Lords Sitting of 12 May 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 Peterborough.

TURNHOUSE AERODROME: CAR PARK
Lord KILMANY: 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 whether it is intended to build a covered car park for the use of passengers embarking at Turnhouse aerodrome Edinburgh either free of charge or on payment of a charge.
Lord TREFGARNE: My Lords, this is a matter for the British Airports Authority. I will draw the noble Lord's Question to their attention.
Lord KILMANY: My Lords, I thank my noble friend for his rather cautious reply. Is it not the fact that Her Majesty's Government still have influence in these affairs? Would he himself not agree that
2
such a car park would be very much welcomed by passengers on the aerodrome, especially in wet weather, and, indeed, more so when there is snow forecast, and that many of these passengers would be perfectly prepared to pay a substantial sum for that convenience?
Lord TREFGARNE: My Lords, the Government's influence in this matter, as my noble friend described it, is very strictly limited, because Parliament has put responsibility for these matters upon the British Airports Authority. They will wish to proceed with the proposal which my noble friend described only when they can see it earning a proper return, and I must tell my noble friend that I think that is unlikely. But I certainly agree that it would be desirable from the point of view that my noble friend described.

DR. UGARTE'S VISIT
2.38 p.m.
Lord MERRIVALE: 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 whether they will make a statement about the recent official visit to this country of Dr. Delfin Ugarte Centurion, Minister of Industry and Commerce of the Republic of Paraguay.
Lord TREFGARNE: My Lords, Dr. Ugarte visited the United Kingdom at the invitation of the British Overseas Trade Board. His visit was in the nature of a normal ministerial exchange on commercial relations. In addition to calls on Ministers in the Departments of Trade and Industry, Dr. Ugarte met several United Kingdom companies, banks and institutions interested in trade with Paraguay.
Lord MERRIVALE: My Lords, I thank my noble friend the Minister for that reply. Would he not agree that Paraguay, a friendly Latin American country with a stable and representative democracy, and with increasing economic and social development, deserves special attention on the part of Her Majesty's Government and of British industry? Would he not agree, too, that the ECGD should extend very favourable terms to business people here who trade with that country?
Lord TREFGARNE: My Lords, I certainly agree with almost everything that my noble friend has said. The visit of Dr. Ugarte was a most helpful one and we certainly hope that British companies will take advantage of the opportunities now offering.

"THE DAY OF PROTEST"
2.40 p.m.
Baroness SHARPLES: 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 steps they are taking to encourage voluntary effort to minimise the inconvenience that will be caused to the public on 14th May.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, the President of the Confederation of British Industry has urged firms to make clear that they will keep premises open for work as usual on 14th May, make alternative transport arrangements where necessary, encourage car sharing and provide car parking at workplaces. I have no doubt that people will use their initiative and common
4
sense. The Government have made clear that all employees who wish to work on 14th May have a right to do so and there are increasing indications that many will, in fact, be working normally.
Baroness SHARPLES: My Lords, I thank my noble friend for that reply. Could he perhaps go a little further, and could Her Majesty's Government actively encourage car sharing on a wide basis?
The Earl of GOWRIE: My Lords, I understand that my right honourable friend the Minister of Transport will be making a Statement later this afternoon. There is, of course, no legal problem about car sharing, provided that car owners and drivers do not seek to make a profit from carrying passengers.
Lord LUCAS of CHILWORTH: My Lords, will Her Majesty's Government consider using their best endeavours to have car parking arrangements— that is, for time and money— suspended during that day, so that those who bring cars into London, or any other cities, with passengers are not put to too much inconvenience or undue expense?
The Earl of GOWRIE: My Lords, special car parks will be opened and arrangements are being made to keep radial routes open. It is not the intention at this stage to lift car parking restrictions, but I take my noble friend's point, and precise arrangements on the day will, as always, be a matter for police discretion.
Lord ORR-EWING: My Lords, would my noble friend give some assurance to certain people who are a little anxious as to whether their insurance covers passengers whom they may pick up as they travel to work? Is this covered in normal practice?
The Earl of GOWRIE: My Lords, that depends on the precise insurance arrangements which individuals have with their own companies. There is no blanket arrangement there, because some individuals are insured only for third party. So everybody should be most careful to check up as to what their precise insurance arrangements are.
Lord LEATHERLAND: My Lords, will the Minister express the view that, in

5
the picking up of pedestrians by motor cars, the principle of sexual equality will be preserved?
The Earl of GOWRIE: My Lords, the Government are anxious to see that men are as well treated as women at all times.
2.42 p.m.
Viscount ST. DAVIDS: 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 whether the form of political strike being suggested for 14th May is protected by law as a trade dispute; and, if not, whether any firm or individual put to loss or damage by this action may recover damages from individuals or unions concerned.
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, the definition of "trade dispute" is contained in Section 29 of the Trade Union and Labour Relations Act 1974, and its interpretation and application is a matters for the courts. If the proposed action is not in contemplation or furtherance of a trade dispute within the statutory definition, then subject to the statutory immunity conferred by Section 14 of the same Act liability for damages would be determined by reference to the common law.
Viscount ST. DAVIDS: My Lords, I thank the noble and learned Lord for that Answer. I wonder whether he can tell me what remedy a private individual has in a case of this kind? I am thinking in particular of those who lose a day's work or who are forced to take expensive transport and to book expensive hotel rooms, and of those who are otherwise disadvantaged. Since the Trades Union Congress themselves promoted this day of action and set the date for it, can the noble and learned Lord tell me whether they are in the position of being liable and able to be sued?
The LORD CHANCELLOR: My Lords, I would respectfully think that it is undesirable for the Lord Chancellor to give legal advice about matters which might be justiciable in the courts. I would recommend any such private individual
6
to consult a solicitor, with legal advice and assistance under the Act of 1972 if so entitled.

ANGLO-LIBYAN RELATIONS
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend Lord Trefgarne will repeat a Statement being made in another place on Anglo-Libyan relations.

INDUSTRY BILL
2.45 p.m.
Report received.
Clause 1 [Functions of the Board and Agencies]:
Lord ROCHESTER moved Amendment No. 1:
Page 1, line 14, at end insert—
(" (g) in undertakings for which the Board is responsible, promoting the disclosure by management to employee representatives of information aimed at achieving a shared understanding of the relationship between productivity, investment, prices, pay and employment. ")
The noble Lord said: My Lords, I think that I first owe the House an apology for not having given notice at the Committee stage of the Bill of an intention to move an amendment of this kind at Report. What happened was quite simple. To my surprise, an amendment from the Opposition Front Bench to leave out Clause 19 of the Bill, which prescribes that the sections of the 1975 Industry Act relating to planning agreements and disclosure of information by companies should cease to have effect, was not moved. When, immediately afterwards, the Question was put, That the clause stand part of the Bill, I should of course have leapt to my feet and said what I had in mind, but I am afraid that my slow wits grasped what was happening too slowly and I allowed the opportunity to pass. It then seemed that the best thing I could do was to move at Report this amendment standing in the names of my noble friend Lady Seear, who is sorry that she cannot now be present this afternoon, and myself, and to which the noble Lord, Lord Bruce of Donington,

7
and the noble Lord, Lord Kilmarnock, have been kind enough to lend their names.
I should make plain that we on these Benches are shedding no tears about the ending of planning agreements. Indeed, I think it is correct to say that not one of these has been implemented since 1975, not even in the case of Chrysler. Moreover, we do not approve of a statutory requirement that certain information should be disclosed exclusively to trade union representatives. But we do think that as much business information as possible should be given by management to representatives of employees generally, and that in eliminating the relevant sections of the 1975 Industry Act and putting nothing at all in their place the Government have missed a glorious opportunity to help to achieve that desirable objective.
I have been looking back to our discussions on this subject when we debated the Industry Bill, as it then was, in 1975, and I have been reminded that at that time members of the party opposite lent their names to an amendment which I moved, aimed at ensuring that certain information relating to the business of particular undertakings should be disclosed to employee representatives. Now there is a Conservative Government, and I should like to see in this Bill some recognition on their part of the need for employee representatives to receive from management information which would give them a clearer understanding at all levels in an undertaking of how the business is run, the alternative uses to which money can be put and, as this amendment has it,
" the relationship between productivity, investment, prices, pay and employment ".
I believe that nothing could contribute more to an improvement in our industrial performance and, incidentally, to the avoidance of occasions such as next Wednesday's "Day of Action" that we have just been hearing about, than the sharing of information of this kind. If the Government feel able to accept this amendment, that will afford welcome evidence of their consistency and their desire to contribute to stability and continuity of policy in this field.
Instead of moving such an amendment, I could of course have sought to replace Clause 19 of the Bill with new clauses, but that would have given rise to a number of difficulties. It would have been necessary to specify the precise categories of information in place of those set out in the 1975 Act which it would be a statutory requirement for employers to disclose. That in itself, it seemed to me, would have been highly controversial. It would also be necessary to define a number of terms, and the clauses would generally have had to be much longer and more complicated than is needed for the National Enterprise Board to exercise what, in my view, is really a very simple function.
The amendment which I moved in Committee relating to the desirability of the increased involvement of employees in the making of decisions affecting them, sought to make it a function of the board to encourage action having that aim in view, and in replying on that occasion the noble Viscount, Lord Trenchard, questioned whether the word "encouraging" should find a place in legislation of this kind. He said it was in that sense that the Government believed the amendment to be unnecessary. Learning from that experience on this occasion, I have substituted for "encouraging", as your Lordships will see, the word "promoting".
The amendment makes plain that the information should be disclosed to employee representatives, and at this point I should like particularly to stress to noble Lords on the Labour Benches that although in this amendment there is no reference to trade unions, where employee representatives are trade union members, or indeed shop stewards, as in many companies they now are, if my amendment were acted upon they would of course be recipients of the information to be disclosed. By using these words the amendment gives expression to what seems to me to be a minimum requirement. I should like, however, to add that in my view, and I think in the view of my noble friends, the communication process should not end with employee representatives but with briefing groups, at which their present relevant business information should, so far as possible, also be given directly by first-line managers to all those whom they manage.
The amendment refers finally to five items— productivity, investment, prices, pay and employment. The words used are deliberately of a general kind, for I think it would defeat the whole object of the exercise to seek to define them more precisely. It is an understanding of the inescapable relationship between these items that it is so vital for management and employees to share, and, as with the amendment which I moved in Committee earlier, I once again emphasise that this is a matter only of communication and of consultation, not of negotiation, although of course it may have enormous effect on collective bargaining subsequently.
I hope that this time it will not be said that the amendment is unnecessary because people of the calibre of Sir Arthur Knight and his board do not need to be told of the importance of the point. For one thing, if what is here sought is likely to happen anyway, that seems to me to remove any possible objection to its inclusion in the Bill. More positively, I believe this matter is of such significance for our future, especially in medium-sized firms, that form such a large part of British industry, that we need to take every opportunity, including that presented by this Bill, to draw attention to the importance which I do not doubt noble Lords in all parts of the House accord to it. I beg to move.
Lord BRUCE of DONINGTON: My Lords, on behalf of this side of the House I wish to say that we are very pleased to give support to the amendment that has been moved by the noble Lord, Lord Rochester. I have no desire to go over the ground that was covered at the Committee stage when we were dealing with an amendment substantially on these lines, but it is true to say that the amendment itself, if I understood the noble Viscount, Lord Trenchard, aright at the Committee stage, more nearly meets the objections which the noble Viscount might have had to a clause of this kind. As I recall, the noble Viscount expressed some sympathy with the views that were then expressed by the noble Lord, Lord Robbins, who himself objected to the use of the word "involved".
In the Committee stage the noble Viscount seemed to give the impression, if he did not state it outright, that although he thought the subject matter of the
10
amendment was admirable in itself, he himself considered that this was a matter that would be far better left to the individual companies as distinct from the NEB. I wonder whether the noble Viscount has had an opportunity to reconsider that in the light of the form that the debate took? The various companies involved are, in the main, new companies. They are companies which have not had a tremendous amount of experience in industrial relations. That obviously does not apply in every case, but for the life of me I cannot see why it should not be said that the board should promote the various sentiments that are expressed in the amendment itself.
Even the existence of this particular clause in the Bill would itself have some effect. It would indicate to those concerned that the NEB after all had the final power of promoting all those particular types of activity. It seems to me that the Government could quite easily accept an amendment of this kind that does not do violence to the main principles enshrined in the Bill, and therefore I am hopeful that the noble Viscount, Lord Trenchard, will indicate that he is prepared to accept the amendment.
Lord KILMARNOCK: My Lords, I should like to rise briefly from this politically neutral terrain to support the amendment to which my name is attached along with those of the noble Lord, Lord Rochester, the noble Baroness, Lady Seear and the noble Lord, Lord Bruce of Donington. Some members of your Lordships' Select Committee on Unemployment recently visited the Northwest of England, and I was lucky enough to be among them. I was tremendously struck by the emphasis laid by the managements we talked to on the importance, in their view, of improving industry-education links. They felt that the academic world was not sufficiently sympathetic to the aims and problems of British manufacturing industry. They felt that much more information about how industry actually works should be included in such school courses as economics and geography. If the desirability of improved communication between industry and schools is accepted, as I think it must be, is it not equally important, if not more so, that such communication should be continued and strengthened

11
once the school-leaver actually takes the step of entering industry, at whatever level?
This amendment is a very simple and modest one but I think an important one. It lays upon management none of the elaborate obligations to disclose information specified in the Industry Act 1975, Part VI Sections 28 to 34, which the Government seek to repeal in this Bill. It does not specify that employee representatives must be union officials; it simply enjoins on the rump of the National Enterprise Board and the development agencies that they should promote disclosure by management to employees of information aimed at giving the workforce a better understanding of management policies. In fact, it is a simple recipe for a more open form of government in industry. If manufacturing industry in this country is to have any future at all, we simply have to overcome automatic acceptance that there are two sides of industry. I always thought this was an alarming phrase, not to say an incomprehensible one, and it is all the more alarming if we merely accept it as though it were laid down by some divine law. Anything, even such a modest proposal as this amendment embodies, which helps to promote the idea that management and labour should be on the same side is surely to be encouraged. I therefore very much hope that we shall hear from the noble Viscount, Lord Trenchard, who has these matters so much at heart, that the Government will take an opportunity of showing that on this issue their heart is in the right place.
Lord CAMPBELL of CROY: My Lords, in moving this amendment the noble Lord, Lord Rochester, made reference to support that was given to a somewhat similar amendment in July 1975, nearly five years ago, when we were dealing with the Industry Bill 1975 which became the Industry Act 1975. This is very relevant because Clause 19 of the present Bill has the effect of repealing Sections 28 to 34, the whole machinery, on which we spent three days at Committee stage at that time, dealing with disclosure of information. And this was not a procedure applying only to the National Enterprise Board and bodies within its control; it was to cover the whole of manufacturing industry in this country.
12
So that is being taken out, and the noble Lord is suggesting that something like this might go in its place.
I do not know what my noble friend the Minister of State is going to say about this amendment because I have not had a chance to talk to him about it, but I should like to put what the noble Lord, Lord Rochester, said in its context. He rightly said that my noble friends and I supported with our voices and with our votes what he was doing, and he supported some of the similar amendments which we were making. But what we were doing almost five years ago was considering Part IV of that Industry Bill, several clauses, and we were not trying to take out that whole Part of the Bill. Of course, we were regarding our role in this second Chamber, as a revising Chamber, as trying to improve this machinery for disclosure of information which the Government of the day were putting forward. We did not regard it as our role in this House to try to vote out about eight clauses of that Bill, the whole of that Part; we were trying to improve it. But we made it quite clear that we did not think it was necessary; we did not like the procedure which was proposed, but we were trying to make changes, and we were, therefore, supporting these kinds of proposals and also putting forward proposals ourselves.
Since then it seems to me that that machinery has been little used, and I would ask my noble friend the Minister of State to tell me, if he can, how much it was used during the nearly four years after the passing of the Bill while the Labour Government were in office. The machinery had to be activated by a Minister; under Clause 28 a Minister was to serve a preliminary notice, as it was called, when he thought that a certain company should start taking action to provide information. Moreover, under subsection (3) of that clause the Government at the same time had to lay a statement before both Houses of Parliament stating that a preliminary notice had been served.
I have not seen any such statement. I should like to ask my noble friend whether in fact any statements were laid before Parliament during that time and whether the machinery was activated. If I am right in thinking that the machinery which we spent so much time dealing with

13
in this House— both in Committee and on Report, long hours into the night; and I see noble Lords here who were present— was not activated, or was activated very little, it goes to show that this kind of thing was not necessary.
We at the time did not think that it was the best way of trying to solve problems or improve unsatisfactory situations. We all agreed that, while some companies are paragons in this field, others leave a great deal to be desired on questions of disclosure; but we did not think that legislating in the kind of way proposed in Part IV of that Bill, which became the Industry Act 1975, was a sensible way of doing it. It seems that we have been proved to be right, because almost nothing has been done under that Part of the Bill.
I think that puts it into its context. I would add that the proposals we were putting forward during the Committee stage in July 1975 were drafted in order to bring in employee representatives, people who were employed by the company, rather than trade union officials who were not employees of the company, and who indeed in some cases would be receiving information from quite a large number of companies. We were also concerned with the question of commercial confidentiality of information and we found agreement on all sides of the House on that; it was a question of how it could be drafted. Otherwise trade union officials, in the best of faith, unwittingly, without realising the sensitivity of the information, might have discussed among themselves information which was highly confidential and would then go to other rival companies.
That was the background to the discussions on the amendments which were moved at that time, and it was in relation to a system applying to the whole of British manufacturing industry, not confined to the National Enterprise Board, as this is. So I look forward with particular interest to hearing how my noble friend the Minister of State will react to this amendment. Having followed the discussions which took place at Committee stage, when I could not be here, I shall listen with great interest to my noble friend's reaction.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): My Lords, this amendment has been moved in the most calm and reasonable way, with appeals to reason, by the noble Lords, Lord Rochester, Lord Bruce and Lord Kilmarnock. But I have to say that I am afraid I still believe the view I expressed in the case of a similar amendment, though on consultation rather than on providing information, which was moved by the noble Lord, Lord Rochester, and the noble Baroness, Lady Seear, at Committee stage. That is to say, it is one aspect, a very important aspect, of good business practice. On the question of how the NEB sees its role in relation to its subsidiaries and to making sure that they adopt good practice, I find that Sir Arthur Knight in his chairman's statement quotes his predecessors and says, "I cannot improve upon the statement of my predecessor in his report last year". He goes on to explain, quoting his predecessor:
" The NEB cannot and does not seek to involve itself in the day-to-day management of the companies. That would be to duplicate the management skills which are to be found in the companies ".
He goes on to give as a general philosophy the role of the board of the parent company. The phrases that I used at Committee stage were that they would no doubt give company A or company B a prod or a nudge in a particular direction, which might be to do with industrial relations and man management and might be to do with other vitally important areas of good management. I notice that the noble Lord, Lord Rochester, has changed from the word "encourage" to the word "promote"; but to have it singled out that the NEB is required by the statute book to nudge its companies, I do not believe is necessary, as my noble friend Lord Campbell has said. Nor do I believe that it should be singled out.
We are against putting into statutes a lot of words giving the impression that we expect the NEB, or the Government, or Government agencies to be constantly breathing down the neck of important companies. I believe, if I may say it rather rudely, that nothing is to be gained by putting pious, platitudinous declarations in statutes. If they have a use at all, once there, they will probably be misused by being taken out of context and used at just such a time when perhaps

