Lords Sitting of 26 June 1991

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on
the Woolsack.
Prayers—Read by the Lord Bishop of Portsmouth.

Lord Mackay of Ardbrecknish
John Jackson Mackay, Esquire, having been created Baron Mackay of Ardbrecknish, of Tayvallich in the District of Argyll and Bute, for life—Was, in his robes, introduced between the Lord Sanderson of Bowden and the Lord Fraser of Carmyllie.
Lord Ponsonby of Shulbrede—Sat first in Parliament after the death of his father.

Vietnamese Migrants
2.48 p.m.
Lord MacLehose of Beoch Lord MacLehose of Beoch asked Her Majesty's Government:
What success they are having in implementing the comprehensive plan of action over Vietnamese migrants who do not qualify as refugees agreed at the International Conference on Indo-Chinese Refugees of 1989.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, we believe that the comprehensive plan of action remains the best option for returning non-refugees to Vietnam. Seven thousand three hundred and twenty-one Vietnamese migrants have returned in safety but we would have liked to see greater numbers returned. We are investigating new ideas both to reduce the flow of Vietnamese to Hong Kong and to increase the rate of return of non-refugees.
Lord MacLehose of Beoch: My Lords, I thank the noble Earl for his Answer. Numbers of people are pouring into Hong Kong. Is not the American blockage of international aid a powerful factor in the delay over implementing the plan? Vietnam is reluctant to accept her own people back in reasonable numbers until aid is unblocked. Further, the prospect of poverty in Vietnam destabilises the whole area. Will the Government do everything they can to persuade the American Government to change their policy as soon as possible before there is an explosion in Hong Kong?
The Earl of Caithness: My Lords, we are grateful to the noble Lord for bringing this important matter to the attention of the House. As he says, the situation is becoming extremely critical. The camp population now exceeds 61,000 people. I can assure the noble Lord that we are in constant touch with the Americans. We undertook a successful visit at the beginning of June and hope that we shall be able to make progress with internationally managed centres in Vietnam as a result.
Lord Cledwyn of Penrhos: My Lords, can the noble Earl say whether the resumption of trade and the giving of aid to Vietnam have been discussed with the United States Administration? Can he say what the response of the United States has been? Can he further say when the screening of the boat people will be discussed with the United Nations High Commission for Refugees and what prospect there is of making progress on that matter?
The Earl of Caithness: My Lords, aid to Vietnam is one of the important factors. If the situation in Vietnam improves, there will be less reason for people to try to leave the country. America has put forward what is called a road map of future development with Vietnam. However, much depends on the result of the negotiations on Cambodia; so it is a long-term prospect. As to the noble Lord's second point about screening, that is a matter in which the UNHCR is involved and an appeal can be made to it at any time.
Lord Molloy: My Lords, is the noble Earl aware that those of us who have been in Hong Kong recently were profoundly shaken by the deep feeling there about the boat people? We should bear in mind that the problem with the Vietnamese refugees was probably created by the United States of America. We have to realise that the United States has recently made communist China a most favoured nation. This also causes great concern. Could those matters be discussed with the American ambassador in this country in an endeavour to help to relieve the situation of the Hong Kong people?
The Earl of Caithness: My Lords, we commend the Hong Kong Government for the manner in which they have handled this extremely difficult problem. We seek to help where we can legitimately do so, and American help is also needed. I say to the noble Lord that it is by no means the majority who are refugees. Quite the reverse—the vast majority of people arriving in Hong Kong are non-refugees.
The Earl of Selkirk: My Lords, can my noble friend say whether the number of migrants in Hong Kong is increasing or diminishing to any substantial extent?
The Earl of Caithness: My Lords, the number is increasing rapidly at the rate of about 200 a day. Over 5,000 arrived last month and 3,500 or slightly more have already arrived this month.
Lord Geddes: My Lords, in view of my noble friend's initial response, if the influx of boat people becomes so great that it exceeds the capacity of the camps, bearing in mind EXCO's reluctance to fund further camps, have Her Majesty's Government any views on assisting the Hong Kong Government?
The Earl of Caithness: My Lords, that is precisely the point that my right honourable friend the Secretary of State and I discussed with the governor this morning. We hope to work out a solution jointly.

Sunday Trading Laws
2.55 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
Whether they intend to reform the laws on Sunday trading; and if so, when.
Viscount Astor: My Lords, the Government are committed to reform of the law on Sunday trading in England and Wales. The terms and timing of fresh legislation remain to be determined. But our aim is that such legislation should be workable, enforceable and enjoy sufficient support in the country and in Parliament. We have initiated a fresh programme of discussions with the major groups interested in this reform to try to identify what particular provisions might satisfy those criteria.
Lord Dormand of Easington: My Lords, how much longer will the Government dither over this matter? After 12 years in power the Government have allowed the position to deteriorate into utter chaos. The worst feature of the present position is that the law is being openly flouted. Does not the Minister agree that the most important feature of any legislation on this matter must be the legal protection of the shop worker? A voluntary code of practice would be utterly useless.
Viscount Astor: My Lords, as I have already said, we are undertaking consultations, and discussions are likely to continue into the early autumn. My right honourable friend will consider making a statement on the conclusion of the discussions nearer the time.
Lord Boyd-Carpenter: My Lords, does my noble friend appreciate that a situation in which the law is disregarded and treated with derision by considerable sections of the population is damaging to our whole concept of law and order, and therefore there is some urgency in getting the matter right?
Viscount Astor: My Lords, my noble friend is entirely correct. There are some major anomalies in the law. The Government support, in principle, the idea of deregulation.
The Lord Bishop of Manchester: My Lords, does the noble Viscount appreciate that the leaders of the churches in England, Wales and Northern Ireland are united in wishing to see a sensible reform of the Sunday trading laws but that they are also united in believing that in the meantime the present law should be observed? Does he further appreciate that it is considered that such a reform should mean that as few people as possible will work on a Sunday, that family life will be protected and that the traditional character of Sunday will be observed? Does the noble Viscount further appreciate that in Scotland the churches are deeply disturbed at the increasing number of shops opening on Sunday, thus destroying the traditional character of the Scottish Sunday?
Viscount Astor: My Lords, the right reverend Prelate mentioned Scotland. In Scotland shops can open on Sunday and there is an absence of restrictions
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on Sunday trading. However, only a minority of shops open on Sunday there. I believe that Sunday is still special in Scotland.
Baroness Nicol: My Lords, how wide are the consultations that are being undertaken? Are the Government talking to representatives of shop employees, for example? Will the noble Viscount give us a few representative names from the list of consultees?
Viscount Astor: My Lords, my right honourable friend is undertaking consultations with about 20 interested parties at the moment. The list is quite long and I am sure other organisations will be added to it as time goes on.
Viscount Tonypandy: My Lords, is the noble Viscount aware that, despite the anomalies that surround Sunday and despite the fact that a handful of people are tremendously worried about removing the anomalies, a large section of the people in this country still cherish Sunday? Over the greater part of the country Sunday is still a very different day from any other day of the week. Will the Government move slowly before they do anything that will damage yet again the symbol of the faith that we in this land traditionally hold?
Viscount Astor: My Lords, I agree with the noble Viscount that Sunday is an important day for family life among other considerations. But there are some odd anomalies surrounding Sunday that I am sure noble Lords are aware of. One can, for example, sell a Bible on Sunday at a designated railway or bus station or at an airport but one cannot sell a Bible on Sunday in a cathedral bookshop.
Lord Hailsham of Saint Marylebone: My Lords, in view of the reference made by the noble Viscount on the Cross-Benches to this country, will my noble friend reiterate that there is a part of this country called Scotland and that Sunday is more rigorously observed there than in any other part of this island? Will he also confirm that there are no restrictions in Scotland as regards Sunday trading apart from a restriction on hairdressing?
Viscount Astor: My Lords, my noble and learned friend is entirely correct.
Baroness Oppenheim-Barnes: My Lords, does my noble friend agree that it is not the Government who have dithered but those in another place who have not voted for the legislation? Does he also agree that the majority of consumers and retailers would like the opportunity to choose whether shops open on Sundays and that the worst remedy would be to give local authorities discretion to decide whether or not to allow that?
Viscount Astor: My Lords, I agree with my noble friend that one of the problems was the Shops Bill of 1985. I said in my original Answer that it is important that if we go forward with reform it must enjoy sufficient support in the country and in Parliament.
Lord Williams of Elvel: My Lords, is the noble Viscount aware that we have Questions on this subject frequently and that the topic comes up almost every month? Is he further aware that it is time the Government started to govern and resolved the problem? Is he also aware that the mother of George III said to him, "George, be King". I am not inviting the noble Viscount to be king, I am inviting the Government to govern and to solve this problem as soon as possible.
Viscount Astor: My Lords, that is exactly what we are doing. As I said, we are consulting a great range of people. I must point out to the noble Lord that if in this intemperate weather we are experiencing he manages on Sunday to pick the strawberries in his garden that is only the beginning of his problems because on a Sunday one can sell tinned or untinned clotted cream and untinned unclotted cream but not tinned unclotted cream.
Lord Mellish: My Lords, is the Minister aware that some of us do not regard the Government as the ditherers in this matters but the vast majority of Members of this House and of the other place? Does he agree that it is about time that we stopped all this rubbish and cant about so-called family life and all the rest?
Viscount Astor: My Lords, I am very grateful for the noble Lord's support for the Government.
Viscount Montgomery of Alamein: My Lords, in the light of the way in which the questions have developed does my noble friend think that it is reasonable to expect that all major parties will include Sunday trading reform in their manifestos?
Viscount Astor: My Lords, I am rather unclear as to what the view of noble Lords opposite is on this matter.
Lord Cocks of Hartcliffe: My Lords, will the Minister give an assurance that children under the age of 16 will not be enrolled by inspectors to go round making sure that the law is not being broken?
Viscount Astor: My Lords, that is a question of detail which will have to be looked at if we ever have any legislation to reform Sunday trading law.
Lord Dormand of Easington: My Lords, if the Minister takes note of what my old friend the noble Viscount, Lord Tonypandy, said the Government will stall, because they could hardly proceed any more slowly. The thrust of my question was, when is anything going to be done about it? However, I am in favour of consultation. Is the Minister aware that some of us who do not have religious views feel that there is something special about Sunday?
Viscount Astor: My Lords, I said that we are consulting on this matter and we very much hope to do something about it.

Salmon Fisheries
3.2 p.m.
Lord Stodart of Leaston Lord Stodart of Leaston asked Her Majesty's Government:
Whether they have concluded the review of the English north-east coast fishery, following the undertaking given in January 1986.
The Earl of Strathmore and Kinghorne: My Lords, Section 39 of the Salmon Act 1986 requires my right honourable friends the Secretary of State for Scotland and the Minister of Agriculture, Fisheries and Food to present a review to Parliament on the salmon net fisheries off the north-east coast of England and the east coast of Scotland. Scientists in the fisheries departments of the Ministry and the Scottish Office have completed a substantial background paper and my colleagues are now considering it and the way forward. A report will be presented to Parliament as soon as possible.
Lord Stodart of Leaston: My Lords, I thank my noble friend for that reply. Is he aware that five and a half years have elapsed since considerable anxiety was expressed in this House on conservation grounds about the fact that the catch of salmon in the north-east coast fisheries had risen from 2,000 a year in the 1950s to 48,000 a year in the 1970s and to 77,000 in 1984 and that that anxiety triggered the three-year review? Can my noble friend say what the figures are for the catch since 1984 and whether a fall in the catch justifies what I might describe as his remarkably relaxed reply?
The Earl of Strathmore and Kinghorne: My Lords, it was not my intention to give a relaxed reply. I hope that I did not do so. Detailed catch statistics are published regularly and copies are placed in the Library of the House. Provisional data only are available for 1990 because all catch returns have not yet been received. The total net catch for salmon in the review area in 1990 was 51,881. However, I must stress that those figures are provisional.
Lord Mason of Barnsley: My Lords, is the Minister not aware that north-east coast drift netting takes salmon destined to spawn in the Yorkshire Esk and Scottish rivers and is therefore regarded as bad management practice? Secondly, is he not aware that the narrow nylon monofilament gill nets used in the North Sea, especially when they are broken, hang as ghost nets and are responsible for fish, diving sea birds and dolphins suffering cruel deaths. Is the practice not embarrassing to her Majesty's Government when they wish to protest against the Faroese netting the Atlantic salmon destined for our shores? Finally, is he aware that the North Atlantic Salmon Conservation Organisation and the Salmon and Trout Association oppose the practice? Why do Her Majesty's Government not just stop it?
The Earl of Strathmore and Kinghorne: My Lords, I recognise the point which the noble Lord, Lord Mason, makes. I am fully aware that it is a highly sensitive issue. However, the review will not address

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economic issues. Salmon are undoubtedly a valuable component of mixed fisheries in the area alongside species such as white fish, lobsters and crabs, depending on the time of year. The Government have commissioned a separate economic evaluation from Portsmouth Polytechnic of the country's salmon fisheries. I understand that that study will shortly be completed.
Lord Moran: My Lords, is the Minister aware that there is serious concern about the decline in world stocks of Atlantic salmon and that world catches in home waters, excluding Greenland and the Faroes, have declined from 10,439 tonnes in 1967 to a mere 4,000 tonnes in 1990, which is a decline of more than 60 per cent. in 23 years? Is he also aware that in 1989 and 1990 this single fishery was taking half the salmon caught everywhere in England and Wales and two-thirds of the sea trout? Does the noble Earl not think, therefore, that those factors taken together reinforce the calls for the phasing out of this interceptory and damaging fishery made by the noble Earl, Lord Home, and many others during the debates on the Salmon Bill in 1986? One last point—
Lord Hailsham of Saint Marylebone: That is five questions, my Lords!
The Earl of Strathmore and Kinghorne: My Lords, although provisional rod data only are available for 1990, we are aware of reports that in some cases rod catches were lower than in previous years. Drift net salmon catches in some English regions were higher in 1990 than in 1989. The distribution and variation of catches is being analysed by scientists in the fisheries departments and by the National Rivers Authority. It is too early to draw firm conclusions. Year-on-year fluctuations in catches of migratory fish are normal and can be the result of a number of factors, including low water levels due to drought and higher than normal levels of natural mortality. It is not yet known whether there are any other abnormal factors in relation to the 1990 catches.
Lord Sanderson of Bowden: My Lords, will my noble friend ask his right honourable friend the Minister of Agriculture to bear in mind that drift netting at sea has been banned in waters off Scotland but not yet in waters off England and Ireland and that that should be a salient point when he eventually produces a report?
The Earl of Strathmore and Kinghorne: My Lords, suffice it to say that I have taken on board the concern felt by the whole House on this subject. I shall certainly pass on your Lordships' anxieties to my right honourable friend the Minister of Agriculture, Fisheries and Food in another place.
Lady Saltoun of Abernethy: My Lords, is it not true that Lowestoft scientists reported in 1982 that 94 per cent. of the fish caught by the north-east drift net fisheries were returning to Scottish waters? Does the Minister agree that those catches must have had a significant and damaging effect on the stocks and catches in the rivers in north-east Scotland? Is it not
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also true that the necessary scientific evidence on which decisions could be based has been available to Ministers for quite a long time?
The Earl of Strathmore and Kinghorne: My Lords, I understand that the 1982 report by departmental scientists concluded that, although 94 per cent. of the fish caught in the English drift nets were returning to Scottish rivers, the overall effect on catches in Scottish rivers in the review area was only about 6 per cent. A more recent assessment has been obtained for the purposes of the review and will be presented in the report.
Lord Carmichael of Kelvingrove: My Lords, I am glad that the Minister made the last point. He will perhaps have read our debate in Committee on the Bill in 1986. It was a long debate and, although no one tried to suggest that drift netting off the north-east coast of England was not an important issue, the salmon shortage could not be wholly blamed on it. I am glad that the Minister confirmed that point. Can he say anything about the new licensing proposals for the salmon fisheries? The hardship to a number of families who have fished for generations in that area must be considered as well as the issue of the salmon.
The Earl of Strathmore and Kinghorne: My Lords, I take the point about licences. However, I cannot go further down that road today. No specific time limit was set for the completion of the review. The Salmon Act requires that the report should be laid before each House of Parliament as soon as practicable after November 1989. It has been necessary for scientists from the fisheries departments to collect and analyse a wide range of scientific information on which to base the review. The Government are now in the process of assessing that information. We appreciate the widespread interest in these complex issues; we are moving as quickly as we can.
Lord Tryon: My Lords, is the Minister aware that, as a result of the recent splendid international initiative of an Icelander, Orri Vigfusson, the end of Faroese fishing for salmon seems to be imminent and Greenland may follow shortly? That will leave only England and Ireland among the North Atlantic countries still drift netting. Does that not make life difficult for the Government in all international negotiations on fishing?
The Earl of Strathmore and Kinghorne: My Lords, at this stage I cannot comment on what the review will say. However, drift netting off the north-east coast of England is very tightly regulated and closely monitored.

European Federalism
3.14 p.m.
Lord Ezra Lord Ezra asked Her Majesty's Government:
Whether in their opinion European federalism means more or less centralisation.
The Earl of Caithness: My Lords, federalism means different things to different people.
Noble Lords: Hear, hear!
The Earl of Caithness: My Lords, in Britain it is often held to mean a unitary state with a universally elected central executive. We do not believe that that would be acceptable to Parliament.
Lord Ezra: My Lords, does the noble Earl recall that one of the reasons that led the then Government in 1950 to reject the invitation to participate in the negotiations for the creation of a European Coal and Steel Community was a misunderstanding of the French words en principe? Does the noble Earl agree that it would be unfortunate in historic terms if we were to repeat that semantic difference so many years afterwards and thus diminish the effective role that we can play in the development of Europe?
The Earl of Caithness: My Lords, the answer to the noble Lord's first question is, no, I cannot remember the negotiations of 1950. With regard to his second question, I agree that it is important to get the definition right so that everyone is clear.
Lord Beloff: My Lords, does my noble friend the Minister agree that this is one of the questions which is frequently asked but which has no meaning? It is like asking whether the A.1 goes from London to Scotland or Scotland to London. It depends which end you start from. If you have a unitary state and you demand federalism, as some people have for the United Kingdom, it is a matter of decentralisation. If, as in Europe, you have what are still independent sovereign states, federalism can mean only a central form of government as in the United States and other well-known federations.
The Earl of Caithness: My Lords, my noble friend makes important points. It would be interesting if the Europeans were to tell us what they understood by the word "federalism".
Lord Jenkins of Hillhead: My Lords, will the noble Earl accept that I agree that "federal" has different meanings in the different countries of Europe, although, curiously, the English dictionary definition appears to agree with the interpretation that is put on it in, say, Germany rather than with the interpretation put on it by the British Government? The Concise Oxford Dictionary, for instance, defines it as:
"a polity in which several states form a unity but remain independent in internal affairs".
That does not sound very terrifying or much of a juggernaut state. Will the Minister also bear in mind that, if King Henry IV of France thought that Paris was worth a mass, perhaps Mr. Major, given his proclaimed aim of a position at the heart of Europe, might think that that was worth a single mention of the word "federal"? Will the Minister convey to his noble friend the Leader of the House that this matter is dominating issues at present and that it would be desirable if the House could have a debate on Europe before we separate for the Summer Recess?
The Earl of Caithness: My Lords, on the noble Lord's last point, that is for the usual channels to
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decide. On his other questions, he is absolutely right to underline the important point that we must know what we are talking about in any treaty.
Lord Cledwyn of Penrhos: My Lords, in view of the views expressed in recent weeks and over a period of time on this issue by Mrs. Margaret Thatcher, Mr. Edward Heath and, more recently, by the present Prime Minister, will the noble Earl persuade his right honourable friend the Foreign Secretary to produce a short White Paper giving the Government's definition of federalism? As the noble Earl is aware, the people of this country are totally confused as to the Government's policies at present. Arising from that point, will he say whether the present draft treaty would create a federation in Europe?
The Earl of Caithness: My Lords, when one is in the middle of negotiations the aim of which is to reach an agreement by the end of this year and when the situation is evolving, it would seem a little odd to try to produce a White Paper. The noble Lord the Leader of the Opposition referred to the fact that some people in this country might be confused by what was happening at the moment. I am sure that they are extremely confused as to what the position of the Labour Party is now that it seems to be on at least its seventh policy as regards Europe.
Lord Monson: My Lords, does the noble Earl agree that a federal super-state with a common foreign policy would entail a single seat at the United Nations instead of 12 seats; a single ambassador representing all 12 members in Washington, Tokyo, Moscow and so on, instead of 12 separate ambassadors in each place; and, above all, a common army, navy and air force operating in 10 languages, with the possibility that a Luxemburger admiral of the fleet might be in command of what was left of the Royal Navy?
The Earl of Caithness: My Lords, that is one interpretation, but again it shows the need to get the definition absolutely right to begin with.
Lord Bruce of Donington: My Lords, in view of the fact that the European Commission itself claims, under the provisions of Article 155 of the treaty, to be the authentic interpreter of European legislation, will the Government consider making formal representations to the Commission asking it to produce, within the limitations imposed by Article 163, its authentic version in English as to exactly what it means by federal union or federalism?
The Earl of Caithness: My Lords, the noble Lord raised an important point. It is the responsibility of the member states to get it right first. That is why there is no way that we would permit the word "federal" to appear in a treaty until or unless it is clear what it means and that it does not mean the centralisation of power.

Business
3.20 p.m.
Lord Hesketh: My Lords, it may be for the convenience of the House to know that the Committee stage of the Ports Bill will be adjourned at about 7 p.m. for about one hour and that during that adjournment the Appropriation (No. 2) (Northern Ireland) Order 1991 will be taken.

Highland Regional Council (Harbours) Order Confirmation Bill.
Read a third time, and passed, and returned to the Commons with amendments.

Forestry Bill
The Earl of Lindsay: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(The Earl of Lindsay.)
On Question, Motion agreed to.

Property Misdescriptions Bill
Read a third time.
Baroness Carnegy of Lour: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Baroness Carnegy of Lour.)
Lord Williams of Elvel: My Lords, it would be wrong to allow this Bill to pass from this Chamber without congratulating the noble Baroness, Lady Carnegy, on her persistence in carrying a Private Member's Bill through this House. There have been a number of debates and she applied herself with assiduity to answer them. If all noble Lords were to apply themselves as assiduously as the noble Baroness, this would be a very happy place.
Baroness Carnegy of Lour: My Lords, I thank the noble Lord for his kind remarks and for the extremely helpful way in which he followed the Bill and gave his comments on it. I should like to thank all those who spoke on the Bill, including my noble friend Lord Coleraine, who did a great deal of work on it. My thanks also go to everybody who has been involved with the Bill. I thank the Consumers' Association, which did all the preliminary work and put the Bill together and the Government, who assisted with its drafting. In particular my noble friend Lord Astor was extremely helpful. I am grateful to all concerned with the passage of the Bill through this House.
On Question, Bill passed.

Medical Qualifications (Amendment) Bill [H.L.]
Report received.

Ports Bill
3.23 p.m.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Brabazon of Tara.)
On Question, Motion agreed to.
House in Committee accordingly.
[The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Formation of companies for purposes of transfer of certain statutory port undertakings]:
Lord Underhill Lord Underhill moved Amendment No. 1:
Page 1, line 14, after ("body") insert ("listed in Schedule (List of Trust Ports)").
The noble Lord said: In moving this amendment it may be convenient for me to speak also to Amendment No. 70, which is the new schedule mentioned in Amendment No. 1. The definition and description of port undertakings is a matter of much importance to this Bill which is concerned with such provisions. Clause 1(1) refers to:
"Any relevant port authority".
Subsection (3) states:
"'relevant port authority' means any body which is a harbour authority, other than one within subsection (4)".
The Committee will no doubt agree that that subsection hardly answers the question about the definition of a trust port.
At Second Reading my noble friend Lord Clinton-Davis said that we were entitled to know what is a trust port and how many there are. He said:
"Surely those trust ports which are likely to be affected should be mentioned in a schedule to the Bill. The trouble is that the Government either did not know or deliberately declined to give either those statistics or definitions".—[Official Report, 10/5/91; col. 1294.]
I supplemented those remarks (col. 1318) by asking:
"what are trust ports? No explanation is given in the Bill … there is nothing in the Bill to indicate which ports are covered".
I also remarked that I had a list indicating four categories of trust ports covering 116 ports and said that no doubt the Minister had a similar list. That was confirmed by the Minister, who said that he could produce such a list and that there was nothing whatever secret about it. Indeed, he said that it was public knowledge. He stated:
"I believe that the definition of a 'trust port' is in Clause 1. However, if it is not, that clause contains all the other definitions".—[Official Report, 10/5/91; col. 1327.]
The noble Lord can check exactly what was said.
Emphasis was put on the need for a definition. That point was raised quite strongly in the Committee stage in another place. It was suggested that a definition by exclusion enabled the Government to avoid giving a

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clear answer as to what was meant by a trust port. In the Commons Committee the Minister on that occasion was hardly helpful in dealing with the matter.
The Notes on Clauses, for which we are very grateful to the Minister, do not help. At Second Reading (col. 1287) the noble Lord, Lord Brabazon, stated:
"Clause 1 defines a trust port by excluding other categories of harbour authority".
Reference to the House of Commons Library's reference sheet gives a very useful account of trust ports. It explains the differences between public trust ports, municipal ports and company ports. That document quotes a statement by the Minister for Shipping to the effect that the term "trust port" is not a legally defined term. Moreover, he said:
"It is a convenient shorthand term to describe ports which are not owned and run by a company, a local authority or a nationalised industry".
The Minister has relied on that definition. We do not consider that that is good enough. The reference sheet has an appendix which lists 113 public trust ports under four categories. It states that those listed are taken from the total of some 300 ports, of which 100 only are commercial. We have to rely on that list in the Commons' reference sheet.
I repeat that there is nothing in the Bill to define precisely a trust port. Nothing in the Bill indicates which ports are covered in Part I of the Bill. Amendment. No. 1, with the schedule contained in Amendment No. 70, will help us achieve that definition. I beg to move.
Lord Brabazon of Tara: As the noble Lord explained, the effect of these two amendments would he that Part I of the Bill would apply to the ports listed in the proposed new schedule—except for the Port of London Authority as that appears in Clause 1(4) of the Bill—and to no others. The list of ports which the noble Lord would like to place in this proposed schedule seems to me to bear a strong resemblance to a list of trust ports produced by the Department of Transport. But the department does not attempt to maintain an accurate list of such ports. There is no reason why it should do so. The list tabled may therefore be out of date. Some ports listed may now be defunct. There may be others which are not included; other trust ports may be created in the future to which the Bill ought to apply.
I see nothing wrong in the way in which the Bill defines the ports to which Part I of the Bill is to apply. I think that it does so better than would the noble Lord's proposed amendments. I must therefore ask the noble Lord to withdraw the amendment.
Lord Underhill: I am naturally disappointed with the Minister's reply. It does not explain why the only definition of a trust port is by excluding all ports which are not trust ports. That is hardly a definition.
The Minister for Shipping made clear that there is no definition of a trust port; yet Part I deals with trust ports. Surely powers can be included in the Bill to amend, as required, the list which the department keeps. We are prepared to accept that. We ought to have a clear definition in the Bill. Will another Bill be presented to Parliament which does not define what is
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covered by this Bill but which states that it covers all other ports except those which are excluded? That is what the noble Lord stated.
I can do no more than read carefully what he said. He has not answered my questions. I shall consider what to do at the next stage of the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
3.30 p.m.
Lord Greenway Lord Greenway moved Amendment No. 2:
After Clause 1, insert the following new clause:
("Powers of relevant port authorities to amalgamate etc. with other authorities
.—(1) Any relevant port authority shall have power, in addition and without prejudice to the powers conferred on a harbour authority by section 37 of the Docks and Harbours Act 1966 to amalgamate its business and undertaking with any other relevant port authority or authorities; or to acquire the business and undertaking of any other relevant port authority or authorities under subsections (2) and (3) of this section.
(2) Any relevant port authority shall have power, for any of the purposes of subsection (1) of this section, to subscribe for or acquire any securities of a body corporate which is wholly or mainly engaged, or which it is proposed should become wholly or mainly engaged, in carrying out harbour operations or in the acquiring and carrying on of the business and undertaking of one or more harbour undertakings. Such body corporate is hereinafter in this section referred to as "a holding company".
(3) Any relevant port authority shall have power for any of the purposes aforesaid to transfer to a holding company, in exchange for shares in that holding company or for cash or any combination of cash or shares—

(a) all property, rights and liabilities of the authority; and

(b) all functions conferred or imposed on the authority by any statutory provision of local application;

but may not transfer any part less than the whole of the foregoing.
(4) A holding company to which a transfer is made under this section by a relevant port authority shall thenceforth have all the powers, rights, duties, functions and liabilities of that authority and shall (subject to section 2(7) below) be treated for all the purposes of this Part as if it were a relevant port authority.
(5) Part I of Schedule 1 to this Act shall apply upon the transfer of property, rights, liabilities and functions under subsection (3) of this section as it applies on a transfer under section 2.
(6) If any relevant port authority exercises the powers conferred on it as a harbour authority under section 37(1) of the Docks and Harbours Act 1966 to acquire the business or undertaking of another relevant port authority, then subsections (4) and (5) of this section shall apply in relation to that acquisition (mutatis mutandis) as they do to a transfer under subsection (3) as if the acquiring relevant port authority were a holding company.
(7) Any cash paid to a relevant port authority under subsection (3) above shall be applied first in meeting the residual liabilities of that authority including corporation tax on income and chargeable gains arising from the transfer and any balance shall be paid as soon as practicable to the holding company.
(8) Section 7 shall apply to a relevant port authority which has transferred all its property rights and liabilities to a holding company in exchange wholly for cash as it does to an authority which has fulfilled all its functions under sections 3 and 4(3).
(9) Any relevant port authority which makes any transfer under sub-section (3) in exchange for shares shall be under a duty to join with the other shareholders of the holding

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company in procuring that no dividends are paid on the shares which it acquires and that the holding company fulfils all its duties and functions. The shareholders collectively shall be treated with those shareholders as a relevant port authority for the purposes of this Part.").
The noble Lord said: I shall speak also to Amendments Nos. 3 and 5.
It is true to say that of the ports affected by the Bill some are enthusiastic about the possibilities of privatisation and some have set their faces resolutely against it. Most are what I might describe as ambivalent, seeking to test the likely effect of the Bill against the criterion of what will be in the best interests of the port as the trustees of that port currently see it. In those circumstances it is regarded as a pity by some of the ports that the Government appear to have had little regard to the needs of a very diverse group, particularly as regards their post-privatisation futures.
It is true that under the various schemes that each port has to draft for submission to and approval by the Secretary of State, there is room for manoeuvre. However, such manoeuvre as there is must lie within the framework provided by the Bill. It is a framework which presents any privatising port with Hobson's Choice in relation to its future structure and which lays down no criteria for the future objectives of privatised ports.
My amendments seek to remedy those two failings without in any way attacking the principle on which the Bill has been constructed. If the amendments become part of the Bill it is certain that several of those ports which are dubious about how the Bill will benefit them will be much encouraged about their futures. That in turn will diminish the resistance still being expressed in many quarters with regard to the reserve compulsory powers.
As the Bill currently stands, each trust port contemplating privatisation, whether or not voluntary, must establish one successor company to which it shall transfer its rights and obligations and assets and liabilities in return for shares which it must eventually sell. However, many of the ports affected by the Bill, in particular the smaller ones, are worried that individually they lack adequate means, especially immediately following privatisation, to defend themselves from predatory attacks by those with objectives other than port operations. Such potential purchasers might be property developers or shipping companies hoping to exert monopoly control over a port.
One means of increasing the defensive capabilities of these ports—Amendment No. 2 seeks to achieve this—would be to permit them to exploit the benefits of co-operation and integration before privatisation. Under the Bill each port, once privatised, would be free to amalgamate with any other private sector port, although not with a non-privatised one. However, a newly privatised port is likely to have many other urgent matters to attend to during this critical and dangerous time, in addition to investigating and negotiating a merger with another port.
There is a precedent. I believe that Associated British Ports came into being from the privatisation of
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the nationalised British Transport Docks Board, itself a grouping of various ports of various sizes located in pockets around the coast. Harbour authorities already enjoy certain powers under the Docks and Harbours Act 1966 to,
"acquire by agreement any business or undertaking which consists wholly or mainly with carrying out of harbour operations".
However, these amendments enlarge those operations by giving a port authority the power to merge its business either with that of another port or with the new company owned by one or more ports. Accordingly, subsection (1) of the new clause sets out the general power to be conferred by the clause in addition to those conferred by Section 37 of the 1966 Act. It is not known whether or not any port or ports likely to be affected by the Bill are determined to take advantage of the amendment if it is passed. However, several ports—I include among them Dover, which is one of our largest trust ports—have indeed discussed the possibilities of doing so.
The amendment provides a moderate and, I believe, useful increase in the flexibility of the Bill which does not in any way attack the fundamentals. After all, in my opinion there is not a great deal in the Bill as it stands to demonstrate the Government's interest in these ports in the long term, which is most unusual in privatisations. I believe that rather more flexibility is not too much to ask. I shall not go through the other subsections of the clause in detail. They follow on from what I seek to achieve.
Amendments Nos. 3 and 5 are designed to permit any port authority planning or considering privatisation to propose to the Secretary of State what it believes to be a more appropriate organisational structure from that which the Bill requires or which Amendment No. 2 permits. However, all the Secretary of State's rights of approval under Clause 9 of the Bill would apply to this extension so that anything he believed to be inappropriate, or indeed downright wrong, could be disallowed.
I believe that these two amendments build into the Bill further flexibility without in any way circumscribing the Secretary of State's powers to approve port schemes or to require ports to produce a scheme if they appear disinclined. I appreciate that the drafting of my amendments may leave something to be desired. However, I look forward to hearing what the Minister says. I beg to move.
Lord Murton of Lindisfarne: As I indicated in my speech at Second Reading, although I am firmly against the powers of compulsion contained in Clause 10 I am not averse to the principle of privatisation on a voluntary basis for those trust ports which see their future to be down that road.
I doubt whether the expenses incurred in privatising under the scheme of transfer proposed in the Bill would be very different from schemes pursued under the old Private Bill procedure. But at least this Bill removes the uncertainty of the outcome. The scheme proposed in the Bill provides a much less complicated structure than that proposed in the Private Bill promoted by the Tees and Hartlepool Port Authority. That Bill was rejected by a Select Committee of your

