HL Deb 25 March 1987 vol 486 cc260-82

9.10 p.m.

Baroness Turner of Camden

My Lords, I beg to move that this Bill be now read a second time. The Bill seeks to provide new rights to information and consultation for trade unions, their members and employees of companies involved in a takeover, merger, sale of a subsidiary or transfer or engagement. The year 1986 was a record one for takeovers. The media has aptly described what has been taking place as "merger mania".

To quote from the 6th February issue of British Business: In 1986 industrial and commercial companies' expenditure on acquisitions and mergers within the UK reached a record £13½ billion, which is almost double the 1985 total of £7 billion. There were 695 recorded acquisitions in 1986, almost 50 per cent. higher than in 1985, and the highest annual total since 1973. The 1986 figures are dominated by the acquisitions of Imperial Group by Hanson Trust and of Distillers Company by Guinness in the second quarter, both valued at just over £2½ billion, but even if these were excluded expenditure in 1986 would be substantially higher than in 1985". The livelihoods of about 500,000 employees were bound up with these deals. A number of major companies escaped unwanted takeover bids, but many others succumbed after a struggle.

The background to all this is a big rise in profits, but stagnant investment in manufacturing industry. The City is finding it easy to provide finance for takeovers, but is still failing to provide investment capital in manufacturing industry. The merger activity is not producing new jobs or stimulating our manufacturing base: indeed, quite the contrary. In the last two years, something approaching one-tenth of British industry has been subject to a change in ownership. The control of whole sectors of industry, such as retailing, food and drink and mechanical engineering, has been transformed.

A number of companies not presently subject to takeover bids have been selling off subsidiaries when suitable opportunities have presented themselves. Further major changes of ownership could well be imminent, giving further cause for concern to the employees whose investment—the investment of their working lives in the companies by which they are employed—should matter as much as those whose investment is a financial one. As takeovers proceed apace, it would have been natural to assume that they must at least be in the interests of the shareholders of the companies concerned even if the other interests lose out. However, past experience does not indicate that that is necessarily so.

Looking back to the last merger wave in the early 1970s the objective then appeared to be asset stripping rather than a restructuring of industry. A study of more recent United States experience shows that the majority of mergers could not be adjudged as successes even on the narrow basis of evaluation employed by shareholders. In half the cases examined by the consultancy firm of McKinsey and Co. the return earned on assets taken over actually failed to exceed the cost of the capital employed in financing the takeover. Generally, it was found that the larger the merger, the less successful the outcome.

However, my intention tonight is not to raise the whole matter of mergers and takeovers but to seek to ensure that there is some protection for those who become involved. At the present time there is legislation but it seems to me to be deficient in a number of important respects.

Mergers are initially examined by the Office of Fair Trading which considers whether there arc grounds for believing they could operate against the public interest. The Director General of Fair Trading makes a confidential recommendation, as I understand it, to the Secretary of State for Trade and Industry who then decides whether to refer the merger to the Monopolies and Mergers Commission for full investigation. Mergers not referred are allowed to proceed. If a merger is referred, the Monopolies and Mergers Commission has six months in which to investigate and report. If the merger is found to be against or potentially against the public interests, the Commission will recommend either that it should not be allowed or that undertakings should be obtained about future conduct. Many bids automatically lapse if they are referred.

As I understand it, all relevant matters must be considered by the Commission, but five specific factors must be borne in mind. First, the desirability of maintaining and promoting effective competition; second, protecting the interests of consumers; third, promoting through competition a reduction in costs; fourth, maintaining and promoting the balanced distribution of industry and employment; and fifth, maintaining and promoting competitive activity in overseas markets.

The scrutiny of mergers is strongly influenced by government policy. In recent years this has put most of the emphasis on competitiveness. Indeed, it would appear to be government policy to make references to the MMC primarily on competition grounds. This narrow interpretation has been criticised recently. The Government resisted pressure to refer the BTR bid for Pilkingtons to the Commission. Eventually BTR withdrew, but only after a combined campaign conducted by the company, the unions and the local authority at St. Helens which was justifiably concerned about what might happen to the local community if a major provider of labour in the area were to he taken over by a multinational conglomerate.

Recently Sir Gordon Borrie, Director General of Fair Trading, in a speech to the Glasgow discussion group on finance and investment, indicated that other considerations should be weighed in addition to pure competitiveness. He said: Although I hold strongly to the view that competition should be the main consideration in merger policy and that references to the MMC should therefore usually be in cases where competition would significantly be damaged … I certainly do not take the view that where competition is not affected everything can be left to 'market forces'. I do not have complete faith in the 'invisible hand' of Adam Smith as the regulator of our economic and social affairs. I often ask who it is who drives these market forces and the answer— shareholders, institutional or otherwise, and a myriad of financial advisers and experts—does not encourage me to believe that their decisions whether to buy or sell particular shares at a particular price will necessarily bring about the most efficient deployment and development of the assets which those shares represent. If this is heresy to those who believe in efficient financial markets then I stand a heretic—or at least a sceptic". I believe that competition alone is an inadequate yardstick. That is why my Bill provides for consideration of other factors. It writes in a requirement to consider the interests of the employees, to ensure that production and output in the United Kingdom is maintained to the benefit of the economy and to ensure some control of strategic industries, where these are in the interests of national security.

I return specifically to the position of employees. We have the Transfer of Undertakings (Protection of Employment) Regulations which were introduced in 1981. These were introduced in response to an EC Council directive which was designed to ensure information, consultation and continuity of employment contracts when the ownership of companies was transferred. However, the regulations were drafted in such a way as to exclude transfers affected by share purchases. The regulations therefore do not apply to the typical British merger or takeover.

Public regulation is concerned with a limited view of competition. Shareholders are concerned about the size of the offer and the prospects for future dividends. Trade union interests naturally centre on employment. Your Lordships will know that I am a trade union official, and hence my interest in this Bill. I am also a member of the TUC General Council. For a long time, the TUC has been concerned about mergers and their effects on employees.

At no stage of the merger is there an obligation on a bidder to declare details of his plans in regard to the future size and shape of the workforce. Employees in the bidding company have no rights at all. This is despite the fact that takeovers often lead directly to plant closures, redundancies and changes in terms and conditions of employment and sometimes to the termination of union recognition agreements. Indeed it is not uncommon, particularly if the buyer is an overseas conglomerate, for union agreements simply to be terminated. In contested takeovers both the predator company and its prey may be more forthcoming, particularly if they want union support, but typically will not make any commitments as to what policies will be after the takeover issue has been settled one way or another.

