Ordnance Factories and Military Services Bill

HL Deb 22 October 1984 vol 456 cc11-23

3.4 p.m.

Lord Denham

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Ordnance Factories and Military Services Bill, has consented to place her prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Bill read a third time.

Clause 3 [Operation of schemes]:

Baroness Vickers moved Amendment No. 1: Page 5, line 3, at end insert— ("( ) The Secretary of State shall make a report annually to both Houses of Parliament, and allow time for its debate in both Houses, on progress made on the disposal of any securities issued to him under section 1 (2).").

The noble Baroness said: My Lords, I beg to move the amendment which stands in my name on the Marshalled List. I realise that my noble friend may not be prepared to agree to this amendment being written into the Bill. However, I would be grateful if he would agree that it would be possible to have a report annually to both Houses of Parliament.

My reason for making this request is that the Secretary of State can decide at least 17 times what action can be taken, independent of Parliament. Also, he can decide many times with the Treasury's consent or after consulting the Treasury. A Minister of the Crown can also decide several times. Under Clause 5: The Secretary of State may not dispose of any securities or rights acquired under this section unless the disposal is made with the Treasury's consent … Any expenses incurred by the Secretary of State or the Treasury in consequence of this section shall be paid out of money provided by Parliament".

Clause 7(9) states: A statutory instrument containing an order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament".

Clause 15 deals with repeal, and subsection (2) says: The power to make an order under this section shall be exercisable by statutory instrument, and no such order shall be made unless a draft of the order has been laid before and approved by resolution of the House of Commons".

As I understood it, statutory instruments usually had to go before a Joint Committee of Members of the House of Commons and the House of Lords before they could be approved by both Houses. It appears to me that the Commons may have a better chance of safeguarding the industry for the future.

I still consider that to do away with these Royal Ordnance factories and to privatise them will cause damage to Britain's defence, and it is unfortunate that an organisation with 300 years of excellent work and three Queen's Awards should have its future changed. On 19th July the noble Lord, Lord Trefgarne, made pledges in regard to the pensions and said that the Government would continue to negotiate with the trade unions about them. The noble Lord said that they would continue to negotiate. I should like to see the matter settled before the Bill is passed. Will the Minister agree today to ensure that an unequivocal commitment in regard to pensions is written into the Bill? Will the Minister state that the arrangements made for existing employees who transfer to the new company on vesting day will not be different from those for new employees after vesting day?

I should like to pay tribute to the Royal Ordnance factories' workforce, who have served the nation well for 300 years. If he had had the chance to visit the factories during the war, as I did, the Minister would have seen the excellent work carried out, sometimes under very difficult conditions, by this workforce. I hope that the noble Lord will pay tribute to the part which they have played for over 300 years to keep Britain a free, democratic country. I beg to move.

Lord Graham of Edmonton

My Lords, I should like fully to support the noble Baroness, Lady Vickers. This is a very reasonable and moderate amendment. We agree completely with much of what has been said as regards the genesis of the Bill or the philosophy behind it. We are agin it. But this amendment is not talking about the Bill: it is talking about the Minister coming to the House once a year and telling us the progress or otherwise that he has made in disposing of the assets.

We want a report and a debate. A debate means a discussion. I do not know the parliamentary device that will be used, the peg upon which we shall hang it; but if we are in the process of discussing the dissolution of the Royal Ordnance factories' arrangements then it is reasonable to ask that once a year the Minister should come to the House and tell us how he is getting on, what the problems have been, what the asset realisation has been and so on. This is a very reasonable amendment. In this House the Minister has refused to accept any amendment whatever from this side. He has had amendments forced upon him. This amendment gives the Minister the chance of a lifetime to show that he is reasonable.

Viscount Trenchard

My Lords, perhaps I may detain the House for one minute on this matter. I think that we ought to be satisfied with the many assurances that the Government have given about the objects of privatising the Royal Ordnance factories, which I know to be entirely positive and which are entirely aimed at ensuring that the Royal Ordnance factories flourish as suppliers, not only of Her Majesty's forces in this country, but as is necessary in today's market, of the requirements of allies of Her Majesty's Government abroad. I am quite and entirely satisfied that this has to be done in the private sector and that, in addition to the many Government assurances on the positive nature of their intentions in any privatisation that takes place, there are natural controlling factors which ensure that the long-term interests of the Government, the Royal Ordnance factories themselves and the armed services are bound to coincide in making sure that positive and secure arrangements are made for the future wellbeing of this great organisation.

