HL Deb 21 June 1982 vol 431 cc802-13

3.4 p.m.

Lord Denham

My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they having been informed of the purport of the Oil and Gas (Enterprise) Bill, have consented to place their prerogative and interest so far as they are concerned on behalf of the Crown, the Duchy of Lancaster and the Duchy of Cornwall, at the disposal of Parliament for the purposes of the Bill.

Bill read a third time, with the amendments.

Clause 2 [Provisions supplementary to section 1]:

Lord Bruce of Donington moved Amendment No. 1: Page 4, line 32, at end insert (" insofar as it relates to the preparation of the accounts of the transferor or the transferee.").

The noble Lord said: My Lords, 1 beg to move the first amendment on the Marshalled List standing in my name and in that of my noble friend. Your Lordships will recall that at the Report stage of the Bill the Government sought to introduce an amendment to what is now Clause 2 of the Bill. That amendment, which appeared at the end of a series of provisions that gave the Secretary of State power to effect certain schemes to provide for the transfer of rights and liabilities and for dealing with other matters in connection therewith, and also for the purpose of borrowing powers, sought to insert the words, notwithstanding any rule of law and the provisions of any enactment. The noble Earl gave a very brief explanation of this, and when I ventured to query the importance of the amendment which he was then seeking to introduce he informed me in personal terms that this was an amendment which he had expected that I as an accountant would understand, but as I evidently had not understood it he proposed to explain it in detail. That was a very nice condescension of him which I am sure was deeply appreciated by the House. In the course of his reply he mentioned the case of Shearer v. Bercain as being relevant to the issue he had in mind, and when I bestowed upon him the accolade of my nodded agreement he declined (somewhat discourteously, I thought) to accept it on the grounds that it was, as he put it, too late.

It is not too late to consider the whole question raised by the original amendment that the Govern- ment brought forward giving the Secretary of State powers to do certain things "notwithstanding any rule of law and the provisions of any enactment". It is quite true, of course, that the noble and learned Members of your Lordships' Judicial Committee were not present at the time, obviously, for other reasons, but my noble and learned friend Lord Elwyn-Jones was kind enough to explain the novelty of the proposal to your Lordships. It is rather a remarkable thing that the Secretary of State should have power to do certain things notwithstanding any rule of law or any other enactment.

The view was put forward—and put forward, I can assure the noble Earl, in a completely non-contentious spirit in the party sense, but purely as a matter of correct procedure—that if the Government anticipated (and it took them all the way to Report stage to anticipate it) any difficulty in doing what they wanted to do, the correct thing was to earmark either the specific cases which they had in mind or the particular statutes or sections of statutes that they had in mind, and then to make appropriate amendments specifically in the Bill itself. It is not uncommon for some Bills specifically to amend or to add to or subtract from other Acts which have already been passed, some of them many years ago and some quite recently.

It rather appeared to some of us—and the noble Earl will have to forgive the validity of dissent on some occasions, notwithstanding that he may get a little impatient of them—that it was quite reasonable to propose this discipline of research into any law which might interfere with the Secretary of State's intentions, and that the result should be set out specifically. Instead of that, the Government chose—and they have chosen to do it not only in this part but also in a later part relating to the subsidiaries and assets of the gas board—to put in this omnibus provision.

I hasten to assure the noble Earl that when I politely nodded—in fact, benevolently nodded—my agreement to his reference to Shearer v. Bercain, it was my grateful acknowledgment of the fact that he had even borne that case in mind; no more, no less. In his reply on Report, the noble Earl said: Given that it is possible that certain of the transferred assets may well have a true or market value exceeding their written down value in the books of BNOC at the transfer date, application of this principle could lead to Britoil having a type of reserve—the share premium account does not form part of the distributable reserves—which might not facilitate the sale of its shares to the public."—[Official Report, 8/6/82; col. 1381 The noble Earl, as politically as he is entitled to do, and bearing in mind the judgment in the case of Shearer v. Bercain, explained that that was why he wanted this restriction removed.

