HL Deb 30 November 1992 vol 540 cc1173-99

2.57 p.m.

The Minister of State, Department of Transport (The Earl of Caithness)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(The Earl of Caithness.)

Lord Richard rose to move, as an amendment to the Motion that the House do now resolve itself into a Committee upon the Bill, To leave out from ("House") to the end and insert ("pursuant to the Resolution of this House of 20th October last, declines to consider the Bill in Committee until such time as Her Majesty's Government have received and published the results of the inquiry into the coal industry").

The noble Lord said: My Lords, this is a somewhat unusual procedure and I recognise that right at the outset of what I would like to say to the House. But there are unusual circumstances in relation to the Bill and the subject matter that it deals with. Not only that, I should also make it quite clear at the outset that there are indeed strong feelings on this side of the House at least about the way in which the Government have behaved in this matter.

The problem arises from the postponement of the Committee stage of the Bill on 19th October. That postponement was the first act in a series of somewhat desperate acts on the part of the Government, thrown as they were completely off balance by the storm of protest which greeted their announcement of 31 pit closures. They then tried frantically to extricate themselves from the self-created mess that they had thereby engendered.

We can no doubt appreciate why alarm bells were ringing in government circles. The Prime Minister, that great interventionist the President of the Board of Trade and the few Cabinet Ministers whom they deigned to consult on this matter had all failed to predict the depth of hostility evident throughout the country at this ill-considered policy. The Government, having underestimated the opposition to the pit closures and facing increasing disquiet, if not indeed active panic, from their own Back Benchers, then postponed the Bill, conscious of the fact that it would have to face the stormiest of passages in your Lordships' House, as it will undoubtedly have to face if it is now brought back.

On 19th October the noble Lord the Leader of the House, in withdrawing the Bill—it is important that we remember the words precisely—said: it has become increasingly clear to me that, since the announcement of the pit closures made last Tuesday, many of your Lordships consider that the context in which the Bill is to be scrutinised by the House has changed since the Second Reading debate". He went on to say: Though it is my view that the issue of pit closures and the subject matter of the Bill are separate, I recognise that this perception may not be widely shared by your Lordships". How right he was! He continued: In these circumstances, and particularly in view of the relatively short time which has elapsed since the pit closures' announcement, it appeared to me that the House would find it difficult to fulfil its functions effectively as a revising Chamber should it be asked to proceed into Committee on the Bill today. My feeling was reinforced by the fact that the pit closures policy itself is currently under legal review". A little later he said: Moreover, as your Lordships have just heard, the Government have proposed further adjustments to the policy. In the light of these developments, and the uncertainty they necessarily engender, I considered that the measured consideration of legislation, in which the House plays such a valuable role in Parliament, would not be possible".—[Official Report, 19/10/92; col. 627.] At the time, we on these Benches opposed that rearrangement of the business. We did so primarily on the grounds that we wished a discussion to take place on the pit closures programme and upon the Government's failure to consult and reach agreement with all the opposition parties. The Committee stage of the Bill was therefore not proceeded with.

The next day (20th October) the House considered a Motion moved by my noble friend Lord Cledwyn of Penrhos in the following terms: That this House calls upon Her Majesty's Government to hold a thorough independent inquiry into the future of the coal industry before proceeding with either their original proposals or those announced on 19th October, and to publish the outcome".—[Official Report, 20/10/92; col. 666.] As the House will undoubtedly recall, that Motion was carried by 125 votes to 100 votes. Apart from the Labour Party and the Liberal Democrats, 20 Cross-Benchers voted for the Motion, as did eight Conservative Peers. It was the clear and expressed intention of the House that nothing further should be done regarding the coal industry until there had been a full and independent inquiry which Parliament was in a position to consider. Reflecting that, on that same day (20th October) the Prime Minister and the noble Lord, Lord Wakeham, gave their support to a wide-ranging inquiry under the auspices of the Select Committee on Trade and Industry into the future of the coal industry and the impact of the closures, despite the fact that the day before Mr. President Heseltine had refused to countenance any such development.

Perhaps I may remind the House that the Select Committee has not yet concluded its work. The decision to return the Bill is, in some ways, an attempt to prejudge that inquiry itself. It also casts doubt upon the Government's commitment to the inquiry in the first place. In the light of that background—I am sorry to have taken the time of the House to set it out, but it is important in this case that we have the framework and the parameters of the discussion clear—I find it astonishing that the Bill is now back again in front of the House.

I have three points to make. First, what has changed since 19th October? Nothing, as far as I am aware. The matter is still before the courts. The Select Committee is sitting. No doubt a White Paper is being drafted. The context—to use the words of the noble Lord the Lord Privy Seal in which the Bill is now to be considered is essentially the same as it was on the day that it was withdrawn.

Secondly, it is impossible to argue that the Bill has nothing to do with the closure programme or the future of the industry: one has only to look at the amendments already on the Marshalled List to see that. The issues which the Select Committee is supposed to be considering are bound to be live ones and, indeed, very lively ones, if the Committee stage continues—a fact recognised by the noble Lord the Leader of the House on 19th October when he withdrew the Committee stage.

The noble Lord the Leader of the House may say that he is not responsible for the amendments. Of course, that is perfectly true, but by bringing the Bill forward now at this time, before the Select Committee has had a chance to consider the matter, and before we have had a chance to consider the Select Committee's Report, he is provoking the very discussion that he professes to wish to avoid. Of course the House will wish to consider the whole matter, not just the bits of it that the Government would like it to.

Thirdly, to commence the Committee stage now would be to fly in the face of the Resolution of the House on 20th October. We have not had our independent inquiry; we have not been given the opportunity to consider the result of one. One assumes that there will be a White Paper. Incidentally, whatever happens to this Motion today, I assume that the noble Lord the Leader of the House can assure us that no Bill for the privatisation of the coal industry will be introduced until after the White Paper has been published and until after Parliament has had a full opportunity to consider it.

It may be argued that the Bill is necessary to enable British Coal to employ consultants to advise on the sale of individual pits, and that unless those consultants are employed there is a possibility of eventual job losses. If that is an argument which is valid now, it was an argument which was just as valid on 19th October. Not only that, it was never argued on Second Reading that the Bill was necessary to give British Coal power in respect of individual pits. I find that argument extremely difficult to accept.

To employ financial consultants on the offer to the public of the whole industry in a privatisation is one thing. That may well require consultants of the highest, and no doubt of the most expensive, order in the City; but to deal with the sale of individual pits —if, indeed, any buyers can be found—seems to me to be different. Information as to their life; as to the geology of the area; and as to the costs of production is already in the hands of British Coal, otherwise it could not have taken a decision to close the pits in the first place. It is fanciful and, indeed, somewhat misleading to suggest that that has now become the object of the Bill. Of course it is not. Moreover, I note what Mr. Heseltine said in a debate in another place on 21st October: I have today invited Boyds, an international mining consultancy of world repute, to report to me on the viability of those pits. I also intend to appoint consultants to report on the prospects for British Coal". —[Official Report, Commons, 21/10/92; col. 455] He at least did not feel that he needed the Bill before being able to take such consultancy advice.

That is the situation in which we now find ourselves. What should the Government therefore do in the light of that situation and the Resolution of the House passed on 20th October? Having posed the question, I shall now try to answer it. They should not proceed with the Bill's Committee stage. If they insist on continuing with rail, then coal should be severed. If they wish to proceed with a paving Bill for rail, so be it. That is a matter for them, and the House can consider it in the normal way. But to proceed with a Bill for coal is premature, ill-advised, and contrary to the specific Resolution of the House. It is premature because, essentially, nothing has changed since 19th October. The reasons for withdrawing the Bill then are just as valid today. It is ill-advised because it flies in the face of your Lordships' clearly expressed view that we should await the results of an independent inquiry before proceeding any further. Finally it is—to put it mildly —somewhat tactless to proceed in this slightly autocratic manner that so disregards the views that the House has already expressed.

