendment if No. 2 was not accepted. I wish No. 2 had been accepted, and I wish it had been accepted very much on the grounds that my noble friend has put forward in his argument. After a rather long experience of having to meet the Labour Party in political battle, I was rather delighted but surprised to find that they had put down an amendment which seemed to encourage employees having a share ownership in their works. They have never done that in the past; their record has never shown that;
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and I was delighted that they had put this amendment down on the Marshalled List. That is why I argued not long ago that we ought to let it succeed, in order to pinpoint where the Opposition stood on these matters, in order to preserve freedom; because if it is that you have employee shareholding (and particularly if, as my noble friend said, they are active members of the trade union movement), it adds an extra safeguard or assurance that there will be compensation if they ever consider it worthwhile nationalising it again.
The noble Lord, Lord Wynne-Jones, said that there is not a vestige of evidence that anything of the sort that my noble friend suggested is likely to happen. He knows that that is not according to facts. He knows that there is not a vestige, but a great deal of evidence at party conferences and in speeches from authoritative sources in the Labour Party which shows that it is a real danger from an influential part of a party which could well have the power of government again. It is very much there. It was very interesting that when the noble Lord was giving the disclaimer he spoke only of the past. He said that never in the past had they ever contemplated wanting to do this, and therefore why should we say it now? But he knows, as I do, that it is not the same Labour Party at this time as it was in the past. He knows that there is a real division; he knows that there is a real battle as to which half is to have the power. The evidence is more than a vestige, in my book, if one takes into account the powers that they will possibly get.
Then the noble Lord gave himself a certain cover, so that he could still remain in the party if what he said would not happen did happen. He said:"Of course, I cannot guarantee that there will not be a revolution ". What he meant by that, obviously, was that if the one half of their party do get their way and do carry out what they have said they will by way of taking without compensation, that will be a revolution.
Lord WYNNE-JONES: No.
Lord HA RMAR-NICHOLLS: If it is that it is only a revolution which will bring about what he said has not happened in the past, and if one half of his party say

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that that is what they would bring about and that half is that may well have the power, then what he is saying is that half of the party that he supports could well be revolutionaries. I think that that is a thing which we ought to keep very much in mind.
My noble friend has done a great job in putting down this amendment in order to allow him to make the speech that he has made. I am only sorry that the same sort of tactics did not impress my noble friends, for whom I have such a great respect, because it would be a good thing to have on the record that at any rate the supporters of the Labour Party in your Lordships' House believe in share ownership for employees. They have never done that in the past; and I should like to have it on record, in a written form, that we do. We do in fact, but I should like it in a written form.
I should like to congratulate my noble friend. I do not know whether he is thinking of pressing his amendment to a Division if it comes to it, but I rather doubt that that is what he has in mind, because his amendment is not as good for achieving what he wanted as the amendment which was put forward by the noble Lords on the opposite Benches. But that does not alter the fact that, the way things are moving at the minute, the noble Lords are not likely to have the power if it is that the party they now support ever has the power of government. I congratulate my noble friend, and I hope that we can get a reinforcement of the denial as to what the Left Wing of their party say that they want to do from the Front Bench as well as from the second Bench.
Lord CULLEN of ASHBOURNE: Since the noble Lord, Lord Ponsonby, is waiting for a reply from this Front Bench, I will reply, but very shortly. In point of fact, the question which my noble friend asked has really been directed at the Opposition Front Bench, and not at the Government Front Bench. I would only say that his suggestion of three years' qualification service will of course be considered with the other matters; but so far as I am concerned I think the possibility of renationalisation without compensation by any democratic Government in this country is not possible. So I just do not believe it can be.
Lord PONSONBY of SHULBREDE: Before the noble Lord sits down, may I say that what I am seeking clarification of is the Government's attitude to the amendment moved by the noble Lord, Lord Balfour of lnehrye.
Lord CULLEN of ASHBOURNE: Our attitude to the amendment is that we will certainly consider the idea of the three years' qualification, as I told my noble friend.
Lord PONSONBY of SHULBREDE: I thank the noble Lord. I was interested to know what the Government thought about this particular amendment, and no doubt the noble Lord, Lord Balfour of Inchrye, will withdraw it on the undertaking given by the noble Lord, Lord Cullen of Ashbourne. Let me be quite frank with your Lordships. When I looked through the amendments to be moved today, I thought I could well lend my support to this particular amendment; and I did not actually see that in fact the debate on this particular amendment would revolve around the question of whether or not a Labour Government would pay full or fair compensation. I think that from a worker-shareholder's point of view the much greater problem facing him is whether in fact the shares in the company which he buys today by the normal operation of market forces will in fact be more valuable in five years' time or less valuable; and he will have to make that particular assessment for himself.
But I can assure the noble Lord, Lord Balfour of Inchrye, that in fact the danger the employee faces from a future Labour Government taking back full control of British Aerospace without compensation is one which is not there. He need have no worry about that particular situation; and if he looks at, in a sense the "Gospel" —that which we in your Lordships' House always regard as containing what we should do about legislation passed up here from the Commons; that is, the party manifesto of whichever party it may be, for we in your Lordships' House accept that we will not block something set out in a Party Manifesto—he will not find in any Party Manifesto which has been published by the Labour Party over the past many decades any suggestion anywhere that there will not be other than full and fair compensation paid for any form of nationalisation.
Lord BALFOUR of INCHRYE: I thank the noble Lord very much indeed for that very firm assurance which I think not only some noble Lords in this House but probably the whole country, and certainly the employees in the factories, have been waiting to receive. They have received it now. I make no apology for having raised the issue. It is very relevant to the question of employee shares which we have been debating this afternoon. I have only to thank the noble Lord for the assurance which I sought. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 [Exercise of Secretary of State's functions under sections 3 and 5 through nominees]:
7.30 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE: moved Amendment No. 8:
Page 6, line 27, at end insert—
" (3) The names and the extent of their holding of every person appointed under subsection (1) of this section shall be published in the London Gazette, together with details of any resignations, and the same shall be notified to the successor companies within seven days ".
Page 6, leave out subsection (4) and insert—
(" (4) The Secretary of State, in fixing a target investment limit from time to time by order made by statutory instrument, shall not at any time fix that limit at less than 51 per cent. of the voting rights.".)
The noble Lord said: Clause 6 provides for the exercise of the Secretary of State's functions under Clauses 3 and 5 of the Bill and empowers the Secretary of State to appoint nominees to act for him in these matters. This amendment is asking that, in an era of so-called open Government, the names of those nominees who are to act for the Secretary of State shall be published. I can see no objection to there being public knowledge of those who are to act for the Secretary of State in these matters. I beg to move.
Lord TREFGARNE: I do not believe that the appointment of nominees, or the size of their shareholding, are things which should appropriately be published in the London Gazette. The power to appoint nominees is necessary in the first place because a company must have more than
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one member in order to comply with the provisions of the Companies Acts. Shares will therefore need to be held by at least one person other than the Secretary of State in the period between the appointed day and the flotation. In practice, we intend to use the power to appoint the Treasury Solicitor to hold shares in the company as the Secretary of State's nominee. That is one point out of the way. This will have purely presentational significance, to show that the shareholding responsibility within Government is distinct from the sponsoring responsibility. In these circumstances, it may also be convenient for the Treasury Solicitor to buy and sell shares on the Secretary of State's behalf. But the clause provides that nominees are to act as directed by the Secretary of State, subject to the consent of the Treasury. This ensures that any nominee's behaviour will be determined by the Government. A nominee will have no powers of decision as to the acquisition of shares and securities or how they should be held or dealt with. Who acts as nominee is immaterial; he or she will have no power to act other than as directed. The nominee is a mere cypher.
The Government will be ready to inform Parliament of the size of the Government's holding of shares, securities and rights in the successor company from time to time. But we do not believe that any purpose would be served by publishing the names of the nominees in the London Gazette.
Lord PONSONBY of SHULBREDE: My Lords, I thank the noble Lord for his explanation in this matter. This is not an amendment which I intend to press to a Division. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7 [Target investment limit for Government shareholding under Sections 3 and 5]:
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 9:
Page 6, line 42, leave out subsection (4) and insert—
(" (4) The Secretary of State, in fixing a target investment limit from time to time by order made by statutory instrument, shall not at any time fix that limit at less than 51 per cent. of the voting rights.").
The noble Lord said: My Lords, we come to an important amendment, No. 9, which deals with subsection (4) of Clause 7. This is the subsection which currently empowers the Secretary of State by order to fix a target investment limit which has to be lower than the target investment limit previously in force. My amendment seeks to insert (instead of the present subsection (4)) a new subsection (4) which fixes the minimum target investment limit at 51 per cent. of the voting rights of the company. The corporation's business is vital to the national interest in terms of its contribution to exports, profitability, employment and, of course, the defence of the Realm. Its effective control should remain vested in the Government. This in no way need derogate from the independence of the management of the corporation—which is one of the Government's objectives in placing the Bill before Parliament.
A majority shareholding in the company would be regarded by overseas customers and partners, especially governments, as a clear expression of the continuing interest and support for the corporation's business and management. Third-party concern will be increased if Clause 7(4) is not amended because, as it stands, it appears to recognise a continuing diminution in the Government support for British Aerospace. But confidence in the industry is essential. The mere fact that the Bill has been introduced is causing unrest and uncertainty among people in the industry. I understand that there was to have been a lobbying of Parliament today by those involved in the industry. I understand also that the Secretary of State has gone round the country telling the workers that they need not worry too much. But the mere fact that he has had to do this indicates a need for people to be reassured. The passing of this amendment would give people that assurance.
As we have already said, today the House is being asked to authorise an extraordinary process. The Government have set up a £100 company whose capital (as we have already noted) is held by two civil servants on behalf of the Secretary of State. The memorandum and articles of association have been placed in the Library and only later will we learn what are to be the memorandum and articles of association to which British Aerospace will eventually be transferred. It is because of
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my concern to see that certain items are written into the articles of association that this amendment is here. The noble Lord's colleagues (if that is the right word) have given assurances that the ratchet mechanism as prescribed in this clause will operate in such a way that at no time will the size of the Government shareholding in the company be reduced below 25 per cent. But that figure is not in the clause at all at the present time.
As the clause stands—without the assurances—the Government holding could be reduced to nil. But we have the assurance and therefore at a later stage I could well ask that those assurances be written into this clause of the Bill. However, our strongly-held view is that, in view of the importance of British Aerospace, it is crucial for the functioning of British Aerospace—particularly in its relationship with foreign Governments and the many Commonwealth Governments who have negotiations with British Aerospace for the purchase of defence equipment—that they should know that the Government are solidly behind British Aerospace and that it is a company which is within the control of the British Government.
I do not see that it need affect in any way the performance of the company if 49 per cent. of the company is owned by the public at large and 51 per cent. owned by the State. If we agree this particular amendment, many other problems which arise—some of which we are going to talk about later; for example, the question of foreign control—will disappear. Therefore, I would press very strongly that we make this substitution and place in the clause the figure of 51 per cent.
Earl AMHERST: I should like to support this amendment very strongly. I agree with everything that the noble Lord, Lord Ponsonby, has said. My special reference is to security. Assuming the control of the board is by a simple majority, 51 per cent. is a protection against any possibility of foreign infiltration. If it is not a simple majority, then we will have to be told what it is. If it is a simple majority, then if we get 51 per cent. of the voting rights we can control the position so that the company is not infiltrated by foreign interests.
7.41 p.m.
Lord TREFGARNE: This amendment would prevent the operation of the downward ratchet mechanism provided for in Clause 7(4). I recognise that it is also intended to probe the Government's intentions as to the size of their shareholding. When the successor company ceases to be wholly owned by the Government, a target investment limit will have to be set at the level of the proportionate shareholding of the Government at that time. The purpose of the limit is to set a target level for the Government's proportionate shareholding in the successor company which, although it need not be maintained, must not be exceeded. We want to be able to retain a given proportionate shareholding if we wish to do so, and in particular we must be able to retain a holding of over 25 per cent. in order to protect the foreign control article; but we want it to be clear that the Government's shareholding will not increase above a given level. Subsequent orders setting new limits may be made from time to time provided that each new order sets an investment limit lower than the one it replaces. An order setting a limit can only be revoked by another order setting a lower limit, and this means that some limit must always be in force.
This is wholly consistent with the Government's intention that they should stand back from the successor company. The Government do not intend to intervene in the commercial decision making of the company and do not intend to control it. That is the Government's policy and it is to make it clear that there will be no retrenchment from its initial position—that the company is firmly committed to the private sector—that the Government have provided in the Bill that the Secretary of State's proportionate shareholding cannot be increased above the level immediately after flotation. The Secretary of State can of course reduce his shareholding, and it is right that he should be able to do so. It also follows that the Government should be able to set lower target limits if it wishes, and this power is provided in susbsection (4).
If the amendment were made the effect of the clause would be fundamentally different. The target limit could never be less than 51 per cent., though I should emphasise that it does not follow that the
110
Government's shareholding could not fall below that level: the limit is a maximum only. More important, however, the clause would let the Government set higher target limits and so enable it to increase its proportionate shareholding above the initial level. It would also permit an existing order setting a target limit to be revoked without the need to replace it by an order fixing a new limit. The amendment would therefore make the position of the successor company unclear, by leaving open the prospect that the Government might substantially increase their shareholding in the future. This is wholly contrary to our policy towards the company, and would make shares in the company a less attractive proposition to investors. I hope the Committee will therefore appreciate why we will ask it to disagree with the amendment.
The Government have decided initially to retain about half the shares in the successor company. However, as we have repeatedly stressed, the precise proportion is of no significance because the Government have made it quite clear that we do not intend to exercise control over the company. I must make it clear that the Government do not rule out the possibility of selling more shares in the future. However, I expect that at the time of the flotation the Government will announce that they will not sell any further shares in the company for a specified period.
It would clearly be wrong for the Government to look too far ahead when circumstances may change and make one level of shareholding more desirable than another. The Government will not therefore set a minimum level for their shareholding. But I can repeat the assurance that has been given here and in the other place that the Government will maintain a proportionate shareholding of over 25 per cent. of the voting shares so as, in particular, to be able to prevent any undesirable amendment to the article of association dealing with foreign control. As the noble Lord, Lord Ponsonby, said, this amendment drives to the very heart of this Bill. I do not think that it would be going too far to say that it seeks to negate the whole purpose of the Bill. if hope for that reason at least your Lordships will reject it.
Lord WYNNE-JONES: The noble Lord, Lord Trefgarne, has twice stated that it is the intention of the Government not to allow their holding to drop below 25 per cent. Such a statement, as I pointed out on Second Reading, is a statement which bears no permanent force at all. The mere fact that the Minister states in Parliament that it is the intention of the Government to do something does not commit that Government, and certainly does not commit any other Government. Therefore, if the noble Lord is not prepared to write such a figure into the Bill, then his statement is worthless.
Lord TREFGARNE: I do not think that is fair. I have given a clear undertaking on this matter. The same undertaking was given by my honourable friend Mr. Butler in the other place. The undertaking certainly binds this Government.
Lord WYNNE-JONES: When the noble Lord says"this Government ", he is saying that the present Ministers who make such a statement have a certain honourable obligation in the matter. He does not mean—and he knows he cannot mean—that the Government, which may or may not be in office during the next few years, will be bound by such a statement. This has happened in the past. One knows perfectly well of occasions when definite statements have been made by Ministers. There was one made some years ago on immigration. That
promise was later broken; but nothing could be done about it because one cannot enforce a Minister's statement in a court of law. A court of law deliberately ignores statements made by Ministers. It is therefore important to realise that when a Minister makes a statement such as the noble Lord, Lord Trefgarne, in all honour has made, it only binds him, and it does not bind the Government at all. Consequently, it is quite unreasonable for the Government to expect the Committee to accept a Ministerial statement as being the same as a commitment in the Bill. If it were, he would presumably put it in the Bill.
Lord PONSONBY of SHULBREDE: The noble Lord, Lord Trefgarne, has said that this is an amendment of principle. Despite the various minor points he put about this amendment, and some of the side effects that it might have, I will seek to divide the Committee on this amendment on the point of principle that the Government should retain a 51 per cent. holding in the company. I believe that it would be in the national interest that a holding of that size should be retained in the company.
7.48 p.m.
On Question, Whether the said amendment (No. 9) shall be agreed to?
Their Lordships divided: Contents, 25; Not-Contents, 64.