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Lordships' House and, given all the circumstances and the reasons expressed by the committee, I am quite sure that that was the right decision.
Having said that, I believe that insufficient thought has been given to providing a mechanism which covers all the individual schemes for those ports desiring to take the road to privatisation. I realise that it has proved difficult to tailor a scheme suitable for all. The reason is not hard to find. Trust ports are spread diversely in geographical terms. Some play a much more significant part than others in the regional economy. Their customers differ, as do their operations. Of most importance is their variation in financial structure. Some have wide powers to function commercially and are almost indistinguishable from private companies. However, others are much more curtailed.
This part of the Bill is satisfactory so far as it goes but it does not give me confidence that it has been drafted with the needs in mind of such a diverse set of ports. In this part of the Bill we are concentrating on the 15 trust ports with a turnover of more than £5 million. Since the port of Dundee has probably come up to the starting gate the figure is now perhaps sixteen. I am a little confused as a result of comments made in respect of Amendment No. 1 but I believe that there are 32 major trust ports. Admittedly some are still small but others have considerable potential.
It could be made easier for some of those ports to amalgamate should they wish to do so at some time in the future and before taking the final step into privatisation. There is at present nothing in the Bill to facilitate this more flexible approach nor is any clue to the department's thinking on the matter contained in the guidance notes on the procedure for the sale of ports. I took that document out of the Library and read it carefully but found that it does not deal with any of the problems which are currently worrying us.
There is a requirement in the Bill fully to accommodate privatisation schemes individually tailored to meet the needs of the various ports concerned. Although the Government have gone some way towards meeting that requirement I believe that more detailed consideration is required of alternatives to the creation of a single successor company. For example, the transfer of the harbour undertaking to a specialised subsidiary within a group structure, the sale of the port in two or more parts, and the sale of two or more ports as a group are options about which Government intentions are unclear and which should be explored more fully. Similarly, it should also be possible to pursue the concept of a local flotation whereby shares even in a relatively small port will be offered primarily to local investors.
That being the case the noble Lord, Lord Greenway, has moved this amendment to which I have added my name. The mechanism is made more flexible by allowing various choices of corporate structure for the successor company and enabling port authorities to amalgamate if they so wish before privatisation. It should be borne in mind that in combination the trust ports deal with 186 million tonnes annually and comprise no less than 39 per cent. of the port industry. That is a significant part of the
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whole. If the Bill is to be a success it is important that ports contemplating privatisation should be able to consider the benefits of co-operation and integration. That would give them confidence in having the increased capability to defend themselves from predatory attacks from any quarter by persons or companies with objectives other than port operation. The most dangerous form of predator is the property developer whose activities could well lead to a small port operation being closed down in favour of some other form of land use. I suggest that in the North such land would probably be used as sites for factories or warehouses and in the South it will have a more Sybaritic use, for so-called luxury homes more vulgarly described as yuppie dwellings. I support the amendment.
Lord Shackleton: I too support the amendment. The noble Lord, Lord Greenway, is a younger Brother of Trinity House and the noble Lord, Lord Murton, is well known in the other place and to those of us who live in the Poole area. Any amendment that protects the commissioners of Poole Harbour, which is a most wonderful part of the world, will have my support. I hope that the Government will consider the proposals carefully. I also hope that the amendments achieve their intended purpose and I await a further explanation. In general, I support the amendments.
Lord Skelmersdale: Assuming that the department approves the scheme setting forward the ideals contained in the amendment, Clause 9(1) appears to allow them. However, it is important that my noble friend takes this opportunity to spell out exactly what the department will allow and its current thinking on these issues, as suggested by my noble friend Lord Murton.
3.45 p.m.
Lord Brabazon of Tara: I am grateful to the noble Lord, Lord Greenway, for his explanation of the amendments which he has tabled. I have to say, however, that there are serious doubts that the amendments would work in the way intended.
I shall deal first with Amendment No. 2. The heart of this amendment is the transfer by one or more trust ports, or relevant port authorities as they are designated in the Bill, of their undertakings to what is termed as a holding company in exchange for shares in the holding company, or cash, or a combination of cash and shares. There is nothing in the amendment to suggest that the transfer at this stage is to be the subject of a scheme of transfer under Clause 2 of the Bill, which would then be subject to the procedure set out in Clause 9 of the Bill to which my noble friend Lord Skelmersdale referred. But I do not imagine that the noble Lord's intention is to avoid the procedure set out there and I take it that the point of providing in subsection (4) of the amendment that the holding company is to be treated for this part of the Bill as if it were a relevant port authority is so that the holding company can transfer the undertakings of the various ports which have already been transferred to it to a

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successor company by means of a Clause 2 scheme of transfer, which would then be subject to the Clause 9 procedure.
However, I suggest that that leaves a great deal of confusion as to how the various duties and powers which relevant port authorities acquire under the Bill are to be discharged. Under Clause 3, for example, who gives directions to the successor company about the issuing of securities? Is it the various trust ports concerned or the holding company (since it is to be treated as a relevant port authority), or all of them? Similar questions arise throughout this part of the Bill, but I do not believe that I need elaborate further on them.
A point which is perhaps more of detail relates to the provision in subsection (4) of the amendment that the holding company should have the powers, duties and so on of the trust ports which have transferred their undertakings to it. But the local legislation under which trust ports have been established varies considerably from one port to another and their powers and duties vary accordingly. The holding company could therefore end up with sets of powers and duties which could be not only a hotch-potch but inconsistent and mutually contradictory.
A more important consideration is that there can be no certainty that once the holding company has been formed it will be sold into the private sector. The trust ports concerned, having bought into the holding company, might decide that the market is not right for a sale, or that the ports might not attract good enough bids. Alternatively, the trust ports might disagree between themselves as to whether the bids put forward were good enough. But if a sale does not occur we are left with two or more ports which have amalgamated without having to use the harbour revision order or harbour reorganisation scheme procedures which would usually be required. These procedures provide for objections to a proposed amalgamation, the possibility of a public inquiry and of special parliamentary procedure.
I do not believe that we should allow a Bill which is about the privatisation of trust ports to become a means of amalgamating trust ports which would avoid the statutory procedures already laid down for such operations. It is true that the Bill does not provide for trust ports to be sold as groups, but it would be a difficult and complex matter to make specific provision for that in the Bill. In any case, I believe that with some ingenuity and careful attention to timing it will be possible even under the Bill as drafted for two or more trust ports to arrange matters so that they can be bought by a single purchaser.
I turn now to Amendments Nos. 3 and 5 proposed by the noble Lord. As I understand it, these are intended to make it possible for a trust port to transfer its undertaking to more than one successor company and thus to sell parts of its undertaking separately. I have first to say that to achieve that objective we believe that far more extensive changes would be needed to the Bill. The tax provisions in the Bill would need to be reviewed and substantial changes would be needed to retain the tax position achieved under the
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Bill at present. Indeed, that would apply also if we adopted the noble Lord's proposed Amendment No. 2.
The provisions about the distribution of the proceeds of sale and about the schemes of transfer would also need a thorough overhaul; in particular the distribution of a trust port's assets, liabilities and statutory functions between the various companies would need to be considered. So I have to tell the noble Lord that I do not believe that these amendments achieve their objectives. Neither do I believe that the Bill needs to provide for ports to be sold in separate parts. It is difficult to see the circumstances in which this would lead to a better price being obtained for a port. The risk is that a less attractive part of a port's business might not sell at all.
The noble Lord, Lord Greenway, and my noble friend Lord Murton of Lindisfarne said that the Bill was perhaps inflexible. I do not believe that that is true. It is not inflexible as regards the future structure of the ports. There has to be a single successor company, but the purchaser can bring the company within a more complicated structure and can introduce a holding company and/or subsidiaries. For all those reasons, I must ask the noble Lord to consider what I have said in regard to these amendments. In the circumstances, I hope that he will feel able to withdraw the amendment.
Lord Clinton-Davis: The Minister, perhaps with some justification, has been critical of the detail of the amendments. In introducing the matter the noble Lord, Lord Greenway, observed that it is extremely difficult to draft such complicated provisions, as is the lot for all noble Lords other than, of course, the government Minister. Indeed, I believe that very few of us are parliamentary draftsmen and very few of us have the money to enable us to consult parliamentary draftsmen in order to suggest amendments for consideration in this Chamber. Nevertheless, it was a pretty good try even though I have one or two minor criticisms. What the Minister did not do was to concentrate on the principles which were adumbrated by the noble Lords, Lord Greenway and Lord Murton of Lindisfarne. They eloquently expressed those principles. But not for one moment did the Minister have anything to say about them. The first principle I identify is the fact that the Bill does not properly address the diverse interests of the numerous ports throughout the country. The Minister also chose not to say anything about that aspect. Of course, he is entitled to make his speech in his own way. However, I should have thought that that was a point worthy of response.
As I understand it, the basic worry lies in the alarm which has been expressed about the possibility of predatory activity which could disadvantage the interests of those ports which concern noble Lords, or at least some of them. I should have thought that that was something which the Minister should have seized the opportunity to deny, repudiate, confirm, or whatever. But, again, he chose to say nothing about it. That is a point of great substance. I know from correspondence that I have received and from discussions which I have had that this is a matter

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which, rightly or wrongly, disturbs people. Therefore, the o is on the Minister to try to allay those suspicions and concerns.
The noble Lord, Lord Murton of Lindisfarne, illustrated that concern by saying that in his judgment the property developer is the most dangerous type of predator in terms of taking action which might be injurious to the interests of the proper functioning of a port. I know what he means by that; he means effectively—and we shall come to consider that aspect in later amendments—that a property developer might choose to undertake courses of action which have nothing to do with the effective functioning of a port. I believe that that is a reasonable interpretation of what the noble Lord said. Indeed, I see that he is nodding his head affirmatively. That is a matter which the Minister must address.
I am sure that the Minister is right to say that the drafting of the amendment does not really achieve the objectives sought by noble Lords. That may be so. However, we want to know whether the Minister accepts the principles underlying what was said by the noble Lords in their introductory speeches, or whether he denies that. If he denies that, he must give chapter and verse to determine, for the benefit of the Committee, whether the Government are right in so repudiating the matter.
I share the anxieties which have been expressed. I do not know whether this series of amendments achieves the intended purposes; it is all far too complicated for me. However, at the end of the day, that is not what the Committee is really concerned about at this stage of the Bill. The Committee is concerned to hear what noble Lords have to say in addressing really vital concerns about which the Minister must be aware from the representations which have been made to him. We shall, therefore, listen with interest to what he has to say in further response to the debate.
The Earl of Selkirk: I very much support the remarks made by the noble Lord, Lord Clinton-Davis, and those made by the noble Lord, Lord Shackleton. There is grave anxiety in certain places as to what shape and form this Bill will take. Noble Lords may have explained the matter to those who understand it, but they have not explained it to many other people who do not understand it.
Let us take Poole as an example. It is an extraordinary port. Indeed, it has been used as a port since the time of the Romans and has developed steadily since that time. It has all manner of interests, among them oil and a vast amount of private sailing. That is nothing to do with the broad commercial interests of ports as such. I should have thought that those concerned are really disturbed about the proposal. They want to know exactly what form the Bill will take. For example, why should that form be largely settled by a large department in London instead of letting the people on the spot decide what it is they really want to do?
I believe that what is to follow has been laid down very rigidly. Moreover, I am not sure whether what is proposed will give all ports the same facility. I am not saying that it will not suit some of them—indeed,
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perhaps it will—but, so far as I can gather from my understanding of the Bill, it does not suit Poole. It is a different sort of port with many interests. Those concerned may be wrong in their interpretation of the Bill, and I must confess that it is not an easy Bill to interpret. However, I should like the noble Lords to consider the fact that there are special circumstances relating to Poole and therefore it will be difficult to impose one rule. I hope that that will be carefully considered.
Lord Ezra: As the debate on the amendment has developed it seems to me that the underlying purpose is of great importance; indeed, it strikes at the root of the Bill. The concern on the part of many of the trust ports which are capable of having Clause 10 applied to them is that they feel that their destiny might lie elsewhere. Therefore, it is desirable that there should be greater flexibility in the Bill. After all, local communities are involved. The port of Poole has been mentioned, but there are many others.
I should have thought that it would be helpful if the Minister could at least indicate that he has some sympathy for the underlying purpose of the amendments, even if the wording is defective in some respects. There are serious fears, with strong local support, about how this Bill may develop in respect of ports which have developed and served their localities and which are now to be put, as regards their future, in what appears to be something of a strait-jacket.
Lord Brabazon of Tara: I recognise the concerns expressed by my noble friend Lord Selkirk and the noble Lord, Lord Ezra, in regard to the port of Poole. Obviously we shall have the opportunity to debate that issue later when we deal with Clause 10, which relates to the element of compulsion. If I may say so, the noble Lord, Lord Clinton-Davis, was a little unfair in saying that I gave no details when outlining the Government's objection to this amendment other than to criticise the drafting—or words to that effect. I believe that when noble Lords read Hansard they will find that I did in fact go considerably further than that. I see that the noble Lord wishes to intervene. I am happy for him to do so.
Lord Clinton-Davis: My criticism was that in his reply the Minister did not seize the opportunity to respond to the underlying principles adumbrated in the speeches of the two noble Lords who proposed the amendment. That was the purpose of my observations.
Lord Brabazon of Tara: I am afraid that we shall have to disagree about that fact.
The issue of predatory interests was raised, especially by my noble friend Lord Murton of Lindisfarne. I understand the anxieties. However, I believe that they are somewhat exaggerated. The Bill includes provision for clawback and that will discourage the type of difficulty which worries my noble friend. Moreover—I believe that this has been made clear and is well understood—the Government expect to agree the objectives of the sale with the ports which may, of course, include objectives relating to the continuity of the port, and so on. I have already said

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that we believe that sales of more than one port can be arranged under the Bill at present. That is the point which the noble Lord, Lord Greenway, is making in the amendment. We shall have further opportunities to discuss the specific concerns of ports such as Poole. But I believe I have dealt with the amendment.
4 p.m.
Lord Greenway: I am grateful to noble Lords from all quarters of the Chamber who have taken part in this short debate, and for their support for the principle behind the amendment. I am bound to say that I am a little disappointed by the Minister's answer, which will make it more difficult for some ports which still have considerable worries about how to proceed with their privatisations.
I hope that I did not give the impression to the Minister that I thought the Bill was inflexible. Indeed at Second Reading I commended him on its flexibility. I was merely attempting to seek a greater element of flexibility to help some of the ports. It was not my intention to undermine in any way the Bill as it stands.
I noted what the Minister said with regard to the problems of tax provisions in Amendments Nos. 3 and 5. It is a complex issue. I shall read in detail what he said and reserve the right to come back at a later stage if need be. Before I withdraw the amendment I believe that the noble Lord, Lord Clinton-Davis, wishes to intervene.
Lord Clinton-Davis: Perhaps I could return to two remarks made by the Minister. First, in referring to the question of predatory interests, he said that he thought this was "somewhat exaggerated". He did not dismiss it. "Somewhat" means that they were perhaps underlined more forcefully or emphatically than the Minister would accept. By saying "somewhat exaggerated" does he mean that there is no cause for anxiety whatever? That is quite different. That is what the Committee wishes to know. Does the Minister recognise that there is something in the anxieties expressed?
Secondly, he said that he "believed" the sale of more than one port could be arranged under the Bill. That evidences some degree of uncertainty. Perhaps he could indicate in the Bill where that may be possible. He must be precise. Before the noble Lord withdraws the amendment, which I gather is his intention, perhaps the Minister could answer that point.
Lord Murton of Lindisfarne: Before my noble friend replies perhaps I could make one comment in regard to what the noble Lord, Lord Clinton-Davis, said. We are somewhat inhibited inasmuch as we cannot mention ports by name because we may cause a certain amount of confusion and embarrassment. However, I am familiar with another port because of my territorial background—not military but otherwise—where the predator could be a strong threat. I worry a great deal about that. I cannot mention the port but I know that the people concerned in that authority are extremely alarmed. I hope that the
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Minister—I do not say he does not take the matter seriously—will mark it up as being an important factor in the consequences of compulsion.
Lord Brabazon of Tara: My noble friend Lord Murton says that we are not to name ports. We seem already to be naming them.
Lord Murton of Lindisfarne: I do not mind mentioning my own port. I am a bit chary of mentioning ports in other parts of the country.
Lord Brabazon of Tara: Be that as it may, at the risk of repeating myself I shall respond to the noble Lord, Lord Clinton-Davis, who asked me to clarify two points. With regard to the possibility of ports merging I said that I believed that, with some ingenuity and careful attention to timing, under the Bill as drafted it would be possible for two or more ports to arrange matters so that they could be bought by a single purchaser. I believe that covers that point.
With regard to the threat of predators buying the ports for property speculation, to which my noble friend Lord Murton referred, I merely drew attention to the claw-back provisions in the Bill which will do a lot to discourage people from that type of activity.
Lord Greenway: I believe we have given this particular hare a good enough run. As I said earlier, reserving the right to come back to this specific question at a later stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
Earl Howe Earl Howe moved Amendment No. 4:
Page 2, line 23, leave out ("statutory provision of local application") and insert ("local statutory provision;").
The noble Earl said: On behalf of my noble friend Lord Brabazon of Tara, in moving Amendment No. 4 I shall speak also to Amendments Nos. 74, 82, 83 and 98. These amendments are largely technical. They arise from the existing provision in Schedule 1 for transfer schemes to provide for,
"repealing or amending any statutory provision of local application".
By appearing to limit the provisions which could be repealed or amended to ones which were only applicable locally—that is, within a limited territorial area—it is possible that this expression might be taken to exclude, for example, a port authority's borrowing powers, leaving the new successor company encumbered with the old authority's more limited borrowing powers. It is precisely such statutory limits on trust port activity which this Bill is intended to remove. Any such unintended effect is now avoided by the substitution of the expression "local statutory provision" and its accompanying definition. I beg to move.
On Question, amendment agreed to.
[Amendment No. 5 not moved.]
Clause 2, as amended, agreed to.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 6:
After Clause 2, insert the following new clause:
("National Ports Council
.—(1) Before exercising their powers under this Act the Secretary of State or the appropriate Minister shall consult a National Ports Council.
(2) The National Ports Council shall consist of representatives of Government, port authorities or, where appropriate, their successor companies, local authorities covering the areas in which the ports are located, and workers in ports, and of individuals with relevant experience and expertise in the industry, according to a scheme of appointment to he approved by the Secretary of State.").
The noble Lord said: Amendment No. 6 relates to a national ports council. The burden of our case, as I have said on many previous occasions, is that in approaching transport policy we believe that it is fundamentally misconceived always to compartmentalise the different modes of transport and thus to approach the legislation in that way. As a result, because the Government do not accept that, their approach to transport policy is essentially piecemeal. There is no recognition that for a transport system to operate we must ensure that, where necessary, the different modes in the transport sector operate in a coherent and integrated fashion. Left to their own devices, with competition allegedly being the prime factor, the impact on the nation's economy can sometimes be harmful and negative. Sometimes the competition that affects different modes of transport does riot take into account the different methods of paying for infrastructure and so forth, so it is not fair competition.
I do not suggest for a moment that competition is undesirable. It must be viewed as part of the whole. In some respects in the development of transport policy it is important to dwell on the complementarity between the different modes of transport as well as on competition. If competition is to be effective and fair, then it must be, to use that horrendous phrase, based on a level playing field. That does not exist at the present time in regard to road and rail.
One can take a simple example. In London we have been dealing in other contexts with the Road Traffic Bill. There was some discussion in regard to lone driver/conductors on buses. Operating that system in the outdated manner deployed by London Transport means that, although it may be less expensive for London Transport to operate in that way, the cost of traffic congestion, the inevitable hold-ups and the prejudice to the environment that is caused is borne by others It is not reflected anywhere in the balance sheets. These are costs which the public have to take up. I have given the Committee a single example of what I mean. That kind of situation can be multiplied through the various sectors over and over again.
Our intention is to ensure that the ports, docks and waterways become part of the integrated transport policy. That is not something which can be achieved overnight. It will take time. It may take five, 10 or more years. I do not believe that what we are putting forward here represents a particularly radical proposal because the system of a national ports council or something comparable operates in virtually every other member state. The Government chose to do away with something comparable some years ago.
We believe that a national ports council should be able to offer advice to the Government on ports
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policy. It would be an important instrument in achieving the objective to which I have referred. Among other things, we contemplate the body advising on the development of a national policy for ports. It would be able to bring independent and objective advice to the Government. It would be able to advise on the adequacy and application of investment in the ports, which represent a critical part of the nation's infrastructure. It would be able to insist on a port-operating licensing scheme.
All these functions are required because market forces cannot be the sole arbiter of how a transport system works. The Government implicitly concede that because they permit wholly different criteria to determine the operations of the different transport modes. A national ports council would have a great advantage when long-term policies have to be developed. I wish to stress that point. Sometimes policies can be unpopular and public cynicism—perhaps "prejudice" would be a better word—emerges very soon. That causes governments difficulty in moulding policy. Complicated matters such as ports policies, cars in London and waste are difficult to deal with. All governments find such matters difficult. They give rise to enormous prejudice on the part of the public. Such problems consistently lead either to delays or to the abandonment of proper schemes.
The value of having an independent, objective organisation containing representatives of government, ports authorities, local authorities, successor companies (if this Bill is to go through), employees in ports and individuals having knowledge and expertise, can be of value in the demarcation of lines of policy that should be undertaken over a period of time. The Secretary of State will be able to consult the council in undertaking his obligations under the Bill. Such a council would attempt to reconcile differences which will probably emerge under the legislation between the ports authorities and the Government. I refer to the kind of difficulties anticipated in the previous debate. I do not believe that anyone can say that government would be wholly objective and independent. They would be an interested party.
The Government have a clear vested interest in procuring the best price in relation to the privatisation of ports. Disputes between the users of the ports and the ports authorities concerning charges could be another area which gives rise to concern and where the advice of a national ports council would be of value.
It is a pity that some years ago the Government abolished the old national ports council. Our intention is not to restore that council in every shape and form. One thing, however, is clear. It is wrong for the Minister, when he has a vested interested in these areas, to make very critical decisions because he cannot be seen to be adopting a proper judicial approach to the matters with which he will have to deal.
There are many other areas of potential dispute beyond those to which I have referred. One may be the question of fair representation on a port authority. At present the procedure for nominating board members is often outdated to say the least. In the longer term it is a matter on which the national ports council could

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offer significant advice. It could offer advice in reconciling disputes between the different authorities as regards any difficulties that might arise concerning infrastructure problems. Because the national ports council would be the repository of confidential information, it could help to ensure maximum efficiency in ports policy as between the users and the ports authorities.
Other countries employ a policy similar to that which I have outlined. It works. I do not believe that our system will work properly without an advisory national ports council. I beg to move.
4.15 p.m.
The Viscount of Oxfuird: The noble Lord, Lord Clinton-Davis, has moved an amendment which perhaps reflects the fact that we are going backwards. The Bill is about the privatisation of ports. I ask my noble friend the Minister: is there a necessity for such a scheme at ports like Felixstowe and Southampton which have been privatised? Is there any proof of need for such consultation? Perhaps my noble friend will advise the Committee when he replies.
Lord Brabazon of Tara: The short answer to my noble friend Lord Oxfuird is, no. However, I must give the amendment moved by the noble Lord, Lord Clinton-Davis, more attention than that. It is a fascinating amendment because it takes us back quite a few years to the grand old days of the national ports council and a ports policy as such. I do not know what such a policy would entail under a Labour Government. We would have to see what that was. It would no doubt also bring us back to the National Dock Labour Scheme if there were a chance for that to happen.
Perhaps I may outline the Government's policy so far as the ports industry is concerned. It is to promote the development of a viable, competitive and commercially orientated industry. Some ports in the private sector have long been exposed to the opportunities and disciplines of the market place. The Government's aim is progressively to expose the remainder of the ports industry to those opportunities and disciplines and—if I dare use the phrase to the noble Lord, Lord Clinton-Davis—to put the ports on a level playing field with the other ports already successfully in the private sector; that is, the majority of the ports in the country, measured by the tonnage moved.
The Government took a first step in pursuit of their policies in the privatisation of the former British Transport Docks Board, which is now Associated British Ports, and of the Sealink harbours in the early 1980s. They added substantially to the size of the private ports sector. A major further step which the Government took to place the ports industry on a genuinely more competitive basis was the abolition of the dock labour scheme in 1989. That established a more level playing field between the former scheme ports and those which had had the immense advantage of being outside the scheme.
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This Bill represents an important further step forward in exposing the ports industry more fully to the opportunities and disciplines of the marketplace. We believe that at least the major trust ports should be released from the constraints which their status places upon their activities and that they should be allowed to compete on a level basis with those ports which are already in the private sector and which already constitute more than half of the ports industry.
Although the noble Lord, Lord Clinton-Davis, spoke at the beginning of his speech about a national transport policy, about roads and rail and even about one-man operated buses, it is not clear what influence a ports council, such as is outlined in the amendment, or a quango, with its membership drawn only from the ports industry, would have on an overall transport policy. According to this amendment, its only function would be to advise on the trust ports which might be privatised under the Bill. It leaves out entirely the activities of the other ports to which I have already referred and which are already in the private sector.
We simply do not have the noble Lord's vision of a centrally planned investment in ports. We do not decide where these should and should not be. We believe that the ports and ports management should be able to decide their own commercial policies and investments. For all these reasons I can see little merit in the noble Lord's amendment.
Lord Geddes: At the Second Reading of the Bill I declared an interest, albeit an indirect one, in that I am a director of a company which owns a number of small ports. However, in speaking to this amendment my interest must be declared as a direct one in that, as I understand it, the amendment goes much wider than the ports to which this Bill is pertinent. I very much support my noble friend Lord Oxfuird.
As a director of that particular company, I would be horrified if the direction of those few ports which we control were subject to the overall control of a Big Brother in the form of a national ports council. We believe we operate on a perfectly level playing field; it is called competition. We co-operate with our fellow ports; the majority of these ports are on the River Trent. There are a number of small ports on the River Trent. We are friendly rivals. To use an analogy, it is rather like the hotel industry: if one's hotel was full, one would try to pass on guests to another hotel which had a certain amount of capacity up its sleeve. The same applies to ports. That works extremely efficiently. I should be appalled if we had Big Brother looking over us in the shape of a national ports council. I would be against that.
Lord Clinton-Davis: If I may say so, I am not sure whether the noble Lord was listening to the debate and to what I had to say. He has certainly misinterpreted me absolutely and utterly in what he has just said. There is no suggestion that the national advisory council would be directing or controlling anybody; it would be an advisory body. It would be there to assist the Minister in carrying out a ports policy. That was the purpose of it.

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There is a huge difference of principle between the Government and ourselves in relation to the Bill. That was dealt with at Second Reading. However, I do not think it is right for the noble Lord, Lord Geddes, to distort what I have said, albeit accidentally. Certainly he may be horrified by the thought of control of direction. That is not what I was talking about.
The noble Lord, Lord Brabazon, dismissed the idea of a national ports council by saying that it was going back 1.o the past. As I have just explained in response to the noble Lord, Lord Geddes, that is not what the national ports council that I have in mind is all about. The Minister does not like the idea. He believes that market forces should be the sole arbiter of these issues, with a bit of guidance from him as envisaged by the Bill. We on these Benches take the view that that is not right. That is why I thought it appropriate to put down this amendment but I shall not press it to a Division now. I shall listen to what the Minister has to say. However, we may well come back to this at a later stage. I seem to have upset the noble Lord, Lord Boyd-Carpenter, in some way.
Lord Boyd-Carpenter: Far from upsetting me, I was delighted to see the gleam of sanity appearing in the noble Lord's speech when he indicated that he was not going to divide the Committee on this silly amendment.
Lord Clinton-Davis: Like the noble Lord, Lord Boyd-Carpenter, I have lucid intervals from time to time. Mine perhaps are a little more frequent. However, I did not intend to divide the Committee on this matter when I got up. I wanted to hear what the Minister had to say. As I have indicated, it is quite possible that we shall come back to this at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [Initial issue of securities of the successor company]:
Earl Howe Earl Howe moved Amendment No. 7:
Page 3, line 7, leave out ("In consideration or) and insert ("Following").
The noble Earl said: I move this amendment on behalf of my noble friend Lord Brabazon of Tara. I shall speak also to Amendments Nos. 73, 95, 96 and 97. The leading amendments in this group are Amendments Nos. 7 and 95, which relate to the tax payable on the sale by a relevant port authority of securities of its successor company.
clause 3(1) begins with the words "In consideration or and when those words were inserted during proceedings on the Bill in another place, it was explained that the words would ensure that, for capital gains tax purposes, the securities are regarded as being issued in consideration of the transfer of the business. The wording would, it was explained, provide greater certainty, enabling the port authorities and prospective purchasers of shares to assess what share of any bid would accrue to the Exchequer as tax and how much would be left in the residual amount accruing to the authority and, thereafter, to the successor company.
Even so, the use in Clause 3(1) of the words "In
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consideration of" does not by itself indicate their relevance for tax purposes, and it was also less appropriate for company law purposes than the use of the word "Following" (which, in the proceedings in another place, the words "In consideration or had replaced). The word "following", rather than the words "In consideration or, was consistent with the terminology used in a succession of privatisation statutes; and, when taken with the provisions of Clause 3(4) (b), it avoids any apparent inconsistency with existing provisions of company law (in particular Section 103 of the Companies Act 1985, and Article 27 of the second EC directive on company law; to which that section gives effect).
As noble Lords will appreciate, the points to which I have referred are of some technicality, and the purpose of Amendments Nos. 7 and 95 is to clarify them. Amendment No. 7 does so by restoring to Clause 3(1) the word "Following" instead of "In consideration or; and Amendment No. 95 inserts into Clause 35 (which is the general tax clause) a new subsection which expresses the point that it is for capital gains tax purposes (or, in the more technical words of the amendment "for the purposes of corporation tax on chargeable gains") that securities issued by the company to the authority are to be treated as if issued or allotted in consideration of the transfer of the authority's business.
Amendments Nos. 96 and 97 restore to Clause 35 the substance of certain provisions which were originally contained in the general tax clause (at that time Clause 29), but which were omitted from the Bill when the words "In consideration of" were inserted into Clause 3(1) in another place. The provisions in question, which followed similar provision in previous privatisation statutes, were intended to prevent unduly adverse consequences that might arise from certain technical provisions of tax law; in particular, a subsequent repayment of share capital might have been treated in its entirety as a taxable distribution because the shares had not been paid up by the receipt of "new consideration". It is considered appropriate that, even though not paid up by such consideration, the share capital, if repaid, should not be treated as a taxable distribution to the extent that the repayment equals the nominal value of the shares; and similar considerations apply in respect of any debentures issued by the company. Amendments Nos. 96 and 97 provide accordingly.
Amendment No. 73 is consequential on the omission from Clause 3(1) of the words "in consideration or, provided for by Amendment No. 7. Amendment No. 73 refers to heading (c) of paragraph 9(1) of Schedule 1. Heading (c) makes technical provision in relation to the ascertaining of the amount, if any, of a share premium arising on an issue of shares in pursuance of Clause 3. A share premium can, however, arise only where shares are issued for a consideration, either in cash or otherwise. If Amendment No. 7 is given effect, the issue of shares will therefore not arise; and heading (c) of paragraph 9(1) will be redundant. Amendment No. 73 accordingly provides for the omission of heading (c).