In the Netherlands, a merger code gives unions and their members more extensive rights. It provides for unions to be informed, first, of merger talks at an early stage; secondly, of the reasons for a merger; thirdly, of the likely social, economic and legal consequences; and, fourthly, of measures designed to alleviate their effects. Union rights in the Netherlands are, it is true, consultative only, but unions are able to give their views on the likely impact on employee interests before a merger agreement is finally signed. Works councils can appeal to the courts if companies act unreasonably'. It will therefore be seen that the provisions set forth in the Bill are not particularly radical. Such provisions exist elsewhere in Europe.

Another aspect of concern to employees is pension rights. Pension fund surpluses can be a significant factor in encouraging bids for companies. Admittedly, the recent regulations on pension fund surpluses which become operative next month are designed to reduce surpluses and thus, incidentally, to discourage bids motivated by the desire to lay hands on large pension fund surpluses. Pension scheme members would naturally prefer to see the surpluses used to improve benefits, but it is possible for employers to take a contribution holiday, or surplus funds can be returned to the employer where they will attract a high rate of tax. Nevertheless, employees have very real worries about what will happen to their pension schemes in the event of merger or takeover. The Bill specifically mentions rights in pension schemes and seeks to give some degree of protection.

The Government may well tell the House that there is no need for a measure such as this. There is, to my knowledge, an interdepartmental review of competition policy being conducted at present. Perhaps it will be claimed that this review, which I understand is far-reaching and in some depth, will establish whether further legislative steps need to be taken, and if so, just what those should be. Nevertheless, I feel that the issues raised tonight are of such importance—to many people who are in employment and to others who have lost employment through the type of dealings I have described—that some steps need to be taken immediately in order to protect employees.

When my Bill received its First Reading I was asked to appear that evening on the television programme which customarily covers proceedings in this House. As your Lordships will know, the programme goes out fairly late. I had not expected that the audience would be very great or that there would be much response. Nevertheless, I was surprised to receive a number of letters, all of which were supportive of what I was attempting to do. Some were quite pathetic. Several pointed out that it is not only the workforce that is kept in the dark. Shareholders, said one of my correspondents, fare no better.

One correspondent told me that he had been employed as an accountant in a small manufacturing firm which happened to have a great deal of property. The manufacturing firm was, he said, profitable and successful. The firm was acquired and the manufacturing part closed down. My correspondent and his fellow employees lost their jobs. The sole aim of the exercise had been that of asset-stripping. Nothing had been done in any positive way to assist the economy—indeed, the very reverse—and further statistics were added to those of the unemployed. I sincerely believe that something should be done, and for those reasons I beg to move.

Moved, That the Bill be now read a second time.—(Baroness Turner of Camden)

9.25 p.m.

Lord Rochester

My Lords, I should like first to congratulate the noble Baroness, Lady Turner of Camden, on having, by means of the Bill and the clear way in which she has explained its provisions, enabled the House this evening to consider a matter which is not simply of considerable topical interest but of great public concern.

Next, I assure the noble Baroness that, along with my noble friends, I very much sympathise with the view that has prompted her to introduce the Bill; namely, that in situations where companies are involved in takeovers or mergers some means should be found by which employees who are affected should receive greater protection than has often been the case in the past.

I feel qualified to speak from experience on the Bill primarily from the industrial relations angle. I am reminded of the occasion almost five years ago when, as the noble Lord, Lord Wedderburn of Charlton, will recall—because he gave me valuable support at the time—my noble friends and I succeeded in obtaining the agreement of the House to an amendment concerned with employee involvement which, with minor modifications, became Section I of the Employment Act 1982.

That section provides that the annual reports of companies employing more than 250 people should, contain a statement describing the action that has been taken during the financial year to introduce, maintain or develop arrangements aimed at"— among other things—

  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".
That is a modest provision and it does not even oblige companies to inform and consult employees or their representatives. However, it has the merit that it commanded support from all parts of the House and thus reflected a consensus which has, I like to think, enabled employee involvement in British industry to be advanced just a little.

However, I recall that in its original form that amendment referred to employees or their representatives being consulted regularly so that employees' views could be taken into account before—and I stress that word—decisions were made. At the time that wording evoked concern on the Stock Exchange and, indeed, in companies having first class records in the practice of employee participation.

I acknowledged the point at Third Reading of the Bill on 13th October 1982 in saying, as reported in Hansard at col. 829: Having myself been involved in industrial decision-making, I accept that problems do sometimes arise involving matters of considerable commercial sensitivity, perhaps even affecting other companies, when with the best will in the world it may not be practicable to consult employees or their representatives before a decision is taken.". It was that consideration which led me to accept the modified wording that now forms part of Section 1 of the Act to which I have already referred.

I hope that the noble Baroness, Lady Turner, will not think it churlish of me to question, having regard to the current anxieties about insider dealing, whether this problem is dealt with adequately in Clause 1 of her Bill, which requires any company involved in a merger or takeover bid to inform any trade union representing employees in the company concerned at least 30 days before any binding agreements are entered into.

The other point in Clause 1 that gives me cause for concern is the emphasis which it places on informing and consulting only trade unions rather than employees or their representatives. I say that because, as the noble Baroness will know very well, employee representatives may be, but of course are not by any means always, trade unionists. I suggest that it is noteworthy too that there is no reference to shareholders in Clause I nor, so far as I can see, anywhere else in the Bill.

Incidentally, before leaving this matter I should say that I have given the noble Lord, Lord Trefgarne, notice that I should like him, in speaking for the Government, to tell the House, however briefly at this time of night, whether he is satisfied with the progress that has so far been made by companies in developing employee involvement in accordance with Section 1 of the 1982 Act.

To guard against the possibility that Clause 1 of this Bill, for the reasons that I have given, is so defective that it is not practicable to implement it in its present form. I should like to take this opportunity to explore a little further how the fundamental problem of protecting employees, and indeed the public interest, in merger and takeover situations might be dealt with in other ways.

First, I should say that my own party for the past 50 years at least has advocated a policy under which employees would join with shareholders in electing directors to the boards of companies. This has the potential advantage that the directors who are thus elected would represent exclusively neither shareholders on the one hand nor employees on the other, but would be answerable to both constituencies. So far as concerns the underlying purpose of this Bill, the adoption of such a policy would have the effect that the interests of the employees concerned would be protected by directors who owed their appointment at least partly to those employees and who would of course be in a position to receive the earliest possible intimation of mergers or takeover bids.