CONTENTS

Amherst, E.

Greenwood of Rossendale, L.

Peart, L.

Ardwick, L.

Hooson, L.

Ponsonby of Shulbrede, L. [Teller.]

Beaumont of Whitley, L.

Jeger, B.

Boston of Faversham, L.

Kilmarnock, L.

Ritchie-Calder, L.

Brooks of Tremorfa, L.

Kirkhill, L.

Seear, B.

Chitnis, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Stone, L.

Cledwyn of Penrhos, L.

Underhill, L.

Davies of Leek, L.

McGregor of Durris, L.

Wade, L.

Davies of Penrhys, L.

McNair, L.

Wynne-Jones, L.

NOT-CONTENTS

Ailesbury, M.

Brougham and Vaux, L.

Enniskillen, E.

Airey of Abingdon, B.

Buxton of Alsa, L.

Ferrers, E.

Allerton, L.

Caithness, E.

Galloway, E.

Amory, V.

Carrington, L. (A Principal Secretary of Slate.

Gisborough, L.

Ampthill, L.

Glasgow, E.

Armstrong, L.

Craigavon, V.

Gowrie, E.

Avon, E.

Cullen of Ashbourne, L.

Hacking, L.

Bellwin, L.

Davidson, V.

Henley, L.

Belstead, L.

de Clifford, L.

Hives, L.

Bessborough, E.

Denham, L. [Teller.]

Hornsby-Smith, B.

Boyd of Merton, V.

Drumalbyn, L.

Inglewood, L.

Killearn, L.

Mottistone, L.

St. Just, L.

Lindsey and Abingdon, E.

Mowbray and Stourton, L.

Sandys, L. [Teller.]

Long, V.

Moyne, L.

Selkirk, E.

Lucas of Chilworth, L.

Norfolk, D.

Sharpies, B.

Lyell, L.

Nugent of Guildford, L.

Strathcarron, L.

McFadzean, L.

O'Neill of the Maine, L.

Trefgarne, L.

Macleod of Borve, B.

Rawlinson of Ewell, L.

Trenchard,V.

Margadale, L.

Reigate, L.

Vivian, L.

Minto, E.

Renton, L.

Waldegrave, E.

Monk Bretton, L.

St. Aldwyn, E.

Wise, L.

Morris, L.

St. Germans, E.

Resolved in the negative, and amendment disagreed to accordingly.

7.58 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 10:
Page 7, line 21, at end insert (" Where the Secretary of State proposes to exercise any power to dispose of shares in the successor company either directly or through nominees he shall, subject to the provisions of this Act and subject to the need to prevent more than 15 per cent. of the shares in the successor company being owned directly or indirectly by any person not resident in the United Kingdom, take steps to ensure that he obtains an adequate price for them.").
The noble Lord said: This amendment deals with the problem which could arise if the Secretary of State at any time finds himself, or finds the Government shareholding, exceeding the target investment limit. This could happen if, for example, the Government found themselves, directly or through the National Enterprise Board, being forced to rescue another company or to reorganise industries or to reorganise a group of companies which themselves have a shareholding in British Aerospace. The clause, as it stands, requires the Secretary of State to dispose of any surplus shares"as soon … as … reasonably practicable"thereafter. What does that mean? How soon in fact does the Secretary of State have to act upon that?
It could well be a very inopportune time if the Secretary of State had to dispose of those shares straight away. He might, because of the situation appertaining at the time, obtain a quite inadequate price for those shares. Surely it would be wise to introduce an element of flexibility here, subject, of course, to the overriding needs of the corporation. The amendment seeks to add to the clause an element of flexibility which would ensure that the Secretary of State would not necessarily have to act immediately on the sale of his surplus shares. I beg to move.
Lord CULLEN of ASHBOURNE: This amendment would require the Secretary of State to obtain an adequate price for any shares in the successor company that he disposes of directly or through nominees. Although the amendment is intended to be inserted in Clause 7, the duty which it imposes would have effect in any of the circumstances in which the Secretary of State might dispose of shares.
There are broadly two categories of case in which the Secretary of State might do this. The first is where, as a result of exercising his rights to subscribe for shares in a rights issue or to convert securities into shares, the Government shareholding inadvertently exceeded the target investment limit. The Secretary of State would then be required to dispose of the excess shares by Clause 7(6). Secondly, the Government might decide, as a matter of policy, to reduce their shareholding. Having taken the decision to dispose of shares, the Secretary of State would take account of a wide range of factors in deciding the exact form and timing of the disposal.
So far as foreign ownership is concerned, the directors of the company will have to ensure, in accordance with the articles of association, that not more than 15 per cent. of the voting shares are foreign held, so there will be no need for the Secretary of State to take special precautions. The directors will not register any transfer of a share if they do not receive a declaration as to whether the transferee is or is not a foreigner; and they will be required not to register one if it appears to them that, if the transfer were to be registered, the 15 per cent. limit would be breached. If, notwithstanding these safeguards, the 15 per cent. limit were exceeded the directors would disfranchise the excess foreign shares held and sell them.
It will, of course, be the Government's intention, in the arranging of any dis-