15
the NEB did not want to give a prod in that particular direction.
I am grateful to my noble friend Lord Campbell for explaining the attitude of my party back in 1975. I had indeed guessed that as the revising Chamber, he was obviously aiming to avoid wide-ranging compulsory powers for intervention of various orders, and that this part of such a power did not offend to the same degree. I therefore feel that this is not a necessary amendment. There can be no doubt about the NEB, with a chairman like Sir Arthur Knight, with the record of Courtaulds in the area of labour relations and consultation, in an age today when this really is a platitudinous statement which not one single businessman at any conference would contradict— businessmen reaffirm it all the time. To put this in the statute and thus to give it prominence, without any specific powers, is not a sensible thing to do.
I believe that the business experience of the noble Lord, Lord Rochester, must indeed make him fully aware of the truth of what I am saying. I feel that this is the kind of amendment designed to look good politically and to look as though we wanted to encourage all good actions and to discourage sin. I really do not believe that one gets anywhere by that kind of amendment in a statute, and I ask your Lordships to resist it.
Lord CAMPBELL of CROY: My Lords, before my noble friend sits down, may I say that I know that my questions were put at short notice, and I apologise for not having been able to get in touch with him before, but I have flown from home in Inverness this morning and therefore I have had to come in at rather short notice. If he is able to answer the questions about whether the machinery has ever been used, I should be grateful.
Viscount TRENCHARD: My Lords, I apologise to my noble friend. We have an amendment later to leave out Clause 19, which may be moved, and which centres on planning agreements as a whole. I suspect that this subject will come up again then. By then I shall certainly be able to answer the question of whether the machinery that my noble friend Lord Campbell mentioned was activated. What I know now is that only two planning
16
agreements were ever made: one with a nationalised industry and one with a company in desperate straits. Both have expired and have not been renewed. What I also know is that the right honourable gentleman the Prime Minister of that time, Sir Harold Wilson, described these planning agreements after giving up the premiership as the ignis fatuus of Labour policy.
Lord CAMPBELL of CROY: My Lords, before the noble Viscount sits down may I thank him. I was aware that there had been only two planning agreements, and I have prepared him for the later amendment. It is not Section 27 or the planning agreements that I was concerned about, but disclosure of information, which is Sections 28 to 34.
Viscount BARRINGTON: My Lords, may I ask in great ignorance about one point that I did not understand in the noble Viscount's very clear speech. I understood him to say that this amendment, which he agreed is suggesting that this should be an aspect of good business practice, is carried out by all companies all the time. But I understood him later to say that it would be a bad thing to put it in the Bill because there might be a moment when the board did not want to put it in. I am not sure how those two statements are reconciled. I can understand that it is unnecessary if they all carry it out all the time, but I find it difficult to believe it is unnecessary if the situation might be otherwise.
Viscount TRENCHARD: My Lords, I do not think I said that they all do it all the time, which was a point we discussed on a similar amendment at Committee stage. What I said was that businessmen would all say that it is a vitally important aspect of business. In this sense it is a platitudinous remark. Some however do essential things, which are known to everybody as desirable to do, better than others. What I did say is that it must be up to the NEB to decide in relation to each of its subsidiaries, in so far as you can interfere with the management of those subsidiaries, which prod in which direction should be given: Is that subsidiary spending too much time with industrial relations and not enough trying to get its design, its quality, its commercial aspects right? There will be different

17
situations which Sir Arthur and his colleagues will judge.
I am saying that if we put this provision in as a function— and in that sense I regard it as a platitudinous function— if it is used at all it will be misused, probably not by the NEB, and even the management of the subsidiary, but by someone who probably has been consulted very fully, saying, "You have not carried out your function, No. X", probably just at a moment when the NEB feel that the nudge should be given in the opposite direction.
3.18 p.m.
Lord LEATHERLAND: My Lords, the noble Viscount said that he did not want to put a pious statement in legislation. All I would piously ask is this: what is wrong with piety? The aim of this proposal which has been moved by the noble Lord, Lord Rochester, is to encourage peace in industry. Surely that is a very worthy objective. Peace can be encouraged by the methods of consultation which are suggested in the proposals the noble Lord, Lord Rochester, has put forward. That method of consultation already operates in many industries and in many firms. It operates very successfully. It brings about a much happier state of affairs than would otherwise be the case.
I was born in Birmingham and lived there until I joined the Army in 1914, which of course is a long time ago. I knew, as everybody in Birmingham knew, about the firm known as Cadbury. They not only make chocolates; they have for years upon end made industrial peace. They are a very worthy example to the rest of the industrial community. One of the things that they learned was how to enter into consultation with their employees. They have a works council— a very effective body. Two of my brothers happened to serve on it, but, of course, they were not directly responsible for its effectiveness. However, that works council, where proposals by the employers to the workers that certain changes were to be made and certain objectives were to be aimed at, was extremely valuable. I suggest that Cadburys is a fine example to the rest of British industry. I sincerely hope that the Minister will have another look at the matter to see whether something
18
cannot be done along the lines suggested to bring both sides of industry together, working in harmony.
Baroness SEEAR: My Lords, I do not want to prolong this discussion, but I cannot resist the challenge that this is a "platitudinous" amendment: it is nothing of the kind. If it is platitudinous, it is rather surprising that at present the CBI never loses an opportunity to say to its members that they should develop participatitive practices and give far more information to employees. The CBI knows perfectly well— as the Minister is apparently not prepared to agree— that there are a great many backwoodsmen around who are doing absolutely nothing of the kind.
Viscount TRENCHARD: My Lords, with the leave of the House, I would merely say to the noble Lord, Lord Leatherland, that I, too, with him, am against sin; and to the noble Baroness, Lady Seear, I would say that I really do not believe that the cause which we all support will be furthered by including in a statute for a body like the NEB, one aspect of good management which, because the CBI is chanting it all the time, the NEB knows all about as well.
Lord ROCHESTER: My Lords, I am grateful to all noble Lords who have joined in this discussion and I am particularly grateful to the noble Lord, Lord Bruce of Donington, and to the noble Lord, Lord Kilmarnock, for their support. I was interested, of course, in the observations of the noble Lord, Lord Campbell of Croy, because although I did not name him, he was, as he has acknowledged, one of the Conservative Peers who were involved in the episode to which I referred in 1975. He asked the noble Viscount how far the machinery that was then instituted had been activated. He has not as yet received an answer. But I would like to say that it is not, of course, that machinery that I am seeking in this amendment to activate: it is, as I was seeking to say, something very much more general and more modest. In particular, there is no reference in the amendment, as I also indicated, to any specific items of information which might in themselves have given rise to controversy.

19
The noble Lord, Lord Campbell of Croy, also said that what was sought in 1975 was to be applied to industry generally rather than merely to the National Enterprise Board. That, I suggest, is a further indication of how modest the proposals of this little amendment really are. I am sorry that the noble Viscount, Lord Trenchard, has taken the view that he has taken. He has said that Sir Arthur Knight, as chairman of the National Enterprise Board, has made it plain that he does not seek to interfere in the day-today management of the companies for which the Board is responsible. The noble Viscount used some fairly strong words, but it amounted to breathing down those companies' necks. He questioned whether, with my business experience, I did not know that the terms of this amendment were really simply platitudinous— "they looked good politically" was, I think, a phrase which the noble Viscount employed. I ask him to believe that if I had thought that nothing needed to be done I certainly would not have put down this amendment.
I think that the action of the party opposite in 1975 was, to put it bluntly, rather different from that just described by the noble Lord, Lord Campbell of Croy. In 1975 they did, as he said, support an amendment couched in somewhat similar terms to this, but perhaps they then found the Liberal Party a rather convenient nanny— if I may put it that way— to whose apron strings they might attach themselves. Perhaps they remembered the moral of the story of poor little Jim who, your Lordships will recall, had the misfortune to be eaten by a lion—
" … be sure to keep a hold of nurse for fear of finding something worse "!
I am sorry that the noble Viscount, Lord Trenchard, has not been able to give an inch on this matter. I believe that it would be a sign not of weakness but of strength if, just occasionally, the Conservative Government in this House with their inbuilt and unelected majority, showed themselves willing, after informed debate of this kind, to concede a point or two. As the noble Lord, Lord Bruce of Donington, has said, this does not ask for very much; it does not seek to make great inroads into the Bill, but it would go some
20
little way to demonstrate their support for a principle that they claim to uphold.
My noble friend Lady Seear has already referred to the attitude of the CBI towards this matter. It certainly thinks that something is necessary. I suggest also that the Secretary of State for Employment is very well aware of the need to take every opportunity to do something about this. It was, after all, in his Granada television lecture only last Wednesday that he said that management in industry must now be prepared to disclose information and to take employees into its confidence. That is really all that this small, modest amendment seeks to encourage. I do not feel that I can let the matter go at that. I think that the amendment has enjoyed support— for which, let me say again, I am most grateful— from other parts of the House besides these Benches. It is a modest proposal which deserves the support of the House and I propose to press it to a Division.
Lord ROBBINS: My Lords, am I out of order—
Viscount LONG: My Lords, I am afraid that the noble Lord is not in order.
Lord ROCHESTER: My Lords, with the leave of the House would it be helpful to the noble Lord, Lord Robbins, if I sought to suggest to him— as we value so much his contributions— that he phrase what he has to say in the form of a question to me before I sit down. Is that of help to the noble Lord?
Lord ROBBINS: My Lords, before the noble Lord sits down, is he aware that his present amendment meets entirely the strictures which I passed on the original amendment at the Committee stage?
Lord ROCHESTER: My Lords, I am most grateful to the noble Lord.
Viscount TRENCHARD: My Lords, I do not know whether I am out of order in answering the factual question of my noble friend Lord Campbell of Croy? It is only two lines. The machinery of the information powers in the Industry Act 1975, about which he asked have never been used, and I understand that there has never been any formal requests that they should be employed.
3.29 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
3.36 p.m.
Lord LEE of NEWTON Lord LEE of NEWTON moved Amendment No. 2:
Leave out Clause 1.
The noble Lord said: My Lords, during the various stages of the Bill the content of a great deal of Clause 1 has
Their Lordships divided: Contents, 70; Not-Contents, 76.

CONTENTS

Airedale, L.

Gladwyn, L.

McNair, L.

Amherst, E.

Gordon-Walker, L.

Paget of Northampton, L.

Ampthill, L.

Goronwy-Roberts, L.

Peart, L.

Amulree, L.

Grey, E.

Porritt, L.

Ardwick, L.

Hale, L.

Robbins, L.

Aylestone, L.

Halsbury, E.

Rochester, L. [Teller.]

Banks, L.

Hatch of Lusby, L.

Sainsbury, L.

Barrington, V.

Henderson, L.

St. Davids, V.

Birk, B.

Hood, V.

Seear, B.

Blease, L.

Howie of Troon, L.

Shinwell, L.

Boston of Faversham, L.

Hughes, L.

Somers, L.

Brockway, L.

Hylton-Foster, B.

Spens, L.

Brooks of Tremorfa, L.

Jacques, L.

Stedman, B.

Bruce of Donington, L.

Janner, L.

Stewart of Alvechurch, B.

Buckinghamshire, E.

Kilbracken, L.

Stone, L.

Burton of Coventry, B.

Kilmarnock, L.

Strabolgi, L.

Byers, L.

Kinloss, Ly.

Strauss, L.

Cledwyn of Penrhos, L.

Leatherland, L.

Taylor of Mansfield, L.

Cooper of Stockton Heath, L.

Lee of Newton, L.

Underhill, L.

David, B. [Teller.]

Listowel, E.

Wallace of Coslany, L.

Davies of Penrhys, L.

Llewelyn-Davies of Hastoe, B.

Wedderburn of Charlton, L.

Elwyn-Jones, L.

Lloyd of Hampstead, L.

Wells-Pestell, L.

Fisher of Rednal, B.

McCarthy, L.

Wynne-Jones, L.

Gaitskell, B.

NOT-CONTENTS

Alexander of Tunis, E.

Emmet of Amberley, B.

Netherthorpe, L.

Allen of Abbeydale, L.

Energlyn, L.

Northchurch, B.

Avon, E.

Erne, E.

Nugent of Guildford, L.

Bellwin, L.

Exeter, M.

Onslow, E.

Belstead, L.

Gowrie, E.

Orkney, E.

Boothby, L.

Gridley, L.

Redmayne, L.

Brentford, V.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Reigate, L.

Campbell of Croy, L.

Romney, E.

Chesham, L.

Harvey of Prestbury, L.

Sandford, L.

Clancarty, E.

Henley, L.

Sandys, L. [Teller.]

Clitheroe, L.

Hornsby-Smith, B.

Selkirk, E.

Clwyd, L.

Inchyra, L.

Sharpies, B.

Colville of Culross, V.

Kimberley, E.

Soames, L. (L. President.)

Cottesloe, L.

Lindsey of Abingdon, E.

Strathcarron, L.

Cullen of Ashbourne, L.

Long, V.

Strathspey, L.

Daventry, V.

Lucas of Chilworth, L.

Swinton, E.

Davidson, V.

Lyell, L.

Torphichen, L.

De Freyne, L.

McAlpine of Moffat, L.

Trefgarne, L.

De La Warr, E.

McFadzean, L.

Trenchard, V.

Denham, L. [Teller.]

Mackay of Clashfern, L.

Vaizey, L.

Derwent, L.

Macleod of Borve, B.

Vaux of Harrowden, L.

Drumalbyn, L.

Mansfield, E.

Vickers, B.

Ebbisham, L.

Marley, L.

Vivian, L.

Effingham, E.

Merrivale, L.

Willoughby de Broke, L.

Ellenborough, L.

Morris, L.

Young, B.

Elliot of Harwood, B.

Mowbray and Stourton, L.

Resolved in the negative, and amendment disagreed to accordingly.

been examined and, indeed, has been subject to various amendments. This was so both in this House and in another place, and on each occasion the Government have rejected the amendments.
Our central objection to Clause 1 is that it completely changes the function of the NEB, so that it becomes a mere vehicle for expanding the private sector, irrespective of the state of recovery of

23
those firms which have been rescued from probable bankruptcy by the work of the board. We are not objecting in the least to the fact that, after many of these firms have been almost recreated they then go to the private sector. That is not our objection. The objection is that this is the predominant issue within Clause 1 itself. There is no question of when a firm is in a position to revert to private enterprise. Indeed, if one looks at the wording of paragraph (f) in paragraph (b) of Clause 1 (1) one sees that it says:
" promoting the private ownership of interests in industrial undertakings by the disposal of securities and other property held by the Board or any of their subsidiaries ".
Those words are repeated three times in the clause as they refer not only to the NEB, but to the Scottish Development Agency and to the Welsh Development Agency. As I have said, the disposal of such assets at a time when the NEB considers such action appropriate has always been a very important part of its function, but it has always been able to take into consideration the degree of recovery which firms have achieved. It has also been able to determine the price obtainable and, indeed, the desirability or otherwise of the people who wish to take the companies over.
As a result of an imposed instruction from the Government to dispose of its companies in order to assist in reducing the public sector borrowing requirement, the NEB will now be completely unable to exercise its judgment on the timing of such disposals. Indeed, the Government's original instruction was to make sufficient money from sales of NEB firms in order that they could contribute £ 100 million towards the public sector borrowing requirement in the last financial year. Fortunately, wiser counsels prevailed and the order was withdrawn, but that move did not mean any change in the purpose of Clause 1. There is now bound to be confusion as to the relationship of the new board to the NEB, and indeed to the Government, and the relationship between the board and the companies it controls.
Consider the case of Fairey. We have recently learned that Fairey has now been sold to Doulton, which is part of the S. Pearson Group, for £ 24 million.
24
There was an original offer of £ 19–5 million by Hambros, and my impression is that had the Government demand for an NEB contribution of £ 100 million been persisted in, that sale at that figure would have gone ahead, more particularly as the board of Fairey approved of it. I submit that that illustrates the fact that a time limit within which the NEB has to work removes the concept of a willing seller and a willing purchaser. That is one case which illustrates the point I have been making.
What about the future of Ferranti? In the last financial year Ferranti made a profit of about £ 10 million. When introducing the NEB's annual report the other day, Sir John King, deputy chairman of the new board, commented:
" Ferranti belongs in the market place. It is restored to health and we will take a decision on the options available for it by the end of June ".
It sounded as though he had almost picked up a brief belonging to the Secretary of State for Industry, who uses that kind of language. He may be right and perhaps the members of the previous board would have come to the same conclusion, but with the content of the present Clause 1 as a guide, even before it becomes law, I doubt it very much.
Indeed, it makes one wonder what is to be the future of the 60-odd firms which are still within the purview of the NEB, and perhaps the Minister would say. Is the NEB now compelled within the time limit to sell off those companies irrespective of the state of recovery for which the NEB has been responsible? One could ask the same question about the Welsh Development Agency and the Scottish Development Agency. Both those parts of the country are in dire unemployment straits and it seems desperately foolish to force the NEB, or the Welsh and Scottish Development Agencies— unless they themselves are convinced that they have brought those firms to a stage of recovery at which the public can get the maximum returns for them— into a position where they must get rid of them.
I have asked on a previous occasion, more than once I think, for information for the House on the financing of INMOS. Up to now we have had no reply. On Second Reading the Minister said that as for firms dealing with advanced