For those reasons, we on these Benches have tabled the Motion which seeks to ensure that the Bill is postponed until such time as the inquiry into the coal industry is complete. We believe that that is a reasonable request, especially since the court actions have yet to be resolved. I hope that noble Lords on all sides of the House will be able to support the Motion. I beg to move.

Moved, as an amendment to the Motion that the House do now resolve itself into a Committee upon the Bill, To leave out from ("House") to the end and insert ("pursuant to the Resolution of this House of 20th October last, declines to consider the Bill in Committee until such time as Her Majesty's Government have received and published the results of the inquiry into the coal industry").—(Lord Richard.)

Lord Jenkins of Hillhead

My Lords, I had thought that the noble Lord the Lord Privy Seal might wish to speak at this stage. As he does not, I shall intervene and await his reply with interest.

I am not merely surprised, but amazed, that the noble Lord the Leader of the House did not accede to the request which was most strongly put to him last week by the noble Lord, Lord Richard, and myself. That is all the more so as the vote in October indicated that there was a widespread view held right across the House on that issue. The proposition we were putting forward was that the Government should wait only until the publication in January—no longer than that —of the committee of inquiry into the coal industry before proceeding with the Bill. Even from the narrow point of view of the efficient management of government business, it would have been wise to have acceded to that request. To start the Bill in ill-feeling in December is unlikely to produce a quick or earlier outcome than to start it with good feeling in January.

I should also have thought that wise leadership in the present circumstances would have sought to win friends for the Government rather than gratuitously trying to alienate everyone in sight. The hard, incontrovertible fact is that this Government are the least esteemed government within living memory. If the noble Lord doubts that for a moment, let him pick up any newspaper, whether Conservative inclined or not. Alternatively, even more significant, let him listen to the views of people of public spirit and in positions of influence, many of whom must have voted Conservative in April, and see what is their feeling. He will find a widespread sense—and I say this deliberately —of national shame at the antics of this Government.

I cannot, therefore, easily see what are the Government's motives for ignoring a wholly reasonable request and warning from both the Opposition parties. They can hardly believe that by so doing they will achieve what is sometimes known as the "smack of firm Government". There are few sights less convincing or more pathetic than that of a weak government and of weak men trying to puff themselves up with a display of forced strength.

Then, as I understand it, the Lord Privy Seal said that the Government are concerned above all with preserving jobs in the coal industry and that they must have the Committee stage today in order to facilitate that. Have they really no sense, if not of shame, at least of the ridiculous? For the Government to say that their prime motive is the defence of jobs in the coal industry is like Richard III, after the murder of the princes in the Tower of London, opening a subscription list for the Save The Children Fund.

Then we have the proclamation of the doctrine of the mandate: a Bill which was envisaged at the time of the election is sacrosanct. What was primarily put before the country in April was that if this Government were returned, there would return with them renewed confidence, and an economic upswing would begin immediately. What was also put before the country was that the central economic strategy must be to maintain the exchange rate and our position in the ERM. In addition, a great success was to he made of the British presidency of the European Community and Britain was to be acclaimed as the leader of Europe. If I were the Lord Privy Seal, I think I should say as little as possible about the utterly discredited promises of April.

If the Government wish to ride roughshod over this House, instead of observing some decent civilities or convenances between the two sides, it is wise to make sure that they have the resources to do so. At the moment, the Government have neither repute nor authority, neither judgment nor consistency. I think that the Lord Privy Seal will come to regret his intransigence on this.

Lord Dormand of Easington

My Lords, I have only a few brief points to add to the comprehensive speech made by my noble friend and by the noble Lord, Lord Jenkins. After the Government's announcement that a review of the coal industry would take place, any rational person would assume that nothing should be done to change the basis on which the industry exists. The Government suggest otherwise.

It is important to remember why the Government decided to undertake the review. It was decided on because of the sheer strength of opinion in the country against the proposed pit closures. People who had no connection whatever with the coal industry—people with no relatives in it, people who did not live in coal mining areas and those who perhaps did not support the miners in the 1984–85 strike—all joined in the protest against the massive scale of pit closures which had been proposed. The protest was so strong and universal that the Government did not simply say, "We had better take heed of what the people are saying", they were shocked and scared at what was happening. Even this Government, we thought, were not so incompetent and silly as to ignore what could only be described as a revolt.

I venture to suggest that if the public were aware that the Government had decided to press ahead with the Bill, there would be further protests. Of course, the public cannot be expected to know the details of parliamentary procedure. If they were able to do so, there would be cries of, "Betrayal!", because that is exactly what the Government are doing, particularly in view of the detailed information which my noble friend reiterated. There can be no justification whatever for any change since the review was announced.

This is perhaps the most important part of my contribution. Other important changes are taking place: development work at some pits has been stopped. That is blatant interference which cannot be justified in any circumstances. In my former constituency, a planning application has already been submitted to the local authority for the demolition of the entire surface workings of the two remaining pits in the area. I have a copy of that application. Perhaps I should mention that 3,000 miners will lose their jobs at Easington and Seaham Vane Tempest, if those pits are closed, to say nothing of the multiplier effect.

There has been widespread publicity about the numbers of miners who have applied for redundancy payments since the review was announced. Your Lordships should know that many of those applications are based on inaccurate and misleading information being given to miners who, understandably, are deeply concerned that they may lose their payment. That may well be the case.

Last week I met the president of the north-east area of the National Union of Mineworkers. He and his members are greatly disturbed about the matters that I mentioned and, I have to say, other matters. I hope that the Government are listening to what the miners are saying because there may well be a shortage of skilled men to operate the pits which remain.

A plea which I and others constantly make concerns the security of supply. At the present rate of extraction, this country has 200 years' supply of coal beneath the surface. That is of the greatest importance to the future of this nation and it should not be prejudiced in any way. There is abundant evidence that the British coal industry, without subsidy of any kind these days, is as efficient as any other in the world. To start paving the way to privatising it is, to say the least, speculative.

It is as certain as anything can be that safeguarding our massive reserves will not be a priority in a privately-owned coal industry. That should be a major factor, in my view the most important factor, in the review of our coal industry. The Bill is irrelevant and based on an uncertain knowledge of what form the industry will take.

The amendment before us today is not party political, it is based on simple common sense. The people of this country, if they had the opportunity, would say, "What is the argument? We were promised a review. Let's see what it produces and then we will determine whether privatisation, part privatisation, public ownership or public control is the wisest way to proceed".

I need not remind your Lordships because my noble friend made the point forcefully from the Front Bench, but this House defeated the Government's recent proposals relating to pit closures. Some of us thought and still think that the coal industry has made outstanding progress in recent years and that a review was unnecessary in any case. It was a tacit, real admission by the Government that their proposed policy was wrong. In the circumstances, there should be a review, untrammelled by this or any other Bill. Action, if any, can be taken when the results of the inquiry have been examined. In the meantime, let us get on with other more important business.