115
posal of their shares, to obtain the best possible price consistent with fulfilling the obligation to ensure that the target investment limit is observed. It is for this reason that Clause 7(6) includes the words"as soon … as … reasonably practicable ". It obliges the Secretary of State to sell the shares, but it enables him to defer their sale for a short period in order to obtain their true market value unaffected by the dealings in the rights which will no doubt have occurred. The timing will obviously depend upon the particular situation.
As I have said, it will be the Government's intention to obtain"the best possible price ". All that the amendment would require is"an adequate price "; it would therefore be less demanding in practice than what we intend. In any case, what is"an adequate price "? The best price reasonably obtainable is a question of judgment in the particular circumstances which arise, but"an adequate price"brings in so many imponderables that I cannot advise your Lordships to accept the amendment.
I think that your Lordships need have no fear. Nothing in the clause would oblige the Government to dispose of shares in such a rush that they did not achieve their true value. But it is certainly not our intention that the whole purpose of the clause, the limiting of Government involvement in the company, should be frustrated. Hence I consider that subsection (6) is adequate as it stands, and I hope that with that assurance the noble Lord will withdraw his amendment.
Lord PONSONBY of SHULBREDE: I thank the noble Lord for his explanation, but I wonder whether I could press him a little further. In making his explanation, he said that under the clause the Secretary of State would have"a short period"in which to dispose of his surplus holding. I wonder whether he could state what he means by"a short period "?
Lord CULLEN of ASHBOURNE: I find it rather difficult to answer that question. As an ex-stockbroker, I know how extremely difficult it is when somebody rings up and says:"I should like to sell so many shares. I leave it to you
116
when to do it ". If you decide that you might get a better price tomorrow and say:"I will wait until tomorrow ", you are always wrong, and it is always an extremely difficult decision to take. All I would say is that"a short period"might be one account or two accounts, but I doubt whether it would be more than that.
Lord PONSONBY of SHULBREDE: I thank the noble Lord for his explanation. I understand he is saying that by"a short period"he means that the Secretary of State would have to dispose of the shares within a month of becoming——
Lord CULLEN of ASHBOURNE: I would think so.
Lord PONSONBY of SHULBREDE——aware that he held an excessive number of shares. I also thank the noble Lord for his explanation of this subsection, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Clauses 8 and 9 agreed to.
Clause 10 [Dissolution of British Aerospace and transitional provisions]:
On Question, Whether Clause 10 shall stand part of the Bill?
8.6 p.m.
Lord RENTON: This is the only really complicated clause in the Bill. Therefore I feel justified, even at this late hour, in asking a Government spokesman whether he would be so good as to resolve any doubts that one might have, partly about its effect, but also because I should be interested to know about the timing of the various stages which arise under this clause and under the appointed day provision in Clause 14. We find in Clause 10(1) that certain provisions of the Act of 1977,
" shall cease to have effect on the appointed day in relation to British Aerospace ".
Pausing there for a moment about the words"cease to have effect ", sometimes those words are used without justification when it is intended to repeal the clauses to which reference is made in that way. But

117
on this occasion it seems to me that those words are quite properly used, because those provisions of the Act of 1977 will, as we see towards the end of subsection (1), be needed in their application to British Shipbuilders, who, as I understand it, will not be affected by this Bill and, therefore, they will continue to require the provisions of the principal Act.
If we read on to Clause 10(2), we find that British Aerospace is to continue in existence after the appointed day, and that certain other provisions of the Act of 1977 are to,
" continue to have effect in relation to its constitution and proceedings, until it is dissolved in accordance with subsection (9) ".
In subsection (9) we find that the Secretary of State,
" may, by order made by statutory instrument … dissolve British Aerospace on a day specified ".
The day specified will obviously come later than the appointed day. In other words, the appointed day will be the day on which the Bill comes into force and, thereafter, the successor company will be formed. But the day specified is to be the day on which British Aerospace will be dissolved, and between those two days, we find at the end of Clause 10(2), there is to be"the transitional period "—a kind of twilight period for British Aerospace.
My first question is whether my interpretation of those complicated provisions is correct. If it is not correct, it means that the provisions of the Bill may be found perplexing by others as well, but I hope that my interpretaton is correct. My second question is: What sort of interval will there be between the appointed day for the coming into force of the Bill and the day specified for the dissolution of British Aerospace? Is it to he weeks, or months, or years? It would be helpful to be told the answer.
I have one further question—and I shall quite understand if my noble friend is unable to answer without notice this evening, but it is important for us to have the answer from a drafting point of view. One finds that in Schedule 3 various powers and provisions of the Aircraft and Shipbuilding Industries Act 1977 are to he repealed. We find in Clause 10(1) that other provisions are to cease to have effect in relation to British Aerospace but will continue in force in relation to British Shipbuilders. We then find in Clause 10(2),
118
that certain provisions shall apply temporarily to British Aerospace, but after that it would seem to me that they become spent. One does not like to have spent provisions cluttering up the statute book if by vigilance we can ensure that they are removed when no longer needed. Therefore, my third question—I appreciate that it may be difficult to answer on the spur of the moment, but perhaps it could be considered between now and Report—is as follows: are there any provisions in the 1977 Act which are not repealed by Scheule 3, but which may become spent as a result of Clause 10? If so, I suggest that we should make provision in the Bill for those provisions to be repealed if they are no longer needed.
Lord TREFGARNE: My noble friend Lord Renton has raised a complex and difficult matter, and I shall do my best to answer as fully as I can. However, I am afraid that I certainly cannot answer without consideration the last point he put to me about the residual spent provisions of the 1977 Act.
The scenario he described relating to the appointed day as referred to originally in Clause 1 and defined in Clause 14, followed by the day after the transitional period when British Aerospace has finally shaken off this mortal coil, was correct. However, I am afraid that I cannot tell him how long the transitional period will be, because the length of that period will depend on how long it takes to wind down the proceedings and activities of British Aerospace. A number of difficult and technical negotiations have to take place, and I am afraid that at this stage it is not possible to predict what that period will be. As for the last point mentioned by my noble friend, I shall take some advice and write to him.
Lord RENTON: I am much obliged to my noble friend.
Clause 10 agreed to.
8.16 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 11:
>After Clause 10, insert the following new clause:
" Memorandum of Association and Articles
of Association (No. 1) of British Aerospace Limited
.—(1) The Secretary of State shall stipulate as a condition prior to its nomination under this Act that the successor company shall have as its initial memorandum and articles of association those set out in Schedules (Memorandum of Association of British Aerospace Limited) and (Articles of Association of British Aerospace (No. 1)) to this Act.
(2) No amendment to or addition to the Articles of Association and Memorandum of Association of the successor company as set out in Schedules (Memorandum of Association of British Aerospace Limited) and (Articles of Association of British Aerospace Limited (No. 1)) to this Act shall be made without the prior consent of the Secretary of State by statutory instrument, and no such instrument shall be of effect until it has been approved by resolution of both Houses of Parliament.".
The noble Lord said: We now come to a series of four amendments concerning the memorandum and articles of association of the successor company. The Government, as we have previously recalled, are setting up the £100 company to receive British Aerospace and the public corporation will emerge only later. We do not have the memorandum and articles of association of the public company. We have only the straightforward memorandum and articles of association for the private company as provided in the Companies Act 1948, as amended.
There will undoubtedly be elements in common between the two memoranda, but there is no safeguard at present as to what the articles in the one or the other will be. We should have a legislative guarantee as to what will be in the articles of association. This amendment attempts to enshrine the articles of association in the legislation, although I would be the first to admit that this is not entirely satisfactory because even if we enshrine these in legislation, we do not know what will be the exact form of the articles in the ultimate public company.
The Government have already placed in the Library Article 40 concerning foreign control, and one assumes that that article will be included in the articles of the ultimate public company and not in the articles of the initial private company. One wonders whether what is included in Article 40 could in some way be enshrined in the law.
The subsequent amendments deal with other aspects of the ultimate articles which we should like to see enshrined; I shall deal with them when we come to them. If we cannot have the articles enshrined
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in the Bill, the only answer would seem to be to add clauses to the Bill stipulating the matters that we should like to see enshrined in the articles. Since it is unsatisfactory that we cannot know what the ultimate articles will contain, I feel that the only way round this is to add new clauses to the Bill to ensure that within the ultimate articles these matters are satisfactorily dealt with. As it is, the Committee is being asked to sign a blank cheque and this amendment seeks to put the situation right.
Lord CULLEN of ASHBOURNE: I hope it will be helpful if I seek to describe the process by which the vesting of the business in the successor company will occur. The Bill provides that the successor company must have been formed and registered under the Companies Act 1948; that on the appointed day it must be limited by shares; and that on the appointed day all those shares must be owned by or on behalf of the Crown.
The Secretary of State has formed and registered, under the Companies Act 1948, a private limited company, called British Aerospace Limited. The Secretary of State can do this, quite independent of the Bill, in exactly the way that any individual can form and register a company. The sole function of that company is to stand available as the vessel in which the business of BAe will lodge. It has no purpose or function other than to prepare itself for the vesting on the appointed day. The shares in the company are held by the Secretary of State's nominees, in practice two officials in the Department of Industry; the directors of the company are similarly departmental officials. The issued share capital is purely nominal. The articles of association are in essence those of Table A to Schedule 1 of the Companies Act, with some very small amendments designed to ensure that the company can operate on the very limited basis I have described. These articles are available in the Library of the House, and it is these that are included in the second Schedule associated with this new clause.
This company will be nominated as the successor company for the appointed day, and will be placed in a fit state for the Nesting in it of the undertaking of British Aerospace. This will involve holding, on or shortly before the appointed day,