Lord Trefgarne

My Lords, at the outset let me hasten to associate myself with the words of praise which my noble friend directed towards the workforce of the Royal Ordnance factories. I perfectly understand my noble friend's desire that Parliament should be kept aware of what is happening with regard to the privatisation of the new Royal Ordnance company. My noble friend moved an amendment on Report which would have required any disposal of shares in the new company to be authorised by an affirmative resolution of both Houses of Parliament. I explained then that such a requirement would not be practicable, since the details of a flotation could not be finally fixed until a very short time before the offer for sale; and the date of the offer for sale would be variable, since it would depend on many factors. On the other hand, any debate which took place well in advance of a flotation would be lacking those details which Parliament would undoubtedly wish to have. I said that the Government would announce their intention before privatisation took place, and we would do this as close as possible to the event. Any noble Lord who wished to ask questions arising out of such a statement would, of course, be free to do so. It seems to me that this would be much the best way of handling the matter.

My noble friend withdrew her amendment on Report, and now replaces it with this one. On its face the amendment is not restricted to the period during which the Secretary of State holds all the shares in the company. Is it the intention that he should be bound to lay an annual report even while he holds a minority of shares—from which he might at some time or another make further disposals? If so, this obligation could endure for the foreseeable future, long after privatisation takes place. I doubt that my noble friend intends this, but that would be the effect of her amendment as it stands. Clearly, the Government could not accept an obligation of that kind.

In any case, I do not think that an annual report to Parliament is likely to be very informative. Between vesting day, when the new company gets started in business, and the flotation of shares on the market, progress will—I hope—be steady, but it will not be spectacular. There is unlikely to be any more information to put in an annual report than would be found in the report which the company will, like most public companies, issue in any event. Any noble Lord may question Government Ministers on any matter arising out of such a report or, indeed, out of the activities of the company generally. I cannot see that anything at all is to be gained from a formal requirement of the kind which this amendment seeks.

I repeat that the Government will announce their intentions regarding privatisation as fully and completely as possible close to, but in good time before, the privatisation, by whatever method that might take place. This is, after all, the usual way of handling these things. Why do we need some more elaborate process? I see nothing so unusual in this case which would justify so radical a departure from the normal course. I hope my noble friend will, on reflection, think that what I have said is not unreasonable. I understand the point she has been making, but I thought that my undertaking regarding a Government announcement to Parliament would meet her concerns. I am sorry if it does not, but I fear that the Government cannot accept what is proposed by this amendment. Therefore, I hope that my noble friend will feel able to withdraw it.

Lord Diamond

My Lords, would the Minister think again as regards what he said about this being a very unusual thing to ask the Government to do? The Government are acting as a steward and the noble Baroness, Lady Vickers, is suggesting that the Goverment should account for their stewardship from time to time and, instead of leaving the time open and vague, that they should account for their stewardship once a year. No specific date is given, and whether it is a week earlier or later than the anniversary of the last report would not matter very much. But at all events, there would be a report. There must be dozens of other reports which the Government lay before Parliament because of the stewardship which Parliament has given them. What is unusual about that?

Lord Trefgarne

My Lords, if I have your Lordships' permission to speak again, I would say that all that is fairly conjectural. We do not know how long the Secretary of State will be in the position under which the amendment would require him to make such a report. Indeed, as I said earlier, it is not clear from the amendment how long my noble friend had in mind. I believe that the process of the company making its own report in a form with which we are now very familiar is the right way in which to proceed with this matter, and I hope that my noble friend will now think so, too.

Lord Campbell of Alloway

My Lords, before my noble friend sits down, on this Question of accounting for stewardship, is he aware of any precedent in any other legislation of the type of accounting which is proposed by this amendment?

Lord Trefgarne

My Lords, if I still have your Lordships' permission to speak for a third time on this matter, I must say that I could not answer my noble friend's question without taking some advice, but I have a feeling that he may have put his finger on another difficulty.