Lord Boyd-Carpenter

My Lords, the three speeches to which your Lordships have just had the pleasure of listening have all referred to the fact that the Bill deals with the coal industry. I appreciate that it is in respect of that industry that there is real concern, not only on the Benches opposite but generally in the country. However, the Bill also deals with a much bigger and, from the British economy's point of view, more significant matter—that is the railways. If your Lordships were to adopt the amendment moved by the noble Lord, Lord Richard, the provision for preparing the railways for denationalisation would be eliminated. This is the really important part of the Bill. It is the part of the Bill where it is extremely necessary that the British Railways authorities should be given a clear indication of what steps they are to take to prepare for privatisation. It is significant, and perhaps a little alarming, that noble Lords opposite, including the leaders of the two parties, did not feel it necessary even to mention British Rail and the future of British Rail.

Lord Clinton-Davis

My Lords, the noble Lord seems to be arguing a case that it would have made sense in the first place to have had two separate Bills. These are two separate industries. Why not have two separate Bills? Indeed it is perfectly possible, I believe, for that to be done now.

Lord Boyd-Carpenter

My Lords, the noble Lord will be aware of the fact that this Bill in its present form has already had a Second Reading. Therefore to drop it would mean that all aspects of it, including the one to which I am drawing attention, the railways, would have to start again from the beginning. I suggest to your Lordships that the really important matter is that our railways should be given the earliest possible opportunity to organise themselves for the change in ownership which I believe most opinion in most parts of the country believes in. What does the noble Lord want?

Lord Howie of Troon

My Lords, I wish to speak only briefly as I do not wish to detain the House. Surely the noble Lord has overlooked the fact that the railways have been preparing for privatisation for the past several years. To the outsider it looks as if they have been doing little else.

Lord Boyd-Carpenter

My Lords, that is perhaps an undue reflection on those responsible for our railways. I do not think the noble Lord can possibly controvert the view that this Bill is necessary in order that those who run our railways should be given the full authority and opportunity to get ahead with the preparations for privatisation. I regard it as very disturbing that in moving this Motion the noble Lord the Leader of the Opposition and his supporters did not even think this was a subject worth mentioning.

Lord Richard

My Lords, I am sorry to interrupt but that really is just not so. The whole passage of my speech was devoted to saying that the Government should sever coal from rail. I said that if the rail Bill came before the House, we would then consider it in the usual way. The noble Lord does me less than justice.

Lord Boyd-Carpenter

My Lords, the noble Lord cannot get away with that. In fact the Motion which he has moved would prevent your Lordships' House getting ahead with enacting the preparatory legislation in respect of the railways. Merely to say, "Oh well, you can have another Bill to do that", is to avoid the issue. What we are now concerned with this afternoon is whether we shall he able to proceed with a Bill which has already had a Second Reading and which has, as a major factor, the question of the railways and of their getting ahead with the somewhat overdue—in the view of many of us —steps towards privatisation. We heard a great deal about coal. If the Bill goes ahead, noble Lords who object to its coal aspects will be able to move amendments. I am perfectly certain that they will be able to do so. Your Lordships may agree or disagree with those amendments. But the fact that they can raise the point which really interests them—that is, the question of the coal side of this matter—is, if the Bill goes ahead, absolutely conclusive against the idea of scrapping the Bill, as is proposed by the noble Lord. I very much hope that your Lordships will reject this proposal.

Lord Tordoff

My Lords, in the first place in response to that last remark, this is—

Noble Lords


Lord Tordoff

My Lords, I beg the pardon of the House, but I had thought that this was a matter of the Business of the House and that we were discussing a Motion before the House and therefore people were entitled to speak. I merely intend to reply to the noble Lord, Lord Boyd-Carpenter. In response to his last remark, the Motion before your Lordships does not scrap the Bill. It postpones consideration of the Committee stage of the Bill until a later date.

With regard to the connection between rail and coal and the desirability of separating coal from rail, if we proceed to the Committee stage I trust that the noble Lord, Lord Boyd-Carpenter, will agree to support the first amendment standing in the name of my noble friend Lord Ezra. However, there is a connection between rail and coal and that is the matter of coal freight. The bounds of probability of privatisation going ahead in one way rather than another will depend on the amount of coal freight which is available to the rail industry. The noble Lord shakes his head but it is well known that the freight movement on rail is very much determined by the amount of coal which is moved. There is a connection there and it may well be that noble Lords may consider that, as there is uncertainty cast on the future of privatisation of rail as well as of coal, we should proceed on the basis of the Motion from the noble Lord, Lord Richard.

Lord Simon of Glaisdale

My Lords, I hope very much that the noble Lord the Leader of the Opposition will not press this Motion because it runs counter to a settled and very valuable practice of your Lordships' House; namely, that the House will let the Government, any government, get their business through. That has been of great value to Labour governments in the past and will no doubt be of value to any Labour government in the future. What this does is to postpone in the middle of a Bill the progress of government business. I desire only to say this, that that settled practice has a concomitant; namely, that government business managers allow noble Lords to have adequate time to discuss the various government businesses that are before them. That is only a corollary. At the moment the Motion strikes at the very heart of the settled practice of your Lordships' House —that is a very valuable practice indeed—namely, that your Lordships do not entertain dilatory procedures.

3.27 p.m.

Lord Wakeham

My Lords, I hope it will be convenient to your Lordships if I say something at this stage. The Motion that the noble Lord the Leader of the Opposition has moved would have the effect of delaying for both British Rail and British Coal the granting of enhanced powers to do things to prepare for privatisation. The effect of this would be different for each corporation. I intend to concentrate my remarks on the reasons why it would be detrimental for the coal industry to delay proceedings on the Bill as the noble Lord proposes. However, that is not to say I shall ignore the important points that my noble friend Lord Boyd-Carpenter made about British Rail.

In inviting your Lordships to reject the Motion I do not think that I need remind your Lordships of the circumstances in which the Committee stage was postponed. Suffice to say that in the light of the announcement made on 13th October by British Coal of significant pit closures, and in the knowledge of a further Statement which was to be made later that day in another place, I took the view that it would not be proper to invite your Lordships to consider the Bill in Committee on 19th October.

It is, however, interesting to recall the reaction of noble Lords opposite to my decision to postpone the Committee stage. The predecessor of the noble Lord, Lord Richard, as Leader of the Opposition, the noble Lord, Lord Cledwyn of Penrhos, said that I was wrong. He argued that the issue of pit closures was no reason for postponing consideration of this Bill. Speaking in the debate on 19th October, the noble Lord, Lord Cledwyn, said that I had: tried to make a case for the postponement of the Committee stage of the British Coal and British Rail (Transfer Proposals) Bill, but we on this side of the House see no valid argument for that".—[Official Report, 19/10/92; col. 628.1 The noble Lord, Lord Jenkins of Hillhead, was of the same view, although he thought that discussion might be limited to a general debate on energy strategy on the first amendment tabled to the Bill. Now, by contrast, noble Lords opposite ask us to delay the Committee stage yet further.

I appreciate that the noble Lords, Lord Richard and Lord Jenkins, are seeking not to stop the passage of the Bill for all time but to delay its passage for a further period. I shall seek to argue that the agreement of your Lordships' House to such a delay, if perfectly proper in procedural terms, would be more questionable in constitutional terms. Moreover, it would in itself be highly damaging to the task of considering the widest possible range of options for saving some pits and consequently some of the jobs in the mining communities already hard hit by the inevitable run down in the coal industry.

What has intervened since 19th October to justify the call from noble Lords opposite to delay the passage of the Bill until the coal review has been concluded? I confess that I find it hard to find any such reason; indeed, in so far as circumstances have changed, they seem to me to point rather in the direction of proceeding with this Bill as fast as possible.

