HL Deb 09 March 1981 vol 418 cc33-43

4.48 p.m.

Report received.

Clause 6 [Powers to promote careers in industry etc.]

Lord Hinton of Bankside moved Amendment No. 1:

Page 4, line 22, leave out ("and") and insert ("or").

The noble Lord said: My Lords, I should like to thank the noble Earl, Lord Gowrie, for the very long and careful letter which he wrote to me, seeking to remove the fears which I expressed in the last debate. Unfortunately, although it was sent by the most rapid means, it ultimately reached me through the post of this morning and I have had the opportunity only of indicating to the noble Earl that, carefully as he has tried, he has not removed all of my doubts.

Clause 6 of the Industry Bill seeks to give to the Secretary of State financial powers which would enable him to make grants or loans, the purposes of which—I am roughly quoting from the Bill—are to assist in the promotion of the practice of engineering, the improvement of links between industry and education and the encouragement of young people to become engineers. All of those are very laudable objectives. Unfortunately, the strings which are tied on to them are objectionable. The greater body of members of the engineering profession feel that their profession, like all other learned professions, should be self-governing. I understand that it is proposed that whatever board is set up by the Secretary of State as the outcome of the Finniston Commission, that board shall, for an initial period of three years and for no longer, be composed of men who have been appointed by the Secretary of State. Such an arrangement would I believe be aceptable to the engineering profession, but it seems to me that the principle of subsequent self-government is undermined by Clause 6(5). To show your Lordships what I have in mind, I shall quote from what I said in the Second Reading debate: The first board will, unquestionably, need financial pump-priming. It is hoped that it will ultimately be self-supporting, but initial pump-priming will, I am quite certain, be necessary. I believe that, in discussion of the Finniston Report, a figure as high as £10 million has been talked about [although] I should hope that the commitment would be considerably less than that. If that money is provided by way of a loan, and if, as seems likely, that loan, or part of it, is outstanding at the end of the initial three-year period, the Secretary of State could foreclose on that loan. The board would then have to raise money on the money market and it is improbable that it could do this [without] a Government guarantee. Under the terms of Clause 6(5), the Secretary of State could not provide that guarantee, unless the members of the board continued to be appointed by him. I do not for one moment suggest that the present Secretary of State intends to use the clause in that way, but if it gets on to the statute book it will be the law, it can be so used by his successors and he cannot commit his successors to any course of action. Such a position seems to me to be dangerous, particularly when one remembers, as the noble Earl has pointed out, that Ministers are under constant … pressure from the Treasury. That particular danger could be removed by substituting the word 'or' for the word 'and' in Clause 6(5)(a).". My fears on this point still exist. I should like to assure your Lordships that they are based on 13 years as an unestablished civil servant and on 12 years in the nationalised industry and that they are not based on the current TV series, "Yes, Minister".

There could be another objection to the clause as it is at present drafted. The whole profession of engineering comprises technician engineers and engineering technicians as well as chartered engineers. One hopes that whatever board the Secretary of State sets up it will cover the interests of those technician grades because they are a vital and important part of the profession. Just as the chartered engineers will continue to need their Institutions, so will the technician engineers continue to need their Societies and Institutes. Those Societies and Institutes already exist but they are badly supported, I hope that it will be part of the duties of the Secretary of State's new board to help those unchartered technician bodies, but as the Bill is at present drafted the Secretary of State might encounter insurmountable difficulties in attempting to do this.

Finally, it is a constant complaint in the engineering profession and outside it that engineers do not have a high enough status. I constantly point out to my fellow engineers that it is they who must create their status, and I think they have done a great deal to achieve this. But professions can be encouraged or discouraged in achieving status. It seems to me that so restrictive a clause as that which now apppears in the Bill does not give the impression that the profession is one in which the Secretary of State has great faith. I believe that this is a strong reason for the change.

I do not particularly like Clause 6; I think it would have been better to have discussed the engineering profession independently of the finances of British Leyland and other authorities. But we discussed this last week. Today I restrict myself simply to moving that the word "or" should be substituted for the word "and" immediately after the word "Charter" in line 22 on page 4 of the Bill.