25
technology, the NEB would not at this stage be forced to put them in the marketplace. INMOS covers that position exactly; it is dealing with the most advanced kind of technology, including the silicon chip, about which some of us are very concerned over our position vis-à vis the Americans, Germans and others. The last Government allocated certain funds to INMOS, some of which have not yet been granted to them. I hope the Minister can now tell us whether there is some hiatus so far as INMOS is concerned. There are, or have been, some negotiations going on, but if the position is that certain private firms are negotiating to take it over and the Government are refusing to find the finances for it to be able to go ahead with its research and development, we shall lag behind deplorably. Thus, the time is overdue for the Minister to say precisely what the position is.
To take another illustration, in hot pursuit of his intention to enlarge the private sector at the expense of the public one, which the Secretary of State has told us on many occasions is the real basis of Clause 1, may we now be told what is to be the position of Rolls-Royce? We know that after discussions with the chairman of Rolls-Royce it was decided that the Secretary of State would transfer responsibility for it from the NEB to himself. We now have the information that Rolls-Royce has managed to make a loss of £ 58 million, and perhaps the Minister will tell us if there is any truth in the rumour that the Secretary of State would now like the NEB to take it back, plus the £ 58 million loss which he has inherited. Perhaps he could now argue that, as he has always said he wishes to divorce this Government from industry and that, as he has himself agreed, he is incompetent to run industry, it would be a good thing if the NEB would graciously agree to relieve the right honourable gentleman of his responsibilities in this respect.
None of us favours the work of the insider who uses inside information to get great profits, but the Secretary of State has no need to prove his virtue by grabbing all the losses; it really gets to something when we reach that kind of position. Is it still the intention of the Government to attempt to sell Rolls-Royce shares to the public? If so, then against the background of the £ 58
26
million they have now declared, what will be the effect on the timing of that transaction?
It seems to me that the whole objective of Clause 1 is now being shown to be quite ridiculous, not by anything which people in another place or in this House have been saying, but by the facts of life; by the fact that Fairey themselves would have been sold for a much smaller price than was eventually obtained if the Government had had their way and forced a £ 100 million contribution; that Ferranti are now in a position where none of us know whether they are still being forced into the market at a price less than could be obtained if they held it for a while; and that Rolls-Royce itself almost makes a laughing-stock of what the Bill attempts to do. Indeed, the nation is now entitled to know whether the whole objective of seeking to expand the private sector with no consideration to the effects on the public purse is to be the case as laid down in Clause 1. It seems to me that the case has now almost gone by default. I beg to move.
3.50 p.m.
Lord CLEDWYN of PENRHOS: My Lords, as my noble friend Lord Lee of Newton has just said, we had a fairly full debate on this clause during the Committee stage, but I am bound to say that I am still not quite clear what are its full implications for the Welsh Development Agency. The Minister, when he spoke in Committee, gave me a clear impression that the functions of the Welsh Development Agency will remain more or less unimpaired as a result of the Bill, and I should like him to confirm that statement today. If this be the case, then part of my apprehension is removed, although my noble friend Lord Lee has again created some fairly grave doubts in my mind.
The noble Viscount the Minister of State dealt with some of the points that I raised in Committee on 28th April. My concern then— and it is not entirely allayed— was that whatever be the position with regard to the powers and the functions of the board, the resources available to the Welsh Development Agency will be severely curtailed as a result of Government policies and will largely neutralise the £ 48 million which the Secretary of

27
State for Wales, Mr. Nicholas Edwards, has promised over the next two years.
If I may, I should like to read an extract from the letter which the noble Viscount was so courteous as to send me following the debate on 28th April. I quote from his letter:
" As you know, the level of Regional Development Grant is maintained at 22 per cent. in Special Development Areas and reduced to 15 per cent. from 20 per cent. in Development Areas. It will not be paid in Intermediate Areas. These changes apply to assets provided after 31st July 1980. Minimum levels of expenditure eligible for grant were increased on 18th July last from £ 100 for plant and machinery and £ 1, 000 for buildings to £ 500 and £ 5, 000 respectively in respect of expenditure defrayed on or after 18th July last year ".
The noble Viscount continued:
" Because of the transitional provisions and the two years during which applications for grant can be made, we do not expect the full effect of the changes to be felt until 1982–83. The estimate of £ 35 million to which you referred in the debate on the Industry Bill is the estimated reduction in payments of Regional Development Grants in Wales in that year ".
The noble Viscount said that this is not intended to be a precise figure. Let me read more of his letter, and indicate what he said:
" It was made in the middle of 1979 and was based on the changes in the status of Welsh Assisted Areas, in the rates of grant and in the minimum values, and assumed that in future Assisted Areas the rate of investment would approximate to that of the recent past. An assessment of changes in the investment pattern could not be arrived at without a disproportionate amount of time and effort ".
I understand the position of Ministers and civil servants in relation to work of that kind and production of statistics, but the position of Wales is grave enough to justify a little disproportionate time and effort in these circumstances. We are to lose £ 35 million in one year, and the loss will affect a wide area; that is to say, it will affect the whole of the development area in Wales. But the £ 48 million will be used to build factories in those areas affected by BSC plans. That is the object of the £ 48 million; at least that is what Mr. Nicholas Edwards says. I ask the noble Viscount whether he would be good enough to confirm that. Does this relate to advance factories? Is that what the £ 48 million is for? Perhaps the Minister will enlarge upon that. Will the £ 48 million be handled exclusively by the
28
Welsh Development Agency? Can it be used for a purpose other than in connection with factories? We need much more clarification about the £ 48 million than we have had in either of the two Houses thus far.
My chief criticism— and I think it a valid one— is as follows. The Government are to give the £ 48 million over two years to a limited part of Wales affected by steel closures; and of course I welcome this. However, on the other hand, the Government are taking £ 35 million a year at least from a much wider area of Wales— that is the whole of the development area— from 1982 onwards. There is there a very severe disparity which has not been made clear to Parliament or to the people of Wales, and I am very anxious that this point should go home today before we agree to the Bill going through on Report and Third Reading. These are the bare bones of Government action, and they are not an attractive sight. I am bound to say that the prospect for Wales is at present daunting.

ANGLO-LIBYAN RELATIONS
3.56 p.m.
Lord TREFGARNE: My Lords, with your Lordships' permission, I shall intervene to repeat a Statement being made in another place by my honourable friend Mr. Hurd on Anglo-Libyan relations. The Statement is as follows:
"Her Majesty's Government have for some time been concerned about statements and activities by Libyan Government officials which amount to political intimidation of Libyans resident in this country. Within recent weeks there have been a series of crimes involving Libyans.
"My right honourable friend the Prime Minister therefore decided to send a senior Foreign and Commonwealth Office official, Sir Antony Acland, to Tripoli on the 27th April with a personal message for Colonel Qadhafi. This was followed up by meetings in both Tripoli and London between Libyan and British officials.
"These contacts have led to positive developments over the last few days. The Libyan authorities have agreed,

29
at our request, to withdraw four Libyans connected with their mission in London who have been involved in activities which are incompatible with their functions. Three of these Libyans are at present in the United Kingdom We are emphasising that we expect them to leave within the next few days.
"One complication has been the status of the Libyan People's Bureau, which has taken over the functions of the Libyan Embassy. It is not for us to say how the Libyans should organise their mission, but it must be established that the People's Bureau will be fulfilling the functions of a diplomatic mission under the Vienna Convention in Diplomatic Relations. We are holding discussions with the Libyan authorities which, we hope, will resolve this question.
" Our objective throughout has been to show that we wish to maintain good relations with Libya but that harassment of Libyan expatriates here must stop. The Libyan Government have informed us that they wish to see an improvement in our relations and for closer co-operation, particularly in the commercial and economic fields. We share this desire but our relations cannot improve unless the campaign of harassment ends immediately. The action which we have taken is designed to make this clear. "
My Lords, that ends the Statement.
3.58 p.m.
Lord GORONWY-ROBERTS: My Lords, the House will be grateful to the noble Lord for repeating that Statement in this Chamber. There has indeed been general and mounting concern about harassment of Libyan nationals— harassment and worse— in this country, and this feeling is shared by other countries, for the same reasons. We very much welcome the discussions so far with the Libyan Government, and we hope that something concrete will result from them. We should like to be clear regarding the action taken, in agreement with the Libyan Government, in clearing out of the so-called People's Bureau, these three Libyans whose activities, to quote the Statement," are incompatible with their functions ". That is a rather euphemistic way of putting it, I would suggest. We
30
should like to be clear that this figure of three, rather than four, exhausts the immediate possibilities of clearance in this area. Are there any more about whom we are in negotiation with the Libyan Government? Perhaps the noble Lord can tell us about that.
The second point I should like to make is that we take note of the penultimate paragraph of the Statement, which refers to
" how the Libyans should organise their mission … "
Surely it is for the host Government, under the various conventions and protocols, to agree to the number and, indeed, the identity of all accredited to an accepted mission. Can we be assured that, despite the negotiations now proceeding, we shall exercise the full rights of the host country to decide both number and identity?
My Lords, the next point I think we should make is that we whole-heartedly welcome the statement that this country wishes to reinforce good relations with the Libyan Government, and that the Libyan Government (to quote the Statement) have in turn informed us
" that they wish to see an improvement in our relations and for closer co-operation, particularly in the commercial and economic fields ".
We hope that real results will derive from these discussions. The Government will certainly be supported by both Opposition parties, I am sure, in any constructive step they take to this end in discussion with the Libyan Government. But we should like to be assured that such steps as are now being taken to deal with a local situation in London, and which may be taken similarly in other capitals for similar reasons, are also the subject of consultation and concerted action among countries, not only in Western Europe but also in North America and further afield.
It is one thing to get an agreement, perhaps lasting, with the Libyan Government about the situation in London, but surely there is a deeper, more profound issue to be settled. While we may obtain a momentary solution of a local difficulty, is it not time that this country and like-minded countries should go to the United Nations and seek a restatement of the terms and obligations of the Vienna Convention? This is a time, not only when these Libyan activities are calling

31
into question the very fabric of international diplomatic relationship but also when, as in Iran, there are other incidents which threaten the fundamentals of international intercourse. For that reason, will the Government bear in mind— I ask for no answer on this at the moment— that the continued incidence of these happenings, and their spread, may well call for a new appraisal and a new reinforcement of international obligations through the various conventions and protocols by the United Nations itself?
Lord GLADWYN: My Lords, I, too, should like to thank the noble Lord for repeating this Statement, and to associate myself, on behalf of my noble friends on these Benches, with everything that the noble Lord, Lord Goronwy-Roberts, has said. We quite agree that our relations with Libya can hardly improve unless it is clear that what seems to have been the declared Libyan policy of murdering Libyan dissidents resident abroad has been abandoned. Unless it is made clear that they have abandoned their policy, our relations can hardly improve. Indeed, unless this is clear surely our relations can only deteriorate, even to the extent, I fear, of eventual ruptured relations, whatever the effect of this might be on British trade and on British residents in Libya.
Furthermore, my Lords, while we are having discussions with the Libyan authorities in this matter, as we apparently are, might it not be in order at least to raise the question of the supply of arms by the Libyan Government to the IRA, for which there appears, over the years, to have been very considerable evidence?
Lord TREFGARNE: My Lords, I am obliged to both noble Lords for what they have said in response to this Statement. May I deal first, briefly, with the points raised by the noble Lord, Lord Goronwy-Roberts? The personnel who are being withdrawn at our request are exhaustive, so far as we know. The position is, of course, that we require every diplomat in London, accredited or otherwise, to obey the law, and when their activities seem to us to depart from that precept then we seek their withdrawal. As for agreeing to the personnel of the Libyan mission here in London, the present position is rather complicated owing to the fact, as we said
32
in the Statement, that the status of the mission was changed by the Libyans here in September last, when they announced that their embassy was to become a people's bureau. For the moment, we accept the accreditation of those who were in the Libyan Embassy here in London prior to 1st September last. The position of those who have arrived since then is the subject of current discussions, and we hope to be able to resolve that matter shortly.
The noble Lord, Lord Goronwy-Roberts, also asked me about international consultations. We are in close touch with the various countries principally concerned, in particular, of course, the United States, and also our European Community partners, although we are not at present planning to raise the matter in the United Nations. But, of course, in a general way we would keep that under review, as the noble Lord suggested. The noble Lord, Lord Gladwyn, asked me about supplies of arms to the IRA. I can say quite firmly, however, that we have no present evidence that this is happening.
The Earl of KIMBERLEY: My Lords, could my noble friend give your Lordships any assurance, or further information, about the Kingsley School in Chelsea, recently purchased by the Libyan Government? Could he further give an assurance that there is no possible chance of this school being used as a cover-up for educating clandestine Libyan "hit men"?
Lord TREFGARNE: My Lords, there is clearly no difficulty in the school's being used for proper educational purposes, as the Libyans are apparently at present proposing. Of course, the precise use of the premises is a planning matter, and that comes within the compass of the local authority, and not Her Majesty's Government.
Lord ELWYN-JONES: My Lords, while we welcome what the noble Lord has said in response to my noble friend's stressing of the importance of international co-ordination of action in this field, is not the Statement that the noble Lord read out putting the matter rather too mildly? It spoke of "political intimidation". Have there not been incitements to murder; and, indeed, have murders of Libyans

33
living abroad not taken place in circumstances pointing at least in a very significant way to their following these acts of incitement? This is a programme of organised international murder. It cannot be taken lightly; and I should have thought that it was worthy of being taken up at the highest quarters of international diplomacy, which at the end of the day is the United Nations itself.
Lord TREFGARNE: My Lords, there is no evidence that any of the four persons referred to in the Statement was directly implicated in the recent murders. They were involved, however, in the harassment of Libyans resident in the United Kingdom. This apparently included attempted kidnapping and a subsequent attempt to pervert the course of justice; but I can further add that there are three other people currently helping the police with their inquiries in respect of the murders to which the noble and learned Lord referred.
Lord HARVEY of PRESTBURY: My Lords, has my noble friend received assurances concerning the safety and the welfare of the 5, 000 British subjects working in Libya?
Lord TREFGARNE: My Lords, we have no reason to believe that there is any threat to the safety of our citizens in Libya.

INDUSTRY BILL
4.10 p.m.
Report stage resumed.
Lord BRUCE of DONINGTON: My Lords, your Lordships will recall that when we were discussing this particular clause, Clause 1, in Committee, I urged upon the Government that they should not close the door on the possibility of their having to extend public ownership into certain areas of manufacturing industry. I said that I thought it would be unwise if they were to deny themselves that power. It will be within the recollection of the House that I urged on the noble Viscount to retain the flexibility, afforded them by the existing Industry Act 1975, of being able to give the board directions in certain specific ways if they
34
thought the board was going to do something the Government did not want it to do. We were talking of the Committee stage and, as your Lordships will recall, the remarks that I made were in the context of the Government's own projections of the future as put out in the White Paper and in the Budget Statement. These were bad enough; and what I said on that occasion was that the Government would be unwise, in view even of their own projected developments in the next four years (whether they were forecasts or whether they were assumptions), to deny themselves that power and have to come back for legislation.
At that time we were talking within the context of the Government's own statement. But we are now talking in a different circumstance because, since the Committee stage, the Select Committee of another place dealing with Treasury and Civil Service matters has had an opportunity not only of examining the forecasts (or assumptions) to which I then referred but of producing an opinion which states authoritatively that the position is likely to be much worse than that which was thought to exist at the time we were holding the Committee stage on this particular clause of the Bill. If I may, I will refer your Lordships to the findings of this all-party Select Committee in another place, a Select Committee comprising a majority from the Government's own party. It says this:
" The prospects for manufacturing industry arc particularly depressing. It was stated in evidence to the Committee that manufacturing output was estimated to decline by 4½ per cent. in 1980, which, with an average fall of J per cent. a year over the next three years, would imply that manufacturing production might be over 6 per cent. lower in 1983 than in 1979 ".
Are the Government still saying that, in the light of the blight that they themselves originally forecast as settling over the industrial life of this country, they want to forfeit their right, if need be, to invest public money either in saving industries or in promoting new ones? Only two days ago, it was announced that in that free enterprise country, the USA, the US Government were advancing 750 million dollars to save Chrysler. There is not the slightest disinclination by the American Administration when things are going badly to put in public money. Are the Government saying that they wish to tie

