Oil and Gas (Enterprise) Bill

HL Deb 21 June 1982 vol 431 cc819-53

Consideration of amendments on Third Reading resumed.

Clause 10 [Provisions Supplementary to Section 9.]:

4.20 p.m.

Lord Bruce of Donington moved Amendment No. 2: Page 13, line 6, 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, I do not propose to detain the House long over this particular amendment, the substance of which has already been dealt with in Amendment No. 1. However, I should like to take this opportunity of thanking the noble Earl opposite for the initial explanation that he gave in regard to the attitude that he expressed when we were discussing this matter in Committee. I assure him that all is forgiven and that, notwithstanding our political differences, amiable relations are once again restored.

As regards Amendment No 2, I should like to refer to what the noble Earl said on the previous amendment that is equally applicable. The noble Earl was able to identify those particular parts to which the Companies Act 1981, Sections 36 to 40, did not apply. This makes it quite clear that a number of the problems have, in fact, been identified, albeit in a negative sense. Surely I should have thought that, by the process of elimination on which he has obviously been embarked, it should now be possible to identify the problems in more specific terms and thus avoid the necessity of the original wording introduced at the Report stage—the words: in accordance with the scheme notwithstanding any rule of law and the provisions of any enactment ". The noble Earl must realise that, despite the assurances not given in very strong terms by the noble and learned Lord, Lord Wilberforce, it is very undesirable that these words should appear in a British statute giving a Secretary of State such powers, albeit by implication, over quite a small area of operations. Therefore, we shall insist upon this amendment, because, of course, we are well aware that those in another place are very prone to read the proceedings in your Lordships' House. Consequently, by putting this matter to the Question, it will at least ensure that those in another place seize upon this particular amendment and all its implications. I beg to move.

The Earl of Mansfield

My Lords, I must thank the noble Lord for the manner in which he began his remarks as regards this amendment. I have gone over my notes so that I could see exactly what I said in relation to the last amendment, including one or two matters which, for the sake of brevity, I excised. I really do not think that I can improve on what I said previously in the sense that one cannot, in fact, prove a negative. In those circumstances, I do not wish in any way to make the House, still less the noble Lord, feel that I am not anxious to assist, but I do think that I answered the debate on the first amendment as fully as I could he expected to do, and the arguments which I deployed on that occasion really do meet the case which the noble Lord has put forward with his usual charm. I am afraid that I have nothing further to say.

On Question, amendment negatived.

Clause 11 [Powers of Secretary of State as respects disposals by Gas Corporation]:

Lord Underhill moved Amendment No. 3: Page 13, line 34, at end insert (" and that satisfactory standards of service and supply to consumers are maintained.").

The noble Lord said: My Lords, I beg to move Amendment No. 3. Before speaking to the amendment I should like to put the record straight about the original amendment to Clause 9(1), which deals with the powers of disposal and which was accepted in Committee. Those points would also help in consideration of this amendment which I have just moved. I would remind noble Lords that the amendment proposed the addition of a proviso in the following terms: Provided that such disposal shall not result in the impairment of essential services nor imperil supplies to or safety of consumers ".

Two weeks ago on Report the Minister suggested that the amendment was in the wrong place and was too vague. In support of the first claim, the Minister argued that there was no point in amending Clause 9, as that particular clause conferred powers on the British Gas Corporation, which was hardly likely to exercise its powers to the detriment of consumers. But, as noble Lords from all parts of the House who supported the amendment were well aware, the inten- tion was not to promote the interests of the corporation but to assist the interests of the consumers. There was a wide cross-section of speakers praising the corporation and its concern for the interests of the consumers. But we are thinking not only of the corporation today but of the future.

In moving this amendment I want to take a completely a-party political line because we are concerned with the interests of the consumers. Who is to say that at some time in the future there may not be a different board with appointees by, say, a different Secretary of State who may be more inclined to look at the Secretary of State's interests, to look at the corporation's interests, rather than those of the consumers?

The original amendment to Clause 9 would have safeguarded consumers against all possible contingencies whether instigated by the corporation under Clause 9 or by the Secretary of State under Clause 11. When noble Lords gave a majority of 15 to that amendment I am certain that they all knew perfectly well that that was what they wanted. Incidentally, may I remind noble Lords that a substantial number of noble Lords took part in that Division. A total of 213 Members of the House took part.

The Minister also referred to the vagueness of that previous amendment, but I am sure that it was absolutely clear, without any doubt at all, to the many noble Lords who voted for it, precisely what it meant. I would point out that, of the 114 noble Lords who voted for the amendment, no fewer than 19 were from the Government side who saw the common sense of the amendment being proposed. Indeed, 37 were other non-Labour Lords.

In fact, half of the people who voted in favour of the amendment originally put forward to Clause 9 were other than Labour Members of your Lordships' House. It was a decision by noble Lords from all parts of the House. However, as your Lordships will be aware, that amendment was deleted by a Government amendment at the Report stage. Here again I must remind the House that when the Government amendment was carried to delete the previous amendment, 61 fewer noble Lords voted in the Division than voted for the original amendment.

The amendment that I now move to Clause 11 seeks to ensure that the views expressed by all sides of your Lordships' House in Committee once more are to be taken into consideration. Noble Lords will recall that in pressing for the Clause 9 amendment to be deleted, the Minister attached great importance to the amendment to the clause which was to be moved later on by the noble Baroness, Lady Macleod. At col. 161 the Minister said: It will meet concerns expressed in Committee and it avoids the problems to which reference has been made ".

Noble Lords will appreciate that Clause 11(2), which appears on page 13 of the Bill—which gives effect to the amendment of the noble Baroness, Lady Macleod —deals with only one part of the original amendment. It is confined to safety and, in fact, apart from the change of the word "may" to the word "shall", repeats the words already in the Bill in Clause 14, which deals with safety.

In proposing this amendment we fully appreciate the points which the noble Baroness, Lady Macleod, made in her amendment on the matter of safety. Of course, safety to consumers is of vital importance. That is why it was included in our original amendment to Clause 9. But so are the other two points which are now involved in the amendment which I seek to move; the question of service and the question of supply.

I mentioned that the Minister claimed that the wording of the original Clause 9 amendment was too vague. He also made the same claim about the amendment that we proposed to the new subsection to Clause 11 put forward by the noble Baroness, Lady Macleod, when that was debated on Report. If it is still to be suggested that the terms "service" and "supply" are vague than it is strange that those terms appear in a number of places in the 1972 Act and are repeated— are they not? in a number of places in the Bill before your Lordships today without any definition whatever.

Surely the answer is that they are absolutely acceptable expressions which I am certain were perfectly understood by the large number of noble Lords who supported the original amendment to Clause 9, which included those two particular terms. I am certain that they understood what they were voting for at the Committee stage.

I would stress that the Bill gives power for the disposal of the whole or part of any subsidiary. That has been confirmed by the Minister. From time to time I and quite a number of other noble Lords have drawn attention to the Government's statement that at present—note the words "at present"—their disposal plans are limited. In fact, the noble Earl, Lord Mansfield, on 8th June on Report at col. 151 said: The Government have also made it plain that they have no present intention of privatising the gas corporation's transmission system, distribution system or customer services, and therefore I hope it will be agreed that mention of supplies is unnecessary. Again, I must remind noble Lords of the reference to the two words "at present". A future Secretary of State, or a future Government, could decide to use those powers, and in such circumstances surely the questions of service and supply would become even more important if there is to be disposal of any part of the distribution system or the transmission system.

I do not want to go over all the detailed arguments. The present amendment will ensure that the maintenance of satisfactory standards of service and supply are added to that of safety in considering both the present proposals for disposal and any other proposal for disposal that any future Secretary of State or future Government may decide to put forward. At this stage, I am not arguing against the policy in the Bill for disposal; I am not saying that at all. But I am putting forward that in consideration of any proposed disposal the questions of service and of supply must also be in the forefront of the consideration as well as that of safety. When recommending the new subsection of the noble Baroness, Lady Macleod, which dealt with safety, at the Report stage at col. 151, the Minister said: …I do not believe that there is very much, if anything, between the two sides of the House or between the Government and other noble Lords. In view of this statement and the points that I have made, I hope that the Government will now see their way to accepting the amendment as being in accordance with the majority views expressed by some 114 noble Lords in carrying the original amendment on 11th May. I beg to move.

Baroness Fisher of Rednal

My Lords, I rise to support my noble friend Lord Underhill in this amendment. I think that he has quite clearly spelt out the arguments that the Minister used on the last occasion when he accused us of being vague and of inserting our amendment in the wrong place in the Bill. Be that as it may, I think that it is incumbent upon the House to record that noble Lords from all sides of the House fully understood what we are trying to achieve in that amendment. My noble friend Lord Underhill made it quite clear. If it was not quite clear, then we are underestimating the intelligence of noble Lords in that debate. Our intentions were quite clearly understood. They were solely to promote the interests of consumers.

We all understood and appreciated the very great difficulties in which the noble Baroness, Lady Macleod, found herself after she had spoken to and voted on our amendment. We extend a certain amount of sympathy to the noble Baroness. This is one of the penalties that one faces in party political public life; on so many occasions when one feels strongly on a particular issue—and it is not always at the most convenient stage for your political party—one perhaps finds oneself facing great diffiulties. The noble Baroness, Lady Macleod, tried to overcome those difficulties by accepting the advice of the Minister, which during the Report stage resulted in subsection (2) of Clause 11. I accept those difficulties of the noble Baroness.

But what I find strange are the words of the noble Earl, Lord Mansfield, on 8th June during the Report stage. At column 149 he said: The Government have been accused of being totally obdurate so far as this Bill is concerned and unwilling to compromise in any way, shape or form, but it is obvious that there has been a genuine and a sustained attempt at compromise…". I should have thought that the words "genuine compromise", as used in this Chamber, would normally imply consultation with the movers of the amendment, if it is to be genuine. Neither myself nor my noble friends were consulted re the repositioning of the amendment, telling us that it was in the wrong place and asking us to reconsider and put it in Clause 11. I think that the genuine compromise to which the noble Earl referred on Report was not the genuine compromise that we would expect in this House.

Turning to today's amendment, perhaps we ought to spell it out clear and loud. The amendment is to maintain adequate standards of service and security of supply to the consumer. Service, supply and safety must be taken into account in the disposal of assets. If, as is widely believed, the withdrawal of the BGC from retailing leads to an expansion of sales only outlets, the mechanisms of service, supply and safety will need to be reconsidered. The Government have made their intentions clear in regard to gas showrooms, although I do not recall any formal debate taking place in either Chamber.