First, the six weeks which have elapsed have enabled everyone to approach this Bill in a different light to that engendered by the heat of the argument about pit closures.

Secondly, the Government have of course now established a wide-ranging review of the future of the coal industry. Your Lordships' House called on the Government to establish such a review on 20th October before proceeding with the pit closure proposals. The Government have already given a commitment that your Lordships' House will have the opportunity to debate the conclusions of that review before any programme of colliery closures is undertaken by British Coal, beyond the closure of the 10 pits already undergoing statutory consultation.

The amendment to the Motion now before your Lordships' House attempts to pray in aid the resolution of the House of 20th October as a reason for delaying proceeding into Committee on this Bill. I should point out to your Lordships that the resolution of 20th October had nothing whatsoever to do with this Bill. It was, as I have indicated, concerned with the separate issue of pit closures. Moreover, the Bill was not mentioned by any speaker in the debate on 20th October. In those circumstances, I find it difficult to accept the proposition now put forward by the noble Lord the Leader of the Opposition that the decision of the House on 20th October can be taken in some way to justify a further delay in proceeding with the Committee stage of the Bill.

On 19th October I referred to the uncertainty surrounding legal proceedings which had just been instituted as reinforcing my view that the climate was not then right for consideration of this Bill. Since then the issues involved have been clarified and I think that it is now sufficiently clear that a full discussion of matters that are relevant to the Bill need not trespass on the issues that are before the courts.

Since 19th October we have had the opportunity to absorb a number of ministerial statements on the pit closures proposed by British Coal. The review has been announced and its full terms of reference published. British Coal has withdrawn its decision on proposed pit closures announced on 13th October— the subject of the legal actions I referred to on 19th October—and begun statutory consultation on 10 of the pits proposed for closure. It has said that it will await the recommendations of the review before taking decisions on the 21 pits in the moratorium.

Perhaps I may now try to describe in practical terms what the Bill will allow British Coal and British Rail to do. It will allow the two corporations to make their proper contribution to the Government's privatisation proposals, for example by enabling them to comment on and make an input to detailed plans put to them by Government. Since the two corporations themselves have the best and most detailed knowledge of their businesses, that is absolutely essential in ensuring that the detailed privatisation plans will be effective and workable. In addition, there may be some areas where British Coal and British Rail need outside assistance to enable them to make their contribution. The Bill therefore ensures that there will be no legal obstacle to their appointing advisers—for example, to advise them on the financial and legal implications of privatisation.

The Bill does not allow British Coal and British Rail to implement the transfer of functions, property, etc., apart from those which are already possible under existing legislation. Before any such transfers could take place, Parliament would have to approve substantive privatisation legislation at a later date. The Bill has no connection with any pit closures proposed by British Coal.

Moreover, Parliament's agreement to the passage of the Bill would not in any way imply that the substantive legislation would follow immediately. Your Lordships will recall that the water and electricity privatisation Bills were, for instance, introduced in a subsequent session of Parliament to the Public Utility Transfers and Water Charges Bill. Though the passage of the Bill is necessary to ensure that the Government's privatisation proposals can be formulated and implemented with the benefit of expert advice, there is no sense in which the Bill would require the introduction of privatisation legislation itself.

It is of course for British Coal and British Rail to judge the precise limits of what they can reasonably do within the framework of the existing legislation. I understand that the present position is that they have nominated some of the advisers who they would wish to assist them with the privatisation work but that they are inhibited in the work that they can properly ask the advisers to do and the costs that they can incur.

It has been argued that proceeding with the Bill could in some way pre-empt the coal review currently under way. That is not the case. I should like to give your Lordships a categoric assurance on this question. I can assure the House that there is no question of this Bill being used to further privatisation in a way which is prejudicial to the review. I can give an undertaking that no decisions on the timing of future coal legislation will be taken before the White Paper setting out the results of the review has been published and debated in both Houses of Parliament.

There is also a new factor to be taken into account. It is well known that several private organisations and individuals have expressed an interest in licensing some, or indeed possibly all, of the 21 pits which are the subject of the review. British Coal must be put in a position where it is able to give full and thorough consideration to any proposals that are made in the review. It is to be a wide-ranging and thorough review. In my view, it is absolutely essential that British Coal should be put in a position where it can fully explore and develop all the options. There is no doubt that under its existing powers under the 1946 nationalisation Act, and until this Bill comes into effect, there are restrictions on the range of private sector options that British Coal is able to consider in a full and proper way.

In other words, far from prejudicing the coal review in any way, the passage of this Bill is necessary to make sure that all the options can be properly and fully considered, and so that whatever conclusions it comes to arc well informed and can be developed as speedily as possible.

It is for that reason above all that I strongly urge your Lordships not to allow the House in any way to impede the proper working out of options for the future of jobs in the mining industry.

Finally, I urge the House to consider the wider implications of agreement to any such amendment to the Motion as that moved by the noble Lord the Leader of the Opposition today. There is no question but that the amendment is entirely proper in procedural terms. However, the conventions by which the House operates are perhaps more difficult to interpret, not least for one as new to your Lordships' House as I am. Your Lordships would wish me to point out the novelty of what is proposed by the noble Lord opposite.

It is a convention of this House that the House will not oppose at Second Reading Bills introduced to give effect to manifesto commitments. As your Lordships will be aware, this Government were elected on the basis of a manifesto which included the promise of measures to transfer functions of British Coal and British Rail to the private sector. Your Lordships' House has of course given a Second Reading to the Bill. I suggest that your Lordships will wish to think carefully about the implications for the observance of the conventions of the House if it were now to agree to this amendment. Certainly, in modern times there is, I think, no precedent for such a dilatory Motion to be moved in respect of proceedings after Second Reading of any government Bill, let alone one which springs directly from a manifesto commitment.

Indeed, if your Lordships felt that they wanted to restrain British Coal in its powers to prepare for full or even partial privatisation of some or all of its operations, I suggest to your Lordships that this dilatory Motion is not the proper nor most effective way to proceed. I suggest that the right way to achieve this would be to seek to amend the Bill in such a way as to delay the implementation of the coal section of the Bill. I have to say I would see great difficulty with such an amendment for the reasons that I have already given but it would in my view be the proper way to proceed rather than by way of a dilatory Motion after having given the Bill an unopposed Second Reading.

I urge your Lordships to reject this amendment if it is pressed to a Division by the noble Lord opposite; and I hope that we can then proceed to what this House does best; namely, the detailed consideration of the Bill on its merits in Committee and at subsequent stages.

Lord Richard

My Lords, I am grateful to the Leader of the House for what he has just said. I take it that the wording that he used is meant to give the assurance that I asked him for; namely, that no Bills for the privatisation of the coal industry will be introduced until after the White Paper has been published and considered by Parliament. I see the noble Lord nodding his head. Perhaps he would confirm that.

Lord Wakeham

My Lords, certainly I will give the noble Lord that undertaking.

Lord Richard

My Lords, I am much obliged. In that case, what concerns us now is whether it is proper to continue with this Bill.

The noble Lord makes two or three points. First, he says that there are constitutional implications. Secondly, he says that the Labour Party has changed its position. I should like to deal with that point. My noble friend Lord Williams of Elvel reacted first to the Statement made by the Government Chief Whip on 19th October—I hope the Leader of the House will note it—when he said: I can only say that the change is greeted with the greatest resentment. It has been imposed unilaterally".—[Official Report, 19/10/92; col. 603.] Perhaps I may say to the noble Lord the Leader of the House that that too is against the conventions of this House. My noble friend went on to say: it has not been agreed through the usual channels perhaps that is another little breach of the conventions of this House. It has deprived your Lordships of a debate on the coal industry which many of us were expecting to have at the Committee stage of the British Coal and British Rail (Transfer Proposals) Bill which the Government had set down for business this afternoon". I was absolutely accurate in my opening remarks to the House when I said that the Labour Party took the view, when the debate was taken off, that we had been deprived of the opportunity of a full debate on the future of the coal industry. In fact, we had that debate on the following day when the Motion was carried by 125 votes to 100.