35
their hands behind their backs in this particular respect? In the light of all these developments, and in the light of the far worse projections by the Select Committee in another place, and within the context of the American action to which I have referred, are they saying that they are still going to let the weakest go to the wall and the devil take the hindmost— all for the sake of maintaining in its pristine purity the ideological piety of Sir Keith Joseph? Are they still saying that in no circumstances would they be prepared to take the same action as was taken by the Heath Government in relation to Rolls-Royce?
If they are saying this, then they are revealing that they arc quite insensitive to what happens to the industrial structure of this country. I should have thought that prudence would have dictated to the Government that in all the circumstances it would be wise to retain the power contained in Section 2 (2) (c) and/or for that matter Section 2 (2) (b) of the Industry Act 1975.
There is a further question to be taken into account. It will be recalled that the Government paper, the Budget Statement, the White Paper that followed, assumed that unemployment would rise to 1–8 million in 1981–82 and then remain at that level until 1983–84. If I could refer the noble Viscount to the Second Report of the Select Committee from another place, he will find this verdict on that assumption:
" Our advisers estimated that registered unemployed could lie between 2–2 million and 2–5 million by 1983. Higher unemployment means higher expenditure on social security benefits and whether this is financed through higher national insurance contributions or through general taxation, the scope for tax reductions in future years will be significantly tower … ".
So that it is not only a question of industrial activity; it is a question of unemployment. What is noteworthy is that the Select Committee of another place, composed as it is of all parties, went some way towards the conclusions reached by Mr. Wynne Godley which appeared only a month earlier and which were immediately denounced as fantastically pessimistic by the Government spokesman of that time.
Far be it from us on these Benches to add to the doom and gloom that these figures portend, but, certainly, if the noble
36
Viscount, on the basis of his own figures, was not prepared to retain that degree of flexibility, surely the substantial worsening of the prospects which was come to in the opinion of the Select Committee in another place ought to give the Government, and the Minister himself, cause for reflection. That is the reason why we have once again on Report suggested to the Government that they would be well advised, without prejudice to their powers under the Industry Act 1975, to leave the original section of the Industry Act as it stood.
There is no virtue in being inflexible when the fires are gathering all the time; when the storms are blowing with ever-increasing intensity; and when the horizons, wherever one looks in the economic and industrial field, grow progressively darker. Surely, it would be far better for the Government to maintain this degree of flexibility. It does nothing to take away their powers. In certain circumstances flexibility might be an advantage, a lifeline for them— and not only a lifeline for them, but for the benefit of the country as a whole.
4.20 p.m.
Lord HATCH of LUSBY: My Lords, at the Committee stage the noble Viscount agreed that this clause was the philosophical core of the whole Bill. My noble friends Lord Lee and Lord Bruce have made the central issues so far as that core is concerned. I want to confine myself simply to one complementary point: that which I mentioned in particular during the Committee stage. This will take away from the NEB and the agencies mentioned the function of promoting industrial reorganisation.
At the Committee stage, we had a discussion about this. I raise it again simply because I do not believe that the noble Viscount answered the arguments from this side with any degree of satisfaction. The noble Viscount professed not to be dogmatic. He claimed that he was not acting with regard to this Bill on the principle of dogma. I am sure he has read the Hansard of the Committee stage and he will see why some of us on this side are dubious about that claim. At the Committe stage, on 28th April, in column 1048 of Hansard, the noble Viscount had this to say:
"We believe that the health of the private sector of industry, which has in the past created

37
the wealth for this and other nations to a greater extent than the public sector, has been debilitated".
That, I suggest, is his starting point in dogma. If it had not been, if he had been making a reasoned argument, then surely he would have gone on from that assertion to show that the nationalised industries had been less efficient, had provided less wealth than those of private industry and that was why he was introducing this Bill: in order to promote the industrial health of this country through private enterprise rather than through public enterprise. He did not do so.
I should like to hear him argue that case, for example, in the coal industry. Would he like to tell us this afternoon that the coal industry was better organised and produced more wealth for the country under private ownership than it has done under public ownership? What we are really arguing about is whether in the declining industrial age in which this country is living the Government should have the means of intervention in order to stimulate a new industrial age and halt the decline that we all have to accept as characteristic of our age; or whether this can best be done, as the noble Lord has been arguing, through the aegis of the market place. Later in the same Committee stage the noble Viscount had this to say:
" I said the market system would cause reorganisation "—
that was at column 1051 of Hansard.
I pointed out to the noble Viscount in that Committee stage that he had some historical precedent to go on. He has not answered— nor has anyone from the Government answered— why they believe that the system which they are now employing through this Bill and other Acts will be any more successful than was the almost identical system used between the years 1970 and 1972. We know that during those years, because of lack of investment in British industry, because of declining investment in British industry, because of the loss of investment to overseas companies— which again I mentioned at the Committee stage— the then Conservative Government had to reverse their policies in order to escape from complete collapse.
This has not been answered and it is not enough for the noble Viscount to say that the £ 1,000 million which I mentioned
38
had been lost within two months of the removal of exchange controls, had not been completely lost. I did not use the word "completely". I am suggesting that this Bill, for the removal of the power of the Government to use the NEB to revitalise industry, combined with such measures as the removal of exchange control, will have the same effect in this country today as occurred in the years 1970 to 1972. I should like the noble Viscount to answer that question, as nobody that I have challenged from the Government Front Bench has done so.
In removing these powers of industrial reorganisation from the NEB, may I ask the noble Viscount another question— a very pertinent and timely question— taken from a matter which he referred to in public only last week. That is the question of research and development which is an essential part of industrial reorganisation. I understand that the Government are resisting increasing State aid towards research and development in industry. Indeed, according to the OECD, Britain is the only major industrial country where research and development has decreased in absolute terms over the past 10 years. I am sure that the noble Viscount has read the Finniston Report, which shows that of the money spent in research and development in industry in this country 90 per cent. is accounted for by 100 companies. Over 50 per cent. is accounted for by no more than 10 firms. These 10 firms are exclusively within the aerospace, electronics and chemicals industries. Yet only last week the Minister himself was at least suggesting in his words that this Government are resisting the need for increased State aid.
When we come to a crucial organisation for the future industrial development of this country, the micro-electronics industrial support programme, we find, as I understand it, that that has actually been cut. Please correct me if I am wrong. This programme has been cut from £ 70 million to £ 55 million over a five-year period. So I would say to the Minister: What is there that activates the Government in producing this Bill and depriving themselves of the organisation of the National Enterprise Board, with its power to stimulate private as well as public industry in this country, to lead the way in research and development, to assist in the stimulation of new industrial ventures

39
in this country, and to participate in the reorganisation of industry? What is it that activates the Government, other than dogma?
4.31 p.m.
Lord ROSS of MARNOCK: My Lords, I hope the noble Viscount will think again about some of the things which are implied in this clause. I have an interest in it, and particularly regarding subsection (2), where he deals with the Scottish Development Agency Act. As he knows, I was Secretary of State at the time when that Act was passed. It is interesting nowadays, when there is a problem with any industry in Scotland, how the Secretary of State rushes to the press and says, "It's all right: we are going to get the Scottish Development Agency on to the scene and see what they can do". They were not all that helpful when it came to the passing of the Act and the creation of the agency, and indeed it looked at one time as though they were going to get rid of it. There were times when they spoke in this way about the NEB and the Welsh Development Agency as well, and then they probably suddenly realised that they had better have some tools in their locker if they were even to keep up a pretence of dealing with the rising tide of unemployment.
The tide is rising; it is rising very heavily in Scotland. Over the whole of Scotland it is more than 8 per cent., and when you take particular areas it really is a desperate plight. These particular areas are in the old industrial areas of Glasgow and the West of Scotland— not just the Clyde Banks and not the places where you expect to get a great rise in unemployment with the decline of shipbuilding and other heavy industry, but a place like Kilmarnock, which I had the privilege of representing for 33 years.
We have seen all the forces at work there— an American coming in to Glenfield and Kennedy which had been there for over 100 years, milking it and walking out. It was the efforts and the new powers of the Scottish Office, with the help of the Scottish Development Agency, that, by intervention there and by maximum state aid, saved something of it. We have another firm there at the present time which is building up, and it is a
40
credit to our development area policies that they have been able to do it, but it was intervention. If the Government had stood on the sidelines, Glenfield and Kennedy would have gone. There is another one called Massey-Ferguson. It is a well known name, even in racing these days; there is a Massey-Ferguson cup. I should like to tell your Lordships, in case you do not realise it, that there is not a single combine tractor now built in the whole of Britain. They used to be built in Kilmarnock, but they decided to reorganise. There was no difficulty about their re-organising. And where do they concentrate combine harvester production?— in France; and in what part of France?— a non-development area. It makes nonsense of all the Common Market proclamations about strong areas helping the weak. It has nothing to do with bad workmanship or strikes in the factory, or anything else: just a decision by a private company to reorganise to the detriment of an area that was once one of the most popular areas in Scotland.
At the present time— and let us give credit where it is due— with a certain amount of help and know-how from Massey-Ferguson, there is a company which, with the help of the Scottish Agency and the Scottish Office, is struggling for survival, not creating tractors but using their engineering skills that are endemic to Kilmarnock and trying to create a new industry. What I am concerned about is: What will be the effect of this Bill, and in particular Clause 1? It is all very well for the Minister to get up and say, "Ah, but have you read paragraph (a)? "which refers to,
"… the provision, maintenance or safeguarding of employment".
Of course I have read it, but I have also seen the activities of the Scottish Office and their message to industry is obviously: "Sink if you cannot swim. We are not going to give a great deal of help." In fact the complaint is that we tried to help too may people. It is far easier to maintain industry than it is to be able to provide industry. Firm after firm in Scotland is going out at the present time.
What is the outlook for the building industry and the housing projects the Government have got ahead of us? As to the capital cuts, are they going to help private industry by getting the Scottish

41
Development Agency, the NEB and the Welsh Development Agency to sell off what private interests they may have? I can tell you that private industry is more concerned about the contracts that have been put out by public industry. Go and ask Babcock and Wilcox how much they are dependent on the energy industry. Ask some of the other construction agencies and find out how much they are depending, waiting for development. They see no bright news in respect of this, and I am afraid that there is a little bit of whistling in the very dark days so far as paragraph (a) is concerned.
However, when we look at the negative aspect of paragraph (b) it may be possible to help, with the agreement of another industry, by the Government taking a share in it. In fact some people think— and I am one of them— that if we are on to something that may be profitable the Government should have a direct share in it. There is nothing wrong in that. We are not saying they must, but that they have the right to do it; it is the best way the workers can see a measure of control over their own destiny and get an immediate return for the country on what has been put in. But here comes paragraph (b) , permitting the private sector to come in:
" … by the disposal of securities and other property … ".
They will only be able to dispose of those securities if it is a profitable industry. That is where the dogma lies, on that Front Bench; and it is going to be no help to Scotland at all.
Then we have paragraph (c) which deals with "reorganisation". I have heard a lot since I came into this House about small industry. In many ways, one of the curses of Scotland is small industry. There are family businesses in which it is easier just to let the thing go rather than to invest. "It will do my lifetime"— that is the sort of outlook which you get in some of the smaller businesses. Is it not worth while having an agency coming in there and trying to get some reorganisation going and a bit of security for the workers as well as the lifetime of security for the present owners? It really does not say very much for the Government, with all their problems, that they have to pass a Bill like this which is so negative. They do not have very much confidence in their own ability properly to use the
42
tools under the old Industry Act, most of which were theirs, by the way. We could only help Rolls-Royce and all these other people by using the Industry Act 1972; the development agencies for Wales and Scotland were logical additional steps that were acclaimed and welcomed in Scotland.
Now let us not have anything about mandates. The Government have no mandate in Scotland to do anything at all, and if they did not believe me the last time, I hope they will notice the results of the local elections; and if they try to explain that away, I hope they looked at the opinion poll in the Glasgow Herald for today, where the Tories are down again, and we see a one point jump ahead for the Nationalists. The Tories create nationalism by their ill-treatment of Scotland. I sincerely hope the Government— I despair of it— if they had any sense, at the present time with the present unemployment and the employment situation in Scotland, will be strengthening the Scottish Development Agency, not weakening it as they do in this particular clause. I hope my noble friend will press this amendment to a Division.
4.43 p.m.
Viscount TRENCHARD: My Lords, we debated at Second Reading Clause 1 and its purpose as the key to this Industry Bill and at length on more than one occasion at Committee stage. Much as I should like to accept the challenge to do it again, in the interests of time I am not going to answer in almost precisely similar terms noble Lords who have raised points which have been raised and answered many times before, here and in the other place.
In a nutshell, we do not see the NEB or the particular functions of the agencies in relation to general reorganisation; we do not see these bodies as panaceas to deal right across the board. The noble Lord, Lord Bruce, suggested that things had changed since the Committee stage, in that there were various bodies estimating even lower industrial activity situations, and that this might mean that the Government should retain powers via the NEB to take what action they might consider necessary.
I am not going to discuss the general economy and the terrible situation it

43
was in when we took over, nor the length of time that it will take before we begin to get forward movement. But the idea that chosen panacea agencies can cover all the ills that have been created is one that we still reject. In so far as particular company situations are concerned— and the noble Lord, Lord Bruce, mentioned Chrysler in the US— in this Bill we are not, nor have we any such intention, revising any further the powers under Section 7 in the assisted areas and Section 8 nationally to give assistance when it is likely to benefit the economy of the United Kingdom or any part thereof. We retain those powers. Short of Government powers, which on the whole we do not favour in either specific or general situations, there are examples which are constantly occurring, and will occur more in the atmosphere created for private finance where consortia will, I hope, decide that in certain areas help should be given. Noble Lords have barely mentioned the changes in the tax and control policies which played such a part in debilitating industry in the past.
The NEB, in its annual report, clearly accepts the role given to it and obviously considers it to be an important and big one. It states that the Government have accepted the need for a continuing NEB; and that is true and answers a part of the noble Lord, Lord Lee's, suggestions. The broad purposes for which the NEB was set up and which were stated in the Industry Act 1975 remain unchanged; but its functions are to change. Public ownership for the sake of public ownership is no longer a function, and instead the NEB is to have the function of disposing of assets in order to increase the private sector involvement wherever possible. The notion that the NEB could be a major instrument of industrial reorganisation and rationalisation has also gone. It goes on to accept the need to concentrate its efforts in huge areas where they are very badly needed.
The noble Lord, Lord Lee, suggested that it had no flexibility in carrying out its new function of, wherever possible, returning companies to private ownership. What we expect the NEB to do, in the words of my right honourable friend the Secretary of State, is to sell its shareholdings as soon as it is commercially practicable, having regard to the interests
44
of the company and the taxpayer, together with such other special considerations, for example, United Kingdom defence interests, as the Government may identify. The flexibility was indeed shown in terms of the overall economics which faced the Chancellor of the Exchequer when he lowered the priority for the early contribution from the NEB to the need to deliver cash and the £ 100 million target in the financial year was removed. Sales will continue, and continue on a sound and practical basis, as and when that is in the interests of the country, the shareholders and the company concerned.
The noble Lord, Lord Cledwyn of Penrhos, raised the problems of Wales again. I really think I must decline his invitation to a further Welsh debate— we have had one— or even to a full debate on regional policy, at least under this clause, because we are talking of Clause 1 which does not affect it. I have indeed written to him setting out in full the position in relation to the £ 48 million extra, and out of courtesy but not in relation to this clause at all, the £ 48 million in question will be largely spent by the Welsh Development Agency, although a small amount will go to the Cwmbran Development Corporation. It will provide 1½ million square feet of advance factory space and 500 acres of identified sites, together with the reclamation of 300 acres for industrial use.
Lord CLEDWYN of PENRHOS: Would the noble Viscount please answer the latter part of my question, namely, whether the £ 48 million is intended to be directed to those areas which are affected by steel closures in Wales, and not to the rest of the development area which is to lose £ 35 million a year from 1982 onwards?
Viscount TRENCHARD: My Lords, in the main the purpose of this will be to relieve the effects of the steel closures. The regional policy changes have been discussed previously and I am more than prepared to debate them at any time in the future because, as I mentioned last time, I was happy to discover a fairly large amount of waste in the previous regional policy.' I believe we have an overall effective regional policy, in which— to say that Wales gets the largest share is wrong— Wales constitutes the biggest percentage of assisted areas of any of the

45
main areas of need in England, Scotland and Wales.
The noble Lord, Lord Cledwyn of Penrhos, quoted me as saying that the Welsh agency powers would not be altered. I never said that in relation to Clause 1 and the powers of general reorganisation. His concern has always been in relation to regional policy, and I said it in relation both to regional policy and to other functions which the agencies have but which the NEB does not have.
May I quickly answer the question in relation to INMOS, which the noble Lord, Lord Lee, raised? The Government regret the delay in taking the decisions both on the second tranche of £ 25 million for the company and on the location, which is a very important question. But I do not believe that the Government or the NEB could responsibly have refused to discuss, consider and negotiate in relation to certain offers and proposals which have been raised. I believe these to be potentially sufficient in the interests of all concerned, including all whose primary concern is the acceleration of technology in this country, for those discussions to proceed, and to proceed as fast as possible. So I assure the noble Lord— I cannot give him a date— that we are very conscious of the need to come to decisions at the earliest possible moment.
The noble Lord raised the question of Rolls-Royce once more, and of British Leyland. He will no doubt, having looked at the NEB's annual report, have seen that the board believe that they have no conceivable part to play in relation to either of those two huge companies, although on the second one the Government have still not yet taken their decision. In a nutshell, it all comes to this question of whether, if you have an industry whose profitability has been depleted very badly over the years by ill-tretament— by more than one Government and more than one party— by controls and by disincentives until its profit is at a low level, it is then
sensible to pick upon certain chosen agencies and expect them to put it all right.
With no disrespect to the previous board, let alone to this board, even in relation to those tasks which the NEB has taken on in the past— and we believe there is a need to concentrate on a narrower front— your Lordships will have seen in the annual report that after leaving out £ 17.2 million of special once-only costs the results are, on an historical account basis for the year 1979, 4.8 per cent. return on capital historical. I am not criticising. I am merely saying that it is no good noble Lords thinking that chosen agencies are the way to put right all that has gone wrong.
I hope that I can ask noble Lords opposite to consider whether all this stems from the ill-treatment of the wealth-creating section of industry, both private and public, by disincentive at a personal level, which affects both sectors, and by control and intervention, and whether it is a more sensible and more humble approach to limit the amount that you expect of any one centrally appointed agency and to get it to concentrate on essential functions. I just hope that the reason behind that question will go home.
Noble Lords opposite have placed emphasis on the immense problems in the economy and the appalling industrial situation that we have. I do not accept that a decline of industry is a characteristic of our age. In the main, it is a self-inflicted wound and it will take time for industry to recover from the many self-inflicted wounds of past years. It will not be done by giving huge, wide-ranging reorganisation powers to selected Government-appointed agencies.
4.55 p.m.
Their Lordships divided: Contents, 61; Not-Contents, 92.

CONTENTS

Ardwick, L.

Boston of Faversham, L.

Collison, L.

Aylestone, L.

Brockway, L.