Baroness Vickers

My Lords, I am sorry to say that I am not very happy about that reply. The Minister has said that he will answer Questions and I hope that when we put down Questions, either Written or oral, they will be answered quickly and we shall be given some definite information as to what will happen in the future. If that is so, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3.18 p.m.

Lord Graham of Edmonton moved Amendment No. 2: Page 5, line 15, leave out subsection (9) and insert— ("(9) Not less than six weeks before the day on which a scheme comes into force, the Secretary of State shall lay before Parliament a copy of the scheme but omitting any material the disclosure of which he considers would be contrary to national security or to the commercial interest of any person, and such copy shall include any Memoradum of Understanding entered into by a Minister of the Crown and the Chairman of the Board of any Company referred to in subsection (4) describing the relationship between the Government as shareholder and any such Chairman.")

The noble Lord said: My Lords, I beg to move Amendment No. 2 standing in my name and that of my noble friend. This amendment was given an airing at the Report stage. The genesis of it is to provide this House and the other place with an opportunity, before a scheme and the memorandum of understanding come into force, to question and debate the contents of the scheme. Time and time again the Minister has said that work is going on and that details are being drafted, and he has agreed that the Government have nothing to hide.

We are inviting the Government to reveal all that up to now they have hidden from public view in the confidence that they have it right and also in the confidence that if they are challenged they will be able to carry the argument. To the best of our knowledge constructive discussions are taking place outside this House on the way in which the will of the Government can be carried forward. But, quite frankly, the Government must believe that from time to time even those outside this House and certainly Ministers and their advisers can get it wrong. We are asking that, six weeks before the date on which a scheme comes into force, this House and the other place be given the opportunity to debate the matter and perhaps to allow the Minister and his advisers the opportunity to reflect. So far as we are concerned the present situation means that there will be a fait accompli when the actual scheme has been created. All the Minister has argued is that the procedure we are adopting will provide for an undue delay.

We are talking about the dismantlement of something which has served this country for hundreds of years. The basis of the organisation is being radically altered. I think the Minister would concede that that is what privatisation means. We are talking in terms of taking up some parliamentary time. What are we talking about? Half a day? Even a day? We are talking about some hours of parliamentary time in order that we can be satisfied that the Minister and his advisers have it right. We believe that it is possible for this Government, or any other government, to have their ideas improved upon by debate in this House.

Although discussions are taking place—and of course we are not privy to them—we have an air of unease that time after time, vis-à-vis even the last modest amendment proposed, the Government are not prepared to stand by the guns which they deploy in arguments outside this House and allow Members of your Lordships' House and Members of another place to have a look at what they intend to do. The Government are well aware of the parliamentary arithmetic which they can deploy here and in another place. We are simply asking the Minister to take this House into their confidence and treat it with the dignity that we believe ought to be extended to other parliamentarians who are anxious to see what is to happen before it actually takes place. I beg to move.

Lord Mayhew

My Lords, there appears to be a typical conflict here between the convenience of the Government and the rights of Parliament. On this issue my noble friends and I know well where we stand. It was a little reassuring to hear in his reply to an earlier amendment the Minister stating that before any privatisation will take place Parliament will be informed. It is the natural and proper course of events to give Parliament the opportunity of expressing its view on privatisation. The Government have to admit that resolute as they have been in resisting amendments throughout the passage of this Bill, they have on one or two occasions taken Parliament's advice, notably in relation to the Ministry of Defence police.

I think they regret that they ever drafted the Bill without Schedule 3; but by allowing Parliament the proper time—and we cannot complain that we have not had proper time—to discuss this Bill the Government themselves were led to make a substantial and important improvement in the Bill. But now they will not allow Parliament to do the same with the scheme. They are going to keep that secret until the last moment, and then they are going to announce it after they have made it.

They are going to prevent Parliament playing the same constructive and democratic process that we have seen ourselves playing in the course of this Bill. I would urge the Minister to think carefully about this. As the noble Lord who introduced the amendment said, the ROFs began 500 years ago as a public service. I really think that six weeks might be spared to enable Parliament to consider the Government's scheme, which is very important. There are the whole principles of valuation, the whole question of intellectual property rights, and a lot of people are going to be seriously changed one way or another by the nature of the scheme which the Government will announce. Parliament has the right to discuss this. We warmly support the amendment with its demand that the Government should give us a chance to discuss it.