4.57 p.m.

Lord Howie of Troon

My Lords, I rise to support Lord Hinton's amendment. I do so for entirely different reasons from those which he has just outlined and to which he referred in earlier debates on the Bill. First, I should like to thank the noble Earl, Lord Gowrie, for sending me a copy of the letter to which the noble Lord, Lord Hinton, referred. The letter attempted to remove the fears which Lord Hinton had expressed, fears which, it must be well known to the House by now, are fairly widespread throughout the engineering profession.

I agree wih the Minister that these fears, if not unfounded are exaggerated. I believe that that part of Clause 6 to which Lord Hinton objects was adequately explained by the Minister in his letter. That explanation is sound, so far as it goes. The fears which underlie Lord Hinton's attitude towards this amendment are based on a notion which engineers hold, that politicians are moved almost entirely by megalomania and by very little else. It would be idle to deny that there is a small element of megalomania in the make-up of the politician, but I am perfectly sure that it does not extend to an unbridled desire to take over the engineering profession. I entirely acquit politicians of that desire, so I think that the fears expressed by Lord Hinton and other engineers, if not unfounded are exaggerated. He does, however, have a strong point when he refers to the technicians. Lord Hinton might also have included the technician engineers.

I would remind Lord Hinton and the other Members of your Lordships' House that that particular difficulty would have been overcome had the House accepted my very long amendment which I moved at great length during the Committee stage. I assure noble Lords that I shall not speak again at anything like that length.

My reason for supporting Lord Hinton on this occasion is entirely different from his. It is this. The clause as it stands limits the Government's guarantees to three years only. What if three years is not long enough? In his letter to the noble Lord, Lord Hinton, the noble Earl, Lord Gowrie, said We expect to be able to ensure that the council is capable of standing on its feet by the end of the three-year period". That is fine so far as it goes, but what if the council is not standing on its feet at the end of the three years? What happens then? Presumably something will have to be done.

The matter could be dealt with quite simply by the change which the noble Lord, Lord Hinton, has just proposed. That amendment to change "and" to "or" would, if made, permit the guarantee to be continued. For that reason the amendment ought to be accepted or, alternatively, if there are wider reasons for not accepting it they should be made plain and the Government might then be able to deal with that specific question of extending the guarantee beyond three years should that turn out to be necessary by some sort of amendment at Third Reading.

I am not dying to divide the House on this matter. I shall listen carefully to what the noble Earl has to say in his reply but I believe that this is a very serious point. I mentioned it at Second Reading and, although I am not anxious to divide the House, if the noble Lord, Lord Hinton, feels that he must divide the House I shall vote with him, although not for quite the same reasons.

Lord Ponsonby of Shulbrede

My Lords, I would not wish to go over all the arguments which we had at Committee stage on this particular clause but I think it is fairly obvious to your Lordships that there is considerable concern about Clause 6 as it now stands. It seems to me that the noble Lord, Lord Hinton of Bankside, has made out a very powerful case for an amendment to this clause in the particular form which he has indicated. It may be that some other form of amendment to this particular subsection is possible—for example, indicating whether all or only some of the members of the Council for the time being need be appointed by the Secretary of State. But in view of all the arguments which we have had about this particular clause I hope that the noble Earl will either be able to convince the House that the clause is correctly drafted as it stands at the present time or will be able to look at this particular point again. I shall certainly listen with great interest to what the noble Earl has to say.

Lord Rochester

My Lords, I find myself in somewhat the same position. At the Second Reading of the Bill I said that it was a "mixed bag" and therefore it was not surprising that it gave rise to mixed reactions. I have come to feel that the noble Lord, Lord Hinton of Bankside, is essentially right in suggesting that a clause which seeks to give power to the Secretary of State to assist bodies set up to promote engineering and to promote educational links with industry should not really have been tagged on to a Bill which has to do primarily with the National Enterprise Board and the Welsh and Scottish Development Agencies. Instead it might well have been better, as he suggested on an earlier occasion, to await the outcome of discussions between the Government and the various bodies concerned and then, based on the outcome of those discussions and any financial provisions to which they might give rise, we could have had a debate on the subject of our response to the Finniston Report rather than dealing with it in the way in which we are now obliged to do.