Cooper of Stockton Heath, L.

Birk, B.

Bruce of Donington, L.

Crowther-Hunt, L.

Blease, L.

Chitnis, L.

David, B. [Teller.]

Blyton, L.

Cledwyn of Penrhos, L.

Davies of Penrhys, L.

Donaldson of Kingsbridge, L.

Janner, L.

Ross of Marnock, L.

Elwyn-Jones, L.

Kaldor, L.

Shinwell, L.

Fisher of Rednal, B.

Kilbracken, L.

Snow, L.

Gaitskell, B.

Leatherland, L.

Stedman, B.

Galpern, L.

Lee of Newton, L.

Stewart of Alvechurch, B.

Gordon-Walker, L.

Listowel, E.

Stone, L.

Goronwy-Roberts. L.

Llewelyn-Davies of Hastoe, B.

Strauss, L.

Gosford, E.

Lloyd of Hampstcad, L.

Taylor of Mansfield, L.

Greenwood of Rossendale, L.

McCarthy, L.

Underhill, L.

Gregson, L.

Maelor, L.

Wallace of Coslany, L.

Hale, L.

Northfield, L.

Wedderburn of Charlton, L.

Hatch of Lusby, L.

Oram, L.

Wells-Pestell, L. [Teller.]

Henderson, L.

Paget of Northampton, L.

Whaddon, L.

Houghton of Sowerby, L.

Peart, L.

Wynne-Jones, L.

Hughes, L.

Phillips, B.

Jacques, L.

Plant, L.

NOT-CONTENTS

Alexander of Tunis, E.

Gainford, L.

Netherthorpe, L.

Ampthill, L.

Glenkinglas, L.

Nugent of Guildford, L.

Armstrong, L.

Gowrie, E.

Onslow, E.

Avon, E.

Gridley, L.

Orkney, E.

Bellwin, L.

Grimston of Westbury, L.

Pender, L.

Belstead, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Piercy, L.

Bessborough, E.

Porritt, L.

Boothby, L.

Halsbury, E.

Redmayne, L.

Bridgeman, V.

Henley, L.

Reigate, L.

Caccia, L.

Holderness, L.

Robbins, L.

Cairns, E.

Hood, V.

Romney, E.

Chesham, L.

Hornsby-Smith, B.

St. Davids, V.

Cholmondeley, M.

Hylton-Foster, B.

Sandys, L. [Teller.]

Clitheroe, L.

Inchyra, L.

Shannon, E.

Colville of Culross, V.

Keyes, L.

Sharpies, B.

Craigavon, V.

Kimberley, E.

Simon of Glaisdale, L.

Craigton, L.

Kinloss, Ly.

Soames, L. (L. President.)

Cullen of Ashbourne, L.

Long, V.

Somers, L.

Daventry, V.

Lothian, M.

Strathcarron, L.

Davidson, V.

Lucas of Chilworth, L.

Strathspey, L.

de Clifford, L.

Lyell, L.

Swinton, E.

De Freyne, L.

McFadzean, L.

Torphichen, L.

Denham, L. [Teller.]

Mackay of Clashfern, L.

Trefgarne, L.

Derwent, L.

Macleod of Borve, B.

Trenchard, V.

Drumalbyn, L.

Mancroft, L.

Trumpington, B.

Ebbisham, L.

Mansfield, E.

Vaux of Harrowden, L.

Ellenborough, L.

Margadale, L.

Vickers, B.

Elliot of Harwood, B.

Marley, L.

Vivian, L.

Emmet of Amberley, B.

Merrivale, L.

Westbury, L.

Exeter, M.

Morris, L.

Willoughby de Broke, L.

Fortescue, E.

Mowbray and Stourton, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.4 p.m.
Clause 2 [Transfer of property to Secretary of State]:
Lord BRUCE of DONINGTON Lord BRUCE of DONINGTON moved Amendment No. 3:
Leave out Clause 2.
The noble Lord said: My Lords, this is another matter which was discussed by the Committee at some length. It deals with the right of the Secretary of State to direct that certain enterprises are handed over either to himself or to his nominee from the National Enterprise Board.
The reason that I have renewed the discussion on this matter today arises from a report that appeared in The Times on 6th May last from which, with the permission of the House, I will read a short extract. It says:
" Uncertainty over the future relationship between the National Enterprise Board and British Leyland is expected to be resolved shortly, with the Department of Industry taking over responsibility for monitoring BL's performance ".
It continues:
" Although Sir Keith Joseph, Secretary of State for Industry, has not yet decided how to resolve the continuing uncertainty, he is widely expected to use the powers contained in the Industry Bill now before Parliament and scheduled to be enacted at the end of this month. Under the new Act he can formally transfer BL from the NEB to the Department of Industry ".
I will not disguise from the House the fact that I am completely appalled by this terrible prospect. Sir Keith Joseph himself has assured us, repetitively, over the years that politicians are not the people to interfere in industry— indeed, that it is not their function and that this whole business is far better left to private enterprise individuals, with wide experience in industry and commerce and capable of being enthused by the perpetual motivation induced by lower direct taxation and all the benefits which are supposed to flow therefrom. I repeat: I am appalled at the prospect of the Department of Industry taking over BL from the NEB.
The noble Viscount has been good enough to quote from the annual report and accounts of the National Enterprise Board for 1979, which unfortunately were not to hand at the Committee stage. So perhaps it would be better if I were to illustrate the kind of difficulty in which we on this side of the House find ourselves when we read of the observations of the NEB, some of which were referred to by my noble friend Lord Lee of Newton and by other noble Lords on this side of the House in regard to INMOS. I quote from the chairman's statement:
" At the time of writing, three months after our decisions, we await a decision by Government both as to the consent for our investment and as to the company's application for an industrial development certificate. This is a worrying delay to a project where success depends on bringing satisfactory products to the market at the right time in the face of strong foreign competition ".
Are we now supposed to consent to a situation in which the same kind of delays in the making of decisions are to be in Sir Keith Joseph's hands vis-à-vis the future of British Leyland? Are they going to be paralysed by the kind of indecision to which the noble Viscount himself alluded somewhat obliquely by way of excuse? If so, the transfer of British Leyland to the tender mercies of Sir Keith Joseph will be a national disaster.
With the indulgence of the House, I should like to quote from a further section of the NEB report which has some bearing on this subject. Sir Arthur Knight, who, I believe, stands very well in Government circles, said:
"In all that we do there are inherent tensions. We must act commercially but in situations which the private sector alone is unwilling to tackle. Our criteria for investment are therefore special and we are in constant danger of being regarded
50
as 'a soft touch'. There can be nothing in our attitudes or behaviour which diverges from the best commercial practice. A second source of tension arises from the fact that we are spending public money. Pressures may be exerted which can easily lead to uncommercial behaviour or, at best, to delays which can be competitively damaging".
It is quite clear on any reading of the chairman's statement— or those parts of it that I have read— that he is referring to the Department of Industry. There can be no doubt whatsoever of that. Therefore do we wish the same type of tensions on top of their existing troubles to be transmitted further down the line to British Leyland? It is said— and I believe it to be true— that Sir Arthur Knight does not feel that the board at the moment can play any useful part in relation to BL. That may well be so; that may well be because Sir Arthur Knight has complete confidence in the existing management of British Leyland. Can the Government therefore indicate what kind of policies they intend to carry out if they use this clause to transfer British Leyland to the Minister? Have they any clue what they are going to do about it? Have they any clue what directions they are going to get? Of course it may well be that the report in The Times, which is usually very well informed on these subjects, is incorrect, and that the Government do not intend to use the powers under this Bill to transfer British Leyland direct to Sir Keith Joseph. If the noble Viscount can give us that assurance we may take a very different view of the whole matter. I therefore invite him to say whether The Times report has the substance of accuracy in it, or whether it is not the intention of the Government to do anything of the kind. I beg to move.
5.13 p.m.
Viscount TRENCHARD: My Lords, we explored very fully the purposes of Clause 2, both technical and substance, at the Committee stage and I resist the amendment for the same reasons as we adumbrated at Committee stage. The noble Lord, Lord Bruce of Donington, has raised two issues which I suppose by a thread could be attached to Clause 2 of the Bill and I think it necessary for me briefly to comment on them.
I have already made reference to INMOS in speaking to the last amendment and I have said that the Government

51
recognises that the delay in these two important decisions is unfortunate and will be kept to a minimum; and I have also said, in relation to almost the only critical quotation from the NEB report of the Government, that I do not believe cither Government or NEB could responsibly have refused to encourage discussions in relation to the possible future and whether it would be a beneficial future for INMOS and for micro-chip technology.
In relation to British Leyland, the noble Lord, Lord Bruce, did not quote the important reference in the NEB report to Rolls-Royce and British Leyland. This says:
" The Government has decided to relieve the NEB of responsibility for Rolls-Royce and at the time of writing is still considering whether to take similar action in regard to BL. My board and I made it plain on our appointment that we welcomed the opportunity to serve an NEB which would no longer be involved in either of these major companies. The magnitude of BL, its problems and its financial requirements, means that the Government must inevitably be closely involved in its major decisions, thus leaving for the NEB only a relatively minor intermediary role. We would gain nothing of substance by having this illusory responsibility ".
On previous occasions I have argued the case, which I support vigorously from my own industrial background, regarding putting a board of eminent gentlemen on top of a board of eminent gentlemen in the case of either Rolls-Royce or British Leyland and before you get a Government which cannot divorce itself from its responsibilities in relation to the shareholder and in relation to overall finance provided by the Government. This in no way contradicts the oft repeated remarks by my right honourable friend the Secretary of State that we have no intention of intervening in the management; but we are dealing with Government money, Government finance in huge operations, and to have an intermediary board in my opinion is not a sensible thing.
In the case of Rolls-Royce the arguments have been concluded and the decision taken. In the case of British Leyland we arc still considering that matter and will be discussing it further with British Ley-land, but I believe that certainly some of the same arguments (not quite all) apply to British Leyland as apply to Rolls-Royce. There is no question of either my right honourable friend, myself or the civil servants in the Department of Industry managing either of these two great companies. I resent the references made by the noble Lord, Lord Bruce, to my right honourable friend the Secretary of State. It is not his current role to manage these industries; and he is clearer of that and of the limitations of Ministers and civil servants in managing industry than noble Lords opposite seem to be.
In regard to the second quotation made by the noble Lord, Lord Bruce, from the NEB report, in my opinion the majority of that quotation refers to the relationship of NEB and subsidiaries or potential subsidiaries. The tensions that Sir Arthur Knight speaks of and of its being a "soft touch" are a soft touch for companies, and his emphasis that it must act really commercially in order to avoid the soft touch is one that I would entirely echo and I so indicated as the noble Lord was speaking. In the main he is speaking there of tensions in the market place. He makes some recommendations in his report where he believes (not surprisingly) that in a wide area the Government should consider things slightly differently; but in the main he and his eminent board are clearly content with their very major roles in which we wish them well. I wish to resist this amendment.
5.19 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 63; Not-Contents, 87.

CONTENTS

Ardwick, L.

Bruce of Donington, L.

David, B. [Teller.]

Aylestone, L.

Byers, L.

Davies of Penrhys, L.

Bernstein, L.

Chitnis, L.

Donaldson of Kingsbridge, L.

Birk, B.

Cledwyn of Penrhos, L.

Elwyn-Jones, L.

Blyton, L.

Collison, L.

Fisher of Rednal, B.

Boston of Faversham, L.

Cooper of Stockton Heat

Gaitskell, B.

Brockway, L.

Crowther-Hunt, L.

Gordon-Walker, L.

Goronwy-Roberts, L.

Leatherland, L.

Shinwell, L.

Gosford, E.

Lee of Newton, L.

Snow, L.

Greenwood of Rossendale, L.

Llewelyn-Davies of Hastoe, B.

Stedman, B.

Gregson, L.

Lloyd of Hampstead, L.

Stewart of Alvechurch, B.

Hale, L.

Lloyd of Kilgerran, L.

Stone, L.

Hatch of Lusby, L.

McCarthy, L.

Strauss, L.

Henderson, L.

Maelor, L.

Taylor of Mansfield, L.

Houghton of Sowerby, L.

Northfieid, L.

Underhill, L.

Hughes, L.

Oram, L.

Wallace of Coslany, L. [Teller.]

Jacques, L.

Peart, L.

Walston, L.

Janner, L.

Phillips, B.

Wedderburn of Charlton, L.

Kaldor, L.

Robson of Kiddington, B.

Wells-Pestell, L.

Kilbracken, L.

Rochester, L.

Whaddon, L.

Kilmarnock, L.

Ross of Marnock, L.

Wynne-Jones, L.

NOT-CONTENTS

Alexander of Tunis, E.

Gainford, L.

Merrivale, L.

Allen of Abbeydale, L.

Galloway, E.

Morris, L.

Ampthill, L.

Glenkinglas, L.

Mowbray and Stourton, L.

Armstrong, L.

Govvrie, E.

Netherthorpe, L.

Avon, E.

Gridley, L.

Nugent of Guildford, L.

Barnby, L.

Grimston of Westbury, L.

Onslow, E.

Bellwin, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Orkney, E.

Belstead, L.

Redmayne, L.

Bessborough, E.

Halsbury, E.

Reigate, L.

Boothby, L.

Harmar-Nicholls, L.

Robbins, L.

Bridgeman, V.

Henley, L.

Romney, E.

Caccia, L.

Holderness, L.

St. Davids, V.

Charteris of Amisfield, L.

Hood, V.

Sandys, L. [Teller.]

Chesham, L.

Hylton-Foster, B.

Sharpies, B.

Clitheroe, L.

Inchyra, L.

Simon of Glaisdale, L.

Craigavon, V.

Killearn, L.

Soames, L. (I. President.)

Cullen of Ashbourne, L.

Kimberley, E.

Strathcarron, L.

Daventry, V.

Kinloss, Ly.

Strathspey, L.

Davidson, V.

Lauderdale, E.

Swinton, E.

de Clifford, L.

Long, V.

Torphichen, L.

De Freyne, L.

Lothian, M.

Trefgarne, L.

Denham, L. [Teller.]

Lyell, L.

Trenchard, V.

Derwent, L.

McFadzean, L.

Trumpington, B.

Ebbisham, L.

Mackay of Clashfern, L.

Vaux of Harrowden, L.

Ellenborough, L.

Macleod of Borve, B.

Vickers, B.

Elliot of Harwood, B.

Mancroft, L.

Vivian, L.

Emmet of Amberley, B.

Mansfield, E.

Westbury, L.

Exeter, M.

Margadale, L.

Willoughby de Broke, L.

Forester, L.

Marley, L.

Young, B.

Fortescue, E.

Moved accordingly and, on Question, Motion agreed to.

5.27 p.m.
Viscount TRENCHARD Viscount TRENCHARD moved Amendment No. 4:
Page 12, line 5, at end insert—
("(3A) Where, apart from this subsection, the amount of a grant under Part I of the Industry Act 1972 towards expenditure falling within subsection (3B) below would be less than 20 per cent. of the expenditure, the amount shall instead be 20 per cent. of the expenditure.
(3B) The expenditure falling within this subsection is expenditure incurred—

(a) in providing an asset as part of, or on or for use in, qualifying premises in a relevant special development area in such circumstances that, by reason of Article 5 (1) and (4) (d) or Article 5A (2) and (5) (b) of the Assisted Areas Order 1979, any grant under Part I of the Industry Act 1972 towards the expenditure is to be made at
54
the rate appropriate to a development area which is not a special development area, or

(b) in providing a building or works at any time as part of or on qualifying premises in a relevant development area in such circumstances that, by reason of Article 5 (2) and (4) (d) of that order, no grant may be made under Part I of that Act towards any expenditure incurred in providing machinery or plant at that time for use in those premises.

(3C) In subsection (3B) above—

(a) "relevant special development area" means an area which became a special development area on the coming into operation of the Assisted Areas Order 1977, the Assisted Areas Order 1979 or the Assisted Areas (Amendment) Order 1979, and

(b) "relevant development area" means an area which became a development area on the coming into operation of the Assisted Areas Order 1977, the Assisted Areas (No. 2) Order 1977 or the Assisted Areas Order 1979.").