Lord Trefgarne

My Lords, we have addressed the question of the publication of these documents on a number of occasions during the passage of this Bill. I must say again that the Government are quite prepared to lay the first scheme before Parliament by vesting day and to publish any memorandum of understanding no later than vesting day, should it be ready by then, and I hope it will be.

The only reservation we have noted is that information may need to be withheld on the grounds of national security or commercial sensitivity.

I have already explained that the scheme will deal with the intricate detail of the transfer; examination of the scheme will show exactly which title deeds to land, for example, which leases, which plant, equipment and materials, and which cash and bank balances will transfer to the new company. All of that will be laid out for Parliament to see; but I do not see any argument that there will be any individual item or set of items in the scheme which are of such importance on their own that the Government must hold their hand for six weeks while such minor issues are examined.

Parliament has already debated and examined in detail the principles of the transfer, and we are all aware of what is to be transferred in general terms to the new company. The essence of the transfer is that the property currently in the trading fund—and accounted for in the annual reports of the ROFs—together with the property comprised at the former PERME establishments at Westcott and Waltham Abbey will be vested in the new company. That is what is of interest to the work force and to Parliament; not whether a particular slice of land or a particular machine tool which formed part of the generality of property involved should or should not be transferred.

Parliament will of couse be able to examine the propriety of the transfer and to look at the details through its Committee system and otherwise. That will come after the transfer, but it must not be forgotten that we are already asking Parliament for the authority to make the transfer by this Bill currently before your Lordships. The Bill already provides for the publication of the scheme at the appropriate time, when it will have been completed. As I have explained before, to require us to lay the scheme before Parliament six weeks in advance of its coming into force will merely import an unnecessary delay while the new company waits to begin business. I simply cannot see what this amendment hopes to achieve. If Parliament approves the principle of the transfer embodied in this Bill, there is no reason for it to seek to delay the executive action by the Government to give effect to the transfer.

As regards the memorandum of understanding, I have said that this is a matter between the Secretary of State as shareholder and the chairman of the company. As shareholder, the Secretary of State will be responsible for the guardianship of public money, but he is of course answerable to Parliament for that function. Parliament is not restricted in making observations or criticisms of the MoU, in the light of which the Secretary of State will be able to amend or supersede that document.

I must therefore resist this amendment. The undertakings I have given about publication of the two documents already meet the purpose of part of the amendment, and there is clearly nothing useful to be gained by requiring the Secretary of State to delay vesting day by at least six weeks while these documents lie before Parliament. Parliament will have as much opportunity to question the Government about the details of the scheme after it comes into force as before. The amendment is therefore unnecessary.

Lord Graham of Edmonton

My Lords, I am disappointed with that reply. The Minister may well have absolute confidence that when Parliament sees the detail of the scheme, or schemes, it will be satisfied. However, he is saying that whether it is satisfied or not, Parliament will then have agreed to the principle of the transference of the assets in one way or the other. If the Minister is also saying that that for which we are asking is not only unusual but even unique, may I say that I am not just talking about the employees or the national interest; I am talking about the interests of parliamentarians. We do not want to clutter up the Order Paper, but we want to see that as often as possible we are kept advised on how this scheme evolves.

The Minister will appreciate that although there will be certain modes of procedure carried out here which are common, this is something like a unique situation. Not only the issue of the transfer of the Royal Ordnance factories but what is at stake. What we have asked for time and time again is the opportunity to make a comment. The Minister more than once has said to the House—and it was said in another place—that discussions are going on and that in the fullness of time all will be revealed. What we say is that as soon as it is possible to reveal it, it should be revealed to us. The Minister is right, we are asking for six weeks' grace. However, as the noble Lord, Lord Mayhew, said, in the totality of what is at stake, what is six weeks in order to provide Parliament with the satisfaction that what we are suspicious about—we are suspicious about some of the details—can be assuaged or argued over? The Minister has not been helpful to the House and I shall invite the House to express its views by a vote on the wisdom or otherwise of the amendment.

3.31 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 63; Not-Contents, 96.

