Ports Bill

HL Deb 26 June 1991 vol 530 cc648-96

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 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—

1. (a) the functions of improving and maintaining the port;
2. (b) conservation and environmental protection including provision for an environmental audit;
3. (c) provision of facilities to local users of the port; and
4. (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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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. 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 moved Amendment No. 51:

Page 13, leave out lines 6 to 9 and insert ("of—

1. (a) relevant land; or
2. (b) a relevant interest in land;").

On Question, amendment agreed to.

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 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 moved Amendments Nos. 53 to 56:

Page 13, line 13, at end insert: ("( ) For the purposes of subsection (1) above—

1. (a) land is relevant land if—
1. (i) it is transferred by the transfer; or
2. (ii) it belongs both immediately before and immediately after the transfer to a transferred 51 per cent. subsidiary; and
2. (b) an interest in land is a relevant interest if—
1. (i) it is transferred by the transfer;
2. (ii) it belongs both immediately before and immediately after the transfer to a transferred 51 per cent. subsidiary; or
3. (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—

1. (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
2. (b) the operative time falls within the levy period.

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

1. (a) "the relevant six-year limit" means—
1. (i) in relation to section 278(3), subsection (1) (b) of that section; and
2. (ii) in relation to section 278(3C), the words "within six years of that time" in paragraph (a) of that subsection; and
673
2. (b) "the operative time" means—
1. (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
2. (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 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 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 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—

1. (i) immediately before the transfer is an effective 51 per cent. subsidiary of the relevant port authority in question; and
2. (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 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 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—

1. (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;
2. (b) to have regard to the desirability of protecting and conserving buildings, sites and objects of archaeological, architectural or historic interest; and
3. (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—

1. (a) to have regard to the desirability of preserving for the public any freedom of access to places of natural beauty;
2. (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
3. (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 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.

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 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.

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 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, 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 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 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 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 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 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 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 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—

1. (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 687 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;
2. (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;
3. (c) a requirement that such a company, before making a disposal shall do any one of the following, that is to say—
1. (i) consult with the Countryside Commission or the Countryside Council for Wales in the case of an area of outstanding natural beauty;
2. (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;
3. (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—

1. (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
2. (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 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 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 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 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 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 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 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 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 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 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 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 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 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—

1. (a) wholly in consideration of a loan made to that company of an amount equal to the principal sum payable under the debenture; and
2. (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 moved Amendment No. 98:

Page 29, line 21, at end insert: (""local statutory provision" means—

1. (a) a provision contained in, or in a document made or issued under, any local Act (including an Act confirming a provisional order); or
2. (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 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—

1. section 2(3) (c);
2. section 5(3);
3. section 13(3) (b);
4. section 19(3) (b) and (5);
5. section 26(5);
6. section 28(2) (b) and (4); and

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 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 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 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.