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I conclude by saying that these amendments make no change in port authorities' liability to corporation tax on chargeable gains as compared with the position in the Bill as introduced in this Chamber. I beg to move.
The Deputy Chairman of Committees (Lord Nugent of Guildford): Amendment proposed, page 3, line 7, leave out the words "in consideration or and insert the word "following".
4.30 p.m.
Lord Clinton-Davis: That is just about the only thing I can understand. I am grateful to the noble Lord, Lord Nugent of Guildford, for reading that again. I must be going through one of those intervals when I am not lucid. I am sure that the Minister explained the amendment to the satisfaction of the Committee but I did not understand more than one or two words of his explanation. The noble Earl said that there was a possible inconsistency in the law and in relation to a European Community directive. Can he develop that point? He did not give further particulars. He merely said that the amendments sought to correct an inconsistency. I shall have to consider carefully in my bath what he said about those other matters.
Earl Howe: The easiest way to answer the noble Lord is to say in summary that the core amendments are Amendments Nos. 7 and 95. The effect of those is to express more clearly and directly than at present the objective intended when Clause 3(1) was amended in Committee in another place, and at the same time to render Clause 3 more consistent with certain elements of existing company law. That is the easiest way of explaining it. If further clarification is required, I should be glad to know.
Lord Clinton-Davis: I am obliged to the Minister but it will test his ingenuity to offer clarification on this point. We may have to take it all as read, but we shall see.
On Question, amendment agreed to.
Clause 3, as amended, agreed to.
Clause 4 [Disposal by the authority of their holding in the successor company]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 8:
Page 3, line 26, leave out ("shall") and insert ("may").
The noble Lord said: It may be for the convenience of the Committee if at the same time we consider Amendment No. 9. These are probing amendments. I think I am right in saying that the word "may" has been interpreted by the courts as importing an obligation. I may be wrong but I think that there was a judgment by the noble and learned Lord, Lord Scarman, to that effect. If the Minister cannot deal with that point today, perhaps he will deal with it in correspondence later on.
I come to the second amendment. I wonder whether it would not be more sensible to give a port authority a right to be able to hold on to part, albeit a minority part, of its holding in contemplating the procedure which the Government have in mind. It might be a
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useful instrument in ensuring that, perhaps only for a temporary period, the experience of a harbour authority in a wide variety of ways could be used positively. It might also be a useful way of monitoring progress, or the lack of progress, in port development and of ensuring that speculative development is restrained or even stopped if it is thought to be deleterious to the interests of the port and/or the local community, a point raised earlier by the noble Lord, Lord Murton of Lindisfarne. This procedure might be used as a way of curbing undesirable actions which could also prejudice the environment. I put forward the amendment only in order to probe the Government's thinking on this matter. I beg to move.
Lord Brabazon of Tara: The noble Lord introduced his amendment and then said that he was not sure about the difference between the words "shall" and "may". I shall certainly write to the noble Lord with the implications of those two words, but it is really for the noble Lord himself to explain what he means in his own amendment. It is his amendment, not mine.
The effect of the amendments would be to allow the trust port authority to sell only a part of its holding in the successor company and to retain the remainder. This joint ownership of the successor company by the trust port, which would continue in existence, and by a new owner seems an odd arrangement and one which falls short of the privatisation of the port. Members of the Committee will hardly be surprised to hear that it is not a solution which we would welcome. It may be that the intention of the amendment is to enable a trust port to retain its conservancy duties while selling off the remainder of the port. In the case of the Port of London Authority, we have recognised that only the main remaining commercial operation at Tilbury should be sold and that the PLA should remain as a conservancy and regulatory body for the River Thames. We believe that the case of the PLA is wholly exceptional, as I explained at Second Reading, because of the sheer scale of the area for which it is responsible, the unique nature of its responsibilities and the role of the river in the life of the capital city. But in other cases we believe that trust ports should be sold off as a single entity, cargo handling businesses and conservancy functions together. We do not believe that the commercial operation should be sold, leaving a rump trust port as a regulatory and conservancy body. That would be doing only half of the privatisation job.
As I said in regard to previous amendments, more than half the ports industry is already in the private sector—cargo handling, conservancy, regulatory functions and all—and we see no reason why the trust ports which are to be privatised should not operate on the same basis. I hope that I have explained our attitude to the noble Lord's amendment.
Viscount Caldecote: Would not the retention by the port trust of a minority holding in the successor company be quite a good way of ensuring that the general interests in a port of fishermen, environmentalists, yachtsmen and the like were looked after? That aspect will be absent if the port is wholly privatised without those interests being represented.
Lard Ezra: I am surprised that the noble Lord, Lord Brabazon, is not more flexible on this issue. There could he cases other than the Port of London Authority. The port of Poole has been mentioned. It is responsible for a large territory and has a good many conservancy responsibilities. Would it not be desirable at least to retain some flexibility in this matter when the possible privatisation of these ports is being considered?
Lord Murton of Lindisfarne: The noble Lord, Lord Ezra, referred to the port of Poole. There are 10,000 acres of water in the port area. The harbour authority is entirely responsible under all the regulations for its maintenance. There could be a serious problem if the port were to fall into other hands. It is questionable whether any other form of company could ever cope with the responsibilities that the harbour authority now has.
Lord Brabazon of Tara: As my noble friend Lord Caldecote said, the amendment seeks to allow a partial privatisation of a port in terms of the shareholding as opposed to a separation of the conservancy functions from the other functions of the port. Clause 2 of the Bill makes it clear that the rights, duties and liabilities of the ports all go to the successor company. Those responsibilities go to the successor company. In this Bill all that we are dealing with is the change of ownership of a port. We are not talking about a change of its responsibility so far as conservancy and the other matters to which my noble friend referred are concerned.
Lord Clinton-Davis: I find that a disappointing answer. I am grateful to those Members of the Committee who have intervened on this matter, but I should like first to deal with the first amendment that I introduced. My attention was drawn to the point that I raised after I had put down the amendment, and I thought it was perfectly reasonable. After all, I introduced this as a probing amendment to find out whether I was right or wrong in my supposition about the law. I had not had the opportunity to research it. The Minister, as he has rather better facilities, has undertaken to do that, and I look forward to hearing from him. I do not feel that this is an abuse of the procedure or that it is wrong in any way. Indeed, it is frequently done in another place, and I sense that it is done here too.
In terms of the main amendment that I moved, which was also a probing amendment, the short debate we have had has been useful because it has isolated the Minister to a degree, as he has chosen to adopt an inflexible position—as the noble Lord, Lord Ezra, put it—about a concern which has been expressed on his side of the Committee as well as by the noble Lord, Lord Ezra, and myself.
It is not just a question of legal responsibilities and duties being transferred from the trust port to a successor company. We have already touched on the anxieties—which were not really properly dealt with by the Minister in an earlier debate—about the way in
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which the successor company will go about undertaking those responsibilities and duties. Some of us are deeply concerned about that.
For ideological reasons the Minister is saying "we want to go through this privatisation process, and nothing short of that will do". With respect, I think that that is absurd. It is perfectly possible in the short or medium term to be able to take advantage of the experience of those who have been running the ports in a way that his privatisation process will not fully permit. This is what I thought it was appropriate to try to do. The Minister has chosen to reject that.
The noble Viscount, Lord Caldecote, referred very properly to concerns on the part of fishermen if the privatisation measures were to go through. He may or may not be right about that, but he expressed a concern that certainly exists, and nothing the Minister has said in the course of this short debate will allay such concerns.
The noble Lord, Lord Murton, referred to the 10,000 acres of water in Poole which have to be overseen. There are similar extensive areas that have to be covered in other ports as well. The Minister had little or nothing to say about that.
I shall of course give consideration to what the Minister has said, but in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 9 not moved.]
4.45 p.m.
Lord Underhill Lord Underhill moved Amendment No. 10:
Page 3, line 39, at end insert:("except for the proceeds of the sale of the successor company which shall be transferred to the local authority, or local authorities, covering the port authority area to use in trust for the local community.").
The noble Lord said: Clause 4 relates to disposal by local authorities of their holding in the successor company, and in particular the amendment refers to subsection (3), which reads:
"The authority shall provide for the disposal of all securities or rights comprised in that holding in such manner, at such time or times and on such terms as they think fit".
The purpose of the amendment is to add the words which appear on the Marshalled List.
I think it is generally recognised that local authorities played a very large part in the establishment of many of the trust ports, and in the continued relationship and responsibility of the trust ports to the local community. The amendment seeks to ensure that those responsibilities to the community shall be continued from the proceeds of sale being held in trust for the community: that the proceeds should be passed to the local authority or authorities concerned—that is, those covering the areas of the particular port authorities.
This has nothing to do with the question of compulsion. It will apply to all the trust ports when they set up the successor company, and its seems to be a very sensible and helpful amendment, ensuring that the future of trust ports will be linked closely to the work of the local community. I beg to move.
Lord Brabazon of Tara: I have listened to the noble Lord's argument, but first I have to say that it overlooks certain important factors.

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Many of the trust ports, especially the larger ones which are more likely than smaller ports to want to take advantage of the provisions in the Bill, are at least as much national assets as local assets. Secondly, the relationship between individual ports and their neighbouring local authorities varies significantly from one port to another, as do so many other aspects of the trust ports.
The local authorities have not invested in these ports. Indeed, it could well be argued that the ports have made important contributions in terms of employment and economic activity to their local communities by providing jobs and export opportunities, rather than the other way round. Local authorities have no claim to the ownership either of the ports themselves or to their assets. In some cases, far from being anxious to benefit from the increased freedom that privatisation may bring to their local port, they are actually in open opposition to its plans for early privatisation.
For all those reasons, I do not believe that local authorities would be the obvious or natural beneficiaries of the proceeds of privatisation, as this amendment suggests.
The noble Lord said that some local authorities played a large part in setting up many of the trust ports. I do not see the evidence for that. Therefore, I have to say that I see little merit in the amendment, and I hope that the noble Lord will agree to withdraw it.
Lord Murton of Lindisfarne: Before the noble Lord replies, perhaps I may refer to what my noble friend the Minister said about local authorities. I do not want to beat the Poole drum too much, but I should like to mention the preamble to the Poole Act of 1756. I shall not read the whole Act because there are 23 pages of it, but for "time out of mind" the port had been controlled by the mayor and burgesses, and in 1756 the responsibilities were transferred to the commissioners. So I think my noble friend must agree that historically the ports did not belong to the state, and that the nearest approach to them belonging to anybody was to the local authority and the community which the local authority represented. That goes very far back into history, but it is an interesting historical fact.
Lord Geddes: I wonder whether the noble Lord, Lord Underhill, could explain one matter to the House. I must confess that after hearing what he said and reading the amendment I am somewhat confused, but perhaps I am alone in that. Let us assume that the sale of a trust port is to be 100, or whatever the unit may be, and—to use an expression that I have heard recently—that 50 is left on the front seat of a car, so the net comes back to 50. To what do the words,
"the proceeds of the sale of the successor company"
in the amendment refer? I am not at all clear as to whether they refer to the 100 or the 50.
Lord Underhill: I shall deal first with the final point made by the noble Lord, Lord Geddes. We are discussing the principle of the matter and we want to know the Government's view about it. Later, if we
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need to define what the proportion should be, we can do so. The Minister asked what evidence there was of the part played by local authorities. I ask the Minister what evidence the department has to show that local authorities have hindered the work and progress of the trust ports, which is what his remarks seemed to indicate.
As the noble Lord, Lord Murton, said, in many of the trust ports, including the one about which he is intimately informed, the initiative was taken by local authority officials. It would be bad if a statement came from this place that many local authorities are not interested in what happens to their trust ports. They may not be in favour of privatisation. There are many things in politics with which I disagree, but I do what I can to correct any mistakes.
We are not arguing about the principles of privatisation. The ports will have to set up successor companies. We are asking how the community can best be helped by the proceeds of the sale. It might be that they should receive a proportion of the proceeds. Surely one of the objectives of the trust ports is to help local communities. Improving relationships with the community is one of the trust ports' existing objectives. The amendment tries to ensure that that relationship will not be broken once the Act comes into effect. I am sorry that the Minister has not seen fit to agree with what I and other Members of the Committee have said. We shall have to reflect seriously on this matter. The trust ports' present purposes must not be forgotten. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Greenway Lord Greenway moved Amendment No. 11:
Page 3, line 39, at end insert:
("Provided that in any sale by tender of such securities the authority shall require any person submitting a tender to include with his tender detailed proposals as to how those persons who acquire control of the successor company would intend to procure the implementation of section 7(3) for a period of 5 years following completion of the disposal and in accepting any tender the authority shall require and secure compliance with such proposals as it thinks fit.").
The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendments Nos. 18 and 22. I return, on a slightly different tack, to the trust ports' anxieties about the successor companies. For reasons best known to themselves, the Government have so far been unwilling or unable to list the criteria by which they will decide what is a desirable or undesirable port privatisation scheme or who will constitute a suitable or unsuitable owner of a privatised port. That is regarded as unsatisfactory by a number of trust ports. Accordingly, the amendments propose explicit objectives for the successor companies in relation to port operational matters for a period of five years following completion of the sale. They require the selling port authority to satisfy itself that a tenderer will comply with those objectives for the same period, and they require the port authority, when originally proposing the scheme to the Secretary of State, to prepare a corporate plan for the port to show how its port operational objectives might be achieved in the years immediately following privatisation.
Although the successor company or companies will bear all the responsibilities and duties of the present trusts, it has been usual with other privatisations for the privatised successor company to have spelt out more explicitly what its underlying obligations are to be. Given that many of the trust ports fear predation by those who would not welcome such clearer definition of a port's objectives, and given the underlying local wish, and possibly the Committee's wish, that ports continue to have those obligations while it is economic so to do, the amendments seek to tighten things up.
I do not propose to comment on the amendments to my amendments tabled by the noble Lord, Lord Murton, until after he has spoken, except to say that I deliberately did not include the words relating to the environment that he wishes to introduce. With some fairly weighty amendments relating to the environment to come, now may not be the time to embark upon a long and heated argument on that subject. I look forward to hearing what the Minister has to say. I beg to move.
Lord Murton of Lindisfarne: I reinforce what the noble Lord. Lord Greenway, has said about the amendments. It is important that a successor company which intends to bid for a port should show its bona fides not just as to its financial backing but as to its intentions in relation to the port itself so that the Minister can judge whether it is suitable. For that reason, I support what has been said.
Lord Underhill: In general, I support the amendments. Amendment No. 11 refers to the obligations contained in Clause 7(3). However we have to turn to Amendment No. 18 to see what the noble Lord proposes. As far as we can see, it follows what he said on Second Reading. I then referred to a useful briefing that we had received from the British Ports Federation. It explained the background to the trust ports and pointed out that their purpose is to provide a service for the import and export of goods; to pre vide navigation conservancy; and to make the best use of their assets.
Trust ports were not established to create private profits. Any surplus accumulated has to be reinvested for port development or to reduce charges. Those responsibilities are set out in the separate Acts of Parliament which set up the trust ports.
On Second Reading it was emphasised that a trust port was held in trust for the local community. That refers back to what I said on Amendment No. 10, because that was one of the primary purposes of the trust ports. It was emphasised that the responsibility was to maintain, improve, and administer a harbour. Those are the points that are clearly set out in the amendment. The amendment also provides that the purposes for which the trust ports were set up should continue. The noble Lord, Lord Greenway, made it clear on Second Reading—I believe that he will agree with this—that he agrees with the Government's privatisation proposal. We are not arguing about that. Nevertheless. he wants the obligations of the ports to continue as they are now under their separate Acts of Parliament. We do not oppose the proposals made in
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the amendments tabled by the noble Lord, Lord Murton. Harbour operations should not cease without the consent of the appropriate Minister. That is an important point. Harbour operations should continue until the Minister decides otherwise, as a result, we would hope, of the advice that he receives.
We support the amendments tabled by the noble Lord, Lord Murton, because we should take environmental considerations into account. Amendment No. 22 relates to the procedure involved with regard to schemes proposed by the relevant port authority. The subsection deals with the submission to the Minister of a scheme prepared by the authority for the purposes of the proposed transfer. Amendment No. 22 sets out the criteria about which the Minister would have to be satisfied before he approves a scheme. The Minister must tell us what those criteria will be. There may be some defects in the amendments, but we support their general tenor.
Lord Geddes: It may be a surprise to the noble Lord, Lord Underhill, but I very much go along with the line of his argument. I strongly support the principle behind the amendment. It seems to me that the wording which the noble Lord, Lord Greenway, has put down, particularly in Amendment No. 18, is well drafted. It ends with the phrase:
"without the consent of the appropriate Minister".
The fundamental point, it seems to me, is that this amendment or something similar, if agreed to, would act as an effective brake upon the unprincipled predator who would come in solely, for example, for property exploitation or property development purposes. As I read the amendment, it would not prevent such a successor company developing property, but it would oblige the company to continue the operations of the port unless it received the consent of the Minister to do otherwise. I support the amendment.
5 p.m.
Viscount Caldecote: I support what my noble friend has just said. It is important to ensure that the arrangements that have been in place with the trust ports, where proper attention has been given to all the people who use the ports, should be protected in future. I hope that the Minister will be able to be flexible and give us an assurance that, if these amendments are not quite right, others will be brought forward at Report stage to meet the point.
Lord Brabazon of Tara: I have listened carefully to the debate on the amendment. It seeks to impose a remarkable array of conditions and restrictions, some of which are almost impossible to fulfil, on port privatisations which would be carried out under the Bill. To take one example, Amendment No. 18 would place the new owners of a port under a statutory duty to have regard to the welfare of everyone employed in the locality of the port, whether or not they were actually employees of the port itself and irrespective of whether their employment had any bearing on the port at all. In short, the obligation would be quite irrespective of local circumstances, which vary significantly from one port to another.

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This kind of condition, far from providing any safeguard for the operation of the ports' statutory duties—and remember, these will all be transferred under the Bill in any case—would place the new owners of the ports under obligations which they would find onerous and which would not apply to other ports, whether in the public or the private sector. The main benefits of privatisation to trust ports are to escape the restrictions and limitations which are placed upon them as trust ports. The amendments would add to the limitations placed upon them after privatisation.
I believe it would be a mistake to legislate for the successor company to produce a corporate plan. I refer to the guidance notes still in draft form which the Department of Transport has produced. It would be for the port authority to agree with the Secretary of State on a port by port basis the authority's objectives in selling a port. These objectives will form the criteria against which bids for a port will be assessed. They may, for example, include objectives for the future operation of the port. I hope that that will reassure my noble friends Lord Geddes and Lord Caldecote. Even the major trust ports differ so much in circumstances that we believe that it is much better to proceed on a port by port basis in this way rather than by legislating for the successor company to draw up a corporate plan before the port is sold into the private sector. This would place too much of an inhibition on the subsequent purchaser.
The amendment also suggests that the port authority should cease to carry on harbour operations only with the consent of Ministers. This is an unnecessary provision. A harbour authority—and the successor companies will all be harbour authorities—may cease to carry out its statutory functions and cease operating as a harbour only after seeking the approval of Parliament by means of a Private Bill. I hope that that is a full safeguard against what is feared.
My noble friend Lord Murton drew attention in his amendments to the fact that the statutory functions which will be transferred to the successor companies will include environmental obligations. It is perfectly true that all the obligations of a trust port, whether of an environmental nature or otherwise, will be transferred to the successor company. My noble friend explained why he would like to see the word "all" inserted in Amendment No. 18. However, I am not persuaded that the amendments of the noble Lord, Lord Greenway, would form a useful addition to the Bill, with or without my noble friends' amendments. I hope that, with the assurances I have been able to give, the noble Lord will feel able to withdraw his amendment.
Viscount Caldecote: With the leave of the Committee, perhaps I may ask my noble friend two questions on what he has just said. The comments he made are fair as regards the wording of the amendment of the noble Lord, Lord Greenway:
"the welfare of the persons employed in the locality".
That is somewhat stretching the purpose of the amendment and I take his point. However, the point
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I believe the noble Lord, Lord Greenway, is getting at and that I have picked up from Amendment No. 18 is the obligation of the successor company to produce a plan. I shall come to that in a minute. The company must produce a plan that requires it to continue to operate the port as a port. However, if it wishes not to do so, it must obtain the specific consent of the appropriate Minister. At grave risk of repeating myself, I believe that that is an important safeguard against the unprincipled predator coming in with an artificially high price and killing the traditional use of that area of land or water as a port.
My noble friend made the point that each port is different. With great respect to him, I could not agree more. I have been involved in the industry for 30 years and each port is different. However, that is the whole point of producing a business plan. Quite rightly, each port will produce a different business plan. As regards what my noble friend said on the draft guidelines, which will arise on another amendment, the difference is that the guidelines, as I understand them, impose no obligation nor are they backed by any obligatory powers. On the other hand, this amendment makes an obligation, albeit for a period of five years, that the operations of the port as a port should continue.
I ask my noble friend to look again at the principal point of the noble Lord, Lord Greenway, which, as I understand it, is that the port should continue to operate as a port.
Lord Murton of Lindisfarne: Before my noble friend replies, I am fully prepared to accept the plea from the noble Lord, Lord Greenway, not to make Amendment No. 18 more difficult by moving my amendment. However, it is important. When one reads the guidelines, there is nothing in the selling memorandum which makes any mention of rights or obligations, including conservation or planning restrictions. I know that it is impossible to put everything into guidelines, but with respect, these are somewhat vague on the subject.
Lord Brabazon of Tara: Perhaps I may respond to that point and those of my noble friend Lord Geddes. The rights and obligations of the port are continued in the Bill. They do not have to be written into the guidelines; they are included in Clause 2.
My noble friend Lord Geddes said that the guidance notes carried no legal obligation, and of course they do not. The point of having them is that any port authority wishing to take advantage of privatisation measures in the Bill must agree with the Secretary of State on a port by port basis the authority's objectives in selling the port. The guidance notes give the port authority ideas about what the Secretary of State will seek. Those will be the legal obligations: it is the first stage in the operation, if I may put it that way.
I mentioned the other hurdles which exist when, as my noble friend suggested, a port might wish to give up being a port altogether, cease to carry out its statutory functions and cease to operate as a harbour. That is not affected by the Bill. In order to do that, the port would have to put a Private Bill through

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Parliament and go through all the other hurdles which the proposal would comprise. I believe that that answers the points raised.
Lord Underhill: Before the noble Lord, Lord Greenway, decides what to do with his amendment, I have another point to put to the Minister. Does the Minister generally approve—although he may criticise some aspects—the principles behind the amendment of the. Lord, Lord Greenway? Is there a general line which the Minister feels is the right line to follow? If we can be informed of such a line, that might help us on Report.
Lord Brabazon of Tara: I believe I almost answered that point when I said that the guidance notes issued by the department lay down the criteria which the Secretary of State will require to see fulfilled before approving a privatisation. Those guidance notes cover some of the concerns which the amendment outlines.
Lord Greenway: I am grateful to all Members of the Committee who have taken part in this debate. I recognise that my amendments have certain technical failings, and I was not in the least surprised to hear that. Nevertheless, I am again somewhat disappointed at the Minister's reply. This matter boils down to the draft guidelines. The trust ports have stated on several occasions that they are not happy with the guidelines. They would like far more specific guidelines, if that is possible. The Minister said that the guidelines are still in draft form and that something more concrete may emerge at a later stage. I do not know whether the Minister can give us any idea of when more concrete provisions may appear. All of us who are discussing this Bill would be helped by the provision of concrete guidelines. Many of the trust ports are operating completely in the dark. One of the reasons I tabled the amendment was to try to obtain a slightly more concrete set of criteria on the face of the Bill. I accept the argument that my amendments are lacking; nevertheless, we have had a useful debate on this matter and we may well return to it at a later stage. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5 [Control by appropriate Minister over exercise of authority's functions under sections 3 and 4]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 12:
Page 4, line 6, after second ("time") insert ("after consultation with the authority concerned").
The noble Lord said: I apologise for my tardiness in getting to my feet. I was distracted by my Chief Whip who is very distracting. This is a critically important part of the Bill which affects ministerial control over the exercise of a port authority's functions under Clauses 3 and 4. It is my submission that directions which the Minister can provide should involve prior consultation. It is as simple as that. It will not be sufficient for the Minister to use the time-honoured phrase that he often uses and say that the Government will carry out prior consultation. In my view, that provision should be stated on the face of the Bill. After all, when we debated the New Roads and Street Works Bill recently we discovered that the
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Government had overlooked consultation in a material and critical way. I do not think the Government have been as rigorous in this regard as they have so strongly asserted. I consider that the obligation to consult does not appear in the Bill. It should be written clearly on the face of the Bill. I beg to move.
5.15 p.m.
Lord Brabazon of Tara: I have noted the arguments of the noble Lord, Lord Clinton-Davis, in support of this amendment. I do not believe, however, that the statutory requirement for a full process of consultation to take place before the Secretary of State directed a port authority on the issue or disposal of the securities of its successor company is necessary. In certain circumstances it would be counter-productive. Clause 5(1) already makes clear that the Minister's consent is required before the authority exercises these powers: this presupposes a framework of consultation and agreement between the Minister and the authority and in the normal course of events this will inform any directions that the Minister may need to give. If, however, it is necessary to give a direction urgently—for instance, because there appears to be a risk that the port authority's disposal of the securities might infringe some legal requirement, or if some question of financial propriety were involved—it would clearly be unsatisfactory that such a direction could only be given once full consultation had taken place. I hope, therefore, that the noble Lord will be satisfied with the position I have outlined on that amendment.
Amendment No. 33 relates to the situation where the Secretary of State feels obliged to direct an authority to form a company for the purpose of transferring its undertaking, or to submit a transfer scheme to him. This amendment adds little to what is contained in the subsection it seeks to replace. Under the Bill the Secretary of State is under a duty to consult the port authority before issuing a direction. He will then be obliged to take into account any arguments which the port puts forward. The provision already in the Bill ensures that there will be genuine consultation. Anything less would prejudice the validity of any direction which the Secretary of State might subsequently make. I see no reason therefore to write into the Bill a requirement for written representation. Indeed, a port might well prefer to put its case to Ministers at a meeting because that seems a better way of getting its points across. I hope the noble Lord will be satisfied that his concerns are already covered in the Bill and that he will feel able to withdraw the amendments.
The Earl of Selkirk: What are the time limits within which the consultation is to take place? My noble friend said that the Secretary of State has to consult the local authority concerned. Must that be done within two or three years, or can it be done at any time? I am asking whether there is any pressure as regards the time limits for consultation. The Secretary of State has an obligation to consult. Must that take place within two years, or can it be done at any time that suits the Secretary of State?
Lord Brabazon of Tara: I am not sure to what provision my noble friend is referring. There is a requirement for the port authority to consult with those who are locally concerned. I believe the time limit for that is given in a later part of the Bill as 42 days. Perhaps my noble friend is worried about other aspects of the consultation.
The Earl of Selkirk: I was inquiring about a provision that my noble friend referred to when he said there was an obligation to consult. I wanted to know about the conditions relating to that obligation.
Lord Brabazon of Tara: There are various different obligations within the Bill as regards consultation. I think my noble friend will find they are amply covered.
Lord Clinton-Davis: I listened carefully to what the Minister said. He referred to important matters on which I shall need to reflect further. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 13:
Page 4, line 12, leave out ("particular") and insert ("primary").
The noble Lord said: The purpose of this amendment is to question the word "particular". I should prefer the word "primary". If "primary" were inserted in the Bill I believe it would further elevate the issue of a management or employee buy-out. Under pressure in another place the Government conceded that point. They had not inserted it in the Bill originally, but under pressure from both sides of another place they conceded the point. I wish to see that point given additional emphasis. I believe that if the word "primary" were inserted in the Bill the Government would always be obliged to consider the practicality of a management or employee buy-out as the favoured possibility before they began to consider other possibilities that might emerge.
It does not follow that the Government would have to say that a management-employee buy-out was the best option. They would not have to confer their favour on it ultimately, but it should be recognised before other possibilities emerge. Otherwise the whole question of a management or employee buy-out is brought into question.
I should like the Minister to affirm that he will give that point the priority which the amendment seeks. I hope that he will respond positively. I beg to move.
Lord Boyd-Carpenter: I should have thought the word "particular" strong enough to express adequately the needs of the situation.
Lord Geddes: I, too, see no necessity for the amendment. It is a matter of semantics. However, the point relating to management buy-outs is very important. As the noble Lord, Lord Greenway, said in relation to Amendment No. 11, strong representations have been made on the subject. I have received a number of representations from those involved in the existing trust ports. To use their expression, the draft guidelines have put many of them off. They are regarded as either rather legalistic or straight out of the merchant bankers' standard draft. They do not
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fully address the specific problems involved in the trust ports. I ask my noble friend to look again at the guidelines—it is a great relief that they are still only in draft form—and to discover why the existing draft is regarded by some as off putting.
Two obvious points arise. First, how much help will the Government give to management buy-outs? Secondly, and more specifically, what price preference will be given? I do not expect my noble friend to answer specifically, either now or at a later date. Perhaps he would be ill advised so to do.
There are inconsistencies in the draft guidelines. I shall not bore the Committee with full quotations, but paragraph 5 states that the objectives,
"will need to include the obtaining of the best open market price for the port, taking account as necessary of any other objectives that might seem appropriate to the particular sale".
Four pages further on, paragraph 15 states:
"Those proposals will need to take into account the extent to which the bids meet the objectives of the sale"—
so far, there is consistency—
"and will not therefore necessarily recommend that the highest bid should be accepted. In particular a trust port may wish to recommend that a limited price preference should be applied to a bid from a management and employee buy-out team".
On the following page—and this is my last quotation—the draft guidelines state that the Secretary of State,
"will accordingly be prepared to consider a limited price preference for management and employee buy-outs in individual cases and will have regard to the particular circumstances of each case".
It has been put to me—and I have a great deal of sympathy with the point—that there is at the very least conflict between those three quotations. The present managements of trust ports and the British Ports Federation are confused about exactly what the Government have in mind and to what degree they will or will not encourage management buy-outs. If my noble friend can help in that respect it will allay a great deal of anxiety.
Lord Selsdon: I have a great deal of sympathy with my noble friend Lord Geddes. I had not intended to intervene; however, there is a very important point at issue. I believe that it is the Government's intention and wish to encourage and support the concept of management and employee buy-outs. If that is the case, they should look carefully at the draft guidelines in their present form. They will recognise that to some extent the guidelines create a conflict of interest within the managements as they struggle to honour their own obligations to government and the trust ports and their own ambitions for the future. I hope that my noble friend will look at the guidelines carefully. In addition, perhaps he can give an assurance that it is the Government's intention to give priority to management buy-outs.
Lord Brabazon of Tara: So far as concerns the amendment, we shall make the desirability of a management and employee purchase of a port the Minister's prime concern in supervising the arrangements for its disposal. However, subsection (3) of the clause already establishes a very favourable position for management and employee buy-out teams, and I believe that it is widely accepted that the present

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provision is the right one. As my noble friend Lord Boyd-Carpenter said, the word "particular" is strong enough and it is certainly no worse than the word "primary".
I should like to draw the attention of my noble friends Lord Selsdon and Lord Geddes to subsection (3) as a clear indication of the Government's wish to encourage management and employee buy-outs.
My noble friend Lord Geddes referred to the draft guidelines, the latest draft of which was published on 21st June. As my noble friend said, they are a draft and we look forward to receiving comments on them. I shall take into the account the remarks that my noble friend made as a contribution to those comments. I shall certainly take them into account.
My noble friend asked me—although he then said that he did riot want me to answer—how much help and what price preference we would give to management and employee buy-outs. My noble friend was right to say, and I am sure that Members of the Committee will agree, that it would not be wise for me to answer the question in detail. Circumstances may differ in individual cases. I believe that the question is best left unanswered at this stage.
The trust ports are national as well as local assets and arrangements for selling them cannot be manipulated simply to ensure that the sale is made to a particular bidder whatever the price. The Government hope very much that management and employee buy-out bids will be successful and we are prepared to accept a limited price preference for such buy-outs in individual cases. On the other hand, it would be wrong for the Government to allow the ports to be sold off cheaply whoever the purchaser is.
Lord Clinton-Davis: I fear that I have to explain again why I put down the amendment. It was to give complete priority to the concept of a management or employee buy-out and to ensure that that should be considered before any other option. That is why the word "primary" is used. That meaning cannot be attributed to the word "particular". Therefore, it is not a pedantic expression as the noble Lord, Lord Geddes, observed. I am sorry that I have to keep taking issue with the noble Lord, Lord Geddes, who is a very agreeable golfing partner.
Lord Geddes: To the best of my knowledge, and Hansard will prove me wrong or right, I said "semantic" and not "pedantic".
Lord Clinton-Davis: It is the same thing. The noble Lord may not agree with what I say, but I hope that he will appreciate that it is not a semantic difference. A degree of exclusivity would be offered to the management or employee buy-out. The Minister did not address that point, and presumably by not addressing it he repudiated the possibility. The Minister appears to be sceptical, but he should not consider any other options until he has considered and agreed or dismissed the prospect of an employee or management buy-out. That is the purpose. Perhaps I have the wrong word. I do not want to appear to be semantic about the matter; I am very anti-semantic.
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The other point that worries me in that respect is that it apparently never occurred to the Government to think in terms of a management or employee buy-out when the Bill was drafted. They were converted by pressure from their own side and from the Opposition, and I am glad that they were so converted. Nonetheless, it never occurred to them to introduce the provision in the first place. That is why I am a little sceptical about their approach to these matters. To some degree the Minister is right. Clause 5(3) specifically refers to,
"encouraging the disposal to managers or other persons employed … of the whole or a substantial part of its equity share capital".
Incidentally, it is interesting to note that, when he refers to "the whole or a substantial part of" the equity share capital, he distinguishes that from the debate that we had previously when he said that the whole of the share capital had to be transferred. That was in another context.
5.30 p.m.
Lord Brabazon of Tara: That is simple to explain. It is possible that a management or employee buy-out was not able to afford the whole of the share capital and that an institution or other shareholders would take another part of it.
Lord Clinton-Davis: That does not exclude the possibility in other respects either, but we shall return to that point. I should have thought that beyond the question of whether a management or employee buy-out could take the whole of the equity on board there are other considerations relating to our earlier debate which would make it desirable not to get rid of the entire equity share capital in the company. However, we have passed over that matter and it is certainly not appropriate to debate it now.
The provision must be strengthened and this is a way of strengthening it. Before I withdraw the amendment, I invite the Minister to say whether he will give that degree of exclusivity to the prospect of a management or employee buy-out in the way that I have outlined.
Lord Brabazon of Tara: I do not think that I can add anything further. It is all very well the noble Lord suggesting that we were dragged screaming into bringing the subsection into the Bill, but we have always been in favour of management and employee buy-outs. We have simply been persuaded by the arguments that the provision should be put on the face of the Bill. If the noble Lord carried his argument through logically he would not wish to see the Bill amended at all by the Government. I should have thought that that was not what most noble Lords wish to see.
Lord Clinton-Davis: The logic of that argument completely eludes me. There is plenty of scope for revision of the Bill quite apart from on this issue. If the Government were so manifestly concerned about management or employee buy-outs they showed it in an extraordinary way by not including the provision in the Bill. We may have to return to this matter, but in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Underhill Lord Underhill moved Amendment No. 14:
Page 4, line 12, after ("to") insert:
("(a) the role of the port in contributing towards the achievement of his national ports policy and broader transport policies, in particular by providing access for people and goods in the least environmentally damaging way;
(b) the contribution of the port to the economy of the region in which it is situated;
(c) the views of—

(i) the managers and other persons employed by the authority; and

(ii) the local authorities serving the area in which the port is situated, and

(d)").
The noble Lord said: In moving this amendment I wish to speak also to Amendment No. 24.
Clause 5, to which the amendment relates, deals with the control by the appropriate Minister over the exercise of the authority's functions under subsections (3) and (4). Clause 5(2) provides that the Minister may from time to time give certain directions. Clause 5(3), with which the amendment is concerned, makes clear that in exercising those powers the Minister shall have regard to a limited but important factor; namely,
"the desirability of encouraging the disposal to managers or other persons employed by the successor company of the whole or a substantial part of its equity share capital".
Amendment No. 14 stipulates certain matters to which the Minister should have regard. Paragraphs (a) and (b) set out what we believe is the role that the successor company should play. Paragraph (a) emphasises the role of the port in contributing to national ports policy and transport policies. It is interesting to note that on two occasions this afternoon the Minister said that some trust ports were valuable national assets. If they are valuable national assets surely they must play some part in the national transport policies, as paragraph (a) suggests. The provision also aims to continue one of the responsibilities that the trust ports have at present.
Paragraph (b) continues the objective of a trust port to act in the interests of the community in which it is situated. It must have some regard to the economy of the region in which it is situated. If it is to have some regard to encouraging the disposal to managers or other persons it seems obvious that such persons should have the possibility of giving their views. Paragraph (c) provides that the managers and other persons employed by the authority should be entitled to give their views and that regard should be paid to their views. We do not necessarily say that they should be adopted, but regard should nevertheless be paid to those views. The local authorities in the area should also be entitled to give their views.
Amendment No. 24, relating to Clause 9, deals with the scheme submitted by the relevant authorities. That clause refers to documents which must be issued. It should be noted that some of the points that we suggest should be in the document are similar to those in Amendment No. 14. My noble friend Lord Clinton-Davis may wish to say something further on the question of a business plan for the next five years. I beg to move.
Lord Clinton-Davis: Before the debate proceeds any further—my point is relevant to the amendment—I must say that I have been to the Printed Paper Office to secure a copy of the draft guidelines to which a number of noble Lords referred in dealing with an earlier amendment. I am told by the Printed Paper Office that, having been in touch with the Department of Transport, it has no knowledge of the draft guidelines. It has not been able to procure any copies.
That puts noble Lords, other than those who appear to be in a position of priority here by being able to obtain the document, in a peculiarly disadvantageous position. That is wrong. We on this side of the Committee—I understand that the same is true of the noble Lord, Lord Ezra—have no knowledge of what is in that mysterious document, yet it was apparently printed on 21st or 22nd of the month. The Minister referred to it and other noble Lords referred to it. I wonder how best we can proceed with the Bill without cognizance of the document. Before we proceed any further it is for the Minister to explain the extraordinary situation that has developed.
The document has obviously been of help to some noble Lords in enabling them to determine the Minister's approach when dealing with issues which are germane to a number of amendments before the Committee today. I am puzzled about the situation. Perhaps the Minister will advise the Committee as to how the situation has arisen, where the document is now, how it can be procured and whether it will be in the Printed Paper Office in the near future.
Lord Murton of Lindisfarne: Before my noble friend replies, perhaps I may say that I discovered a document dated 16th May in the Library. I gather that it was placed there as a result of my noble friend's promise at Second Reading. However, I must also say that I failed totally, as did the noble Lord, Lord Clinton-Davis, to find anything dated 21st June.
Lord Brabazon of Tara: Before dealing with the amendment, perhaps I may answer the valid point made by the noble Lord, Lord Clinton-Davis. My noble friend Lord Murton is quite correct in saying that the original draft guidance note was placed in the Library of the House. That document has since been updated. The most recent draft, to which Members of the Committee have referred, was issued on 21st June to the ports themselves for further comment. I suspect that my noble friends who referred to that draft guidance—it is an update of the copy already in the Library of the House—will probably have received copies from someone in the ports industry who will have seen them. I shall make sure that the most recent version, which I remind the Committee is still in draft form, is placed in the Library.
Lord Clinton-Davis: This is quite a serious state of affairs. The document reveals the thinking of the Minister in terms of the discretion and other powers that he may exercise under the material clauses of the Bill. This Bill is now in its Committee stage and the

