HL Deb 14 April 1983 vol 441 cc322-44

4.23 p.m.

Report stage resumed.

Lord Lloyd of Kilgerran

My Lords, if I may continue the debate on the first amendment to the British Shipbuilders Bill, first may I thank the noble Lord, Lord Trefgarne, on behalf of my noble friend Lord Simon, for his letter of 6th April, which dealt with two points which had been raised by my noble friend Lord Simon when speaking to the Question, Whether Clause 2 shall stand part of the Bill?, at the Committee stage. It has been emphasised on this side of the House that this is essentially a bad Bill. It is irrelevant to the needs of the country; it adds nothing to its productivity; it gives no assistance at all towards increasing the wealth of the nation. Therefore, I strongly support the main theme of the amendment moved so clearly a few minutes ago by the noble Lord, Lord Bruce of Donington.

I should have thought that in the circumstances surrounding the recent history of disposal of national assets the Government would have welcomed an amendment to the Bill along the lines indicated by the noble Lord, Lord Bruce of Donington. Some such amendment—that the Government will make arrangements relating to the valuation of any assets to be disposed of—would surely demonstrate to the public that through experience the Government had learned at least one lesson about prudent financing in respect of the disposal of assets. If the Government were to put down an amendment along these lines—not necessarily in the words of the amendment which is before the House; the noble Lord, Lord Bruce of Donington, indicated that he was not committed to its exact wording—I believe that it would assist them. It would avoid them getting into an even more unfortunate position. Indeed, it might improve the Government's position. They would not be criticised in the way that the noble Lord, Lord Bruce of Donington, has criticised them so severely this afternoon.

The media, the press and the public have shown themselves to be dissatisfied with the present statutory arrangements for the disposal of national assets, and I should have thought that an amendment similar to this one would have been helpful to the Government. Prudent financing of the kind indicated in this amendment seems to me to be all the more important in view of the speeches of Ministers both at Second Reading and in Committee. At Committee stage on 29th March the noble Lord, Lord Glenarthur, said at col. 1465 that, inter alia, the Government were seeking to open the way for flexible arrangements with private enterprise". The noble Lord said that with great confidence. Therefore, I am tempted to ask: with whom will these flexible arrangements be made? What are the branches of industry with which the Government are going to be associated? If the Government have certain companies in mind, perhaps they would disclose them at this stage.

At Second Reading, on 7th March, the noble Lord, Lord Trefgarne said at col. 7 that the second element of the Bill empowers the Secretary of State, to direct British Shipbuilders to dispose of assets and to limit or cease activities". Again I am tempted to ask (the noble Lord, Lord Bruce of Donington, had this in mind when he spoke earlier): to whom will the Secretary of State dispose of these assets? Do the Government already have in mind to whom they propose to dispose of them? I see that the noble Lord, Lord Trefgarne, shakes his head and whispers "No" to me across the Floor of the House. Therefore, the disposal of assets is a very sensitive area. That is undisputed. I should have thought that it would have helped the Government if they had put into the Bill a broad indication of the statutory arrangements that they have in mind. They must have in mind some improvement to their past methods of assessing the value of these assets. Therefore, they should put into the statute something about arrangements for obtaining a true and fair value of the assets along the lines suggested in this amendment.

Lord Molloy

My Lords, much of what I wanted to say has already been said by the noble Lord who spoke for the Liberal Party. However, I wish to make one or two points, which I hope the noble Lord will take on board and answer. The irrefragable case submitted by the noble Lord, Lord Bruce of Donington, simply calls for an independent arbitrator. To deal with what? No less a person than the Prime Minister herself said that the Government have no money; it is the people's money, which they pay in taxes. We all agree with that statement. But there is some doubt as to whether the people's money is going to be used judiciously. It cannot be used 100 per cent. judiciously. The very existence of the Bill means that the people's money, which has been paid to the Treasury over the years, is going to be dished out to a few privileged persons. In my judgment, this in itself is almost a criminal act. Nevertheless, we on this side of the House have got to look at what we can do to ease the size of the crime.

I hope that that which my noble friend Lord Bruce of Donington has submitted in his amendment will at least be considered by the Government, and not be simply rejected out of hand, having been looked at for only a couple of minutes in the course of our debate this afternoon. The amendment asks for the establishment of an arbitrator. If the noble Lord who is to respond for the Government has any real concern for—as the Prime Minister herself has said—the people's money, then he ought to be big enough to say that we cannot dismiss this amendment without taking it back and examining it in depth on the basis of the submissions made by my noble friend Lord Bruce of Donington and by the noble Lord on the Liberal Front Bench.

Lord Boyd-Carpenter

My Lords, I cannot recall—although I am sure that the noble Lord, Lord Molloy, will be willing to make up for my lack of recollection—whether at the time when the Government of the day used what he called "the people's money" compulsorily to acquire these shipyards, he showed similar concern for the disposal of "the people's money" at that time. The noble Lord, Lord Molloy, will recall, as the House will recall, that the Government of the day nationalised the shipbuilding industry on the grounds of their general political policy. They tried, although I think somewhat unsuccessfully in this case, to give a fair price to the previous owners—some of them were very badly treated.

Lord Molloy

My Lords—

Lord Boyd-Carpenter

The concern then was not with what the noble Lord so picturesquely called "the people's money"; the concern was with the doctrine of public ownership.

Lord Molloy

My Lords—

Lord Boyd-Carpenter

Does the noble Lord, Lord Molloy, wish to make another speech?

Lord Molloy

My Lords, I am very grateful to the noble Lord, Lord Boyd-Carpenter.

Noble Lords


Lord Glenarthur

My Lords, this is Report stage and I believe that the noble Lord, Lord Molloy, will be out of order if he speaks a second time.

Lord Boyd-Carpenter

My Lords, I will therefore pass on to make one further point. The policy of the present Government, as I understand it—and equally (I hope the noble Lord, Lord Molloy, will accept) dictated by their view of the public interest—is to secure denationalisation or a return to the private sector for these important enterprises. I hate the term "privatisation"; it is a horrible word. It is perfectly clear from the tone of the speech made by the noble Lord, Lord Bruce of Donington, that it was with every intention of making this much more difficult to do that this amendment was put forward.

I will leave one further thought with your Lordships. It is surely extraordinary, in this week of all weeks, that noble Lords should be seeking to interrupt or delay the process of denationalisation in the shipbuilding industry. This week we have had a very unhappy revelation concerning the lack of competitive power of the publicly-owned British Shipbuilders in the case of Cunard's "Countess". It must be a matter of enormous regret to every patriotic citizen of this country that, at a time when the owners of this ship very naturally and properly are anxious, after her war service, to get this ship back on to their profitable Caribbean business, no British shipyard was able to match the timing which the co-operative Malta dockyard has claimed to be able to do.