Next, I suggest that it is significant that in a lecture which he gave at Heriot Watt University in Edinburgh last Thursday, the president of the CBI, Mr. David Nixon, is reported to have said: If well run companies must fear to be swallowed by a shark who does nothing more than bring ruthlessness in practices, then may not the time come for the institutional investors and the banks to limit the appetite of the raiders?". He went on to say that among ways of achieving that might be to give fund managers of investment institutions guidelines on how to behave in contested takeovers—for example, banning them from selling in the stock market, so preventing what he called "short-term operators" acquiring substantial quantities of stock.

I consider that the recent bid by BTR to take over Pilkingtons, a case to which the noble Baroness referred, was a striking example of how a firm, in the CBI president's words, "doing all the right things" might have fallen victim to a predatory takeover. For Mr. Nixon, "the right things"—this is highly relevant to Clause 3—means companies investing in their long-term future—in training, research and development and product innovation. In the case of Pilkingtons, a firm of which I have some knowledge and which enjoys relations with its employees which are of a high quality, the evenutal withdrawal of the bid must have been largely due to the spontaneous way in which the workforce expressed its outrage at the prospect of being managed by people other than those whom it had come to respect as its leaders.

Effective voluntary action to deal with the problem is preferable to legislation. But the trouble with voluntarism is that it necessitates volunteers. If they are not forthcoming, legislation is all that remains.

However, the noble Baroness, Lady Turner, must know very well that even if the Bill were permitted to pass unscathed from this House, it stands no chance of being accepted in another place.

Against that background, if there is to be resort to legislation, the best way of achieving the degree of consensus needed to make it effective may be to seek, as in Clause 8, to amend the Fair Trading Act 1973 by importing at least one or two of the additional criteria contained in Clause 3, but in so doing to provide for action to be initiated by reference merely to the public interest rather than through the more controversial trigger of consultations with trade unions alone.

In conclusion, I hope that, whatever this Bill's fate, this debate will prove helpful in focusing public attention on the need for some effective means of curbing the current excess of speculative capitalism that is directed towards short-term gain rather than the long-term improvement of our industrial performance.

9.40 p.m.

Lord Denning

My Lords, I too should like to thank the noble Baroness, Lady Turner of Camden, for introducing this Bill. Furthermore, I should like to support its principles. The fundamental point is that on any takeover or merger the employee should be protected, and entitled to the first consideration, rather than the shareholders, most of whom have not put capital into the company but have simply bought shares on the Stock Exchange and receive the glossy catalogues every year. The employees, the servants, are the people who have built up the company and given it its goodwill. Certainly, they should be consulted before any takeover of the company is effected.

I turn to a heading of The Times on 19th March of this year which states in bold, black headlines, The employees are a company's biggest asset, and they must always come first". In these days of mergers and takeovers the employees do not come first or last; they do not come into the matter at all. Their interests are entirely disregarded by the operators in the stock market. We all know what happens. These operators buy up enough shares to give them control over the company's affairs. One group bids against another group until they have sufficient numbers of shares to gain control. Having gained control they can appoint new directors. They can close down plants. They can sack employees and make them redundant in the interest, they say, of efficiency.

However, in all those discussions and takeovers there is no regard whatever for the interests of the employees. Nor is there any consultation with them. Underneath those stock market dealings there are the sharks, the inside dealers who, owing to their inside knowledge, can make quick profits. They can buy the shares and get out quickly. They know that the shares are going up. Those sharks, those inside dealers, make their quick profits.

Although they may be regarded as on the sidelines, but very important when millions and billions of pounds are involved in the merger or takeover, there are the large group of professional men—the stockbrokers, accountants and lawyers—with their fees and large commissions dependent on the amount of the takeover. The larger the deal, the larger are the fees. I need only mention the Westland affair, the Guinness affair and the like. We have seen these operating in the City of London. The employee is forgotten and ignored by those operators. Yet it is the employees who have done more than anyone to build up the company and its goodwill.

In these situations what is to be done to protect the employees? We can take a leaf out of the cases where it is not merely shares that are transferred but the company's undertaking. One does not merely sell shares but the undertaking to the other company. We have a good example because this is being provided for by a directive of the Economic Community of Europe which is being imposed on all the member states in order to protect employees on such a transfer. I should like to recite two passages from the directive, which state the principles: Whereas economic trends are bringing in their wake, at both national and Community level, changes in the structure of undertakings through transfers of undertakings, businesses or parts of businesses, to other employers, as a result of legal transfers or mergers; Whereas it is necessary to provide for the protection of employees in the event of a change of employer, in particular to ensure their rights are safeguarded". The directive then recites many safeguards for the employees concerned in a transfer. Article 4 states: The transferor and transferee shall be required to inform the representatives of their respective employees of the reasons for the transfer; the legal economic and social implication of the transfer for the employees and the measures envisaged in relation to employees. That directive was issued in 1977. It has been implemented in England by the regulations called The Transfer of Undertakings (Protection of Employment) Regulations 1981 and, if I may say so, also by Parliament in relation to the Royal Dockyards by the Dockyard Services Act 1986.

Therefore, we have provisions for the protection of employees in our law when businesses are transferred from one to the other, or the instance pending now; namely, the transfer of the Royal Dockyards to other undertakings. However, the provisions concerning the transfer of undertakings do not apply to the transfer of shares, which is why stock markets have been able to deal with the many transfers without consulting the employees. If those provisions had been in use employees would have been informed and consulted. The underlying trouble today is that the transfer of undertakings regulations do not apply to the transfer of shares and yet the result is the same. By transferring shares, or a majority of them. you have the same result as if you have transferred the undertaking itself.

In Clause 1 of the Bill they have taken the very words "legal, social, and economic consequences" from the directive and transfer regulations, and made them not only applicable to the transfer of undertakings but also to the transfer of shares.

Then a little further into the Bill we can take a leaf from the Treaty of Rome and the Common Market. The provisions in Articles 85 and 86 of the Treaty of Rome, which is part of our law, deal with unfair competition and with an abuse of a dominant position. Many takeovers are to eliminate competition—you buy up your rival's shares to take control of him so he can no longer compete with you. The object of a takeover is to eliminate competition from your rival companies, or to get into a dominant position in the market and there we take the leaf.