However, we have to deal with the situation as it is. At the Committee stage I moved an amendment designed to bridge the gap between those favouring a statutory body and those favouring a body set up by Royal Charter. That amendment was not acceptable to the Government. I do not want to go over the ground again and I have not sought to table a further amendment on that subject. It is plain that the new body is to be set up under a charter and that it is to be altogether independent of the Government. Given that situation, I have some sympathy with the views which have been put forward by the noble Lord, Lord Hinton of Bankside, the noble Lord, Lord Howie of Troon (though for different reasons) and the noble Lord, Lord Ponsonby of Shulbrede, and with their fears that subsection (5) of Clause 6 as now drafted may have certain failings in it. Therefore, like the noble Lord, Lord Ponsonby, I shall await with interest what the noble Earl has to say in reply.

5.8 p.m.

The Earl of Gowrie

My Lords, the noble Lord, Lord Ponsonby, made it clear that he would suspend judgment on the Government until he heard my arguments—arguments mainly directed, obviously, at the noble Lord, Lord Hinton, who has put the substantive case and has made his reservations clear to us, both at Committee stage and this afternoon. The noble Lord, Lord Howie of Troon, puts me—and I think the House—in a rather difficult position because he has said effectively that he does not altogether agree with the noble Lord, Lord Hinton, in his argument but that he thinks the amendment should be supported for other reasons. The principal reason why the noble Lord, Lord Howie of Troon, wishes to support the noble Lord, Lord Hinton, is that he is worried because the Government's funding or backing of this body is limited to three years. My Lords, it is not limited to three years and therefore the reason for that support from the noble Lord, Lord Howie of Troon, to the noble Lord, Lord Hinton of Bankside, should really not be valid.

In the remarks that I wish to address to the substantive anxieties of the noble Lord, Lord Hinton, may I take it that I am also talking to the second amendment, tabled by the noble Lord, Lord Howie of Troon, or does the noble Lord wish to move that separately?

Lord Howie of Troon

My Lords, I should prefer to move it separately.

The Earl of Gowrie

My Lords, the noble Lord, Lord Hinton, has explained to us that the purpose of his amendment is to remedy what he sees as a potential problem in the drafting of Clause 6. He is concerned that it would be open to a future Secretary of State—and of course he has acquitted the present Secretary of State of any malevolent intentions, and I am grateful to him for that—to manipulate the provisions of the clause in order to enable him to continue to nominate the members of the proposed Engineering Council beyond the three years that we envisage. I think those were the "objectionable strings", as the noble Lord, Lord Hinton, put it—that were attached in this clause to the concept of the new body.

I had hoped that the noble Lord would have been persuaded by the assurance that I gave in Committee that those fears are wholly unfounded and I am glad to have this opportunity to repeat that without any qualification. The essential point is that it is the charter, not the Bill, which will provide for the nomination of the members of the council and the charter will make it quite clear that the Secretary of State's power of appointment is limited to three years, so that could not be less equivocal. Of course, therefore, we want to ensure, with the noble Lord, Lord Hinton, that this profession is to be self-governing and hence the charter makes it quite clear that the Secretary of State's powers of appointment are limited.

If your Lordships refer to the draft of the charter, the draft of 23rd January, copies of which have been deposited in the Libraries of both Houses, you will see that once it has been issued the charter can only be amended after a resolution has been passed by a meeting of the council itself with a three-quarters majority of the members present. Again, as I emphasised both at Second Reading and in Committee, there is nothing in Clause 6 of the Bill which would enable the Secretary of State to alter this charter in any way whatsoever. There is, therefore, no need—and I repeat my earlier assurances to the noble Lord and to the House—to amend Clause 6 in order to clarify or limit its scope.