When one considers the history of the British shipbuilding industry, without falling back into reminiscences, I had some direct experience of this subject some 28 years ago when I was Minister of Transport. It was then the biggest and most efficient shipbuilding industry in the world. It is enormously depressing that for the refitting of this great ship it has been necessary for the owners, if their timetable is to be met, to go abroad to Malta. If that does not leave in your Lordships' minds at least a suspicion that the shipbuilding industry under public ownership is uncompetitive, then nothing will.

Lord Beswick

My Lords—

The Earl of Longford

My Lords, I wish to raise a point of order. It is a long time since I have raised a point of order in this House but I feel bound to raise one now, as an "old timer" here.

The noble Lord, Lord Boyd-Carpenter, referred to my noble friend Lord Molloy. My noble friend then rose to put him right. The noble Lord, Lord Boyd-Carpenter, kindly gave way, whereupon the noble Lord who appears to be in charge of the House called my noble friend to order for some mysterious reason. My noble friend, with remarkable docility and great propriety, then gave way. I want to know under what authority or under which rule my noble friend Lord Molloy was called to order. Why was he silenced at that moment?

Lord Glenarthur

My Lords, if I hurt the noble Lord's feelings in the way that I expressed what I thought was the wish of the House, then I apologise. As I understand it, the convention is that noble Lords speak only once at Report stage. But if the noble Lord, Lord Molloy, was seeking only to elucidate my noble friend Lord Boyd-Carpenter, then he was right and I was wrong.

Lord Molloy

My Lords, may I just say that the noble Lord, Lord Boyd-Carpenter, and I are among those noble Lords who, when we are challenged on any point, immediately give way; he cannot get out of the habit because of his long experience in another place. I was only going to say that the noble Lord inadvertently credited me with certain words which I used but which I made transparently clear were the words not of myself but of the noble Lord's right honourable friend the Prime Minister. I just wanted to make that point.

Lord Beswick

My Lords, I should like to get back to the amendment that is on the Marshalled List. I should like to say to the noble Lord, Lord Boyd-Carpenter, that the question of Cunard's "Countess" has absolutely nothing to do with this amendment. Nor, for that matter, has the question of privatisation anything to do with this amendment. The question of privatisation has been settled in principle by another place and we are not controverting that. What is at issue here is whether the process of sale shall be conducted in an efficient manner to give the best possible results to the British public—a point on which he and I agree.

My noble friend Lord Bruce of Donington said that the present Government make a big issue out of efficiency and getting value for money, and I agree with him. In this particular Bill, in the same clause, it is laid down that, It shall be the duty of British Shipbuilders so to exercise its powers … in the most efficient manner". It seems to me most extraordinary, if that is laid down in the Bill as a duty resting on British Shipbuilders, that there should not be an equal duty upon Her Majesty's Government to conduct the sale of these assets in the most efficient manner.

I am bound to say, having looked at some of these events and having been closely concerned with at least one of them, that I find it difficult to accept that, up to now, the disposal of public assets has been carried out in a very efficient manner. This amendment seems to me to be a quite cold, clinical and open method of disposal. I would have thought that it should have commended itself to your Lordships' House.

The noble Lord, Lord Boyd-Carpenter, spoke about public money. May I tell the noble Lord about one particular item of public money, because I feel very strongly about this? It was involved in the sale of British Aerospace. We there had, in my time, an item off £50 million which had been set aside for payment of dividends on the public dividend capital. Had British Aerospace not been sold off, or partly sold off, or its constitution changed, that £50 million would have gone into the Treasury. In fact, it was not put into the Treasury but was part of the process of massaging the assets in order to secure a ready sale on the market.

The noble Lord, Lord Boyd-Carpenter, or others may say that putting money back into reserves instead of paying them out as dividends, even to the Treasury, might be in the best interests of the corporation later; but not so when one is proposing to give half of the corporation away to the City.

Then there is another case—that of British Airways. British Airways are now planning to write off £1,000 million of their debts; £800 million will be written off by the Treasury. Again, noble Lords will tell me that reconstructing capital is not unknown. If you reconstruct the capital of a company in order to have it efficient in the interests of the same shareholders in the future, that is one thing, but if you reconstruct the capital of an organisation like this simply to make possible the disposal of shares, not for any commercial reason but in pursuance of a party policy, that is quite different. The noble Lord said that British Shipbuilders was nationalised in the first place in pursuance of party policy; that is quite right. I think the Government are quite right, in accordance with party policy—they have a majority—to dispose of these assets. But surely we all must agree that the disposal should be in the most efficient manner.

I do not see how you can fault the amendment in the name of the noble Lord, Lord Bruce, except in certain detail; the principle of it must be right. This is not a party matter. Anybody who has any reservations about the criticism that is being made of this disposal of assets should read what was said by the Treasury Select Committee. I remember the noble Lord, Lord Boyd-Carpenter, telling us on one occasion—I remember all the words the noble Lord says in this House—how authoritative and important the Treasury Select Committee were and what respect we should pay to them. I believe he himself was chairman of it at one time.

Lord Boyd-Carpenter

No, my Lords, the Public Accounts Committee.

Lord Beswick

Yes, my Lords, the Public Accounts Committee. But the noble Lord did say, he will agree, how authoritative this committee was. I invite noble Lords to read the account that that Select Committee published about the sale of British Aerospace and then come to this House and tell me that the sale was conducted in the most efficient manner. It just was not. I put to the House that we have before us an amendment which does make sense. It is nothing to do with party politics, it is not concerned with any arguments about the Cunard "Countess " and is not seeking to set aside the principle of privatisation. It is simply saying that we should do what is intended to be done in a reasonably efficient manner. I hope very much that the noble Lord who is responding for the Government will be able to say that the principle of this amendment is accepted.

Lord Howie of Troon

My Lords, I should like very briefly to support my noble friend Lord Beswick in the very sober comments he had just made. A few moments ago, before he spoke, the House became a little over-excited. Both my noble and old friend Lord Molloy and my old friend and adversary on the other side of the House, the noble Lord, Lord Boyd-Carpenter, spent a number of years in another place where they learned bad habits, and just for a moment their bad habits came uppermost this afternoon. I think that on reflection both of them perhaps overreacted to the situation. My noble friend Lord Bruce moved a very sober and a very sensible amendment, and it was very adequately supported by my noble friend Lord Beswick. I thought that in the exchanges between my noble friend Lord Molloy and the noble Lord opposite, Lord Boyd-Carpenter, the Treasury Bench got a little over-excited, too. I think that the Treasury Bench should relax and soberly reflect on what Lord Bruce actually said and what Lord Beswick actually said, rather than the excitement that was generated by my noble colleagues on both sides, and consider whether or not there is more in this amendment than they at first thought. I think in that way the reputation of this House would be greatly enhanced and the furtherance of this Bill would be greatly improved.

Lord Trefgarne

My Lords, we have had a wide-ranging debate. if I may say so, on this amendment. I make no complaint about that, but I hope your Lordships will forgive me if I confine my reply to the essence of the amendment as I see it. These complex amendments—because we are, as the noble Lord said at the outset, considering three amendments—would have far-reaching effects upon the ability of the Secretary of State to exercise his powers of direction. It is central to our purpose in introducing this Bill that those powers would be used in the long-term interests of the industry. This is the purpose of these powers. It is, for example, our intention that the powers would be used to build upon the strengths of the industry and not for any purposes extraneous to the industry's needs. In using these powers we would be concerned also to safeguard the interest of the taxpayer.