Are we to deal with this unfair competition? Are we to deal with the abuse of a dominant position? There we can turn to the Fair Trading Act 1973 which applies only in certain cases of unfair competition. In such cases the matter can be referred to the Secretary of State and if he thinks fit he can order an inquiry to see whether or not the merger is in the public interest.

That is a very good way of dealing with cases where there is potential unfair competition, or potential abuse of a dominant position. However, it is very limited. Noble Lords will have read in the newspapers that it was suggested that the Pilkington takeover should be referred, but the Secretary of State did not refer it. It is a very limited way of dealing with the matter.

In the next clauses of the Bill it is suggested that we should have a wider method of dealing with unfair competition and abuse of a dominant position. It should not simply be decided by the Secretary of State. It is suggested that a trade union, along with the Director General of Fair Trading, could inquire into the matter and see whether or not the proposed merger or takeover is contrary to the public interest. In other words, the jurisdiction of the Secretary of State should be expanded to cover all those matters to see whether or not they are in the public interest.

As I understand it, those are the principles underlying this Bill. I should not say that they are right in every detail but the principles underlying it are worthy of consideration. Therefore I ask your Lordships to give a Second Reading to the Bill.

9.57 p.m.

Lord Monkswell

My Lords, I should also like to thank the noble Baroness, Lady Turner of Camden, for bringing the Bill before us. Its timing is very apposite. The hour is late and I fear that if I were to cover all the good points of the Bill we should be here far too long. Therefore, with the leave of the House, I shall concentrate my remarks on two particular aspects of the Bill. The first matter concerns Clause 1(2)(c)(i), which refers to the information that a company should supply to the trade unions about, the size and shape of the workforce and the company's intentions. Secondly, Clause 3(1)(f) refers to the consideration of the Secretary of State, whether the change would … secure national control of strategic industries, or be in the interests of national security". All governments have a duty to ensure the defence of the realm. As with policing, health care and several other aspects of public policy, the defence of the realm can only be ensured with the consent, support and assistance of the people. We have only to remember the recent example of the South Atlantic campaign—the Falklands War, as it is described—to realise the importance of the support that the armed forces received from the civilian population at that time.

To enable the people to do their part they need the capacity to produce the sinews of war. In times gone by the village blacksmith would produce ploughs and scythes in times of peace. In times of war he would produce swords and battle-axes. He would depend on other local sources for his charcoal and steel. In modern times we have whole industries to supply our needs in times of peace. Those industries would also need to supply us in times of war. In peacetime, when we allow our industries to decline we risk reduction in economic prosperity. In war, we risk defeat through the same cause.

The trade unions know this. They know that in defending their industries they are defending their economic prosperity in times of peace and they are also defending their ability to support the national defence effort in time of war. The trade unions also have an expertise which is unavailable to government. They know how firms work from the inside. For example, where a takeover or merger is projected and the new managers—if one can call them that—say that they will rationalise the design capacity of the two original establishments, the workers within those firms will know which design capacity will be closed and which will be built up. They will be able to advise if there is going to be a loss of strategic capacity from this country or from the control of the UK.

The noble Lord, Lord Rochester, mentioned a possible problem with this Bill when he talked about what would generally be described as commercial confidentiality. I should like to give the House one example from my experience of how commercial confidentiality was dealt with by trade unions and employees. Some years ago the company for which I worked had a need to take some decisions which affected the workforce drastically. They realised that the only way they could get the consent of the workers was to explain the circumstances to them.

We had a mass meeeting of over 1,500 employees in that firm. A small number were non-union but we allowed them to come to the trade union mass meeting. At that meeting there were items of information of a highly confidential nature which were imparted to the trade unions and employees in the firm. To my knowledge, not one aspect of that confidential information leaked out in any respect. It was held privy by the workforce. I can only give that as an example to allay fears which noble Lords may have on that aspect.

I am glad to see that the noble Lord, Lord Trefgarne, is to respond to this debate on behalf of the Government. I hope that this indicates that the Government are beginning to wake up to the importance of various industries with regard to national defence. I hope that with the help of this Bill and the support of the trade unions this Government will at last take steps to ensure that vital industries, vital firms and parts of firms will remain under UK control, within the UK, in the interests of national security.

To sum up, this Bill will ensure that important information is forthcoming. It will encourage trust between management and workers and it will enable the Government to review the implications of change for national security. I commend the Bill to the House.

9.57 p.m.

Lord Wedderburn of Charlton

My Lords, the mark of a good Bill is that it never matters at what hour of the night we come to debate it. In that context, I. feel that all your Lordships will wish to thank my noble friend for bringing forward such an important matter which has indeed received remarkable support and which I apprehend the Minister will not wish wholly to reject.

We are living, to quote the Director General of the Office of Fair Trading, in years of an almost hysterical merger boom. The hyperactivity of the City in the booms of the mid-'fifties, the late 'sixties and the early 'seventies is put in the shade by the vast amount of assets, the great costs, not to be ignored, and the great risks to jobs of workers which are involved in the present wave of takeovers and mergers. It is possible to quote, not on any party basis but across the whole spectrum of those who understand the markets, those who say that this has now reached such proportions that the entire future of British investment and markets has to be thought about very carefully.

Two days ago the chairman of Lloyds Bank warned that the City was in danger because of the short-term outlook and the manifestation of the takeover wave. Today's Financial Times reported the newly-appointed Director General of the CBI saying that the tendency for the City to take the short-term view in these takeovers was worrying, and that, We must get across what havoc this causes inside the companies and how it takes management's eye off the ball". If ever there were an issue where workers in their trade unions, and otherwise, and management had, in many cases, common cause, it is this.

My noble friend is surely to be congratulated for bringing forward a Bill the principles of which are very hard to rebut. She will not, I know, misunderstand me if I say that I would want to amend some of the terms and definitions. But we are tonight debating the principles. I apprehend that the first of the two main pillars of principle is that in takeovers and mergers, workers' interests should receive elementary safeguards in our law which they do not now receive in regard to continuity, unfair dismissal and consultation with their representatives over information and meetings called for by the Bill.

The second pillar is that in takeovers and mergers, certainly of any great size, the public interest includes the interest of employees and indeed of employment, which must be safeguarded, and that this means putting the burden of proof upon those who come with the merger to whatever bodies are set up to safeguard the public interest.