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an extraordinary general meeting of the company at which a number of decisions will be taken. First, the authorised share capital of the company will be increased from the purely nominal capital of the"shell company"to a capital appropriate to a company running the British Aerospace industry. Secondly, the company will adopt new articles of association—again, those appropriate for a listed company. The basis of the articles will be those in Table A of the Companies Act 1948, brought up to date in various ways. The articles will also contain the special provisions which I described on Second Reading, for a limit on foreign ownership to a maximum of 15 per cent; and for the appointment of two Government directors. There will be an application for the private limited company to be re-registered as a public limited company. Last, the directors of the new company will be elected from the board members of British Aerospace, and the two departmental officials on the board of the"shell company"will resign. The transformation will be complete: a public limited company, with all British Aerospace's property, rights, liabilities and obligations; with a strong and independent board; with new articles of association; and with an appropriate capital structure will stand ready for a flotation. In response to a direction to be made by the Secretary of State under Clause 3 of the Bill, the company will issue shares in the company to Government nominees.
The essential feature of the memorandum of the public limited company in which shares will be offered to the public—the objects clause—will be that of the company formed at the end of last year. That is the part of the memorandum which sets out the activities the company is permitted to pursue. These are helpfully duplicated in the first schedule associated with this new clause. We expect that they will form the objects clause of the company in which shares will be offered for sale. The memorandum, drawn up in close consultation with British Aerospace allows British Aerospace Limited to do those things which the constituent companies of the statutory corporation were allowed to do. We have put British Aerospace Limited in the same position as that of BAC, Hawker Siddeley and Scottish Aviation. The objects clause in the memorandum of British Aerospace Limited can most easily
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be regarded as that of BAC, amended as necessary to embrace special features of the other two companies, or of recent developments within the statutory corporation. The definition of what British Aerospace Limited will be allowed to do is therefore available to the House.
I have deliberately repeated in some detail the process that will be adopted to enable noble Lords to understand the background against which the new clause must be considered. The effect of subsection (1) would be to require the successor company to have the memorandum and articles of the present"shell company ". I have explained that the objects clause set out in the memorandum of the"shell company"will indeed be the objects clause of the"real company ". But in all other respects, the memorandum and articles of association are quite inappropriate for and incompatible with the requirements of a public limited and listed company, conducting a business with a turnover in excess of a billion, and assets approaching half that. If the new clause and schedules were accepted therefore the sole effect would be to ensure that, on the appointed day, the company's constitution would require immediate change. They would also prevent the change from private to public limited company occurring before the appointed day.
Subsection (2) would require changes in the memorandum and articles to be approved by Parliament. I appreciate the wish of noble Lords to know more about the memorandum and articles. I have explained that the memorandum will be almost identical to that of the shell company, and the articles will be largely standard; and we outlined on Second Reading the special provisions on foreign control and Government directors. The articles are now being finalised and I can undertake that both they and the memorandum will be laid in the House before Report. However, I do not believe it would be appropriate for amendments to them to be subject to Parliamentary approval. This is not a requirement for Cable and Wireless—wholly owned by Government; nor for Rolls-Royce 1971—again about to be wholly owned by Government direct; nor for British Leyland—almost entirely owned by the NEB. We wish British Aerospace Limited to operate like any other private

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sector company, subject to exactly the same constraints as any other public limited company. Shareholders in British Aerospace must have the same rights as shareholders in other companies, including the right—if the necessary three-quarters majority is forthcoming—to change the company's memorandum and articles. To intrude a Parliamentary procedure into this would run quite counter to our policy, and produce a strange half-breed, subject in part to Parliament and in part to its members.
I must apologise for a rather long explanation, but I hope thereafter the noble Lord will withdraw his amendment.
Lord MORRIS: I must support my noble friend on this particular point. I believe this amendment to be entirely mischievous. It would be quite improper that anybody other than the promoters of a company should define the terms of the memorandum and articles of association. In this instance, the promoters of this new public company are the Government of the day, acting by analogy as the trustees for putative future shareholders. For anybody other than the promoters to design the memorandum and articles of association of that company surely must not be proper in the normal course of events. As my noble friend so rightly said, there is no precedent in modern days for this. I think that this point of view is certainly worthy of support.
Lord PONSONBY of SHULBREDE: May I thank the noble Lord, Lord Cullen of Ashbourne, for his full explanation. The noble Lord, Lord Morris, has slightly misinterpreted the point of my amendment. I certainly have no desire to help to draw up the memorandum and articles of association of British Aerospace Limited. Indeed, it gave me comfort from the reply of the noble Lord, Lord Cullen of Ashbourne, to learn that in fact the articles of the public company are almost drawn up and that they will be available for noble Lords to see in the Library before we reach the Report stage. That is a small step forward. I hinted at a number of remarks which were made by the noble Lord, Lord Cullen of Ashbourne, when I moved the amendment: that the articles, as tabled, were placed in the Library by the Government at the end of last year.
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I feel that by tabling this amendment your Lordships had the opportunity of seeing what was proposed to be included in the articles. However, it in no way lessens my feeling of dissatisfaction at the fact that your Lordships' House has very little say and that Parliament as a whole has very little say about what in fact will be included in the articles. Therefore we go on to the subsequent amendments which ask that specific items be included in the articles, and I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
8.31 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 12:
After Clause 10, insert the following new clause:
" Nationality of directors of successor company
" The Secretary of State shall stipulate as a condition prior to its nomination under this Act that the successor company shall have included in its initial articles and memorandum the necessary provisions to ensure that all directors should be British citizens and resident in the United Kingdom.".
The noble Lord said: This amendment concerns the nationality of the directors of the successor company. We shall shortly be coming to my amendment on the foreign investment limit. The Government have admitted their concern regarding foreign control and the need to restrict the amount of foreign investment in the company. As we have said many times before in this debate, British Aerospace is a British company with substantial British defence interests, and bearing that in mind surely it is not too much to ask that the directors of the company should all be British. I beg to move.
Lord TREFGARNE: We entirely agree that all directors of the company should be citizens of the United Kingdom and Colonies. Provisions to this effect will be included in the articles of association of the successor company which, as my noble friend said just now, will be available to the House in draft before the Report stage. The Government would be prepared to vote their shareholding if it was necessary to prevent any amendment to these provisions.
However, there are two points on which we do not agree with the noble Lord. First, we do not think it right to require

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directors to be resident in the United Kingdom. This is because British Aerospace has important overseas activities which might require directors to live abroad, at least temporarily. For example, the Walton Division has a director resident in Saudi Arabia and that might equally apply to a director of the company. Secondly, we do not believe that it is appropriate for provisions of this sort to be included in the Bill. It is important that the successor company should be seen to be a normal private sector company governed by its memorandum and articles like any other company. This principle would be infringed if certain provisions of the articles were to be incorporated in the Bill. In the light of this explanation, I hope the noble Lord will not press his amendment.
Lord PONSONBY of SHULBREDE: In his reply, the noble Lord indicated that a reason why he disliked this particular amendment was that it included the words,"and resident in the United Kingdom ", although he said that it was certainly the view of the Government that all the directors should be British citizens. In view of that, I might be well advised to table an amended amendment at Report stage. However, I have noted what the noble Lord has said—that he feels that this is not something which should be written into the Bill. Our strong view is that items like this should be written into the Bill. However, in view of his particular remarks about the defectiveness of this amendment, I beg leave to withdraw it at this stage.
Amendment, by leave, withdrawn.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 13:
After Clause 10, insert the following new clause:
After Clause 10, insert the following new clause:
"Consultative Machinery
The Secretary of State shall stipulate as a condition prior to its nomination under this Act that the successor company shall have included in its initial articles and memorandum the necessary provisions to ensure that—
(1) Except'so far as it is satisfied that adequate machinery exists for achieving the purposes of this section, it shall be the duty of the successor company to consult any relevant trade union with a view to the conclusion between the successor company and any
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such trade union of such agreements as appear to the parties to be desirable with respect to the establishment and maintenance of machinery for the purposes specified in subsection (2) below.
(2) The purposes referred to in subsection (1) above are:—

(a) the settlement by negotiation of terms and conditions of employment of persons employed by the successor company and its wholly owned subsidiaries.

(b) the resolution of trade disputes, within the meaning of the Trade Union and Labour Relations Act 1974.

(c) the promotion and encouragement of measures affecting efficiency, in any respect, in the carrying out of their activities by the successor company and its wholly owned subsidiaries.

(d) the discussion of other matters of mutual interest to the parties to the agreement.

(3) Nothing in this section shall be construed as prohibiting the successor company or any subsidiary from taking part, together with other employers or organisations of employers in the establishment and maintenance of machinery for any of the purposes set out in subsection (2) above ".
The noble Lord said: This amendment was to have been moved by the noble Lord, Lord McCarthy, but unfortunately he is unable to be present today. This clause attempts to establish that the sort of workable industrial relations machinery which the new company might have should be enshrined in the Bill. During its two years of existence, British Aerospace has built up a very effective system of consultative machinery which seems to be working satisfactorily at the present time. To have a clause such as this in the Bill would reassure the present workforce of British Aerospace and I hope that the Government will be able to see their way to include a clause like this in the Bill. I beg to move.
Lord TREFGARNE: The duty which this clause seeks to impose upon the successor company through its articles of association is a standard one imposed upon public corporations. It is one by which British Aerospace is bound by virtue of Section 6 of the Aircraft and Shipbuilding Industries Act 1977. I understand why the noble Lord has moved this amendment, but I believe that when I have described its effect he will see that it is a limited provision which will achieve little or nothing. Provisions in the articles imposed by the clause would require the successor company to consult relevant

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trade unions (which are not defined, incidentally) as to the establishment and maintenance of machinery for settling terms and conditions of employment, resolving trade disputes, promoting and encouraging measures affecting efficiency and discussing other matters of mutual interest to the parties concerned. It appears that the words"relevant trade unions"are intended to denote those recognised by the successor company for collective bargaining purposes. But the new clause would require consultation only where the successor company was not satisfied that adequate machinery already existed. There would therefore be no compulsion to start from scratch and the successor company would have complete discretion to decide whether or not adequate machinery already existed.
Under its own statutory duty, British Aerospace has for the most part continued to operate the procedures that existed in the companies before nationalisation. Since the corporation has evidently been satisfied with these arrangements there have been no moves towards, for example, major rationalisation of negotiating machinery. The effect of the duty, therefore, can be said to have been very limited indeed.
We believe it is essential that British Aerospace Limited should behave and be treated as a normal private sector company. Therefore, it will have the same responsibilities in relation to consultation and other industrial relations matters as any private sector company. The Government are very much in favour of genuine participation and consultation in industry, and I have no doubt that the successor company will wish to continue and to build on the arrangements that exist in British Aerospace. But to impose upon it a duty in this area by statute and particularly one normally imposed upon public corporations, as this clause would do, would be wholly inappropriate. For that reason and because, as I have explained, the clause would achieve very little, I hope the noble Lord will not press it.
Lord PONSONBY of SHULBREDE: The reply which the noble Lord has given is not unexpected and, in view of the late hour, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.39 p.m.
Lord WYNNE-JONES Lord WYNNE-JONES moved Amendment No.14:
After Clause 10, insert the following new clause:
"Corporate Plan
(" The Secretary of State shall stipulate as a condition prior to its nomination under this Act that the successor company shall have included in its initial articles and memorandum the necessary provisions to ensure that it shall be the duty of the successor company, after consulting with any relevant trade union, to formulate in each year a corporate plan relating to the conduct of the operations of the successor company and its subsidiaries and dealing with the following matters, namely:—

(a) capital investment

(b) research and development

(c) employment of persons

(d) forecasts of income and expenditure on profit and loss account and of payments and receipts of the successor company and its wholly owned subsidiaries

(e) such other matters as the successor company considers appropriate, and

(f) such other matters as the Secretary of State may for the purposes of this section specify in writing to the successor company.").