Of course, it was the case that, where a share transfer took place in those circumstances, a share premium account was created, and under the decision in Shearer v. Bercain, it would not have been possible for the company to have distributed the share premium account, even though the existence of the share premium account was due to previously earned profits. So far, so good. Then returning to the second limb of the amendment, he said, The obvious example here is Section 56 of the Companies Act 1948 which requires that where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the amount or value of the premium is to be transferred to a share premium account. There are substantial restrictions on what may be done with the moneys in a share premium account. In particular, they may not be utilised for the payment of dividends. Quite clearly, the prospect of the new company not being able to distribute profits that have been previously earned by BNOC was repugnant to the noble Earl. Politically, he is entitled to express his repugnance and to take steps to remedy the situation, although others of us may take a slightly more jaundiced view of it, in saying that the noble Earl—or his right honourable friend—is quite determined that his political friends shall get their share of the swag on the dismantling of BNOC and the partial sale of the assets of the gas corporation. But, that is as it may be. The noble Earl made much of Shearer v. Bercain, which enshrined the principles to which he objected, but when the noble Earl came to reply, after having instructed me as to the law, which he had previously withheld because he thought that I knew all about it, he ended up with the statement that, after all, it was purely an accounting matter.

If your Lordships will refer to the amendment, it clearly sets out the limitations to which he himself referred. After the offending amendment, which he himself introduced and which states: notwithstanding any rule of law and the provisions of any enactment what we now seek to do is to insert the words, insofar as it relates to the preparation of the accounts of the transferor or the transferee ". That sets it right for the noble Earl. We accept the limitations to which he referred. The noble Earl says that no vital British constitutional question arises here, and nothing that need alarm your Lordships in any way; it is purely a matter of accounts. Very well then, my Lords, let us insert the words in the amendment, insofar as it relates to the preparation of the accounts of the transferor or the transferee ". I shall not hide from your Lordships that, even after the insertion of those words, the whole phrase would still not be acceptable and I am devoutly hopeful that, when the amendments go back to another place, the other place will seriously examine the original amendment to which I have referred. But, for the moment, in order to modify the impact of what I consider to be a completely unreasonable amendment, this amendment is before your Lordships.

If what the noble Earl says is true about the impact of his original amendment which I read to your Lordships— notwithstanding any rule of law and the provisions of any enactment "— what is the relevance of Sections 36 to 40 of the Companies Act 1981? It was precisely those sections, which your Lordships will recall went through this House late last year, which were supposed to remedy the situation in Shearer v. Bercain? What the noble Earl is really saying is that Sections 36 to 40 of the Companies Act 1981 do not affect the position. That is not what we were told at the time of the passing of the Companies Act 1981. We were told that the principles of Shearer v. Bercain had been dealt with by Sections 36 to 40.

I am going to put a question to the noble Earl and I hasten to put it to him, in all humility, as an accountant to a distinguished lawyer. If the Shearer v. Bercain situation, to which I have referred, is covered by the Companies Act 1981, Sections 36 to 40, why does he have to have this extra provision? If, on the other hand, the situation is not covered by the Companies Act 1981, Sections 36 to 40—and I shall rely on his legal judgment and on that of his advisers for that—why should this company have any particular privileges that are denied to the broad general mass of public and private companies in this country? If it is not covered, what is their position? Why should this series of transactions have that privilege?

The position is thoroughly unsatisfactory. As I have said, the noble Earl brought forward this amendment after the Bill had been through the other place, and after it had been through Committee here, because somewhere in the department, among his legal advisers or officials, there emerged a doubt and this omnibus way of sweeping up, without reference to any particular Acts, was chosen.

I put it to the noble Earl: is there another case in the lists of the courts at the moment of which the noble Earl has reason to be apprehensive? Is that the reason? If that is not the reason, what is the real reason for the insertion of the original clause, which however limited its effect is alleged to be, is nevertheless a very undesirable precedent to set for future Governments, allowing Ministers powers to act, notwithstanding any rule of law and the provisions of any enactment "?

My Lords, I beg to move.

3.20 p.m.

Lord Wilberforce

My Lords, at the Report stage some complaint was made—in a very good-tempered way, but still it was made—that at the discussions at that stage the House did not have the benefit of assistance from any of those of us who have some experience in legal matters. The reason was simply this. This amendment came in at a very late stage, only at the Report stage, I am afraid it escaped the notice of myself, and I think my colleagues, and we were not alerted to it. I felt that as a matter of courtesy at any rate one of us should be here today to give what help we can—which will not be very great, I am afraid as to the merits of the amendment proposed by the Government and the new amendment proposed by the noble Lord, Lord Bruce of Donington.