I have not been able to find written in the Tory manifesto clearly spelt out that it was their intention to deprive the consumers of a well recognised consumer sales, advisory and service centre from the high streets of this country. Where do the cries of complaint come from? I would suggest to noble Lords, not from the ordinary gas consumer. Are the services to those gas consumers to be jeopardised in the future to satisfy a very small section of certain business interests? It is hard for me to see at the present time how the special services to the elderly, the handicapped, and the disabled are likely to be maintained when all appliances are supplied by private retailers through the normal shopping facilities. I would ask the noble Minister what attention have the Government given to the problems of maintaining those services and also the existing schemes of providing low or no cost safety measures.

On a humble note I would ask noble Lords to recognise some of the services which are offered through the gas showrooms and how important they are to certain categories of gas consumer. Some of those services are of the greatest benefit to what we call the poorer consumers in the country, and particularly to the elderly. There is one service which is so welcomed by those people who have difficulty in paying their gas bills and that is the opportunity, through the gas showrooms, to buy and collect savings stamps to pay their gas bills. We all know how much more expensive all energy costs are to all of us in our individual homes. This service ought to be recognised as a valuable service to those less fortunate in the community. That service is a service which amounts to roughly £10 million worth of savings stamps sold every quarter through gas showrooms.

The Minister too readily falls into the habit of speaking of improving the standards of reliability of products and services through competition, but only through private competition and never considering that the competition should be between the BGC and the private retailer. His greatest fault is that he fails to recognise the consumers' viewpoint that they receive an effective and economic service from British Gas. It would be unfortunate if the Government encouraged the consumer to believe that by preventing the gas showrooms from selling appliances, it will mean a better service and better product at a reduced cost. I do not feel that this will be the outcome. There will be an outcome which will be detrimental in the long term to the gas consumer.

In conclusion, I should like us to remember that gas impinges on people's lives in a personal way. It does so through fuel being supplied to the home. In our amendment today we are trying to make it possible to enable individuals to take sensible decisions in their own best interests as to what appliances to install. Also we want to give to the consumer the opportunity to assert his rights and obtain proper redress if he has a genuine complaint or grievance regarding supply or service. That is why I and my noble friends are asking noble Lords once again to support our amendment and add to Clause 11(2) the words: and that satisfactory standards of service and supply to consumers are maintained ".

4.46 p.m.

Lord Tanlaw

My Lords, I should like to speak in support of the amendment, which certainly makes a contribution to the Bill rather than taking anything away. If anything, we concentrated a great deal on the safety aspects of this Bill, and in particular on the clause to which this amendment relates. It is on the service and supply side that I should like to add a short word because it has been overlooked, and there is some genuine concern among the gas consumers who have not followed the detail of this Bill clause by clause as noble Lords have and who are still a little worried as to where they are going to end up if the Secretary of State exercises these powers as contained in the Bill.

I want to say a word about the showroom side. There may also be a way out for the Government by giving a reassurance that they will look again at the showrooms and retail outlets of all the nationalised energy industries. I have already stated at Second Reading of the Bill that the competitiveness between the nationalised industries is not always to the benefit of the consumer, certainly when choosing equipment. The Electricity Council have given me details that the value of their freehold showrooms is £33 million. The value of the freehold showrooms of the gas boards is in the region of £40 million, and the Coal Board are apparently not aware of the value of their retail outlets and could give me no figures. However, approximately £100 million worth of property is being split up through competitiveness between the nationalised industries.

I submitted at an early stage of our consideration of this Bill that those industries should be brought together and have one showroom to provide a complete range of services, in which the gas showrooms are a part and in which the gas hoards have established a special relationship with their customers which is of some value. If the Government do not want to take this amendment into consideration, could they on the otherhand give an assurance that they are looking into all the retail outlets of all the nationalised energy industries on the basis of the consumers' interests coming first? In their efforts to put this Bill through for mainly doctrinal reasons, the consumer element has been a bad third in various parts of the Bill and in particular in the clause we are discussing.

If the Government, on the other hand, see fit to accept this amendment I hope they will be able to convince themselves, and indeed the consumers not only of gas but of electricity and coal, that they are prepared to look at the whole gamut of retail outlets of the nationalised energy industries for the benefit of the consumer, in which case we would accept their views. If they do not do this, this amendment should be supported if for no better reason than that the consumers of gas can be given this reassurance that we have their interests at heart, certainly on the Opposition Benches in this House.

Lord Wilson of Langside

My Lords, I too would rise to support this amendment. I am sorry that I was not able to be here when your Lordships' proceedngs started today. There are delays both above ground and underground in transport between here and Scotland today. Accordingly, arriving somewhat out of breath, I content myself with saying only that I should have thought that the Government themselves would have found this amendment well nigh irresistible. I see no reason why a statutory protection for satisfactory standards of service and supply to consumers should be resisted, particularly by this Government in this Bill.

Baroness Macleod of Borve

My Lords, my name has been mentioned more than once this afternoon, so I feel I should make a brief comment. Time is short and there is more business to do. I am grateful for the sympathy of the noble Baroness, Lady Fisher; she made her point very well, in a wide-ranging speech. Since Amendment No. 18A to Clause 9, we have come quite a long way, in that, as noble Lords opposite will agree, we have not only put safety first, which we all agreed was most important, but we have put it in the right place in the Bill; it now appears in Clause 11(2), and that must be read in conjuction with the whole of Clause 14, which is a most important provision in that it gives power to go into homes to see that all appliances are satisfactorily installed, whether they have been put in by British Gas or by private people.

As noble Lords will recall, I supported the insertion of "services and supply to consumers", along with a provision saying that those services should be maintained, and I still agree with that, because until we are well and truly over what will be the difficult hump of putting part of the supply of gas into the hands of private people, we shall not quite know where we are. However, we have ensured that at absolutely every level, from the Secretary of State to Ministers in your Lordships' House, in no way will they agree to the hiving off —that was the original term—of gas showrooms or any part of them unless they are absolutely satisfied that all the prerequisites for safety are maintained and are likely to be maintained in the future.

Like the noble Baroness, I recognise that there are many occasions in courts of law when one has to interpret certain words, and, as we are all aware, words are important and must be as precise as possible in a Bill. For that reason, when the amendment refers to "satisfactory standards", I, as a magistrate, however lowly, must ask myself: what is a satisfactory standard and who is to adjudicate on it? If it came to it in a court of law, a learned judge, counsel or someone else would have to prove what was a satisfactory standard. Although, therefore, as noble Lords will be aware, I agree with the principle that services and supplies to consumers should be maintained, I could not agree to the phrase "satisfactory standards" because it would not hold up in a court of law. In any event, I believe that what is sought is covered elsewhere in the Bill. For that reason, I shall not be able to vote for the amendment on this occasion.

The Earl of Mansfield

My Lords, with this amendment we return to a point which was fully discussed on Report, and it is obvious that the explanations which I gave to noble Lords opposite on that occasion were not received with favour. Nevertheless, I shall not go fully down all the avenues which were explored last time. I have said, and I have said consistently, that the amendment is unsatisfactory both in the way in which it has been drafted and in the effects that it could have. It does not get any better by merely repeating time and again, as the noble Lord, Lord Underhill, has sought to do, ably assisted by the noble Baroness, Lady Fisher, that it is a good amendment.

No doubt all of us have some idea of what we mean by "supplies and services" but, as my noble friend Lady Macleod said, when we actually come to consider the detailed meaning of those words, considerable uncertainty can arise. If we were to postulate a specific disposal—for instance, the disposal of the Gas Corporation's offshore oil interests—then, if we asked each noble Lord who on the first occasion voted for the amendment, what he or she understood by the phrase and how they would define the relationship between that disposal and services and supplies, I suspect we should have almost as many answers as there were noble Lords going into the Division Lobby, and the debate, I dare say, would become heated.

That is no idle question to ask, for it is not an academic matter. If the amendment were written Into the Bill, that is precisely the situation that would be created. It is all too easy to talk about concepts like standards of service and supplies to consumers, but the vagueness of such terms mean that it is difficult to say whether at any given moment one has achieved the maintenance of those standards at a satisfactory level. All concerned, if the amendment were agreed to, would be in a state of uncertainty as to whether particular directions could properly be given; there would be perpetual discussion as to the precise scope of the powers. After a direction had been issued, it would be possible for the BGC to challenge it by dredging up all sorts of relatively minor matters which they might claim would lead to a lowering of standards for the consumer, and, since there are no absolute standards of that kind, the courts would be hesitant to come to a view that the matters were irrelevant.

The danger would be that the imprecise wording would frustrate the purposes of the Bill. I do not suggest for a moment that the corporation would seek to mount a challenge of that type. Of course not. But the wording of the Bill must be proof against any possible challenge on spurious technical grounds. The noble Lord, Lord Underhill, is always chiding the Government by telling us that it is not what is not in the Bill which counts but what is in the Bill. I would go further and say that not only does what is in the Bill count but the way it is drafted.

I must stress that the amendment is not only badly drafted in the innocent sense that it could no t achieve what it seeks to do, but it would actually threaten to frustrate the Secretary of State in the achievement of the Government's stated objectives. For that reason, it is thoroughly undesirable and could not be accepted, as I have repeatedly said, although perhaps not in quite such trenchant terms. If the amendment were accepted, the disposals could be bogged down and effectively lost in interminable legal dispute, which I am sure is not in the minds of noble Lords opposite, and I am sure that is something they would not wish to have a part in. The noble Lord, Lord Underhill, said that there are many statutory references to "supply", and indeed there are, but there are no statutory references that I know of to "satisfactory standards of supply", let alone "satisfactory services" or "satisfactory types of service".

Then the noble Baroness once more raised the matter of gas showrooms and services to consumers. What she did not mention—and I am sure that it was due to a lapse of memory—was the report and the attitude of the Monopolies and Mergers Commission. The Government are determined to act upon the problem of gas appliance retailing which the commission highlighted, but it is no part of the Government's decision to act on the report in such a way that the corporation should either cease appliance installation and servicing, or should cease its emergency services; nor should it cease to maintain consumer contact points where advice can be sought and stamps and so on can be bought for the purpose of settling gas bills.

I repeat that so far as showroom policy is concerned, I must stress that the Government are determined to act upon the findings of the commission that the appliance retailing of the gas corporation in its present form is against the public interest. However, having said that, I repeat that the Government will not act until legislative measures can be introduced to protect gas safety. In the meantime, we have made it clear to the gas corporation that we shall consider other solutions to the problems which the Monopolies and Mergers Commission highlighted.