The noble Lord said: This amendment proposes the introduction of a clause requiring a corporate plan every year from the company. The purpose of a corporate plan is to obtain from the company an estimate of its capital requirements, as stated here; its research and development work; the employment of persons; forecasts of income and expenditure on profit and loss account; such other matters as the successor company considers appropriate and such other matters as the Secretary of State may, for the purposes of the section, specify in writing to the successor company.
The aerospace industry is one of the largest and most successful industries in the country. It has a very considerable sale of aircraft and components abroad, and it is an industry which is in the very forefront of technological development. If ever there was a case when one could talk about white hot technology, this is it. The aerospace industry has been a focus of white hot technology, and very successful too, and has done a great deal for this country. But what is abundantly clear with an industry of this type, engaged in the very forefront of technology, is that unless large sums of money are spent upon research and development the future is bleak.
This particular industry, of which I think we must all in this country be proud has produced notable achievements, but let us notice that those achievements have only been won at a very high price. If one goes back to the time when we had introduced the first jet airliner, the Comet, we had great trouble with the Comet. Several Comets blew up in the air. Why? Because there were certain weaknesses in the structure which were not known in advance. It was not until a very elaborate testing procedure was introduced, which was the tank that was brought in at the Royal Aircraft Establishment, that they were able to find out why these Comets has been destroyed in the air. This was fundamental research of an extremely important type, and very expensive.
People talk about the high price of Concorde. I remember several years back, ten years or so, going to the Royal Aircraft Establishment and to Filton in order to see what was happening in the development and building of Concorde. What became abundantly clear was the great amount of money that has to be spent upon basic research work—not research work just to build one aeroplane, but research work in order to find out whether supersonic flight could be used for carrying passengers. It was the solution of these immensely difficult problems which cost the very large sum of money which amounted to the fantastic price of Concorde. You may say Concorde is not a financial success, but we do not yet know whether the money spent on the development of Concorde will not in the future reap considerable rewards. We cannot say. But what we can be sure of is that all development of aircraft, all these aerospace developments that we talk about, will only be achieved if there are large sums of money available for research and development.
When the research and development is required for military aircraft the problem is not so grave, because there are plenty of resources made available, from the Defence Ministry and in other ways, in order to develop military aircraft. But when it comes to civil aircraft then these resources have to be devoted by the company concerned. One of the difficulties is to he sure that the money is available. Your Lordships will recollect that some years ago there was the problem with regard
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to Rolls-Royce, not because Rolls-Royce were doing something badly but because in order to build their new engines they had to commit so much in the way of research and development; they were unable to find the resources, and the Government had to step in and help.
What we are suggesting in this amendment is that a corporate plan should be published every year which states all this, makes it clear what the company requires in order to do the job, which, whether it is a national company or a private company, will remain the job it has got to do; that is, to develop new means of conquering aerospace. This is why we believe that it is vital that a corporate plan should be published every year, in order that we should know exactly what the company is aiming at and know what sort of resources may have to be made available. I beg to move.
Lord MORRIS: I believe this to be another mischievous amendment. It clearly shows that the noble Lord has lost temporarily the idea of what the functions of a memorandum of association and articles of association are. The memorandum is there solely to state the name, the registered office and the broad strategy of the company. The articles of association are the rules which state the way in which the company is being operated. It is not the function of any company to entrench in articles of association any corporate plan, or even to say that the directors of a company should do so year-in, year-out. This must be considered on the exigencies of even the day-to-day decisions of the directors, and it is certainly not the function of the articles of association to be used in this way.
Lord TREFGARNE: As the noble Lord, Lord Wynne-Jones, said, this new clause would provide that the articles of association of the successor company should include a provision requiring the company to formulate a corporate plan after consulting its trade unions. It would, therefore, in effect impose upon the successor company a duty comparable to the one to which British Aerospace is subject as a nationalised industry under Section 7 of the Aircraft and Shipbuilding Industries Act 1977. This approach is fundamentally opposed to the Government's policy, which is to vest British

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Aerospace's business in a company like any other, subject only to commercial disciplines and free of Government interference. Indeed, the noble Lords who put down this clause have perhaps tacitly recognised that it is incompatible with the basic philosophy underlying the Bill, for although the new clause is based upon Section 7 of the Aircraft and Shipbuilding Industries Act, it does not include any requirement, as that Act does, to act upon lines settled by the Secretary of State.
Of course, British Aerospace Limited will, like any other major company, plan its corporate strategy, and it could hardly produce a corporate plan which did not deal with the items specified in paragraphs (a) to (d) of the new clause. Equally, I have no doubt that the successor company will wish to build on the arrangements which already exist within British Aerospace for consultation with the trade unions. But these will be matters for the company itself. No private sector company is subject to special statutory requirements or ministerial directions in these areas. They are governed by their articles of association which are subject to amendment by a three-quarters majority of their shareholders. We believe it would be quite wrong for British Aerospace Limited to be different and to be subject to duties which, while enshrined in the articles of association, were put there because of a statutory requirement, and, if noble Lords opposite had their way, could only be amended by a decision of Parliament. I hope your Lordships will not accept this amendment.
Lord WYNNE-JONES: I am sorry that the noble Lord is not prepared to accept the amendment. I realise, of course, that if the Government consider that this is at variance with the purpose of the Bill, then the noble Lord has the ability to carry that point of view. I am sorry about that because I think that the Government may regret that they do not have such a clause in the Bill. Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.51 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE: moved Amendment No. 15:
After Clause 10, insert the following new clause:
Foreign Investment Limit
. (1) The Secretary of State shall by order made by statutory instrument fix a limit for investment by non-United Kingdom residents (the foreign investment limit) in the successor company.
(2) Any issue or transfer of shares which would cause the foreign investment limit to be exceeded shall be void and any moneys paid pursuant to such issue or transfer shall be recoverable as an ordinary debt.
(3) The foreign investment limit shall be expressed as a proportion of the voting rights exercisable at general meetings.
(4) The powers under paragraph (1) above shall not be esercised so as to fix the limit above 15 per cent.
(5) In this section"investment"means the legal ownership or ownership through nominees.".
The noble Lord said: The purpose of this new clause is self-evident. It seeks to protect the corporation against a major foreign stake or influence in the company. The Government have accepted the principle of this amendment and, indeed, have placed draft articles in the Library showing how it is proposed to deal with the problem of foreign shareholding. I think that the noble Lord, Lord Trefgarne, cannot in fact use the argument, which he put forward as regards some of the previous amendments, that British Aerospace should operate on all fours with other public companies, because here the Government have accepted that it will not operate on all fours with other public companies in that it will have in its articles of association Article 40 which deals with the problem of foreign shareholding. Therefore, this amendment should be looked at by the noble Lord in a different way from the way he looked at other amendments which have been tabled.
I hope that the noble Lord, Lord Morris, who spoke to the two earlier amendments, will also realise that this amendment is different from those earlier amendments in that the Government have agreed that in fact the question of foreign ownership must be protected in the articles. In view of that, I hope that the Government will give very serious consideration to including a new clause, like this, in the Bill.
I have not had much success with the noble Lord, Lord Trefgarne, this evening, but I should hope that he might find some merit in including this clause in the Bill. I certainly believe that it would be much more satisfactory from Parliament's point

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of view if this limitation on foreign ownership was clearly stated in the Bill.
Our misgivings in this matter stem from two concerns. First, we know that the Government are anxious to raise money by selling off national assets—a course of action with which we, as the noble Lord knows, do not agree. But, there must indeed be a temptation to sell off assets to the highest bidder. British Aerospace is a successful undertaking and its knowledge and expertise could be much in demand by a foreign bidder who could well be prepared to pay a premium for a stake.
Secondly, we know how the De Beers Corporation recently, unbeknown to the most inquisitive and investigative journalists, was able to gain a measure of control of Consolidated Goldfields. That makes one concerned that every effort should be made to ensure that the Government's wish, that this company remains under United Kingdom control, is one which is made absolute. Therefore, I think that it would be advisable if we could enshrine within the Bill a clause stating a maximum or ceiling limit for foreign ownership. The Government should give very serious consideration to that matter. I beg to move.
Lord CULLEN of ASHBOURNE: We have consistently made clear that the Government are determined that British Aerospace Limited should not fall into foreign hands. In that matter, we are absolutely in accord with noble Lords opposite. That was made clear by my right honourable friend the Secretary of State in his initial statement in the other place on 23rd July and on Second Reading on 20th November; it was frequently reiterated during the debates on the Bill in the other place, and we reaffirmed it on Second Reading here. I again formally set on record our determination to prevent the company, that will be so important to our defence, from falling into foreign control. It is a determination which I know the Opposition shares. What divides us is merely the means of achieving a common end.
The means we wish to adopt rely on three mechanisms. First, a provision in the articles of association of the new company restricting foreign ownership to not more than 15 per cent. of the voting rights in the company; in substance this
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is what is proposed in the new clause, though the article is immensely more complicated. Secondly, we have made clear that we shall retain a shareholding of over 25 per cent. and we shall not hesitate to use the voting rights attached to the Government's shares either to stop any attempt to remove or weaken this article, or to oppose the election of directors representing foreign interests. Thirdly, we should be prepared if necessary to use Part II of the Industry Act 1975 to stop a change of control of this key British manufacturing enterprise. We believe that these triple mechanisms provide a full and effective means of enabling us to stop foreign control.
Of these three mechanisms, the most important is the restriction in the company's articles of association. In January, a copy of the first draft article was lodged in the Library: a second draft, incorporating one or two suggestions made by the Opposition in the other place, was placed in the Library on 6th February. It has been drafted with great care to ensure that the objective of this new clause—that no more than 15 per cent. of the shares should be foreign-held—is achieved.
We believe that a relatively simple legislative provision of the sort envisaged in the new clause would be ineffective on its own because there would be no guarantee that all the detailed provisions concerning enforcement, the definition of ownership through nominees, and so on, would be included in the articles.
I recognise that the noble Lord has made some attempt to deal with these points in his new clause, but the draft article (whose purpose is the same) runs to several pages. On the other hand, I believe that it would be wrong to include the full article in the Bill. This would run counter to the principle that the company will be like any other private sector company, free from Government interference and governed by articles of association determined by its shareholders. If the article was laid down by the Bill it would presumably be subject to amendment by Parliament, either by statutory instrument or by new primary legislation. This would be a stark case of the rights of shareholders being subject to specific parliamentary (and indirectly Government) control over the company of the sort we are most anxious to avoid. So