If these amendments were accepted they would seriously inhibit and delay implementation of a direction to dispose. The concept of a willing seller and willing buyer price is one which is readily grasped in a market where a standard commodity is regularly traded. But in this industry every shipyard is unique and rarely does ownership change. A market price is very difficult to determine. Without such a determination, however, a direction would not be enforceable short of arbitration, and I cannot envisage arbitration in these circumstances, with each party no doubt wishing to table specialist merchant bank advice, being other than a lengthy process. The effect of this amendment, therefore, would be to impede use of these powers and to cast doubts upon the ability to enforce a direction. Such delay and doubts would seriously harm the industry. While the enforceability of a direction and the eventual ownership of a company were open to considerable uncertainty, there would be damage to management and employee morale, difficulties in long-term planning, and potential contracts for our shipbuilding industry could well be lost. Indeed it is more than likely that in these circumstances the potential purchaser would not be prepared just to wait in the wings.

It may be argued that if British Shipbuilders agreed a price a willing seller/willing buyer price would have been established and that therefore there would be no doubt about the enforceability of a direction. But I do not think that this follows. If British Shipbuilders willingly participate in a sale, the question of enforceability does not arise; indeed a direction would not be necessary. If, however, a sale were subject to a direction requiring BS to sell, then they could not be considered as a willing seller, even if they accepted the price. Given the unique nature of the assets, a willing seller/willing buyer price would still be as difficult to establish and the ability to enforce an order would remain open to doubt.

I hope that in the light of the difficulties I have described, which relate specifically to the amendments before your Lordships, the noble Lord, Lord Bruce, will see fit not to press the amendment.

Lord Bruce of Donington

My Lords, I must express my immediate regret that the noble Lord has not seen fit to accept this amendment. The arguments that he has adduced about the loss of time in the process of determining a fair price certainly cannot stand up to any kind of examination at all. We have already said, and indeed it has been reinforced by the noble Lord, Lord Lloyd of Kilgerran, that this Bill itself and the whole process of privatisation adds nothing at all to the country's productive capacity; it has no impact whatever on that. All that it really means, within the context of what the noble Lord has already said, both at Second Reading and at Committee, is that an opportunity is given to private capital to acquire companies which have an assured profit on a cost-plus basis, and are virtually on that account alone gilt-edged. To pretend for one moment that that influences British Shipbuilders' prospects of obtaining orders, or indeed affects its reputation professionally, is, as the noble Lord knows, a complete nonsense.

In point of fact, the management of British Shipbuilders has various experts in a managerial, technical and financial control capacity, and indeed in an ordinary production and works capacity. All this is well known and acknowledged. The personnel who run British Shipbuilders are some of the finest managers and technicians in the country. That point has very often been acknowledged by the noble Lord opposite.

It is not the mere name of British Shipbuilders or the abstract personality of the corporate bodies composing it, which have perpetual life precisely because they are abstract bodies; it is the actual people who work the industry who carry the respect and the work. To think for one moment that their reputation or the future of British Shipbuilders will be affected by the adoption of this procedure is, as the noble Lord well knows, completely wide of the mark and is entirely irrelevant.

All that the amendment seeks to do is to make everything open, fair and above board. As my noble friend Lord Beswick was kind enough to indicate, it is not even a party matter. It is purely a national question of doing the right thing in the right way. If the noble Lord had any experience at all of determining share values and asset values, I assure him, as one who has been engaged in this process professionally for a number of years, that he would find that it is not as complicated as he would think. It is a matter susceptible of the application of the normal professional rules.

One thing of which I am certain and one thing on which the House may perhaps accept my assurance, is that, when the professionals who are skilled in the art of valuing enterprises and share prices are involved in this, they employ far more talent than, I regret to say, is available in the general administrative grade of the Civil Service, or even among some Ministers themselves. They know what they are doing.

I regret, therefore, that the noble Lord has not seen fit to accept the amendment and I also regret very much that I am forced to press the amendment to a Division.

4.52 p.m.

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

Their Lordships divided: Contents, 63; Not-Contents, 108.

Amulree, L. John-Mackie, L.
Ardwick, L. Kagan, L.
Aylestone, L. Listowel, E.
Banks, L. Lloyd of Kilgerran, L.
Beaumont of Whitley, L. Longford, E.
Beswick, L. Lovell-Davis, L.
Birk, B. McCarthy, L.
Bishopston, L. [Teller.] McIntosh of Haringey, L.
Boston of Faversham, L. Milner of Leeds, L.
Briginshaw, L. Molloy, L.
Brockway, L. Nicol, B.
Bruce of Donington, L. Peart, L.
Caradon, L. Phillips, B.
Collison, L. Pitt of Hampstead, L.
Cooper of Stockton Heath, L. Ponsonby of Shulbrede, L. [Teller.]
Diamond, L.
Donaldson of Kingsbridge, L. Roberthall, L.
Ewart-Biggs, B. Rochester, L.
Fisher of Rednal, B. Scanlon, L.
Gaitskell, B. Serota, B.
Gallacher, L. Shinwell, L.
Gladwyn, L. Stedman, B.
Gormley, L. Stewart of Alvechurch, B.
Hampton, L. Stewart of Fulham, L.
Hanworth, V. Stone, L.
Harris of Greenwich, L. Strabolgi, L.
Hooson, L. Underhill, L.
Howie of Troon, L Wallace of Coslany, L.
Hunt, L. Wells-Pestell, L.
Jacques, L. Wigoder, L.
Jeger, B. Wilson of Langside, L.
Jenkins of Putney, L. Wootton of Abinger, B.
Alexander of Tunis, E. Hornsby-Smith, B.
Alport, L. Hunt of Fawley, L.
Ampthill, L. Hylton-Foster, B.
Avon, E. Ilchester, E.
Belhaven and Stenton, L. Killearn, L.
Beloff, L. Lane-Fox, B.
Bessborough, E. Leatherland, L.
Boyd-Carpenter, L. Lloyd of Hampstead, L.
Caithness, E. Long, V.
Campbell of Alloway, L. Lucas of Chilworth, L.
Campbell of Croy, L. Lyell, L.
Cathcart, E. McAlpine of Moffat, L.
Chelwood, L. Mackay of Clashfern, L.
Clitheroe, L. Malmesbury, E.
Coleraine, L. Mancroft, L.
Cox, B. Massereene and Ferrard, V.
Cullen of Ashbourne, L. Melville, V.
Daventry, V. Merrivale, L.
Davidson, V. Mersey, V.
De L'Isle, V. Milverton, L.
Denham, L. [Teller.] Minto, E.
Derwent, L. Molson, L.
Drumalbyn, L. Mottistone, L.
Ebbisham, L. Mountgarret, V.
Ellenborough, L. Mowbray and Stourton, L.
Elliot of Harwood, B. Moyne, L.
Elphinstone, L. Murton of Lindisfarne, L.
Elton, L. Nelson of Stafford, L.
Ferrers, E. Newall, L.
Fortescue, E. Northchurch, B.
Fraser of Kilmorack, L. Nugent of Guildford, L.
Gainford, L. O'Brien of Lothbury, L.
Gardner of Parkes, B. Orkney, E.
Garner, L. Orr-Ewing, L.
Glanusk, L. Plummer of St. Marylebone, L.
Glenarthur, L.
Grantchester, L. Portland, D.
Gray, L. Rankeillour, L.
Gridley, L. Renton, L.
Hailsham of Saint Marylebone, L. Romney, E.
St. Aldwyn, E.
Halsbury, E. St. John of Bletso, L.
Hives, L. Salisbury, M.
Home of the Hirsel, L. Sandford, L.
Sandys, L. Taylor of Hadfleld, L.
Sempill, Ly. Terrington, L.
Skelmersdale, L. Teynham, L.
Somers, L. Thorneycroft, L.
Spens, L. Trefgarne, L.
Stamp, L. Trumpington, B.
Strathcarron, L. Vaux of Harrowden, L.
Strathspey, L. Vivian, L.
Sudeley, L. Ward of Witley, V.
Swansea, L. Westbury, L.
Swinton, E. [Teller.] Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 2 and 3 not moved.]