Certainly, when one sees these words which were inserted by the original Government amendment, notwithstanding any rule of law and the provisions of any enactment ", one's hackles tend to rise. I daresay they rise more vigorously on the back of my noble and learned friend Lord Elwyn-Jones on the Opposition Benches than they do at the rather cooler place from which I am speaking. Nevertheless, one does not like the look of those words and one certainly wishes to scrutinise them rather carefully. I have read with some care—and I hope with understanding—the explanation of these words given by the noble Earl, Lord Mansfield, at the Report stage, at columns 137 and 138 of Hansard. Speaking entirely for myself, I find his explanation in relation to the case of Shearer v. Bercain totally satisfactory. He is there explaining that that case lays down that it is the true value of an asset which determines the value of the shares at issue, and he does not wish that that principle should be continued into this Bill.

I personally think that while the explanation is a satisfactory one, it does not really render this amendment necessary because the provisions already in the previous subsection, subsection (4) (a) to (e), of this Bill make it perfectly clear what the statutory value of these assets are to be taken to be. They are not the true value; they are the value ascertained in accordance with those paragraphs. Therefore, I think the situation is quite satisfactory. There is the elaborate Clause 2, and the same goes for the later clause dealing with British Gas, which establishes a special value to be attributed to assets for the purposes of this clause. So far, so good. I must say that I am not so happy about the noble Earl's explanation regarding Section 56 of the Companies Act. That is a section, as your Lordships know, which requires establishment of a share premium account in certain circumstances. His explanation there is contained at the foot of column 138, of Hansard of 8th June. I shall not read it out.

I am left in some doubt regarding Section 56 and what it is that the Government are trying to do. Are they displacing Section 56 altogether and saying that there is to be no share premium account in relation to these assets, or are they saying, "All right, we recognise that Section 56 requires a share premium account but for the purposes of that section we wish the value to be taken into account to be the value given in the scheme"'? I am not at all clear which it is that the noble Earl is desiring in relation to that section. It would certainly benefit and help the discussions here—and certainly my approach to the amendment—if the noble Earl were able to make it clear. Just to recapitulate, is the noble Earl saying that there is not to be a share premium account at all, or is he saying that there is to be a share premium account but it is to he arrived at in relation to the scheme and not in relation to the true value of the assets?

Summing up, I do not personally regard this clause in its context as having any very dire effect. There is always the risk that if it is put in one Bill it will be taken up and put into others. We shall see it popping up in all sorts of contexts which may be much more far-reaching than the present one. I am sure that the noble Earl is now well-briefed to explain what he wishes to effect by these words, and the House will be very interested to hear his explanation.

Regarding the amendment of the noble Lord, Lord Bruce, it would seem, if I may respectfully say so, to be a quite innocuous amendment. It only carries out what the noble Earl explained was the purpose of the clause on moving the amendment. It does not, to my mind, dispose of the doubts which I have already tried to explain in relation to Section 56. It does no harm, but possibly not very much good. I take rather a benevolent but neutral attitude towards it. The purpose of it is of course to probe the Government into explaining more carefully what they are trying to do through the original amendment. I think that that is all the assistance that I am able to give the House on this occasion.

Lord Balogh

My Lords, I am not going to go through the Bill sentence by sentence and clause by clause. This has been done in various meetings. What I should like to do is to sketch the probable results of the Bill in a very peculiar background which is not often recognised in this country. The passage of this Bill, in my opinion, ushers us into a new era, an era of violence. Looking back on the story of the impact and influence of the completely unexpected finding of oil and gas to the tune of £200 billion has not improved the outlook. One ought to ask: Why not? How can it be improved? What kind of methods are necessary?

When we look back on the story of the impact and influence of oil and gas a regular pattern can be discerned in the Government's reaction. They made good all their pledges, and the pledges were to roll back the public sector and to increase savings by shifting taxation from direct taxes to indirect ones. The Government had, of course, a very good legal case to do whatever they liked. The Tory Governments in power between 1951 and 1964 passed a law which vested the hydrocarbons in the state and they disliked early amendments.