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I hope that the noble Lord will accept that the arrangements we propose to prevent foreign control really are effective, and that he will withdraw the new clause.
Lord PONSONBY of SHULBREDE: I thank the noble Lord for his explanation and I shall read his detailed reply with interest in Hansard tomorrow. Let me say straight away that my advisers have looked at the new Article 40 placed in the Library. I am advised that it is a very satisfactory attempt at trying to ensure that, in fact, foreign ownership does not creep up above 15 per cent.
Indeed, I agree with the noble Lord that that is a complicated article and competently defines the nature of a foreign company. However, I am not altogether convinced that, in fact, this is as far as we should go. Whether it might be appropriate to have some form of mechanism in the Bill, as we have for the total Government shareholding, as regards the foreign ownership aspect of shareholding is something I should want to consider. Therefore, I beg leave to withdraw this amendment, but could well return to it at the Report stage.
Amendment, by leave, withdrawn.
9 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 16:
After Clause 10, insert the following new clause:
"Complaints about charges of successor company
—(1) If at any time a complaint is made to the Secretary of State by any body appearing to be representative of persons engaged in the aerospace industry as to the prices charged by the successor company for its goods, the Secretary of State may make directions to the company with regard to the charges made or the subject of the complaint.
(2) The Secretary of State shall not give a direction under this section with regard to any such charges as are mentioned in subsection (1) of this section unless it appears to him that the charges in question are excessive, having regard to the full cost of absorbing the source or sources in respect of which they are made.
(3) It appears to the Secretary of State that a body making a complaint under subsection (1) of this section has a reasonable case to make in support of the complaint, he shall refer the complaint for investigation to a person appearing to him to have suitable qualifications for that responsibility, and shall consider the report of
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that person before giving a direction upon the complaint under this section.
(4) The procedure on any complaint under this section (including any referral of the complaint for investigation) shall be such as the Secretary of State may determine ''.
The noble Lord said: The Committee stage has perhaps gone a trifle longer than some of us anticipated at one point earlier in the afternoon. Therefore, I shall move this particular clause very quickly indeed. This clause is to provide for investigation of the charges of the successor company so that what it charges can be monitored in the same way as other corporations are monitored. I beg to move.
Lord TREFGARNE: I shall do my best to reply as quickly as the noble Lord has moved the amendment. To be perfectly honest, when I read this amendment I thought that it probably qualified for the silly-amendment-of-the-week prize, and I hope that your Lordships will agree with me when I have quickly said a few words.
The Government have made it clear that the successor company should be like any other company. That means that it should be subject to all the general laws of the land and should have no special privileges. But it also means that it should not be subject to controls or interference to which the generality of companies are not subject. No mechanisms for controlling the prices of an individual company such as those proposed in this clause exist in legislation of general application, and so the successor company would be treated differently from other companies. I think that I have said enough this evening to indicate that that procedure is not acceptable to us, and I hope that the noble Lord will now accept our point of view on that matter and not press his amendment.
Lord PONSONBY of SHULBREDE: I thank the noble Lord for his reply and do not intend to press this particular amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.4 p.m.
Lord PONSONBY Lord PONSONBY of SHULBREDE moved Amendment No. 17:

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After Clause 10, insert the following new clause:
"Government Funding
.—(1) For the purpose of promoting the design, development or production of civil aircraft, the Secretary of State with the consent of the Treasury may at any time after the appointed date make payments in accordance with this section to the successor company or any of its wholly owned subsidiaries.
(2) No payments may be made under this section unless—

(a) the Secretary of State is of opinion that it is in the national interest that payments on the scale and in the way proposed should be made; and

(b) it appears to the Secretary of State that, if the payments are not made, it would be inconsistent with the objects of the company imposed by or under section 1(2)(b) of this Act for the company or any of its wholly owned subsidiaries to undertake the design, development or production in question.

(3) Payments under this section may be made on any terms and conditions, and, without prejudice to the generality of this subsection, by way of fees or by any description of investment or lending or by the making of grants.
(4) There shall be defrayed out of moneys provided by Parliament any sums required by the Secretary of State for making payments under this section and any sums received by the Secretary of State in pursuance of the terms and conditions on which payments are made under this section shall be paid into the Consolidated Fund.".
The noble Lord said: I am afraid that I cannot be quite so speedy about Amendment No. 17. This amendment deals with the question of Government funding. The sort of money which the Corporation will require to launch new projects over the next five years will be formidable and it is difficult to see it coming from private sources. The Airbus entry fee—and we shall not see the pay off of that for some seven or 10 years—was at least £250 million. The 146 project required a commitment of £250 million. The new company could well face research and development costs of between £500 million and £1,000 million over the next five years. I do not see how the company will be able to obtain that sort of money without a Treasury guarantee.
The Government have an overriding desire to reduce the public sector borrowing requirement, so unless there is some special provision for help, it is difficult to see how we can again have civil aviation aircraft projects in this country. One cannot see sufficient money for research and development under the Industry Act,
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the Civil Aviation Act 1949 or the Science and Technology Act 1965 being made available. Unless we have a commitment from the Government, we could well be seeing the beginning of the end of British Aerospace. When it is pressed for cuts, inevitably the first cuts will come in its research and development work.
The money needed for this is high-risk money. Private investors in this country do not have a good record of putting up massive amounts of capital for research and development in high-risk projects. One can only look at the situation in the British Aerospace industry prior to nationalisation to understand that that is what did not happen. Indeed, had it not been for nationalisation, the Hawker Siddeley 146 project would not be with us today. It is only because the Government were prepared to back this project that we have it here now. I beg to move this amendment.
Lord TREFGARNE: I do not disagree with the principle that powers of the sort included in this new clause should be available to the Government. However, they will be available in any case, since we shall be able to provide assistance under Section 1 of the Civil Aviation Act 1949 to encourage measures for the designing, development and production of civil aircraft. The new clause would, therefore, add nothing to the powers of the Government, since the successor company will be
eligible for assistance under the 1949 Act on the same basis as any other company. In this respect it will differ from British Aerospace which was debarred from receiving Civil Aviation Act money by Section 46 of the Aircraft and Shipbuilding Industries Act 1977. Section 45 was included in the 1977 Act as a substitute for the Civil Aviation Act power, to enable British Aerospace to receive direct funding for civil aircraft projects in certain circumstances. We now intend, in effect, to return to the position which existed before nationalisation. British Aerospace Limited will be in exactly the same position as any other company in respect of eligibility for assistance under the 1949 Act. There is, therefore, no need for a special provision in the Bill.
I must, however, sound a word of warning. British Aerospace has not received any launch aid. With one exception—the

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£50 million provided in connection with British Aerospace's membership of Airbus Industrie—it has received finance related to civil projects only as part of its overall financing requirements in the form of public dividend capital or loans from the National Loans Fund. The policy has been that the Corporation should make its own decisions on investments in future civil projects on fully commercial grounds, and that financing should normally be on commercial terms. This will continue to be the position with British Aerospace Limited, hut it will be reinforced by the fact that the company will have to raise the funds for its investment programme from commercial markets. I would not wish to rule out the possibility that in future there may be reasons of national interest for wishing to consider the provision of launch support. But this is a matter which would need to he looked at on its merits at the time. It would not be profitable to speculate now upon the possible circumstances. However, British Aerospace Limited will he treated on exactly the same basis as any other private sector company.
Lord PONSONBY of SHULBREDE: May I thank the noble Lord for his reply. which I shall study with interest in Hansard. In the meantime, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Remaining clauses agreed to.
Schedule I agreed to.
[Amendments Nos. 18 and 19 not moved.]
Remaining schedules agreed to.
House resumed: Bill reported without amendment.

COMPANIES BILL [H.L.]
Lord DENHAM: My Lords, I think it would be for the convenience of the House if I announced that consideration of Commons amendments on the Companies Bill will not now he taken tomorrow. It will instead be taken on Thursday, 27th March. This is due to difficulties with the printing which delayed the publication of the amendments.

ROAD PLANNING: SECOND STAGE AUDITING
9.10 p.m.
Lord BEAUMONT of WHITLEY Lord BEAUMONT of WHITLEY rose to ask Her Majesty's Government whether they will set up effective machinery for auditing the second stage of the road planning process, expressed in cost benefit analyses and traffic models for individual schemes. The noble Lord said: My Lords, this appears on the face of it to be a singles match, although there was a moment when I thought that even my opponent might not be appearing on the court in time to pick up his racquet. Let me serve notice that I think it is none the less an important Question. I have given notice to the noble Lord the Minister of the various points that I was going to put to him, not only because I would wish to extend to him the courtesy that he has always extended to me and to others in your Lordships' House, but also because I think it is important that on this particular Question there should be no misunderstanding about the questions being asked or the replies being given.
Although the singles match this evening may merely result in one single slow rally of two shots, nevertheless Iserve notice to the noble Lord and to the Government that should the replies be unsatisfactory this is a matter which in fact must be pursued well beyond that. On the other hand, I have every hope that the replies will prove satisfactory. The Question is about the second stage of the road planning process. The motorway and trunk road construction programme in this country is planned in two stages. The first is what may be called the basic methodology of national trunk road assessment, and it incorporates methods of national traffic predictions. This is now subject to some sort of independent scrutiny, that of the successor to the Leitch Committee, the Standing Advisory Committee on Trunk Road Assessment—SACTRA. I see that our singles match is even more singles, for the noble Lord appears to be lacking any seconds in the wing.
The second stage is the application of that methodology which, combined with other factors involved in the mathematical traffic model and the cost benefit analysis, constitutes a financial, economic, and