Before your Lordships vote on my amendment I hope your Lordships will reflect upon what the House agreed to on 20th October. What we said collectively on 20th October was that nothing should happen to the coal industry until after there had been a full and independent inquiry, until after that had been considered. That still remains the position.

The Leader of the House presented the Motion in his usual charming way but I am sorry that he has done nothing to reassure me, nor, I suspect, any noble Lords on these Benches, that my amendment is unnecessary or tendentious, or that it should be withdrawn. I propose to test the views of the House on this amendment.

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, the original Question was, That the House do now resolve itself into a Committee upon the Bill, since when an amendment has been moved To leave out from "House" to the end and insert the words set out on the Order Paper. The Question is that this amendment be agreed to? As many as are of that opinion will say, "Content", to the contrary, "Not-Content". Clear the Bar.

Division called.

3.44 p.m.

Their Lordships divided: Contents, 106; Not-Contents, 165.

Division No. 1
Airedale, L. Jenkins of Hillhead, L.
Archer of Sandwell, L. Jenkins of Putney, L.
Ardwick, L. John-Mackie, L.
Ashley of Stoke, L. Judd, L.
Aylestone, L. Kagan, L.
Barnett, L. Rennet, L.
Birk, B. Listowel, E.
Blackstone, B. Llewelyn-Davies of Hastoe, B.
Blease, L. Lovell-Davis, L.
Bonham-Carter, L. McIntosh of Haringey, L.
Boston of Faversham, L. Mallalieu, B.
Bottomley, L. Mayhew, L.
Brimelow, L. Merlyn-Rees, L.
Broadbridge, L. Milner of Leeds, L.
Brooks of Tremorfa, L. Molloy, L.
Bruce of Donington, L. Monkswell, L.
Carmichael of Kelvingrove, L. Morris of Castle Morris, L.
Carter, L. Mulley, L.
Cledwyn of Penrhos, L. Murray of Epping Forest, L.
Clinton-Davis, L. Nicol, B.
Cross, V. Ogmore, L.
Cudlipp, L. Peston, L.
Dainton, L. Pitt of Hampstead, L.
Dean of Beswick, L. Ponsonby of Shulbrede, L.
Desai, L. Prys-Davies, L.
Donaldson of Kingsbridge, L. Rea, L.
Donoughue, L. Richard, L.
Dormand of Easington, L. Ritchie of Dundee, L.
Ezra, L. Rochester, L.
Falkender, B. Sainsbury, L.
Fitt, L. Seear, B.
Gallacher, L. Serota, B.
Galpern, L. Shackleton, L.
Gladwyn, L. Shaughnessy, L.
Graham of Edmonton, L. [Teller.] Soper, L.
Stallard, L.
Greene of Harrow Weald, L. Stoddart of Swindon, L.
Gregson, L. Strabolgi, L.
Grey, E. Taylor of Gryfe, L.
Hampton, L. Thomson of Monifieth, L.
Hamwee, B. Tonypandy, V.
Hanworth, V. Tordoff, L. [Teller.]
Harris of Greenwich, L. Turner of Camden, B.
Hayter, L. Varley, L.
Healey, L. Wallace of Coslany, L.
Hilton of Eggardon, B. Wedderburn of Charlton, L.
Hirshfield, L. White, B.
Hollick, L. Wigoder, L.
Hollis of Heigham, B. Williams of Elvel, L.
Hooson, L. Williams of Mostyn, L.
Howie of Troon, L. Wilson of Rievaulx, L.
Jay, L. Winchilsea and Nottingham, E.
Jay of Paddington, B. Young of Dartington, L.
Jeger, B.
Abercorn, D. Hood, V.
Ackner, L. Hothfield, L.
Aldington, L. Howe, E.
Alexander of Tunis, E. Hunt of Tanworth, L.
Archer of Weston-Super-Mare, L. Hylton-Foster, B.
Ironside, L.
Arran, E. Jellicoe, E.
Astor, V. Johnston of Rockport, L.
Astor of Hever, L. Killearn, L.
Attlee, E. Kimball, L.
Banbury of Southam, L. Kinloss, Ly.
Barber, L. Kinnaird, L.
Belhaven and Stenton, L. Kitchener, E.
Beloff, L. Knights, L.
Belstead, L. Knollys, V.
Bessborough, E. Laing of Dunphail, L.
Birdwood, L. Lauderdale, E.
Blatch, B. Lawson of Blaby, L.
Blyth, L. Long, V.
Boardman, L. Lyell, L.
Borthwick, L. Mackay of Ardbrecknish, L.
Boyd-Carpenter, L. Mackay of Clashfern, L.
Brabazon of Tara, L. Macleod of Borve, B.
Brougham and Vaux, L. Mancroft, L.
Butterworth, L. Manton, L.
Cadman, L. Mar, C.
Caithness, E. Margadale, L.
Caldecote, V. Marlesford, L.
Campbell of Alloway, L. Merrivale, L.
Campbell of Croy, L. Mersey, V.
Carnegy of Lour, B. Milverton, L.
Cawley, L. Monk Bretton, L.
Chalfont, L. Morris, L.
Charteris of Amisfield, L. Mountevans, L.
Chelmer, L. Mowbray and Stourton, L.
Cochrane of Cults, L. Munster, E.
Cockfield, L. Murton of Lindisfarne, L.
Coleraine, L. Nelson, E.
Colnbrook, L. Norfolk, D.
Constantine of Stanmore, L. Northbourne, L.
Cox, B. O'Cathain, B.
Cranborne, V. Oppenheim-Barnes, B.
Crickhowell, L. Orkney, E.
Cullen of Ashbourne, L. Orr-Ewing, L.
Cumberlege, B. Oxfuird, V.
Davidson, V. Park of Monmouth, B.
De Freyne, L. Pearson of Rannoch, L.
Denham, L. Pender, L.
Denton of Wakefield, B. Perry of Southwark, B.
Dudley, B. Peyton of Yeovil, L.
Eccles of Moulton, B. Platt of Writtle, B.
Effingham, E. Porritt, L.
Elliot of Harwood, B. Prentice, L.
Elliott of Morpeth, L. Rankeillour, L.
Elphinstone, L. Reay, L.
Elton, L. Rippon of Hexham, L.
Faithfull, B. Rix, L.
Ferrers, E. Rodger of Earlsferry, L.
Fraser of Carmyllie, L. Romney, E.
Fraser of Kilmorack, L. St. Davids, V.
Gainford, L. Seccombe, B.
Geddes, L. Shannon, E.
Gilmour of Craigmillar, L. Simon of Glaisdale, L.
Goschen, V. Soulsby of Swaffham Priory, L
Grantchester, L. Stedman, B.
Gray of Contin, L. Stewartby, L.
Gridley, L. Stodart of Leaston, L.
Hailsham of Saint Marylebone, L. Strange, B.
Strathclyde, L.
Halsbury, E. Strathmore and Kinghorne, E. [Teller.]
Harding of Petherton, L.
Harmar-Nicholls, L. Terrington, L.
Haslam, L. Teviot, L.
Hayhoe, L. Teynham, L.
Henderson of Brompton, L. Thomas of Gwydir, L.
Henley, L. Thorneycroft, L.
Hesketh, L. [Teller.] Thurlow, L.
Holderness, L. Trumpington, B.
HolmPatrick, L. Ullswater, V.
Vaux of Harrowden, L. Wharton, B.
Vivian, L. Wolfson, L.
Wakeham, L. Wyatt of Weeford, L.
Walton of Detchant, L. Wynford, L.
Westbury, L. Young, B.