May I now turn specifically to the amendment in the name of the noble Lord, Lord Hinton, because, in addition to this assurance and the objection I am making, its effect would be rather different from the ones he intends. The purpose of subsection (5) of the clause is simply to identify the proposed Engineering Council as the body in relation to which the Secretary of State may under subsection (4) guarantee certain obligations. Had these subsections (4) and (5) merely specified that the body had to be established by Royal Charter and concerned with promoting the practice of engineering, it would have been open to the Secretary of State to guarantee the obligations of a number of other chartered engineering bodies, including the CEI and its 16 corporation members. That, too, would be the effect of the amendment which the noble Lord has proposed, to substitute "or" for "and" in line 22 of page 4 of the Bill. I am sure the House will agree that this would be undesirable. The effect, however, of including, as we have, the additional provision that the members are, for the time being, appointed by the Secretary of State is to identify precisely the Engineering Council, since no other body would fulfil all the necessary conditions. The noble Lord, Lord Howie of Troon, has, therefore, effectively spoken in favour of the provision. From the explanation I have given, I am sure he will agree that the construction he has placed on it is also unfounded. I have said that the provisions of Clause 6 give the Secretary of State no powers of nomination and that this rests entirely on the Charter. Once the initial three years specified in it have expired the Secretary of State's power to issue guarantees will also lapse.

Finally, let me come to the other substantive point about which the noble Lord, Lord Hinton, was concerned. He was concerned that it might be open to a future Secretary of State to attempt to influence the council by foreclosing on a Government loan and then guaranteeing its private sector borrowing in return for retaining the right to appoint the membership. This would seem to me to be an extraordinarily tortuous way of going about an end which this future Secretary of State, should he wish to achieve such an end, could presumably take powers to achieve in the ordinary way because Parliament is sovereign. But, where this Administration is concerned, our policy, as I am sure the House recognises, is to keep Government involvement in this, and indeed in other bodies, to a minimum. We do not intend to leave the council in a position where it could be subject to the kind of crude pressure which the noble Lord has acquitted us of but has suggested some future Secretary of State might exercise.

As I have explained, we expect the council to become rapidly self-financing, and for that reason and as part of our policy of not interfering in its affairs, we hope it will be possible to limit the Government's contribution to guaranteeing its private sector loans during the initial three-year period. But we have also made it clear that we are prepared to stand financially behind the body if this proves necessary; we have accordingly sought the power in Clause 6 to provide it with grants and loans, and those grants and loans would not have the kind of strings the noble Lord has dangled before our eyes attached to them. So one way or another we do expect to be able to ensure that the council is capable of standing on its own feet by the end of the three-year period, and we are confident that this would in practice remove the danger of the kind of interference about which the noble Lord is so anxious. When we add that particular intention, and the flexibility behind that intention, to the unequivocating way in which we have devolved the powers of nomination to the body under the charter, I do honestly think that it is clear that the noble Lord's anxieties are misplaced. However, because of his great experience we have taken them very seriously. We have been through the Bill with a toothcomb since he raised them. We have now been through it twice. I honestly believe that his anxieties are unfounded, and, in the light of what I have said, I hope he will feel free to withdraw his amendment.

Lord Howie of Troon

My Lords, before the noble Earl concludes, may I, with the leave of the House, put this to him? The Minister said I was wrong in my understanding of the provision. My understanding is this, that in order to qualify for the Government guarantee the new council has to satisfy two conditions and it has to satisfy both of them. One is that it is a Royal Charter, and we are all clear about that. The other is that its members are, for the time being, appointed by the Secretary of State. But we do know from other things which the Minister has said, and from his speech just now, that the period of appointment by the Secretary of State is limited to three years. That must mean to me that the period of the guarantee is also limited to three years. I see the noble Earl shakes his head. That must relate to the words he used "one way or another". If he could explain what in this connection "one way or another" means, perhaps he could satisfy me.

The Earl of Gowrie

My Lords, if I may address the House, by leave, for a second time, I may need to backtrack on my use of the phrase, "one way or another"; it was a rather sloppy phrase and no doubt I should not have used it. The point here is that the Secretary of State has powers to make guarantees and he is not limited in time when he does so; but he is limited in time as to the period in which he may make nominations of the members. The point of the charter is that the charter will in fact make the nominations in the future. So I do not see that there is any difficulty between these two positions.

On Question, amendment negatived.

5.19 p.m.