The noble Viscount said: My Lords, I move this amendment which I believe to be entirely a technical amendment, — and I hope the noble Lord will not accuse me of calling things technical which are not technical. We discovered, following the changes in the regional policy which were brought in last July and some of which are consolidated in this Bill, that an unanticipated effect of those changes and of the transitional arrangements was taking place. This amendment relates solely to the situation of companies which have negotiated Section 7 aid, which your Lordships will remember is provided to support a project and is not automatic aid on capital like the regional development grant. Companies which have negotiated assistance to a project under Section 7 and whose project is located in an area that has been upgraded will inadvertently get for part of that project, as I shall explain, less than they anticipated. What was intended was to prevent companies in areas that were upgraded from getting a windfall extra regional development grant, over and above that which they anticipated getting at the time when they applied for aid and when aid was negotiated with them to enable the project to go ahead. Thus it is a technical amendment to reverse the unanticipated effect of the transitional provisions in the Assisted Areas Order 1979 and the Assisted Areas (Amendment) Order 1979 which, combined with the effects of the Regional Development Grants (Variation of Prescribed Percentages) Order 1979, would result, as I have said, in some companies in upgraded areas suffering an unintended shortfall of regional aid as a whole on a project.
The amendment has nothing to do with the intended reduction in both RDGs on assets provided after 1st August 1980, nor the consequence of a reduction in the total support for a project under Section 7 and RDGs in either downgraded areas or unchanged areas after the transition period. The companies affected are those who accepted offers of selective assistance of £ 20, 000 or more before the orders came into operation. The transitional provisions allow such companies the option of retaining the selective assistance, as negotiated, and receiving the RDGs during the period of the assisted project as if the areas had not been upgraded, or repaying
56
selective assistance so far received and foregoing future assistance under the offer and receiving the new rate of RDG.
As I have said, the intention was to avoid companies who retained their selective assistance from receiving a windfall increase in grant more than had been used as a background figure in the negotiation leading up to the Section 7 grant. What has happened is that because the transition period ends on 1st August and because at that time in development areas the grant goes down from 20 per cent. to 15 per cent. for the residue of any project on assets not provided until after that date— because of that situation, a company under either of the options offered it to avoid a windfall will, in fact, be disadvantaged.
Perhaps I may give an example. In order to make the figures as simple as possible let us suppose that a company negotiated a Section 7 assistance of 10 per cent. of the project as grant and that that company was located in a development area which was upgraded with immediate effect in July last to a special development area. At the time the project was negotiated and the 10 per cent. was awarded, the company was working on the assumption of receiving 20 per cent. RDG. The combined legislation in the orders that I have mentioned was designed to avoid it receiving a windfall extra 2 per cent. and still getting the 10 per cent. which has been negotiated, possibly quite recently, on a different basis. But, in effect, because of the reduction in grant in development areas from 22 per cent. to 15 per cent. on 1st August 1980, the choice before it was either to forego the whole of the 10 per cent. Section 7 grant— in which case the project would only have received 20 per cent. support— or to retain that, but after 1st August 1980 to receive only 15 per cent. RDG on any remaining expenditure in relation to that project, which at times was quite a large amount,
Therefore, on that residue of expenditure it would get 10 per cent. and 15 per cent.; that is, 25 per cent., and not the expected 30 per cent. which it had originally done, the negotiation in order to achieve. This is all related to areas where, because of the greater need of the area— and there are areas where the need has become greater— it had been upgraded and where it was neither intended, nor

57
would any company accept, that in an area that was upgraded as regards a project just negotiated it should, in fact, receive less than it had anticipated. Therefore, a rather complicated amendment is before your Lordships which is designed to remedy those effects.
There are 52 projects in the new upgraded special development and development areas which are affected by these transitional provisions with an expected loss of aid estimated at £ 480, 000. The amendment reverses this effect and provides that applicants in the new special development and development areas who opt to retain their selective assistance should continue to receive the 20 per cent. rate of grant during the period of their assisted projects. I must repeat once again that this is quite a separate case from those who have asked us to avoid the effect of part of a project receiving less than anticipated after the 12-months transition period, in both downgraded areas and in areas retaining existing development area status where the rate of grant falls after the transition period. These effects were intended and declared in what we believe was the fairest administratively practical way of bringing about the necessary savings and the concentration of aid on the areas of greatest need. I beg to move.
Lord LEE of NEWTON: My Lords whenever a Minister appears either at the penitent form or the Dispatch Box to tell us in either technical or untechnical language that they have found a need, because of their own shortcomings, to move amendments to their own Bill, my heart goes out to them. I have no more to say.
Clause 19 [Planning agreements and disclosure of information]:
Lord BRUCE of DONINGTON Lord BRUCE of DONINGTON moved Amendment No. 5:
Leave out Clause 19.
The noble Lord said: My Lords, Clause 19 of the Bill which has come from Committee has the effect, among other things, of nullifying the effect of Section 21 planning agreements and it is that to which I specifically desire to refer. In the course
58
of the debate in Committee the noble Lord was good enough to point out that the power under that particular section had rarely been invoked and he did mention some observations said to have been made by Sir Harold Wilson after he ceased to be Prime Minister. I must inform the noble Lord that, although I am a very considerable admirer of Sir Harold Wilson and agree thoroughly with the policies that he pursued as Prime Minister, I do not necessarily associate myself with the remarks that he made when he no longer occupied that exalted office.
The reason that I am calling the whole matter of planning agreements into question is one again connected with a very informative article that appeared in The Times on 1st May. It is by Mr. Peter Hill, who is the industrial editor of The Times, and it is quite clear from its whole content that it could have been written only with substantial, unofficial conversations with spokesmen or other officials of his department. That is quite authorised and there is nothing improper about it in any way. It is what he says that concerns us. He says:
"Plans for expanding the level of public sector purchasing by Government departments, agencies and the nationalized industries, which could benefit the private sector by hundreds of millions of pounds, are being prepared by the Department of Industry.
First results of the detailed work now underway in Whitehall should emerge by the autumn. The plan is being supported by Mrs. Thatcher, the Prime Minister and by Sir Keith Joseph, Secretary of State for Industry, against the background of continued gloomy forecasts by the private sector based on high interest rates and the strength of sterling".
The article continues:
" The Department of Industry has been charged with taking the lead in formulating policy on increased public sector purchasing and identifying opportunities ".
I read this with a slightly raised eyebrow because of course "planning" in any form is a dirty word to the Conservative Party. As is well known, we have endeavoured to point out to the Conservative Party that one of the advantages inherent in any nationalised industry is that it enables a planned demand to be made upon private industry for the supplying to publicly-owned industries of a very considerable amount of their requirements. Indeed, the use of the nationalised industries for the purpose of stimulating demand for the supply of goods

59
and services from the private sector has for long been regarded on this side of the House as one of the advantages of having industries in public ownership. It enables the Government to use them in some ways as a sensitive instrument to stimulate demand where demand is required in the private sector.
As I say, if this be true— and I have no reason to doubt it from such an illustrious source as The Times — then we welcome the conversion of the Government to this point of view. But quite clearly, if they are going to do it, they must go the whole hog— or at least they would deem it wise to go the whole hog— because quite clearly they cannot formulate plans until they know the extent to which the private sector is able to supply some of the demands of the publicly-owned industries. They cannot know the capability of various sections in the private sector unless they get a good deal of information by it, and, in protection of the taxpayers' money— I emphasise once again the term, "taxpayers money"— I should have thought that it would have been prudent for the Government to make it a condition, for the organisation of their own plans, to conclude some planning agreements with some of the private companies involved; otherwise, perish the thought, they would be subject to political pressure from all sections of private industry that suddenly apprehended that their own turnovers could be increased if only they could influence the Minister to say that the publicly-owned industries should buy from them.
Quite clearly, they would not like public funds to be used in that way. Therefore, if it is to be planned on one side, surely it should be planned on the other. It should not be left to the caprice of private industry, where the public sector is to be required "to take part in the plans" that they have at present in mind. Therefore, it is to elicit some information from the Government as to how seriously we are to take this expressed intention of the Government that we move this amendment; in addition to which there are, of course, other matters in connection with the information that was required under the other sections, which are referred to in Clause 19, on which we require further elucidation. I beg to move.
5.45 p.m.
Viscount TRENCHARD: My Lords, in our view planning agreements do not have a part to play in the kind of way in which we believe the Government can steadily— not all at once, with any magic wand— improve the climate and conditions for the efficiency of British industry. They really were a dead letter from the start. There have been only two planning agreements; one with a company which was being rescued by the Government and the other with a nationalised industry. Both agreements have lapsed and will not be renewed. Therefore, we believe that this power which is certainly fundamentally inconsistent with the Government's approach to their relations with industry, should be removed.
The noble Lord, Lord Bruce of Donington, has mentioned public purchasing, which is a large and very interesting subject which I should love to have the opportunity to debate more fully in public. There have been no conversions of policy. I think that our predecessors underwent a development of policy. My right honourable friend the Prime Minister has announced in the House of Commons the basis of our attitude towards public purchasing. I have asked my advisers in the box for a note as to the date of that announcement; if I do not get it, I shall let the noble Lord, Lord Bruce, have it. But about a month ago the Prime Minister made very clear the policy on public purchasing, and it is in that regard that the Department of Industry is following up her policy exactly as enunciated and as agreed in consultations before she made that statement.
It is not a policy of "Buy British anywhere at any time". It is not a policy— and I know that the noble Lord did not quite say this— of "Throw hundreds of millions here and there", or as the article in The Times suggested. It is a policy of Government customers and potential suppliers getting much more closely together at a much earlier stage so as to give British industry every opportunity to be competitive when the time for quoting comes along. I am afraid that I cannot give the noble Lord that date; my advisers do not have it with them in the box; but I shall send the noble Lord, and anyone else who wishes it, a copy of Hansard of that date. However, there

61
are no secrets about it. Responsible journalists are good at writing newsworthy articles. There are no mysteries here at all. There will be a steady evolvement of trying to make sure that wherever possible the combined needs of public authorities to get real value for taxpayers' money and the most frequent success of British suppliers in tendering, will be achieved. It is those two needs that must be put together. Therefore, leaving public purchasing on one side, I should like to resist the amendment on planning agreements for the reason that I previously outlined.
On Question, amendment negatived.
Lord SANDYS: My Lords, I beg to move that the House do adjourn for about 10 minutes until six o'clock, in view of the fact that we have now concluded the Report stage ahead of schedule.
[The Sitting was suspended from 5.50 p.m. until 6 p.m.]

SOUTHERN RHODESIA (SANCTIONS) (AMNESTY) ORDER 1980
Lord TREFGARNE Lord TREFGARNE rose to move, That the order laid before the House on 23rd April be approved. The noble Lord said: My Lords, I wish at the outset to apologise for not being in my place a few moments ago; the speed of the Industry Bill left me speechless.
Lord ELWYN-JONES: And absent.
Lord TREFGARNE: Quite so, my Lords. In moving the first Motion standing in my name on the Order Paper, I will, with your Lordships' permission, speak at the same time to the second Motion standing in my name, but move the latter only formally when we come to it.
The Sanctions Amnesty Order 1980 is made under Section 3 of the Southern Rhodesia Act 1979 by which power was granted to deal with the consequences of the expiry of sanctions provisions. The
62
purpose of this order is to provide for an amnesty, and the discontinuance of criminal proceedings, for offences against those measures which provided for the imposition of economic sanctions against Rhodesia. My noble friend the Foreign Secretary gave the background to the Government's decision to grant an amnesty for sanctions offences in his Statement on 15th April. An amnesty in United Kingdom law was granted by the Zimbabwe Act 1979 for political offences in connection with UDI. Subsequently, a comprehensive amnesty was granted by the Governor in Rhodesian law. In these circumstances, the Government judge it inappropriate to initiate further prosecutions arising out of the tragic business of UDI, and this order provides accordingly.
There are no prosecutions for sanctions offences pending and the appeal to which my noble friend referred on 15th April has now been determined. This order does not pardon the actions of past sanctions-breakers, nor does it affect past convictions. However, with the decision of the Director of Public Prosecutions not to proceed over matters arising from the Bingham Report, and in the absence of any pending proceedings, the Government believe a line must now be drawn under the past. This country and British industry in general had a good record in the maintenance of mandatory sanctions against the former illegal regime. No Western country sacrificed more in this cause. There is no evidence to suggest that any major evasion of sanctions by British firms or individuals has taken place which has not already been investigated by the authorities and, where appropriate, dealt with by the courts.
But the era of Rhodesian illegality ended last December. The newly independent Zimbabwe has now taken its rightful place in the world community. His Royal Highness the Prince of Wales, in the presence of very many distinguished world leaders, has handed over the instruments of power to a Government fairly chosen by the people. It cannot surely be right in these circumstances to con-templace new prosecutions for offences which were part of our apparatus of disapproval of an illegal government no longer in power. To do so would serve only to open old wounds to no one's advantage. I do not believe that, in

63
this context, the continuance of prosecutions for sanctions offences would be regarded as anything other than an anachronism and a reflection of the past to which the people of Zimbabwe and the world outside are now pledged to forget. I believe your Lordships will agree that a comprehensive amnesty both for political and sanctions offences is an important element in the overall settlement of the Rhodesian problem and that with such an amnesty we can build on the spirit of hope and reconciliation which has transformed Zimbabwe over the past few months.
I turn to the second Motion in my name relating to the Zimbabwe (Independence and Membership of the Commonwealth) (Consequential Provisions) Order 1980. When the Zimbabwe Act was enacted it was uncertain whether Zimbabwe would attain independence as a member of the Commonwealth. The British Government took the view that it would be for the incoming government of Zimbabwe to decided on Commonwealth membership. The Act was therefore drafted on the basis that Zimbabwe would become independent outside the Commonwealth, but a power was included to enable the necessary modifications to be made in the event of a decision in favour of Commonwealth membership. The Zimbabwe Act also contains a power enabling the modification of enactments or instruments in consequence of Zimbabwe's independence. In the event, Mr. Mugabe applied shortly after his election victory for Zimbabwe to become a member of the Commonwealth when it attained independence. It was announced on 9th April that this application had been unanimously accepted by Commonwealth members and that Zimbabwe would come to independence as the 43rd member of the Commonwealth.
The main object of this order, therefore, is to give effect in the law of the United Kingdom to Zimbabwe's Commonwealth membership. It also contains further provision consequential upon Zimbabwe's independence. In brief, the effect of the Articles, taken in order, is as follows. Article 2 (1) restores Zimbabwe to the list of Commonwealth countries from which it was removed by the Zimbabwe Act. Article 2 (2) renews the status of British subject— that is, Commonwealth Citizen— for those who enjoyed the status
64
by virtue of their citizenship of Southern Rhodesia before independence and who became citizens of Zimbabwe on independence. Article 3 repeals two transitional provisions now unnecessary concerning applications for citizenship of the United Kingdom and Colonies by persons with a Southern Rhodesian connection. Article 4 repeals that part of the Zimbabwe Act which preserved for a limited period for Zimbabwean citizens the benefits of the status of British subject. This provision is no longer necessary now that Zimbabwe is in the Commonwealth. Articles 5 and 6 make provision in connection with the Government of Zimbabwe assuming responsibility for the stock and debts of the Government of Southern Rhodesia. Mr. Mugabe has stated that his Government will honour pre-UDI debts and talks are taking place in London at the moment with a view to reaching a mutually acceptable arrangement.
Lord ELWYN-JONES: My Lords, in relation to Articles 5 and 6, the Minister mentioned that they deal with stocks and debts of the Government of Southern Rhodesia. I do not see any reference to debts. If they are intended to cover debts, what is the position in regard to debts incurred by the illegal Government of Rhodesia between 1965 and 1980? Presumably Mr. Mugabe's Government are not accepting responsibility for those, so what is the position about those?
Lord TREFGARNE: I have it in mind, my Lords, that I should speak again at the end of this short debate, and perhaps the noble and learned Lord will allow me to deal with that matter in more detail then. As I said, Mr. Mugabe has stated that his Government will honour pre-UDI debts, and talks are taking place in London at the moment with a view to reaching a mutually acceptable arrangement.
The schedule to the order contains a number of technical and consequential provisions concerning diplomatic immunity, evidence, the enforcement of judgments, inter alia fraud prevention, solicitors and double taxation relief. The basic intention is to provide for the application in relation to Zimbabwe of relevant enactments and instruments in these fields. Zimbabwe is also accorded the status of a Commonwealth country in relation

65
to the Commonwealth Institute, and to service and visiting forces law.
In all probability, this will be the last legislation concerning the transition of Southern Rhodesia to independence. It is a moment which your Lordships may wish to savour. I therefore beg to move the first Motion standing in my name on the Order Paper.
Moved, That the Order laid before the House on 23rd April be approved.— (Lord Trefgame.)
6.10 p.m.
Lord BROCKWAY: My Lords, all Members of your Lordships' House will welcome the amnesty in Rhodesia for those who committed military offences during the war and for those who committed political offences during UDI. These steps are necessary for reconciliation in Zimbabwe itself. However, I regret the decision of the Director of Public Prosecutions not to proceed in the cases of alleged sanctions breaking by prominent oil companies. I am strengthened in that view by the annex to the Bingham Report— to which little attention has been drawn— headed "Evidence of Criminal Offences". The annex lists all the companies involved, and at great length it also gives the names of the directors of those companies, I regret to say that those directors include a number of Members of this House, including at least one who had close association with the Foreign Office.
The Minister said that he is doubtful whether other companies not yet discovered broke sanctions, and that he has no knowledge of this. I submit to the House that not only oil sanctions were broken; sanctions were broken over a much larger field. Would it really be necessary for the order to be produced if there were not other British firms concerned? The order refers to companies who are alleged to have broken sanctions and who have not yet been exposed. It refers to them only. These would be cases not of activity in Zimbabwe but of breaking British law in this country.
It is difficult to overstate the seriousness of the offence. It amounted to a conspiracy to assist an illegal Administration in rebellion against the Crown. These offences were committed purely for monetary gain. Those guilty placed
66
profits for their companies before a sense of patriotism to this country. They were also offences against international decisions which had the effect of international law. The sanctions were authorised on British initiative by the United Nations Security Council.
One must face the fact that sanctions-breaking meant the loss of hundreds of lives in Rhodesia and in the civil war. If the sanctions had been applied with the co-operation of big business, UDI would have ended much earlier and the civil war would have been concluded before it reached its climax of destruction. The sanctions breakers have that on their conscience. I submit that it should be on the conscience of this Government as well, if they now condone the guilt of those who so far have escaped discovery.
We shall be asked this week to endorse sanctions against Iran. I shall oppose those sanctions because I believe that they will endanger the lives of the hostages, rather than save them. But how can those who will vote in favour of sanctions against Iran also vote for this order, which provides an amnesty to sanctions breakers? Will not this order positively invite breaches of sanctions imposed against Iran? Sanctions breakers will feel that this is a precedent allowing them to go scot-free. My Lords, I hope that this House will reject the order.
6.16 p.m.
Lord HALE: My Lords, my very old and noble friend, and my best political friend, has done a considerable service to the House in putting these facts before it. I came here informed, to my surprise, that the Labour Party were proposing to vote against the order. I came to follow the course of a decision that I have taken already, to say that I support the order. I support it fully realising the strength, the power, the sincerity— which is always there— of all that my friend has said. I support it thinking that but for other considerations I might have been tempted otherwise. My first view is this. I shall not start coining a phrase about amnesty being indivisible; but amnesty is a position which if taken up abstains from distinctions.
The spirit which prompted that wonderful organisation which is endeavouring