Resolved in the negative, and amendment to the Motion disagreed to accordingly.

3.55 p.m.

On Question, original Motion agreed to.

House in Committee accordingly.


Clause I [Power to act in relation to proposals for transfer of functions, property etc.]:

Lord Ezra moved Amendment No. 1:

Page 1, line 7, leave out ("the British Coal Corporation or").

The noble Lord said: In moving Amendment No. 1, I shall speak also to Amendments Nos. 50, 52, 53 and 54. The issue raised in the amendment was touched on in the previous debate. The object is to separate coal from rail. The noble Lord, Lord Boyd-Carpenter, in his intervention a few minutes ago indicated he thought that that might be a reasonable proposition. It is clear that the privatisation of rail is more advanced than the privatisation of coal; in the case of rail there has already been a White Paper. In those circumstances it could be argued that British Rail should be in a position to consider what further steps might be proposed by the Government before its eventual privatisation.

That is not the position as regards coal. There has been no White Paper as yet but there are in train three reviews and two court cases. If I heard correctly, Mr. Tim Eggar, Minister for Energy, indicated on television last week that one outcome of the present reviews could well be special legislation addressed to coal. Is that a possibility which the Government have in mind? If that is the case and, as was indicated by the noble Lord the Leader of the House, there could be a White Paper, and that possible legislation relating to it will follow, there is an even stronger reason for deferring the consideration of coal.

The issues relating to coal and rail are different in almost every particular. Apart from the subject of timing which we are addressing today, it would be more reasonable to devote time to each of those industries in turn. Each raises major issues which are of an entirely different order. In the case of coal the issues remain of an unknown order until the promised White Paper appears.

In considering the legislation there is a strong case in practical terms to separate the two industries. As regards coal many uncertainties lie ahead. I do not wish to repeat some of the relevant points raised in the previous debate. However, I detected in some of the remarks made by the noble Lord, Lord Wakeham, a suggestion that he would not consider it entirely illogical if rail and coal were separated. That is precisely what is proposed in the amendment. I beg to move.

4 p.m.

Lord Haslam

Perhaps I may introduce a slightly practical note into the discussion. I spent 40 years of my industrial career in the private sector and eight years in nationalised industries. Also I am one of the few remaining managers who has worked in both the privatised and nationalised UK coal industries. That exposure has led me to become a fervent advocate of the benefits of privatisation.

Managing a nationalised industry is more demanding and frustrating than running a comparable private sector company. Obviously many operational and strategic problems are common to both, but nationalised industries carry a raft of unique problems which in themselves can be very debilitating.

I will mention two examples. When I was chairman of the then nationalised British Steel, I was also chairman of Tate amp; Lyle, sharing my time between the two. During certain months I kept a record of the time spent in accounting for and explaining the board's activities, as distinct from engaging in creative work. In Tate amp; Lyle that accountability element never exceeded 10 per cent. of my time, involving talking to shareholders, investment groups, government and the European Commission. In British Steel it never fell below 50 per cent., involving talking to government departments, the opposition, Select and Back-Bench Committees, the MMC, the European Commission, regional and local authorities, many groups of MPs, individual MPs and so on. One month, when we closed the Gartcosh steel works in Scotland, the accountability factor rose to 80 per cent. This phenomenon is not confined to the chairman but permeates down through the organisation and in the process carries a heavy overhead cost; but the major negative is the distraction from using one's energy in a creative way. Nevertheless, it is perfectly understandable that this accountability element should be so dominating, particularly in those nationalised industries like steel and coal which in the past have had substantial financial support from government. But at the same time it has to be recognised that this factor has a marked adverse impact on potential performance.

Secondly, in my nationalised industries' period of eight years I responded to seven different Secretaries of State. In their different ways they were all very helpful and supportive, but understandably they were all anxious to put their particular stamp on the industry, which made the development of a consistent strategy somewhat elusive. That is equivalent in private sector terms to an on-going chief executive having a new chairman who has little or no relevant knowledge of the industry imposed on him each and every year. In practice, could one imagine that ever happening?

I could quote many other unique problems which are peculiar to nationalised industries and hence I can understand better than most the great sense of release which is felt by management when an industry is privatised. That release brings a surge of confidence and inevitably an improved performance. Although British Coal, since the miners' strike, has carried out the most radical restructuring of a major UK industry in recent times, accompanied by a massive improvement in productivity, I firmly believe that if British Coal had been privatised four years ago we should be looking at a much better prospect for the industry than we do today.

Turning specifically to the amendment proposed by the noble Lord, Lord Ezra, even in the unlikely event that the current inquiry into the future of the coal industry does not foresee a somewhat brighter future for coal than was outlined in the original controversial announcement, I still fervently believe that British Coal, whatever its residual size and shape, should be privatised. We are now discussing an enabling Bill which would be helpful to my successors in British Coal in moving in that direction. For those reasons, I oppose the amendment.

Lord Donoughue

This amendment, which stands in my name and that of the noble Lord, Lord Ezra, approaches the problems involved in bringing this Bill before Parliament from a slightly different angle from that on which we have just voted. I wish to support what the noble Lord, Lord Ezra, said.

From the beginning it has always seemed to me odd to mix together rail and coal, which I believe are intrinsically different. Coal is an industrial commodity; rail is a public service. The case for separation was from the beginning and is now, I believe, strong. The noble Lord, Lord Ezra, made a basic case. I felt that the noble Lord, Lord Boyd-Carpenter, appeared to support the case for separation. I look forward to hearing him speak on the amendment and possibly voting in favour of it.

It was odd, and has now become totally inappropriate, to proceed with coal linked with rail since the setting up of the inquiry into coal. Some of that argument has been covered as regards the previous Motion. However, it must be stated that if we believe the Government's assurances on that inquiry, all options are still open on coal policy. Therefore, it is surely illogical to deal with privatisation of coal now when we do not know what will be the shape, size, nature and market for the coal industry. Is it not terribly wasteful to spend public money on consultants when they too will not know the nature or scale of the industry on which they are being consulted? I should like to think not, but perhaps the insistence on proceeding reflects something about the Government's approach to the coal inquiry. Perhaps some in the Government do not intend to listen or to change their approach, whatever the inquiry's conclusions.

In October the Prime Minister and Mr. Heseltine stated very firmly that they were convinced of the need for closures and that there is no market for coal. I wonder whether the insistence on proceeding means that they are still convinced of that; they are proceeding with this privatisation because their minds are still closed and in their minds nothing has changed.

If the inquiry is not a sham and if the Government are genuinely willing to listen, they should put the privatisation of coal on hold until the inquiry reports. The noble Lord, Lord Wakeham, assured us that there will be no privatisation Bill until after the inquiry's report; that is helpful. However, that is not the point. The point is that until the inquiry has reported on energy policy, on the changes which could be made that will fundamentally affect the demand for coal, it is quite wrong to proceed with this part of the Bill.

I make the point also about the courts. That was the basic reason given by the Minister at the time for withdrawing the Bill on 19th October. It was said that the matter was before the courts. That was stated as the reason and that still applies. The matter is still before the courts today, this week. Surely if it was a reason for not proceeding then, it is a reason for not proceeding now.