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environmental case for a proposed section of road. I do not have to remind your Lordships that these days, as always, but I think particularly these days, the construction of new sections of road really does need extreme defence, because it is extremely expensive. This is the form in which road proposals come before local public inquiries, and it has been subject to no independent audit or scrutiny whatsoever. This is not through any ill will on the part of the Government or anyone else, but, as I shall goon to point out it is because basically it is a difficult thing to do and there has not been the realisation of the need to do it. I hope tonight to point out the need.
It is difficult to do so because there are only two means whereby such audit and scrutiny can be undertaken: either objectors are rich and skilled enough to employ the necessary expertise, as was the case with the Winchester Joint Action Group in 1976–77; or a statutory or quasi-Government body decides to object and calls on public funds in order to do so, and there is an interesting precedent in that that has been done in the past by bodies other than the Government. In those particular cases the precedents were Haringey Council in the case of the Archway proposals, and the Countryside Commission in the case of the A30 Dartmoor National Park proposals at Okehampton.
Without exception, when the individual models and cost benefit analyses have been subjected to scrutiny, they have been found to be subject to major error and inadequacy, and where that has been done in sufficient depth, they have been found to be characterised by such extent of error that the schemes and orders have had to be either withdrawn or substantially amended, and I will give just some of the evidence to hand. In the Hayle by-pass proposals there was revealed a loss of £650,000 on a discounted construction cost of £4.9 million, as a result of which the orders were amended. As a result of documents being prepared for the district auditor, it was discovered that the Cumnor Hill dual by-pass scheme had been constructed on an error of 40 per cent. in traffic assignment. Haringey Council's objections at Archway resulted in the orders being withdrawn and the inspector saying:
" From the evidence given, it is clear that there have been changes of sufficient magnitude that
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would justify the recomputation of the predictions … I am sure that Government would not wish to go ahead with such an expensive scheme unless it is sure that its future traffic usage will justify it.".
There the inspector talked of change, but, although there was probably change, there was also error. The orders were withdrawn.
Last October it was discovered that Hampshire County Council's proposal for the Easton Lane linkroad could not even sustain an inquiry, so dubious had been the assignment and modelling process. The inquiry was adjourned until 1980. Major errors were discovered at the Swanley M25 inquiry in both the traffic model—Mr. George Dobry Q.C., the inspector appointed, said,"The differences are staggering "—and in the geological survey work. The money ran out before adqeuate testing could be done.
At the Okehampton A30 inquiry, counsel for the Countryside Commission so undermined the department's model and cost benefit analysis that he invited the inspector to ignore the entire financial and economic evidence, it being without a shred of value. At the Uxbridge M25 inquiry, counsel for a very wealthy objector gained the department's agreement after a mere month's work that a short stretch of an alternative route would give a saving of £5.8 million, a finding totally different of course from that which was being put forward.
Those are merely samples, and I return to the statement that universally they have been found subject to serious error. In order to get a scrutiny of cost benefit analysis, it is important to show that all the rules have been complied with; to establish that all the assumptions for the production of a model are correct; to ensure that no tinkering has taken place, for whatever good motives; to check whether the cost benefit analysis has been fed the right input; to check whether correct use has been made of its output; to check for validation and calibration the exercises on traffic assignment; and check the engineering and geological work. I do not need to tell your Lordships that such a task is immensely complicated and expensive.
No one is casting stones at the Government or at the various bodies concerned for ill-will or for in any way trying to do

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something which may eventually prove to be wrong. What we are talking about is the difficulty of all these matters and the importance that the difficulties should be understood and explained. For instance, the Leitch Report said—and it was a very valuable step forward in this field, as all your Lordships know:
" Complicated mathematical models are sometimes necessary, but they can only be of value if they are used with discretion by people who understand them ".
The report went on to say:
" There were certainly several ways in which cost benefit analysis results can be influenced by someone who understands how it works, and the staff at Departmental Headquarters see it as a major part of their work to prevent this happening. Of 80 schemes they have examined in recent months at least 60 have had some major corrections made."
That is an error rate of 75 per cent. undetected until that particular stage of the examination.
Elsewhere the report reveals that, out of 3,282 staff employed on the Trunk Road Programme, only eight are classified as economists, statisticians, et cetera. More relevantly, these eight are out-numbered by 2,231 professional and technical staff—for example, engineers and highway planners—which gives a ratio of 278 to one.
Furthermore, from page 6 of the report we learn that these few economists and statisticians are concerned at any one time with supervision of no less than 300 road schemes costing in excess of £1·5 million each. It is virtually impossible to accept that there can be adequate scrutiny by such limited personnel, and indeed all the facts and instances that we have, show that there is not—and no blame to them.
The validity of major road proposals depends very much on what is called traffic assignment. Dr. Outram, the department's principal expert on traffic assignment, admitted at the Swanley inquiry that:
" our knowledge does not enable us to determine the best assignment method in an urban area ".
Work so far done is admitted to be unsatisfactory. Major disagreement exists within the department regarding general traffic assignment. Should it be based on time alone—the amount of time that it takes vehicles to go in one direction or the other—or should it be based on the generalised cost, should it be measured in
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money? The mind of the department has been changed between 1976 and 1978. One road construction unit uses both methods at different times; some use one method; others use the other. Yet the differences can be startling. Evidence at the Swanley inquiry revealed that the traffic flow at Wrotham doubled when time only was used, as against generalised cost. A measure of the imprecision and uncertainties of the traffic assignment process is a report last year when the AA announced findings under the headline:
" Motorists desert motorways in their thousands ".
That headline must have struck such dismay into the hearts of those who had built those motorways for the motorist.
External scrutiny by Parliament, the Exchequer, and the Audit Department fails for want of time and resources. Internal scrutiny fails for the quite obvious reasons that we all know: that in any organisation for which one works internal harmony is important, and it is not enhanced by civil servants questioning their colleagues' spending plans. I do not want that to be misunderstood in any way. I am not casting any criticism at all on the civil servants concerned. I am merely telling your Lordships what you all know—and it is just one of the universal laws of any particular organisation, whether it be a company, a Civil Service department, or whatever. One always knows that in order to test things to their utmost, one must have outside validation, outside criticism, outside testing.
The Secretary of State and the Department are basically and ultimately on the side of the angels. Command No 7132, Policy for Roads, said:
" the aim must be to demonstrate that decisions are being taken on the best possible evidence, which should be available to all who have an interest in it.".
Command No. 7133, Review of Highway Inquiry Procedure, said:
"…technical matters must not be immune from rigorous examination by an independent body. The Leitch Committee has already made recommendations on these subjects. The new Standing Advisory Committee, to be chaired by Sir George Leitch which is being set up by the Secretary of State for Transport, will have a continuing responsibility to monitor developments in methods of technical assessment ".
The general principle that is concerned will, again, be accepted, I have little doubt, by everyone in your Lordships' House.

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It is to do with natural justice. If I may quote Professor Wade in his book on Administrative Law, page 223, he said:
" The right to know the opposing case. One important requirement of natural justice is that the objector should have the opportunity to know and meet the case against him ".
If a case is presented in such a form that it cannot be understood, then no objector can have much prospect of meeting it. The noble and learned Lord, Lord Reid, appeared to have this in mind in the case of Sloan v. General Medical Company in 1970, when, having dealt with the practice in America, he said:
"…even in our legal system the party concerned must be timely informed of the substance of the case he has to meet, which must be reasonably clearly formulated ".
The Leitch Committee appeared to be saying the same thing when they said:
" The first criterion is that the assessment should be generally comprehensible to the public and should command their respect ".
I can have very little doubt that your Lordships would go along with that. Comprehension may be difficult because one is dealing with very difficult facts and figures and with mathematical models, but respect can surely be absolutely demanded; and respect can be earned, I think, only by there being knowledge that not only the people who are party to the decision and not only the advocates of objectors understand the evidence, but that the other side does, too.
There is no doubt whatsoever that the ultimate responsibility is that of the Minister. In the House of Lords' ruling in Bushell, their judgment stated the constitutional principle that policy is the Minister's, that it is executed in his name by the civil servants in his department and that for his decisions, based upon their collective expertise, he is responsible only to Parliament. I am not seeking to challenge that, though it would be an interesting subject for a philosophical debate, but the fact remains that public accountability for the immense sums expended on roads—the GLC alone seeks to spend £1,100 million over the next 15 years—is non-existent. In an age when the Government are subjecting other fields of our national life to the and scrutiny of financial and economic appraisal—and I may say, my Lords, that, though I may quarrel with the way in which they are doing it, I in no way
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quarrel with the need for it to be done—the need for adequate accountability in road expenditure has never been greater, and, really, nothing is being done about this important second stage.
A leader in the Sunday Times on February 10th, commenting on the Lords' Bushell judgment, said:
"…the necessary expertise is very unlikely to be on call in Parliament ".
We now have a specialist committee on transport. It may be that they will be able to call on greater resources, and it may be that that is the way forward. It certainly would not be for me, or for this House, to comment on the rights and duties of a committee of the other place.
I hope that I have said enough to your Lordships tonight to show that there is an immense gap in making the judgments as to the expenditure of an enormous amount of money in doing things which may affect our townscapes and countryside very strongly and seriously for the future as far as we can see it; and a gap in the process of justice whereby people whose houses, livelihoods, farms and gardens are disturbed by changes cannot yet have confidence that justice has been done. I hope that I have said enough to show that there should not be any difference between the two sides of the House or any of the people involved in this matter. It is merely a question of finding the machinery. That is what I am asking the Government tonight and that is why I beg leave to ask this Unstarred Question.
9.31 p.m.
Lord MOWBRAY and STOURTON: My Lords, I think that the House will be grateful to the noble Lord for asking this Unstarred Question on which so much interest has been aroused over the past few years in the country—interest which has been aroused by anxiety by individuals and by bodies looking after people who they think are not able to look after themselves. There is a problem. We in Government are most anxious that our trunk road proposals and the assumptions and forecasts underlying them are open to full and proper scrutiny. But the arrangements for scrutiny have to be relevant and practicable.
In considering the arguments put forward by the noble Lord, Lord Beaumont,