5.2 p.m.

Lord Bruce of Donington moved Amendment No. 4: Page 4, leave out lines 10 to 15.

The noble Lord said: My Lords, this amendment has been put down for purely exploratory reasons, and I do not intend to speak on it at all. I would appreciate it if the noble Lord would explain the circumstances that he has in mind that would occasion the use of subsection (6)(b). As he will see, it gives power to the Secretary of State to give directions to secure: that the share capital of the company is increased by the sum and in the manner so specified and that any share or shares representing the whole or any part of that sum are issued to the Secretary of State or to a nominee of his". If the noble Lord would be kind enough to explain the practical application of that particular paragraph within the context of the clause as a whole I would be most grateful. At the same time, perhaps the noble Lord would explain, when any share or shares representing the whole or any part of that sum are issued to the Secretary of State or to a nominee of his", what consideration will be forthcoming for the particular shares that are issued either to the Secretary of State or to his nominee.

Lord Glenarthur

My Lords, perhaps I can explain to the noble Lord, Lord Bruce of Donington, the purpose of paragraph (b) of the new Section 4B(6) which this amendment would delete. Both paragraphs (a) and (b) of subsection (6) are intended to prevent our warship building yards coming under foreign control. If British Shipbuilders decided to dispose of a warship building yard or the Secretary of State directed them to do so, paragraph (a) would enable the Secretary of State to direct British Shipbuilders to amend the articles of association of the company in such a way as, for example, to restrict the size of foreign shareholdings or the nationality of the directors.

Paragraph (b) would enable the Secretary of State to direct British Shipbuilders to create a special rights preference share to be held by the Secretary of State or his nominee. Holding such a share would mean the Secretary of State's consent would be required before the relevant articles of association could be changed. This would ensure that even after disposal the restrictions on, for example, the size of foreign shareholdings in the new company could not be lifted without the Secretary of State's consent. I think that I should point out that the powers under paragraphs (a) and (b) would be used only for national security reasons which would not breach our obligations under the Treaty of Rome.

The noble Lord, Lord Bruce of Donington, talked about consideration, or what might be the results or proceeds of any disposal. I think that was the drift of the argument that he was putting forward—the consideration for any shares that may be sold. The answer is that the consideration would go to British Shipbuilders. British Shipbuilders at corporate level, or one of the subsidiaries, whichever is the owner of the property being sold, will receive the proceeds. As a group, British Shipbuilders consumes rather than generates cash, and depends on the taxpayer to meet deficits. The proceeds received by British Shipbuilders arising from any disposal could go to reduce this deficit to the benefit of taxpayers, who have put into British Shipbuilders over £700 million. Alternatively, the proceeds could be re-invested in the industry. This would depend on opportunities for profitable investment at the time, and no assurance can be given now about how the proceeds which will go to British Shipbuilders will be used.

The noble Lord explained that it was a probing amendment. To accept it would mean that, even though the Secretary of State could safeguard against British Shipbuilders disposing of a subsidiary to foreign ownership, there would be nothing to prevent the newly privatised company changing the articles of association in such a way as to lift these restrictions. I hope that, in the light of that explanation, the noble Lord will see fit to withdraw his amendment.

Lord Bruce of Donington

My Lords, I am most grateful to the noble Lord for the explanation that he has given, which has supplied the House with a good deal of information which did not arise from this amendment but which is very welcome all the same. There is just one small technical point that he did not clear up finally. When the shares are issued to the Secretary of State or to his nominee, what cash passes? Does the Secretary of State pay for the shares that are issued to him? The noble Lord said that they would be a rights issue, but a rights issue presupposes that the Secretary of State already holds some shares; otherwise, rights would be of no value. Would the noble Lord just explain? It is a purely technical point. I do not want to press him too hard upon it, but I should like to know how it works in that way. I am looking at the accounting entries as well as the passage of cash.

Lord Glenarthur

My Lords, with the leave of the House, I think that the information the noble Lord seeks is that it is a special preference share for which there is no consideration—that is, no cash. I hope that clarifies the point he raised.

Lord Bruce of Donington

My Lords, no, not entirely, but perhaps the noble Lord will solve this matter by correspondence. I am most grateful to him for the information he has given to me and to the House, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.8 p.m

Lord Bruce of Donington moved Amendment No. 5: Page 4, leave out lines 22 and 23 and insert ("which shall be laid before Parliament after being made and shall cease to have effect at the end of a period of twenty-eight days beginning with the day on which it was made unless during that period they are approved by resolution of each House of Parliament").

The noble Lord said: My Lords, this amendment seeks to ensure that when there is exercise of the powers which the Secretary of State takes under Clause 2 to order the cessation of activities of British Shipbuilders, or a change in them, or to order a disposal, then any regulation by virtue of which that direction is given should be subject to the positive approval of both Houses; in other words, that it should go through under the affirmative procedure.

It will be within the recollection of the House that the noble Lord, Lord Trefgarne, attached importance to the exercise of powers under Clause 2. Clearly, the exercise of the powers to direct were not trivial matters in his mind, because he explained that any delay in their exercise would have disastrous consequences for the industry as a whole. He gave a whole catalogue of woes that would follow any delay in the exercise of the powers taken under Clause 2. As the Bill now stands, Clause 2(7) states: Any power to make orders conferred by this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament".

That is, of course, the negative procedure. I venture to suggest that the important exercise of powers under Clause 2 certainly warrants the adoption of the positive procedure and requires the Secretary of State to come down to both Houses to obtain Parliament's consent. This is all a matter of relative priority. It is not a matter necessarily of precedent in other nationalisation Bills. The House is always careful to guard its position as a check upon the Executive and in important instances normally insists on the affirmative procedure, sometimes under rather peculiar circumstances.