The noble Lord, Lord Wakeham, suggested in our opening discussions that the court issue is not now related to the Bill's provisions. I question that and should like further elaboration from the Minister on that. As I understand it, the matter before the courts concerns consultation. Clauses 31, 34 and 36 deal with consultation. If that was a reason for withdrawing then, that reason still exists. If that is not now a genuine reason for withdrawing the Bill, I wonder whether it was an honest and accurate reason then.

Much has changed since 19th October when the Bill was last before the House and withdrawn. Those changes, encapsulated in the inquiry, are an unanswerable reason for delaying the coal clauses of the Bill. It must make sense now, with the changes that affect coal and do not affect rail, to delay the coal provisions. I am sure that on this side we would have been co-operative on rail—that has been indicated —had the separation been made.

This is a positive amendment. It is not a wrecking amendment. I am sure that many noble Lords on the Cross-Benches, and we hope some government supporters, will see the logic and practicality of what we propose, which would be a helpful move enabling the Committee to proceed constructively on the rail proposals, where much work has been done, where there has been a White Paper and where much is known. Let us have further consideration on coal, where there has been no White Paper, where we do not know the Government's policy and where we trust all options remain open until after the report of the committee of inquiry has been made.

Lord Boyd-Carpenter

This debate has been a somewhat quieter replay of the more animated discussion that we had on the Motion not to take the Bill into Committee. This amendment at this stage follows—which I do not think the amendment on the previous debate did—the proper procedure. The noble Lords, Lord Ezra and Lord Donoughue, both referred en passant to the speech that I made on the earlier debate when I said, and I repeat, that if we wished to take coal out of the Bill this—that is, an amendment in Committee—is the proper procedure. I did not of course indicate any support for the view that we should take coal out of the Bill. Indeed, if Members of the Committee would care tomorrow to study my speech they will see that I emphasised, perhaps at undue length, the importance of keeping it in. But we are at least now having a debate in the proper procedure and not, as we frankly were on the previous round, wasting time with a wholly unnecessary Motion.

I believe that on balance we must keep coal in the Bill. As my noble friend the Leader of the House said in the earlier debate, it enables the Coal Corporation to make the preparations for privatisation; and the fear that nonetheless this might be rushed through before the present difficulties have been cleared up has been dealt with effectively by the full and detailed assurances given by my noble friend the Leader of the House. Consequently this amendment seems to me to be a mistake, and I hope that the Committee will not accept it.

4.15 p.m.

Lord Peyton of Yeovil

I do not wish to keep the Committee for any length of time, but I should like to say how warmly I support what has been said by my noble friend Lord Haslam. He speaks with great experience. He made the point clearly that this Bill does not set out to change anything. It merely enables certain preliminary steps to be taken. I for one see no objection whatever to our proceeding with it as it is now. Indeed, I would think it odd if we did not.

Whenever a problem arises, no matter what the source, it is our instinctive knee-jerk reaction to set up an inquiry. In this instance we have two, even three, on the tapis now. That would seem to me to be an excess. One of the consequences of an inquiry is delay. Further to add to the delay by holding this Bill back would do nothing to help.

I hope that the discussion of this Bill will afford to the Government an opportunity to make clear at least some of their intentions. I do not wish to go back into history, but I have always thought that to put the privatisation of electricity in front of coal was a cardinal error. I said so at the time and so did many other people. I also thought it was a grievous error to have only two generators because it put them in a very powerful bargaining position. I felt some sympathy with the coal industry in the great disadvantages, so it seemed to me, that it faces.

The second reason why I am on my feet now is that I want to express to my noble friend the earnest hope that opportunity will be taken by the Government during the discussion of this Bill to look with favour upon any pattern that has in it an ingredient of flexibility. The rigidity that worries me now has been greatly overdone in previous privatisation measures. I think I should declare an interest here. I am president of British Alcan and we have a large smelter in the North East which depends upon a neighbouring colliery. The fate of that colliery is likely to depend upon a degree of flexibility being introduced that is now absent.

One of the aspects that I most fear is that large concerns —British Coal, no matter who it is owned by, or any large successor body and the two generators—will not consider local problems, local difficulties and local interests, with the result that quite promising enterprises could well be extinguished when they might be saved. I hope that my noble friend will have that very much in mind and keep it in the minds of her noble friends.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield)

I was delighted to hear my noble friend Lord Boyd-Carpenter clarify his views on this amendment. Much has happened since we were due to debate this Bill on 19th October, and much of the material has been covered by my noble friend the Lord Privy Seal. But as your Lordships will know, following British Coal's announcement of pit closures, the Government announced a review of the prospects of 21 of those pits in the context of their energy policy. This review is full and wide-ranging, and I am pleased to assure my noble friend Lord Peyton that it will indeed look at flexibility.

Consultation is taking place with the principal providers and consumers of energy, the trade unions and other interested parties. The evidence to the review and its findings will be published to the fullest extent possible, except where those providing information have done so in confidence in view of commercial sensitivities. Early in the new year there will be a White Paper setting out the results of the review in the context of the Government's energy policy. The White Paper will make clear the consequences for British Coal, the implications for individual pits and the employment prospects for the industry. The White Paper will be presented to Parliament, and my noble friend assured the House that each House will have the opportunity to debate the issues fully.

There may be temptation in some parts of this Committee, reflected in this amendment, to think that it is a sensible response to such a wide-ranging review to remove British Coal from this Bill, or even to take coal privatisation off the political agenda. I think that would be a mistake.

The Government remain committed to privatisation of the coal industry. Although decisions about privatisation will take account of the review, the policy will remain in place. Whatever conclusions are reached as a result of the review, it must continue to be the case that the long-term interests of the industry will be best-served by freeing the management from the constraints of public sector ownership. I hasten to reassure the noble Lord, Lord Donoughue, that that does not mean that we will not be listening to and taking note of the full review. I hope that my noble friend Lord Peyton will agree that freeing the management from the constraints of public sector ownership is one of the best ways to achieve flexibility.

The Bill is a technical paving measure to give British Coal and British Rail powers to participate in the preparation process. It is not the substantive legislation which will allow privatisation transfers to take place, decisions on which will have to take account of the results of the review. I assure noble Lords that there is no question that the Bill will be used to further privatisation in a way that is prejudicial. I confirm the assurance that was given by my right honourable friend that no decision on the timing of further main legislation in respect of coal will be taken until the White Paper, which will set out the results of the review, has been debated.

As my noble friend Lord Haslam so ably stated, it will be vital to the effectiveness and workability of the Government's proposals for privatisation that British Coal and British Rail are able to contribute.

If references to British Coal are removed from the Bill, it will be prevented from playing a full and proper role in commenting on and making an input to Government proposals for privatisation. British Coal would be handicapped, which would be a worse situation than delaying giving it the power. The amendment would have a greater effect than the amendment that was moved by the noble Lord, Lord Richard, which proposed that the Bill be postponed until after the pit review. This amendment would remove British Coal from the Bill.

I should like to remind the noble Lord, Lord Donoughue, that we gave a Second Reading to the Bill as a coal and rail paving Bill. We wish to think hard about the implications of that situation, particularly in the light of the Lord Privy Seal's commitment that no decision on the timing of substantive coal privatisation legislation will be taken until the pit review has been debated in both Houses.

It is possible that options will be considered in the coal review, for example exploring the opportunity for the private sector in the production of coal. British Coal may wish to have an input in relation to that matter. The amendment could inhibit British Coal from making a full contribution to the development of such an option.