DIVISION NO. 1
CONTENTS
Ardwick, L.	Donaldson of Kingsbridge, L.
Attlee, E.	Elwyn-Jones, L.
Aylestone, L.	Ezra, L.
Banks, L.	Fisher of Rednal, B.
Birk, B.	Fitt, L.
Blyton, L.	Galpern, L.
Boston of Faversham, L.	Gosford, E.
Bottomley, L.	Graham of Edmonton, L.
Brockway, L.	Grey, E.
Bruce of Donington, L.	Hampton, L.
Buckmaster, V.	Harris of Greenwich, L.
Burton of Coventry, B.	Jeger, B.
Carmichael of Kelvingrove, L.	Jenkins of Putney, L.
Cledwyn of Penrhos, L.	Kilmarnock, L.
Collison, L.	Kinloss, Ly.
Cooper of Stockton Heath, L.	Lawrence, L.
Cudlipp, L.	Leatherland, L.
David, B. [Teller.]	Lindsay of Birker, L.
Davies of Penrhys, L.	Listowel, E.
Diamond, L.	Llewelyn-Davies of Hastoe. B.

Lockwood, B.	Ross of Marnock, L.
McCarthy, L.	Seear, B.
McNair, L.	Serota, B.
Mayhew, L.	Stedman, B.
Mishcon, L.	Stoddart of Swindon, L.
Oram, L.	Strabolgi, L.
Phillips, B.	Taylor of Mansfield, L.
Plant, L.	Underhill, L.
Ponsonby of Shulbrede, L. [Teller.]	Wallace of Coslany, L.
	Wigoder. L.
Rea, L.	Wilson of Langside, L.
Roberthall, L.	Wootton of Abinger, B.

NOT-CONTENTS
Airey of Abingdon, B.	Ilchester, E.
Alexander of Tunis, E.	Ingrow, L.
Alport, L.	Jessel, L.
Auckland, L.	Kinnaird, L.
Avon, E.	Lane-Fox, B.
Beloff, L.	Long, V.
Belstead, L.	Lucas of Chilworth, L.
Bessborough, E.	Mancroft, L.
Blake, L.	Margadale, L.
Boyd-Carpenter, L.	Marley, L.
Brabazon of Tara, L.	Maude of Stratford-upon-Avon, L.
Caithness, E.
Cameron of Lochbroom, L.	Milverton, L.
Campbell of Alloway, L.	Molson, L.
Carnegy of Lour, B.	Morris, L.
Coleraine, L.	Mottistone, L.
Cottesloe, L.	Mowbray and Stourton, L.
Cullen of Ashbourne, L.	Murton of Lindisfarne, L.
Daventry, V.	Newall, L.
Davidson, V.	Nugent of Guildford, L.
De Freyne, L.	Peyton of Yeovil, L.
Denham, L. [Teller.]	Porritt, L.
Donegall, M.	Rodney, L.
Ebbisham, L.	St. Davids, V.
Eccles, V.	Saint Oswald, L.
Effingham, E.	Savile, L.
Ellenborough, L.	Seebohm. L.
Elliot of Harwood, B.	Skelmersdale, L.
Elton, L.	Soames, L.
Faithfull, B.	Somers, L.
Fraser of Kilmorack, L.	Spens, L.
Glanusk, L.	Stamp, L.
Glenarthur, L.	Strathspey, L.
Gormanston, V.	Sudeley, L.
Gray of Contin, L.	Suffield, L.
Gridley, L.	Swansea, L.
Hailsham of Saint Marylebone, L.	Swinton, E. [Teller.]
	Trefgarne, L.
Halsbury, E.	Trenchard, V.
Harmar-Nicholls, L.	Trumpington, B.
Harvington, L.	Ullswater, V.
Hatherton, L.	Vaux of Harrowden, L.
Hawke, L.	Vivian, L.
Hayter, L.	Ward of Witley, V.
Headfort, M.	Westbury, L.
Hives, L.	Whitelaw, V.
Holderness, L.	Wise, L.
Hornsby-Smith, B.	Young of Graffham, L.
Hylton-Foster, B.	Younger of Leckie, V.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 17 [Finance: general]:

3.39 p.m.

Lord Stoddart of Swindon moved Amendment No. 3:

Page 13, line 39, at end insert— ("(3) This Act shall come into force at the end of the period of six months beginning with the day on which it is passed.")