On the first area, it is now generally accepted that a modern and civilised system of employment law in these types of situation provides that contracts of employees should continue and not be ruptured by changes of ownership; that employees should be protected against unfair dismissal arising from takeovers; that new owners should continue negotiation and recognition structures with the trade unions of their employees; and that those trade unions should be informed and consulted in advance about the nature and intended consequences of the takeover, not least where major changes of the workforce are envisaged.

I say to the noble Lord, Lord Rochester, that it may be that some of the apparent disagreements between us about whether there should be negotiation with trade unions or with workers, or with both, are really rather semantic. When I and, I apprehend, most of my noble friends, use the term "trade union", we speak of representatives of a combination of workers freely chosen by them to speak on their behalf, which, in any collective matter, is almost inevitable as a matter of procedure. That, of course, is a formulation which is included with the definition of "trade union". So whereas the noble Lord might want one union when I might want another—that is a different matter—I am not sure that we are very far apart on this issue.

My noble friend's Bill addresses to us all of these issues in a timely manner. As my noble friend said, more than half a million workers were involved in the six most recent takeover battles of 1986–87. Many of the conditions to protect workers are indeed more fully elaborated in many of the employment law systems of western Europe.

I pause to say to the noble and learned Lord, Lord Denning, that I am not at this point following him down the road that workers must come first, although I apprehend that it is one of the first occasions that I have found myself outflanked on the left by the noble and learned Lord. I say merely that those more moderate principles for the moment are found in other employment law systems and not in ours. As the noble and learned Lord told the House, that is really very odd. The directive that he cited, No. 187 of 1977, requires the, safeguarding of employees' rights in transfers of undertakings, businesses or parts of businesses". The Government's legislation to enact that directive took the form of the narrowest possible compliance in the notorious regulations of 1981, Statutory Instrument 1794.

The 1981 regulations apply, albeit narrowly, certain fundamental protections on unfair dismissal, consultation and the rest, where there is a transfer of an undertaking in the nature of a commercial venture. In most member states that bites—in France, West Germany and in Italy—because mergers there, as I am sure the Minister knows, frequently take the form of transfers of assets or of the undertaking in some recognisable form. Indeed as my noble friend Lady Turner said, one has to add to that the various rights of works councils. She cited the Netherlands, the works councils in Germany, the comités d'entreprise, different and diverse but rights superadded to the directive as applied. But here most takeovers take the form of a transfer of shares and so the regulations do not bite.

I pause to ask the Minister—not necessarily tonight but perhaps he will consult his right honourable friend—to consider further whether we really are obeying the spirit of the directive. The Luxembourg Court, as the Government know from recent equal pay matters, has gone rather strongly for the spirit of other directives. I wonder, I simply wonder, whether one day in looking at this they will think that our regulations, which catch so few mergers, really apply the spirit of that directive. To allow this fortuitous formality—made possible by the privilege of incorporation by limited liability, a much bigger immunity than the so-called immunity of a trade union—this fortuitous legislism means that the great majority of workers whose employer changes in reality have no protection in regard to the negotiation provisions, the consultation provisions, the dismissal provisions, and so on. It is manifestly absurd that this should be so and that is the first target that I submit my noble friend's Bill hits and hits in the bullseye.

The bidder's shares are issued to acquire the target company's shares or of course in a real sense the assets. Indeed, as the recent case of Barclay's Bank has shown very well, our regulations are extraordinarily narrow. On 21st March 1987 the Employment Appeal Tribunal had to decide the case of an enterprise set up by Barclay's Bank (BZW) in order to cope with the new work they would move into as, in the old terminology, stockbrokers and jobbers, after Big Bang. Although the bank recognised the trade union, it set up this enterprise in such a way that BZW would not recognise unions in the same way. The EAT was forced to conclude that no undertaking had been transferred and therefore the regulations did not bite even though it recognised that this might be an easy way for unscrupulous employers to evade their responsibilities under the regulations.

I see the noble and learned Lord glancing at me. If he were in the Court of Appeal I apprehend that we might have some hope of upsetting that, but I am not sure that that is so at the moment. Something that he did mention I should like to put on record from these Benches—that is, the debt we all, especially the workers, owe him, in relation to the dockyards, because it was largely by his efforts that the Government were compelled to insert provisions of this kind into the Dockyard Services Act 1986.

It therefore would seem that we need at a very elementary level some legislation of the kind that my noble friend puts forward. To the noble Lord, Lord Rochester. I say that in regard to voluntary action I preferred the first formulation of his amendment which the Government would not accept. However, we had some action from the Government. Under the Employment Act 1982 companies are required to report—no more. They are not required to do much but they must report. The situation in my perspective is rather worse than he thought because the only survey I know of company reports on this matter was conducted in 1985. It found that one-sixth of the 300 companies did not make any entry at all on this matter, and only 13 per cent. covered the various headings in any way that was substantial under each. There does not seem to be a great desire by large numbers of companies to follow the voluntary road. The interest of employees of course is part of a wider public interest, as my noble friend has said, especially in regard to longer term investment and investment in manufacturing industry that will provide secure and real jobs.

The Government's position, as I understand it, is that since 1984 they have not referred a merger under the provisions to which other noble Lords have spoken other than on the grounds of competition. That was confirmed on 15th January by the Secretary of State for Trade and Industry, Mr. Channon, in another place at col. 413 to col. 415, where he repeatedly said that he would not refer such a merger to the commission He said that the shareholders would have to decide on the best long-term prospects for the future of the company.

Mr. Channon was asked about the risk to groups of employees in their jobs, especially those engaged on research and development if the bid from BTR was successful. Indeed, there was good reason to ask the question, because the chairman of BTR had said earlier: We have never seen the ethical need or material reward for placing research or development to the forefront of our activities". What did the Secretary of State say? In reply to just that question at col. 416, he said: Those involved have to decide. It is not for me to make a judgment between those two management philosophies. What I think is being said to the Government tonight is this. Those involved are not merely the shareholders. Those involved, as noble Lords have said, are certainly equally the workers, and those involved should be listened to and should have some rights.

When it comes to the wider issue of mergers, for example, the issue of how short-term activity on the stock market promotes conglomorate mergers rather than those with some industrial sense, where does one find the statements preferring those with industrial sense? Frequently they are from the trade union movement. Mr. Todd, the general secretary of the Transport and General Workers' Union, said in a speech on 20th March on conglomerate mergers: There is no industrial logic to them, no economies of scale, no strengthening of the potential for efficiency and collaboration. I assert that he is saying something that is accepted by a large area of management and—I do not put this aside, although the Government are not very fond of this sort of thing—academic research. The research on mergers is now so strongly against their being, in the British context at least, efficient in the orthodox sense that it is difficult to see what the Government can do except ignore it if they wish to take a different course.