Noble Lords will recall that, in the Companies Act 1981, the positive procedure is there in order merely to change a name eligible for inclusion in a schedule to the Act. I should like to draw your Lordships' attention to the debate that took place on 16th December in your Lordships' House, when the noble Lord, Lord Lyell, rose to move that the regulations laid before the House on 24th November 1982 be approved. This was merely for the addition of a couple of words to what must be regarded as a comparatively obscure schedule to the Companies Act of 1981. Yet, in the Government's view, it merited the affirmative procedure. Indeed, a debate took place upon it. It was disposed of in one of those glorious periods that commence at 7 o'clock in the evening and go on until about 8 o'clock when your Lordships disport themselves elsewhere for refreshment. It was disposed of during that time by the affirmative procedure.

If the affirmative procedure is initiated by the Government on what, on any grounds, must be regarded as a very trivial matter, how can they possibly resist the application of the affirmative procedure in what the noble Lord, Lord Trefgarne, has described as the exercise of most important and, indeed, nationally significant powers contained within Clause 2 of the Bill? I hope, notwithstanding the representations of the Parliamentary counsel, his own senior civil servants and all the upper agencies of his department, that the noble Lord will see fit to assent to this reasonable request. It is made in no partisan spirit. It is made in the best traditions of the proper exercise of checks and balances in this House and in another place. I hope sincerely, therefore, that, on this occasion, the noble Lord will feel disposed to accept the amendment.

Lord Campbell of Alloway

My Lords, any lawyer, by his instincts and training, must support the affirmative procedure as preferable in the interests of serving as a check on the Executive. One would not be true to one's training if one did otherwise, but it is certainly for me a preference: it is not an article of faith on which I would go into a Division lobby against the Government. On the other hand, I am not prepared to sit silent while so important a subject is under debate.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne)

My Lords, this amendment is clearly designed to wreck Clause 2 of the Bill. The noble Lord, Lord Bruce of Donington, has proposed a constraint that, despite his reference to the Companies Act, has certainly not appeared in any comparable previous legislation. Most, if not all, of the orders to discontinue or restrict activities, or to dispose, would relate differently to members of a specific class. Therefore, to apply the affirmative procedure to the orders could make them hybrid. They would thus be subject to the procedure for private or hybrid Bills. To have to adopt such laborious and time-consuming procedure would surely be an unnecessary encumbrance. It would blunt the effectiveness of the powers, if not remove their effectiveness altogether. I do not think that I need to say more in reply to this amendment. I hope also that I have persuaded my noble friend Lord Campbell of Alloway. I hope that your Lordships will not agree to the amendment.

Lord Campbell of Alloway

My Lords, before the noble Lord sits down, I accept totally that if there is this problem of hybridity—

Lord Trefgarne

My Lords, my noble friend needs the leave of the House.

Lord Campbell of Alloway

With the leave of the House—

Noble Lords


Lord Trefgarne

My Lords, if I may intervene, my noble friend cannot speak, I believe, even with the leave of the House.

Lord Bruce of Donington

My Lords, I very much regret the attitude of the noble Lord, Lord Trefgarne. I believe that a constitutional principle is involved. I do not accept the observation that he has made concerning hybridity and the rest. The noble Lord knows perfectly well what are the effects of the affirmative order. It is widely used. I shall not say more. I propose to divide the House.

5.18 p.m.

On Question, Whether the said Amendment (No. 5) shall be agreed to?

Their Lordships divided: Contents, 44; Not-Contents, 91.

Ardwick, L. Listowel, E.
Beswick, L. Longford, E.
Bishopston, L. [Teller.] Lovell-Davis, L.
Briginshaw, L. McCarthy, L.
Brockway, L. McIntosh of Haringey, L.
Bruce of Donington, L. Melchett, L.
Caradon, L. Milverton, L.
Collison, L. Molloy, L.
Cooper of Stockton Heath, L. Nicol, B.
Elwyn-Jones, L. Peart, L.
Fisher of Rednal, B. [Teller.] Phillips, B.
Gaitskell, B. Pitt of Hampstead, L.
Gallacher, L. Ponsonby of Shulbrede, L.
Gregson, L. Scanlon, L.
Houghton of Sowerby, L. Serota, B.
Howie of Troon, L. Shinwell, L.
Jacques, L. Stewart of Alvechurch, B.
Jeger, B. Stewart of Fulham, L.
Jenkins of Putney, L. Strabolgi, L.
John-Mackie, L. Underhill, L.
Kagan, L. Wallace of Coslany, L.
Leatherland, L. Wootton of Abinger, B.
Avon, E. Lawrence, L.
Beloff, L. Long, V. [Teller.]
Boyd-Carpenter, L. Lucas of Chilworth, L.
Caithness, E. Lyell, L.
Campbell of Alloway, L. Mackay of Clashfern, L.
Campbell of Croy, L. Malmesbury, E.
Cathcart, E. Mancroft, L.
Chelwood, L. Massereene and Ferrard, V.
Clitheroe, L. Merrivale, L.
Coleraine, L. Mersey, V.
Cox, B. Minto, E.
Craigavon, V. Molson, L.
Cullen of Ashbourne, L. Mottistone, L.
Daventry, V. Mountgarret, V.
Davidson, V. Mowbray and Stourton, L.
De L'Isle, V. Murton of Lindisfarne, L.
Denham, L. [Teller.] Newall, L.
Derwent, L. Northchurch, B.
Drumalbyn, L. Nugent of Guildford, L.
Ebbisham, L. O'Brien of Lothbury, L.
Elliot of Harwood, B. Orkney, E.
Elphinstone, L. Orr-Ewing, L.
Elton, L. Portland, D.
Ferrers, E. Rankeillour, L.
Ferrier, L. Romney, E.
Fortescue, E. St. Aldwyn, E.
Fraser of Kilmorack, L. St. John of Bletso, L.
Gainford, L. Salisbury, M.
Gardner of Parkes, B. Sandford, L.
Garner, L. Selsdon, L.
Glanusk, L. Sempill, Ly.
Glenarthur, L. Skelmersdale, L.
Grantchester, L. Spens, L.
Gray, L. Stamp, L.
Gridley, L. Strathcarron, L.
Hailsham of Saint Marylebone, L. Strathspey, L.
Sudeley, L.
Halsbury, E. Tenyham, L.
Harvington, L. Thomas of Swynnerton, L.
Hives, L. Trefgarne, L.
Home of the Hirsel, L. Vaux of Harrowden, L.
Hornsby-Smith, B. Vickers, B.
Hunt of Fawley, L. Vivian, L.
Hylton-Foster, B. Ward of Witley, V.
Ilchester, E. Westbury, L.
Lane-Fox, B. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.25 p.m.