The noble Lord, Lord Tan law, asked whether we would look at the showroom arrangements for all nationalised industries so far as energy is concerned. Well, I think the answer is that we have to go one step at a time, and what we are dealing with at the moment, and what the Bill attempts to deal with, is gas. Whether in the future some other source of energy will have the searchlight of public inquiry switched upon it, I cannot at this stage say.

Therefore I have to say that, although I appreciate the very sincerely held views of noble Lords opposite, and indeed in all parts of the House, on matters of safety as affecting the consumers and the way in which they obtain their supplies and services related to gas, I cannot see that the amendment will in any way ameliorate the position of consumers. For the reasons that I have given I consider that the amendment would act as a potential way of causing legal disruption and preventing this Part of the Bill coming into effect. So in those circumstances I can but advise the House to reject the amendment if it is pressed to a Division.

5.3 p.m.

Lord Bishopston

My Lords, I think that the House will be extremely disappointed about the Minister's reply; and not only disappointed, but concerned as well. I should like very briefly to recap the situation which has been referred to by my noble friends Lord Underhill and Lady Fisher of Rednal. The amendment that we earlier proposed would have been an addition to the proviso of Clause 9(1) of the Bill, which, as we know, deals with the disposals of assets. What the House agreed on an all-party vote—and this is of course a non-party matter—was to add, in respect of disposal of assets the words: Provided that such disposal shall not result in the impairment of essential services nor imperil supplies to or safety of consumers ". So there are there three points—the impairment of essential services, the wish not to imperil supplies, and the desire to maintain safety standards. By a majority of 15, I believe, your Lordships, despite Government advice, said that the three aims and objectives were essential to the Bill.

As we have said, during the Report stage, on Tuesday, 8th June, the Government were successful in securing the deletion of that proviso. The noble Baroness, Lady Macleod of Borve, had quite rightly been anxious to deal with the safety aspect, and I submit that the amendment which was passed, and which we supported, dealt with safety only. That was the amendment which the noble Baroness proposed to what is now Clause 11(2) of the Bill. So that is quite clear. The Government argued that the noble Baroness's amendment achieved the objectives of what your Lordships, on an all-party basis, had put into the Bill at the earlier stage. But it dealt only with the question of safety, which is of course of very great importance, and concern has been expressed not only here, but also in the country, about the prospects of safety being endangered by the changes in the future structure of the industry. But that was already covered by Clause 14. Nevertheless your Lordships, with the Government's support, agreed to the noble Baroness's amendment. The Government might have come along and said that there was no need to support the noble Baroness because the matter was already covered by Clause 14. But we inserted a double assurance by passing her amendment as well.

However, the other two aspects to which I have made reference—the maintenance of essential services, and the need not to imperil supplies—have not since been dealt with, and the present amendment, for which I expect that there will be all-party support, as there was prevoiusly, is intended to look after those two important aspects. At the earlier stage your Lordships' Committee was anxious to ensure that the need to maintain adequate standards of service and security of supply to the consumer should also be taken into account in the disposal of the assets. In a way, although we are opposed to the principle of the Bill, by proposing the amendment and seeking the support of noble Lords, we are actually helping people to accept the Government's Bill; but we do not mind that, so long as we have the safeguards on all three issues—that is, the other two issues besides the safety issue.

The noble Baroness said that as a magistrate it is very difficult for her to work out what is meant by "satisfactory". Well, I, too, am a magistrate, and I could have said that when she voted for the earlier amendment the noble Baroness would have had some difficulty in saying when the disposal of the assets would result in impairment of essential services and the imperilling of supplies. But we all know what we mean by "satisfactory service", as indeed the noble Baroness knew what she meant, and noble Lords knew what they meant, when they supported in Committee Amendment No. 18A, as it then was.

So the question is whether the House will let the Bill go through with, quite rightly, a concern about, and indeed legislative action to ensure, safety, but without insisting on satisfactory standards of service, and without expressing any concern, as we did earlier, about the need not to imperil supplies, that point having been taken out. It would be quite wrong for the Bill to go back to the other place in that condition, or indeed for us to be seen in the country as not being concerned with the other two matters because the Government had taken them out. This is a non-party issue, and I hope that noble Lords will join us in the Lobbies in order to ensure that the other two aspects of concern which earlier enjoyed all-party support, are safeguarded in the Bill. This is absolutely essential, and I hope that we shall receive support on this very important amendment.

5.9 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 64; Not-Contents, 93.

DIVISION NO. 2
CONTENTS
Amherst, E.	Kilmarnock, L.
Ardwick, L.	Listowel, E.
Aylestone, L.	Llewelyn-Davies of Hastoe, B.
Bacon, B.
Balogh, L.	Lovell-Davis, L.
Bernstein, L.	Mayhew, L.
Beswick, L.	Mishcon, L.
Birk, B.	Molloy, L.
Bishopston, L.	Oram, L.
Blyton, L.	Peart, L.
Boston of Faversham, L.	Phillips, B.
Briginshaw, L.	Ponsonby of Shulbrede, L. [Teller.]
Bruce of Donington, L.
Byers, L.	Rhodes, L.
Caradon, L.	Sainsbury, L.
Cledwyn of Penrhos, L.	Shinwell, L.
Collison, L.	Stamp, L.
Cooper of Stockton Heath, L.	Stewart pf Alvechurch, B.
Davies of Penrhys, L.	Stewart of Fulham, L.
Denington, B.	Stone, L.
Elwyn-Jones, L.	Strabolgi, L.
Elystan-Morgan, L.	Tanlaw, L
Ewart-Biggs, B.	Taylor of Mansfield, L.
Fisher of Rednal, B.	Tordoff, L.
George-Brown, L.	Underhill, L.
Gladwyn, L.	Wallace of Coslany, L. [Teller.]
Gosford, E.
Hampton, L.	Wells-Pestell, L.
Houghton of Sowerby, L.	White, B.
Howie of Troon, L.	Wilson of Langside, L.
Jacques, L.	Winterbottom, L.
Jeger, B.	Wootton of Abinger, B.
John-Mackie, L.	Young of Dartington, L.
Kilbracken, L.

NOT-CONTENTS
Airey of Abingdon, B.	Elton, L.
Alexander of Tunis, E.	Faithfull, B.
Avon, E.	Fraser of Kilmorack, L.
Balfour of Inchrye, L.	Gainford, L.
Belhaven and Stenton, L.	Glenarthur, L.
Beloff, L.	Glenkinglas, L.
Belstead, L.	Gormanston, V.
Bessborough, E.	Grimston of Westbury, L.
Boyd of Merton. V.	Hailsham of Saint Marylebone, L.
Caithness, E.
Campbell of Alloway, L.	Harvey of Prestbury, L.
Campbell of Croy, L.	Hartherton, L.
Cathcart, E.	Henley, L.
Chelwood, L.	Home of the Hirsel, L.
Clitheroe, L.	Hylton-Foster, B.
Cockfield, L.	Ilchester, E.
Colyton, L.	Kilearn, L.
Cork and Orrery, E.	Kinnaird, L.
Cottesloe, L.	Lane-Fox, B.
Craigavon, V.	Lauderdale, E.
Cullen of Ashbourne, L.	Long. V,
Daventry, V.	Lyell, L.
Davidson, V.	Mackay of Clashfern, L.
Denham, L. [Teller.]	Macleod of Borve, B.
Dilhorne, V.	Mancroft, L.
Ebbisham, L.	Mansfield, E.
Eccles, V.	Marley, L.
Ellenborough, L.	Merrivale, V.

Mottistone, L.	Skelmersdale, L.
Mowbray and Stourton, L.	Spens, L.
Newall, L.	Strathclyde, L.
Norfolk, D.	Swinfen, L.
Nugent of Guildford, L.	Terrington, L.
Onslow, E.	Teviot, L.
Orkney, E.	Thomas of Swynnerton, L.
Orr-Ewing, L.	Thorneycroft, L.
Pender, L.	Torphichen, L.
Plummer of St. Marylebone, L.	Trefgarne, L.
	Trumpington, B.
Reay, L.	Valux of Harrowden, L.
Renton, L.	Vivian, L.
Romney, E.	Wakefield of Kendal, L.
St. Davids, V.	Ward of Witley, V.
St. John of Blesto, L.	Westbury, L.
Sandford, L.	Windlesham, L.
Sandys, L. [Teller.]	Wynford, L.
Savile, L.	Young, B.
Sharples, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.17. p.m.

Lord Mishcon moved Amendment No. 4: Page 14, line 25, leave out (" except as aforesaid").

The noble Lord said: My Lords, in my respectful submission to the House, this is a most important amendment which, indeed, I hope the House will agree, involves the sovereignty of Parliament. When we were discussing the situation in respect of the British National Oil Corporation and the approval by the House indeed, by Parliament as a whole of the very important memorandum and articles of association of the subsidary, Britoil, I ventured to put to the noble Earl the Minister and to the House at the Report stage the following considerations. The nation was being protected by the Government, so we were told, in respect of valuable assets that might be disposed of through subsidaries, by the fact that there were articles of association which protected the nation in the following respects.

First, there would be directors on the board of the subsidiary company however much of the subsidary was disposed of; and, secondly, there would be a protection against, among other things, the question of a transfer to those outside the United Kingdom if such people endeavoured to obtain a substantial interest in the subsidary, that protection being the protection of the special share. Under the articles of Britoil that special share gave the Government the right, through holding that special share, to exercise the vote upon it in various contingencies, which vote gave it control, it amounting to one vote more than all the others that could be cast.

My Lords, we were discussing those provisions in regard to BNOC. The other place did not have much of an opportunity to discuss them because there was only one hour allotted to that discussion on the very important memorandum and articles of association, and the articles were not produced until March. We are looking now at a different situation in the case of British Gas, and in regard to British Gas there has been no discussion at all in the other place about the memorandum and articles of association because, apart from anything else, they were not produced to the other place, and they are not available to us.

This is terribly important, because when I was dealing with the memorandum and articles of association in regard to BNOC, I ventured to say to the House, and specifically to the noble Earl the Minister, that, quite apart from the need in any event when there was any disposal for Parliament to look at the vital protections to the nation given in the memorandum and articles of associations, in what had been produced by way of memorandum and articles for Britoil, the situation to me was quite unsatisfactory.