For example, Professor Julian Franks of the London Business School has recently completed surveys of 3,000 companies and comes to that kind of conclusion. Dr. Geoffrey Meeks in Cambridge has worked on mergers for 20 years; Dr. Ajit Singh for a shorter period. All come to the same conclusion, which is in accord with that which the Director General of Fair Trading put forward in a speech that my noble friend quoted earlier. The American authority Professor Edward Herman in his book Corporate Control, Corporate Power on mergers up to 1981, came to the conclusion on the balance of evidence that these led, to the vulnerability of small companies, the dominance of large companies and purchasers and the lack of evidence of profitability enhancement as a consequence of acquisitions". The invisible hand of the market is not blessed with omniscient guidance. If the Government have not taken that on board, it is a sad prospect for the future. They may, of course; but I hope that the Minister will not hide behind the Government review of competition policy. I understand that that will limit what he says, but certain aspects are surely absolutely clear. I cite one final example, because it is a bridging point. A recent publication from the London Business School called Acquisitions: the Human Factor is the result of a study of a considerable number of takeovers from the inside, as it were, talking especially to the managers who were concerned. Forty-five per cent. of the managers thought the result had been unsuccessful or relatively so; 55 per cent. thought that it had been relatively successful or better. But the important thing is that—and I quote— In two-thirds of the acquisitions regarded as successful a senior executive from the buyer company, often the chairman, personally communicated with all levels of the organisation at in-plant meetings, area conferences or other occasions, and in two-thirds of the unsuccessful acquisiton the buyer did not do this". The link is there with communication, information and consultation with the workforce. It is a clear one, and one that bridges the two points. We need a new merger policy which includes at least three things. The first is a definition of "public interest" which places greater emphasis upon the promotion of secure employment and indeed upon strategic industries for the various purposes that my noble friends Lady Turner and Lord Monkswell have mentioned. Secondly, the onus of proof must be placed upon those who promote large mergers to prove that they will be in the public interest. A case is often won or lost on the burden of proof far more than on the substantive law.

That is the policy of my party, and many things flow from it. Indeed, as the noble Lord, Lord Rochester, suggested—and I wish I had time to follow him into these matters—consequences flow for company law, for the status of the Takeover Panel and of the Securities and Investments Board, which must become public agencies in a fuller sense for the disclosure of nominees' shareholdings and indeed for insider trading. I say, as did my noble friend Lord Monkswell, that it is the general experience—and it was certainly the experience of the inquiries made (which were somewhat extensive) on this matter by the Bullock Committee, of which I happened to be a member—that it is difficult to find cases where confidentiality is broken by union officials, shop stewards or indeed representatives of workers generally. I ask your Lordships to think, for example, about the manufacture of a new car which comes out, and which is something the whole workforce knows about for a long time. It is difficult to find examples of breaches of confidentiality here. So though one must look at that, obviously one must look at other matters related to company law.

I conclude by saying two things. First, the point on company law is a wider one. I would put it in this way. Our law at the moment places certain very small obligations on employers in takeover situations, and they should be larger. But its approach is to say, "Of course if you break those obligations it will have no consequences in the merger and company law field"—that is to say, the observance of obligations in employment law is not in our orthodox thinking a condition precedent to proceeding with a merger or a takeover to the company law field. I congratulate my noble friend on the fact that her Bill approaches this area from a different aspect in Clause 4; namely, that the obligatory disclosure and consultation is to an extent a condition precedent such that if it does not take place the takeover or the merger may not be approved. That seems to me to put a different principle before your Lordships, and one that deserves support.

Finally, the Bill also takes a first step towards the protection of pension funds from company raiders in this area of the law. My noble friend has spoken about limitations in other areas of the law, and the decision on the Courage Group's pension fund by Mr. Justice Millett this year which protected the fund from the extraordinary raid which the Hanson Trust attempted to make upon it. That attempt to milk the pension fund, standing at some £70 million, of the employees was fortunately prevented by the High Court at the last ditch. Although it is true that further regulation, especially through the tax system, is now coming into place, I hope that the Minister will take on board the fact that we may not yet have seen the last of predatory raids on companies for the purpose of obtaining advantage from the pension fund. It may be said, "Well, the surplus will only be 5 per cent. which belongs to the employer." Nevertheless, 5 per cent. of a large pension fund can be a very large sum and it could at least pay for the costs of the bid. The Bill raises that issue and is to be commended on that ground, too.

In a global market of an internationalised economy it is not easy to execute an effective domestic policy on takeovers and mergers. But we can take the first step to a more rational policy and one that protects working people in a way which, so far, our law has more or less wholly failed to do.

10.21 p.m.

The Minister of State for Defence Procurement (Lord Trefgarne)

My Lords, I have listened with interest to the debate this evening. We have seen in this country recently a considerable number of large takeovers, and the concern of the sponsors of these proposals is perhaps understandable. However, the Government have profound reservations about the Bill. It would necessitate major changes to our current legislation on mergers; namely, the Fair Trading Act 1973. I do not wish to rule out the possibility of legislative change in due course. Indeed, as your Lordships will be aware, the whole area of law and policy on mergers and restrictive trade practices is currently under review. The proposal being considered today would, however, make a number of important changes which need careful and thorough consideration and for which the review provides a proper forum.

Among the changes to current procedures proposed by the Bill would be a change in the burden of proof: that mergers henceforward would, to be allowed, need to prove themselves beneficial to the public interest rather than to be shown not to be against the public interest, as at present. If implemented, such a change, together with automatic reference of all mergers to the Monopolies and Mergers Commission, would have major implications not only for companies which would, in all cases, be subjected to an in-depth investigation by the Monopolies and Mergers Commission, but also for the commission itself, since that proposal would at the very least result in a major increase in its workforce to many times its current level.

In some respects the proposed legislation shows—and I hope the noble Baroness will not mind my saying so—a misunderstanding of the procedures for scrutinising mergers under the Fair Trading Act as they operate at present. Clause 3 of the Bill sets out certain matters which must be considered by the Monopolies and Mergers Commission in its investigation. Under Section 84(1) of the Fair Trading Act the MMC already has a wider remit than this. It has a duty to take into account all matters which appear to it in the particular circumstances to be relevant. It seems unnecessary and undesirable to narrow down that remit.