Lord Rochester moved Amendment No. 6:

Page 4, leave out lines 44 and 45 and insert— ("(3) Section 18 of the 1977 Act (annual report) shall be amended as follows—

(a) after subsection (1) there shall be inserted the following subsection— (1A) The report of the corporation under subsection (1) above shall contain a statement describing the action that has been taken during the financial year to introduce, maintain or develop arrangements aimed at—

  1. (i) providing employees systematically with information on matters of concern to them as employees,
  2. (ii) consulting employees or their representatives on a regular basis so that the views of employees can be taken into account in making decisions which are likely to affect their interests,
  3. (iii) achieving a common awareness on the part of all employees of the financial and economic factors affecting the performance of the corporation,
  4. (iv) otherwise encouraging the involvement of employees in the corporation's performance."

(b) after subsection (3) there shall be inserted the following subsection—")

The noble Lord said: My Lords, this amendment, No. 6, arises from one which was moved by the noble Lord, Lord Bruce of Donington, at the Committee stage of the Bill in which he sought, unsuccessfully, to reverse the Government's decision—taken by eliminating the whole of Section 2 of the Aircraft and Shipbuilding Industries Act I977—to repeal among other existing British Shipbuilders' statutory duties one which obliges the corporation, in the words of the statute: to promote industrial democracy in a strong and organic form". In supporting that amendment my noble friend Lord Simon reaffirmed that we on these Benches and, indeed, our allies, are very keen to see more progress made on employee involvement. My noble friend Lord Simon recognised that the phrase used in the Act was a somewhat nebulous one, but said that since the requirement already existed its removal would give the impression that the Government did not want to see the matter followed up.

In replying to the debate the noble Lord, Lord Trefgarne, said that British Shipbuilders' subsidiaries would be required to report progress on industrial democracy following the amendment to the Companies Act 1967 introduced by the recent Employment Act, and he expected British Shipbuilders to do so as well. This amendment is designed to ensure that that expectation is realised, and in saying so I am not in the least seeking to disparage whatever the corporation is already doing in this field.

With two substantial exceptions the wording is the same as in Section 1 of the Employment Act 1982, which requires companies employing more than 250 people to describe the action that has been taken during any financial year to develop employee involvement in certain specified ways. The first exception arises from the fact that British Shipbuilders are not a company and the corporation cannot, therefore, be brought within the scope of the Companies Act 1967. For that reason the amendment before us aims to fulfil the same purpose by imposing a statutory duty on British Shipbuilders to state in their annual report what progress has been made in this field.

The second exception follows the first. Since British Shipbuilders are not a company, involvement of the corporation's employees in its performance cannot be encouraged through an employee share scheme. In this amendment the words, otherwise encouraging the involvement of employees in the corporation's performance have therefore been substituted for those used at the relevant point in the Employment Act.

I should not be moving this amendment if it was not aimed at making progress towards a more important objective which I hope the noble Lord, Lord Trefgarne, and indeed many others on the Benches opposite, will support. Section 1 of the Employment Act 1982 follows closely the amendment on employee participation which I moved, and which the House agreed to, at the Report stage of the Employment Bill last July. In welcoming the new clause which the Government introduced at Third Reading of the Bill on 13th October last I regretted that, through being obliged to use the vehicle of the Companies Act, it was not possible to extend to the whole of the public sector the requirement to report on progress made in developing employee involvement. I said that because in my view the need for progress in this field is even more urgent in the public than in the private sector of industry, and the nation would benefit greatly if that need could be met. I expressed the hope that, as opportunity offered, we would be prepared to remedy the defect.

When the new clause was considered by another place on 25th October, one of those who spoke was the honourable Member for Kidderminster, Mr. Esmond Bulmer. In a Private Member's Bill he had earlier sought, without success, to achieve much the same objective as that ultimately secured in the Employment Act. At col. 768 of Hansard of 25th October he said: I am sure that in due course the Minister will wish to address himself to a glaring omission in the Bill's approach—the exclusion of the public sector. There is a greater problem in the public sector in terms of 'us and them' than in the majority of private companies.

I move this amendment not primarily because of what it can be expected to achieve in British Shipbuilders, but as an indication to those responsible for running all nationalised industries and public services that more should be done to encourage the involvement of employees as the most effective way in which their motivation and performance can be improved. It may be said that it would be wrong to place this duty only on British Shipbuilders and not on other parts of the public sector; but it is difficult to see how all the elements making up the public sector could be brought within the scope of a single Bill for this purpose. If they can, and if the Government are prepared to give an undertaking that they will introduce the necessary legislation at the earliest opportunity, I shall, of course, withdraw this amendment.

However, I should like to ask the noble Lord who is to reply the direct question: what are the Government's plans for developing employee involvement in the private sector? Failing a satisfactory response, we as a House should surely act wherever we can, and this Bill gives us the chance to do so in the nationalised shipbuilding industry. Further, it may be claimed that there is no need for the amendment because there are relatively few people employed in the corporation as such, and anyway it is the Government's intention in due course to move British Shipbuilders back into the private sector of industry. But that intention might not be realised for some time—or, indeed, at all.

In any case, surely nothing is to be lost by accepting this amendment now. Indeed, in my view it would be inconsistent with the decision which the House has already taken in principle on this matter if the amendment is not now agreed to. I cannot think of any technical flaws in it which might make it unacceptable to the Government, but if there are any I shall gladly withdraw it so that they can be remedied at Third Reading. At the very least I hope that, if the Government cannot accept the amendment today, they will agree to take the matter back for further consideration between now and Third Reading of the Bill, which I understand is to take place in a week's time. I beg to move.

Lord Aylestone

My Lords, briefly, I should like to support my noble ally in this amendment. I think it is recognised by everyone in the House that one of the main troubles in industry is lack of communication, and anything that we can do to improve what is known as "industrial democracy" will help in solving problems within industrial relations. I fail to understand why—and perhaps I have not read the detail of the Second Reading debate as I should have done—the Government thought it necessary to repeal that section in the Aircraft and Shipbuilding Act 1977 which required the corporation to engage in industrial democracy. It was taken out completely. I am sufficiently charitable to hope that at a later stage the Government may still decide to insert something.

But failing that, we have in front of us the amendment moved by my noble friend, which is in line with a decision taken by this House on an amendment of the Employment Act 1982, when this House decided, on a vote, to put in a clause providing that in its annual report every company in the country with more than 250 employees should report on what it is doing in the field of industrial democracy. That was carried by this House; and, as is usual, of course, we accepted the Government's view that in its form the amendment as moved in this House was not quite acceptable. So the Government came forward at a later stage—I believe on Third Reading—and included what is now in the Employment Act 1982. This amendment does precisely the same thing in respect of this Bill, and I hope that this House will repeat the action that it took on the Employment Act, and carry this amendment.

Lord Beswick

My Lords, briefly, I should like to support this amendment. I do so partly because of what was said at an earlier stage of the Bill about the wording of the 1977 Act, which is removed by this Bill. I understand that a number of my noble friends and noble Lords opposite were a little worried about the expression "industrial democracy in a strong and organic form". I think that conceivably I was to blame for this. To reminisce, there was a certain amount of enthusiasm among certain of my friends for having in a Bill a cut and dried scheme of industrial democracy, but I felt it was a mistake to impose from above. My argument was that it had to grow from below, and I used the expression "organic". It is not a word which the parliamentary draftsmen customarily use, and I rather think that it was picked up from the discussion that we then had. But there was merit in my thinking. I am absolutely certain that if we are to get industrial democracy which lasts and which takes root, it must grow up from below.