The noble Lord said: My Lords, a similar amendment was moved at Report stage to delay implementation of the Bill until 1st October, 1985. This amendment was lost by only 16 votes, indicating that a good number of your Lordships were convinced that the Government were not really ready to proceed with the implementation of the Bill in an orderly manner to the benefit of the taxpayer and with proper safeguards for the careers, conditions of service and prospects of the people concerned at Royal Ordnance factories,

I do not intend to repeat at length the arguments for delay which I put forward at the Report stage, although all those arguments still apply. I should therefore simply like to emphasise that no answer has yet been given as to the benefit of privatisation, and the employees have yet to be satisfied on a number of serious and important matters. That is a matter of great concern to us as well as to the employees of ROF.

The memorandum of understanding, to which reference has already been made in previous debates, has not been published, and amazingly the noble Lord the Minister was unable at Report stage last week to give any firm date for the publication of this document; although over three months ago the noble Lord assured the House that the memorandum of understanding was almost finished. It was three months ago when the noble Lord the Minister said that the memorandum of understanding was almost finished. We have still not received sight of it. Indeed, the Minister can still only answer us by saying that it will be ready for publication in due course, whatever that may mean.

The Minister said nothing at all about the current order book situation in the ROFs and the possible announcement of large-scale redundancies at a number of factories, a matter which concerns us, and indeed concerns the trade unions and the people employed in ROFs very much indeed. But nothing has been said. Since these redundancies have arisen while the factories are still part of the Ministry of Defence, can we assume that the announcement will be made before vesting day? If the announcement is made before vesting day, it will give absolute confidence to the staff affected that they would be getting MoD levels of redundancy compensation; but, further, for the mobile non-industrial grades affected by potential redundancies it would ensure that they would have the opportunity of transferring to other jobs elsewhere in the Ministry of Defence if suitable vacancies exist. This will take a while to achieve so that this, too, means that there should be a reasonable gap between the enactment of the legislation and vesting day itself.

Parliament has been given no real details of the financial arrangements—a point which has been referred to earlier by the noble Lord, Lord Mayhew. He was rightly concerned about it. There have been no details of financial arrangements and the sale value of the new company can apparently only be guessed at. The taxpayers are therefore buying a pig in a poke and overall may find themselves in the end paying private entrepreneurs to take off their hands an undertaking making handsome profits for the Treasury. In other words, the taxpayers may very well be handing over good cash in lieu of profits—not in lieu of losses, but in lieu of profits—which amounted last year, if my memory is correct, to no less than £62 million for the Treasury. Yet we may be paying private firms and private entrepreneurs to take these profits off our hands. It is a ridiculous situation.

Even those noble Lords who are in sympathy with the general aims of this Bill must agree that the Government approach is sloppy, ill-considered and hasty in the extreme. It is a rush job which can only do harm. I would urge noble Lords on all sides of the House to support this amendment in the interests of efficiency, the taxpayer, the armed forces, the ROFs themselves and all those who work in them. I beg to move.

Lord Trefgarne

My Lords, your Lordships will recall that we amended this clause in Committee to take out of the Bill a provision that the Act should come into force two months after Royal Assent. I must say that I find it disappointing that the noble Lord, having accepted that amendment in Committee, now seeks to replace the two-month delay with a six-month delay. The Government's position remains now as it was at Committee stage, and was explained to your Lordships at that time. We are anxious that vesting day should occur as soon as possible after this Bill receives Royal Assent. Obviously it cannot take place before the Act comes into force, and therefore we sought, successfully, to amend the Bill to allow vesting day to take place as soon as the Act is passed. We cannot accept a substitution of a six-month delay for the two-month delay which we have already removed from the Bill.

The noble Lord advances as justification for this amendment a suggestion that more time is needed in which to solve certain outstanding problems. I accept that there are still some important matters to be resolved, and we hope that we shall be able to resolve them very shortly. But I must tell the noble Lord, frankly, that there is no legal necessity to resolve them before vesting day, because the legal position of employees is already amply secured by the existing provisions of the Bill. Indeed, it is arguable that many of the outstanding problems may be more easily resolvable after vesting day, when the trade unions are dealing face to face with the new company, than before, when inevitably the Ministry of Defence is involved in the discussions as a kind of intermediary.