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Chamber is faced with the position that some Members are apparently aware of the contents of the document while others are not.
We must consider the matter carefully. It is relevant to many of the amendments that we are soon to consider. I find it difficult to understand how we can proceed with this part of the Bill without having sight of the document. Obviously it is critically important as a guide to how the Government are likely to react. After all, the Minister himself referred to the document on a number of occasions.
We are under considerable prejudice as a result of not having the document and therefore not having an insight into what the Minister may be thinking. It is true that we are speaking of an updated document, but I have no idea in what respects it has been updated.
Lord Boyd-Carpenter: Before my noble friend answers the noble Lord, I should point out—perhaps it was a slip of the tongue—that he said that he would arrange for the document to be placed in the Library. Surely copies should be made available to the Printed Paper Office if it concerns a subject of debate in your Lordships' House. Frankly, one or two copies in the Library are not sufficient.
Lord Brabazon of Tara: The original draft guidance note was placed in the Library and has been there for quite a considerable length of time. All that is new is that the most recent version—I emphasise again that it is still only in draft—has not been placed there. I take my noble friend's point and shall ensure that as well as being placed in the Library it is put in the Printed Paper Office. I am afraid that I can go no further than that at the moment.
5.45 p.m.
Lord Clinton-Davis: This is a very important matter. The Minister may say that he cannot go any further. I wonder whether the Committee can go any further in its consideration of these amendments. I was not aware—perhaps I was not sufficiently diligent but evidently the noble Lord was also not aware—of the earlier document which was put in the Library but which has not been made available in the Printed Paper Office.
We have the Notes on Clauses, for which we are grateful to the Minister, but those are quite separate. The document is very important in terms of the points relating to the memorandum and articles of association that we shall be considering and the variety of other points that must be discussed. Yet we are denied that important document. I wonder whether we should not continue our consideration of the Bill until that document is made available. It is a very serious matter. I hope that the Minister will address himself to it.
I feel that the Committee should adjourn its consideration at least of this part of the Bill in so far as the document is germane to it until the document is available. It is an important document and the Committee should be given the opportunity to study it.
Lord Brabazon of Tara: I shall certainly send a copy to the noble Lord as soon as I possibly can. My noble friend Lord Murton confirmed that I said at Second Reading that I would place a copy of the draft guidance in the Library, and so I did. Had the noble Lord wished for additional copies, I could easily have supplied them. I received no such request. In this instance we are speaking of the most recent version of the draft guidelines which have been sent out to the ports as part of the consultation process.
Lord Clinton-Davis: With respect, the ports have been given a priority over Parliament, which is simply not good enough. How can the Committee consider the possible views of the Minister in relation to these critical matters unless it has had an opportunity to consider the document? It is no good saying that it will be available tonight. The fact of the matter is that the document needs to be carefully considered. Advice may have to be taken upon it. I do not know whether that is conceivable in a matter of even a few hours.
I do not want to take the Minister unduly to task but it is a matter which reflects on the priorities that have been applied. The ports have been given this information. Parliament ought to have had it contemporaneously. We are at the Committee stage of an important Bill. I ask the Minister again whether in these circumstances he will consider adjourning the Committee stage of the Bill so that there is an opportunity to see the document. A number of Members of the Committee are deeply concerned about the Bill. They may hold differing points of view, but that does not matter in this regard. The Committee is entitled to have this document before it when considering the wide variety of amendments that have yet to be considered. Indeed, it should have been available in relation to the previous amendment.
Baroness Young: I have considerable sympathy with the point made by the noble Lord, Lord Clinton-Davis. I also have considerable sympathy with my noble friend the Minister. I once found myself in a somewhat similar position and know only too well how difficult are such circumstances.
As a matter of practicalities, given that the first document has been placed in the Library—I assume that the noble Lord, Lord Clinton-Davis, has seen it as he is following the discussion so closely—and the second document is one that amends it, I wonder whether it would be possible to obtain a copy. Clearly, copies are available. I have noticed my noble friends referring to them. Even a photocopy would be something for those who want and need to have sight of the contents immediately. It is a difficulty that could be overcome, and I hope that such an arrangement can be made.
Lord Tordoff: I have not been party to all the discussions but it seems that we are close to a situation in which it would be wise to adjourn the Committee for a brief period so that the usual channels can discuss the matter. Certain arrangements might be made during that period, which could avoid pressure being applied for a fuller adjournment.
Lord Brabazon of Tara: The best I can do may be to ask the Committee to adjourn for a short period during which I shall provide the latest updated version of the draft guidance to the Printed Paper Office. I hope that we can find sufficient copies; otherwise they may have to be photocopies. I hope that that will not be objectionable to the noble Lord. I wonder whether anyone would care to give me a clue as to how long it is felt that this process should take. I am listening hard.
Lord Clinton-Davis: I should say about two years. Seriously, I am grateful for the suggestion made by the Minister. In practical terms, the difficulty will lie in digesting two documents and comparing them. I am therefore a little loath to suggest a specific time. The Minister knows the documents and the differences between them. Procuring a sufficiency of them for the Committee is another matter. I do not know how long the adjournment should last. Maybe we should leave it to the usual channels to discuss the matter. Obviously I shall help in whatever way I can.
Lord Tordoff: Perhaps I may suggest that an adjournment of half an hour would be reasonable. If we find that there is need for further adjournment that can always be moved. During that period we can have discussions through the usual channels. Perhaps the Minister will be good enough to do what he can to provide the Committee with copies.
Lord Graham of Edmonton: From these Benches, we certainly accept 30 minutes as a reasonable period.
Lord Brabazon of Tara: I hope that I can provide copies of the guidance notes within a much shorter period than 30 minutes. I therefore beg to move that the Committee be adjourned until twenty minutes past six.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 5.51 to 6.20 p.m.]
Lord Clinton-Davis: I wish first to thank the Minister and his colleagues for having made available a copy of the draft guidance notes. The problem is that the document is complex and, as it has only recently been handed to me, I have not had an opportunity to read and digest it. It is material to a number of amendments which, frankly, might otherwise have been drafted differently. Despite that we must plough on. The Minister must not rebuke us by saying that the proposals contained in the amendments are covered by the draft guidance notes, and I am sure that he will not do so.
I hope that we can learn one or two lessons from the incident. First, the Minister is right that at an earlier stage he said that he proposed to place a copy of the original draft in the Library. Apparently he did so but I do not believe that the practice is sufficient. The noble Lord, Lord Boyd-Carpenter, said that such a document should be placed in the Printed Paper Office. This is an important matter. I know that I should read the Minister's speeches with great care and I promise to do so in the future. However, on this
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occasion I missed his comment and therefore did not see the original document. That is my fault in a way, but it is a problem that should be overcome.
Secondly, it is important that the circulation of such documents be timed to coincide reasonably with debates which are to take place. We cannot do justice to the Bill this evening and, through the usual channels, have now resolved to complete the Committee stage this evening. I thank the Government Chief Whip for recognising the difficulties that I face next week. The best course is to carry on and to utilise the dinner break in considering the guidance notes further and deciding whether they have relevance to these proceedings.
Lord Geddes: I apologise to the Committee for being absent from the Chamber approximately 40 minutes ago when the matter was discussed. I wish to make clear to Members of the Committee that the draft guidelines that I received dated 21st June were not sent to me by the department. I am sure that my noble friend will confirm that a certain number of copies of the guidelines were distributed to the ports concerned; in my case to the British Ports Federation. It was from that source that I obtained the guidelines and not from the department.
Lord Brabazon of Tara: I am grateful for what was said by the noble Lord, Lord Clinton-Davis. I apologise to Members of the Committee for omitting to place the latest version of the draft guidelines in the Printed Paper Office. The original draft was placed in the Library. If there had been an overwhelming demand for that draft from Members of the Committee I should have ensured that all who wished to have a copy received one. Perhaps I was at fault in omitting to place the document in the Printed Paper Office. My noble friend Lord Geddes is right in saying that the department did not circulate the guidelines to any Members of the Committee. Copies were sent to the British Ports Federation from where my noble friend received a copy.
I take the point made by the noble Lord, Lord Clinton-Davis, about needing time to look through the guidelines. I hope that Members of the Committee will find them useful. The guidelines vary from the earlier version mainly because they contain more detailed guidance about how the Secretary of State will expect the roles to be arranged. The objectives of the sale of ports vary little from the original draft.
Perhaps I may remind Members of the Committee that we are discussing Amendments Nos. 14 and 24. I shall reply first to the noble Lord, Lord Underhill. Amendment No. 14 threatens seriously to hinder and delay the process of transfer and disposal by placing blanket statutory obligations on the Minister irrespective of the actual circumstances of the individual port sale involved.
The Government are fully aware of the need to ensure that port sales take place on a careful and realistic basis. But at the same time, the circumstances of individual ports differ so greatly that it would be neither careful nor realistic to saddle every sale in advance with criteria of the sort mentioned in the amendment.

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Each port will, on an individual basis, agree objectives governing its own sale with the department before the formal process begins. The objectives will need to include the obtaining of the best price for the port, but they may also include plans for the port's future and other matters depending on individual circumstances. This will ensure that there is a suitable framework for each privatisation.
The amendment also seeks to impose an obligation on I he Minister to take into account the views of managers, employees and local authorities. Inasmuch as these views are likely, naturally, to favour a sale of the port to the management and employees themselves, the Minister is already required to have regard to the desirability of this under subsection (3) of the clause.
As regards other views, under Clause 9(3) the port authority is already obliged to take such steps as are reasonably practical to serve a copy of a notice of a transfer scheme on every one of its employees. All managers, employees, local authorities and any other interested parties will be able to make representations to the Minister at the same time as the transfer scheme is submitted; they are representations which he is obliged to consider. I have no doubt that those making representations will take that opportunity to express their views on the proposed sale.
It must be remembered that a transfer scheme will merely effect a port authority's transfer of its whole undertaking to a successor company which at that stage will still be its wholly-owned subsidiary. In practice, therefore, the scheme will be doing little more than re-establishing the former authority in a form in which it can enter the private sector. It is the business plans of those bidding for a port which will be important and they will become important at the point when the company is offered for sale. Also, much of the amendment proposed by the noble Lord would take us into the realm of the Government planning where ports should be, what business they should undertake and how they should undertake it. I know that that is dear to noble Lords opposite but we on this side of the Committee believe that the ports industry is a competitive business which should operate in the marketplace with as few restrictions on it as possible. These amendments reflect the difference in philosophy between us and therefore I cannot agree with them.
Lord Clinton-Davis: I am faced with a peculiarly difficult task this evening. I must listen to the Minister, try to read the document that has been distributed and attempt to understand whether it applies equally to the port of Tilbury as to the trust ports. That is not clear and perhaps in parenthesis the Minister could indicate whether it is the case.
I wish to allude further to Amendment No. 24. With respect, I do not think that the Minister has done justice to that amendment. I have not yet been able to marry up the draft advice that the Minister has given with what we propose. However, that is not our fault and no doubt the Minister will indicate whether there is a disparity.
Perhaps I may first draw attention to the fact that there is no indication in the Bill, so far as I can see, of the precise nature of the company documents which
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would have to be provided. It says what they should include and particularises those aspects. Therefore, I am simply seeking to probe the Minister in that respect.
I am not seeking in any sense to make this amendment all-embracing. It is possible that there are other issues which also need to be caught. But I now turn to the individual points which are raised in the amendment. Paragraph (a) refers to,
"a business plan for the company covering the next five years".
Clearly a business plan is a prerequisite, but the period of time is a matter which can be commented upon. I do not know whether the period of five years is too long, but we should at least have something of the kind. Surely it is a matter of concern about which the Minister needs to be satisfied in relation to the proposed transfer.
Paragraph (b) refers to a "policy statement" to indicate,
"how the company's plans will contribute towards achieving the objectives of the Government's national ports policy".
The Minister said that he is not much interested in that—although, perhaps, he did not say that in so many words: he implied it. It appears that he is concerned to deal with such matters in a piecemeal way. It is our contention that this is a matter of great concern. Indeed, it will be of great concern to us within the short period ahead when we shall take office. Moreover, it reverts back to the points that I made during an earlier debate. But I shall not weary the Committee by repeating them.
However, environmental policies are also important here. So far as I can see, there is no reference to them in the document—although I have only reached paragraph 14 and perhaps I am in for a shock, because it is possible that the Minister will have referred to environmental policies somewhere, though I suspect not. It seems to me that this is a critical element, having regard, notably, to the remarks made by the noble Lords, Lord Murton of Lindisfarne and Lord Greenway during earlier debates. I do not see how in this current day and age one can exclude that consideration. However, it is excluded from the Bill, and, so far as I can see, it is excluded from the draft guidelines. That is not acceptable.
Paragraph (c) of the amendment provides,
"as a primary objective for the company, the encouragement of the movement of goods and people [by]"—
the word here should be "by" although the word "to" is used in the amendment—
"the least environmentally damaging means, and in particular provisional facilities designated to facilitate

(i) coastal shipping; and

(ii) the carriage of freight and passengers by rail.")".

So far as concerns the issue of coastal shipping, I believe that that is a matter of concern to the General Council of British Shipping, yet there is no reference to it whatever. In response, the Minister merely says that he and I do not agree or that he and my noble friend do not agree and that is that; that is the end of the story. However, it is not the end of the story. We are entitled to a fuller explanation from the Minister about the company documents and why, in particular—if I may emphasise one particular topic—there is

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absolutely no reference to environmental protection in the documents which he is calling on the company to provide.
6.30 p.m.
Lord Boyd-Carpenter: I am sorry that the noble Lord, Lord Clinton-Davis, is tiring himself out with the reflection that he may shortly be in office. I fear that he is indulging in wild speculation and causing unnecessary fatigue to himself. I am sure that he will be happy to reflect that he is likely to be relieved of any such worries.
I have one general point to make on both amendments. It is one which has not yet been made. When drafting a statute, if you spell out a large number of matters which must be taken into account—as both amendments do—then you raise, from the point of view of interpreting that statute, at least a presumption that other matters need not be taken into account. In other words, if you spell out a large number of matters, then matters not included will be assumed, and likely to be taken—if necessary by a court—to be matters with which you need not concern yourself.
Therefore, in drafting a statute, it is very often self-defeating to spell out many matters which you think are important. With due respect to the noble Lord, Lord Clinton-Davis, I must point out that none of us in drafting an amendment of this sort could possibly include every conceivable possibility. I believe that he is making a mistake from his own point of view by trying to put all these detailed points into the Bill. I say that because the effect is likely to be that other matters which may turn out to be just as important will more likely be thought to be excluded. I shall be much happier if the Bill stays in its present form.
Lord Geddes: Perhaps I may intervene briefly in respect of Amendment No. 24. I can only give the Committee an example of my own experience. It is effectively singularly unlikely, if not impossible, that any port could conceivably make a five-year plan. Ports do not work in that way. They work either on a day-by-day or a week-by-week basis. One does not know when ships will come into port nor what sort of cargo they may be carrying.
However, there may be one exception. I can give an example without mentioning the name of the port. On one occasion the port in question was asked to consider the implementation of a plan to put a complete covered warehouse alongside the jetty. That was a major investment. The company said, "Yes, we will contemplate this. It will cost £x million. Therefore, we should like an undertaking from you of y tonnes per annum at a price of £z per tonne in order to justify the initial investment". That was a major exception to the rule. The normal operations of a port simply do not work on a long-term basis; ports rely on short-term business coming in on an ad hoc basis.
Lord Greenway: I must take issue with the noble Lord, Lord Geddes, on that point. I was most grateful for his support during the earlier debates. However, I
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cannot let this pass. One of the ports about which I know a great deal, although it is not in this country, is already planning up to the year 2020. I cannot, therefore, believe that all ports are looking ahead only in respect of one or two years.
Lord Geddes: I believe that the noble Lord may have misinterpreted what I said. Of course, any port will look ahead to see what sort of projections it thinks will arise. I was talking about the actual commitment of cargo coming into and going out of a port. Other than the two exceptions of contracts of affreightment and a regular liner service—although, as the noble Lord, Lord Greenway, knows, liner service can be taken away—a port lives effectively from hand to mouth. It can plan to its heart's content, but it does not plan on any security.
Lord Brabazon of Tara: Perhaps I may say a few words in reply to the noble Lord, Lord Clinton-Davis. We have just heard an interesting debate between my noble friend Lord Geddes and the noble Lord, Lord Greenway. I know that both of them are very experienced in the matter of ports. Indeed, my noble friend has personal experience through actually being in the business and I know that the noble Lord, Lord Greenway, takes a close interest in ports, although he is not actually involved in the running of them.
So far as concerns the business plan of the successor company, we are talking about the situation before the port is bought. We should be more interested in the business plan of those who bid for the port, the intention of the bidders and how they relate to the objectives underlying the sale of the port. All those will be taken into account when considering bids for a port.
We should perhaps remind ourselves of the purpose of the Bill. It is the transfer of ownership of the trust ports from being trust ports to being in the private sector. We are not asking them, as the noble Lord, Lord Clinton-Davis, proposes in his amendment, to embrace any great ideas of encouraging a national ports policy—that was dealt with in a previous amendment—or regional, local, transport, planning or environmental policies. Environmental policies are not noted because the obligations of the port in regard to the environment do not change with the change of ownership.
With regard to the possibility of encouraging coastal shipping and the carriage of freight and passengers by rail, admirable as those objectives may be they would be quite a burden to place on a port merely because ownership is being transferred from a trust port to a private port. It is a burden that is not placed on any of the other ports. I remind noble Lords that over half the ports in this country are already in the private sector.
Lord Underhill: It is almost an hour since I moved the amendment. I have not forgotten what I said; I have a pretty good idea what it was. But I am certain that the Minister has not understood what we require. He said that we were not concerned with wide policies for the ports. Surely we should be. If the Bill is proposing to transfer the ownership of trust ports—

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nobody knows who owns them—to private organisations, we should know why we are disposing of them. That is the purpose of Amendments Nos. 14 and 24.
The noble Lord, Lord Geddes, referred to details and I bow to his knowledge of shipping. But all Amendment No. 24 asks for is,
"provisional facilities designed to facilitate (i) coastal shipping; and (ii) the carriage of freight and passengers by rail".
We are not asking for details as to the times when vessels will come in and go out. We want to be sure that facilities will be provided. That is the point contained in Amendment No. 24.
All we can do is to read carefully what the Minister has said and consider how to act at Report stage. I repeat what I said at the outset. The purpose of the Bill is to ensure that new owners of trust ports—which, as the Minister has said on more than one occasion, are national assets—carry out certain functions. Therefore we must lay down some of those functions. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.45 p.m.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 15:
Page 4, line 14, at end insert ("and pursuant thereto the Minister shall be satisfied that such managers or such other persons shall individually have received or had the opportunity of receiving independent and objective professional advice concerning the desirability of such disposal to them and that the expenses incurred in providing such advice shall have been discharged by the authority").
The noble Lord said: In moving Amendment No. 15, I shall speak also to Amendments Nos. 16 and 89. The purpose of these amendments is to facilitate the possibility of management or employee buy-outs.
I visited the port of Tilbury recently—I do not know whether the Minister has done so—and it was a fascinating opportunity to speak to management and employees separately, and to glean some indication from them of their respective attitudes. One of the most profound anxieties expressed to me was that the sale of Tilbury may be to a foreign company or to a company whose prime concern is with pursuits other than the development of the port. Employees were worried about their jobs and livelihoods in either contingency.
I sensed that people were not wildly enthusiastic about a buy-out for its own sake but were enthusiastic for that concept in preference to the other possibilities that appeared to be central to their thinking. It was to avoid those possibilities that in principle they welcomed the idea of the two options to which I refer. I susrect that the same anxieties would be prevalent in other trust ports. That is a point already raised by the noble Lord, Lord Murton.
Management or employee buy-outs can be a risky business. They undoubtedly require each potential participant to be properly advised by people who are capable of offering advice that is objective and independent, for example, of the interests of management. It is not inconceivable that in such buy-cut schemes there could be conflicts of interest between employees and management and between different groups of employees.
Each individual has different interests. There is a need to ensure that those interests are taken properly into account before that individual participates in a wider scheme. For example, one must take into account the individual's personal commitments. That is a private and confidential issue. It is not something that people want to discuss in a group. Mortgage and other personal commitments are relevant considerations in determining whether the individual should participate in such a scheme. Those commitments need to be carefully assessed with professional guidance so that the investor can be properly advised as to whether there is a risk of becoming over-extended. Enthusiasm for the principle is certainly worthy. But that enthusiasm can become distorted when viewed against the realities of the individual's existing commitments.
I turn to the question of costs. The cost of professional advice in this field may be very high. It may be beyond the means of the average employee. It is advice which some port authorities may be prepared to offer but that will not necessarily be independent advice. It may be thought that the interests of the port authority are inconsistent with those of the person receiving the advice. People should feel that the advice they are receiving is independent and objective.
People involved in buy-out schemes are not like the shareholders involved in a privatisation exercise. Those people frequently dispose of their shares at an early opportunity; they take a quick buck. I do not know what is the average proportion in privatisations, but a substantial number of people go into such ventures for that reason. We are speaking here of people who have devoted a lifetime of work to the service of the port: it is their precious savings that may be at risk.
Nobody should exaggerate the importance of management/employee buy-outs; they are not always appropriate. They may involve only a small part of the equity—perhaps as little as 10 per cent.—because they may not be able to match the investment requirements. The Minister appeared to make that inference when we were debating another issue a short time ago. For those reasons potential participants must know the full facts; they must know the truth about these matters.
It is perfectly reasonable that, if people are to be in a position to seriously consider all the possibilities, they should have independent and objective advice; that it should be paid for, because such payments are beyond the scope of individuals; and that it should be aimed at individuals as well as at a collection of people. All that should happen regardless of the outcome. It may be that bona fide people will come forward with a proposition but the proposition does not commend itself to the Minister. They will have been put to expense and should be indemnified. I beg to move.
Lord Brabazon of Tara: I have not had the opportunity to visit the port of Tilbury as recently as the noble Lord, Lord Clinton-Davis. I have visited it in the past: I wish to reassure him on that point. As the noble Lord explained, the amendment is about giving advice individually to managers and employees

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wishing to bid for a port. If they wish to do so they will undoubtedly take financial advice which will enable them to decide whether or not it is realistic for them to mount such a bid and, if so, at what level that bid should be. The port authority will be able to reimburse them for the cost of that advice. That is already in the Bill.
As the noble Lord explained, these amendments seem to require individual counselling for all those concerned as to whether their purchase of the port will be good for them. That is a matter for them to decide, but should they need further advice they will no doubt seek it. I do not believe that that is a suitable provision to add to the Bill. Therefore, I hope that the noble Lord will not press the amendment.
Lord Clinton-Davis: I do not consider that to be a satisfactory response. If the Government are proposing to maximise the possibility of employee buy-outs, then the Government must be prepared to go along the lines proposed by the amendment. It is all very well to put the employees in a position similar to that of anyone else coming forward with a bid; but they are not in the same position. The Minister conceded that: they have to be given certain precedence. That is one of the sure ways of providing that they receive expensive advice. I believe that the Bill provides for indemnity in whole or in part. That is another matter we shall refer to. I shall seek to eliminate the words "in part". We shall find out in due course whether the Minister responds to that. He assures me that he will, but I am not sure whether we shall hear from him or whether he will concede.
Lord Brabazon of Tara: No.
Lord Clinton-Davis: This is a test of the Government's credibility. The Minister has not begun to answer the point. In the circumstances I believe that the news he has given the Committee tonight will come as a shock to people at Tilbury and elsewhere who are placing great reliance on the possibility of a scheme of this kind being made available to them. I fear that they will be put off. I fear also that the costs will frequently be too great for a scheme even to be contemplated. There are many uncertainties as to whether those involved will be reimbursed. The employees need help at a very early stage, much more so than other bidders who will not be short of money or of the ability to get advice.
I suggest that what the Minister has said tonight runs completely counter to the suggestion that the Government want to maximise the possibilities of a management or employee buy-out. It is bad news. I do not know whether the Minister wishes to reply. He indicates not. I shall want to come back to the issue at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 [Supplementary provisions as to the authority's functions]:
[Amendment No. 16 not moved.]
Clause 6 agreed to.
Clause 7 [Dissolution of the authority]:
Lord Underhill Lord Underhill moved Amendment No. 17:
Page 4, line 43, after first ("authority") insert ("relevant local authorities, users of the port, trade unions representing the employees of the authority and conservation bodies including local conservation bodies").
The noble Lord said: In moving this amendment on behalf of my noble friend Lord Clinton-Davis, I wish, with the leave of the Committee, to speak also to Amendments Nos. 26, 41, 43, 44 and 81. To save the time of the Committee, instead of going into each of the subsections where we want these particular words included, I propose to make a general statement. Wherever there is to be consultation with the authority, we wish consultation with the other bodies also to be included except in the case of Amendment No. 26 to which I shall refer later.
The Minister said at Second Reading:
"This is too important a matter to leave entirely to those who have been appointed, for the time being, to the boards of these ports".—[Official Report, 10/5/91; col. 1324.]
That is excellent justification for having the consultation process widened. It will be noted that we wish to include consultation with the relevant local authorities, bearing in mind, as I have said two or three times today—the Minister has not always agreed—that in most cases the local authorities were deeply involved in setting up trust ports and in the work that they are carrying through. We believe also that the users of the ports should be consulted on particular matters as should trade unions representing the employees of the authority. We also wish to include local conservation bodies.
I note from a report in February that the Nature Conservancy Council held a conference about the effect on the environment of developments in Britain's ports and estuaries. The council regards that as a very important matter. We believe that it should be consulted along with any local conservation bodies in the area.
I now come to the one exception, which is Amendment No. 26. Clause 9(3) states:
"Where an authority have submitted such a scheme to the appropriate Minister, the authority shall—

(a) publish by Gazette and local advertisement the required notice relating to the scheme; and

(b) take such steps as are reasonably practicable to serve a copy of that notice on—

(i) every employee of the authority".
We believe that while it is good that every employee of the authority should receive a notice, that is not sufficient. Amendment No. 26 provides that a copy of the notice should be sent to,
"any trade union representing employees of the authority".
I have spoken in a form of shorthand, but I am sure that Members of the Committee will understand what we seek. I await the Minister's response with great interest. I beg to move.
Lord Ezra: I support the amendment. The dissolution of a port authority is a very important decision to take. Other bodies should be consulted about it apart from the authority itself. No doubt the Minister will have satisfied himself of all the matters mentioned in Clause 7. Nonetheless, it is advantageous from the Government's point of view that all bodies concerned in the operation of the ports—in

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many cases over many decades and maybe even centuries—should have been consulted before the act of dissolution takes place.
Lord Murton of Lindisfarne: I support what the noble Lord, Lord Clinton-Davis, said. The harbour authorities generally have representatives on their bodies of all the various users and trade union representatives, and in particular the local authorities, who often nominate members. As far as I am aware, the conservation bodies have no representation at all. In a major upheaval such as the privatisation of a port, full consultation should be held locally.
7 p.m.
Lord Brabazon of Tara: I believe that Amendment No. 17 is unnecessary. By the time the question of dissolving the authority arises it will be a port authority in name only. All its property, duties and liabilities, except such as are required by the provisions of the Bill, will have passed some time before to its successor company. The act of dissolution itself, as Clause 7(2) indicates, affects the final transfer of these residual rights, liabilities and so on, but does nothing else. Clearly, the only parties that need to be involved in this formal winding up of the privatisation process are the Ministers and the residual authority itself. There would simply be no locus for any of the parties mentioned in the noble Lord's amendment.
The later amendments are also unnecessary. I refer to Amendment No. 26. The authority is already obliged to take such steps as are reasonably practical to serve a copy of the notice of the scheme on every one of its employees—a process which certainly is more direct and democratic than going through the local trade union. Any employee, or for that matter any trade union, who wishes to do so will be able to make representations to the Minister within 42 days of the scheme being submitted, which of course the Minister is obliged to consider.
The later amendments all relate to the probably rare situation where the Secretary of State is obliged to propose and then to make his own scheme of privatisation. It must be remembered that by the time that happens the Secretary of State will already have fully consulted the port about the prospects of privatisation. The Bill already obliges him to consult the port before preparing his own scheme. He then has to advertise the proposed scheme locally and nationally under the existing provisions of Clause 12. In addition, the authority has to take all practicable steps to serve a notice of the scheme on all employees and on certain other individuals. There will then be a 42-day period in which any interested party can make representations to the Secretary of State, which he is obliged to consider. Further consultation with the authority has to be undertaken, still under the existing provisions of the Bill, before the Secretary of State can modify the proposed scheme.
I hope I have persuaded your Lordships that there are already sufficient provisions in the Bill for consultation and the consideration of representations. I see no need to add to them as proposed in the amendments.
Lord Underhill: I am grateful to the noble Lord, Lord Ezra, for his support for the first amendment in this group. I presume he also supports a number of the other amendments. I am also grateful to the noble Lord, Lord Murton, who recognised the importance of conservation bodies. I listened with great interest to his speech on Second Reading on behalf of the port of Poole and I can understand why he appreciates the need for conservation bodies to be consulted.
Having listened to the Minister's reply I wish now that I had taken every one of my amendments one by one, explained exactly where they were situated, and argued the case; but I tried to be helpful to the Committee by not doing so. However, I shall study carefully the Minister's reply. He said sufficient consultation is provided for in the Bill. We on these Benches think otherwise or we would not have tabled these amendments. The Minister may smile at that, but I can assure him that we have looked very carefully at the Bill and its various provisions and decided where there is need for wider consultation. In an important matter of this kind we are dealing with the possible transfer—certainly with the formation of successor companies—of practically all the trust ports, the background of which very few people know but which came into existence via several Acts of Parliament. We must ensure that there is the widest degree of representation for consultation. That is the point of all these amendments. I repeat, we shall study carefully what the Minister said.
Perhaps I may deal with one specific point he mentioned. The Minister is satisfied that there is no need for our Amendment No. 26, believing that if every employee has a copy of the notice there is no need to send a copy to the trade unions. I should have thought it elementary common sense that if one wants to obtain support and people to understand exactly what one is after it is not sufficient to send a copy to each employee, but also to the trade unions who may have employees in the respective port authority areas. That is the point of Amendment No. 26. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe: I beg to move that the House do now resume. In moving this Motion I suggest that the Committee does not resume until five minutes past eight.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Appropriation (No. 2) (Northern Ireland) Order 1991
The Paymaster General (Lord Belstead)The Paymaster General (Lord Belstead) rose to move, That the draft order laid before the House on 11th June be approved.
The noble Lord said: My Lords, this draft order has two purposes. The first is to authorise expenditure of £2,735 million for the current financial year. This is in addition to the sum voted on account by the House

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in March and brings the total Estimates provision for Northern Ireland departmental services—other than the Northern Ireland Office—to £4,676 million.
Your Lordships may wish to have a brief explanation of the main items in the order. In the Department of Agriculture's Vote 1, some £31 million is for agriculture and fisheries support measures which apply throughout the United Kingdom. This includes £15 million for capital and other grants to improve farm structures and £16 million to provide support for farming in the less favoured areas.
In the Department of Agriculture's Vote 2, some £116 million is sought for local support measures. This is an increase of some £10 million over last year. Some £48 million is for agricultural, scientific and veterinary services and £27 million is for arterial drainage, fisheries and forestry.
In the Department of Economic Development's Vote 1, some £212 million is sought for industrial development and financial assistance to industry. The Industrial Development Board (the IDB) is seeking to encourage internationally competitive companies in the manufacturing and tradeable service sectors to set up in Northern Ireland. This will create conditions for growth in durable employment in the Province and thereby strengthen the Northern Ireland economy.
In Vote 2, some £40 million is sought for the Local Enterprise Development Unit (LEDU) to enable it to develop and strengthen the small firms sector in Northern Ireland. Also in Vote 2, £5.5 million is sought for the Northern Ireland Tourist Board, an increase of £0.3 million over last year. This, we believe, will enable the board to market Northern Ireland at home and abroad and to build on its success in attracting a record 1.2 million visitors to Northern Ireland in 1990.
Vote 3 of the Department of Economic Development covers expenditure by the Training and Employment Agency, which was established in April 1990. Some £31 million is sought for the youth training programme to provide 8,000 training places for unemployed young people. Some £53 million is for the action for community employment programme, an increase of £1 million over last year. This will provide almost 10,000 places for long-term unemployed adults. Some £17 million is for the job training programme, which offers employer-based training to assist the long-term unemployed to obtain employment. That is almost £6 million more than in 1990–91 and is clear evidence of the Government's commitment to help those who have been out of work for some time to obtain employment.
For the Department of the Environment, £169 million is sought in Vote 1 for roads, transport and ports. That is nearly £8 million more than last year. Some £139 million of that is for the roads programme. Details of major construction projects currently under way are contained in the estimates volume. That includes the Belfast cross-harbour road and rail link—a very major project—on which work is due to begin in October.
In Vote 2, £197 million is required for housing, mainly for the Northern Ireland Housing Executive
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and the voluntary housing movement. When net borrowing by the housing executive and rental income is taken into account, gross public expenditure on the housing programme will be about £522 million. That is £18 million more than in 1990–91 and will enable further progress to be made on improving housing conditions in Northern Ireland.
The DoE Vote 3 covers expenditure on water and sewerage services. Gross expenditure in 1991–92 is estimated at almost £134 million, an increase of £10 million over last year. Within this vote it is planned to spend some £96 million to improve the already high quality of drinking water supplies in Northern Ireland.
In DoE Vote 4, £124 million is sought for a wide range of environmental services. This includes some £40 million for urban regeneration measures targeted at areas of social, economic and environmental need; £10 million is for environmental protection and improvement, including conservation of wildlife and the countryside.
The Estimates for the Department of Education seek a total of £1,151 million, an increase of nearly 12 per cent. over the previous year. In Vote 1 some £648 million is sought for the Education and Library Boards to cover recurrent expenditure, including teachers' salary costs; 80 per cent. of this will be delegated to the schools and colleges and managed by them at local level. This provision includes some £11 million to tackle a backlog of urgently required maintenance work. Vote 1 also seeks £138 million for the boards to cover recurrent expenditure on libraries and youth services and for mandatory student awards; £54 million is for capital projects which will provide, among other things, new laboratories and technology workshops.
Expenditure in the rest of the schools sector, which is administered directly by the Department of Education, will be £128 million. That includes £4 million for grant maintained integrated schools, reflecting the increasing demand from parents who recognise the benefits which integrated education offers.
In the department's Vote 2, £153 million is sought; £87 million is for Northern Ireland's two universities. The vote also covers teacher training and a range of youth, sport and community activities. It includes £2.4 million for the improvement of community relations. That is the Department of Education's part of the community relations programme.
For the Department of Health and Social Services, total net provision of £1,052 million is sought for health and social services. This includes £223 million for family health services, £837 million for health and social services boards' current expenditure, and £51 million for capital development. The DHSS Vote 4 provides a total of £1,106 million for social security benefits, an increase of some £122 million over 1990–91. That includes some £491 million for income support, £170 million for housing benefit and £431 million for family and non-contributory benefits.
Finally, I should like to draw attention to the Department of Finance and Personnel Vote 3, in which almost £3 million is sought for the community