First, there was the point in regard to protection by directors being appointed by the Government that, in the articles of association, where Government ownership was between 35 per cent. and 20 per cent. the Government were entitled to only one director; and there was no provision at all in the articles—which is quite a usual provision, as those who are concerned in these matters know—to have an alternate director in the event of enforced absence through illness or for any other reason. That would mean that when the proportion of shares held on behalf of the nation had dropped to 35 per cent. to 20 per cent., and there being only one director, a director would not be present because there was no provision for an alternate director at what could be a very vital meeting.

When the proportion drops below 20 per cent.—there is nothing in the Bill to prevent the Government from disposing of more than the 51 per cent. which we are told the Government have in mind—there will be no directors there at all and, obviously, therefore, no protection. When it came to the special share, apart from my raising the point that was raised in the hurried debate in another place about how the Government are to know when there is what is the equivalent of what is called a dawn raid on the share or where it looks as though people not resident in the country are trying to get control, then one asked how they were going to discover this, what agency would they employ and how would this be done? There was a much more vital question because in the articles there was provision that at any time the Government could surrender, if they so wished, their one share for a par value; in other words, they could decide that they no longer wanted to hold that special share and that would be a right given to the Government and that meant again that every bit of security was removed.

The noble Earl the Minister decided in his wisdom but with his usual courtesy to remain silent on the questions I asked in that specific regard and, if I may say so, I know of nobody more eloquent when he is silent. I asked the Minister if he would deal with those points and if not then to deal with them between Report and Third Reading. Again, there was an eloquent silence; so that I return to the attack with precisely the same points in mind but, if I may say so, with so much stronger a case because the noble Earl did say in the course of his remarks that the argument, he felt, was not a weighty one in regard to BNOC because the plans in regard to BNOC were known to Parliament. The Government have made them very clear and there have been the draft memorandum and articles of association of Britoil. In regard to British Gas, nothing by way of plans has been made clear and in regard to the memorandum and articles of association, we have not got them.

So it is that this amendment is moved, as I said in the beginning, in protection not of the principles of this Bill but of the sovereignty of Parliament; because if a Secretary of State, whatever his political colour may be, is going to be given the right by a direction and without the matter coming to Parliament, to dispose of national assets by a direction and to do it in regard to subsidiaries owning national assets without Parliament being able the approve the memorandum and articles of association (which are vital in maintaining proper protection for the nation) then, in my view, your Lordships are wasting their time sitting on these Benches and Members are doing the same thing in the other place, because complete power is being given to the executive and being taken away from those who are democratically elected in one place and those who are the custodians for the nation in this House, as I believe we arc, of the legislation which comes to us for approval.

It may be argued that these directions are subject to the negative resolution procedure. We all know what the negative resolution procedure is. First, you have to be terribly observant even to know that you have the chance of negativing a statutory instrument but, if you arc, in this House which, as I said at Report stage, has the great privilege of having on its Benches those who are specialists in company matters, accountancy matters and legal matters, it is the tradition of this House that you must choose a very rare occasion in order to pray against a statutory instrument on negative procedure and, worse, you will face the most terrific unpopularity and be told that you are letting the side down or letting the House down if you venture to go into the Division Lobby or ask for a Division in respect of a Motion negativing a statutory instrument; so that our hands are tied by tradition and we in this House have our procedures laid down for us and by tradition; we have no written standing orders with which to comply and no Speaker to direct us. It is the will of this House. What we are doing in this House when we weaken our powers and have to follow a tradition, is that we are undermining the sovereignty of Parliament. In this spirit, I move this amendment. It has nothing to do with the principal object of this Bill. It has only to do with the fact that on important matters of this kind the Parliament of this country must be sovereign and this House is an important part of that sovereignty.

The Earl of Mansfield

My Lords, at an earlier stage in the course of the Bill, the noble Lord, Lord Mishcon, asked me a number of technical questions on the memorandum and articles of association of Britoil which are in existence and are there to be read. Rightly or wrongly, and partly owing to their technical nature, I did not at that stage answer, and nor have I since answered, the noble Lord's questions. Now the noble Lord asks me questions on memorandum and articles of association which do not exist and therefore I ask myself whether I would be well advised on this occasion to answer his questions bearing in mind that on the last occasion I did not. It would be very foolish to try to peer so far into the future in respect of what may happen in relation to Part II of this Bill relating to gas and try and foresee what might be within the memorandum and articles of association of a firm, and try to say what they might mean.

I thought that what the noble Lord was going to say was that, whatever justification there may or may not be for floating off Britoil without a further layer of parliamentary scrutiny, it was a constitutional outrage to do the same for some future company which may be floated off the gas corporation. I would not have been surprised to hear him say that and I would in my turn have said that there is plenty of provision for parliamentary scrutiny so far as Part II of the Bill is concerned because the order transferring shares to the Secretary of State will be subject to negative resolution procedure. Before that, it is likely that the Secretary of State will have to issue a direction to the gas corporation to set up an appropriate subsidiary and that direction will also be subject to the negative resolution procedure.

I would have argued that the amendment as it is set out on the Marshalled List is unnecessary. But the noble Lord does not make that point, and it may well be that after I have sat down one of his noble friends will elaborate on it for him. I do not know whether to make the full answer now but I think that I shall not do so because it has all been said before and I do not want to delay the House unnecessarily.

If I may go back to Britoil for a moment—because that is the matter to which the noble Lord, Lord Mishcon, was addressing himself—I see from the Official Report that one of the matters which he asked about was the fact that the articles of association for Britoil contain no provision for directors to appoint alternates. I think that was one of his complaints. That is true. It applies to Government directors just as much as to other members of the Britoil board. The case is that as individuals, as in any other public company, the directors of Britoil will be people who can make a contribution as individuals, and it would be as individuals that they will contribute to the success of the company, and alternate directors would be contrary to the philosophy behind this.

The noble Lord asked about the single special share and the rights which it gives to the Government in effect to enable the Government to prevent any unacceptable change in the control of the company. As the noble Lord will know, the ownership of the single special share does not depend on the continued ownership of any other shares in Britoil or on the directors who may be appointed by the Government, whether such exist or not.

I said at an earlier stage that the Government regarded it as appropriate that they should have the right to appoint two directors so long as they own more than 35 per cent. of the share capital of Britoil, and one director so long as they own more than 20 per cent. If the Government-appointed director fails for some reason to be able to carry out his responsibilities, then the Government will make a new appointment. It is also a fact that if the circumstances became such that the Government wanted to dispose of their single share then of course they could, although I have no doubt that the circumstances of such disposal will be such that there will be no longer any point in the state, as it were, keeping an eye on the affairs of Britoil.

The way in which Parliament in one way or another can keep an eye on the Secretary of State is something of which we should not lose sight. The noble Lord pours a degree of scorn upon the negative resolution procedure so far as your Lordships' House is con- cerned. I quite agree that there is a custom—if not a convention, still less a law or rule—that we do not vote on such matters. Nevertheless, during the time in which I have been in your Lordships' House, on more than one occasion such prayers have been raised and the matter can be debated.

One also has to have regard to what the other place could and can do if the Secretary of State, when he was floating off a subsidiary—whether an oil or a gas subsidiary—failed to act prudently. This is really what we are talking about. lf, for instance, he did not get the price right, however innocently—and this has happened as we know in the past few months—then the Secretary of State is subject to severe parliamentary criticism, and that can be debated. He also of course would be subject to the scrutiny of the Public Accounts Committee so far as the disposal of shares is concerned. That body is a highly effective monitor of executive actions of government which include a financial element, and of course a floating off of this nature would include that. The precedent of the 1977 sale of Government-held shares in BP, which was a substantial disposal of public assets, is one which I think I can pray in aid. There was no question of prior parliamentary approval. Parliament was informed when the sale was ready to go ahead. The sale went ahead and Parliament exercised the scrutiny that it thought was necessary.

In the circumstances, I appreciate that what it is that this Bill does is unwelcome and—dare I say it? —anathema to noble Lords opposite. However, I hope from the detailed debates that we have had on the various provisions of the Bill—including Clause 11 — and the powers of the Secretary of State, that the noble Lord will see, as he did in Committee, that so far as parliamentary scrutiny is concerned, we are really doing the best that can be done in the circumstances, bearing in mind that at the end of the day there has to be a commercial disposal for a commercial price at the right time and in the right manner.

5.28 p.m.

Lord Bruce of Donington

My Lords, we are a little sorry that the noble Earl has not taken a more constructive attitude to this arrangement. When we get to Third Reading and amendments are put down they sometimes, quite understandably, tend to have a more technical flavour and are kept within a very narrow context of matters that have been discussed on Report and in Committee. It is therefore necessary, when we are considering this amendment, to remember that what we are discussing are the principles that should govern the disposal by the state of interest in a highly profitable and highly efficient industry—the British gas industry—which has consistently made profits, much to the chagrin of the party opposite, and which has delivered to the public at large one of the best services in the provision of gas in the whole of the world. This is indeed what we are discussing.

We do not, and we cannot, here challenge the right of the majority party to enforce its political will. It does it in the other place with its colossal majority, and it can usually, in an appropriate instance, get a majority here by whipping. It can do all these things. All we can do here with any degree of success is to challenge the method and procedure by which this politically monstrous disposal of public assets can in fact be carried out. This is the most we can do.

In connection with the Gas Board, it should be remembered that the powers given to the Secretary of State in Clause 11 of the Bill enable him to require the British Gas Corporation to dispose in such manner as the Secretary of State thinks fit of—

1. " (a) any shares of a relevant subsidiary;
2. (b) the whole or any part of the undertaking of, or any property, rights or liabilities of, a relevant subsidiary; or
3. (c) any part of the undertaking of, or any property, rights or liabilities of, the Corporation,".

Under Clause 10 of the Bill that right extends to the establishment of subsidiaries. These powers are given to the Secretary of State.

My noble friend Lord Mishcon has dealt with the question of the submission of the memorandum and articles of association of the relevant subsidiary. This forms a very important part of this amendment. All that we are requiring is that the memorandum and articles of association of the relevant subsidiary should be produced to Parliament. The noble Earl quite properly drew a distinction between the position relating to Britoil, where the memorandum and articles are already in existence, but he said that since there existed at the moment no memorandum and articles which might become necessary by reason of the exercise of the powers of the Secretary of State under Section 11, he could not possibly envisage what they would contain. The noble Earl did not even in his usual fashion—which has endeared him to us on previous occasions—give us any form of assurance as to what the future memorandum and articles might contain. He did not even give us the assurance that the safeguards of the state and the safeguards of the corporation would be least equivalent to the safeguards already contained in the memorandum and articles relating to Britoil. He gave us no assurances at all.