It has already been necessary to delay vesting day well beyond the period it was hoped it might occur. Both the Government and the company are most anxious that the company should get started in business as soon as possible. Further delay can only work to the disadvantage of everyone concerned, including the employees. Your Lordships will know as well as I do that the inevitable effect of moving a deadline is to dissipate the sense of immediacy attached to having to meet it. There is nothing to suggest that if we amend the clause as proposed we shall be any nearer a solution to outstanding problems in six months' time than we are at present. The disadvantages of this amendment are clear, without there being any apparent advantages. I assure the noble Lord that I share his concern that, if possible, outstanding issues should be resolved before vesting day, and we are doing our utmost to ensure that this is done.

The noble Lord referred to the question of redundancies. This is a matter which was raised last week at the previous stage of the Bill. I shall have some more to say about that when we come to the next pair of amendments, Nos. 4 and 5, but in the meantime I hope the noble Lord will feel able not to press his amendment.

Lord Mayhew

My Lords, I wonder if the noble Lord would reassure the House on one or two points which arose out of his statement. It is quite plain from his statement that a whole mass of work and agreement needs to be done which has not been done. He said that it is just on the verge of being agreed, but I recall that he said that at Committee stage. I am not sure that he did not say it at Second Reading. May we please have from the Minister a clear statement as to what now has been, first of all, agreed with the trade unions—pensions, redundancies and other matters—and, second, what is the state of play with regard to the memorandum of understanding? Is that finally drafted? Can he please tell us in relation to each of these important matters where the Government have got?

We get the impression not simply that the Government are unwilling to postpone—maybe they are unwilling to postpone, but they have done it once already; and they will have to postpone because all these other things are in arrears. It sounded to me from what the noble Lord said that the Government might be very wise to accept this amendment, and might be very wise to postpone the operation of the Act until they have got their whole ploy in order.

Lord Trefgarne

My Lords, if I may have permission to speak again, may I answer the noble Lord in this way? First, the question of when we shall reach agreement on these matters is not wholly in the hands of Government because we are discussing these matters with other people. The noble Lord should address his questions to those other people, for example, the trade unions, who are also involved in the discussion. But, as I said during my earlier remarks, it is not in any event absolutely necessary that all of these matters are precisely agreed before vesting day. I very much hope that they will be and most of them, I believe, will be. I have already assured your Lordships about the sort of documents that we shall be able to make available at that time. But I think that there is an important argument to put before your Lordships, which I have already done; namely, that if we keep moving the deadline nothing will ever be agreed. I hope therefore that the noble Lord will see the force of that.

Lord Stoddart of Swindon

My Lords, I am most disappointed at the Minister's reply. It may very well be his own opinion that it is not necessary for all the matters mentioned by me and by other noble Lords to be resolved by vesting day; but I can assure him that there are many people, including me, who believe that these matters should be resolved before vesting day. I am surprised that the noble Lord should have referred to the fact that there had been already a two-month delay in vesting day. He implied, in fact, that that was a concession to the Opposition, but I would remind him that that two months' delay was at the behest of the Government themselves, and certainly not at the behest of the Opposition. Indeed, when the noble Lord was discussing the original plan for vesting day to be the 1st October 1984, he said, at col. 915 on 16th October: With the benefit of hindsight I think I can say that we would have had some difficulty in meeting that date, anyway". Therefore out of his own mouth he confirmed at the Report stage that the original vesting day of 1st October 1984 could not be met. It seems that he has learned nothing since then.

What we are saying is that matters which are of great importance have not yet been resolved and that vesting day coming too early may very well put the Government themselves in a bad position. It would certainly be against the best interests of the taxpayers and of those working in the industry. I hope that even now the noble Lord will listen; but there really is no time. I suppose that he cannot get up and say, "I accept this amendment", but unless he is prepared to do so. I shall have no alternative, in all the circumstances and in the light of what he has said in reply, to press it to a Division.

3.52 p.m.

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

Their Lordships divided: Contents, 64; Not-Contents, 98.