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relations programme. The programme of community relations work, which is undertaken jointly with the Department of Education, continues to expand. Total expenditure by both departments will be more than £5.5 million in this financial year, some £1.5 million more than last year. This will support projects designed to create equity of treatment for all sections of the community and to improve community relations. This remains one of the Government's highest priorities and we believe that these practical measures will, over time, help to ease community divisions. I commend the order to the House.
Moved, That the draft order laid before the House on 11th June be approved.—(Lord Belstead.)
7.15 p m.
Lord Prys-Davies: My Lords, I thank the Minister for explaining the main provisions sought by the order. Further details are set out in the Estimates booklet for 1991–92. The noble Lord's opening speech and the Estimates demonstrate very clearly the huge scale of public expenditure over a vast range of activities in the Province. I notice that this expenditure was analysed in an instructive, although somewhat dispiriting, article in the Independent on 29th May. Leaving aside expenditure on security, expenditure per head of population in Northern Ireland in respect of almost every heading in the budget is far higher than such expenditure in England, Wales and Scotland respectively. Of course there are good reasons why the expenditure should be so high. It is partly explained by the entrenched unemployment, the still fragile state of the economy, the higher morbidity and the continuing violence.
The Estimates acknowledge that the strengthening of the Northern Ireland economy is the Government's stated second public expenditure priority, being second only to the maintenance of law and order. The alliance between the Department of Economic Development and the Industrial Development Board has played a large part in attracting foreign investment to the shores of Northern Ireland. The Minister referred to the importance of inward investment. It is a sad commentary that foreign investment in this country—not merely to Northern Ireland—is seen as essential to the development of new scientific knowledge arid modern technology in industry. This point was referred to repeatedly in the important debate in your Lordships' House last Wednesday on manufacturing industry. The importance of inward investment was emphasised almost a year ago when we discussed the Appropriation (No. 2) (Northern Ireland) Order.
Against that background I was concerned to read in the press that figures released about 10 days ago indicate a serious decline in job creation from new foreign investment in Northern Ireland. I stress that I read that in a press report. I did not see the announcement by the IDB itself. It appears that the Industrial Development Board announced that the number of new jobs promised had fallen 700 short of the target, which was set at 2,000. The director of the Northern Ireland Economic Council is reported as having said:
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"You are talking about the lowest numbers since the really dismal years at the beginning of the decade".
That was his comment. Then I saw that two economists at Queen's University had written to the Independent questioning the present pattern of expenditure on industrial development in the Province and pointing out that productivity in industry in Northern Ireland remains much lower than that in Britain. That prompts me to ask the Minister whether this seriously worries the department; or have the two economists got it wrong? If the department and the IDB accept that the criticism is fair and just, what do they propose to do about the position? Do they have in mind any new initiatives to attract inward investment?
It might be convenient if I were to refer at this stage to the draft order to privatise the electricity industry in Northern Ireland which is the subject of consultation in the Province. A few of your Lordships will recall that about a month ago a very strong deputation came to Westminster to lobby against the decision to privatise the industry. That deputation represented a reservoir of knowledge and experience, and it was very critical of the decision.
In the light of that representation, from these Benches we should certainly urge the Government to consider postponing the introduction of the privatisation legislation until they have reviewed the original policy decision which was taken in 1987 or 1988, and to review it in the context of the growing awareness of the importance of North-South co-operation in developing a unified energy policy for the whole island. It would be very reassuring if the department were to consider such a postponement, because I understand that the technical arguments against privatisation may well be stronger than those for privatisation.
I gather from the deputation that the Government have commissioned two or three reports on the feasibility of the proposal. The members of the lobby which came to Westminster a month ago were anxious to find out what advice the Government had received from the experts whom they had consulted. I believe they were anxious to find out what advice had been tendered to the Government because they believed that at least one of the reports may have been disregarded by the Government. When I met the deputation I promised that I would raise this issue when we came to the next appropriations debate, so I honour the commitment which I then gave. Are the Government prepared to disclose the contents of the reports which they commissioned, or at least to publish a summary of the findings? I believe that that would be much appreciated by many people in Northern Ireland.
I should now like to move to the health budget, which is a substantial one by any standard. A report which has been made public is that of the Comptroller and Auditor General on the control of administrative and clerical staff employed by health boards. The report was published on 28th May. It is not a report on the whole remit of the health department. The Audit Office investigated the expenditure on A and C staff between 1983–84 and 1989–90, but during that

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five-year period such expenditure increased by 58 per cent. and the number employed increased from 6,187 to 6,999.
I see from the report that the Department of Health advanced many arguments to justify that increase, but there can be little doubt that the Audit Office did not find them convincing. That message comes through loud and clear. The Audit Office has made a number of recommendations. For example, it has recommended that the boards should adopt a common approach to classification of jobs so that meaningful inter-board comparisons can be made. It has come down firmly in favour of staff inspection programmes, believing that to be essential if there is to be effective control over staff numbers. Then it has asked the department and the boards to take action to demonstrate whether the growth in the number of A and C staff has led to an increase in overall efficiency.
The perceptive questions asked by the Comptroller and Auditor General lead me to return to an old question which I have raised on more than one occasion when discussing an appropriations order. What is the relationship in practice between the health department and the health boards? We know the theoretical answer to that question, but what is the relationship in practice? I do not want to underestimate the need for devolved power within the NHS, but in the light of the report of the Auditor General I just question whether the Department of Health is doing quite enough, through the many channels which are or could be open to it, to provide a more effective and efficient service by the health boards. Unless the department offers firm leadership, there is always the risk that management at all levels will be tempted by the pressures of the passing hour to pursue short-term interest at the expense of the long-term interest of the NHS in Northern Ireland.
I note that the Auditor General also investigated one of the operations of the Housing Executive. I was gratified that the executive had made worthwhile efforts to reduce mortgage arrears due to it from house purchasers. It seems to me that that objective was achieved primarily by a large-scale transfer of the existing indebtedness and mortgages into the private sector. This prompts me to ask the Minister whether house purchasers who live in the more troubled areas of Northern Ireland are experiencing difficulties in obtaining private mortgages upon terms which compare favourably with those available to purchasers in mainland Britain, even though things are overstretched here. While the Audit Office, for its part, is satisfied with the current state of the mortgage arrears account of the Housing Executive, we do not want things to go very wrong for the individual house purchaser, so I very much hope that the Minister can give a reassuring reply.
Finally, I should again like to express the full support of these Benches for the positive encouragement which the Government have given to the improvement to community relations and education for greater understanding in and around the Province—a commitment which I am pleased to note is reinforced by the European Regional Development
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Fund. The Minister referred to the constructive work which has been undertaken in Northern Ireland by the Community Relations Unit. I am delighted at the way that it is setting about that task.
Another matter which has delighted me is the way the charity Ultach Trust is supporting the Irish language, seeking to do so by rediscovering the Gaelic background to the Protestant and Unionist traditions in Northern Ireland in the 18th and 19th century.
I think we all agree that it is essential in Northern Ireland to work for openness and tolerance, and to pull the different threads together in a positive framework. It seems to us on these Benches that that must be a fundamental aim or policy. That is why we need also to reflect on how the present initiatives can be further developed. I accept that it may be too early for me to press the Government on that point this evening, but I very much look forward to the way the Minister will respond to the handful of questions and problems which I have raised.
7.30 p.m.
Lord Holme of Cheltenham: My Lords, I too thank the Minister for the customary care and courtesy with which he took us through an extremely complex order, and I express my gratitude to the noble Lord, Lord Prys-Davies, for his thorough exposition of the issues upon which he wishes to be better informed. I associate myself with his question on electricity privatisation. I share his curiosity as to the answer.
Before I raise one or two issues of especial interest to myself and these Benches, perhaps I may reflect for a moment on what we are doing here in an almost deserted House, in the dinner hour, discussing an extraordinarily detailed, complex and massive expenditure programme for Northern Ireland. If there were no other reason for supporting, as we all do most warmly, the Brooke talks, and wishing them well—there are of course a multitude of reasons for wishing them well—it would be that this is not a suitable system of government to run the affairs of Northern Ireland. I am sure that many noble Lords wish for the day when the people of Northern Ireland themselves, through devolved executive power-sharing government—having elected members of a Northern Ireland Assembly or Parliament—deal with these questions, make these dispositions, and consider these complex matters with which we are grappling on their behalf.
I wish to refer to education. I apologise to the Minister for not having given him advance notice of the questions. Perhaps he will try to answer the drift of my remarks rather than wrestle with the figures from the Estimates that I propose to throw at him. The first question relates to the provision for adult education. If I understand the detailed figures in the Estimates correctly, within the total education expenditure, which rose in gross terms by an impressive 14 per cent. between 1989–90 and 1990–91, and again by 14 per cent. between 1990–91 and 1991–92, it is notable that the provision for adult education fell by 25 per cent. between 1989–90 and 1990–91 and increased by only 3 per cent. for the latest year. The Road Ahead, which was produced by the Department of Education in Northern Ireland, says

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that some 50 per cent. of adults had not taken any education or training since they left school and that participation levels in further education and training were discouragingly low and had barely improved. That must be a matter of concern for the future of Northern Ireland.
The noble Lord, Lord Prys-Davies, spoke eloquently about inward investment. The regeneration of the Northern Ireland economy depends upon the skills of the people in Northern Ireland. It must be a high added-value and highly skilled economy. That is one of the routes to peace and prosperity that the Government have rightly identified. It would be good to think that adult education received the priority that other forms of education clearly receive.
Secondly, I should like to mention integrated education. Like many other people, we on these Benches warmly support the movement towards integrated education which has taken some valuable steps forward in Northern Ireland. I am all the more puzzled that in the grants category in the Estimates, which includes help to bodies involved in the promotion of integrated education, there was a fall of nearly 40 per cent. between 1989–90 and 1990–91, and virtually no increase for 1991–92. Will the Minister tell me what the latest position is? He may not be able to answer me tonight, but if he would let me know subsequently I should be grateful. It may be that I do not understand the figures properly because the category includes other forms of grants such as grants towards European studies. Within that category money provided for integrated education may not have decreased, as it appears to have done from a crude reading of the headlines. I should value further information. We need an assurance from the Government that any school, state or private, which wants to take steps towards integration will be able to do so.
Finally, will the Minister be good enough, however briefly, to give his appreciation of the state of the Northern Ireland economy? That again is a matter to which the noble Lord, Lord Prys-Davies, referred. Formidable efforts have been made, not least under the leadership of the Minister, Mr. Needham, to increase inward investment. How is it now going? We know that unemployment is rising. How is it rising compared with the rest of the United Kingdom? We know that the prospects for agriculture, upon which Northern Ireland is so dependent, are especially bleak at the moment. What effect is that having on the economy?
We have the impression—it is, I believe, a fair one—that the Northern Ireland economy is a paradox. It is relatively resilient compared to other parts of the United Kingdom, due partly no doubt to the active role played by, and financial support from, central government. At the same time, the Northern Ireland economy is vulnerable. It would be interesting to hear the Minister's perception of the Province's economic prospects.
We must trust that the Government's policies are addressed towards moving Northern Ireland from a dependence economy—dependent heavily upon subvention by central government—towards an enabling
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economy where every pound of government money spent helps to gear up enterprise, initiative, skills and effort in Northern Ireland itself. That is part of building the community of success upon which, to a great extent, the prospects for peace must depend. I support the order generally, but it will be interesting to hear the Minister's views.
Lord Hylton: My Lords, it is sometimes necessary to point out that Northern Ireland is a small place. The population of the six counties and two cities is about 1.5 million people. Those people suffer many of the problems associated with geographic remoteness and a legacy of old-style industry. Unemployment is therefore regularly higher than in other United Kingdom regions. Added to that are the difficulties caused by low wages and the high cost of fuel and food. All those problems have been exacerbated over the past 20 years by political violence and terrorism which have diminished new investment—there has already been reference to that point—and tourism.
Those factors help to explain why voluntary bodies are even more important in Northern Ireland than in most other parts of the United Kingdom. It is difficult to foresee circumstances in which government would not have to rely upon voluntary organisations for the delivery of services to those in need, for community care and community development, not to speak of partnerships in areas such as education and employment training. At their best, voluntary groups are highly cost effective.
At this point I should declare an interest as the current president of NIACRO. I am pleased to say that that body enjoys a constructive relationship with the prison and probation departments and with other departments in work training and crime prevention.
The history of government relations with other parts of the voluntary sector has gone through a number of phases. Early in the troubles there was the community relations commission. That body was wound up and the emphasis shifted towards leisure centres. Later, we had the Belfast Areas of Special Need, the BAN schemes. These withered away and along came Action for Community Employment. That has been a relative success. It has given work to many and, as a result, some have secured permanent jobs.
At the moment we have a new community relations council and the community relations unit advising the Secretary of State. At local level, there is Making Belfast Work and the Belfast action teams, both coming under the Department of the Environment. A similar programme exists for Derry, while the countryside has the rural action project.
The record seems to show a somewhat ad hoc placing of money on whatever seemed to be urgent at the particular time. This has been known to happen in conjunction with cuts in main government programmes in health, housing and social welfare.
I therefore ask Her Majesty's Government whether they intend the present arrangements for the voluntary sector to continue permanently. Have they analysed the best way of enabling voluntary bodies to function effectively? Continuity is very important and yet ideally voluntary groups should not become

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over-dependent on government funding. We have to recognise also that direct fund-raising and grants from charitable trusts are a finite source of money. It can be difficult to raise money for unpopular causes, for example, mental health or prisoners. Complete reliance on the ACE scheme for workers is another pitfall to be avoided.
I urge Her Majesty's Government to take a coherent, long-term look at all these matters. Should there perhaps be an inter-departmental committee with the benefit of some independent members from outside the Civil Service? There is a lively and active voluntary sector and the needs it meets will not disappear at all quickly. I put to the Minister that it is necessary to take a long, calm look at how community development, cross-community relations, job creation and training can best be reconciled with education and social welfare. The Government have a part to play in sustaining the voluntary sector. I do not believe that they have yet found the most effective ways of doing so.
7.45 p.m.
Lord Blease: My Lords, I join my noble friend Lord Prys-Davies, and the noble Lords, Lord Holme of Cheltenham and Lord Hylton, in thanking the Minister, the noble Lord, Lord Belstead, for his helpful and informative explanation of this important order. I also warmly support the relevant and major matters raised by noble Lords in this appropriations debate.
Section 5 of the Estimates booklet for 1991–92 sets out the historical context and the parliamentary procedure from which these appropriation measures are derived and processed. As the Minister and other noble Lords have mentioned, this order and the Estimates invite the approval of Parliament for the amount of £4,676 million in order to finance the spending on government plans for the financial year 1991–92.
I agree with the Minister and other noble Lords that these appropriation orders are of crucial importance to the good governance and to the financial bases of the public services on which the present and future well-being and prosperity of the people of Northern Ireland may be built.
These plans, projects and developments have been duly proposed, considered and devised by Northern Ireland departments and Ministers as being desirable and necessary for publicly financed, supported services. In United Kingdom terms of parity of public supported services, this sum of money for appropriations and estimated spending is huge, by any stretch of the imagination. As I understand it, to maintain this parity principle, there is a subvention by the United Kingdom Government to Northern Ireland of £1,200 per head for each man, woman and child in Northern Ireland, above the average amount per head of population in the United Kingdom. That arises because of the separate financial provisions and estimates that have been arranged throughout history. I believe that other regions in the United Kingdom
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have similar arrangements and subventions, but this amount requires us to stop and think what money achieves if we throw it at problems.
Many responsible people in Northern Ireland and here at Westminster have been involved in the compilation of these Estimates. I feel sure that their knowledge, experience and honest commitment have been fully exercised in the separate elements and plans and in the public expenditure proposals.
Without going into detail, your Lordships will know and fully appreciate the manifold and distinctly hazardous difficulties with which Ministers, elected representatives and those involved in the exercise of public duties and services have to contend in the Northern Ireland context at present.
In this appropriation order debate, I have selected a few matters for explanation and perhaps criticism. I do so not for mere negative reasons but because I consider each part of the Estimates and appropriation measures as deserving of close appraisal and examination.
I applaud and fully support my noble friend Lord Prys-Davies and other noble Lords who have spoken on the major aspects of the issues which they have raised dealing with economic development and jobs in the Province. I shall put my points as succinctly as possible, not arguing the case in question. I shall try to deal with the points seriatim as they arise in the Estimates booklet.
Page 54 of the DED, Vote 2 of the Estimates, deals with energy efficiency. Section E indicates a decrease of provision from £734,000 in 1989–90 to £620,000 in 1990–91 and a tremendous decrease to £211,000 for 1991–92, the year we are considering. In my view this is a large decrease in the provision under Section E.1.(2) and (3), the energy enterprise scheme and the energy efficiency survey scheme. I should have thought that the need for energy-saving measures is still with us in Northern Ireland and I shall be pleased to hear the Minister's reply.
On page 55, DED, Vote 2, Section H, paragraph H.4. deals with expenses of the General Consumer Council. The provision for 1990–91 was £350,000. That is now reduced to £343,000 for 1991–92. That body has a statutory function to provide advice and information to the public in Northern Ireland concerning consumer affairs and protection. The General Consumer Council's work is highly regarded throughout the Province by elected representatives and the wider public. I wish to quote from a news release by the General Consumer Council for Northern Ireland of Tuesday 7th May 1991:
"Access to good advice is fundamental if people are to benefit from laws giving consumer protection. However the provision of advice services in Northern Ireland is patchy and under-funded.
"This is the main conclusion of a report 'Good Advice—How Does Northern Ireland Measure Up?' published by the General Consumer Council for Northern Ireland today, Tuesday 7 May 1991".
Perhaps the Minister can explain the reason for that reduction.
Page 60 of the Estimates relates to Vote 3. Section B.8 concerns skill training and Section B9 the priority skills initiative. I believe there is a reduction of £131,000 in the provision for skills training. It was a

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shock to many of us in Northern Ireland to see banner headlines in the local press and to hear it broadcast that one of our most recently arrived and biggest foreign companies that had invested in an engineering project was facing problems with recruiting skilled labour. The Engineering Employers' Federation confirms that a number of firms are experiencing similar difficulties in finding highly skilled employees, including machine tool makers and experienced electricians and technicians. I fully accept that the new Training and Employment Agency established under the Government's Next Steps initiative has some awkward and difficult training and employment hurdles to clear. However, I should have thought the skilled labour hurdle could be made easy to surmount. A reduction in the provision in this area does not appear to me to be helpful.
I hope the Minister can help me as regards Vote 4 on page 81 of the estimates. Reference is made to environmental protection at Strangford Lough. Section A indicates a reduction of some £1,781,000 in the general environmental provision. I understand that the Department of the Environment has correctly identified the need for a structured management approach to conservation in the Strangford Lough area. It is mooted that a two-tier advisory committee is to he established to promote proper co-operation and management of the lough and its environs. Is it proposed to reduce the environment service provision by the amount that is mentioned in the estimates? What measures are proposed for the management of the Strangford Lough area? Will the proposed committee be publicly financed?
Vote 6 on page 94 concerns the provision for the fire services. Section A4 covers the maintenance of emergency fire-fighting services and fire prevention information. Why has a reduction of £5,000 been agreed in the provision of these two essential elements of the fire services, particularly at this time? I understand the fire authority is aware that Ulster firemen are concerned about the reductions and about the proposed restructuring plans and manning levels. That could seriously affect the fire services.
Page 110 deals with Vote 2. Section F concerns sport and community services. I know the Minister is particularly interested in the excellent sport and recreation services, and the active cross-community work provided by the Sports Council for Northern Ireland. I can assure the Minister that his support and interest are warmly appreciated by all connected with the Sports Council. However, there is one aspect of the capital grants provision which I know those involved in the Sports Council will wish the Minister to consider carefully. Serious concern has been expressed about the quality of the athletics tracks and stadium amenities provided in Northern Ireland. Facilities are urgently required there, to attract athletes of international standard and to enhance competitiveness and standards in Northern Ireland. I hope the Minister will give consideration in due course to the appropriate means of grant aiding such facilities.
Pages 126 to 129 relate to Vote 3. An official announcement was made in another place on 24th June 1991 by the Secretary of State for Northern
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Ireland, the right honourable Peter Brooke, on the establishment of a social security agency. It was only this morning in the Library of the House of Lords that I obtained a copy of the framework document and business plan of the new Social Security Executive Agency. This agency is the fourth such agency to be set up in Northern Ireland under the Next Steps programme. It is the ninth largest agency of the 66 agencies that are proposed for the whole of the UK and has some 5,000 employees.
I know two of the chief executives who have been appointed by the Government to lead the new agencies in Northern Ireland. I was privileged some time ago to become associated with those two gentlemen in trade union and public service work in Northern Ireland. I know that both of them are experienced, skilled, thoughtful and competent civil servants. They bring to each of their separate executive positions high standards of public service, accountability and honest commitment. The functions of this social security agency are challenging and demanding in terms of the delivery of services and customer expectations. I hope the Minister will make available to each noble Lord who has participated in this debate a copy of the document concerning the social security agency. There are a number of matters of concern, including staffing, the proposed three-year review, the reporting to Parliament, the planned customer entitlements and the complaints and appeals procedure.
Page 140 concerns Vote 1 and Ulster savings certificates. There is provision for £592,000 to cover the administration of Ulster savings certificates. As I understand the position, Ulster savings certificates are no longer available. The services have been referred to the National Savings Office in London. I should have thought that the administrative costs of the savings office in Ulster would diminish considerably for the financial year 1991–92 as no business will be done in that period. If there is still some work to be done there, should there not be a financial credit return for handling the remaining Ulster savings certificates?
Finally, I turn to page 152 of the estimates. In the absence of an elected representative forum in Northern Ireland where local issues can be publicly debated in an informed way, there are in my opinion at least three organisations in the Province which perform an essential public service by way of scrutiny and the provision of helpful community information work. There is the General Consumer Council, which deals with consumer issues. There is the Northern Ireland Economic Council, which I am pleased to see has had its provision increased. The NIEC provides an excellent representative forum and public information service on a wide range of economic and social issues. But the subject of this Vote is the Northern Ireland Audit Office, which has a statutory duty to undertake the scrutiny of the spending of public moneys by Northern Ireland departments and other public bodies. The Northern Ireland Audit Office is a watchdog on public spending. There has been some public discussion as regards the under-staffing of that body because of the scarcity in Northern Ireland of suitably qualified and experienced accountants and

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other personnel. Perhaps the Minister can clarify the position and say whether that problem has been remedied.
With those remarks I support the order.
8 p.m.
Lord Belstead: My Lords, I am grateful to your Lordships for taking part in this appropriation order debate and for the care which noble Lords have taken in picking up individual points. Perhaps I may say in the space of a sentence or two that I agree with the noble Lords, Lord Prys-Davies, Lord Holme and Lord Blease, and with what was implicit in the remarks of the noble Lord, Lord Hylton—that we are talking about a great deal of money. The public expenditure allocation for the present year amounts to some £6.4 billion. Within that allocation we very much hope that it will be possible to maintain services at a high standard and to promote a range of developments and initiatives. It was on the question of developments which your Lordships, and in particular the noble Lord, Lord Holme, focused.
Perhaps I may first endeavour to answer the points put to me by the noble Lord, Lord Prys-Davies, to whom I am most grateful for notice of the points which he raised. The noble Lord asked the fundamental question as to whether difficulties have been experienced recently by the Industrial Development Board in attracting inward investment. It is indeed so. I confirm that the IDB has reported a decrease in inward investment for the past year as compared with the previous two years. There is no question but that a range of factors influence the inward investment results. The Gulf war undoubtedly caused a number of companies to postpone, and in some cases to abandon, their investment plans. The recession being experienced in a number of economies has also made companies cautious about major investment plans.
Having said that, I can give the noble Lord a direct answer to the direct question which he asked me about what is happening now and whether inquiries and opportunities are under consideration. I am glad to be able to tell the noble Lord that at present the IDB has some 70 cases under active consideration.
The noble Lord, Lord Prys-Davies, also raised the question of Northern Ireland Electricity and the noble Lord, Lord Holme, too, expressed an interest in that subject. The advisers' reports on the privatisation of NIE are commercially confidential. I hope that I am not saying anything particularly controversial in saying that my honourable friend Mr. Richard Needham, who is responsible for the subject, during a recent debate in the Northern Ireland Committee distributed a summary of the advice provided and conclusions reached by the Government on the structure which they propose. As the noble Lord specifically asked whether there was a possibility of receiving a summary, I can tell him that there is and that I shall be very happy to send a copy to him and to other noble Lords who have taken part in this debate.
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The noble Lord also asked me about the possibility of postponing privatisation. The Government's decision to adopt the proposed structure was taken because we believe that that could introduce, in the best way possible, real competition into the electricity supply industry in Northern Ireland. We intend to go ahead with that. We are working on the matter and intend to come back to both Houses of Parliament later this year.
The noble Lord, Lord Prys-Davies, raised the question of the report of the Comptroller and Auditor-General on the control of administrative manpower in the Northern Ireland health and personal social services. That is a matter which is now being looked into by the PAC, before which the department appeared recently. As the noble Lord will know, the Government's response to the report of the Comptroller and Auditor-General will follow the normal procedure. There will be a government response in due course and within the correct period of time. In making that response we shall consider the conclusions and recommendations which were made and the response will be laid before both Houses of Parliament. Any response will, of course, reflect the Government's policy on health and personal social service reforms. I can assure your Lordships that we shall, as always, give full and positive consideration to the PAC's recommendations.
The noble Lord, Lord Prys-Davies, also asked me about the important question of mortgages in Northern Ireland. The Housing Executive has operated a home loans scheme for Northern Ireland similar to those operated by local authorities in Great Britain for individuals who are unable to obtain mortgage finance from normal commercial lenders. The scheme is on all fours with the local authority schemes here. However, it is good news that the scheme is being used less and less as a result of the widespread availability of mortgage finance in Northern Ireland. I am unaware of any areas where there is now a mortgage supply problem. The short answer to what is an important question is that there was a supply problem but my understanding is that there is no such problem now and the scheme is being used less and less.
I was grateful to the noble Lord for what he said about the important work of the Ultach Trust. It has received from the European Commission under the physical and social environment programme of the European Community a contribution of half a million pounds to its capital trust fund. The Government, for their part, have enhanced that support for the trust with a contribution of a quarter of a million pounds. The income from the trust fund will be used to support both new and existing Irish language groups operating at local level.
The final point which the noble Lord raised—and I was grateful to him for doing so—concerned community relations and education for mutual understanding in Northern Ireland. The noble Lord spoke supportively about those matters. He made a glancing reference to the need to monitor the position and to see where we stand. I should like to give the noble Lord an assurance that the programmes which

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I have just mentioned are regularly monitored to assess their impact as best we can. There is an increasing amount of quantitative data to demonstrate that the programmes are beginning to break down traditional barriers between the communities. That is supported by research such as the social attitudes survey.
However, the ultimate aim of our policy is to change behaviour and attitudes. That will clearly not be achieved in the short term. We are therefore undertaking a number of long-term studies of the work in order to develop the range of qualitative indicators available by which we can measure progress. I therefore very much take to heart what the noble Lord said—it is no good indulging in what we believe is good work without knowing where it is heading.
Perhaps I may turn last to the questions of the noble Lord, Lord Holme, he does not mind, because he raised some fundamental questions about the economy. I shall, if I may, deal first with the questions of the noble Lord, Lord Blease.
Lord Hylton: My Lords, may I intervene to apologise for not being able to stay any longer and to say that I should be extremely grateful if the Minister would write to me about my single point?
Lard Belstead: My Lords, perhaps I may deal with the points raised by the noble Lord, Lord Blease. He asked, quite rightly, about what appears to be a reduction in support for energy efficiency. The answer to his question is that the energy efficiency provision is required for the energy enterprise scheme, which involves the promotion of and publicity for energy efficiency, and the energy efficiency survey scheme, which provides grants to industrial and commercial concerns for the employment of consultants to improve energy efficiency in the workplace. That is what the figures in the estimates to which the noble Lord referred relate to.
The noble Lord is quite right. There is a big dip in the expenditure. Much of that is explained by the fact that over £225,000 of the 1990–91 provision was required to meet a backlog of claims under the forerunner of the energy efficiency scheme. The current level of provision will be kept under review in line with the commitments in the consultative paper on energy efficiency.
The noble Lord also asked why there is a reduction in the provision for the Consumer Council for the current year. Provision for the council for this year, at £343,000, is only marginally lower than the out-turn figure for last year. That should enable the council to maintain its level of activity in an important field.
The noble Lord raised an important point about skills training. The reductions for skills training that he identified are almost minimal. There are some reductions, but they are tiny. They are the result of rationalisation in funding arrangements following the reorganisation of training in Northern Ireland. There is no question of a reduced commitment to skills training which has been given a high priority in the Training and Employment Agency's published strategy and operational plan. Industry-led working
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groups have already completed reviews of the training needs of certain sectors, including engineering, and action plans are being drawn up to implement their recommendations.
The noble Lord asked me about environmental services. He asked why there has been a reduction in funding of environmental services. Last year's expenditure included two major exceptional items which meant that the 1990–91 figure for environmental services was unusually high. There is therefore no real reduction in expenditure this year and, at nearly £9 million, it is over £2 million higher than for 1989–90.
The noble Lord also asked about Strangford Lough. I should like to assure him that the Government are aware of the importance of preserving Strangford Lough and are currently engaged in consulting local interests including residents of the area. All views will be carefully considered and we shall publish proposals in due course. I cannot say anything this evening about public funding, but all interested parties are agreed on the need to preserve that wonderful amenity in that most beautiful area and I hope that we can reach broad agreement on the most suitable way forward.
The noble Lord asked about the reduction in the provision and maintenance of emergency fire-fighting appliances which are known as Green Goddesses. There is a tiny reduction of some £2,000. The estimated costs of maintaining the emergency appliances has been reduced because the number of new replacement parts that had to be purchased this year decreased. That is good news. I assure the noble Lord that there will be no change in the standards of maintenance of those important stand-by vehicles.
The noble Lord asked me about the Sports Council. I was most grateful to him for his kind words. The figure on which he lighted in the Estimates is the capital grant to the Northern Ireland Sports Council and is intended for the upkeep of the Sports Council headquarters building—the House of Sport—the Northern Ireland Mountain Centre at Tullymore and some equipment such as computer terminals. However, any money that finds its way to, for example, athletics tracks—in other words, through the governing bodies of sports—and the noble Lord specifically mentioned such facilities, will come from the Sports Council's recurrent grant which has increased this year by more than 9 per cent. over last year.
The noble Lord asked me about the Social Security Agency and about accountability to Parliament. Ministers will remain fully accountable to Parliament for the work of the DHSS including in the Social Security Agency. That means that Ministers will continue to reply to letters from noble Lords. However, where the issue raised is one of an operational nature it is intended that a full response will be provided by the Chief Executive with copies placed in the Library of this House. The noble Lord asked me whether I could make available a copy of the relevant document. I shall consider that matter urgently and do my best to respond to him.
The noble Lord asked me about Ulster savings and suggested that there should be a credit transfer in the

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Estimates. With effect from 1st June 1991, no new investments for Ulster savings will be accepted. From that date Northern Ireland investors will have access to national savings. The amount in the Estimates represents the cost of administering existing investments for the present year. I hope that the noble Lord will not think that I am being controversial if I say that the moment had come when it was reckoned that to run a regional variant of a national scheme, however important it was for Northern Ireland, was not cost-effective. That is why the change has been made.
Finally, the noble Lord asked me about the difficulty in recruiting which it is reported has been experienced by the Northern Ireland Audit Office. I understand that the Comptroller and Auditor General for Northern Ireland is of the view that, although the wastage rate particularly for qualified staff gave cause for concern in recent years, he is glad to report that the overall wastage rate for the past year has declined considerably and did not include any qualified staff. He attributes the improvement in the recruitment and retention of those well-qualified staff at least in part to the performance-related pay system which is now operated by his office.
The noble Lord, Lord Holme, asked the fundamental question, sometimes raised by other noble Lords, why we were debating this important order in an empty Chamber and why it was not a proper piece of legislation. He said that he would like the day to come when responsibility for such matters would be in the hands of those affected in Northern Ireland. I say amen to that. Let us hope that we shall move towards that position in view of the talks that are taking place.
The noble Lord raised the important question of integrated education, which is a subject in itself. I should like to write to him on that matter, but perhaps I may make two comments. Expenditure has increased from £1.6 million in 1990–91 to over £4 million in the current year. I quoted that figure in my speech. I am sorry that I cannot interpret the figures that the noble Lord gave from the Estimates, but that is the answer as regards expenditure. That is good news. Since becoming involved in Northern Ireland affairs I have seen the integrated education story continuing to expand, with more primary schools being opened.
Given the hour and the fact that there is further business to come I shall not go into the question of further and adult education which the noble Lord raised, save to say that, although there is a fine further education system in Northern Ireland, the participation rate by adults has been, as he said, disappointing. I hope that the noble Lord will allow me to write to him on that matter.
Finally, I come to the point raised in a pretty fundamental way by the noble Lord, Lord Holme, and by other noble Lords as regards where the Northern Ireland economy is at present, how it looks and what is likely to happen in the future. The Province has been less affected by the national recession than elsewhere. Unemployment started to rise after that of the UK and at a slower rate. That has been good news. Nonetheless, the recession is now undoubtedly being
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felt in Northern Ireland and the economic difficulties that we are experiencing at the moment—I do not conceal that fact—highlight the need to enhance the productive capacity of the local economy. In that context, strengthening the economy has been one of our top priorities.
I believe that much has already been achieved. We have invested heavily in all aspects of infrastructure. The necessary physical and communications infrastructures which are so crucial to economic development—roads, air links and telecommunications—are of extremely high quality and leave Northern Ireland well placed to take advantage of the forthcoming economic upturn. In the middle of it all the Industrial Development Board has been playing a crucial part. We talked about it earlier.
Before I finish I want also to mention that we have been undertaking a programme of urban regeneration which has been under the responsibility of my colleague Mr. Needham. It has been pursued for quite a few years now. Most of the initiatives of urban regeneration are geared towards encouraging private investment. For example, in Belfast urban development grant totalling £43 million has since 1983 generated £177 million of private sector investment—a ratio of one to three. The overall regeneration package has undoubtedly assisted the recent revival of Belfast, where private investment in major projects in the city centre completed in the past six years, under way and programmed currently total over £600 million. If the noble Lord has not had an opportunity to do so since becoming spokesman for his party on Northern Ireland, one of the things that might interest him very much, if it could be arranged, would be to go to see what has happened in the centre of Londonderry, where the city on the West Bank has been absolutely transformed by regeneration programmes and inward investment.
Apart from the answer that I should have given to the noble Lord, Lord Hylton (and I shall write to him), I believe that I have answered the points which noble Lords have raised. Perhaps I may thank noble Lords for taking part in the debate on this order, which I commend to the House.
On Question, Motion agreed to.