If we have that idea, I find it difficult to believe that anyone can find anything to fault in this amendment. It is a modestly worded amendment. But, as I see it, the idea of the noble Lord is not simply to have this in relation to British Shipbuilders. He is endeavouring to create an atmosphere in which it is taken as the ordinary course of things that in any organisation—public, private or whatever—it is naturally thought that one should encourage the involvement of employees in the organisation's performance, or that we should try to achieve a common awareness on the part of all employees. If we can do that and take it for granted that that is done, I think we shall find that we are on the way to what I should like to see as a form of industrial democracy. I should have thought it inconceivable that the Government could find a reason for rejecting this amendment. I hope they will tell us that they will take it on board.

Viscount Massereene and Ferrard

My Lords, in this House I have always fully supported the sentiments behind this amendment. But with respect to the noble Lord, Lord Rochester, did he not make a slip of the tongue when he asked what plans the Government had in regard to industrial democracy in respect of private companies? Surely he meant to say the public sector, did he not?

Lord Rochester

My Lords, with the leave of the House, if I may respond, it may be that there was a slip of my tongue. If so, I apologise, and I am most grateful to the noble Viscount for drawing the attention of the House to it. I did indeed mean what he is suggesting.

Viscount Massereene and Ferrard

My Lords, private companies for some considerable time, and I think almost all private employers in a private capacity, have always tried to explain to their employees the economic factors, and to take them into their confidence on various aspects that concern the employees. I do not know whether this amendment is correctly drafted or not. It appears all right to me, but I am not a parliamentary draftsman, and there will not be any future stage on this Bill, apart from Third Reading.

However, this is a process that must come about. There are a lot of employees who are only interested in their wage packet, which is quite natural, and they are not really interested in the performance of the company. On the other hand, a great number of employees, perhaps even a majority, are interested in the progress of their company. The more that can be explained to them of the whys and wherefores, and why the company will not make a profit if such and such a thing happens, or will make a profit if something else happens, the better.

As we all know, we live in an extremely competitive world. Certainly as regards British Shipbuilders we do. I know they are different because they are not a company, and I do not really see how this amendment could apply to the present Bill. We have only to take notice of the Cunard "Countess". If the employees of the various firms under British Shipbuilders had been taken more into the firm's confidence, as with the setting up of the task force for the Falklands, they would have put their whole heart into it and the Cunard "Countess" might have been able to be refitted in this country. That is evidently not so now.

I remember when I was in a shipping company and we were building a ship. It is true that we could have got better terms abroad, but we did not because we felt that it was slightly unpatriotic to do so. I do not want to criticise in any way the leadership of Cunard, because obviously they are under tight deadlines to start cruises, and they must go to the shipyard which can refiit the ship in the shortest possible time. Foreign currency coming from meeting that deadline for their cruises will probably more than repay the British economy for their decision. But, of course, it is sad that it will cause a loss to British shipyards. I have rather gone off the point, which I should not have done. I should like to say that I heartily endorse the sentiments behind this amendment. The more the employees in any industry can be told of any aspect which concerns them, the better.

5.45 p.m.

Lord Bruce of Donington

My Lords, noble Lords will forgive me if I do not follow the line pursued by the noble Viscount, Lord Massereene and Ferrard, save to say that he reminded me of the story, which is perhaps apocryphal, attending the election to the presidency of the United States of the late President Hoover. He, on being asked a question at an election meeting, would ponder deeply and then say, "Well, yes. And then again, no". Thereby securing the support of a sufficient majority of the electorate to return him to office.

If the noble Lord, Lord Trefgarne, is disposed to reject this amendment on the grounds that, if he accepted it, the Government would have to amend a lot of other Acts to bring them into conformity, I sincerely hope that he will not. He will recall that this amendment itself was occasioned by the deliberate deletion from the 1977 Act of the provision referred to by my noble friend Lord Beswick relating to the promotion of "industrial democracy in a strong and organic form". I do not propose to repeat the arguments that I used in the Committee stage on this Bill because they have already been covered very adequately by the noble Lord, Lord Rochester, and my noble friend Lord Beswick. I sincerely hope that the Government will agree to this amendment.

The fact that it is designed to apply to a corporation not covered by the Companies Act is quite apposite because the corporation itself, by virtue of its control of the various companies concerned, which are themselves responsible under the Companies Act, as the holding company has power over the policies of its subsidiaries. Therefore, it is quite proper for this kind of amendment to be incorporated.

I myself would have preferred the amendment to have been in a slightly different and more comprehensive form. Indeed, my party also would have preferred it to be a little more definite in some respects. But it represents progress in what we consider to be the right direction. If the noble Lord, Lord Rochester, takes the matter to a Division—on the assumption that the noble Lord does not accept the amendment—we on this side of the House will support the noble Lord, Lord Rochester.

Lord Campbell of Alloway

My Lords, I wholly support the spirit behind this amendment as expounded by the noble Lord, Lord Rochester, for it seeks to introduce into the public sector principles of employee involvement, adapted albeit, which as regards the private sector are embodied in Section 1 of the Act of 1982. Not only that, as a matter of principle it serves a useful and constructive purpose in marking a signpost: a signpost which points the way towards a new approach in industrial relations in the public sector.

However, there are objections. Can it be right to adopt a piecemeal approach, industry by industry, as this amendment seeks to do, starting with the shipbuilding industry? Must we not have a general approach to industrial relations in the public sector? Is not this question of employee involvement part and parcel of that general approach?

I hope the Minister will be able to endorse the spirit of the amendment, although it would be wrong to pre-empt legislation which may be on its way to deal with industrial relations in the public sector generally, by the extraction of a single ingredient of general policy for a particular industry because it happens not to be a company. There are other employees in the public sector who do not serve companies. This is an important question and a general problem, and although the amendment serves as a valuable vehicle for debate, I submit that it would not afford a useful addition to the statute book.

Lord Somers

I am no expert on this subject, my Lords, but I find it difficult to understand why an approach to it which is what the noble Lord, Lord Campbell, described as a piecemeal approach would necessarily be ineffective. Surely if one adopts a policy of that sort in one part of industry and the results are proved to be successful, other parts of industry will be all the more willing to adopt it. I should have thought that as an experiment it would be a good thing.

Lord Trefgarne

My Lords, securing genuine employee involvement is one of the main challenges facing management today. We do not believe that can be done by putting companies into a tight legal straitjacket. The Government view is that employee involvement is best achieved by voluntary means and that management must assess for itself exactly what arrangements best suit its circumstances.