Clause 4 gives trade unions the right to make representations about mergers to the Office of Fair Trading, the Monopolies and Mergers Commission and indeed to the Secretary of State for Trade and Industry. That right already exists. Trade unions can and often do make such representations, and these are of course taken into account. Many of the concerns which the Bill expresses are therefore already met by existing legislation. The wider question of the rights of employees in merger situations is, moreover, being considered in the context of the review to which I have already referred.

Turning to the proposed rights for employees in a little more detail, what does this Bill propose? First, it aims for an extension of trade union rights to information and consultation. As many of your Lordships will be aware, there is already legislation in this area. The Employment Protection Act 1975 places a general obligation upon employers to provide information to recognised trade unions for collective bargaining purposes. There is an ACAS code of practice giving practical guidance as to what this obligation entails. That was the purpose of the amendment to which the noble Lord, Lord Rochester, referred during his speech, and with which he was much concerned during the passage of the Bill, which is now an Act.

Furthermore, the same Act places an obligation upon employers to consult recognised unions about any proposed redundancy, and details minimum periods in which this consultation shall take place. The Government believe that these existing provisions already provide a substantial and adequate measure of statutory protection for employees. To introduce a new range of information and consultation requirements for the specific circumstance of proposed takeovers and mergers would in many instances merely serve to duplicate the existing provisions.

Furthermore, it would be impractical to require firms to give information about every aspect of the consequences of a takeover or merger. There will be many aspects of any such change that will be simply unpredictable. To require employers to give binding assurances about future plans, which must always be subject to changing circumstances in an uncertain world, is simply unrealistic. The major effect could only be to impose new and unreasonable burdens on business.

Let no one be in any doubt that the Government fully support the development of voluntary consultation arrangements between employers and employees. But when it comes to proposals for prescriptive legislation it is clear that in the real world of industry and commerce effective consultation depends upon the presence of the spirit of trust and co-operation, not upon the existence of formal structures and statutory rights. Trust is an attitude of mind and you cannot impose an attitude of mind by legislation.

Clause 5 of the Bill provides for the guarantee of continuity of employment for workers affected by a takeover or merger. The Employment Protection (Consolidation) Act 1978 preserves for the purposes of statutory employment rights the continuity of employment of employees affected by a takeover merger, or sale. And of course when a takeover is effected by share transfer there is no change in the legal identity of the employing company, and therefore the possibility of employees' continuity being broken will not arise.

The Bill then goes on to require the new employer to recognise any independent trade union recognised by the old employer. Furthermore, the new employer may not change employees' terms and conditions for 12 months without union agreement. I am afraid that these proposals have little to commend them. The Government firmly believe that trade union recognition is a matter for negotiation and agreement between employers and unions. Nor would I consider it appropriate to grant trade unions the power of veto over changes in terms and conditions of employment. In some cases, businesses which are the subject of takeovers are businesses which are performing badly. In the interests of everybody managements must be free to take the measures necessary to turn around an unprofitable enterprise without having their hands tied behind their backs.

Clause 6 seeks to provide unfair dismissal protection for employees if the change of ownership is the principal reason for their dismissal. The Government take the view that the existing unfair dismissal legislation provides appropriate protection for employees against unjustified dismissals by employers. Any new provision of this kind is therefore unnecessary.

As it stands, this proposal would create a legal minefield for new employers, who could be prevented from making the changes in the levels of their workforce which are necessary to rescue inefficient or unprofitable businesses which have come into their hands.

May I add in parenthesis that the Transfer of Undertakings Regulations which implement the EC acquired rights directive provide certain protections for employees when businesses are transferred other than by a share transaction. I know the noble and learned Lord, Lord Denning, is very much aware of that, and he and I exchanged a number of views on the matter during the passage of the dockyard legislation to which he has referred.

Where the Bill deals with pension rights, it proposes some rather inflexible provisions which I suggest would not always work to the best interests of the members. Occupational pension schemes are set up voluntarily by employers, almost invariably under a deed of trust. We believe that it is important to retain this voluntary principle and that trust law is a suitable basis for regulating the conduct of pensions schemes.

Trust law places a general duty on trustees to act at all times in the best interests of all the members in accordance with the trust deed and rules of the scheme. The flexibility and protection of trust law have led to a wide variety of pension schemes, tailored to the differing circumstances of individual firms and employments. We should be very wary of interfering with these provisions.

In addition, there are specific legislative provisions which provide for the protection of members. These cover matters such as the preservaton of benefit and the right to a transfer value when pensionable service or relevant employment ends before pension age. There are also new rights for members and their trade unions to have comprehensive information about their pension scheme.

The provisions of the Bill seem to pay little regard to the variety of circumstances in which a company may be merged with or acquired by another. If the identity of the company remains unchanged, the pension scheme remains in existence and the employees remain in membership, pensionable service continues and rights continue to accrue. In most other circumstances, pensionable service in the original scheme will terminate. Existing legislation provides either that the accrued benefits are preserved in the original scheme, or are transferred to another scheme, or are secured with an insurance company. In our view, these provisions provide adequate protection for members and are more flexible and give greater freedom of choice than the proposals in this Bill.

Perhaps I may now turn to some of the points that have been raised this evening. In opening the debate the noble Baroness, Lady Turner, made various criticisms of the operation of the Government's current policy on mergers. I must emphasise that although it is our policy to make decisions on the reference of mergers to the Monopolies and Mergers Commission primarily on competition grounds, this does not mean that they are made exclusively on competition grounds or that other considerations—for example, those of employment—are not taken into account in that decision. When a merger is referred, the Monopolies and Mergers Commission has a duty to take into account all the relevant circumstances. I cannot therefore accept that the interests of employees are disregarded under current policy.

The noble Baroness correctly referred to the review of law and policy on mergers and restrictive trade practices. That review is considering a number of important and complex issues. I can assure the noble Baroness that the question of the rights of employees in takeovers is one matter under consideration.

The noble Lord, Lord Rochester, asked me about the position of Section 1 of the Employment Act and whether we were satisfied with the operation of it. Yes, my Lords, we are indeed satisfied with progress in employee consultation and involvement, as shown by reports made under Section 1 of the 1982 Act. Perhaps it would help the noble Lord if I were to send him a copy of the latest analysis of the reports. I shall be happy to do that. The noble Lord also referred to certain policies which had, he said, been endorsed by his party for the past 50 years. I suppose I am entitled to comment that it is more or less for that period that the Liberal Party has been out of office, but whether there is any connection between the two I should not care to suggest.