As this could not be done so soon by legislation—and nobody wanted it, anyhow—what happened was that a licensing system was introduced for the exploitation of oil which was more favourable and which would have the same effect as granting money freely to the corporation. The licences were for longer periods, and the state had practically no right to supervise and ascertain the working of the oil giants which could manipulate transactions in and between their single units and so regulate the distribution of profits as they accrued, making as much as possible shift into colonial areas or ex-colonial areas, of which we have only too many.

The Secretary of State for Trade greeted this arrangement with enthusiasm, as did his predecessors. If the aim of the economic policy exercise was the satisfaction of the multinationals, they might indeed have been delighted. In the end, the British Government gave away some two-thirds of the existing oil and gas reserves, at concessionary prices, without taxation being immediately and in parallel remodelled. The Government had not secured access to the books. This approach was commented on with great sharpness by the Public Accounts Committee.

From a British point of view, the outlook is at least sombre. The unexpected fortune of the oil and gas discoveries was not adequately safeguarded. Indeed, Britain could not be certain that the indirect impact of the hydrocarbon wealth would not, through the steady upward push on sterling, be upset or more than upset.

How was it possible that the British Government did not realise this gravely disturbing potentiality? The explanation of this failure, in my opinion (increasingly shared by the more knowledgeable) lies in the fallacious basic hypothesis on which their analysis and measures depended. Contrary to all evidence, conventional monetaristeconomiststrumpet their success in curbing inflation and in rolling back the public sector. That the public sector was rolled back there can be no doubt. That the end of inflation is in sight is somewhat more doubtful. The vast increase of unemployment is, in their view, the consequence, not indeed of the increasingly restrictive policy due to the over-valuation of the pound but of undue wage demands.

The neo-classical doctrines seem to be weakening in the academics, but under Mrs. Thatcher's enthusiasm, shared by Mr. Reagan, still dominate the larger number of the Government experts in defiance of all experience and reason. The economic Bourbons might, unwittingly, reproduce the catastrophe of 1931–34. Professor Hayek has suddenly re-emerged from nowhere and now, as then, still misunderstands the nature of those distant times as he does the present. Of course, the noble Lord the Minister claims that the restoration of competitive markets will solve our problems, that the signalling system based on "free" prices is the best possible way of ensuring balance in the economy, and from there expansion. At no point, however, was the expansion of the hydrocarbon industry induced by free competition. At first it was a heroic battle of Standard Oil and Shell. Subsequently, they admitted and stimulated five major and half-a-dozen minor corporations.

In no way could their behaviour be brought into any relationship with the picture of perfectly competitive markets. This has important implications for Government in their relations with industry. If the market is not able—as it palpably was not and is not—to produce a balance in the economic system, it would have to be substituted by monitoring and acting on the result. This was the reason why, during the Wilson-Callaghan era, a state company (BNOC) was organised. Without participation in actual production, no one could follow the complications of conscious adjustment which was required. The law which we are discussing, will make such effective supervision and adjustment impossible. The BNOC has been stripped of all the powers it would need for that purpose. What emerges from the ashes of an orderly adjustment is a second BP, a second private oil company, partly-owned by the state —which is not capable of acting as a monitor for, and liaison between, the Government and the industry.

The prospects are aggravated by the growing concentration—and the growing importance of the spot market—cif the retail trade. The inelasticity of demand will again be tested as a result of the recent increase in petrol prices. It was fully demonstrated by the disappointment of the widespread hopes for a collapse of the market price of oil in Rotterdam below the 34 dollars per barrel level; when the "market" weakened last year, the relatively vulnerable countries, especially Nigeria, seem to have demanded further concessions from their trading partners, on the pain of cancelling orders. Actually the success was very meagre. The Saudi Arabians threatened further cuts in their own production and discrimination against weak buyers and exhausted producers. The market is begining to tighten.