British Shipbuilders have made considerable efforts in that direction. At national level BS regularly meets the trade unions to discuss the major issues facing the industry, at least every other month and more frequently when urgent strategic issues need to be discussed. At local level, every subsidiary of the corporation has set up consultative machinery which includes the joint monitoring of progress on productivity and other matters. Trade unions are also consulted in the process of the formulation of the corporate plan. The Government have consistently encouraged employers to devote more attention to communicating and consulting with their employees.

Lord Beswick

My Lords, may I ask the Minister to make it clear, before he leaves that passage, that what he has just recited has been done by British Shipbuilders in accordance with the requirement in the 1977 Act?

Lord Trefgarne

With respect, the noble Lord's intervention is out of order.

Lord Bruce of Donington


Lord Trefgarne

However, as your Lordships will be aware, the new Employment Act includes a provision requiring directors' reports of larger companies to contain statements of the sort described in the amendment. British Shipbuilders' 31 subsidiaries are Companies Act companies and will be bound by the Employment Act. Statements on employee involvement should start to appear in the annual reports of BS subsidiaries from January 1984.

The British Shipbuilders Corporation, which employs only about 1 per cent. of the group's manpower, is in itself not a Companies Act company, but its consolidated reports and accounts reflect Companies Act requirements. It is Government policy that the nationalised industries should do that. All the corporation's consolidated reports and accounts to date have included reports on employee involvement, and I would expect BS to continue that practice.

I argue, therefore, that the amendment, even in spirit, is not desirable. In all its essentials it would duplicate the requirements of existing legislation, and the amendment is therefore unnecessary. I would add, however, that if BS fails to publish adequate information about its affairs we would be prepared to consider the exercise of the Secretary of State's powers under Section 8 of the 1977 Act—that is, the power to require the furnishing and publication of information—and I hope, in the light of that last assurance and the earlier explanation I gave, the noble Lord will not press the amendment.

Lord Rochester

My Lords, I am grateful to all who have joined in this brief debate. I am disappointed by the Minister's response and as this is such an important matter I am anxious to make sure that I have fully understood what he said, before determining what I should invite the House to do. I understood him simply to say that British Shipbuilders' subsidiaries will be required to report progress on employee involvement as now laid down by the Employment Act 1982 but that, in the case of the British Shipbuilders Corporation itself, although he has the expectation, as I acknowledged in my opening remarks, that BS would take action of the same kind in reporting progress in their annual reports, that is no more than an expectation.

The noble Lord added that if they failed to act with sufficient speed in the matter of communication to their employees, the Secretary of State would consider taking powers under the 1977 Act to ensure they improved in that regard. But he said no more than that and, if I have correctly represented what he said, his remarks did not go to the heart of the matter. It seems that BSC—maybe with only 1 per cent. of those employed in the shipbuilding industry as a whole—should be required to do no less than private companies in this regard.

Lord Trefgarne

My Lords, the noble Lord has more or less correctly interpreted what I said. To repeat it in short form, I said that 99 per cent. of the work force of the BS organisation was already covered by existing legislation. The remaining 1 per cent. already have the benefit of the practice of the main BS holding organisation, and if that main organisation failed to publish adequate information we would certainly stand ready to use the powers which are already available to us.

Lord Rochester

My Lords, I am grateful to the Minister for those comments, but I am not satisfied. I made it plain that I was moving the amendment not primarily because of what it could do in the corporation as such but as an indication to those responsible in all nationalised industries and in the public services—indeed, in the public sector generally—that more needed to be done in this direction. The Minister did not say anything to satisfy me on that count.

Here is here a glorious opportunity, as I see it, for the Government positively to give some encouragement to the development of employee involvement in the public sector. They are not taking it. It seems to me that the reputation of the House for consistency in this matter is at stake here. Indeed, the basis on which I have moved my amendment is dependent upon a section in an Act which was put forward by the Government last October. In those circumstances, I feel that I must press this point and divide the House.

6 p.m.

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

Their Lordships divided: Contents, 60; Not-Contents, 67.

Amultree, L. Gladwyn, L.
Ardwick, l. Halsbury, E.
Aylestone, L. Hanworth, V.[Teller]
Banks, L. Harris of Greenwich, L.
Beswick, L. Hayter, L.
Bishopston, L. Hooson, L.
Briginshaw, L. Houghton of Sowerby, L.
Brockway, L. Howie of Troon, L.
Bruce of Donington, L. Hylton-Foster, B.
Collison, L. Jacques, L.
Cooper of Stockton Heath, L. Jeger, B.
Diamond, L. Jenkins of Putney, L.
Donaldson of Kingsbridge, L. John-Mackie, L.
Gallacher, L. Kagan, L.
Lawrence, L. Rochester, L.[Teller]
Leatherland, L. Scanlon, L.
Lloyd of Kilgerran, L. Seebohm, L.
Longford, E. Serota, B.
Lovell-Davis, L. Shannon, E.
McCarthy, L. Shinwell, L.
McGregor of Durris, L. Somers, L.
McIntosh of Haringey, L. Stamp, L.
Northfield, L. Stedman, B.
Ogmore, L. Stewart of Alvechurch, B.
Oram, L. Stewart of Fulham, L.
Peart, L. Strabolgi, L.
Phillips, B. Underhill, L.
Pitt of Hampstead, L. Wallace of Coslany, L.
Ponsonby of Shulbrede, L. Wigoder, L.
Roberthall, L. Wootton of Abinger, B.
Avon, E. Hunt of Fawley, L.
Beloff, L. Killearn, L.
Boyd-Carpenter, L. Lane-Fox, B.
Brougham and Vaux, L. Lindsey and Abingdon, E.
Campbell of Alloway, L. Long, V.[Teller]
Cathcart, E. Lucas of Chilworth, L.
Chelwood, L. Lyell, L.
Coleraine, L. Massereene and Ferrard, V.
Colville of Culross, V. Merrivale, L.
Colwyn, L. Molson, L.
Cowley, E. Mottistone, L.
Cox, B. Mowbray and Stourton, L.
Craigavon, V. Murton of Lindisfarne, L.
Cullen of Ashbourne, L. Northchurch, B.
Daventry, V. Nugent of Guildford, L.
Davidson, V. O'Brien of Lothbury, L.
De L'Isle, V. Orkney, E.
Denham, L.[Teller] Portland, D.
Drumalbyn, L. Rankeillour, L.
Ebbisham, L. Rochdale, V.
Effingham, E. St. Aldwyn, E.
Elphinstone, L. Sandford, L.
Ferrers, E. Selsdon, L.
Ferrier, L. Spens, L.
Gainford, L. Strathcarron, L.
Glanusk, L. Strathspey, L.
Glenarthur, L. Sudeley, L.
Gridley, L. Swinfen, L.
Hailsham of Saint Marylebone, L. Teviot, L.
Teynham, L.
Harvey of Prestbury, L. Thomas of Swynnerton, L.
Hives, L. Trefgarne, L.
Home of the Hirsel, L. Vaux of Harrowden, L.
Hornsby-Smith, B. Vickers, B.

Resolved in the negative, and amendment disagreed to accordingly.