DIVISION NO. 2

DIVISION NO. 1
CONTENTS
Ardwick, L.	Hampton, L.
Attlee, E.	Harris of Greenwich, L.
Aylestone, L.	Jeger, B.
Banks, L.	Jenkins of Putney, L.
Birk, B.	Kennet, L.
Blyton, L.	Kilmarnock, L.
Bottomley, L.	Lindsay of Birker, L.
Brockway, L.	Listowel, E.
Brooks of Tremorfa, L.	Llewelyn-Davies of Hastoe, B.
Bruce of Donington, L.	Lockwood, B.
Buckmaster, V.	McCarthy, L.
Burton of Coventry, B.	McNair, L.
Carmichael of Kelvingrove, L.	Mayhew, L.
Cledwyn of Penrhos, L.	Mishcon, L.
Collison, L.	Oram, L.
Cooper of Stockton Heath, L.	Ponsonby of Shulbrede, L. [Teller.]
Cudlipp, L.
David, B. [Teller.]	Rea, L.
Davies of Leek, L.	Roberthall, L.
Davies of Penrhys, L.	Ross of Marnock, L.
Diamond, L.	Seear. B.
Donaldson of Kingsbridge, L.	Serota, B.
Elwyn-Jones, L.	Stedman, B.
Ennals, L.	Stoddart of Swindon, L.
Ewart-Biggs, B.	Strabolgi, L.
Ezra, L.	Taylor of Gryfe, L.
Fisher of Rednal, B.	Taylor of Mansfield, L.
Fitt, L.	Underhill, L.
Galpern, L.	Wallace of Coslany, L.
Gladwyn, L.	Wigoder, L.
Gosford, E.	Wilson of Langside, L.
Graham of Edmonton, L.	Wootton of Abinger, B.
Grey, E.

NOT-CONTENTS
Airey of Abingdon, B.	Avon, E.
Alexander of Tunis, E.	Bauer, L.
Alport, L.	Beloff, L.
Auckland, L.	Belstead, L.

Bessborough, E.	Kinloss, Ly.
Blake, L.	Kinnaird, L.
Boyd-Carpenter, L.	Lane-Fox, B.
Brabazon of Tara, L.	Long, V.
Brentford, V.	Lothian, M.
Caithness, E.	Lucas of Chilworth, L.
Cameron of Lochbroom, L.	Mancroft, L.
Campbell of Alloway, L.	Margadale, L.
Carnegy of Lour, B.	Marley, L.
Coleraine, L.	Maude of Stratford-upon-Avon, L.
Cottesloe, L.
Cullen of Ashbourne, L.	Milverton, L.
Daventry, V.	Molson, L.
Davidson, V.	Morris, L.
De Freyne, L.	Mottistone, L.
Denham, L. [Teller.]	Mowbray and Stourton, L.
Donegall, M.	Murton of Lindisfarne, L.
Ebbisham, L.	Nugent of Guildford, L.
Eccles, V.	Peyton of Yeovil, L.
Effingham, E.	Porritt, L.
Ellenborough, L.	Rawlinson of Ewell, L.
Elliot of Harwood, B.	Renwick, L.
Elton, L.	Rodney, L.
Faithfull, B.	St. Davids, V.
Fraser of Kilmorack, L.	Saint Oswald, L.
Glanusk, L.	Savile, L.
Glenarthur, L.	Seebohm, L.
Gray of Contin, L.	Skelmersdale, L.
Gridley, L.	Somers, L.
Hailsham of Saint Marylebone, L.	Stamp, L.
	Strathspey, L.
Halsbury, E.	Sudeley, L.
Harmar-Nicholls, L.	Suffield, L.
Harvington, L.	Swinton, E. [Teller.]
Hatherton, L.	Thomas of Swynnerton, L.
Hawke, L.	Trefgarne, L.
Hayter, L.	Trenchard, V.
Headfort, M.	Trumpington, B.
Hemphill, L.	Ullswater, V.
Hives, L.	Vaux of Harrowden, L.
Holderness, L.	Vivian, L.
Hornsby-Smith, B.	Ward of Witley, V.
Hylton-Foster, B.	Westbury, L.
Ilchester, E.	Whitelaw, V.
Ingrow, L.	Wise, L.
Jessel, L.	Young of Graffham, L.

Resolved in the negative, and amendment disagreed to accordingly.