The other part of the amendment which is, if I may suggest it, of even more importance, is the submission to Parliament of a memorandum setting out the terms on which the disposal is to be made. What good is it to Parliament that the directions of the Secretary of State have to be incorporated in an order that is subject to negative procedure in another place and also in this House? The order may be as brief or as long, as terse or as verbose, as the Secretary of State may see fit to make it. I would venture to suggest that all that would be in it is the plain, simple, stark and harsh direction of the Secretary of State, ordering the British Gas Corporation or its subsidiaries, as the case may be, to do exactly what he wants them to do and what he has the power to enforce under the Bill as it now stands. What the negative resolution will not provide, I can assure your Lordships, is the full explanation to which Parliament is entitled, setting out the terms on which the disposal is to be made.

The party opposite on many occasions say that they are a party that believe in open government. Here we have a situation where they have taken powers to sell off the whole or part of any undertaking owned by British Gas and any part of British Gas itself, which, I repeat, is one of the most successful public corporations in the world. Yet they will not tell Parliament in ad- vance the terms on which a disposal of any part of the undertaking or any of its subsidiaries is to take place.

I would say to the noble Earl that no rational person would think that that is maintaining the power of Parliament. If these important disposals are to take place—and if they are not important why would the Government bother about them?—what is the objection to letting both Houses of Parliament, but, at a minimum, the Members of another place, have a memorandum well in advance, explaining precisely what is going to be done? This is a policy which is followed by public companies throughout the United Kingdom today. If they propose to sell part of their undertaking, whether they may dispose of shares or anything of that kind and whether there is going to be an acquisition of shares and so on, normally the brokers or the bankers inform the shareholders as to exactly what is being done and why, and why it should be profitable to the shareholders or why it might prove to be unprofitable.

Parliament in regard to these nationalised industries stands in the position of representative of the shareholders, the British public at large. Parliament is entitled to know and debate the terms on which any deal is done on the basis of the direction of the Secretary of State. The negative procedure would not cover that because, as I have explained, there is nothing in any negative procedure, following the laying of an order, which compels the Government to give Parliament any information at all as to why they are doing something or information on the consequences that are likely to flow from it.

This amendment is a very modest one indeed. It ought to appeal to all reasonable men and women anywhere. If the media let the public know that such an amendment exists—I very much doubt whether they will—and if it attracted the interest of one at least of the 14 national newspaper editors, it would of course be plastered all over the papers that the Government propose to proceed so capriciously in furtherance of the will of the Secretary of State to do almost precisely what he wants to do with national assets without informing Parliament in advance—and regardless on what side of the House any noble Lords may sit I invite them in the interests of the public at large, to support the amendment moved by my noble friend.

Lord Mishcon

My Lords, I was hoping so much that the noble Earl was not going to follow the example that he said himself was not a very good example of the Front Bench by not rising to answer a speech when it was a challenging speech, a fair speech and a speech which put very material points to the Government. It is with sorrow that I see him sitting in his seat and not adding anything more to what he has already said.

The sorrow is increased by my having on two occasions put points to the noble Earl to which he has not replied. His reason given to the House at Report stage was that I had put technical points and, as I understood him, he wanted to consider them. That is a perfectly fair point for any Minister to make. He cannot be expected to be briefed upon every aspect, and certainly not upon technical matters. If the noble Earl, with the courtesy that I usually associate with him, had said at Report stage that he wished to have time to consider and would write to me, I would have been thoroughly content. But although the technical points, and they were material points, were raised last time, I received no communication between Report stage and Third Reading.

Being the optimist that I am, and having faith and confidence in Government Ministers to fulfil the duties which this House expects of them, I waited for today. Again, I put my points absolutely courteously, with the Minister having had a full opportunity to appraise himself of the answers to the technical points. All I got was a deathly silence, and that is all that the House got, too. Then, when the points raised this time were not of a technical nature but of a constitutional nature, again there was no answer, except that the Secretary of State, if he behaved badly, would no doubt be criticised —not a very healthy answer—and that, furthermore, there was the Public Accounts Committee which might decide to take this into their purview; because, of course, they do not look at everything. If the Secretary of State behaved badly and foolishly, and endangered the nation's finances and its assets, then, no doubt, the Public Accounts Committee would do their job and criticise him.

What are we all here for? What is Parliament here for? It is to check the powers, if they get too great, of Secretaries of State and Ministers, to whatever political party they belong. If this amendment is not carried today, we will have set a very sad precedent, with a Government Front Bench being able to impose their will, without answering a debate properly, and with a Secretary of State in future, of whatever political party, being given powers without informing Parliament, without consulting Parliament and treating Parliament as this House has been treated today—with disdain.

5.53 p.m.

On Question, Whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 55; Not-Contents, 87.

DIVISION NO. 3
CONTENTS
Amherst, E.	Jenkins of Putney, L.
Ardwick, L.	John-Mackie, L.
Bacon, B.	Listowel, E.
Balogh, L.	Llewelyn-Davies of Hastoe, B.
Bernstein, L.
Beswick, L.	Longford, E.
Birk, B.	Lovell-Davis, L.
Bishopston, L.	McGregor of Durris, L.
Briginshaw, L.	MacLeod of Fuinary, L.
Bruce of Donington, L.	Mayhew, L.
Byers, L.	Mishcon, L.
Cledwyn of Penrhos, L.	Northfield, L.
Collison, L.	Oram, L.
Davies of Penrhys, L.	Peart, L.
Elwyn-Jones, L.	Phillips, B.
Elystan-Morgan, L.	Ponsonby of Shulbrede, L. [Teller.]
Evans of Claughton, L.
Ewart-Biggs, B.	Shinwell, L.
Fisher of Rednal, B.	Stewart of Alvechurch, B.
George-Brown, L.	Stewart of Fulham, L.
Gladwyn, L.	Stone, L.
Gosford, E.	Strabolgi, L.
Hampton, L.	Tanlaw, L.
Jacques, L.	Taylor of Mansfield, L.
Jeger, B.	Tordoff, L.

Underhill, L.	White, B.
Wallace of Coslany, L. [Teller.]	Wigg, L.
	Winstanley, L.
Wells-Pestell, L.	Wootton of Abinger, B.

NOT-CONTENTS
Aircy of Abingdon, B.	MacAndrew, L.
Alexander of Tunis, E.	Mackay of Clashfern, L.
Avon, E.	Macleod of Borve, B.
Belhaven and Stenton, L.	Mancroft, L.
Beloff, L.	Mansfield, E.
Belstead, L.	Marley, L.
Bessborough, E.	Merrivale, L.
Caithness, E.	Mottistone, L.
Campbell of Alloway, L.	Mowbray and Stourton, L.
Campbell of Croy, L.	Newall, L.
Cathcart, E.	Norfolk, D.
Chelwood, L.	Onslow, E.
Clitheroe, L.	Orkney, E.
Cockfield, L.	Orr-Ewing, L.
Colville of Culross, V.	Pender, L.
Colyton, L.	Plummer of St. Marylebone, L.
Cork and Orrery, E.
Cullen of Ashbourne, L.	Reay, L.
Daventry, V.	Renton, L.
Davidson, V.	Romney, E.
Denham, L. [Teller.]	St. Davids, V.
Dilhorne, V.	St. John of Bletso, L.
Drumalbyn, L.	Sandys, L. [Teller.]
Eccles, V.	Savile, L.
Ellenborough, L.	Sharples, B.
Elton, L.	Skelmersdale, L.
Faithfull, B.	Stodart of Leaston, L.
Fraser of Kilmorack, L.	Strathclydle, L.
Gainford, L.	Swinfen, L.
Glenarthur, L.	Terrington, L.
Glenkinglas, L.	Teviot, L.
Gormanston, V.	Thomas of Swynnerton, L.
Grimston of Westbury, L.	Thorneycroft, L.
Hailsham of Saint Marylebone, L.	Torphichen, L.
	Trefgarne, L.
Harmar-Nicholls, L.	Trumpington, B.
Henley, L.	Valux of Harrowden, L.
Home of the Hirsel, L.	Vivian, L.
Hylton-Foster, B.	Wakefield of Kendal, L.
Killearn, L.	Ward of Witley, V.
Kinnaird, L.	Westbury, L.
Lane-Fox, B.	Windlesham, L.
Lauderdale, E.	Wynford, L.
Long, V.	Young, B.
Lyell, L.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendment No. 5 not moved.]

Clause 32 [Provisions as to regulations, orders etc.]:

6.3 p.m.

Lord Beswick moved Amenmdent No. 6: Page 39, line 21, at end insert (", provided that any duty of which the Corporation is to be relieved is specified in the direction.").

The noble Lord said: My Lords, I beg to move Amendment No. 6. At each stage we have listened carefully, when the Ministers have chosen to speak, to the arguments put up by them against the amendments moved from this side and, where possible, we have then endeavoured to meet the Government part way by moving more modest amendments. This is a process which, I suggest, could and I emphasise the word "could"—lead to legislation which would survive, but so far the Government have rejected the concept of reasonable compromise. They have rejected the possibility of what I would describe as durable legislation. However, with this amendment the very last of our amendments—they have one more opportunity to recognise moderation and to accept what is, by any standard, a modest provision.

At the Report stage I suggested that the powers sought by the Secretary of State—to be enabled to direct that the corporation should do certain things "notwithstanding any duty imposed on it by or under any enactment"—were sweeping powers. The Minister said that I was exaggerating. If the power to ignore any duty under any enactment is not a sweeping power, then it would seem to me that words are losing their meaning.

The Minister insisted that the words of which we complained had little application and that there was—and I quote from col. 502— scope for a limited degree of interaction ". In the same column, however, the Minister argued that, without the power which they sought—to override any duty imposed upon it by or under any enactment—there would be considerable confusion. All concerned, he said, would be in a state of undesirable uncertainty. If there is undesirable uncertainty of that kind, I would suggest that there is a possibility that the powers cover a wider area, or are likely to cover a wider area than was at first suggested. It seems to me that there will be undesirable uncertainty, even though the amendment which we moved at the Report stage was defeated, and that the Government do now have the power to override any duty imposed on the corporation by or under any enactment.