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there are two points to be borne in mind: uncertainty, and the way the various elements of scrutiny mesh together. New trunk roads are intended to serve the nation's needs for many years ahead. Taking into account the lengthy design period which precedes their construction, they need to be considered against forecasts of traffic for some 20 to 30 years into the future. These forecasts, by their very nature, must be subject to a considerable degree of uncertainty.
The uncertainties stem from two principal sources. First, the factors influencing the growth of traffic are many and varied and themselves difficult to forecast with accuracy. The growth of national income and the level of oil prices are subject to substantial short-term fluctuations; population trends are notoriously difficult to predict in the long term. Secondly, people are individuals. How they will react to changes in economic circumstances, on the one hand, or to the provision of a specific new road on the other, can only be estimated in total in the light of experience. Our techniques for doing so have been improved over the years, as understanding of the factors influencing traffic growth and the effect of new roads has increased. The Government believe that the techniques now being used are the best currently available, but I agree that it would be foolish to claim that no further improvement is possible in the light of continuing research.
However, my Lords, despite all the uncertainties involved in traffic forecasting and the assessment of the costs and benefits of new road schemes, decisions have to be taken about the level of resources to be allocated to the trunk road programme, the respective priorities of individual schemes within the programme and the standard to which new roads should be built.
These decisions must take account of the uncertanties involved—and this is why the forecasts produced by the Department of Transport are expressed as a range of likely possibilities. In applying this range to individual schemes for design and assessment purposes. the department takes account of the likely consequences if traffic grows at the most unfavourable end of the range so that, for example, the highest forecasts are generally used for
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assessing the adverse environmental effects of a scheme, while the lowest may be used in the basic calculation of the net economic benefits. But, where the appropriate solution differs depending on whether the high of low forecasts turn out most nearly right, the"cost of being wrong"becomes an important criterion. For example, how would the"lost"cost to building an extra lane, if the lower growth happened, compare with the cost of delays to traffic, disruption and physical improvement later if the high forecast turned out right?
But given all these uncertainties, the proof of the pudding must remain in the eating. How well have the forecasts stood up in"before and after"comparisons? The record varies. For many of the early motorways traffic was clearly underestimated—as those who have suffered on the M5 in Worcestershire or the M1 in Hertfordshire are well aware. For some other schemes, the actual flows are well below the forecasts. The sort of range involved is illustrated in Chapter 16 of the Leitch Report: there is no consistent"bias ", but arrangements now in hand for more regular"before and alter assessments should help ensure that no unintentional bias does develop. But I repeat that I do not accept that forecasts are deliberately or in general misleading.
I now turn to the vaious types of scrutiny to which the traffic forecasts and economic assessments are subject. Underlying all of them are certain basic assumptions and policies: about the future growth of the economy; about the availability of energy and the priorities for its use; about the needs of industry and how they can be met; about whether or not we should direct traffic to use rail rather than road, and so on. The only forum which can properly debate such policies and whether it is sensible to plan on such assumptions is Parliament. The fact that we rarely do so is not the fault of Ministers—of any party. Annual reports and White Papers have provided occasions, rarely taken up. My right honourable friend therefore greatly welcomes the appointment of the new Select Committee in the other House, and its intention to consider the road programme when my right honourable friend's Roads White Paper is available. Perhaps we also might find time then to debate the subject, though I appreciate that we will be hard-pressed

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during the summer. It is now something like two years since we had a full-blown debate on transport in this House.
The present Government wholly accept the view expressed in the Report of the Review of Highway Inquiry Procedure that:
" local inquiries are unsuitable for examining technical issues, such as methods of trunk road assessment, which have a national impact. But technical matters must not be immune from rigorous examination by an independent body ".
This has been precisely the role of the Advisory Committee on Trunk Road Assessment, which was set up in 1976, under the chairmanship of Sir George Leitch, to review the department's methods of forecasting traffic and appraising trunk road schemes.
The Committee reported in October 1977 and made several useful suggestions for the improvement of traffic forecasting methods, most of which have now been implemented. On cost benefit analysis, the Committee had this to say:
" In general we believe that COBA "—
that is the department's methods of cost benefit analysis—
" has been competently designed and feel that it has been implemented for the user with considerable skill …"
and later on, in considering the sensitivity of the cost benefit analysis technique to different inputs:
"… these are problems to be faced by any evaluation process and we feel that, subject to COBA's basic assumptions being reasonably closely observed, it uses the available information in a constructive and productive manner ".
The Committee's successor, the Standing Advisory Committee on Trunk Road Assessment, continues to monitor the department's assessment methods. My right honourable friend the Minister of Transport has already announced his intention to publish their reports on the framework for appraisal and on the regional highway traffic forecasting project, which is aimed at improving forecasting on individual schemes. The Committee is currently considering with the department possible ways of improving the national traffic forecasts.
Lastly, and more directly relevant, comes the scrutiny of the forecasts and cost benefit analyses of individual schemes. For this, the main forum is the public inquiry, though of course the department's headquarters will have already monitored
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the work of the design team before that stage is reached.
The noble Lord has suggested that the Government should set up machinery for auditing such traffic forecasts and cost benefit analyses. It has been suggested in the past that this would help people in understanding the way in which the department carried out these operations and to test the reliability of the department's figures. The Government accept that it may often be difficult for members of the public to satisfy themselves that the traffic forecasts and economic analyses for individual road schemes are soundly based. As I have said, these techniques have become progressively more sophisticated over the years and, therefore, unfortunately, less easily comprehensible to the layman. I do not think however, than an independent audit would assist people in understanding the way in which these forecasts and analyses are carried out. The"auditors"would themselves have to be experts in the fields of traffic forecasting and economic analysis, and I doubt whether their conclusions would be more readily comprehensible to the layman. The Department of Transport itself—
Lord BEAUMONT of WHITLEY: My Lords, may I intervene to ask whether that is the end of that part of the noble Lord's analysis?
Lord MOWBRAY and STOURTON: Not quite, no, my Lords.
Lord BEAUMONT of WHITLEY: My Lords, in that case, would the noble Lord give way when he has finished that part?
Lord MOWBRAY and STOURTON: My Lords, the noble Lord has got me in some slight difficulty. Let me go hack for a moment. The Department of Transport itself publishes a wide variety of documents explaining, in simple terms, how the methods and techniques work and is always ready, at public inquiries and elsewhere, to explain any points which may be a source of difficulty. This explanation is best left to the originators of road schemes and does not require the setting up of an elaborate auditing mechanism. Moreover, it is difficult to see what an"audit"on the lines suggested by the noble Lord could

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achieve. In view of the unavoidable uncertainties attached to the assumptions and methods used by the department, the auditors would not be in a position to say whether or not the department's figures were right or wrong—only time will reveal this. They could only say whether or not they agreed with the figures and their view would, of course, be subject to the same reservations and uncertainties as the forecasts themselves.
What is important is that the department explains—as they do—the basis on which they have prepared forecasts and analyses and why, in their view, the traffic forecasts and economic analysis presented in evidence to the inquiry are appropriate to the scheme in its local setting, and represent a reasonable basis on which decisions can be taken. It is open to the department's critics to question this view in cross-examination of the department's witnesses, and to adduce such evidence of their own as they think fit in support of their view. In this way, the department's traffic models and economic analysis are frequently subjected to an exhaustive examination at public inquiries. It is then for the inspector to form his own view on these matters, after consideration of all the evidence placed before him, and to advise the Secretary of State for the Environment and the Minister of Transport accordingly.
Lord BEAUMONT of WHITLEY: My Lords, I am sorry to interrupt the noble Lord, but this really will not do. We are not talking about forecasts being wrong; anyone can be wrong in his forecast. We are talking about a situation where, every single time that a forecast has been challenged by independent people with the proper resources and working with forecasting material, the department's forecasts have been shown to be wrong and have been accepted as wrong by the inspector. This has happened not once or twice out of 10 times, but on every single occasion. In those circumstances, the public has a right to say that there should be a second opinion.
I entirely take the point of the noble Lord—I shall not go on with my intervention, but I must make this one quick
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point—and, in fact, I said in my speech that not all the public will understand it. But they will understand that a separate independent body has made an examination, and will accept that it has found either differently or the same as the department.
Lord MOWBRAY and STOURTON: My Lords, I am not certain why the noble Lord got up to say that. I do not think it is totally fair, in regard to what I have been saying. If he listens to and digests what I have been saying, I think he will better appreciate what we are trying to do. The Leitch Report is something which the noble Lord cannot just push under the carpet. He may want to push it under the carpet—
Lord BEAUMONT of WHITLEY: I do not, my Lords, I accept it.
Lord MOWBRAY and STOURTON: Good. I am delighted to hear that the noble Lord is willing to accept the Leitch Report. There has been comment made, and I should like to quote from the Leitch Report, which stated:
" We have received some comment that COBA can be manipulated to give the desired result ".
This is getting at the gist of what the noble Lord said and at what people of his ilk—if I may use that term—are worried about, as regards over-building of roads through the countryside. The report went on:
" There are certainly several ways in which the COBA results can be influenced by someone who understands how it works, and the staff at department headquarters see it as a major part of their work to prevent this happening. Of 80 schemes they have examined in recent months, at least 60 have had some major corrections made. They feel that their considerable experience of scheme scrutiny enables them to identify serious cases of bias. We recommend that this scrutiny should continue ".
That is what Leitch says.
This illustrates the way in which all schemes are scrutinised by staff at department headquarters who are independent of the design scheme. The high percentage of cases in which errors have been detected and corrected is indicative of the thoroughness of double checking. I wish only to add that the errors detected at headquarters were of various types, and by no means all of them tended to overestimate the benefits of the schemes concerned.
It has been suggested in the past that only rich objectors who employ consultants

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or statutory bodies can effectively scrutinise the forecasts and economic assessements. That is not our experience. Detailed and sometimes—though not always — constructive comments on the assumptions and methods used, especially in relation to local circumstances, are made at many inquiries. Certainly such complex matters call for a degree of numeracy, but not genius, while many objections on the grounds of the impact of the precise proposals can be fully considered without examination of these issues.
There are three main types of scrutiny; namely, that by Parliament of the policy and underlying planning assumptions; that by the standing advisory committee of assessment methods; that by objectors at the public inquiry of the local application of those methods. An"audit"of the latter could do no more than provide a second opinion on the methods used, and this the objectors are free to do in the course of the inquiry.
The overriding consideration is that setting up additional machinery to consider these matters would not cast further light on them, but would undoubtedly result in further delay in the provision of urgently needed new roads and give rise to a whole series of practical problems. It is worth remembering that traffic forecasts and economic analyses are not the only factors, or even necessarily the most important ones, to be taken into consideration in deciding whether new roads are needed. New trunk roads are built to solve the pressing problems which face us today. The costs to industry, and the general public, of deficiencies in the trunk road network can be seen today in traffic delays, high accident rates and the problems of the many towns and villages which have not yet been by-passed. Some of these costs can be quantified; others cannot. The Leitch Committee has warned against the dangers of attributing too much importance to the former, at the expense of the latter.
Traffic forecasts and economic analyses are useful aids to decision-taking, especially on the standard to which we should build to provide for the future, where something has to be built to meet present needs. But they cannot provide a formula for deciding whether or not particular roads should be built. This will remain a matter for judgment by Ministers in the light of all the available evidence.