Ports Bill
8.22 p.m.
House again in Committee on Clause 7.
[Amendments Nos. 18, 19 and 20 not moved.]
Clause 7 agreed to.
Clause 8 agreed to.
Clause 9 [Schemes made by a relevant port authority]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 21:
Page 5, line 34, at end insert:
("(1A) A scheme prepared under subsection (1) above shall include a requirement that the following criteria will be met to the existing standards of the authority—

(a) the functions of improving and maintaining the port;

(b) conservation and environmental protection including provision for an environmental audit;

(c) provision of facilities to local users of the port; and

(d) provision of working conditions.").

The noble Lord said: In moving this amendment, for the convenience of the Committee I shall speak also to Amendment No. 77. The situation affecting schemes that are prepared under subsection (1) is very imprecise. It is an extremely important element of the Bill from a number of different points of view. That is why we believe that certain criteria should be met so as to conform at the very least with existing practice. The guidelines are no substitute for that. They have no force of law. We have looked at them with some interest and they are not unhelpful in some respects. However, they do not have that important ingredient of having the force of law.
I am aware that the noble Lord, Lord Boyd-Carpenter, who is not in the Chamber at the moment, said that one should not include in the Bill anything other than what this Government propose to put into it. I do not find that a very compelling doctrine. We believe that the scheme should include a requirement that the criteria set out in paragraphs (a) to (d) of the amendment will be met to the existing standards of the authority. I should have thought that that was absolutely crucial.
Perhaps I may briefly mention why I have selected those four criteria. With regard to the first:
"the functions of improving and maintaining the port",
the noble Lord, Lord Murton, and other noble Lords have amply demonstrated that it is a concern which has not been allayed by anything said by the Minister today or in the past. It is an issue which should be made clear beyond peradventure. That is why it is there.
Paragraph (b) refers to:
"conservation and environmental protection including provision for an environmental audit".
I remain totally unconvinced by what the Minister said in relation to environmental considerations. At the present time environmental protection of ports is not sufficiently highlighted in existing legislation or even in the Government's White Paper. There is considerable confusion between the responsibilities of the NCC and the local authorities in terms of designating sites of special scientific interest. Moreover, neither the NCC nor the local authorities have sufficient resources to ensure that the environment is properly protected.
Some months ago, when the Bill was in Committee in another place, the then Secretary of State for Transport spoke at a conference. He addressed the point of the principal intentions of the Government in introducing the Bill. This is what he had to say:
"enhancing the prospects of port development, by giving them access to share as well as loan capital and by making them, as companies, more attractive partners to industrial users and property developers".
Those are the Minister's own words—the words of the Secretary of State:
"making them … more attractive … to property developers".
That was the concern of the noble Lord, Lord Murton. It is mine too. The second aim of the Minister was to stimulate:
"the release for alternative development of land no longer wanted for port purposes by removing present restrictions on development for non-port purposes".
That represents a potentially grave problem for the environment. We want to test the Government as to
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how they propose to safeguard it. Paragraph (b) is a further way not only to demonstrate a clear commitment to the environment and its protection but also to include a provision for an environmental audit.
On the whole, existing port authorities have achieved reasonably high standards of protection. One needs only to consider the way in which Poole harbour authorities have dealt with the situation to see how demonstrably clear they are about their environmental responsibilities. But the importance lies in the fact that it is done in conjunction with the local authorities and a wide variety of interests. I am not at all sure that under a privatised system the same attention or priority would be given to that aspect as distinct from the profitability of the ports. I do not say that profitability should be sneered at—not at all. But it is something that must be encompassed within the need to protect the environment.
Many of the trust ports are areas of outstanding beauty and environmental importance. I shall not go into the issue of Poole because I am sure that the noble Lord, Lord Murton, on this or another occasion will demonstrate the significance of Poole in that regard. It is a very special trust port. It is surrounded by a large area of outstanding natural beauty. In combination with the NCC and the RSPB, the trustees have devised ways to ensure a balanced development. In doing so, they have protected the environment.
A number of other ports are faced with a not dissimilar situation, but I shall not go into details of them now.
Paragraph (c) deals with:
"provision of facilities to local users of the port".
The standards need to be maintained at the very least to current levels. The port's future is intrinsically bound up with the facilities that it affords to its local users. That applies only in so far as any future purchaser is concerned to ensure the viability of the port. It does not necessarily follow with all potential purchasers who might be more interested in developing other ports and their facilities in which a potential purchaser might have a substantial interest. They might even have an interest in developing only certain assets relating to the port. These worries have been expressed to me by a number of important people. I am sure that they have been expressed to the Minister.
There is the provision of working conditions to be maintained. That is of major importance to the workforce. It is not sufficient to say that any purchaser would be sufficiently aware of the desirability of looking properly after its skilled and expert workforce. That is not how life is lived. I believe that the provision that we put forward in that regard is important.
I wish to say a few words about environmental audits. There is no legal provision for environmental audits at the present time. The better companies are voluntarily embracing the idea. Financial audits are required by law. I believe that when we embark on a new concept in relation to ports, such as that which the Bill devises, it is important that we introduce the concept in order to allay people's concerns about environmental audit. Why should the provision not be

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in the Bill? Why should not the new privatised authorities be prepared to undertake that obligation? I do not believe that the matter should be left simply to an undertaking on a voluntary basis. The law needs to step in. I beg to move.
8.30 p.m.
Lord Ezra: I support the amendment. It is common ground that the trust ports are special institutions. It is not entirely clear who owns them but they are clearly interlocked with the local community. Their disposal therefore has to be handled with extreme care.
It is not sufficient for the Bill to state that a scheme shall be prepared—Clause 8 is a purely financial provision—and that on that purely financial assessment, the scheme should be submitted to the Minister for his approval. The considerations and criteria set out in the noble Lord's amendment are of great importance. The amendment does not impose onerous obligations in regard to the transfer of those assets other than to state that they should in certain important respects meet the existing standards. It is obviously to be hoped that as a result of the transfer existing standards would be improved upon. That would be wholly desirable.
However, what needs to be guarded against are schemes that may lead to total change in the activities relating to these ports—the predatory absorption of important port areas by developers who may have entirely other objectives in mind. That was a point much emphasised by the noble Lord, Lord Murton.
If the Minister objects to the amendment, I hope that he will give a very reasoned argument for doing so. If not, we shall fear the worst: that the intention is to enable those important ports to be used for purposes for which they were never intended, and to disregard the considerations referred to in the criteria listed in the amendment. I hope that the noble Lord, Lord Brabazon, will be able to reassure us on this important issue.
Lord Wade of Chorlton: I listened to what the two noble Lords said. The Bill is set up for the prime purpose of allowing our ports a more competitive role in the movement of goods in and out of the country, to give us an opportunity to rationalise the ports: system, which is not at present the most effective, and to allow capital now tied up in matters unrelated to the greater efficiency of the ports to be used for the general benefit of the country, thus reducing our costs and making for a more effective system for everyone, in particular our manufacturers and importers and exporters. I find unacceptable the argument that we should establish in the Bill environmental conditions which do not apply to all those private ports already in existence which have contributed enormously in those respects. I accept no argument that to open up the opportunity for developers is a bad thing. I refer to the enormous advantages that have been achieved in the past 10 years by allowing developers to turn what were otherwise dying areas into areas of benefit to the people. I can give many examples from many
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parts of the country of land which has lain derelict and unproductive but which now has developing businesses and benefits communities to an extent never achieved before. That achievement did not come about by putting restrictions in Bills but by allowing people the freedom to do what was most productive and effective.
I do not accept the idea that we should now bring certain restrictions into the Bill which do not apply to other extremely effective ports. My noble friend referred to legislation of recent years which has completely revitalised many of our ports. There is now opportunity to do so again. As a result of this legislation there will be rationalisation of the system. I see no harm in that. Some ports will close. Their assets can be used more effectively in other ways. I see nothing wrong with that.
We have to create a more efficient system. I strongly object to the concept that every time we introduce new legislation we must put some environmental standards in it. Good heavens, such standards already operate within existing legislative control to the environmental benefit of everyone. The same planning laws and restrictions which apply to all developments will apply to the new ports. I strongly disagree with the two noble Lords. I hope that the Minister will resist the amendment.
Baroness White: I do not wish to intervene at length. However, having heard the speech from the other side of the Chamber—which was about as barbaric as any speech could be in such a situation—I am compelled to speak. I am, as every Member in this Chamber ought to be, a life member of the National Trust. I am concerned about many ports; I do not refer to every port. As I understand it, the number of ports covered by this legislation is legion. They vary enormously in their situation, characteristics and so on.
However, ports by their nature affect the coastal environment. Those of us concerned about coastal environmental problems—I refer to the Enterprise Neptune campaign and so on—are very glad indeed that my noble friend, with the support of the noble Lord, Lord Ezra, the noble Lord, Lord Murton, whom I am delighted to see in his place, and others, are anxious that such a comprehensive Bill should not disregard the special requirements of our coastal areas. At this stage I do not wish to go into the question of Poole harbour. Clearly, the noble Lord opposite has never been there; or if he has, his eyes must have been closed.
Of course we want opportunities in the market place. But we also wish to have civilised sensibility. I am much concerned that the environmental aspect of the ports, which is particularly sensitive, should be referred to in the Bill. I had hoped that we might by now have had the major discussion on Amendment No. 62. I am, frankly, doubtful whether I shall still be present in the Chamber—I believe that I may speak for others—by the time that we reach Amendment No. 62. I hope that the Minister will take seriously the anxieties of many Members of the Committee from all sides of the Chamber. If one accepts opportunities in the market place as one's main criteria—desirable

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though they may be in many cases—one should not overlook other important aspects of such an operation. I trust that the Minister will feel disposed to accept the proposition that my noble friend puts before the Committee.
Lord Greenway: I do not wish to become too embroiled in the environmental issues but must say that I have in front of me numerous examples of environmental friendliness shown by the trust ports. My main objection to the proposals is that this is not a blanket issue; the Bill deals with only about 35 per cent. of ports. If measures such as this are to be pushed through, they should apply to all our ports and not merely to a section. After all, the existing ports in the private sector—that is Associated British Ports and others—have a good environmental record. It would be wrong to impose these measures on a small number of pores and ignore the others.
Lord Napier of Magdala: I too support the noble Lord, Lord Wade, in his comments. The noble Baroness, Lady White, has confused two issues. The National Trust cannot be likened to a trust port in this way. Trust ports are commercial businesses first and foremost. There is no need to confuse the issue of the privatisation of these businesses with the environmental control of the ports. Their record in the private sector has so far been totally commendable.
Lord Brabazon of Tara: We have reached our debates on the environment a little earlier than expected. There are several more major amendments affecting environmental considerations yet to come so at this stage I shall deal relatively briefly with the matter. I shall deal in particular with the amendment proposed by the noble Lord, Lord Clinton-Davis.
I really do not believe that these amendments, if they are passed into the Bill, would serve any useful purpose. Clause 2 already provides that the present statutory functions, powers and duties will pass to the successor companies. These will include functions of the kind mentioned in these amendments; that is improving and maintaining the harbour, environmental and conservancy responsibilities, provision of port facilities and so forth. I do not believe that it makes much sense to add to the transfer of these functions and so on an obligation to carry them out to the present standards of the trust port. It seems a very vague obligation. How would we measure whether it was being met? Nor do I understand why a trust port's existing standard should be enshrined in legislation or be apparently the sine qua non; they may wish to improve. Previous legislation about these functions and duties has not referred to standards of performance and I do not believe that it is a road we should start to go down now. The noble Baroness, Lady White, in particular focused on environmental considerations. The Bill is concerned with the change in ownership of ports. The direct environmental implications or repercussions of the Bill are nil, as was emphasised by the noble Lords, Lord Greenway and Lord Napier. The noble Baroness described the speech made by my noble friend Lord Wade as being one of the most barbaric that she had
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heard for a long time. I do not agree with the noble Baroness. My noble friend rightly pointed out that various parts of the ports might be ripe for redevelopment. What is wrong with that if the land is no longer required for port purposes? If one looks around some of the ports one can see that that is clearly the case. For instance, where should we now be in Docklands if the opposite attitude had been adopted?
Some of the areas may be of interest to property developers but the point is that safeguarding the environment becomes an issue only once the development is proposed. I shall have more to say about that matter in later debates. Permissions must be obtained in exactly the same way as they are now and the planning laws must be obeyed. There is nothing in the Bill which will make it easier for a privatised trust port to make planning changes or developments than is the case at present in respect of a trust port or a port already in the private sector. Again I remind Members of the Committee that trust ports comprise more than half the industry. They have exactly the same environmental responsibilities as other ports, which they discharge properly. Why should we assume that privatised trust ports would not act in the same way, even if they were allowed to, which they are not?
I have no doubt that we shall return to the environmental issue but I must ask the Committee to reject the amendment.
8.45 p.m.
Lord Clinton-Davis: Two Members of the Committee have referred to other ports. I should be happy to see these obligations applying to all ports and I am interested to know whether that is also the view of the Minister. Why should not environmental audits be applied to all ports? Why should not many of these other considerations, particularly in relation to conservation and environmental protection, apply to all ports? I shall take that idea into account when we return to the issue at a later stage.
I liked the notion put forward by my noble friend Lady White of civilised sensibility. It was a fine, ringing phrase that I hope will attach to the Minister when he comes to consider the environmental matters. My noble friend said in more eloquent terms everything that I should have wished to say.
The problem is that I and, I suspect, the noble Lord, Lord Murton, are not on the same wavelength as the Minister about the possibility—I put it no higher—that some successor companies will be less concerned about environmental protection. We know that many private sector companies have a cavalier attitude towards environmental protection. Who is to say that the same attitude will not apply in this case? Who is to say that we shall not find that these companies will be reluctant to the point of refusal to entertain the voluntary notion of environmental audits even though it is an attitude which better companies throughout the country are beginning to adopt? One does not legislate to catch the advanced companies; one legislates to catch the laggards. They will not be so concerned with promoting the interests

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of co-operation with local authorities as are the present trust ports because the latter are integrally involved with the local authorities. That involvement will be broken to a large extent. It will be for the individual companies to determine the way in which they will conduct their affairs with the local populace surrounding the ports.
I am by no means convinced by the arguments that were adduced by the noble Lord, Lord Wade, whom, notwithstanding the strong injunction directed towards him by my noble friend, I am delighted to see in the Committee. We shall return to the issue as the Minister has indicated. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 22 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 23:
Page 5, line 37, at end insert ("which shall include a provision requiring an environmental audit to be prepared annually").
The noble Lord said: I shall speak also to Amendment No. 79. I can be brief about this issue. We believe that the Memorandum and Articles of Association should contain a provision covering the question of an environmental audit. I have already dealt with the issue at some length and do not propose to detain the Committee. I believe that it is the correct way of approaching the matter and I beg to move.
Lord Brabazon of Tara: As the noble Lord said, we covered the ground to some extent when dealing with the previous amendment. No doubt we shall return to the matter at greater length in later amendments.
The noble Lord has tabled amendments on environmental matters which seek to place special obligations and environmental responsibilities on the trust ports which are to become Companies Act companies. The obligations and responsibilities would not apply to the remainder of the ports industry, whether local authority ports, existing company ports or other trust ports which do not convert. The Government see the privatisation of trust ports as a move towards securing clearer and fairer competition within the ports industry. From that point of view, to put special environmental responsibilities on trust ports which are privatised under the Bill would be a step backwards. There is no good reason for singling them out from the rest of the ports industry in this way.
In any event, I believe that a proposal as general as this for an annual environmental audit to be carried out by each successor company established under the Bill would be of little help. I believe that environmental requirements placed on ports should be precise and directed at specific objectives. These amendments are not of that kind. I hope therefore that the noble Lord will feel able to withdraw the amendment.
Lord Clinton-Davis: I listened carefully to the Minister's response. I shall further consider the matter. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 24 to 26 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 27:
Page 6, line 29, leave out from ("after") to ("and") in line 30 and insert:
("(a) considering any such representations duly made to him before the end of that period and not withdrawn:
(b) satisfying himself that provision has been made by the Port Authority to recognise membership of official trade unions relevant to the activities conducted by the authority, in connection with collective bargaining over pay and conditions of employment").
The noble Lord said: In moving this amendment I shall, with the leave of the Committee, speak also to Amendment No. 78. This is a matter of very considerable importance. Since the abolition of the dock labour scheme in 1989, not only has the Transport and General Workers' Union no longer enjoyed recognition by the Port of London Authority and its subsidiary, the Port of Tilbury, but other unions have also suffered de-recognition. That can be neither right nor sensible.
The amendments seek not only to remedy a wrong but also the consequences of a massive over-reaction in the wake of the traumatic and bitter docks strike which arose through the abolition of the dock labour scheme in 1989. Of course, the Government triggered that abolition and did so, egged on by their supporters, without either consultation or notice to this Chamber, another place or the trade unions. Moreover, they expedited all the parliamentary stages in the summer of 1989.
In dealing with the issue, we are anxious to cover not only Tilbury, which comes later in a sense, but the whole question of trade union recognition. However, it is convenient to deal with the Tilbury issue at the same time. Of course, we cannot reverse history. Unions may view that with some disappointment; but that is a political reality. I believe that it is generally accepted that you cannot put the clock back.
However, I do not accept the charges or criticisms of the unions—for example, that they are guilty of malevolence, greed or blackmail—which are constantly levelled against them. Many of their stewards are still appearing before industrial tribunals. The tribunals are examining the unfair dismissal of something like 192 shop stewards and union representatives. Moreover, another 150 applications by other union members are held in abeyance pending the outcome of those hearings. It is quite unprecedented that that should be the case. I referred to the matter on Second Reading.
These hearings have already taken no fewer than 200 sitting days. But for the purposes of the present debate let us accept that, for whatever reason, there was much to be desired and improved in terms of industrial relations in the Port of Tilbury before 1989. There were serious breaches of basic human rights and there was a failure to ensure that people from the black community and women were recruited. Nothing could discourage me from holding those views. I believe passionately that that was wrong.
Having said that, nothing can justify the de-recognition of the trade unions, especially not in this most critical period. I cannot believe that it is

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defensible to allow a situation where the dock labour force should be denied the opportunity to be represented individually and collectively by their unions in negotiations and consultations; and indeed when dealing with their rights which relate to much wider issues.
It is patently unfair and it is repugnant to all international standards that in key and hazardous industries —and the ports are certainly that—we should have such a situation. It is something which needs to be put right. I do not have to remind Members of the Committee that even today, with containerisation, this industry is dangerous and hazardous. By de-recognition, the trade unions are denied the opportunity to nominate safety representatives. That, too, cannot be right.
Therefore, the Government have decided to pillory the trade union movement, exaggerating the situation which previously occurred. But, even if they were 100 per cent. right in the criticisms that they have made, I believe that the points I have put forward justify the amendment which I now move.
I do not intend to rehearse all the arguments that I have. However, I feel most passionately about the matter. There are very strong reasons why we should ensure that, as we are embarking upon a new passage in the history of the docks—that is, if the Bill is enacted—the responsible voice of responsible trade unions is heard. They are there to represent the workforce.
I should tell Members of the Committee that when I visited Tilbury I found that virtually all the employees I met wanted the trade unions to be recognised so that they could represent the workers. That is not to say that they were happy with the past; but it was clear that they felt unprotected. In my view those feelings are right.
A poll was carried out by the Transport and General Workers' Union at Tilbury to ascertain the view of its membership. The membership is still a strong one. The poll was taken from 80 per cent. of those who were working. The results showed that 90 per cent. of those voting—about 500 to 600 people—voted in favour of trade union recognition. I believe that that ought to be recognised.
The result of the poll was put to the port authority. The authority was asked to recognise and accept the ballot. Otherwise, it was put to the authority, "If you cannot accept our ballot because you may say that it was carried by us and was therefore biased, why don't you put it to an independent, outside agency such as the Electoral Reform Society?" Regrettably, the port management has declined what I think on any showing is a reasonable request.
I believe it is important that we should recognise this essential right. People have learnt lessons from the past. Now is the time to change some of the more miserable features—and there are many of them—which have been affected by this Government's ideological pillorying of the unions. That is what we would do. I beg to move.
The Viscount of Oxfuird: The words concerning safety and the consideration of safety in ports weigh heavily upon us, especially bearing in mind the Health
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and Safety at Work etc. Act 1974 which applies to ports as well as to any other industrial area. We talk about containerisation, but this cannot be done in any way in any port without expertise, the best possible equipment and an extremely efficient management and computer system.
Therefore we come to the ports where we are talking of the handling of goods—probably palletised goods—or handling of bulk. In all those cases there is a clearly defined method of handling, and as far as possible the dangers have been virtually removed for the workers. We are speaking of 1991 not 1891.
9 p.m.
Lord Brabazon of Tara: In his closing remarks the noble Lord, Lord Clinton-Davis, referred to the "miserable features" of the Government's recent legislation. I believe that the abolition of the dock labour scheme, which admittedly the noble Lord said could not or should not be reversed, was one of the best things we have done for the ports industry for a long time.
My noble friend Lord Oxfuird answered the anxieties of the noble Lord, Lord Clinton-Davis, in respect of safety. I recall from the debates on the dock labour scheme that the Health and Safety Executive was, as it remains, powerful in the ports. However, I can give some assurance to the noble Lord, Lord Clinton-Davis, in regard to Amendment No. 27. Paragraph 5 of Schedule 1 to the Bill specifically applies the Transfer of Undertakings (Protection of Employment) Regulations, (TUPE), to every transfer under Part I of the Bill. The TUPE regulations serve to provide for the continuation of various employment conditions when an undertaking is transferred. Section 9 of TUPE provides that any independent trade union recognised by the transferor in respect of its employees shall be deemed, after the transfer, to be similarly recognised by the transferee.
Section 6 provides that the effect of any collective agreements between the unions and the transferor shall also continue after the transfer. Therefore, wherever formal arrangements to recognise trade unions exist in port authorities, those will transfer to successor companies. I believe that that covers the situation, aside from Amendment No. 78 which refers exclusively to the port of Tilbury.
As the noble Lord said, there is no trade union recognition for collective bargaining purposes at Tilbury. I understand that consultation procedures with employees operate perfectly satisfactorily there without such recognition. As everybody knows, industrial relations have improved immensely since the scheme was abolished and recognition withdrawn.
I understand that the industrial tribunal's findings are not yet known. It would be sensible to await them before commenting on the matter. The Government have no need to exaggerate the situation obtaining before the abolition of the dock labour scheme. It was bad: that was clear for all to see. This matter is entirely for the Tilbury company management and subsequently, under the Bill, for whoever buys the port of Tilbury. I do not believe that it is for us to legislate on the subject here. I ask the noble Lord to withdraw the

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amendment. At the same time, I hope that he is encouraged by my remarks in regard to Amendment No. 24.
Lord Clinton-Davis: I thank the Minister for the first part of his remarks, but as regards the second part my agreement disappears. I accept that the agreement continues; but for how long? It is open to the successor company to terminate those arrangements. It is by no means unlikely that that will happen.
Tilbury is a matter of serious concern. Wages have gone down. The Minister did not refer to that. They have depreciated considerably. I believe that the consultation procedures which must be undertaken should operate with due recognition of the trade unions. It is idle to say that the situation in regard to safety is immeasurably improved and therefore we do not need the trade unions. It was implicit in what was said by the noble Viscount, Lord Oxfuird, that we do not need trade unions in this day and age. I see him nodding. That is a somewhat antediluvian attitude.
Trade unions are there to carry out observations in regard to safety which are critically important. Whatever work the Health and Safety Executive does, and it does a good job, it has inadequate numbers. It is the man on the spot, able to look after the interests of his workforce, who is so critically important. I listened to what the Minister said. There is a great deal of difference between us. We shall perhaps come back to the matter at a later stage. In the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 agreed to.
Clause 10 [Schemes initiated by the Secretary of State]:
Lord Underhill Lord Underhill moved Amendment No. 28:
Page 6, line 45, after ("until") insert:
("(a)").
The noble Lord said: In moving Amendment No. 28, with the leave of the Committee I shall speak also to Amendments Nos. 30 and 35. Amendment No. 28 is merely a paving amendment for Amendment No. 30. Amendment No. 30 provides that the compulsory purchase provisions in the clause shall take effect only at the end of two years and after Parliament has approved a compulsory company formation order. Amendment No. 35 makes clear that before such an order is made the Secretary of State shall lay a report before Parliament. The report shall include a number of points which are listed clearly in the amendment.
Parliament is entitled to know,
"the number of authorities which have exercised their powers under sections 1, 2 and 3".
Those important clauses relate to the formation of companies for transfer, the transfer of undertakings and the disposal of the ownership of the successor company. Parliament is entitled to know the names of the authorities which exercised those powers. I am certain that the Minister will disagree with paragraph (c) because he does not believe that there should be a national ports policy or wider transport policies. We believe that Parliament should see a report showing
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precisely what contribution has been made towards carrying out a national ports policy and broader transport policies.
Paragraph (d) concerns another important point. We believe that the company formation order to be laid before Parliament by the Secretary of State should give the Secretary of State's reasons as to why he is exercising his compulsory powers under Clause 10 and why it is necessary in this case to support the implementation of those policies. Finally, the amendment reminds us once again:
"An order under this section shall be laid before and approved by each House of Parliament".
It seems to us to be a reasonable amendment. Parliament has the right to have this information laid before it in the company formation order. I beg to move.
Lord Brabazon of Tara: I do not believe that the amendments would add a great deal which is helpful to what is already in the Bill. The Secretary of State is already required to undertake a full process of consultation with any port authority before directing it to begin the process of privatisation. In addition, and importantly, any order that he makes confirming a transfer scheme made under the reserve power is subject to the approval of both Houses of Parliament.
Clearly, as part of that process the Secretary of State may be called on in debate to explain his reasons for privatising a particular port. At that stage the relevant points at issue, and in particular the arguments that will be of concern to the port itself, will not involve a description of how a change in its own status, let alone previous changes in the status of other ports, will relate to some national transport policy. There will be arguments about the position of the port itself which will no doubt have been brought into play during the consultation period. I am sure that the Secretary of State will be asked to explain those arguments in the parliamentary debates on the order.
The substance of what is needed in such a situation is already to be found in the Bill. I do not believe that the amendment would add a great deal extra which is not already taken into account.
Lord Underhill: The Minister has made two points. He said that the amendment would add nothing to what is already in the Bill. He also emphasised that there are already adequate grounds for consultation. Yet, as regards previous amendments, when I have endeavoured to extend the consultation so that it will take in all the bodies that may have some influence in the matter, the Minister has rejected the suggestion. The strangest argument of all was that instead of putting into the Bill the necessary provisions, we should rely on what is said in debate in Parliament. If the matter is so important that it should be debated in Parliament, why not include it in the Bill? To rely on the Minister's statement that he is certain that the matters will be raised in parliamentary debate and therefore there is no need to have the measures in the Bill, means that one could take half the Bill and say that the issues concerned can be raised in Parliament and therefore most of the clauses could be removed.
Lord Brabazon of Tara: That is to exaggerate the situation. As regards Clause 10 we are here talking about an order which has to be made by an affirmative instrument. All the points which the noble Lord raises in the amendment can be debated at the time and they would have to be answered.
Lord Underhill: The Minister will understand that one has to be a little forceful and exaggerate a point in order to make it understood and for the amendment to be accepted. He made it quite clear that there is no need for these matters to be in the Bill because they are certain to be raised in parliamentary debate. I say that it is necessary to include them in the Bill so that they will be placed before Parliament. That is the point of Amendment No. 35. I shall study very carefully what the Minister has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 29:
Page 6, line 45, leave out ("two") and insert ("five").
The noble Lord said: My Lords, in moving this amendment, it may be for the convenience of the Committee if I speak also to Amendment No. 86. The amendment enables us to discuss the Government's current determination to insist on a two-year period for compelling ports within specified categories to be privatised if the Minister considers it appropriate to do so. One immediately asks why the Government have selected a period of two years. The difficulty is that one has the sword of Damocles suspended over the eligible trust ports. That is important in terms of re-investment and development. I believe that that period will be a destabilising factor. I wonder whether the Minister perceives any dangers in that regard.
Furthermore, why should one interfere with the judgment of those in the trust ports, such as the trustees and the commissioners, to decide the best way forward for the ports over which they preside? Their record of deciding what is in the best interests of the ports—it must never be forgotten that that is integrally related to the communities around the ports—has not been assailed by the Government. However, here they come forward with the doctrine that the man in Whitehall knows best. That is something which causes the trust port authorities very great concern. They are concerned about the compulsory element. As a result of the representations made in Committee by the noble Lord, Lord Murton, but also from Blyth, Milfc rd Haven and many other ports, the Government will be aware that they are deeply worried about the compulsory element.
The basis of their concern is that, contrary to the man in Whitehall knowing best, they believe that, by experience, the ports know best what is good for them and the surrounding areas. I suspect the real reason for this power is that the Government fear that some, perhaps even many, trust ports will oppose their desire. Therefore, in relation to the amendment, perhaps the Minister will say what criteria he intends to deploy in exercising his discretion. If he says that it is all set out in the beautiful guidelines—to which we
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have now fortunately been made privy—is there not a case for ensuring that many of those points are incorporated in the statute itself? I beg to move.
9.15 p.m.
Lord Ezra: The Minister will not be surprised to learn that based on what was said at Second Reading there are many who are concerned about the reserve powers given to the Minister. We are talking not about those ports that wish to prepare a scheme in order to transfer their assets and activities into private ownership but those ports which do not wish to do so. We had explained at some length at Second Reading the reasons why some of the ports would probably oppose that. It seems to me that this is a major blemish in a measure which otherwise in many ways could be considered desirable. I am all in favour of these ports preparing a suitable scheme if they wish do so. There are certain safeguards, of which the noble Lord, Lord Brabazon, has reminded us, which are reserved for the Minister in regard to whether he approves or disapproves of those schemes. So far so good. However, it is on the reserve powers and the enforcement of a scheme on port authorities which do not wish to go along that route that I feel we are justified in having serious doubts.
The amendment, which I support, is merely an expression of those doubts. Therefore, I hope the noble Lord, Lord Brabazon, who is to answer this point, will do his best to reassure us that where ports which come into this category make out a strong case for not being subjected to a scheme—Poole has been mentioned many times—restraint will be exercised by the Minister in his decision.
Lord Murton of Lindisfarne: Perhaps it would be as well for the time limit to be increased. There are various ports which, as the noble Lord, Lord Ezra, said, are anything but keen to be involved in the compulsory privatisation. The port that I am most interested in has already spent a considerable amount of money taking legal advice on going into the question of whether or not it will be feasible to change its status. Two years is really not long enough. Five years would be very much more reasonable because it would give ports time to settle down and consider the matter. It would allow time to show what the economic climate was like at that particular time.
Lord Brabazon of Tara: I have obviously listened carefully to the views of noble Lords about the necessary timescale for the coming into force of the reserve power of compulsion in these clauses and I think it would be helpful if I set out some of the thinking behind the question of the reserve power—as has been mentioned by the noble Lords, Lord Clinton-Davis and Lord Ezra and, indeed, by my noble friend Lord Murton—and, of course, the timing of its introduction.
We believe that a reserve power is necessary if the Government are to build on the benefits arising from the abolition of the dock labour scheme by opening up the ports industry more fully to market forces. On a number of occasions in the debates in another place both my right honourable friend the Secretary of State

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for Transport and my honourable friend the Minister for shipping have been at pains to emphasise that we fully appreciate the extent to which the circumstances of individual ports differ. That is why the Bill departs so importantly from the normal approach to privatisation by being primarily an enabling measure instead of the instrument for transferring a whole industry into the private sector.
The noble Lord, Lord Ezra, is basically in favour of voluntary privatisation of these ports, as indeed is my noble friend Lord Murton. I hope that they will gain some assurance from that.
We do of course accept nonetheless that the inclusion of the reserve power in the Bill causes concern among some of even the larger ports which may see themselves as unsuitable candidates for privatisation. That is why the provisions qualifying its use are clearly stated on the face of the Bill itself.
Moving therefore to the question of the two-year gap before the reserve power becomes enforceable, this is not a provision which has been drafted into the Bill as an idle afterthought. We could have made the reserve power available from the time of enactment. In drafting the Bill, however, the Government have recognised the great variety of different ports even among the relatively small group whose annual turnover exceeds £5 million. A two-year delay before the reserve power becomes operative should allow ports which may be uncertain about privatisation to get some idea of how those in the van are faring as a result of privatisation and to judge the likely shape of the market and its competitive pressures and opportunities as more ports privatise under the Act. For that purpose two years should be sufficient.
The noble Lord, Lord Clinton-Davis, said that two years would be a destabilising factor in ports' investment decisions. If the noble Lord were to take that argument to its logical conclusion, a period of five years would be an even more destabilising factor. It is rather rich of the noble Lord to say that we believe that the man in Whitehall knows best when he proposes to take away the power of port management to invest in the ports and to do it from Whitehall, as some previous amendments have suggested.
Lord Clinton-Davis: Oh!
Lord Brabazon of Tara: The noble Lord will be able to reply when I come to the end of my speech and to comment on the whole scheme of national ports' policies.
The noble Lord is seeking to delay any action almost indefinitely; in this case, by five years for any port. The effect of the amendment in the current circumstances would mean that any decision concerning the use of the reserve power would be delayed, not just to the next Parliament but in all probability to the one after that. Perhaps working to such a timescale which would delay any effective action almost indefinitely may be congenial to the party opposite. But we on the Government side have become accustomed to working on a somewhat less leisurely timescale than that. I ask the Committee to reject the amendments.
Lord Clinton-Davis: Sometimes the Minister is conciliatory and sometimes he is helpful; at other times he is just obdurate. He has chosen in relation to this amendment to be obdurate. For him, market forces are the cure for everything. That is patently wrong. There are so many examples to illustrate that, most particularly in relation to the way in which regard for the environment is held. Even this Government concede that if one allowed that to be governed by market forces, catastrophic situations would reign; so there has to be regulation. The noble Lord said that my comments were a little rich. I thought that it was a little rich of him to say that I was arguing that power in relation to the ports should be centralised. We discussed earlier a national ports council of an advisory character to help the Minister. However, this amendment has been regarded by the Minister in that rather pejorative way. It is a silly criticism.
The Minister said that ports will volunteer because ports will have perceived how well others are doing. It is not a question of volunteering; it is a question of "You will be a volunteer". The Minister has reserve powers. Many of the ports have seen the reserve powers inscribed in the Bill and they have seen the qualifications to which the Minister has referred but they are totally unimpressed. Their concerns remain. The Minister has said nothing today that will begin to allay those anxieties.
This is a matter to which I am sure we shall want to return. It is late and we must move on to other matters. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 30 not moved.]
Earl Howe Earl Howe moved Amendment No. 31:
Page 7, line I, after ("authority") insert ("who have not formed a company in pursuance of section 1 above and").
The noble Earl said: I move this amendment on behalf of my noble friend Lord Brabazon of Tara. With the leave of the Committee, I shall speak also to Amendments Nos. 32 and 34. These amendments clarify the exercise of the Secretary of State's power of compulsion under Part I of the Bill.
Amendment No. 31 makes it clear that the power to direct a port to form a company can be exercised only where a port authority which would otherwise come within it has not already voluntarily formed a company for the purpose of transferring its property, rights and liabilities under Clause 1. Amendment No. 32 is a drafting consequential of Amendment No. 31.
Amendment No. 34 fulfils a commitment made by my honourable friend the Minister for shipping in another place to John Ward MP, who put down an amendment which was accepted in principle by the Government. As now drafted, it provides that, if the Secretary of State consults a port authority with a view to exercising his reserve power of compulsion but ultimately decides not to apply it, he must provide that authority with written notification of his decision. Also, he will not be able to exercise his reserve power of compulsion under this clause of the Bill in respect