I asked one question of the noble Earl the Minister at the Report stage, and again I put the same question to him. It would be useful to have his answer. I asked then whether the words "notwithstanding any duty imposed covered the duties laid down in the present Bill. Do those words give power, for example, to override Clause 14(2), about which we had discussions earlier? I am not asking for an assurance that the Secretary of State would not direct the corporation to do anything contrary to Clause 14(2), but I am asking about the legal situation. Do the words of which I complain have the effect of enabling the Secretary of State to override, for example, Clause 14(2)? I want to know whether the powers which Parliament now has in the Bill give to the Secretary of State this very significant and rather frightening power to override duties to maintain services. I am sure that the Minister will agree with me that even though those powers are in the Bill we should be quite clear as to their effect if directives are issued. All these matters should be set out clearly and straightforwardly. That is why I now move this amendment, a more modest amendment than the one which I moved at Report. I simply say that if the corporation is to be directed to take certain action and this action involves the disregarding of duties, then these duties so affected should be specified for all to see. I beg to move.

Lord Wilson of Langside

My Lords, I support this amendment. The House is in debt to the noble Lord, Lord Beswick, for his persistent pursuit of this theme. To delegate to the executive a power to give directions, irrespective of whether the giving of those directions is in conflict with a statutory duty incumbent on the person to whom the directions are given, strikes me as being—I must be careful how I describe it, because the noble Earl is wont to accuse us of hyperbole and the like—perhaps somewhat extravagant.

I had some difficulty in deciding how it should be described constitutionally in the light of the noble Earl's reaction to the arguments which have been directed against him on this particular provision. I have in mind particularly the very reasonable arguments advanced by the noble Lord, Lord Beswick. I wondered, in pondering, whether it should be described as a constitutional outrage or whether it is a kind of constitutional aberration. But certainly there is something wrong about it. I imagine that the late Lord Hewart—I have referred to him before in the context of this matter—must be turning in his grave. When he in the early 1930s, I think it was, published his polemic which he entitled The New Despotism, attacking the then growing practice of delegating to the Executive powers which had previously been guarded as the powers of Parliament, I remember myself as a young and pretty ignorant law student thinking that perhaps the old gentleman was getting unnecessarily excited. I felt that, after all, if one was going to govern effectively one had to have what I believe the noble Earl himself described during one of the debates on this very provision as a sensible executive discretion. We do not quarrel with that.

I imagine that what concerned Lord Hewart and what perhaps escaped me as an ignorant young student of law, was that, if Parliament was not vigilant in this context, the appetite of the Executive for powers would grow and grow and grow. That is what has happened. This Bill is surely a high watermark and, with these kinds of consideration in mind, I hope that the House will accept this very modest amendment. It does not go so far as many of us felt we ought to have gone at the earlier stage—but, if the Government could not accept that, perhaps they will accept this amendment.

6.11 p.m.

The Earl of Mansfield

My Lords, this is not the first time that Clause 32(3) has occupied the attention of the House. I am sorry that there still seems to be considerable uncertainty as to the meaning of this clause. Obviously there is that uncertainty or we should not be having yet another debate in this form. I hope that I can once more put the clause into perspective and correct any misapprehensions there may be and also say why we find this amendment unacceptable.

On the last occasion when this matter was considered, some noble Lords imputed what I might call a deep constitutional issue to it. We really got into the realms of the fanciful, if not the colourful. We had mentioned The New Despotism, which has been referred to again today; and we had the noble Lord, Lord Mishcon—who will no doubt spring to his feet when I sit down—talking about Magna Carta. I am very glad that my noble friend Lord Mowbray and Stourton, whose ancestor actually signed the document, is not too far from his place today.

Joking apart, there are two important restrictions on the duty to comply with directions which limit the scope of the words, notwithstanding any duty imposed on it by any other enactment ". Firstly, the directions to which Clause 32(3) apply can be given only in certain circumstances. They relate solely to the powers of disposal set out in the first two clauses of Parts I and II and to the common carrier provisions in Clauses 15, 16 and 17, and those powers have specific objectives in mind. The powers of direction, therefore, are themselves restricted in scope and are not so widely drawn as it has been suggested. The noble Lord, Lord Beswick, asked me whether Clause 14(2) is included; the answer is, no— because it is something not related to the powers of disposal.

Secondly, the duties referred to in the parenthesis to which I have just referred are those, and only those, duties imposed specifically on either corporation. This means duties imposed on that corporation by name or in circumstances which are equally specific. The words "any enactment" therefore apply to the small category of enactments which impose individually identified duties on one or other of the corporations. What we are really talking about are just two Acts; the Gas Act 1972 and the Petroleum and Submarine Pipe-lines Act 1975.

There is no question of the words creating the wide-scale abandonment of our British legal system, of which we are all so proud, which some noble Lords suggested at Report stage. In other words—and I want to emphasise this—the words "any enactment" do not apply to all Acts. The corporations would not be able to ignore those statutory duties which apply to everybody. It would not be right to say, as the noble Lord, Lord Mishcon, suggested on the last occasion, that the corporations would be able to ignore the duties imposed on them by the Companies Acts or by the various Acts imposing taxation. It would indeed be a curious state of affairs if that interpretation were correct—but it is not. In other words, the tailpiece to Clause 32(3) has a precise and limited effect and it cannot bear the wide-ranging interpretation that some noble Lords have attempted to give to it.

A few examples. In the case of the British Gas Corporation, their principal duty is set out in Section 2(1) of the Gas Act 1972. The corporation are required, to develop and maintain an efficient, coordinated and economical system of gas supply in Great Britain, and to satisfy, so far as it is economical to do so, all reasonable demands for gas in Great Britain. Another important duty on the gas corporation, in Section 14, is to secure that, taking one year with another, the combined revenues of the corporation cover the outgoings and equipment reserve allocations. A limited number of other duties are specified in the Gas Act 1972—for example, the corporation has to promote the welfare, health and safety of its employees; to settle a general programme of gas research; to comply with directions arising out of representations made by the National Gas Consumers' Councils, and so on. However, the Act specifies a relatively small number of duties for the corporation.

In the case of BNOC, as I said on the previous occasion, the corporation does not have the kind of statutory duties which are comparable to those of a public utility such as the gas corporation—but I can quote an example. Under Section 10 of the 1975 Act, BNOC has the duty to prepare accounts, including accounts for subsidiaries, on an annual basis. As part of the preparations for flotation, however, accounts will have to be prepared for Britoil part way through the year. We would not wish there to be any doubt or confusion on the part of the corporation that it should prepare accounts for a broken period.

If I may quickly take the amendment, the noble Lord, Lord Beswick, presented it as being a reasonable compromise, which he hinted would not be acceptable to the Government because the Government are not susceptible to compromises, reasonable or otherwise. What the amendment seeks to do is to anticipate, or rather to ask the Government to anticipate, in each direction every possible legal objection that might be advanced by a corporation which disagreed with the Government's policies. I can liken it to suggesting that the Finance Bill should include a comprehensive code on tax avoidance covering not only all schemes already devised but also all those which might be contemplated at some stage in the future. To endeavour to cover every possible legal argument that might be advanced in a direction might confer a wholly misplaced legitimacy on some insubstantial contentions, implying wrongly that, but for the provisions of Clause 32(3), those matters would have stood in the way of the direction.

If we were to accept this amendment, there would be the real danger of inviting the Secretary of State to pick and choose between the statutory duties imposed on the corporation. But, because many of these duties, particularly those imposed on BGC, are worded in such general terms, there could well be scope to argue that any duty not specified in the direction was being breached. This would lead to the confusion that Clause 32(3) seeks to avoid. In practice, the amendment would invite the Secretary of State to relieve the corporations of all their duties. This I believe would have the opposite effect to that intended. And the Government do not wish to relieve the corporations wholesale of their duties. The only purpose of the tailpiece to Clause 32(3) is to prevent a particular duty from in some measure frustrating the Government's declared policy. I think that is the nub of the argument. If one looks at it in this light and in the light of the explanations I have given as to the scope of the tailpiece I do hope the noble Lord, Lord Beswick, will consider withdrawing his amendment.

Lord Mishcon

My Lords, the noble Earl, with his usual powers of anticipation, said that I might rise after he concluded his remarks, and he was kind enough in those remarks to reflect upon a speech which I had inflicted upon your Lordships on a previous occasion when I had evoked, with some emotion, I may say, the principles of Magna Carta. A very touching reference was made to a Peer who is very much respected in this House and whose ancestry goes back to the days of Magna Carta, and in some way the noble Earl seemed to get some comfort from the fact that the noble Lord concerned was somewhere near this Chamber. My best information is that the noble Lord is seeking comfort in regard to this breach of Magna Carta in another room in your Lordships' House.

If I may immediately come to the argument which appears to have developed upon this reasonable amendment, the noble Earl was good enough on this occasion to deal with the arguments that had been advanced by my noble friend, and for that courtesy and kindness I thank him. But there was not very much substance, if I may say so, in the reply to the debate, and I hope to show very briefly why I say that. We are no longer arguing about the provision in the Bill which many of us find extremely distasteful that exempts the Secretary of State from having to comply with existing enactments. That is done, from our point of view, with some degree of distaste. But we have had a debate upon that, the will of the House has been expressed, and, from that point of view, that is the end of the matter for this Bill. It may not be the end of the matter from the point of view of precedents which might be set, but there it is. That argument is over.

My noble friend Lord Beswick advanced an entirely different argument, and said this: let us take it for granted that the noble Earl the Minister is right, that it is only within a very narrow province that the Secretary of State is enabled to ignore an enactment, and that, from that point of view, surely Parliament ought to be able to give him this power. however unusual it may be, without having any fears as to the future. We have swallowed that argument; we have to; there was a vote upon it and it was decided. All this amendment asks is that there should be a frank disclosure when the Secretary of State is in fact going against an existing enactment, is in fact taking away a power or a duty of the gas utility or the oil corporation. It merely asks that he in his direction says what he is doing and is frank and open about it. Parliament, in deciding whether or not there ought to be a Motion negativing the statutory instrument which contains the direction, will at least be put upon notice of the fact that an enactment is being breached, a duty is no longer to be fulfilled, a power is being removed.

What answer can there be to this amendment? Is it that the Secretary of State feels that he need not be frank with Parliament? Is it that the Secretary of State is trying to hide from the public that an enactment is being breached? What can there be by way of answer to this amendment? I hope that your Lordships will take it for granted that the noble Earl the Minister is wrong when he turns to these Benches and says that we find ourselves so hostile to the principle of this Bill that we are out to attack it at every point purely because of our opposition to it. It has been conceded —it has to be—according to our democratic process that the principle of the Act will be fulfilled, but it is our duty to see that in the powers that are given under this Act we protect the nation, we protect the public, and we protect the frankness with which the Secretary of State ought to act. That is embodied in this amendment, and that is all this amendment says.