67
to consider the question of the application of human rights all over the world, by men of vastly different religions— the religion of some of them includes hatred as a virtue— is a very complex matter indeed. If we are now to say let us rejoice, and let us give Zimbabwe a chance, let us not muck it up with attempts to bring cases which can never succeed. I doubt whether any practising lawyer will ever tell your Lordships that people should be charged with offences in breach of these regulations— vague, ambulatory and so on— over years that are passed, in times of acute controversy when Ministers themselves were being accused of letting sanctions go by and going to sleep, and when it was being said that the British Navy was deliberately watching the wrong port. Let us not forget these things.
The Bingham Report was a very thorough report, and after that we had to consult ourselves as to whether we should go further and endeavour to embark upon criminal prosecutions when there was clearly evidence that oil companies might say, "We were negotiating with that particular section of ministerial officers which deals with this matter". They have said it. We know that they are going to say it. We know that, even on pragmatic grounds, the intention is to do something; it does not vindicate justice. It expresses a determination to blame somebody for it— not us. I was one of those who were to blame. I have never been to Rhodesia; but I was certainly a Member of Parliament during this period, and I was certainly a Member of the House of Lords at some time during this period. Not many of us really asked ourselves very carefully what was happening, and why cars in Rhodesia were running, with every seat taken, in full sight of men. Many of us, very conveniently, did not ask ourselves what was happening to the chrome of Rhodesia. Every one of us who cared to know knew it was going to America. As to whether or not it was in President Carter's time, I do not think it was, to be fair to him, but we shall have another appeal, as allies, to back America on the question of sanctions.
I take the view that, after all the discussions we have had and after all the praise we have lavished, we should now say, "Call it a day". This is the moment
68
when amnesties are granted; a moment when there is something to celebrate; a moment when there is something to be pleased about; a moment when we can say that, just because they happen to be big companies and not individuals— and even big companies, I am afraid, have got to exist— to embark on further bitterness will serve no purpose, and this order as presented is an order that commends itself to the main decencies of most Members of this House.
6.22 p.m.
Lord HATCH of LUSBY: My Lords, it is not often that I disagree with my noble and old friend Lord Hale, but I do so on this occasion, and I take his own words to illustrate my first disagreement. My noble friend said that amnesty means the abolition of discrimination. This amnesty does not mean the abolition of discrimination, because according to this order those in this country who (I put it no higher than this) may be guilty of breaking sanctions in the past are going to be given preference over those companies which have already been convicted and fined for the same offence. So far as discrimination is concerned, therefore, this order introduces discrimination; and I wish that the noble and learned Lord the Lord Chancellor were here, because I should very much like to hear his views on the question of natural law. Does it square with natural law that certain groups of people and certain individuals should be penalised under our law for an offence when we are now asked to grant an amnesty to other people who have been accused of the same offence? I doubt it; and it is for that reason that I disagree with the argument that my noble friend has put forward.
But is it not curious, my Lords, that this order comes from the party that claims to be the party of law and order? All Governments since 1965, Conservative and Labour, have maintained the law imposing sanctions on the illegal regime in Salisbury. We are now being asked to give a blanket amnesty to those companies and those individuals who broke that law, and who broke that law for no other reason than economic gain. I hope that the noble Lord the Minister who introduced this order, when he visited Salisbury for the independence celebra-

69
tions, also went round such African townships as Harari, and went out into the countryside, and saw some of the cripples, some of the damage and some of the destruction caused to that country as a result of the war. Without blaming one side or the other, are we not entitled to say that if the sanctions law, as it was imposed by Labour and Conservative Governments alike, was designed to shorten that war, then those who broke that law are themselves responsible for the thousands of deaths and mutilations, and the massive destruction that has continued over the last 15 years? And, if they are— and most of them are large companies, particularly oil companies— should they not now be paying some compensation? Is it not a usual principle in an amnesty to confess one's sins and pay compensation for them? That compensation, surely, is due first to Zimbabweans, but also to Zambians and to Mozambiquans, who have suffered in some ways equally with the people of Zimbabwe as a result of the breaches in sanctions which have bled both their countries.
We have heard of the Bingham Report, and we have been told again that the Director of Public Prosecutions decided not to proceed with those prosecutions. Like my noble friend Lord Brockway I disagreed and thought, as did indeed many legal minds in this country, that the reasons given for the refusal to prosecute were very weak indeed; but, beyond that, there is perhaps one bright spark that comes out of this. We were frequently told, and told particularly in this House, that one of the reasons why there should not be a parliamentary inquiry following the Bingham Report was that those who might be called as witnesses on oath could be incriminating themselves by appearing before such an inquiry. If this order goes through, that excuse has gone. If this order goes through, there will be no further excuse for not holding a parliamentary inquiry on the grounds that witnesses may incriminate themselves. They will already be amnestied; and whether or not this House agrees, I hope there will be a parliamentary inquiry into the affairs that were raised by the Bingham Report, if only because of the phrase used by a member of the party opposite, that this issue raises the whole question of the integrity of Parliament.
70
Finally, there is a still bigger issue which is raised by this order— bigger, even, than that of the future of Zimbabwe and of Central Africa. It is the future of sanctions. There are many of us here— and I particularly bow my knee to my noble friend Lord Brockway for his long service, and to my noble friend Lord Noel-Baker— who have argued that the only alternative to war as a means of settling international disputes is economic sanctions. As my noble friend has already mentioned, this week, in another place and in this place, we are going to be asked by the same Government who proposed this order to impose another set of sanctions— this time on Iran. Will the Bill or order (however the Government decide to deal with it) asking for sanctions on Iran contain a provisional clause that there will be an escape route, that those who break that order will be excused?— because if this order is passed, as it will be, and when it is passed, what it is going to do is to weaken the use of sanctions themselves as a means of settling international disputes. Sanctions are one of the few non-violent international means of coercion still at the disposal of the international community. If it is now found that those who break the sanctions laws are going to be legally forgiven and that no penalties are to be exacted, then that means of settling international disputes will be thus much weakened.
I believe that we shall live to regret the means that we are now taking to weaken the international use of sanctions by saying to those who have broken the sanctions laws of this country under Governments of both parties: "Now we wipe the slate clean. We are not going to pursue you as we pursued those who did the same as you have done. We are now going to forget that we passed the law and that you broke it".
6.32 p.m.
Lord GRIDLEY: My Lords, I have listened with the greatest respect to the speeches of the noble Lords, Lord Brockway and Lord Hatch. I should like to support the Government proposition that there should be an amnesty. I should like to put this to both noble Lords. When I went to Rhodesia (or Zimbabwe as it now is) during the Lancaster House conference I found an overwhelming desire by the people of that country,

71
both white and black, that the war should be ended and that there should be peace. We now have the chance of a settlement and of good government in Rhodesia under the Prime Minister, Mr. Mugabe. I feel with the utmost sincerity at this time that if we were to proceed with prosecutions— and I do not deny that in certain circumstances sanctions may have been broken and that possibly, in normal circumstances, prosecution might be justified— and possibly long-drawn-out prosecutions against the various individuals and companies who (it is alleged, at this stage) have broken sanctions, this would be the very source of dissatisfaction within Rhodesia itself, possibly setting black Rhodesians and white Rhodesians against one another. For that reason, in all sincerity this evening, I feel that this amnesty should be granted.
I should like to make one point in a final exposition of what I have said. At the end of the last war, I remember the criminal trials in Singapore where, of 12 Japanese brought to trial, six were executed. I would have wished at that particular time that the life of the camp commandant of the prison where I was incarcerated had been spared. I see no point in carrying on an Act to perpetuate something which is now in limbo. In Zimbabwe, the chances are that there will be peace, good government and prosperity. I think that this chapter should be closed on the question of sanctions.
6.35 p.m.
Lord WALSTON: My Lords, I find it very difficult to speak on this occasion because my instincts are entirely on the side of my noble friends Lord Brockway and Lord Hatch. I have always been what is described as a hawk over the matter of Rhodesia. When I was a member of the Government I criticised the Government from the inside, and when I left it— and my resignation was not entirely unconnected with my attitude towards their conduct of the Rhodesian affair— I criticised the then-Labour Government for taking too soft a view about it. I still believe that things would have been better had the "hawks" had the upper hand in that argument. Therefore, my instinct is to go into the Lobby with my two noble friends and others.
72
But, my Lords, I come down on the side of my noble friend Lord Hale and, possibly regretfully, on the side of noble Lords opposite. My reason for doing so is basically because our great duty now is to do all that we can to see that the new country of Zimbabwe succeeds. It is going to have a very uphill struggle. It faces enormous problems. It is led, in my view, by a remarkable man whom later generations will describe as one of the great statesmen of Africa— a rash prophecy, but I believe it to be true. He has shown by his actions as well as by his words that he wants to wipe the slate clean; that he wants to start his new country without recriminations and without rancour over what has happened.
One of the most remarkable things that have happened in the Lancaster House proposals, in everything leading up to them and in everything since, is that a man who suffered, as Robert Mugabe suffered, at the hands of Ian Smith and his colleagues, should be prepared to sit down at the table with them, to talk with them and, since his victory, to say the things that he has said. I think it would be wrong indeed for us here, sitting thousands of miles away from the scene of this struggle that is now going to go on— not, thank God! a military struggle but an economic struggle— to rehabilitate a whole country with appalling difficulties facing it, to take a different line from the line which he so courageously is taking there. For that reason above all, I think that, much as I personally should like to pursue those who, as my noble friend Lord Brockway rightly said, prolonged the war, caused the death and suffering of many hundreds, many thousands, of people; much as the vindictive side of my character would like to do that, I still believe that we shall serve the best interests of Zimbabwe by following his example and by agreeing to this order.
6.40 p.m.
The Earl of ONSLOW: My Lords, I should just like to point out one small thing. Some 20, 000 people were killed in the war in Zimbabwe, tens of thousands of people are paraplegic, possibly hundreds of thousands of people were wounded, maimed, hurt, displaced and terrorised. The people who actually wounded, maimed, hurt, displaced or terrorised on either side, be they Selous

73
Scouts, ZIPRA or ZANLA, are not being prosecuted. Nobody is being prosecuted. There is a call for amnesty, reconciliation and forgiveness. We all believe it to be right for an amnesty for these people. Of course this is preferential treatment. Some of them were hanged. Some of them suffered actually during the war. For us to contemplate further petty prosecutions of somebody for "flogging" razor blades, oil or whatever it is, would be mean, vindictive and counterproductive. I am totally and completely on the side of Her Majesty's Government. This is a good example of forgive and forget. Of course the sanctions-breakers were wrong; but let us forgive, forget and end it now.
6.41 p.m.
Baroness GAITSKELL: My Lords, I am very worried about this business of enforcing sanctions, either against Zimbabwe or even against Iran. It is a very tricky issue. Sanctions, if applied to Rhodesia, are very unfair— no one can deny that— to the freedom fighters, to the people who fought and who have suffered. There is no doubt about that. I can only say that I would understand it if the Government, instead of enforcing sanctions, would raise their miserable £ 75 million that they have offered to Zimbabwe for the suffering that all those people there have gone through. I cannot support sanctions wholeheartedly for Zimbabwe or even for Iran.
6.42 p.m.
Lord GORONWY-ROBERTS: My Lords, the House has, I hope for the last time, considered an order relating to Rhodesia or Zimbabwe. It has done so with evidence of very deep feeling about the issue of the amnesty proposed in the first of the two orders. So far, at least, it has considered with a remarkable absence of recrimination and rancour this very testing question for all of us. I join my noble friend Lord Walston, who says that our first duty today is not to do or say anything which will in any way imperil the further progress of Zimbabwe on peaceful and democratic lines into independence within the Commonwealth. However, we may differ a little as to our attitudes on these two orders, bearing in mind that major objective. If the House will bear with me for a few minutes, I
74
should like to put the position as I see it and as I think the majority of my noble friends on this side of the House see it.
As to the second order, which is consequential upon the acceptance by the Commonwealth of the 43rd Member, there can be nothing but enthusiastic agreement. We are delighted that this has happened on its own volition. I have presided over constitutional discussions and have never asked them: "Would you like to be a member of the Commonwealth?"; they have asked me. In this case one of the most remarkable gestures of statesmanlike goodwill on the part of the new Prime Minister and Government of independent Zimbabwe was that they said: "We wish to apply for membership of the Commonwealth".
This order finalises and formalises in all its consequences the fact of their membership of the Commonwealth. All of us look forward to having the benefit of their contribution to the deliberations of the Commonwealth and of their cooperation in the various agencies— some of them very important indeed— which carry forward the great work of the Commonwealth. So, on the second order, there is no disagreement in this House.
As to the first— that relating to the blanket, retrospective amnesty— we have profound reservations. There are two views on this matter. We have heard both those views put most powerfully this evening. There is the one that says: "Let bygones be bygones. Let us draw a thick line under the past and look to the future". There is the other that says: "Unless you make it absolutely clear that there shall be no expectation of amnesty for the breakers of national— and, ultimately, international— law then the whole efficacy of economic sanctions as a substitute for military action is destroyed ".
My noble friends and I, in all sincerity, will vote against this particular order; but we do so not in recrimination about the past, but in reinforcement of the future. One thing has come out of all these years of discussing sanctions and their application: many have felt that sanctions are ineffective and should be abandoned. That is a dangerous mood for any member of the United Nations and any subscriber to its Charter to take. Once we

75
abandon the possibility of non-violent economic pressure on the lawbreaker, we are left with no alternative but war, or indeed surrender. I would ask my friends on both sides of the House to consider very carefully whether they are serving the greater purposes of the peace of the future by denouncing sanctions as such by urging that they should never be part of the armoury of the international authority to guard and preserve the peace.
I believe that non-violent economic sanctions together with peace-keeping and peace-making are of immense importance to the maintenance of international law and order in the future and the preservation of the peace. There are others who say that in any case they are ineffective. But so is war. For centuries we have applied the dread arbitrament of force to international disputes, and have learned very little from it. From this last attempted application of non-violent means of coercion we can learn a lot. It is this to which J hope we shall address ourselves. Certainly I do not wish to stir up sterile recrimination about what has passed; but we have a duty to study very carefully the lessons of the past so that in the future we avoid those past mistakes.
I want to make three points before I invite those who agree with me to make this gesture in the Lobbies tonight. First, we should assert that we regard the instrument of non-violent economic sanctions as part of the armoury of the world to preserve order and to preserve peace. Secondly, we should learn from the imperfect attempts to apply this instrument, for instance in Rhodesia— not completely ineffective but certainly imperfect, as we heard tonight. We should learn from the experience of our admittedly imperfect attempts to apply it as to how constantly to improve this instrument for the future, so that nations whom we saw during the past 15 years were hesitant about throwing themselves wholeheartedly into this international action will in the future have more confidence to co-operate in international J action.
Thirdly, in any proposal we put forward, we must above all avoid either on our own behalf (as may be imminent in the next few days) as a country, or in concert with friends or in the United Nations,
76
in the name of the world, creating an implicit precedent that although sanctions are to be engaged in, at the end of the day there will be a general amnesty for those who broke them. That is the point made by the noble Lord, Lord Hatch, with great force, and it is something which concerns us all.
If, as I hope, there is a determined effort made in the United Nations, and severally in individual countries, to learn from the past so as to refine and make more effective the bloodless instrument of economic pressure, then surely to include in any provision for such a pressure any assumption beforehand there will be no sanctions against the sanctions breakers will destroy every hope we have of building up an effective alternative to war as the instrument of settling international disputes.
That is the approach we have to this question. We deeply respect the sincerity of feeling on both sides on this issue; but it goes beyond Rhodesia. It goes to the very heart in the future as to how the nations of the world, through the United Nations, fashion and increasingly perfect and learn from deficiences and experience an alternative to war which will give them confidence as well as security and peace.
It is therefore in no spirit of recrimination or any desire to stir up the old agruments about Rhodesia that I state clearly from this Box that the Opposition will vote against this particular order. Having heard what they have heard this evening and having studied what has been said in the other place with great force and sincerity, particularly by my right honourable friend Mr. Peter Shore, I hope that the Government will take on board that we will not accept proposals even for non-violent action of this kind, if inside them there is an assumption of this sort of retrospective, indiscriminate amnesty for people who, for profit, broke the law of this country and, in doing so, helped not only to hearten the people of Rhodesia but to weaken one of the best hopes of mankind for a really effective alternative to war.
6.53 p.m.
Lord TREFGARNE: My Lords, I confess to being somewhat surprised by the tone adopted by some of your Lordships concerning this order, especially as

77
the announcement by my noble friend on the 15th April that there would be a sanctions amnesty drew no reaction whatsoever from your Lordships— and indeed the noble Lord, Lord Hatch, who has waxed so eloquent this evening, was not even in the House on that occasion. In commending this order to your Lordships, I must make one point quite clear. Certain noble Lords, including in particular the noble Lord, Lord Goronwy-Roberts, have referred disapprovingly to the granting of what they call "a blanket amnesty", thus giving the misleading impression that an amnesty is being given to a very large number of people known to have committed offences. My Lords, it is not. As I explained in my introductory speech, this is simply not the background against which the Government are introducing this measure. There-are no prosecutions pending: indeed there are no proceedings pending and no evidence whatsoever to suggest that any major evasion by British firms or individuals has not been the subject of full investigation by the authorities. Furthermore, I believe that a number of your Lordships are attempting, by means of a debate on this order, to revert to the Attorney General's Statement in another place last December on the Bingham Report.
The decision of the Director of Public Prosecutions not to proceed on the matters arising from the Bingham Report was a legal matter. It was not a decision taken by this Government. The DPP had to consider and assess the enormous quantities of oil company documents available in this country. The decision not to proceed with the further inquiries was taken by the DPP totally independently of the Government and was based upon the impartial advice from outside counsel. His decision was based upon the evidential problems involved, and his conclusions as to the chances of successfully mounting prosecutions were that these were remote. I believe his conclusions should be respected.
Can I just touch on some of the other points that have been raised this evening. The noble and learned Lord, Lord Elwyn-Jones, asked me about the debt provisions, which are actually covered by the second order but to which I referred in my opening speech. I am advised that my noble friend— the governor as he then was,
78
Lord Soames— validated, with effect from the return to legality, a number of transactions including debts incurred by the Smith and Muzorewa régimes. The "independence" Government of Mr. Mugabe succeeded to these obligations as well as to the pre-UDI debt, but these obligations are not, in any event, affected one way or the other by this order. The noble Lord, Lord Hatch—
Lord ELWYN-JONES: My Lords, may I thank the noble Lord for giving way. Will payment of those debts, incurred by the Smith regime in the period of illegality, by the successor Government of Mr. Mugabe be necessary? Also, will the amount they have to pay come off any grant-in-aid the Government will name in the meantime? If that were the position it would be perfectly appalling, would it not?
Lord TREFGARNE: My Lords, I am sure that is not the position. I think the noble and learned Lord may be referring to the oft-quoted £ 75 million of aid. It is certainly not the case that repayment of debts should come from that aid allocation, but it is the case that the various debts incurred during UDI, which have now been accepted by the new Government, will have to be repaid in due course. But doubtless, like all the other debts which Mr. Mugabe has accepted, the timing and dates of repayment will be negotiated with the creditors, and agreed in due course.
Lord WALSTON: My Lords, will the noble Lord let us know if included in those debts are those which were incurred by the Smith regime for arms imports from South Africa?
Lord TREFGARNE: My Lords, I have not got that information in front of me, but I will find out if I may and write to the noble Lord. I was coming to the remarks of the noble Lord, Lord Hatch, who, I think, once again, if I may say so, has not fully understood the nature and extent of the change which has taken place in Zimbabwe following the Lancaster House agreement and the elections which took place earlier this year. The noble Lord asked me whether those who had sinned should not confess. I am not quite sure who he now says should confess because, as I have said, there are no