Lord Howie of Troon moved Amendment No. 2:

Leave out Clause 6.

The noble Lord said: My Lords, this is an amendment which was put down at Committee stage by Lord Hinton, and he was supported then by my noble friend Lord Ponsonby and, I think, Lord McCarthy. I have put it down for three reasons. First, I agree with those who have said during the course of this Bill through both Houses that it was quite wrong that the new Engineering Council should be dealt with in a clause tacked on to the end of a Bill which was really intended to deal with entirely different matters. It is interesting to note that the debate on the Bill in this House has concentrated entirely on Clause 6 and has left the other matters completely out of consideration, as though it were, as it ought to have been, a separate Bill.

My second reason for putting down the amendment again was that in the confusion of procedure at the end of the Committee stage I thought the noble Lord, Lord Hinton, had missed his chance of dividing the Committee, which he seemed to have intended. I understand that he does not wish to proceed on that course any longer, so my offer of a second chance is no longer necessary. However, more important, my third reason is to give the Government an opportunity to tell the House what stage the discussions on the setting up of the new Engineering Council have reached.

In Committee, I asked for assurances on matters which were important to the engineering institutions. I believe that I got those assurances and that the institutions ought to be satisfied with the assurances which were given then. Now, on this occasion of the Report stage, I want some assurances for myself. I disagree with the proposition which has been put forward in earlier stages of our discussions that this Bill is only about financial measures. It is, of course, about financial measures, but it is also about the matters to which those financial measures refer. I put those in an amendment which I moved in Committee and I should have liked to do so again, but that would perhaps have been unseemly.

Nevertheless, the nature of the body to which the Government guarantees refer is central to this entire debate. I think that the House ought to be told what the proposed Engineering Council now looks like. We know what it might have looked like from the draft charter which the Minister put in the Library some while ago. We also know that that charter has not been agreed or accepted and that the situation has moved on from there. We know what it might have been and we should like to know now what it actually is so that we know what we are offering these guarantees for.

The Engineering Employers' Federation were willing back in February to accept the draft as it then was—that is, the one which is now in the Library—but the institutions were not willing to do so. As the Finniston Committee said in its report—and I think we are all agreed here—in implementing the recommendations of Finniston (and that is what the Engineering Council is all about) the employers are actually more important than the institutions. Important as the institutions must be, it is through the employers that these recommendations will come to life. I think that their views should be very strongly taken into account. Are the employers still in favour of the January draft or have the employers followed the institutions in objecting to certain parts of it?

There is one other thing that has happened since our last debate which I think is quite germane to this entire matter, and that is that the steering committee which organised the conference last October on the educational parts of the Finniston Report has published its report of that conference. The conference report wants an Engineering Council set up right away, but it says one or two things about the powers of that council which certainly ought to be ventilated and discussed before we guarantee funds to that body. For instance, the report of the conference still wants the Engineering Council to set up a registration body. But, as far as I can make out from the report, the registration suggested by the steering committee would be much more flabby than that proposed by the Finniston Committee. The registration proposed now seems to be little more than a list of names—a type of telephone book. I do not think that there is any point in pursuing a register of that type. The kind of register proposed by the Finniston Committee would make sense: the kind of register now proposed by the steering committee in its report of the conference seems to me to make very much less sense.

What I am really saying is that if the Government continue to dilute, as I believe they have been doing, the recommendations of the Finniston Committee, there is very little point in it going on. The Government have to make up their mind whether to dilute these proposals to the extent at which they become pointless, or to dig in their toes and get an agreement between the various bodies involved—and they include not only the engineering institutions, but the employers, the trade unions and professional engineers themselves, whether members of the institutions or not. I believe that we are in grave danger of providing guarantees and funds for an Engineering Council which might not be worth having. If that is the case, we do not need Clause 6. I beg to move.