6.26 p.m.

On Question, Whether the said amendment (No.6) shall be agreed to?

Their Lordships divided: Contents 62; Not-Contents 75.

DIVISION NO.4
CONTENTS
Amherst, E.	Llewelyn-Davies of Hastoe, B.
Ardwick, L.
Aylestone, L.	Lovell-Davis, L.
Bacon, B.	McGregor or Durris, L.
Barrington, V.	MacLeod of Fuinary, L.
Bernstein, L.	Mayhew, L.
Beswick, L.	Mishcon, L.
Birk, B.	Oram, L.
Bishopston, L.	Peart, L.
Broadbridge, L.	Phillips, B.
Bruce of Donington, L.	Pitt of Hampstead, L.
Cledwyn of Penrhos, L.	Ponsonby of Shulbrede, L. [Teller.]
Collison, L.
Elwyn-Jones, L.	Rhodes, L.
Elystan-Morgan, L.	Sainsbury, L.
Evans of Claughton, L.	Shannon, E.
Ewart-Biggs, B.	Shinwell, L.
Fisher of Rednal, B.	Stewart of Alvechurch, B.
George-Brown, L.	Stewart of Fulham, L.
Gladwyn, L.	Stone, L.
Gosford, E.	Strabolgi, L.
Greenway, L.	Tanlaw, L.
Gregson, L.	Taylor of Mansfield, L.
Hampton of Sowerby, L.	Underhill, L. [Teller.]
Jacques, L.	Wallace of Coslany, L.
Jeger, B.	Wells-Pestell, L.
Jenkins of Putney, L.	Whaddon, L.
John-Mackie, L.	White, B.
Kennet, L.	Wilson of Langside, L.
Kilmarnock, L.	Winstanley, L.
Listowel, E.	Wootton of Abinger, B.

NOT-CENTENTS
Airey of Abingdon, B.	Long, V.
Alexander of Tunis, E.	Lyell, L.
Auckland, L.	Mackay of Clashfern, L.
Avon, E.	Macleod of Borve, B.
Belhaven and Stenton, L.	Mansfield, E.
Belstead, L.	Marley, L.
Bessborough, E.	Merrivale, L.
Caithness, E.	Mottistone, L.
Campbell of Alloway, L.	Mowbray and Stourton, L.
Campbell of Croy, L.	Newall, L.
Cathcart, E.	Norfolk, D.
Chelwood, L.	Onslow, E.
Cockfield, L.	Orkney, E.
Colville of Culross, V.	Orr-Ewing, L.
Cork and Orrery, E.	Plummer of St. Marylebone, L.
Cullen of Ashbourne, L.
Daventry, V.	Renton, L.
Davidson, V.	Romney, E.
Denham, L. [Teller.]	St. Davids, V.
Drumalbyn, L.	St. John of Bletso, L.
Eccles, V.	Sandys, L. [Teller.]
Elton, L.	Savile, L.
Faithful, B.	Sharples, B.
Fraser of Kilmorack, L.	Skelmersdale, L.
Gainford, L.	Stodart of Leaston, L.
Glenarthur. L.	Strathclyde, L.
Glenkinglas, L.	Swinfen, L.
Grimston of Westbury, L.	Terrington, L.
Hailsham of Saint Marylebone, L.	Thorneycroft, L.
	Torphichen, L.
Harmer-Nicholls, L.	Trefgarne, L.
Hatherton, L.	Trumpington, B.
Home of the Hirsel, L.	Vaux of Harrowden, L.
Hylton-Foster, B.	Wakefield of Kendal, L.
Inglewood, L.	Westbury, L.
Killearn, L.	Windlesham, L.
Kinnaird, L.	Wynford, L.
Lane-Fox, B.	Young, B.
Lauderdale, E.

On Question, amendment agreed to.

6.34 pm.

The Earl of Mansfield

My Lords, I beg to move that this Bill do now pass. I am not going to inflict a long speech upon the House at this stage, because the matter has been considered at very considerable length by your Lordships. When I moved the Second Reading I described it as a major piece of legislation, and that, indeed, is what it is. We have had many debates and they have been thorough. I do not complain of that at all, particularly because the deliberations of the other place, so far as this Bill is concerned, were truncated.

Our oil and gas reserves are of fundamental importance to the economy of the country. I said that, or words like it, on Second Reading and I make no apology. The safe and efficient management of these resources will be of even greater importance in the future. We believe that the proposals set out in this Bill, controversial as they undoubtedly are, will be in the best interests of the country in the years to come.

I am very grateful to all noble Lords who have taken part in our deliberations. I am particularly grateful to my noble and learned friend the Lord Advocate and my noble friend Lord Skelmersdale who have borne the heat of the fray at various moments. Also I pay a great compliment, I hope, to my noble friend Lady Macleod of Borve who, having pointed out what could be described as a deficiency in the Bill, was then good enough to see a way in which that difficulty could be overcome.

I also include in my thanks the very considerable and distinguished battery which has faced me—far removed from the South Atlantic we may be—the effect of which I sometimes felt was similar to the naval part of our task force. The noble Lord, Lord Bishopston, and the noble Lord, Lord Bruce of Donington, two entirely separate and distinct individuals—each had his own particular brand of fire power. I also pay tribute to the noble Lord, Lord Mishcon, who, if he is not called noble and learned, certainly ought to be from the depth of his constitutional knowledge, and to the noble Lord, Lord Underhill, who has his own expertise and, indeed, to the noble Baroness, Lady Fisher of Rednal, representing stoutly as always the consumer interests. Then, of course, there was the noble and learned Lord, Lord Wilson of Langside, who I hope as he reflects upon this Bill when it reaches the statute book, will not consider it perhaps quite such the constitutional outrage as he thought. I pay tribute to other noble Lords who have taken part, not least, of course, the noble Lord, Lord Tanlaw, who has caused me on more than one occasion to think, and to think furiously. To all these noble Lords, and others, I and my noble friends are indeed indebted. My Lords, I beg to move.

Moved, That the Bill do now pass—(The Earl of Mansfield.)

6.37 p.m.

Lord Bishopston

My Lords, I shall also try to be as brief as possible, but this is an important Bill and after many days of debate in the other place and in this House a good deal still remains in doubt. I was rather interested this afternoon when my noble friends brought in Magna Carta in support of some of our assertions. I suppose I ought to declare an interest because I understand that one of the statues of the Barons of Runnymede which happens to be behind me, is of one of my maternal kinsmen and I always have the impression that he is keeping a eye on me to see that I do my duty in the way in which he did his so nobly in the centuries gone by.

However, today I am not concerned with statues, so much as with statutes. We have had before us legislation which has been very contentious, and my noble friends and I have said from the start that we should behave responsibly in recognising, if not accepting, the purposes of the measure and would do our best constructively to bring about some improvements. But I am rather sorry that, after all our efforts and the contributions by my noble friends and others who have given support to the Opposition both in argument and in the Lobbies, very little has been achieved in getting the Government to rethink some of the important aspects of this legislation.

The Minister referred a moment ago to his Second Reading speech. I recall that it seemed to be lacking in any intention to bring about changes in our two great national assets of oil and gas in such a way that the public interest would be enhanced. The noble Earl said that the main purpose was to restrict or to curtail the area of public enterprise. We also know that the aim of the Bill is not only to fragment the industry in privatisation, but to bring in some currency to help the Chancellor of the Exchequer. This has been quite evident in a number of privatisation measures which have come before both Houses of Parliament.

In the last election the electorate decided to have a new housekeeper in the form of the Prime Minister to look after our national affairs. Although we are told from time to time that as a result of the changes brought about by the Government's policies we must cut our coat according to our cloth, balance our budgets and so on—we know, of course, that there have been many cuts in the essential services of our national household: in services, education, housing and in other ways affecting the standards of life of the inhabitants of the national household—here, of course, we have the worst form of the selling of the capital assets of the household, the seedcorn on which the future prosperity of our national family depends.

We have had the Forestry Bill, a two-clause Bill which says that the aim is not to enhance our forestry, to cut down on imports of timber and paper, but to sell off land for purposes even other than forestry so that money goes into the national Exchequer. We have the same privatisation not only in oil and gas but also in transport. We have it in fuel and power; we have it in communications, and many other areas will be subject to this fragmentation and giving away of essential assets.

In the case of the industries affected by this Bill the Government are selling a vital part of our heritage for a mess of potage. Indeed, in the sale of national assets we are not selling parts of our national household, such as art treasures or assets of historic or architectural merit; we are selling assets—as we are today in this Bill—essential to the wellbeing of all who live in these islands. Some of them, of course, will pass to foreign control. We have tried to get through amendments to stop that. Not only are we selling arms to our enemies, as we all know from recent concern, but these assets of our fuel and power will, in some cases in the future, also be sold to our foreign competitors.

The House is now considering the Motion, That the Bill do now pass. If we could table an amendment, it would be to the effect that it ought to pass away, because we do not believe that the best interests of the country will be served by it in the future. Few Bills have had such a muted welcome, even by Government supporters who, even if in agreement with the political objectives, have said that they have grave misgivings about many aspects, not least of course the future of the industries being privatised.

The House recognises—as, indeed, does the country—that this is no ordinary privatisation of two nationalised industries. First and foremost, they are two of our great national resources, of strategic importance in time of emergency—in such a stage as we have been passing through, and we are still not out of it yet—and, of course, of vital interest in time of peace, both from the domestic and the industrial aspects. Could there have been anything more foolish in the last few months of the Falklands crisis as the Government's blind insistence on going ahead with the fragmentation, and the controversy over this Bill when they have reserved the right, quite properly, of course, to commandeer private property for public purposes?

However, as I say, the Opposition have acted honourably in recognition of the principle of the Bill, although not in acceptance, in seeking to improve it in many important details. It is to be regretted that the House of Lords, whose role has been seen as that of a revising Chamber, has heard many constructive debates with contributions from all sides, only to be met by the blind insistence of the Government, through their Ministers, that the legislation must go through largely unchanged.

The most important amendments have included those seeking to make Ministers responsible to Parliament—a constitutional debate in which my noble friends took part today and on previous occasions. Clause 32, as we have pointed out, is quite notorious in giving Ministers powers in relation to BNOC and BGC to override any enactments which, in the past, Parliament has considered necessary for the public interest: to jackboot the well-thought-out and considered parliamentary requirements. As I say, Clause 32 is notorious for overriding powers. It gives the Secretary of State for Energy powers in relation to company law, in relation to the sale of assets, to such an extent that people could be landed in court. There could be violations of the legal requirements. There was the attempt only a short while ago in this House to put in some safeguards about the standards of services and the maintenance of proper supplies to the consumer, having dealt first, as I have said, with safety. That assurance was not voted into the Bill; it was voted out by the Government at a previous sitting.