The coincidence of these peculiarities on both sides —production and consumption—of the hydrocarbon market would demand strict supervision of the price and production policies of the larger producers. Market forces cannot secure optimal distribution and use. Unfortunately, both economists and civil servants are, if not positively hostile, at least very suspicious of any intervention, let alone management of this most important segment of the economy. Yet, without it, periodic crises will prove unavoidable. Noble Lords opposite, and their friends in another place, might well regret what will prove to be an infatuation with a ridiculous fallacy.

The stripping of the gas corporation of its monopoly powers in purchasing natural gas for fuel purposes shows the shoddiness in the design of policy. The main impact will be an increase in the private sector profits without contributing at all to the equalisation of the market.

Even more intellectually contemptible was the notion that the public sector borrowing (PSBR) is of decisive importance in economic management. This notion reversed the reform of monetary statistics, which we had been able to accomplish. It took us back towards 1922. What ought to be done is obviously the separation in consumption expenditure, investment expenditure, socially-required investment and privately-admitted.

The essential basis of monetary policy ought to be reconsidered and adjusted. These considerations largely determine the choice of the use to which the growing oil surpluses should be put. It is essential to differentiate between the public and the private sectors, not through the mechanical means of the price level but much more by subsidy and extra taxes. The short-term public sector surplus ought to be used to strengthen the reserve position. Under the gold, and gold-exchange standards, this would have been done automatically. Indeed, the mystique surrounding the process prevented, on more than one occasion, the timely devaluation of sterling.

In the last decade, another dangerous mystique has grown up. This condemned any interference with the market by counteracting flows and counter flows by the Central Banks. They fallaciously argued that the purchase (or sale) of foreign currencies caused inflation —or deflation—as the case may be, because it had an impact on the domestic money supply.

The notion that it would tend to stabilise the situation could not be tolerated, as it attacked the very existence of sound monetarist vision. But if intervention in this form was condemned, stabilisation would be elusive.

At this critical juncture, the control of foreign exchange was abolished at a single stroke. The improvement of the current balance of payments was nullified by the tremendous export of capital to purchase both portfolio assets and direct investment. Inasmuch as our supply of managerial talent seems feeble, and much of the capital equipment is admittedly obsolete, the policy of freedom which has been carried through means the continuation of the policy of "too little, too late" followed by crisis, from which we have suffered so much——

Lord Willis

My Lords, would the noble Lord allow me to intervene? I am sure he is making a most stimulating speech but 1 cannot hear a word.

Lord Balogh

My Lords, I am opposite a microphone. You must complain to—

Lord Willis

My Lords, the noble Lord is not near enough to it.

Lord Balogh

The Bill before your Lordships' House is another step downwards which will cause endless difficulties—is that better?

A noble Lord

Much better.

Lord Balogh

The shrinkage of our industrial industries will continue and our international competitive power will remain enfeebled.

3.44 p.m.

The Minister of State, Scottish Office (The Earl of Mansfield)

My Lords, I do appreciate that when we debated on Report paragraph (b) of what is now subsection (6) of Clause 2, the words, notwithstanding any rule of law and the provision of any enactment ", gave rise to a certain amount of comment. May I start, however, on what is possibly a personal note. I am distressed that the noble Lord, Lord Bruce of Donington, should think that I did not give appropriate weight to the comments he made and the way he developed his arguments. The difficulty is always that one is in some sort of dilemma because one has to reply on behalf of the Government and therefore one has to explain and justify. But there is the other side of the coin, that one does not wish to regale the House with a lot of details which it might not want to hear, and particularly when one is talking to people such as the noble Lord, Lord Bruce, who are experts in their own field. If in that case my judgment was wrong, then of course I apologise to him, because he and I both know that is not the way in which this House conducts its business.

I was also asked by the noble and learned Lord, Lord Elwyn-Jones, whose interventions I always take seriously, as indeed I did on this occasion, whether I would refer this particular passage to the draftsmen to see whether or not the effect it gives could be achieved by specific provisions in the various paragraphs of subsections (3) and (4) of Clause 2. 1 have done this and, in the face of what the noble and learned Lord, Lord Wilberforce, says, I have to inform the House, on advice from the draftsmen, that such amendments as the noble and learned Lord suggested on Report would not be possible. That is their judgment of this particular problem. Further, those who have considered this aspect advise me that they could not say with certainty that specific wording in various paragraphs would be sufficient to achieve the desired objective without being underpinned by some general words. It is, therefore, the view of the Government that we should continue with the general words which we have, which cover the ground where specific problems have been identified and which also, on the best view that can be formed, cover other areas where problems have not been identified but where they might still appear.