Lord Rochester

My Lords, I have already supported the first reason given by the noble Lord, Lord Howie of Troon, as to why this clause should not be included in the Bill and I shall therefore say no more about that. However, I wish for the record—although more briefly than either on Second Reading or in Committee—to say why it is that for another reason I am unhappy about this clause. That reason is as follows. Although I welcome very much the provision that is being made to give financial aid to bodies concerned with the promotion of links between industry and education—albeit not in this clause but in some other more preferable way—I am very unhappy that at just this time the Government have made it plain that they are to reduce both the staff and the expenditure involved in these activities. When I said that in Committee the noble Earl very properly reminded me that we were just half as rich per capita in this country as they are in Western Germany, where very much more is done by way of financing activities of this kind. I nevertheless said that it seemed to me extremely shortsighted that at just this time the Government should choose to economise in that direction. I continue to feel the same and I felt obliged to say as much at this stage.

The Earl of Gowrie

My Lords, we debated the purpose of Clause 6 at some length in Committee and, of course, we have touched on important aspects of the clause in the debate that we have just had on the noble Lord, Lord Hinton of Bankside's amendment. I made the point in Committee that the clause contains provisions to enable the Secretary of State to support other areas of activity in addition to the proposed Finniston body. If the clause were left out, as the amendment of the noble Lord, Lord Howie of Troon, proposes, we would have to look very carefully at the future of the industry education activities which successive Governments have financed for a number of years and which, I believe, have the support of all parties in your Lordships' House and elsewhere. I am sure that the House will recognise that it would be a highly questionable procedure to continue to finance this expenditure under the Appropriation Act when specific statutory cover had been sought by us and denied.

In moving his amendment, the noble Lord, Lord Hinton, explained that his intention was to persuade the Government to reconsider their position on Finniston and to bring forward a new Bill to establish a statutory body. As I have explained to your Lordships, we decided against a statutory body after extensive consultations which revealed a clear majority in favour of the Government's proposals to establish a chartered body. Our consultations also demonstrated that there would be widespread opposition to a statutory body because of the risk that this would involve excessive Government involvement in the regulation of the profession.

Finally, I think that it is worth recalling that the Finniston Report itself did not recommend any statutory powers for its proposed engineering authority. The noble Lord, Lord Howie, has also argued that the Government have no option but to establish a statutory body because of the approach adopted by the leaders of the engineering profession. But I think—and I certainly hope—that the noble Lord has exaggerated the extent of the outstanding differences between the Government and the professions and their bodies. We have not yet reached final agreement with all the interests concerned, but we remain confident that it will soon be possible for my right honourable friend to reach agreement on the charter, which will then be recommended for the approval of Her Majesty.

We take the view, as we have done at every stage, that it is, however, important to ensure that the body is given the best possible start rather than to rush it through. So the Government are seeking a consensus. We are not trying in any way to dilute this work; we are trying to reach agreement. We are still continuing our discussions on the Royal Charter with the profession, with employers and with educationists. We are still hoping to reach a consensus and we are confident of doing so. With those assurances, I hope that the noble Lord will not press his amendment.

Lord Hinton of Bankside

My Lords, before the noble Earl sits down, may I emphatically point out that at no stage have I either suggested or implied the formation of a statutory body? The fact that I suggested that the whole matter might have been dealt with as a separate issue in debate does not imply—or I had not intended it to imply—a statutory body, because I think it is implicit in what the noble Earl has said that under the terms of the present legislation he is envisaging a charter body, as indeed am I.

The Earl of Gowrie

My Lords, if I may have the leave of the House to intervene once more, I am most grateful to the noble Lord for his intervention. I wholly acquit him of any misrepresentation on that score. The fault was entirely mine and I am glad that on this issue the noble Lord, whose experience and whose whole career in this field we all so much respect, and I are at one.

Lord Howie of Troon

My Lords, the noble Earl, Lord Gowrie, drew attention to what is undeniably the weakness of my amendment—namely, that, by removing the Government's power in relation to the proposed Engineering Council, it removes powers which relate to a number of other even more desirable bodies. That is sometimes a weakness, but it is a weakness which amply illustrates the fact that the Engineering Council should not have been dealt with in this way. It should not have been lumped in beside other bodies or other items in a general industrial Bill. But it has been, and I quite realise that were we to proceed to leave out Clause 6, we should do damage in areas where we do not wish damage to be done. For that reason, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.