79
prosecutions pending and we are not aware of anybody who really ought to be prosecuted in this matter.
Lord KILBRACKEN: Why not?
Lord TREFGARNE: My Lords, if the noble Lord had listened to my earlier speech, he would have heard the reasons for that. The noble Lord, Lord Walston, and the noble Earl, Lord Onslow, on different sides of the House were most helpful and I thank them for their contributions. My Lords, finally, to the noble Lord, Lord Goronwy-Roberts, who referred to a blanket and retrospective amnesty, I will say as I said earlier; this is no such thing. I must also refute the allegation.
Lord GORONWY-ROBERTS: My Lords, will the noble Lord forgive my interrupting? If evidence emerged showing gross violation of the law of this country in relation to our obligations and to the various enactments we passed, and if those violations emerged now, would they be covered by this amnesty? If it were reported, with prima facie evidence, that there had been violations of the law at some time in the past few years before independence, surely the effect of this order is to ignore such evidence and to declare that the amnesty covers anything tlat comes to the knowledge of the Government from now on about that period in that particular field.
Lord TREFGARNE: My Lords, the noble Lord, I think, is describing a purely hypothetical situation. The situation we are faced with at present is that there have been a number of prosecutions which will stand. There is no question of a pardon for convictions which have already been made. We are saying we shall not
continue indefinitely the "witch hunt", if those are the right words, of people who may or may not have committed offences under the sanctions legislation. We shall draw the line, now that Zimbabwe has come to independence. The intention behind this measure is to continue the logical process of granting an amnesty to those involved in the sad events of the past 15 years. An amnesty for political offences was granted in the United Kingdom and in Rhodesian law so as to assist the implementation of the Lancaster House Agreement. An amnesty for sanctions offences was not necessary to the functioning of the Governor's administration, but the British Government have always considered it an important element in making a clean break with the past.
I believe that the effect of this order on the development of close Anglo-Zimbabwean commercial and economic relations has been underestimated by some of your Lordships. Some have given the impression that sanctions breaking has only a British connection and that somehow no Zimbabwean citizen might be involved. In my experience, commercial transactions tend to involve more than one party and I believe that this amnesty will help to build confidence among individuals and institutions in Zimbabwe which are now committed to support the new Government there, and work for the reconciliation for which Mr. Mugabe has so eloquently called. This order is an important and logical element in that settlement.
7.3 p.m.
On Question, Whether the said Motion shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 33.

CONTENTS

Ailesbury, M.

Davidson, V.

Gridley, L.

Alexander of Tunis, E.

de Clifford, L.

Grimston of Westbury, L.

Alport, L.

De La Warr, E.

Halisham of Saint Marylebone, L. (L. Chancellor.)

Ampthill, L.

Denham, L. [Teller.]

Auckland, L.

Drumalbyn, L.

Hale, L.

Avon, E.

Elliot of Harwood, B.

Hall, V.

Barnby, I,.

Exeter, M.

Harvington, L.

Bellwin, L.

Ferrers, E.

Henley, L.

Belstead, L.

Forester, L.

Holderness, L.

Chesham, L.

Fortescue, E.

Hunt of Fawley, L.

Colville of Culross, V.

Fraser of Kilmorack, L.

Inglewood, L.

Craigmyle, L.

Gainford, L.

Kaldor, L.

Cullen of Ashbourne, L.

Galloway, E.

Kilmarnock, L.

Daventry, V.

Gowrie, E.

Kimberley, E.

Long, V.

O'Hagan, L.

Strathspey, L.

Lyell, L.

Onslow, E.

Swinton, E.

McFadzean, L.

Orkney, E.

Teviot, L.

McGregor of Durris, L.

Reigate, L.

Torphichen, L.

Mackay of Clashfern, L.

Romney, E.

Trefgarne, L.

Macleod of Borve, B.

St. Aldwyn, E.

Trenchard, V.

Mancroft, L.

Sandys, L. [Teller.]

Trumpington, B.

Mansfield, E.

Selkirk, E.

Vaux of Harrowden, L.

Margadale, L.

Sharpies, B.

Vickers, B.

Marley, L.

Shepherd, L.

Vivian, L.

Monson, L.

Soames, L. (L. President.)

Walston, L.

Mowbray and Stourton, L.

Stamp, L.

Westbury, L.

Netherthorpe, L.

Stedman, B.

Winterbottom, L,

Nugent of Guildford, L.

Strathcarron, L.

Young, B.

NOT-CONTENTS

Ardwick, L.

Gosford, E.

Noel-Baker, L.

Bernstein, L.

Hatch of Lusby, L.

Oram, L.

Birk, B.

Janner, L.

Peart, L.

Blease, L.

Kilbracken, L.

Phillips, B.

Boston of Faversham, L.

Lee of Newton, L.

Pitt of Hampstead, L.

Brockway, L.

Llewelyn-Davies, L.

Stone, L.

Cledwyn of Penrhos, L.

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

Taylor of Mansfield, L.

Collison, L.

Underhill, L.

David, B. [Teller.]

Lovell-Davis, L.

Wallace of Coslany, L.

Elwyn-Jones, L.

McCarthy, L.

Wedderburn of Charlton, L.

Gaitskell, B.

Mischon, L.

Wynne-Jones, L.

Goronwy-Roberts, L.

On Question, Motion agreed to.

Resolved in the affirmative, and Motion agreed to accordingly.

ZIMBABWE (INDEPENDENCE AND MEMBERSHIP OF THE COMMONWEALTH (CONSEQUENTIAL PROVISIONS) ORDER 1980
7.10 p.m.
Lord TREFGARNE: My Lords, I beg to move.
Moved, That the draft order laid before the House on 16th April be approved.— (Lord Trefgarne.)
Lord PITT of HAMPSTEAD: My Lords, I did not take part in the previous debate because I wanted to speak on this Motion, and I wanted to speak in different terms and in a different tone from the way in which the previous debate was taking place. Therefore, with your Lordships' permission, I should like to welcome this order and to say a few things that I want to say, because this is the last time that we shall debate Zimbabwe in this House.
When my wife and I were watching the television presentation of Marshal Tito's funeral, we both expressed our happiness at seeing Mr. Mugabe as one of the Prime Ministers present on that occasion, indicating, as it did, that the people of
82
Zimbabwe, through their elected leader, were able to take their place with the other nations. It is that happiness that I wanted to express here tonight, and because I wanted to express that happiness the previous debate did not really suit me.
I want to begin by expressing congratulations, belatedly, because I was not here during the previous debates, to the Foreign Secretary for having successfully walked his tightrope— because, as your Lordships remember, I described what he was walking as a tightrope. He has successfully walked it without falling off and I want to congratulate him. I also want to congratulate the Lord President of the Council on the part he played in bringing Zimbabwe into being.
I want, too, to congratulate the Commonwealth on getting its newest member, and on the part it has played in bringing into being its newest member. It is worth recording that from the beginning, from the time of the declaration of UDI, the Commonwealth has remained faithful to its insistence that there must be majority rule in Zimbabwe. It has, through it all, stuck solidly to that principle; and it was the Commonwealth conference in Lusaka that laid the foundation for the Lancaster House conference, and the eventual elections and the emergence of Zimbabwe and its place now in the Commonwealth.

83
I also— although some Members have done it before— want us to look at the inheritance of the present Zimbabwe Government. The question of the debt has already been raised, but I want to point out a few facts which need to be taken into account in thinking about it: the fact that one in three of adult blacks are unemployed, that there is a great deal of malnutrition and that what has been left as a result of what I would call the terribly wasted years is a devastated countryside. To illustrate what I mean when I talk about a devastated countryside, very few rural stores are functioning, most cattle are dead or stolen, rural health and education services are in ruins, large numbers of schoolchildren are without education, there is an absence of doctors in rural areas and, in addition, there are large numbers of refugees still in Zambia, Mozambique and Botswana.
To these must be added the handicap under which the new Government will be working. The alienation of land from the indigenous Africans has always been, and still is, bitterly resented. The new Government promises to concentrate on bringing neglected land into use and to pay compensation to the owners. But to do that it must have the wherewithal, and there is a great deal of expectation among the population which needs to be met. That is instanced to us by the number of strikes that are now taking place.
Therefore, a country in this position cannot be expected to service loans. What it needs is help. So the question of whether or not the new Zimbabwe Government says: "Yes, we will undertake to meet these debts", is not relevant. What is relevant is what will be the attitude of the creditors; and that is where this country comes in. What the country will need is a long enough spell before it has to repay any debts, so that it can develop to its full potential.
What is required from Her Majesty's Government— and this is why I wanted to concentrate on this debate, and not be diverted by debates on sanctions or anything else— is a commitment to provide every help possible to Zimbabwe in overcoming its difficulties. This Government and this country must give the maximum possible help, and also get
84
other countries to give the maximum possible help.
If I may instance one, I have mentioned the land. At the time of the Kissinger plan, the Americans committed themselves to provide finance for the resettlement of people on the land. It is necessary for Her Majesty's Government to help the new Government of Zimbabwe to get that help. As to the kind of help that the USA will be giving, the suggestion so far is certainly nothing like what one was led to expect when the commitment was made. Therefore, what I am pleading for is that this Government should undertake to raise with the United States Government, its ally, the whole question of its commitment to helping this new country, and ask it to try to fulfil that commitment and not back down on it.
Here I have to agree with my noble friend Lady Gaitskell, that the Government's own commitment so far in terms of their £ 75 million was not good enough, was not a good enough example. Therefore I hope that we shall hear that it is to be regarded as a first step and that in fact the Government will be thinking, as things improve, of increasing their aid to this country. That is something the Government can commit themselves to doing. I was glad to read that at Nairobi it was agreed that Zimbabwe should be admitted as a signatory to the Lomé Convention. What I should like Her Majesty's Government to do is to use their influence in the EEC to see that there is maximum help from the European Development Fund. These are the sort of things I am talking about.
This order deals with diplomatic immunities. I was glad to see in one of the Commonwealth circulars that the Commonwealth is putting on a training programme in Salisbury for Zimbabwean diplomats. I think that we ought to thank the Commonwealth, congratulate them on the part they have been playing over the last 10 years in providing training for Zimbabweans, and also the part Her Majesty's Government have been playing in providing training for Zimbabweans, and ask that that training be continued, because they will need the help and the training now more than ever. One hopes that one of the ways in which Her Majesty's Government will increase their aid to

85
Zimbabwe will be by increasing the extent to which they help with training and technical aid and personnel, where necessary. I know that we are giving military training, but probably we need to do as much in the civilian field as in the military field, and I hope that we shall do so.
While on the subject of the Commonwealth, I want to say something about Zambia because, of the Commonwealth countries, Zambia is the one that has suffered most from UDI. It is a country that has suffered most from what has been taking place in Rhodesia. What is very sad is that in the last period of Rhodesian rule, Britain and Zambia have seemed to be drifting apart. That is sad, but it is also dangerous. I hope Her Majesty's Government will take active steps to bridge that gap and remedy that situation.
Finally, I want to say something about South Africa. South Africa can, by its attitude, have a very definite influence on what happens to Zimbabwe. Because this country still has close and friendly relations with South Africa, I hope that Her Majesty's Government will use their friendship and close relations to persuade the South African Government to accept the result of the Zimbabwe elections— I think they have, actually— and, what is more, to accept the logic of the result of the Zimbabwe elections. By that I mean— I am merely giving an illustration— that if Ian Smith had accepted the logic of the Frelimo conquest of Mozambique, we should not have had to wait all these years for there to take place in Rhodesia the change that is now taking place. In fact, I am fairly certain that the group in Rhodesia that he was trying to help would have done very much better had he accepted the logic of what had happened in Mozambique. Therefore, I hope that the South Africans can be persuaded to accept the logic of what is happening North of the Limpopo, and that they can be made to understand that there can be no way of their being able to settle their problems without some accommodation of the urban blacks.
My own view is that that is the sort of message Her Majesty's Government need to be conveying to them. I do not think that the present Prime Minister needs to do what Harold Macmillan did and go there to tell them about the
86
wind of change. I think she could do it without going. But they need to be told, and told in a friendly way, that these changes are essential. The noble Lord, whom I heard in the defence debate, argued that South Africa is one of our strongest and most important allies here. I want to say that, as South Africa now is, she is probably our biggest liability. On the other hand, she could become the kind of ally that the noble Lord was suggesting that she was. But again that would depend on the changes that take place there, and they have got to take place.
I have spoken for long enough. I wanted to convey a certain feeling to your Lordships' House and I hope that I have succeeded in conveying it. What I want to say is that I hope that Zimbabwe-British relations will blossom and bear fruit and that this country will use its influence to see that this situation in Southern Africa is one of stability and that this new nation is developed into a prosperous, progressive, non-racial nation whose influence for good could be infinite.
7.29 p.m.
Lord HATCH of LUSBY: My Lords, I should like to associate myself with everything that my noble friend Lord Pitt of Hampstead has said. It is indeed appropriate that it should be my noble friend Lord Pitt of Hampstead especially who welcomes this new state into the Commonwealth. As the noble Lord the Minister has already said, it will be probably our last opportunity to debate Zimbabwe and its relations to this country.
It would be ungenerous of me not to pay tribute to the work done by the noble Lord, Lord Carrington, the Foreign Secretary, and by the noble Lord, Lord Soames, lately governor of what was then Rhodesia. This I do gladly. I have already, on several occasions, praised the noble Lord, Lord Carrington, with whom I have many differences, for his courage in reasserting British authority over Rhodesia which I believed, over my 30 years of connection with Rhodesia, was the only way to solve the complex problems of that country. Since the declaration of the election, Lord Soames has acted impeccably and his friendship with Robert Mugabe is, I believe, of the utmost importance to the future relation-

87
ship between his country and ours and to the race relations, the colour relations, within Zimbabwe itself.
Secondly, we must not forget the tremendous part played by Robert Mugabe, Joshua Nkomo and their colleagues over the last 20 years: The profound sense of forgiveness that they have shown after their long experience of incarceration, after a decade has been torn out of their lives, has amazed everyone who knows them personally. But above all tonight I want to draw the attention of your Lordships to the tremendous part played by the Commonwealth in the whole of this drama.
There have been times when the Commonwealth has not been very popular or fashionable in the foreign policy of either party in Government. I believe, and always have believed, that that has been a major mistake. The Commonwealth is a unique association which brings together people of all races, all creeds and all colours; which includes nearly a quarter of the world's population; which above all brings together the north and the south, the rich and the poor and which has shown its ability to provide the means of dialogue between them. But on this occasion the Commonwealth has shown that it has a power to solve an internal problem of one of its members. As my noble friend Lord Pitt of Hampstead has said, it was the Commonwealth which always insisted to the British Government and to the rest of its members and the United Nations that nothing less than full adult suffrage could solve the Rhodesian problem. And some of the members of the Commonwealth have gone to the stake on that issue.
It was the Commonwealth which provided the opportunity last summer, as the noble Lord, Lord Soames, pointed out on his return last week. The timing was right, the timing was fortunate and provided the opportunity for the preparations for the Lancaster House Conference. Members of the Commonwealth Secretariat, and particularly its noted Secretary General, played an important part in that Lancaster House Conference. Then, perhaps above all, the Commonwealth observers and the monitoring force made a successful election possible.
88
I would ask the noble Lord, as I asked him last week and received a not very gracious answer, to make sure that the report of the Commonwealth observers, which is a report that gives a clear and objective historical account of what happened during that election, is made as fully available as possible— not just to Members of this House, not just to Members of both Houses, but to the British public at large. I would just remind him that the Government found it possible to place in the Printed Paper Office the report of the noble Lord, Lord Boyd, which was a report of the Conservative Party. This is a report of the Commonwealth, with no partisan support or connections, and it should be widely read. Those of us who have played any part and associated in any way with the Commonwealth welcome with open arms this new member. We praise the British Government, we praise the Zimbabwean leaders, we praise the Front Line Leaders for making this joyous occasion possible and we believe that the Commonwealth is now tremendously strengthened by the appearance of its latest member.
Lord TREFGARNE: My Lords, I am much obliged to noble Lords for their interventions. If your Lordships will allow me, I will not attempt to answer all these points in depth or detail now but I will study what has been said and, if there is anything that needs to be taken up, I will correspond with the noble Lords in question.

EAGLE & GLOBE STEEL LIMITED BILL [H.L.]
Reported from the Unopposed Bill Committee with amendments.
BRITISH OLIVETTI LIMITED BILL [FIX.]
Reported from the Unopposed Bill Committee with amendments.
FRIENDS MEETING HOUSE (REIGATE) BTLL [H.L.]
Reported from the Unopposed Bill Committee with amendments.
ALEXANDRA PARK AND PALACE BILL [H.L.]
Re-committed to an Unopposed Bill Committee.