We have also sought many other assurances. As I have mentioned, one of the main aims of the Bill is insistence on selling off assets at any price. If we are to say that these assets must be sold, then we cannot guarantee a proper return to the public, whose assets they are; they have to be sold at any price. We have had the very grave national concern about the sale of Amersham International—another very successful and prosperous nationalised industry—and we know that in a few days speculators, who have made no contribution to the public good, netted a return of something like £20 million from the assets owned by the rest of us. At the same time, nurses and others have been told that 4 per cent. is reasonable, and that to want more is being greedy.

This inconsistency has gone on. So in the debates it has been shown that the Secretary of State has been given massive powers. The noble Lord, Lord Campbell of Alloway, was typical of the concern, even on the Government side, when he said on 14th June at column 491: I should like to support the spirit of the amendment "— that is, the Opposition amendment— The problem of sub-delegated legislation raises serious constitutional problems which affect individual liberty. But despite that the House saw fit to support the Government in refusing any of the reasonable safeguards which my noble friends and I wished to have in the Bill. It was only a few days ago that we debated the Employment Bill; in fact, it was just after the second day of Report of this Bill. Then noble Lords expressed concern about the trade unions being above the law. They said that this was quite improper. We have given the Secretary of State for Energy the right to walk tall; he is even taller now because of the action of this House and, indeed, of the other place, in making him above the law. I believe that it was the noble and learned Lord, Lord Denning, who, rightly, once said: No matter how high you are, the law is above you ". That is no longer the case, because we have the evidence in this measure and we have the exception in this Bill; the Secretary of State has asked to be above the law and the will of this House has elevated him to that rare position. As one of our noble and learned Lords has hinted, if not said, this afternoon, the danger is that this might be a precedent for other legislation. So the height of the Secretary of State stretches from the lowest levels of the gas pipe-lines and installations in the earth to the top of the oil rigs over which he will have domination as he ensures that the industry is sold off to the private sector. This, I am sure, is not a precedent which we would want.

The noble Lord, Lord Skelmersdale, said that he felt that the Government wanted to privatise British Gas, for instance, in order to see whether it could be run more efficiently by the private sector. But why pull up a blooming and productive plant or vegetable in order to see whether it is going to grow better if you plant it in another place? The logic of his argument is that if those industries are not better under private enterprise they will be returned to public ownership. If the gas and oil sectors are not as efficient after privatisation, will he indicate whether they will be returned to public ownership once again? Is he accepting the logic of the principle that a number of private industries ought now to be subjected to the competition of the public sector as well? These are some of the questions one might put to the Government after these debates.

We have wanted to have other assurances, which I do not need to detail at this time. The discussion here has shown the widespread praise which has been rightly bestowed on the British Gas Corporation in particular. I recall, as indeed will other noble Lords, the speech by the noble Lord, Lord Miles, in an earlier stage of the Bill on 11th May at col. 124 when, having started off in a way that suggested that he, like others, criticised nationalisation, said: It cannot, surely, be made more successful than it has been…Thus I submit that the Bill aims at cutting a particularly successful nationalised enterprise down to size, in order to maim and shackle it, not for the sake of common sense or justice, or for the general wellbeing, but for the sake of rigid dogma. This seems to me to be a topsy-turvy version of the very tenets which the Government claim to embrace. Those were his comments on that particular day.

My colleagues and I, with the support of noble Lords in other parties, have spent a great deal of time, much of it on a non-party basis, with amendments which have had a technical, legal, constitutional, financial and scientific merit, and we have got very few answers from the Government in respect of them. The Government have in many cases had no answers to make. It may well be that there is some reason given in the reply of the noble Earl, Lord Mansfield, on 11th May at col. 149 when he said: As I tried to say earlier, we have not made any final decisions about privatisation of the gas corporation's oil assets, and still less about the methods which would be adopted to do that. It is a pretty frank and dangerous admission rather late in the day after such considerable debate to say that on this important measure concerning two of our most vital industries the Government have not yet really made up their mind.

My noble friend Lord Mishcon on an earlier debate raised questions about the BNOC articles of association which arrived rather late in the day. Today he has had an admission that the articles concerning the BGC are not yet available. This House has been in a way snubbed by saying, "We want the Bill but do not ask us too much about the details" because either they will not stand investigation, or they are still thinking their way through. The concern of the House, which reflects the concern of the country, regarding the future pros— spects of these industries has not been satisfied.

I feel sure that the Opposition and those who gave us support have won the arguments, but not the votes. We arc grateful to all those who supported us and who have contributed constructive thinking to our debate. We have won the arguments, but not the votes. I have a fear that the time may well come when the country will come to recognise that later, but very much to its cost. Although we thank the noble Lords opposite for the co-operation they have given to us as far as possible in this debate, one has to recognise the difficulty which they have had in trying to explain a Bill which is not yet fully ready. I hope that, in the process, when the Government are concerned with finalising some of the provisions, they will take into account some of the views expressed by noble Lords on all sides.

6.56 p.m.

Lord Tanlaw

My Lords, I just want to thank the noble Earl, Lord Mansfield, for his kind words directed towards myself and these Benches. Certainly his firepower, and that of his colleagues on the Front Bench, was quite superior, with the back-up force from the department to make sure that this Bill goes through. The only point I wish to make at the end of what has been a long, detailed and complex bit of legislation is that we from the Opposition Benches, and certainly from my own position on the Liberal Benches, sometimes feel quite inadequate to deal with a Bill of this kind and to give it justification from what is called the alternative point of view.

There are so many factors that have come out during the course of this Bill in terms of the technical side, the constitutional side, and also the need for overall reform which appear to have been missing in the presentation of this Bill in its course through Parliament.

sincerely hope that, when the details of the debates we have had in your Lordships' House on this Bill come to be analysed,when it comes to the reform of this House they will realise that there is a far greater need for Opposition speakers on technical matters to be better briefed, and possibly with the assistance of civil servants from the Department of Energy in this particular case, if the Opposition is to do a proper job with a Bill of this size and complexity, and if it is to have any meaning as it passes through this House.

The remarks have already been made about this Bill, and I see there is obvious impatience from the other Front Bench to get rid of it and pass it on. All I am saying is that we have spoken with extreme brevity on all occasions from these Benches. This Bill has raised issues far beyond it. I hope it will be taken into consideraton when it comes to the reform of this House as to how Opposition speakers, certainly from my Party and from any other party, are able to do justice not to their voters but to the people as a whole, be they consumers of energy, or on any other matters that come before us in a way that we feel it is our duty to do and in the most effective way possible. This is not the position at this present time.

Lord Wilson of Langside

My Lords, I would echo the regrets expressed by the noble Lord, Lord Bishopston, and concur in the observations of the noble Lord, Lord Tanlaw, with regard to the difficulties of Opposition spokesmen on technical Bills of this kind. My impression is that your Lordships' deliberations this afternoon have taken rather longer than had been anticipated. With that in mind, while saying that I like the Bill no better now than we on this Bench did when it started, I shall content myself with saying only that I suppose the circumstance that nothing more extravagent than "outrageous" was used as an adjective to describe Clause 32(3) is probably a great tribute to the charm and skill of the noble Lord the Lord Advocate, and the noble Lord, Lord Skelmersdale.

Lord Beswick

My Lords, I should like to support something that was said by the noble Lord, Lord Tanlaw, and by the noble and learned Lord, Lord Wilson of Langside. We really ought now in this cradle of democracy to find a different way of considering a Bill of this kind. Recently I helped with others to send upstairs a Bill designed to consider the erection of a car park in Shrewsbury. We sent it up to a Select Committee, and it was given careful consideration up there. There is a case for having a select committee procedure for discussing a Bill of this kind.

When the inevitable reaction against this Government sets in and they are relieved of power and office, this piece of legislation will be seen as one of the most pernicious in their programme. With oil and gas, we are not dealing with industries that have failed the nation or with an area of the economy where the trade unions have been reluctant to adjust to new circumstances or with public corporations which have made great unserviced demands on the public purse. Far from it. We are dealing with highly innovative and profitable industries, and I agree with my noble friend Lord Bishopston that it is precisely that profitability which has led to the Bill.

I was going to deal with some of the smaller details of the Bill which indicate, in my view, that the charge of prejudice against the Government is justified. I will not go into all those details, but I must refer to a particular incident. We tried to ensure that, if extra construction costs were incurred for the benefit of a third party, the responsibility for meeting those costs would fall on the third party. Eventually the Minister was frank enough to tell us why they could not accept that mandatory provision. The noble Lord, Lord Skelmersdale, is in print in the Official Report as saying that there might be a case, infrequently, he admitted, where, those making representations were individually not yet…certain of their plans to commit themselves to meeting the additional costs."—[Official Report, 14/6/82; col. 457.] Is it remotely conceivable that the present Government would ever take powers to compel a private company to incur capital costs to provide a facility which at some future time a public corporation might be so certain of their plans that they might commit themselves to using that facility? Of course not. I do not think "prejudice" is too strong a word to describe the attitude behind provisions of that kind.

I speak this evening because I wish to refer to something else which deserves language stronger than "prejudice". I am thinking of a speech made by the Minister of Transport last Friday. He is reported as saying that the remarkable achievements of the British forces in the Falklands should be followed (and I quote from the Saturday edition of the Daily Tele-graph)— by tougher policies over nationalised industry ". That seems a dangerous line of thought. There will be many, in the military services as well as in the public services, Mho will question the right of a Conservative politician to quote the bravery of the national armed forces as justification for handing over national assets to private entrepreneurs. If that line of propaganda is now to be pursued, it is in order to ask what rewards will be given to the absentee share.. holders of the private sector companies who became involved in the Falklands exercise and how those payments compare with the payments to public servants who gave their all in that fight. If this sort of debate is to follow from the Falklands, then we are in for a very unfortunate stage indeed in our history.

Over the decades I have never been an addict of nationalisation. I have consistently said that many of my party friends and colleagues have much to learn in this field of public enterprise. It seems to me that the great tragedy in the past year or two is that so much time and energy have been spent in trying to prove that one form of ownership is superior to another when we should have concentrated our attention on improving both. The Bill is entirely negative. It deals with disposals and threats of disposals. There is nothing constructive about it and it does not deserve to pass.

On Question, Bill passed, and returned to the Commons.