The noble and learned Lord, Lord Denning, referred to the fact that the regulations do not apply where a share transfer is principally involved. But the EC directive, to which the noble and learned Lord referred, as did the noble Lord, Lord Wedderburn, applies only where there is a change in the legal identity of the employer. This is not the case in takeovers affected merely by share transactions. The regulations to which I have referred fully implement the directive.

The noble Lord, Lord Wedderburn, asked me why the United Kingdom lagged behind European countries on information and consultation rights for employees. I think he felt that the regulations did not fully implement at least the spirit of the directive to which he referred. As I said, there is basic provision in the Employment Protection Act. Beyond that, the Government prefer to encourage industry to develop voluntary arrangements. Experience abroad tends to confirm our view that real consultation depends not upon legal requirements but upon co-operation and trust between managers and workers.

The noble Lord, Lord Wedderburn, referred to a number of worthy and distinguished luminaries in this field. Indeed, the noble Lord is just such himself. I am told that his book The Worker and the Law is one of the standard works in this field. Of course, he has also much impressed us tonight with his knowledge of these matters. However, perhaps I may be forgiven for doubting whether he has displayed equal prowess in objectivity. I do not think that he has looked at the Bill dispassionately. No doubt I would be assisted if I were to read the noble Lord's book or even to attend one of his courses at the London School of Economics; but I am not certain whether I would qualify for admission to that august establishment

In conclusion, as regards the proposals in the Bill which would necessitate significant changes to current mergers legislation, the review currently in progress is, in the Government's view, the proper forum for consideration of any changes. As I mentioned, the rights of employees in merger situations are being considered in the context of this review but there is no doubt that some of the proposals in this Bill would, where they were not duplicating existing legislation, impose undue additional burdens upon businesses and constrain management in their right, indeed their obligation, to manage effectively. Finally, the pension proposals would reduce flexibility and freedom of choice. For those reasons, I regret I cannot commend the Bill to your Lordships.

Lord Wedderburn of Charlton

My Lords, before the noble Lord sits down, I have two questions. I did not want to interrupt the noble Lord earlier as I thought it would be better to wait; partly, as I now see, because I can welcome him to the opening of next term.

My first question is to ask the noble Lord to be so kind as to send me a breakdown of the company reports under Section 1 of the 1982 Act that he is sending to the noble Lord, Lord Rochester. My second question is rather more substantial but can be quickly put in this way. Throughout his speech the noble Lord the Minister relied on what he called, more than once, the basic protections of the Employment Protection Act 1975—the right of trade unions to consultation on redundancy and to information for the purposes of collective bargaining. He said that that was adequate and that to go further was an unnecessary duplication. I took that at least to be the thread of his argument, repeated more than once.

If that is so, the Government might be understood to be saying that although they had to go further under the European directive they did not see the point of doing so and that the 1981 regulations are an unnecessary duplication, or even worse. I wonder whether the noble Lord wanted that indication to remain as the Government's position.

Lord Trefgarne

My Lords, the directive was in 1977, if I remember rightly. Between 1977 and 1979 noble Lords opposite and their right honourable friends had an opportunity to do something about it, though they did not. Indeed, it remained for the Conservative Government who arrived in 1979 to do something, which we did as soon as the opportunity arose in 1981, as the noble Lord is aware.

Having said that, I think that the regulations honour the spirit of the directive. The noble and learned Lord, Lord Denning, and I exchanged a number of views on those during the passage of the dockyard legislation a few months ago. I think I was able to say at that time that we were fully satisfied that the regulations met the needs of that particular situation.

As for sending the noble Lord a copy of the papers that I send to the noble Lord, Lord Rochester, naturally I shall be happy to do that.

Baroness Turner of Camden

My Lords, I wish to thank the noble Lords who at this late hour have participated in the debate on the Bill that is before your Lordships' House. I am disappointed to hear from the Minister that he believes that legislation already exists to cover a great deal of what the Bill is seeking to do. If that is the case, I can only say that it does not seem to be to be working very effectively. Reference has been made to the need and the preference for voluntary action, and so on; but it is because there has been an absence of that kind of voluntary action that trade unions have generally become extremely concerned and why I have put this Bill before your Lordships' House.

The Trades Union Congress has had a number of meetings and discussions about the general situation. It is very concerned indeed about the threat, as it sees it, to workforces because of what has been described as "merger mania". With the exception of the Minister, I think that all noble Lords who have spoken in the debate, whether they have approached the subject from the standpoint of the provisions of my Bill or differently, as has the noble Lord, Lord Rochester, seemed to have been saying that there is a need to look again at the situation, that employees are vulnerable in takeover and merger situations, and that whether or not my Bill adequately meets the situation, there is nevertheless a need to do something different and additional to what is now provided in regulation and statute.

As for the 1981 regulations, I am very grateful to the noble and learned Lord, Lord Denning, for his very clear exposition of what they mean. Certainly when they were first issued, I remember that in my own union we sought legal opinion as to their effect and we had a very substantial opinion. The upshot seemed to be that when it came to applying those regulations to practical situations that were likely to be faced there would be very little protection available for the employees concerned. So I do not believe that the 1981 regulations adequately cover our situation.

As for the remarks of the noble Lord, Lord Rochester, about secrecy, I commend to him the observations of my noble friend Lord Monkswell. Quite clearly on this side of the House we do not believe that secrecy is a problem so far as concerns unions. This has never been shown to be the situation. Nevertheless, in the Netherlands code, as I understand it, there is provision which seeks to deal with secrecy, where that may be a problem. Provisions in the Netherlands legislation go beyond what is provided here for employees.

I say again to the noble and learned Lord, Lord Denning, how flattered and grateful I am that he has participated in the debate this evening, and I am deeply grateful for the experience that he has brought to bear on this situation both in regard to the docklands and so far as concerns the general legal position of employees who are threatened by takeovers and mergers. I am grateful for what he has had to say and the support that he has given.

I do not want to take up much more of your Lordships' time as it is very late. In conclusion, perhaps I may simply say that I should like my Bill to complete its Second Reading this evening.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

House adjourned at sixteen minutes before eleven o'clock.