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of that port for a period of five years, beginning from the day on which he notified the authority of his decision.
The Government accept it as reasonable that a port that has its own reasons for not seeking privatisation and has in the course of consultation convinced the Secretary of State of their validity, should first have a clear indication of its position from the Secretary of State, and secondly be able to carry on its present business, planning its investments and other long-term commitments in the sure knowledge that the issue of privatisation and the sale of its undertaking will not need to be fundamentally reconsidered for a defined, statutory period. I beg to move.
Lord Murton of Lindisfarne: Perhaps I might say with regard to subsection (6)(b) that it will come as no surprise to the Committee that Mr. John Ward is Member of Parliament for Poole.
On Question, amendment agreed to.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 32:
Page 7, line 3, leave out ("a company in pursuance of section 1 above") and insert ("such a company").
On Question, amendment agreed to.
[Amendment No. 33 not moved.]
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 34:
Page 7, line 25, at end insert:
("(6A) Where after consulting a relevant port authority under subsection (6) above with respect to any direction or directions which he is considering giving to the authority under this section the Secretary of State determines not to give the direction, or either or both of the directions, under consideration he shall give the authority written notification of his decision.
(6B) In any case within subsection (6A) above the powers of the Secretary of State under this section shall cease to be exercisable in relation to the authority until after the end of the period of five years beginning with the date on which the required notification is given.").
On Question, amendment agreed to.
Clause 10, as amended, agreed to.
[Amendment No. 35 not moved.]
Clause 11 [The annual turnover requirement for the purposes of section 10]:
[Amendments Nos. 36 to 38 not moved.]
Lord Underhill Lord Underhill moved Amendment No. 39:
Page 8, line 23, leave out ("£5") and insert ("£20").
The noble Lord said: In moving Amendment No. 39, with the leave of the Committee I shall speak also to Amendment No. 40. This subsection refers to the turnover limit of £5 million, and the amendment proposes that the figure should be amended to £20 million.
It appears that the £5 million turnover was deter mined in order to catch as many trust ports as possible. Some ports are very near the borderline, and, although they may be in favour of port privatisation, they want it to take place in their own time and according to their own decisions. It has been put to us that the figure of £5 million is far too low for that purpose, whereas £20 million turnover would give the larger ports in particular a better chance to justify why they should be excluded from the compulsory powers, which I know are reserve powers. As I said, some support privatisation, but they want to take the
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decision themselves when they are ready to take it. They do not want it imposed by the Minister. The figure of £20 million would be far better for them. A number of representations on that point have been made to us. Will the Minister justify the Government's insistence upon the figure of £5 million and say why they will not accept the figure that I have suggested. I beg to move.
9.30 p.m.
Lord Ezra: I support the amendment. The figure of £5 million is too low. It represents a relatively small enterprise. It is taking things too far to impose a scheme on an enterprise of that size, especially against its wishes. I feel that the figure should be higher.
Lord Brabazon of Tara: As the noble Lord explained, the amendment is clearly intended to remove all but the largest of the ports from the scope of the reserve power. If a threshold of £20 million were adopted, only four ports out of the 100 covered by Part I would fall within it. The present threshold of £5 million brings in some 14 ports, as the noble Lord will probably have seen from the list. The opportunity to consider seriously the arguments for and against privatisation for each of the larger trust ports would be lost under the amendment, and an important element would be removed from the Government's longer-term strategy for progressively exposing the ports industry to market forces.
It would not be right to exclude ports with a turnover of between £5 million and £20 million from the list of ports which my right honourable friend the Secretary of State might decide to direct to enter the private sector. However, we shall not go along to all of them on 31st July 1993 and direct them all to do so. We shall want to discuss with them their views on the subject, and probe the meaning behind those views before we make up our minds. I do not believe that those ports should be taken out of the field, and so I hope that the Committee will not accept the amendment. If we had intended to catch as many ports as possible, we could have set the turnover threshold at nil. That would have included them all.
Lord Geddes: Will my noble friend advise the Committee, if not now perhaps later, how many ports would have been included had the threshold been nil? What scale are we talking about?
Lord Brabazon of Tara: I said nil, but that might make life a little difficult. As I said when we debated the first amendment, there are many trust ports, and we may not know them all. It might be more helpful if I said that approximately 90 trust ports have a turnover of less than £1 million and six ports have a turnover of between £1 million and £5 million.
Lord Geddes: I am most grateful to my noble friend.
Lord Underhill: The Minister referred to the 14 larger ports. He will agree that many of them are well run, efficient and profitable. They do not oppose privatisation but they do not want it imposed upon them by the Minister when he decides to do so. The

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Minister has said that there will be consultation. When discussing a previous amendment I quoted what the Minister said on Second Reading. He said that the views of many of the boards running the ports were not much good. I am using colloquial language. The Minister may remember that he said that these matters are important but that the views of the people running the boards were not necessarily those that should be adopted. Therefore, mere consultation with the port authority does not solve the issue. Some of the bodies are quite happy to be privatised but they do not wish to be compelled to do so within the Minister's timescale. I shall read carefully what he said and may come back to it. There is a strong feeling that the £5 million turnover figure is far too low. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 40 not moved.]
Clause 11 agreed to.
Clause 12 [Schemes made by the Secretary of State]:
[Amendment No. 41 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 42:
Page 9, line 24, leave out ("forty-two") and insert ("fifty-six").
The noble Lord said: This is a short point. The Minister has made provision for 42 days as the period within which representations must be made. I wonder why he chose 42 days. This is obviously a probing amendment. There are holiday periods to be taken into account which could severely curtail the ability of people to make representations within the period. For that reason, I have suggested an alternative of 56 days. It seems to me that in the circumstances 42 days is too short but I shall listen with interest to what the Minister says. I beg to move.
Lord Brabazon of Tara: I can answer my noble friend, the noble Lord, succinctly and, I hope, satisfactorily. I said "my noble friend" and perhaps outside the Chamber he is so, but inside we have to take heed of the proprieties. The 42-day period is already reliably established in the context of objections to harbour revisions order applications made under the Harbours Act 1964. We believe that the period allows a reasonable time for representations and there is no reason not to follow the precedent as it is so closely related to the Bill.
Lord Clinton-Davis: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 43 and 44 not moved.]
Clause 12 agreed to.
Clause 13 agreed to.
Clause 14 [Payment of levy]:
[Amendment No. 45 not moved.]
Clause 14 agreed to.
Clause 15 [Information for purposes of levy]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 46:
Page 11, line 24, leave out ("thirty") and insert ("fourteen").
The noble Lord said: Again this is quite a brief point. I wish to know why the Government have
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chosen 30 days. It may be consistent with the precedents to which the Minister referred earlier, but it seems to me to be the reverse of the point I was making earlier and that it would be more appropriate to specify 14 days. I shall listen to what the Minister has to say. The thought that occurred to me when I considered this probing amendment was that the port authority would have sufficient time because negotiations would then have been going on for a considerable time, so the shorter period would be sufficient to enable it to comply with the requirement. I beg to move.
Lord Brabazon of Tara: Thirty days seem to us perfectly reasonable and adequate as the period in which written notification of a disposal should be given. Fourteen days by contrast do not seem adequate. Such a short period would seem to risk the possibility of premature and unnecessary action being taken under subsection (4) of Clause 15 to penalise a port authority that was a little slow off the mark in its paper work. It is also worth bearing in mind that by this stage an authority will only have residual resources available to it after the transfer of its undertaking, and it would be a mistake to impose unnecessarily tight deadlines for its remaining duties. I hope that the noble Lord will feel that that is a satisfactory explanation.
Lord Clinton-Davis: I am not entirely certain that I am satisfied with that explanation. However, I shall think about it. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 47:
Page 12, line 5, leave out ("£300") and insert ("£3,000").
The noble Lord said: In moving this amendment I wish to speak also to Amendments Nos. 48 and 49. At first sight it seems to me that the penalty of £300, and indeed all the penalties mentioned in the Bill, are derisory. They are penalties for failing to give a notification under Clause 15(1). I wish to know why those figures have been selected. Presumably the penalty is inserted in the Bill to impose some kind of requirement for compliance and to constitute a deterrent effect if the requirement is not fulfilled within the appropriate time. The Minister has just explained why the appropriate time should be 30 days. If the penalties constitute a deterrent, or are determinants in enforcing compliance, why have such low amounts been prescribed?
I suggest a multiplier of 10 might be more appropriate, most particularly in relation to Clause 15(5) where the £3,000 penalty relates to fraud or negligence. Why not separate fraud and negligence as there is a great distinction between them? Negligence is somewhat less serious than fraud. I should have thought the penalty for fraud is completely derisory. I am at fault in not having tabled an amendment to separate fraud from negligence. However, as the Minister has heard my arguments on that matter I shall not engage in a discussion on it in a clause stand

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part debate. I believe that the Minister should seek to differentiate between the concepts of fraud and negligence. I beg to move.
Lord Geddes: Members of the Committee opposite may be surprised that I strongly support the intention behind the amendments.
Lord Brabazon of Tara: I shall explain to the Committee how we arrived at these figures. It is a simple matter in that they derive ultimately from the Taxes Management Act 1970, as amended by the Finance Act 1989, which lays down standard penalties for failure to supply accurate information in respect of liability to taxation. I see no reason why the penalties in this Bill should be so much higher than the penalties laid down there.
The same argument applies to the point the noble Lord, Lord Clinton-Davis, made about fraud and negligence. The bracketing together of those two contraventions derives from the same Act. I hope that the noble Lord and my noble friend will consider that we were correct to follow the precedent laid down in that Act for similar offences. We are discussing in this amendment a similar offence of failing to supply essentially the same kind of information as regards liability to taxation. Therefore, I believe it is right that we should propose the same penalties in this Bill as are imposed in another piece of legislation concerning similar offences.
Lord Geddes: I hope that my noble friend will be kind enough to consult his colleagues in another place to discover whether they consider that the penalties imposed under the Taxes Management Act are inadequate. I quite understand the point that one particular Bill should not necessarily set a precedent in this matter. However, I believe that the Taxes Management Act imposes ridiculous penalties in this context.
Lord Brabazon of Tara: That is another matter.
Lord Geddes: Indeed.
Lord Brabazon of Tara: However, I shall refer my noble friend's remarks to my right honourable friend the Chancellor of the Exchequer. On the other hand, I cannot make any promise that anything will be done about them with great speed.
9.45 p.m.
Lord Clinton-Davis: I think that the Minister should seek a special audience with the Chancellor of the Exchequer on a matter of this seriousness.
It defeats me, as it has obviously defeated the noble Lord, Lord Geddes, why such an irrelevant precedent has been chosen to justify the penalties. I urge the Minister to think again about that. He has said that he will seek to do so. Perhaps we may hear more before we reach Report stage.
I believe that the Minister should not seek to introduce the precedent of dealing with fraud or negligence. They are different concepts and I urge him to think again or at least to elicit the views of his colleagues in the Government. I believe that I have
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Members of the Committee with me on this issue and I hope that the Minister will agree to consider that point as well.
Lord Brabazon of Tara: Before the noble Lord sits down perhaps I may point out that my noble friend said that, if that was the penalty set out in the Taxes Management Act, as amended by the Finance Act, then it was the right penalty to put into this Bill. However, he said that the penalty in the Taxes Management Act was the wrong one. I said that I would draw that point to the attention of my right honourable friend the Chancellor of the Exchequer but I was doubtful as to whether I would persuade him instantly to change that Act.
Lord Clinton-Davis: I do not think that it is necessary for the Minister to follow that particular precedent. I do not see why one should have to follow the Taxes Management Act. The Minister is a very independent man at times. Let him illustrate his independence with regard to this point. Nonetheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 48 and 49 not moved.]
Clause 15 agreed to.
Clause 16 agreed to.
Clause 17 [Levy on disposals of land, etc.]:
Earl Howe Earl Howe moved Amendment No. 50:
Page 13, line 2, leave out ("land or any interest in land belonging to a relevant port authority is") and insert ("property, rights, liabilities and functions of a relevant port authority are").
The noble Earl said: On behalf of my noble friend Lord Brabazon of Tara, I should like to move Amendment No. 50. With the leave of the Committee, I shall speak also to Amendments Nos. 51, 53, 59 and 101
Amendments Nos. 50, 51 and 59 and the amendment to the Bill's Title are all in one way or another paving amendments for or consequential to Amendment No. 53, which is designed to close a serious potential loophole in the arrangements for a clawback levy contained in Clauses 17 and 18 of the Bill. In its present form, that levy applies only to land which is transferred directly from a port authority to its successor company, but some of the larger trust ports own subsidiary companies and, even if they do not, may well have the power to establish them. Those companies perform a variety of functions, including, in some cases, the owning of land. It is therefore clearly necessary that the Bill should provide for the levy on onward land disposals to apply not just to land owned by the successor company itself but also to land owned by the port authority's subsidiaries, which after the transfer will become subsidiaries of the successor company.
To take the different amendments briefly, Amendments Nos. 50 and 51 pave the way for Amendment No. 53, which defines the relevant land or interest in land as being that either transferred from the port authority to its successor company or belonging both before and after the transfer to a transferred 51 per cent. subsidiary. Amendment No.

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59 defines the term "transferred 51 per cent. subsidiary" by reference to the taxes Acts. Finally, there is a consequential amendment to the Long Title.
The clawback levy is an important aspect of the provisions contained within this Bill, enabling a fair balance of financial interest to be struck between the taxpayer and the new owners of the privatised ports.
These amendments are necessary to ensure that the arrangements set out in Clauses 17 and 18, which were the product of much debate and consideration in another place, work as they are intended. I therefore hope that the Committee will accept them in that context. I beg to move.
On Question, amendment agreed to.
Earl Howe Earl Howe moved Amendment No. 51:
Page 13, leave out lines 6 to 9 and insert ("of—

(a) relevant land; or

(b) a relevant interest in land;").

On Question, amendment agreed to.
Earl Howe Earl Howe moved Amendment No. 52:
Page 13, line 13, at end insert ("("the levy period").").
The noble Earl said: In moving this amendment I shall speak also to Amendments Nos. 54, 55, 56 and 58. I apologise to the Committee in advance for the technical character of what follows.
The principal amendment in this group of five amendments is Amendment No. 55 which is intended to close a technical but not insignificant gap in the provisions of the Bill relating to the clawback levy. The amendment relates to the meaning of the word "disposal" in the context of Clause 17. It is made necessary because of a discrepancy between the time factor in Clause 17 of the Bill (specifically, the levy period of 10 years) and a time factor which is sometimes relevant for determining whether there has been a disposal for the purposes of the Capital Gains Tax Act 1979. This latter time factor may be referred to as the six-year time limit.
The Government have accepted that "disposal" should have the same meaning for clawback purposes as it has for the purposes of the 1979 Act (that is, the Capital Gains Tax Act). This is expressed in subsection (4) of Clause 17. One of the cases where there is a disposal for the purposes of the 1979 Act could, however, have anomalous effects if applied without modification for the purposes of Clause 17. The case in question is where land or an interest in land is transferred by a successor company to another company within the same group (or, indeed by a relevant port authority to a subsidiary company at some time before the property of the authority is transferred to a successor company under Clause 2 of the Bill) and then, during the levy period, the company owning the land or interest in land leaves the group.
For the purposes of the 1979 Act, the transfer from one group member to another would escape tax, but tax would be chargeable on the transferee company's ceasing to be a member of the group. The technical basis for charging the tax at that time is that the company leaving the group is treated as having disposed of the asset by selling it at market value immediately after it has acquired it. A deemed
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disposal such as this is acceptable for clawback purposes, so far as it goes but, under general tax law, it applies only if the company leaves the group within six years of having acquired the relevant asset from the other member of the group. This is unsatisfactory in the clawback context because it could, depending on the timing of transactions, effectively reduce the clawback period from 10 years to six, or even (if the intra-group disposal took place before the transfer under Clause 2 of the Bill) to less than six years.
Amendment No. 55 deals with the matter by providing, in effect, for the six-year limit to be disregarded if the company leaves the group within the clawback levy period. Amendments Nos. 52 and 54 are small paving amendments.
Amendments Nos. 56 and 58 are intended to clarify an aspect of provision already contained in subsection (5)(a) of Clause 17. That provision enables an order to provide for determining when a disposal is to be regarded as being made. The amendments make clear that this includes the shifting into the levy period of a disposal which would otherwise be deemed to take place before that period. The specific case that we have in mind is one that I have already mentioned; that is, where land is disposed of by an authority to a subsidiary of the authority before the authority's property is transferred to a successor company and the subsidiary subsequently ceases to be a member of the successor company's group.
If clawback is to be leviable on the subsidiaries leaving the group, the deemed disposal must be capable of being treated as being made within the levy period. Amendments Nos. 56 and 58 provide accordingly. I beg to move.
On Question, amendment agreed to.
Earl Howe Earl Howe moved Amendments Nos. 53 to 56:
Page 13, line 13, at end insert:
("( ) For the purposes of subsection (1) above—

(a) land is relevant land if—

(i) it is transferred by the transfer; or

(ii) it belongs both immediately before and immediately after the transfer to a transferred 51 per cent. subsidiary; and

(b) an interest in land is a relevant interest if—

(i) it is transferred by the transfer;

(ii) it belongs both immediately before and immediately after the transfer to a transferred 51 per cent. subsidiary; or

(iii) it is an interest of any specified description in land which is relevant land or in land in which a relevant interest within sub-paragraph (i) or (ii) above subsists at the time of the transfer.").

Page 13, leave out line 17 and insert ("levy period;").
Page 13, line 27, at end insert:
(4A) In addition, there is such a disposal for the purposes of this section in any case where—

(a) there would be such a disposal for the purposes of the 1979 Act by virtue of section 278(3) or (3C) of the Income and Corporation Taxes Act 1970 (deemed disposal of assets by company leaving a group) if the relevant six-year limit were disregarded; and

(b) the operative time falls within the levy period.

(4B) For the purposes of subsection (4A) above—

(a) "the relevant six-year limit" means—

(i) in relation to section 278(3), subsection (1) (b) of that section; and

(ii) in relation to section 278(3C), the words "within six years of that time" in paragraph (a) of that subsection; and

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(b) "the operative time" means—

(i) in relation to section 278(3), the time when the company in question ceases for the purposes of that section to be a member of the group referred to in subsection (1) of that section; and

(ii) in relation to section 278(3C), the time when the company in question ceases to satisfy the conditions specified in subsection (3D) of that section.").

Page 13, line 45, at end insert:
("(aa) for treating a disposal of land or an interest in land as being made at any specified time notwithstanding that it is not the time at which the disposal takes place, or is to be regarded as taking place, for the purposes of the 1979 Act (including that Act as it applies by virtue of subsection (4A) above);").
On Question, amendments agreed to.
Earl Howe moved Earl Howe moved Amendment No. 57:
Page 14, line 13, after ("order") insert:
("( ) imposing penalties (including continuing penalties) in respect of contraventions of provisions of any order under this section;").
The noble Earl said: On behalf of my noble friend Lord Brabazon of Tara I beg to move Amendment No. 57. With the leave of the Committee I shall speak also to Amendments Nos. 60 and 61.
The main amendment here is Amendment No. 57 which makes it possible for penalties to be imposed where the provisions concerning the clawback levy on subsequent disposals of land are not complied with. The Committee will know that Clause 15 already makes provision in subsections (4) to (8) for fines to be payable in respect of a failure on the part of a port to provide accurate information about liability to the levy on initial disposal of securities. Clearly, it is easy to envisage a similar situation arising in respect of information about the levy on land disposals.
The amendments therefore make provision for appropriate penalties to be included in the order to be made by the Secretary of State determining the types of land disposal which would attract the clawback levy and the circumstances of such a disposal as well as the administration, assessment and collection of the levy.
I should remind the Committee that this order will be subject to the affirmative procedure so that its
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provisions will be subject to debate in the other place. The other two amendments in Clause 18 provide for the payment of penalties to be made into the Consolidated Fund. I beg to move.
On Question, amendment agreed to.
Earl Howe Earl Howe moved Amendments Nos. 58 and 59:
Page 14, line 16, at end insert:
("(6A) The provision referred to in subsection (6) (aa) above includes provision for treating a disposal as being made at a time falling within the levy period notwithstanding that for the purposes there mentioned it takes place, or is to he regarded as taking place, before the beginning of that period.").
Page 14, line 21, at end insert ("; and

(b) "transferred 51 per cent. subsidiary" means, in relation to a transfer under section 2 above, a company which—

(i) immediately before the transfer is an effective 51 per cent. subsidiary of the relevant port authority in question; and

(ii) by virtue of the transfer becomes such a subsidiary of the chargeable company.

(9) In subsection (8) (b) above "effective 51 per cent. subsidiary" has the meaning that it would have for the purposes of sections 272 to 281 of the Income and Corporation Taxes Act 1970 by virtue of subsections (1E) and (1F) of section 272 if the word "or" were substituted for the word "and" between paragraphs (a) and (b) of subsection (1E) (by virtue of which, for a company to be an effective 51 per cent. subsidiary of another company, that other company must meet conditions both as to entitlement to profits and as to entitlement to assets on a winding up).").
The noble Earl said: These amendments have already been spoken to. I beg to move.
On Question, amendments agreed to.
Clause 17, as amended, agreed to.
Clause 18 [Supplementary and consequential provisions relating to levy under section 17]:
Earl Howe Earl Howe moved Amendments Nos. 60 and 61:
Page 15, line 15, leave out ("and").
Page 15, line 17, at end insert ("; and
(c) all penalties paid to the appropriate Minister by virtue of any such provision.").
The noble Earl said: I have already spoken to Amendment No. 60. I beg to move.
On Question, amendments agreed to.
Clause 18, as amended, agreed to.
10 p.m.
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 62:
Before Clause 19, insert the following new clause:
("Environmental duties
.—(1) It shall be the duty of each of the following, that is to say, the Secretary of State, the Minister, the authority and any successor company in formulating or considering any proposals relating to his or its functions under this Act—

(a) to exercise any power conferred on him or it with respect to the proposals as to further the conservation and enhancement of natural beauty and the conservation of flora, fauna and geological or physiographical features of special interest;

(b) to have regard to the desirability of protecting and conserving buildings, sites and objects of archaeological, architectural or historic interest; and

(c) to take into account any effect which the proposals would have on the beauty or amenity of any rural or urban area or on any such flora, fauna, features, buildings, sites or objects.

(2) Subject to subsection (1) above, it shall be the duty of each of the Secretary of State, the Minister, the authority and any successor company, in formulating or considering any proposals relating to his or its functions under this Act—

(a) to have regard to the desirability of preserving for the public any freedom of access to places of natural beauty;

(b) to have regard to the desirability of maintaining the availability to the public of any facility for visiting or inspecting any building, sites or object of archaeological, architectural or historic interest; and

(c) to take into account any effect which the proposals would have on any such freedom of access or on the availability of any such facility.").

The noble Lord said: It is unfortunate that we are debating this important amendment—a new clause—at such a late hour. I know that a number of my noble friends would have wished to participate but have been unable to do so since they have trains to catch—if London Transport, with the Minister's blessing, permits.
I am torn as to how to handle the situation. I believe that the best and most appropriate way forward is formally to move the new clause and, by highlighting some of the anxieties, to enable the Minister to put on record his views on the matter. I presume that they will be objections.
Reputable environmental bodies, including the Royal Society for the Protection of Birds and the Nature Conservancy Council, have expressed grave anxiety that they were not consulted about the Bill. That has compounded their anxieties about the environmental risks that may well ensue. The RSPB has produced a valuable document, Turning the Tide, dealing with a future policy for estuaries. A report by the Nature Conservancy Council published as recently as 25th March deals with no less than 155 different estuaries in the country. It is a review based on extremely patient and detailed research. I commend those studies to the Minister.
The Minister will be familiar with the representations made by organisations and mirrored in the amendments that have been put down. There are serious anxieties. Many of the port authorities in this country—the trust port authorities and the PLA—own land which is within areas designated as sites of special scientific interest (SSSIs). There is anxiety that the laws in relation to special protection areas, based
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upon the European directive on the conservation of wild birds (European Directive 79/409EC), are not being applied. It is believed that once privatisation occurs there is a greater risk that the law will not be properly enforced.
There are ample precedents for incorporating such environmental duties in legislation. One can cite tranches of Acts where that has been done. Among the most recent is the Water Act 1989, although the Minister in another place said that that was not an appropriate precedent. I do not know how he can say that after our debate on Amendment No. 46, when the Minister chose an altogether inappropriate precedent with regard to dealing with penalties—but that is another matter. The Electricity Act requires privatised companies to undertake environmental duties. More recently, the Coal Industry Act 1990 covers not only the British Coal Corporation but also anyone holding or applying for a licence to carry out opencast coal mining. There is a range of precedents that one can cite to incorporate environmental duties.
I am sure that on another occasion we shall be able to investigate apprehensions of various ports. It is for the noble Lord, Lord Murton, to determine whether he wishes to do so on this occasion. I should have added for the convenience of the Committee that I am speaking also to Amendment No. 63. I beg to move.
Lord Norrie: Amendment No. 62 is framed so as to apply to functions exercised only under this Bill. Irrespective of any move to privatisation, it does not apply a general duty. The duties are triggered when a Minister, port authority or successor body makes such a move.
I suggest to the Government that such safeguards are absolutely necessary. There is no provision in general harbours legislation which places a duty on port authorities or Ministers in respect of environmental conservation. Ministers would be acting beyond their powers if they tried to levy an environmental duty when formulating a privatisation scheme.
I wish to draw the Committee's attention in particular to our international nature conservation responsibilities. Failure to meet them could have important implications for our reputation worldwide. We can hardly invite other countries to protect their wetlands, or indeed their rain forests, if we cannot get it right at home. Land with port development potential lies within internationally important wetlands in many trust port areas, including those of the Medway, London, Poole, Ipswich, Harwich, the Forth, the Clyde and Dundee. We have international responsibilities to conserve this land under the wise use provisions of the Ramsar Convention and under the EC wild birds directive.
As matters stand, transport Ministers have no power to direct that any such treaty be complied with in the course of implementing a privatisation scheme. Surely it is in the best interests of the nation to protect internationally important wetlands. The opportunity which the Bill presents to secure their better conservation should not be overlooked. I hope that the Minister will take these points away and consider carefully this worthy amendment.

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However, if he continues to resist environmental protection amendments to the Bill perhaps he will look urgently at other means of introducing a general environmental duty for all ports. An ideal opportunity to do so would be in the Bill promised soon by the Government to enlarge the order-making provisions of the Harbours Act. Members of the Committee may recall that it arises out of the recommendations in the report of the Joint Committee on Private Bill Procedure.
Lord Ezra: The Bill raises two fundamental issues. The first has been dealt with in connection with Clause 10—that is, the compulsory powers—and the second concerns the safeguarding of the environment. Amendment No. 62 has been put forward after great consideration and at the suggestion of leading environmental bodies. As was made clear by the noble Lord, Lord Clinton-Davis, it follows precedent. Since the Countryside Act 1968 there have been progressive applications of this environmental concern to legislation. The noble Lord cited a number of cases but there are many others. The Bill presents an opportunity to begin to extend environmental concern to the ports and beyond the trust ports to the remaining ports.
I hope that the Minister will take the amendment extremely seriously. Perhaps he will let us know how the Government view the matter bearing in mind the increasing importance of environmental issues.
Viscount Bridgeman: I support the amendment. Experience has shown that directives such as the EC directive on wild birds and planning controls are not adequate to safeguard wildlife. Members of the Committee will be aware that the majority of agricultural operations are outside planning controls. The proposed amendment is a valuable additional safeguard.
The noble Lord, Lord Clinton-Davis, also referred to the Water Act. During the short time that the Act has been in operation the National Trust has taken advantage of it to buy some valuable land in the Peak District. That shows the value of that legislation which is similar to what is now proposed.
Lord Wade of Chorlton: Having already been accused of being a barbarian in this matter, it is inevitable that I should return to express my views. I do not believe that it is right and proper for us to bring these environmental issues into a Bill which is solely concerned with the transfer of ownership of existing going concerns.
One of the things which worries me about these amendments which introduce environmental pressures is the fact that there are so many people who want to use such amendments to force forward their views on issues which are not related to the main purpose of the Bill. I lose confidence in certain environmental groups which, in a way, have been taken over by people who want to use them for their own personal reasons to hold up progress and stop the right economic development which is so essential. I am the first one to admit that in these matters I am "economic led". At the end of the day, I believe that
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it is more important that we should have viable, effective and growing businesses to raise the money to create the environment which we wish to see, than to let the environmental issues influence the thinking initially.
I am not a barbarian in the sense that I want to see things polluted; in fact, quite the opposite. However, I do not believe that this is the right way to handle the issue. There are much more effective methods; indeed, many are already in place. For example, we have environmental Bills, we have greatly increased controls on what people can do and we are bringing forward further regulations about what local authorities can achieve. That does not in any way change the responsibilities in that regard of the people who own these businesses. It does not alter the position in the slightest way.
Therefore, I believe that it is a mistake to keep bringing forward strong environmental issues into such Bills. In fact, we could end up with people doing more harm than good. I say that because it is the purpose of the people running such businesses to run them efficiently. They are operating them in the same environment and under the same controls and regulations as apply to everyone else running a business in the United Kingdom.
We know from our own experience that, as private enterprise has been encouraged, such businesses have responded very well to the necessity for greater environmental responsibility. A noble Lord referred earlier to what some of the existing private ports have achieved. They are a great example of how, with a responsible and effective approach, such ports can work with both local authorities and environmental bodies and achieve many excellent things. More important, they have had the money to do so because they have been able to run their businesses efficiently.
I hope that my noble friend will resist to the utmost the implications of bringing these further amendments into a Bill which is concerned solely with the transfer of ownership of existing businesses. I resist any suggestion that the proposal should go any further because I do not believe that it would be in the interest of any of the ports.
Lord Murton of Lindisfarne: I sincerely hope that I may, perhaps, be able to soften the hard heart of the noble Lord who has just spoken by taking him to Poole and letting him see what, without in any way restricting its activities, a harbour authority can do to help the environment.
I do not want to take too much of the Committee's time because we have heard much about Poole, and other ports, this evening. However, I should like to reinforce what I have just said. For example, the National Trust very recently required some sea defence work to be carried out to the freshwater lake on Brownsea Island. The Poole Harbour Commissioners managed to produce 10,000 tonnes of secondhand stone armouring for the National Trust at a mutually agreeable cost. That was in 1990. During that year, too, 542,000 cubic metres of sand were removed from one of the entrances to Poole harbour, the Swash channel, by suction dredger and transferred to Bournemouth to help reconstitute its beaches.