I should stress again to the House that although the words of paragraph (13) of Clause 2(6) appear wide, their effect would in fact be specific because those words will have effect only when allied to provisions appearing in the scheme by virtue of one or other of the paragraphs in subsections (3) and (4). I would also remind the House that the transfer of an undertaking by means of such a scheme as is envisaged in this Bill is something completely outside the normal run of company practice. Not surprisingly, specific problems have been identified and have led to Clause 2 being in the form it now is. In turn, because of the novelty of the exercise, and because problems have already been identified, Clause 2 has been further cast in a form which will enable problems which might arise to be resolved, as it enables the resolution of the problems already identified.

The noble Lord, Lord Bruce of Donington, asked whether Sections 36 to 41 of the Companies Act did not cover the Shearer v. Bercain point. These sections were drafted to cover certain specific situations in company practice. What is now being considered is well outside the usual run of commercial transactions. The company Britoil is being set up out of a state corporation by means of a scheme in preparation for a flotation. Sections 37 and 38 describe circumstances which are not on all-fours with those which the Government now face. Section 37 deals with certain arrangements concerning a company and its holding company, and of course BNOC is not a company, so we are not within that circumstance. Section 38 deals with allocation of shares by a company to its holding company—again, not the position which faces the Government. Section 39 deals with one company allocating shares in exchange for shares in another company. In short, the 1981 Act does not fully cover the circumstances facing the Government, which the provisions of the Bill do.

Then the noble Lord asked whether there might be a case before the courts to which the attention of the draftsmen might have been directed when they were drafting this particular provision. The answer is that there was no such case in mind although, if the noble Lord knew of one, I daresay the Government would be extremely grateful to be told about it.

I was grateful to the noble and learned Lord, Lord Wilberforce, for his intervention and I was relieved, I think I might say, to some extent. He asked whether or not the new provision in Clause 2 anticipated the creation of a share premium account as defined in Section 56 of the Companies Act. The answer is, yes; the scheme-making powers would enable a share premium account to be established in Britoil's opening balance sheet. The account would be the difference between the value of the shares issued in consideration and the net value of the assets transferred. Whether or not there is to be such an account has yet to be determined, but the power is there. I cited various examples on Report, and I will not repeat them now. There are, I suggest, respectable precedents for the effect of what is proposed in the Bill in this respect, and particularly Section 4 of the British Aerospace Act 1980 springs to mind.

In view of what the noble and learned Lord said, I think I should say why it is that the Government regard the noble Lord's amendment as unacceptable in the context of Clauses 2 and 10. The amendment assumes that the provisions in subsections (3) and (4) of these clauses relate solely to the preparation of accounts. While their main purpose is to provide for continuity of accounts between the transferor and the transferee, it is not their only purpose. These provisions look to actions which are to be taken as well as to the way those actions are to be reflected in the accounts.

For example, paragraph (c) of subsection (4) provides for the creation of a reserve which will be available for distribution to shareholders. The distribution to shareholders from this reserve is not a matter relating to the preparation of accounts, although the accounts would record the transaction. It is an action which would fall outside the qualification which the amendment seeks to introduce. This reinforces the difficulties which I have already described in attempting to include specific wording in the various paragraphs and the reason why we have adopted the formulation in paragraph (b) of subsection (6).

I appreciate immediately—and did so as soon as I saw the drafting of the amendment—that this kind of wording can give rise to misapprehension. I hope, however, that those misapprehensions will now have been dispelled and that the purpose and effect of par-graph (b) have been explained. Therefore. I very much hope that the noble Lord, Lord Bruce of Donington, will see fit to withdraw his amendment.

Lord Bruce of Donington

My Lords, I am grateful to the noble Earl for having given his explanation, which was largely in technical terms. However, he still has not particularised the problems which his original phrase was designed to cover. I am most grateful to the noble and learned Lord, Lord Wilberforce, for his very objective examination of the problem that the original phrase raised. He was unable to go the whole way with me, but one sentence of his impressed me. It was a point which, in less felicitous terms, I myself had made at Report: that clauses such as this may always be quoted as a precedent. The amendment which I have ventured to lay before your Lordships severely circumvents the operation of this clause to the extent that it is not already covered by the Companies Act. It is a matter which should be circumvented and I propose to press the matter to a Division.