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Those are just two examples of what a harbour authority can do. After all, as I said before—and I said it on Second Reading, though I do not intend to labour the point any further tonight—the Poole Harbour Commissioners have 10,000 acres to look after. The area is an ecologically restricted one in a site of special scientific interest, RAMSAR wetland and heritage coast. That is all laid down by regulation and cannot be altered. Everybody is delighted that that is so.
I tabled Amendment No. 63. It is probably totally incorrectly drafted but I did it because I had a sneaking suspicion that the Minister would not wish the Secretary of State to be involved in planning issues. My alternative amendment leaves the subject open for consultation between the authority and the successor company, and the relevant local authorities and consultation bodies, including local conservation councils.
10.15 p.m.
Lord Wade of Chorlton: If my noble friend will permit me to comment, he made the point I wanted to make. Poole achieved those excellent advantages without the necessity for legislation. Poole achieved it but there was no legal obligation on it to do so; it was done because it was the right and proper thing to do. I do not believe legislation is necessary to force people to do those things.
Lord Napier of Magdala: Most of the points have already been made on the environmental issues. We do not want to devalue the importance of the environmental issue by confusing it with the matter of privatisation. We all feel strongly about environmental issues.
I simply want to make the point that the ports industry is associated with the shipping industry; it is a service to the shipping industry. We do not want the Committee to go away with the feeling, which seems to be abundant, that that is an environmentally unfriendly industry. Transport by ship is the most environmentally friendly way of moving goods around. It uses around 50 times less energy to transfer one tonne of goods than does the train; it is around 500 times more efficient than a lorry and 5,000 times more efficient than carrying goods by air. As a service to such an efficient industry we must put in perspective the relatively small environmental impact that today's modern ports have in this country. That should be borne in mind.
Lord Greenway: I agree with my noble friend. At this late hour I can only repeat what was said when the matter was discussed earlier. It is wrong to impose any restrictions as regards the environment in a Bill of this sort which deals with only 35 per cent. of our ports. If we are to discuss the matter—and we all agree on the importance of the environment—we should follow the line suggested by the noble Lord, Lord Norrie, that, as regards the environment, all ports should be discussed at one go. This Bill is not the right place to do it and we should not waste any more time talking about it.
Lord Brabazon of Tara: We have had an interesting short debate on the matter. At the outset the noble Lord, Lord Clinton-Davis, said that the hour was late and many of his noble friends had gone home; they had trains to catch. It is only Wednesday night. I have been here much later than this on a Wednesday night, and indeed a Thursday night.
Lord Clinton-Davis: The noble Lord has a ministerial car.
Lord Brabazon of Tara: I shall not respond to that remark.
We were given notice that the environmental matters would be an issue to which we would return after Second Reading. The noble Lord has been as good as his word. There are a whole raft of amendments relating to environmental matters and we have touched on them only in part. At that stage I expressed considerable doubts about the appropriateness of detailed environmental measures being included in a Bill of this sort which is designed to effect an essentially environmentally neutral change in ownership and, as the noble Lord, Lord Greenway, said, is likely to apply to no more than a relatively small proportion of Britain's ports.
I shall take Amendment No. 62 first. It is true that provisions similar to this have been included in previous legislation such as the Water Act 1989, to which the noble Lord, Lord Clinton-Davis, and my noble friend Lord Bridgeman referred. That legislation was concerned not only with the privatisation of an industry, but also with the detailed operation of the whole industry, for example, in the case of the Water Act the laying of pipelines, carrying out works, and so on. As I indicated at Second Reading and again on occasions tonight, there is nothing similar in the present Bill. I do not believe that the new clause would be appropriate in this case.
There seems to be no good reason why measures directed at environmental and conservation matters, which are not applied to other harbour authorities, should be applied to privatised trust ports. I am not aware of any evidence to suggest that private company ports generally have a worse record than trust ports on environmental matters. I believe that the same responsibilities for such matters should be placed on all sectors of the industry alike.
I say to my noble friends Lord Norrie, Lord Bridgeman and Lord Murton, that if they have any evidence that private company ports have a worse environmental record than the trust ports, I shall be delighted to hear it. I do not believe that they will be able to find any such evidence.
I now turn to the amendment of my noble friend Lord Murton. I fully recognise the environmental considerations that concern particularly Poole harbour to which my noble friend has frequently drawn attention. I recognise his concern and that of others on the matter. The amendment which my noble friend has tabled is inappropriate to the present Bill. This evening my noble friend Lord Wade has again rightly reminded us that the Bill is about the transfer of ownership of trust ports into the private sector

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Nothing can be done under the Bill to develop land or change its use. I make that point to my noble friend Lord Norrie in particular.
After it has been privatised, if any port makes any such proposals then the normal procedures will apply. I refer to the Harbour Works (Assessment of Environmental Effects) Regulations 1988 for works of certain categories and the Harbour Works (Assessment of Environmental Effects) (No. 2) Regulations for works below the waterline. The third and perhaps most important case is one where we have seen examples in relatively recent times. That is where authorisation is being sought for harbour works under Private Bills. I recall our debates on both the Felixstowe and the ABP Humber proposals.
In future these too will be subject to environmental assessment before they are considered by Parliament. The Government have announced their acceptance of the recommendation in the report of the Joint Committee on the Private Bill Procedure. It will involve amendments to standing orders in the House and they are expected to be tabled shortly. That meets at least part of the point which my noble friend made.
I believe that we are all agreed on the importance of environmental matters as regards the ports industry. I repeat once again that the Bill is about the change of ownership of ports from the trust sector to the private sector. In no way does it make any other alterations. It would be quite inappropriate to place extra burdens on ports which are not suffered by any other ports in the industry, just because those ports move from one sector to another.
Lord Clinton-Davis: To some degree there has been a good deal of repetition in the debate of that which we heard previously. The noble Lord, Lord Wade, made precisely the same speech on this occasion as he did on the last. He was rebuked by my noble friend Lady White who referred to him as a barbarian or a savage. I would never dream of referring to him in quite those terms. I believe that he is engagingly naive about the attitude of some in industry in relation to environmental matters. If all industry had such a remarkable record, why would the Government be producing White Papers and legislation such as the Environmental Protection Act and that kind of thing?
I lived through a great deal of argument of that character when I was a Member of the European Commission charged with responsibility for the environment. Time and time again I heard denials of responsibility for all kinds of pollutant activities on the part of the United Kingdom Government representing British industry.
What we are talking about is not the best of British industry; no, that does not need legislation. It is the worst that does, the laggards. Those are the people that the noble Lord does not even recognise as existing. I shall come to the other point in which he joined farces with the Minister in a moment. I felt impelled to join issue with him on that particular score.
A number of your Lordships have made short speeches during this necessarily truncated debate. It has been suggested that the shipping industry has a remarkable record. I think it has an improved record,
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but nobody can tell me, as shipping Minister and as commissioner for transport, that the record of the shipping industry is impeccable in these matters; it is not. It is high time that people began to recognise the warts that exist instead of living in a dream world.
However, let us come to the main point made by the Minister and his noble friend Lord Wade. They say that this is an environmentally neutral Bill. I do not regard it in that light at all. I regard it as having considerable potential dangers. I would have no objection whatever to imposing these duties on all ports. I shall reflect on that when we come to the next stage of the Bill. I do not think that the Bill is an inappropriate vehicle. When one dislikes something one always says the Bill is not an appropriate vehicle; that we ought to change the vehicle, get another car. I think it is an appropriate vehicle and we shall reflect as to whether we can import a provision of that kind. I do not regard the Bill as environmentally neutral. That is to take a somewhat naive view about it. Nonetheless, we need to come back to these issues when it is possible to engage the attention of a number of Members of the Committee who do not have ministerial cars and who have to go home a little earlier than the Minister and myself. In those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment No. 63 not moved.
Clause 19 [Financial assistance for proposals to maximise employee participation in equity of successor companies.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 64:
Page 15, line 38, leave out ("or any part").
The noble Lord said: It will be for the convenience of the Committee if we also discuss Amendments Nos. 65, 87 and 88. The anxiety that I have about this provision, which deals with the indemnification of people qualifying for assistance under the proposals to maximise employee participation, is one I expressed earlier. The Minister did not reply, but he indicated that he was opposed at that stage to what I am now proposing.
Subsection (2) is strange. It provides a relevant port authority with enormously wide powers. The subsection states:
"The body concerned may on such terms as it thinks fit agree with any persons"
to carry out the functions referred to in paragraphs (a) and (b). I emphasise the words "as it thinks fit". I have not put down an amendment to the first part and I do not propose to address the House on clause stand part, so I raise the issue now. Is that not taking the issue far too wide? Why should the body concerned have such wide discretion in dealing with people who have sought to engage in an employee participation scheme? I thought that the purpose of the Bill was to maximise their opportunities. Why should the indemnification be couched in the terms:
"to indemnify those persons in respect of the whole or any part of any expenditure",
in respect of which the body concerned has the sole discretion; or,
"to discharge on their behalf the whole or any part of any liability to which that subsection applies"?
I believe that that will operate as a deterrent to an employee participation scheme. Such people are not endowed with great wealth. They are not people who can easily go to City solicitors, City accountants and other advisers to get the best possible advice on these matters. It is imperative that people of this kind should have the opportunity to take individual advice but under the same indemnification as exists for a collective body. I see no reason why people who are seeking to participate in an enterprise of this kind should be in any doubt about being indemnified for the expenditure in which they have engaged.
The Minister may say that expenditure could be undertaken unreasonably. That can be cured by importing into the provision the word "reasonably" and also by enabling some form of arbitration to take place. We should not qualify the assistance that may be available to people who in good faith want to go ahead. There is some enthusiasm. People should therefore be encouraged to go for a management or employee buy-out. They should not have impediments placed in their way. This is a serious matter. I hope that the Minister will say that he will think about it again. I beg to move.
10.30 p.m.
Lord Brabazon of Tara: I listened carefully to the noble Lord but I believe that the amendments are unnecessary. We are well aware that a port authority will wish to do everything that it can within the limits of propriety to assist its own management and employees in the bidding process. But these amendments would remove the authority's ability to indemnify only part of the expenditure or to discharge only part of the liability incurred by a management and employee team in formulating a proposal for purchasing the port. They would therefore oblige the authority to choose between not financially supporting that proposal at all or supporting it in toto, however substantial and perhaps even unreasonable the expenditure and liability incurred. That would place port authorities in an unhappy dilemma and in the long run would benefit no one.
The noble Lord says that the clause gives too wide a discretion to the port authority in this matter. He also says that the management and employee teams should be able to get the best possible advice. I believe that the clause gives a substantial benefit to MEBO teams. It allows them to seek advice at the expense of the port authority and to formulate their proposals. I do not believe that the discretion is too wide. However, I shall reflect on what the noble Lord has said. If I have anything to add to my views on the matter, I shall write to him. In the meantime, I hope that the noble Lord is at least partially satisfied with my reply.
Lord Clinton-Davis: I am grateful for that offer. The Minister has been reasonable in that regard. I believe that there could be a serious deterrent. I listened to what the noble Lord said and I await with interest the letter that he will send to me. I am not sure
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that there are so many letters on this occasion as there have been in the past, so I shall be able to digest it more easily. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 65 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 66:
Page 16, line 3, at end insert:
("( ) that such a proposal is supported by a majority of the employees determined by a secret ballot; and").
The noble Lord said: I beg to move Amendment No. 66, and perhaps it would be for the convenience of the Committee if we also considered Amendment No. 90.
There is a great difficulty about management or employee buy-outs. There could be a situation where a management group got together effectively excluding the rights of other employees to participate. There is a clear distinction—unfortunately it is still practised at Tilbury, as I saw for myself—where rather outdated methods of industrial relations are practised in terms of, for example, management being totally independent of the rest of the employees in their cafeteria arrangements and other personal arrangements. That is outdated, but it indicates that there is a distinction of interest between the management and the rest of the workforce. It may be that that is simply a symptom which is unimportant in the circumstances and that there will be an identity of interest, but one cannot exclude the possibility—I put it no higher than that—that there will be a dichotomy of interest that develops as far as the buy-out process is concerned.
That is why I suggest that the proposal should meet with the support of the majority of the employees as a whole and that it should be determined by a secret ballot. Secret ballots have been practised very frequently of late within the trade union movement. Sometimes that is right. One should pay tribute where it is due. The Government introduced legislation relating to secret ballots, and I believe that it was justified. But why not here, when there is a major interest which would be pursued in terms of a scheme of this kind and it should therefore receive the support of the majority?
Another problem in relation to buy-outs is that in practice the management is in a much more favourable position to be aware of information which is critical to the whole question of a buy-out, whereas the rest of the workforce might not have that available to them. The employees will also need a little more time than management to get their act together. First, there are more of them; secondly, as I have previously indicated, it will be incumbent upon them to satisfy their own requirements, to see that their individual circumstances are dealt with, and that they are accessible to advice, which will be critical to them. They will take rather longer to get a scheme together.
As far as concerns the nature of the ballot, there is no reason why that should not be invigilated by the Electoral Reform Society or some such body. That is something that the Minister should consider as a positive contribution towards maximising employee buy-outs. I beg to move.
Lord Brabazon of Tara: I am slightly surprised by these amendments. On the one hand, the Opposition are strong in their support for management and employee teams against all other bidders. Yet, while fundamentally being in favour of public ownership, they happily place delays and obstacles even in the path of management and employees.
If the workforce of a port authority or successor company wished to hold a secret ballot to decide whether or not to bid for that port's undertaking, or whether to support a particular proposed bid, that is not something to which the Government would have the slightest objection. However, it would not be acceptable to write such a provision into the Bill, thus making it mandatory. That would unnecessarily limit a port's ability to provide financial assistances for a MEBO bid. Clause 40 already provides that maximising participation of the employees includes disposing of the port to the greatest possible number of employees and I see no reason for a 50 per cent. cut-off point. With that expanation I hope that the noble Lord will feel able to withdraw the amendment.
Lord Clinton-Davis: I do not propose to prolong the debate. The explanation does not begin to answer the points that I made, which were of practical importance. I do not oppose the idea of the workforce combining to acquire a share in the company. The Minister is wrong about that, but we can pursue the matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe Earl Howe moved Amendment No. 67:
Page 16, line 4, leave out from second ("to") to end of line 5 and insert ("have a reasonable prospect of securing that the objective of the proposal is achieved.").
The noble Earl said: With the leave of the Committee I shall speak also to Amendments Nos. 68, 91 and 92. The amendments are intended to clarify the drafting of one aspect of the provision enabling port authorities to repay the costs incurred by their management and employees in attempting to buy the authority's successor company.
More than one group of a port's management and employees may attempt to buy the company and, if that were so, it would clearly be unsatisfactory if the authority ended up providing financial support for several competing bids, one or more of which would, inevitably, be unsuccessful. Accordingly, Clause 19(3) limits the authority's support to the management and employees who appear to it to be best placed to maximise employee share ownership in the new company. It was considered, however, that the drafting of that point was insufficiently clear, so Amendments Nos. 67 and 68 clarify the position, and contemplate the possibility that there might be one or more than one management buy-out team in a port. Amendments Nos. 91 and 92 make parallel provision in the case of the privatisation of Tilbury in Part II.
I ask the noble Lord, Lord Clinton-Davis, to reconsider his amendment which would require a port authority in either part of the Bill to consult independent accountants before deciding which management and employee proposal to support. In
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the unlikely event that a trust port board could not decide which of two proposals was likely to maximise employee share ownership in the new company, I am sure that it could be relied upon to consult the independent advisers that it will in any case have engaged to assist it in the sale of its undertaking. The amendment tabled by the noble Lord is therefore unnecessary, and I ask him not to move it. I beg to move.
Lord Clinton-Davis: Again, this is not the time to engage in long debate, but I believe that there is a strong case for ensuring that there is such a provision. Ministers are obstructing their own purpose here by taking a narrow view of this matter, as they have in the past. I have listened to what the noble Earl said. Incidentally, I am not sure whether I welcomed him earlier. It is late at night to welcome him to these miserable Committee stages, but join the club! The Minister has shown that he deals with these issues very agreeably. We do not welcome him for too long, but we welcome him for the time being. I shall return to these matters in due course. I shall reflect upon what he has said.
On Question, amendment agreed to.
Earl Howe Earl Howe moved Amendment No. 68:
Page 16, line 8, at end insert:
("( ) Where in accordance with subsection (3) above different persons would qualify for assistance under this section from any body in respect of different proposals, only such of them as appear to the body concerned to have the best prospect of securing that the objective mentioned in paragraph (b) of that subsection is achieved shall be regarded as qualifying for such assistance.").
On Question, amendment agreed to.
[Amendment No. 69 not moved.]
Clause 19, as amended, agreed to.
Clause 20 agreed to.
[Amendment No. 70 not moved.]
10.45 p.m.
Schedule 1 [Supplementary provisions with respect to transfers under section 2]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 71:
Page 32, line 19, at end insert:
("Transfer of protected land
5A. An authority shall not transfer any protected land except with the consent of, or in accordance with a general authorisation given by, the appropriate Minister.
5B. A successor company shall not dispose of any protected land, or of any interest or right in or over any of that land, except with the consent of, or in accordance with a general authorisation given by, the appropriate Minister.
5C. A consent or authorisation for the purposes of paragraphs 5A or 5B above shall be set out in a notice served by the appropriate Minister on the person who is or may be authorised, by virtue of the provision contained in the notice, to dispose of land or of interests or rights in or over land or, as the case may be, on every such person, and may be given on such conditions as he considers appropriate.
5D. Without prejudice to the generality of paragraph 5C above and subject to paragraph 5E below, the conditions of a consent or authorisation for the purposes of this Part may include—

(a) a requirement that, before there is any disposal, an opportunity of acquiring the land in question, or an interest or right in or over that land, is to be made available, in such manner and on such terms as may

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be specified in or determined under provision contained in the notice setting out the consent or authorisation, to such person as may be so specified or determined;

(b) a requirement, in the case of a consent or authorisation for the purposes of paragraph 5B above, that the company making the disposal has complied with such of the conditions (if any) of its appointment under a scheme made in compliance with section 9 or 10 of this Act as relate to the disposal of land or of any interest or right in or over that land;

(c) a requirement that such a company, before making a disposal shall do any one of the following, that is to say—

(i) consult with the Countryside Commission or the Countryside Council for Wales in the case of an area of outstanding natural beauty;

(ii) consult with English Nature or the Countryside Council for Wales or Scottish Natural Heritage in the case of an area of special scientific interest;

(iii) enter into such agreements under section 39 (management agreements) of the Wildlife and Countryside Act 1981 or such covenants under paragraph 5F below as the Secretary of State may determine.

5E. A consent or authorisation shall not be given on any such condition as is mentioned in paragraph 5D (a) above except where the appropriate Minister is satisfied that the condition will have effect in relation only to land situated in an area of outstanding natural beauty or an area of special scientific interest.
5F. Where a successor company is proposing, in such a case as is mentioned in paragraph 5D (c) above, to dispose of, or of any interest or right in or over, any of its protected land, it may enter into a covenant with the Secretary of State by virtue of which it accepts obligations with respect to—

(a) the freedom of access to the land that is to be afforded to members of the public or to persons of any description; or

(b) the use or management of the land;

and a covenant under this subsection shall bind all persons deriving title from or under that company and shall be enforceable by the Secretary of State accordingly.").
The noble Lord said: I formally move the amendment so that it is on the record and I do so out of respect to those who prepared it since they spent considerable time doing so. I do not propose to engage in further debate which would only encourage the noble Lord, Lord Wade, to make the same speech three times! I could not bear that. I shall not say anything further, it is for the Minister no doubt to recapitulate the same arguments. I beg to move.
Lord Brabazon of Tara: I do not think I can add much to what has already been said on these matters. I am sure my noble friend Lord Wade would not repeat the arguments that he has already used, unless the noble Lord, Lord Clinton-Davis, were to do the same in putting forward the amendment. Perhaps it is best if we do not hear anything from anyone.
Lord Clinton-Davis: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 72 not moved.]
Earl Howe Earl Howe moved Amendments Nos. 73 and 74:
Page 33, line 8, leave out paragraph (c).
Page 34, line 30, leave out ("statutory provision of local application") and insert ("local statutory provision").
The noble Earl said: These amendments have already been spoken to. I beg to move.
On Question, amendments agreed to.
Schedule 1, as amended, agreed to.
Clause 21 [Power of Port of London Authority to form a company to operate the port of Tilbury]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 75:
Page 17, line 31, after ("activities") insert ("within the curtilage of the Port of Tilbury").
The noble Lord said: I am in some difficulty because I have to try to read the writing of my noble friend Lord Underhill. He intended to move the amendment but had to leave. This is a matter to which my noble friend alluded on Second Reading. Clause 21 has a heading:
"Disposal of the Port of Tilbury".
It provides that the Port of London Authority shall have power to form a company carrying on that part of the undertaking which consists of operating the port of Tilbury. However, the port of Tilbury remains undefined. There is a need, in my submission, to make certain that only land and property included in the port of Tilbury is covered by the clause. That is what the amendment seeks to achieve.
It would be of assistance to know precisely what the Government envisage as being the port of Tilbury. There has to be a legal definition. After all, even when one sells a house there is a legal definition of the property one is selling. Our amendment goes as far as it can to carry the notion forward. I assume that the port of Tilbury is distinct from the port of London, although even that is not referred to in the Bill.
The second amendment seeks to ensure that the activities to be involved in the formation of the company which operates the port of Tilbury shall not include any activities that may be provided by the Port of London Authority. The provision in the Bill at the moment is far from clear, so we look forward to hearing from the Minister with further elucidation of the matter. I beg to move.
Lord Brabazon of Tara: I hope that it will be helpful to the noble Lord, Lord Clinton-Davis, and to the Committee if I give some detail and allay the uncertainty which the noble Lord feels over the extent of the new Tilbury company.
First, the Bill itself specifically provides for the new company to take on the operation of the port of Tilbury, together with activities incidental to or connected with it. As regards land, I can inform the Committee that the transfer will involve only the current operating land within the Tilbury perimeter plus the Tilbury fort land to the east of the port of Tilbury, most of which is already earmarked for a riverside berth and cargo handling back-up for the port. It is not proposed that any other land outside the Tilbury perimeter should be transferred.
As regards incidental and connected activities, I hope the Committee will accept that this is primarily a decision for the authority to ensure that the activities transferred are appropriate to the transfer of the Tilbury operation and will reflect an efficient division between the authority and the new company. To restrict the transfer, as these amendments propose, would rigidify that division, at the expense of efficiency: they would also, I think, tend to make the

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Tilbury operation excessively dependent on the authority and thus limit its viability as a separate commercial operation. I hope that the noble Lord will be satisfied with that explanation.
Lord Clinton-Davis: I shall read carefully what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 76 not moved.]
On Question, Whether Clause 21 shall stand part of the Bill?
Lord Clinton-Davis: I have one or two questions to raise on the clause stand part debate. The Minister has given me an assurance that the draft guidelines refer to Part II of the Bill as well as to Part I. I hope he will confirm that.
I wish to question the Minister on the matter of the Port of London Authority Police at the port of Tilbury. I have received a long letter from the chief police officer at the port of Tilbury. He rightly points out that the force, established by statute as long ago as 1908, has been a very efficient force and engages in a multitude of activities including anti-terrorist activities and security at a high level. It also deals with matters affecting safety. The chief police officer states that l here are over 100 serious incidents within the port each year involving injury. The water is over 40 feet deep and the port handles many hazardous cargoes which have to be controlled. That is somewhat at odds with what was said about safety earlier in another debate.
The chief police officer makes some important points. I am sorry I do not have time to read out the whole letter as it is most interesting. He writes:
"To ensure an independent element in supervising the overall direction of the Force, however, we have a written agreement with the Police Complaints Authority that the statutory provisions of the Police and Criminal Evidence Act 1984 will apply to this Force. In actual practice this means that the Police Complaints Authority may give directions to the Pert Authority about their Police Force in the event of wrong doing by one, some or all of it members. Since 1984 there has only been one minor complaint under this procedure and that was resolved amicably. The arrangements for control of the Force have therefore worked exceptionally well over the last seven years to my personal knowledge and it is respectfully submitted that no cause exists to justify any change in procedure".
The question that immediately springs to mind is whether there would be any change in procedure as a result of the Bill's provisions. The letter continues:
"Insofar as the future is concerned, both myself and the Force Senior Officers have every confidence in the present Chief Executive and Directors at the Port of Tilbury. They never interfere in operational matters, have not stinted their investment in training or new equipment and have always lent their utmost political support in questions of external policy
… The Port Authority have not been consulted in the compilation of this letter".
He is anxious, as is his force, to know what the situation will be in the future in the event of the port being transferred in terms of property liabilities and so on. Who will be responsible for any similar police force in future, or will the police force be permitted to continue? Who will pay for it? What happens in terms of these duties which that police force has to carry out in invigilating the baggage of passengers travelling through the port and other cargoes? When I visited
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the port I saw for myself the very sophisticated equipment which the force has and the success which it has had. I was shown a revolver which had been revealed by one of the searches which had taken place.
It is very important that the anxieties of the police should be allayed as soon as possible. It was with that purpose in mind that I thought it appropriate to raise this matter in the debate on clause stand part. It has a wider application. It could equally apply to Part I of the Bill, although other police forces would be involved.
I look forward to hearing the Minister's response. I understand that he may not be able to respond fully tonight since I did not give him notice of that point. Nevertheless, I should like to hear from him as soon as possible. If he were to reply by letter it would be appropriate for that letter to be placed in the Library, although I have my doubts about documents which go to the Library. I hope that the Minister will respond fully to the points that I have raised, and I shall be happy to provide him with a copy of the letter that I have received.
Lord Brabazon of Tara: I shall certainly read carefully what the noble Lord said and I shall probably wish to write to him to expand on the points which I shall now make.
I can confirm that the guidelines apply to the PLA, due to the fact that trust ports will themselves be privatised and then abolished while the PLA will sell off part of its operation. Some aspects of the guidelines will therefore not apply to the PLA. Those will be self-evident. The guidelines are headed:
"Secretary of State for Transport's Guidance Note Concerning Procedure for the Sale of Trust Ports".
The PLA is, of course, a trust port.
Regarding the PLA police force it is intended that the force should be transferred to the Tilbury company. I see no reason to believe that there will be any change to the agreed procedures, functions or duties of the force. Those will all be transferred under the scheme. When we come in a few moments time to Amendment No. 94 my noble friend Lord Howe will have something more to say about the PLA police force.
Clause 21 agreed to.
Clause 22 [Transfer to the company of relevant property, etc., of the Port Authority]:
[Amendments Nos. 77 to 81 not moved.]
Earl Howe Earl Howe moved Amendment No. 82:
Page 18, line 37, leave out ("statutory provision of local application") and insert ("local statutory provision,").
On Question, amendment agreed to.
Clause 22, as amended, agreed to.
Clause 23 [Supplementary provisions relating to the transfer under section 22]:
Earl Howe Earl Howe moved Amendment No. 83:
Page 19, line 42, leave out ("statutory provision of local application") and insert ("local statutory provision").
On Question, amendment agreed to.
Clause 23, as amended, agreed to.
Clause 24 [The required provision for the protection of pension rights]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 84:
Page 21, line 9, at end insert:
("(4A) Subsequent to the transfer under section 22(8) above from the employment of the Port Authority to that of the Company, and at regular intervals thereafter not longer than three yearly, the Fund trustees shall obtain a valuation report on the Fund and shall ensure the equitable distribution of any excess of assets to all current and future beneficiaries up to Inland Revenue maxima.").
The noble Lord said: It is very late at night to start talking about pensions, which is an extremely complicated matter. In another place the Government recognised that there was a problem in relation to pensions of staff at Tilbury, but I am not entirely sure how far the steps which they have taken will cure the difficulties which appear to have arisen.
I understand that, at the last valuation of which I have knowledge which was carried out some two years ago, the Port of London Authority fund at Tilbury stood at £170 million. There are 4,500 beneficiaries and 500 deferred pensioners. The number of current members—that is to say, those contributing—is merely 800. To meet the requirements of the beneficiaries and deferred pensioners, a sum of £125 million must remain in the fund. That leaves £45 million to cover the position of the 800 current members. When 400 of those leave, they will be deemed to have a pension value of £25 million.
The PLA fund will therefore barely notice the loss of those 400 as it will still be a £145 million fund. The 400 who have to leave will be adversely affected, as I shall explain. At one time the Port of London Authority employed 12,000 people. It now employs about 1,500. There will be no, or at least, very few pension members so that, with normal investment returns and with people dying, the fund will increase in value beyond the current ability to meet obligations to the point at which pensions could be index-linked.
Those benefits will not accrue to those leaving the Port of London Authority. An additional factor is, what is in store for the 400 who leave? If the new company does not do well or if the dock is taken over by predators, the question of pensions becomes linked with the prospects of Tilbury Dock, while those remaining with the Port of London Authority will continue to enjoy the protection that the trust port status gave them.
I understand that the Port of London Authority pension rules preclude transfers out, but that applies only to other pension schemes within the Port of London Authority. Apparently, all that must be changed to allow freedom of movement between pension schemes, so that this will no longer be a problem as regards privatisation.
The concern is therefore with the 400 people who want to achieve terms no less favourable than those that obtain at present. I understand that the Minister in another place indicated his sympathy with the situation. Perhaps the Minister will deal with the matter briefly this evening and elaborate on it in correspondence if necessary, as it is extremely late to engage in a debate about pension rights which are necessarily extremely complicated. However, that is a matter for the Minister. In those circumstances, my amendments, which are probing amendments, are
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designed to elicit from him some way in which the anxieties of those 400 people can be put at rest. I beg to move.
Lord Brabazon of Tara: I agree with the noble Lord that this is a complicated matter, as pensions tend to be, especially when businesses are transferring. However, I am sorry that the provisions that we have made in Clause 24 for the protection of pension rights for those employees transferred with the Tilbury undertaking are not yet adequate for the noble Lord, Lord Clinton-Davis. I fear, however, that the amendments far from making matters clearer and simpler, would complicate them.
Amendment No. 84 would make provision for regular valuations of the PLA pension fund. This, however, is simply no more than happens at present and is provided for within the rules of the fund. Nevertheless, the noble Lord is obviously looking forward, in the drafting of this earlier provision, to Amendment No. 85.
The force of Amendment No. 85 would be to enable the transferred employees to continue in the PLA pension fund after transfer, under other employers. That would pose great difficulties. First, it would require substantial work of a highly complicated nature to re-structure periodically the entire rules of the fund to take account of other employers. Secondly, such a fund would not be compatible with the requirements of the Inland Revenue.
I therefore hope that the noble Lord will accept my assurance that Clause 24, as currently set out in the Bill, offers adequate protection for transferred employees of the PLA, including the provisions in subsection (5), which enables the PLA's scheme of transfer to impose duties upon future owners of the Tilbury company in respect of pension rights.
I shall read in Hansard what the noble Lord said. I am sure that I shall wish to write to him and expand on what I have just said. In the meantime, I hope that he will feel able to withdraw the amendment.
Lord Clinton-Davis: I shall certainly look at what the Minister has said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 85 not moved.]
Clause 24 agreed to.
Clauses 25 and 26 agreed to.
Clause 27 [Power of Secretary of State to require exercise of Port Authority's powers under sections 21 and 22]:
[Amendment No. 86 not moved.]
Clause 27 agreed to.
Clause 28 [Financial assistance for proposal to maximise employee participation in equity of the company]:
[Amendments Nos. 87 to 90 not moved.]
Earl Howe Earl Howe moved Amendment No. 91:
Page 23, line 40, leave out from second ("to") to end of line 41 and insert ("have a reasonable prospect of securing that the objective of the proposal is achieved.").
The noble Earl said: I have already spoken to this amendment. With the leave of the Committee I should like to move Amendments Nos. 91 and 92 en bloc. I beg to move.
The Deputy Chairman (Lord Skelmersdale): The noble Earl wishes to move Amendments Nos. 91 and 92 en bloc, which I cannot accept. The Question is that Amendment No. 91 be agreed to.
On Question, amendment agreed to.
[Amendment No. 93, as an amendment to Amendment No. 92, not moved.]
Earl Howe Earl Howe moved Amendment No. 92:
Page 23, line 44, at end insert:
("( ) Where in accordance with subsection (2) above different persons would qualify for assistance under this section in respect of different proposals, only such of them as appear to the Port Authority to have the best prospect of securing that the objective mentioned in paragraph (b) of that subsection is achieved shall be regarded as qualifying for such assistance.").
On Question, amendment agreed to.
Clause 28, as amended, agreed to.
Clauses 29 and 30 agreed to.
Schedule 2 [General supplementary provisions with respect to transfer under section 22]:
Earl Howe Earl Howe moved Amendment No. 94:
Page 37, line 50, at end insert:
("Transfer of rights and liabilities relating to employment S.I. 1981/1794
9A.—(1) For the purposes of the Transfer of Undertakings (Protection of Employment) Regulations 1981 section 22(8) above shall be regarded as effecting a transfer to which those regulations apply of a part of the Port Authority's undertaking comprising all activities of the Port Authority which by virtue of the transfer cease to be carried on by the Port Authority, including any such activities which themselves form a part of the Port Authority's undertaking which is not in the nature of a commercial venture.
(2) Accordingly in those regulations, as they apply in relation to the transfer, references to the part of the undertaking transferred apply to all such activities of the Port Authority (of whatever description).").
The noble Earl said: This is a technical amendment specifically applying the Transfer of Undertakings (Protection of Employment) Regulations to the transfer of Tilbury under Part II of the Bill, as they are already applied to transfers of port undertakings under Part I. It is necessary in order that the PLA police force may be transferred to the new Tilbury company. I hope that that will further reassure the noble Lord, Lord Clinton-Davis, in the light of his remarks earlier. Since the force is not a commercial undertaking, it is not automatically covered by the regulations and a specific application is required.
These regulations will provide the protection of employment rights as a result of the transfer both to the PLA police themselves and, if necessary, to any other transferred PLA employees whose work might possibly be considered as not being in the nature of a commercial venture. I beg to move.
Lord Clinton-Davis: The Minister says that he will communicate with me about police authorities. I shall study what he has said in that connection. I am still not at all sure of the precise position in terms of police complaints. For example, will the position still subsist
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as it is provided for at the present time? Will there be no change? Who pays for the police-and so on? I do not invite the Minister to go into this matter now. His noble friend said that he will write to me. These matters are highly pertinent to the anxieties of the police force there.
On Question, amendment agreed to.
Schedule 2, as amended, agreed to.
Clauses 31 to 34 agreed to.
Clause 35 [Corporation tax]:
Earl Howe Earl Howe moved Amendments Nos. 95 to 97:
Page 27, line 40, at end insert:
("( ) Where following the transfer to a company under section 2 above of property, rights, liabilities and functions of a relevant port authority securities of the company are issued or allotted to the authority in pursuance of section 3 above, the authority shall be treated for the purposes of corporation tax on chargeable gains as if the securities had been issued or allotted to the authority in consideration of the transfer.").
Page 27, line 47, at end insert:
("( ) Any share issued by a company in pursuance of section 3 above shall be treated for the purposes of the tax provisions relating to company distributions as if it had been issued wholly in consideration of a subscription paid to that company of an amount equal to the nominal value of the share.
( ) Any debenture issued by a company in pursuance of section 3 above shall be treated for the purposes of the tax provisions relating to company distributions as if it had been issued—

(a) wholly in consideration of a loan made to that company of an amount equal to the principal sum payable under the debenture; and

(b) wholly and exclusively for the purposes of the trade carried on by that company.").

Page 28, line 10, at end insert:
("( ) In this section "the tax provisions relating to company distributions" means the provisions of the Corporation Tax Acts, excluding any of those provisions relating to corporation tax on chargeable gains.").
On Question, amendments agreed to.
Clause 35, as amended, agreed to.
Clauses 36 to 39 agreed to.
Clause 40 [General interpretation]:
Earl Howe Earl Howe moved Amendment No. 98:
Page 29, line 21, at end insert:
(""local statutory provision" means—

(a) a provision contained in, or in a document made or issued under, any local Act (including an Act confirming a provisional order); or

(b) a provision of any other instrument which is in the nature of a local enactment;").

The noble Earl said: This amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Earl Howe Earl Howe moved Amendment 99:
Page 29, line 44, at end insert:
("(3) For the purposes of any provision of this Act to which this subsection applies a person employed by a company which is a wholly-owned subsidiary of any company or other body mentioned in that provision shall be regarded as employed by the company or other body so mentioned.
(4) Subsection (3) above applies to the following provisions of this Act—

section 2(3) (c);

section 5(3);

section 13(3) (b);

section 19(3) (b) and (5);

section 26(5);

section 28(2) (b) and (4); and

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subsection (2)(a) above; (all of which are concerned with participation by employees of a company in ownership of its equity share capital or related matters).").
The noble Earl said: The Bill already provides that management and employee buy-outs should be encouraged and that a port authority may bear the costs incurred in mounting such buy-outs. In some cases, however, ports own subsidiary companies which have their own directly employed workforce. After the transfer of the port's undertaking, these companies will become wholly owned subsidiaries of the successor company. It seems only right that employees of these wholly owned subsidiaries should be in a position to benefit from the same encouragement that the Bill provides to management and employees of the port authorities, or their successor companies themselves, who are seeking to purchase the new port companies on privatisation.
The amendment achieves that by applying the relevant provisions of the Bill to the employees of such subsidiaries. I beg to move.
On Question, amendment agreed to.
Clause 40, as amended, agreed to.
Clause 41 [Northern Ireland]:
Earl Howe Earl Howe moved Amendment No. 100:
Page 30, line 9, leave out ("17") and insert ("18").
The noble Earl said: This amendment concludes the drafting of the Bill as it applies to Northern Ireland by putting Clause 18, which sets out a number of supplementary and consequential provisions on
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clawback, on the same footing with respect to Northern Ireland as the clawback provisions in Clause 17.
The amendment means that equivalent provisions to those in Clause 18 can be incorporated into the affirmative Order in council which will in due course apply the provisions in Part I of the Bill to Northern Ireland. I beg to move.
On Question, amendment agreed to.
Clause 41, as amended, agreed to.
Clause 42 agreed to.
In the Title:
Earl Howe Earl Howe moved Amendment No. 101:
Line 6, leave out from ("of-) to end of line 8 and insert ("certain land or certain interests in land").
The noble Earl said: The amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Title, as amended, agreed to.
House resumed: Bill reported with amendments.

Criminal Justice Bill
Returned from the Commons with certain Lords amendments agreed to; with a further Lords amendment agreed to with an amendment; with certain other Lords amendments disagreed to but with amendments in lieu thereof and with amendments to the words so restored to the Bill; and with the remaining Lords amendments disagreed to with reasons for such disagreement. The amendments and reasons ordered to be printed.
House adjourned at fourteen minutes past eleven o'clock.