3.53 p.m.

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

Their Lordships divided: Contents, 67; Not-Contents, 89.

Airedale, L. Elystan-Morgan, L.
Amherst, E. Ewart-Biggs, B.
Amulree, L. Fisher of Rednal, B.
Ardwick, L. George-Brown, L.
Aylestone, L. Gladwyn, L.
Bacon, B. Gosford, E.
Balogh, L. Hampton, L.
Banks, L. Hatch of Lusby, L.
Beaumont of Whitley, L. Houghton of Sowerby, L.
Beswick, L. Howie of Troon, L.
Birk, B. Irving of Dartford, L.
Bishopston, L. Jacques, L.
Blyton, L. Jenkins of Putney, L.
Boston of Faversham, L. John-Mackie, L.
Briginshaw, L. Kilmarnock, L.
Brockway, L. Kirkhill, L.
Brooks of Tremorfa, L. Llewelyn-Davies of Hastoe, B.
Bruce of Donington, L.
Byers, L. Lovell-Davis, L.
Caradon, L. MacLeod of Fuinary, L.
Cledwyn of Penrhos, L. Mayhew, L.
Collison, L. Mishcon, L.
Cooper of Stockton Health, L. Northfield, L.
Denington, B. Oram, L.
Elwyn-Jones, L. Peart, L.
Phillips, B. Strabolgi, L.
Plant, L. Tanlaw, L.
Ponsonby of Shulbrede, L. [Teller.] Taylor of Mansfield, L
Underhill, L.
Rhodes, L. Wallace of Coslany, L.. [Teller]
Sainsbury, L.
Shinwell, L. Wells-Pestell, L.
Stewart of Alvechurch, B. White, B.
Stewart of Fulham, L. Wootton of Abinger, B.
Stone, L. Young of Dartington, L.
Adeane, L. Lauderdale, E.
Airey of Abingdon, B. Long, V.
Alexander of Tunis, E. Lovat, L.
Avon, E. Lucas of Chilworth, L.
Balfour of Inchrye, L. Lyell, L.
Belhaven and Stenton, L. Mackay of Clashfern, L.
Beloff, L. Macleod of Borve, B.
Belstead, L. Mancroft, L.
Bessborough, E. Mansfield, E.
Campbell of Croy, L. Marley, L.
Chelwood, L. Merrivale, L.
Clitheroe, L. Milverton, L.
Clwyd, L. Morris, L.
Cockfield, L. Mottistone, L.
Colyton, L. Mowbray and Stourton, L.
Cork and Orrery, E. Newall, L.
Cottesloe, L. Nugent of Guilford, L.
Craigavon, V. Onslow, E.
Cullen of Ashbourne, L. Pender, L.
Daventry, V. Porritt, L.
Davidson, V. Reay, L.
Denham, L. [Teller] Renton, L.
Dilhorne, V. Richardson, L.
Drumalbyn, L. Romney, E.
Ebbisham, L. St. Davids, V.
Eccles, V. St. John of Bletso, L.
Effingham, E. Sandford, L.
Ellenborough, L. Sandys, L. [Teller]
Fraser of Kilmorack, L. Savile, L.
Gainford, L. Sempill, Ly.
Glenarthur, L. Sharples, B.
Glenkinglas, L. Skelmersdale, L.
Gormanston, V. Soames, L.
Hailsham of Saint Marylebone, L. Spens, L.
Stamp, L.
Harmar-Nicholls, L. Thomas of Swynnerton, L.
Harvey of Prestbury, L. Thorneycroft, L.
Hatherton, L. Trefgarne, L.
Home of the Hirsel, L. Trumpington, B.
Hornsby-Smith, B. Vaux of Harrowden, L.
Hylton-Foster, B. Vivian, L.
Ilchester, E. Wakefield of Kendal, L.
Killearn, L. Ward of Witley, V.
Kinnaird, L. Wynford, L.
Lane-Fox, B. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.