Lord Tordoff

Can the noble Baroness explain how it can be that the Bill is necessary to enable British Coal to make a contribution to the review? Is that what the noble Baroness is saying?

Baroness Denton of Wakefield

Without the Bill, British Coal does not have the necessary authority to have advisers, which means that it would be handicapped. The noble Lord, Lord Ezra, drew attention to a comment made by my honourable friend on the necessity of further legislation relating to coal. It is for the review to reach conclusions and it would be wrong to rule out any situation.

The noble Lord, Lord Donoughue, questioned why, if the court situation was relevant in October, it was not relevant now. I should like to point out that full discussion of matters in the Bill need not trespass on the issues that are before the courts. We have now had time to examine that issue, unlike the situation in October.

I feel sure that noble Lords would not wish to restrict the rights of British Coal. If noble Lords vote for the amendment, the effect will be to deprive British Coal of an ability to play a full part in considering options that might be helpful to coal miners and the coal-mining industry of this country.

My right honourable friend pointed out that a possible method of achieving separation would be to amend the Bill in such a way as to delay the implementation of the coal section of the Bill. However, there can be no firmer assurances than those that have been given today and I hope that in the interests of British Coal the amendments will be withdrawn.

Lord Donoughue

Can the noble Baroness help us all by explaining what I have never understood? What was the basic rationale in putting together a totally different industry and service? Why did we not have two separate Bills that could have been taken concurrently?

Baroness Denton of Wakefield

The amendments are not intended to involve debates about the industries. They concern technicalities which apply to both industries. The Bill has passed through the other place and it seemed that this was a sensible and logical way to deal with them.

Lord Ezra

I am obliged to those noble Lords who have considered the amendment and done so in a very careful way.

The noble Baroness has stated that if we were to approve the amendment it would put British Coal at a big disadvantage because it would be prevented from giving proper consideration to the various options for privatisation and it would be deprived of the ability to recruit advisers. British Coal must have changed a good deal since I was connected with it. I did not need to have a paving Bill in order to answer questions that might be put to me on strategic issues.

Baroness Denton of Wakefield

I should like to clarify the point. I did not intend to suggest that British Coal could not make its own decisions, but the paving Bill allows it to have advisers if necessary. If the amendment is passed it will be handicapped in that manner.

Lord Ezra

I thank the noble Baroness for that elucidation. I was going to say that I did not need a paving Bill in order to give my views on various strategies that the Government might think up in relation to the coal industry. There were very many strategies in my time on which I was asked to give an opinion; sometimes they took my opinion and sometimes they did not. But I never felt it necessary to turn to the outside world for advisers on the intricacies and affairs of the coal industry. It is an extraordinary suggestion that such a great industry, with an in-built knowledge of its business, with leading mining engineers of the world and with people who are particularly knowledgeable in financial and economic matters and who spend their entire time on those subjects, cannot prepare itself for possible eventual privatisation without turning to the outside world. Inevitably, any advisers who were obtained would know far less about the coal industry than those who are already involved in it.

To my mind that is not the issue. The issue is that as between the two industries there is a different case. There is a White Paper in relation to railways. The Government have indicated how their mind is working towards eventual privatisation, so as we go through the provisions of the Bill regarding the railways we can relate them to those ideas. That makes it a logical, sensible procedure.

However, in the case of coal the situation is entirely different, as we well know. There were a number of ideas floating around about the form of possible privatisation when we went up to the Second Reading stage and while the Bill was going through another place; but the whole situation has been fundamentally altered by recent events, as everybody admits. As a result of the inquiries that are now taking place, we have been promised a White Paper in the early part of next year. That is not very far away. As a result of the debates to which that White Paper will give rise, no doubt we shall get some idea about the Government's thinking regarding the privatisation of the coal industry. Indeed, the noble Lord, Lord Peyton, referred to this in his speech. He said he hoped that during the course of our debate on this Bill the Government would give an indication of the way their minds were thinking. I hope I have understood him correctly.

Lord Peyton of Yeovil

Is there anything wrong with that? The Government will be passing legislation, and if they take away the veil which presently covers their intentions I for one would be delighted. I do not see that they would be doing anything wrong, although they may be doing something unusual.

Lord Ezra

I see nothing wrong with that at all. I was going on to say that I fully supported what the noble Lord had said. If it were the Government's intention during the course of our deliberations on this Bill to tell us the various options they have in mind for privatisation, that would certainly alter my opinion of the amendment which is now before your Lordships. Perhaps the noble Baroness would tell us whether that is the intention of the Government—if so, I would take a very different view about this amendment. Are we to be told during the course of the various amendments that we shall be moving today what sort of privatisation the Government have in mind for the coal industry?

Baroness Denton of Wakefield

I believe the noble Lord, Lord Ezra, knows well that this is not a debate on privatisation. It is a debate on a technical Bill to allow British Coal and British Rail to take advisers, and not about privatisation. There will be lots of scope in due course to debate privatisation.

Lord Ezra

Precisely! That is exactly the answer that I expected. So we are not going to be told anything more on privatisation of the coal industry because we cannot be told anything more. What I am trying to suggest to your Lordships is that we could have a much more sensible debate in the not-too-distant future of this paving Bill for coal if we knew as much about the Government's intentions for the coal industry as we know now about the railway industry. That is what this is all about. We are not expressing an opinion on privatisation and we are not even trying to delay privatisation, because the Government have made it clear that there is no timing attached to it. It might be quite a long time, judging by previous examples which the noble Lord, Lord Wakeham, quoted, before a privatisation measure comes before us. So we are not trying to delay privatisation: nor are we arguing for or against it. All we are saying is that we could have a much more sensible debate on this paving measure for coal, if we had the same sort of indication of the Government's thinking as we have for rail. It is on that basis that I have moved the amendment.

4.34 p.m.

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

Their Lordships divided: Contents, 99; Not-Contents, 150.

Division No. 2
Addington, L. Jeger, B.
Airedale, L. Jenkins of Hillhead, L.
Archer of Sandwell, L. Jenkins of Putney, L.
Ardwick, L. John-Mackie, L.
Aylestone, L. Judd, L.
Barnett, L. Kagan, L.
Birk, B. Listowel, E.
Blackstone, B. Llewelyn-Davies of Hastoe, B.
Blease, L. Lloyd-George of Dwyfor, E.
Bonham-Carter, L. Lovell-Davis, L.
Boston of Faversham, L. McIntosh of Haringey, L.
Bottomley, L. Mallalieu, B.
Brimelow, L. Mar, C.
Broadbridge, L. Masham of Ilton, B.
Bruce of Donington, L. Mayhew, L.
Callaghan of Cardiff, L. Merlyn-Rees, L.
Carmichael of Kelvingrove, L. Milner of Leeds, L.
Carter, L. Molloy, L.
Cledwyn of Penrhos, L. Morris of Castle Morris, L.
Clinton-Davis, L. Mulley, L.
Cobbold, L. Nicol, B.
Cross, V. Ogmore, L.
Cudlipp, L. Peston, L.
Dean of Beswick, L. Pitt of Hampstead, L.
Donaldson of Kingsbridge, L. Prys-Davies, L.
Donoughue, L. Rea, L.
Dormand of Easington, L. Richard, L.
Ezra, L. Ritchie of Dundee, L.
Falkender, B. Rochester, L.
Fitt, L. Russell, E.
Gallacher. L. Seear, B.
Galpern, L. Serota, B.
Gladwyn, L. Shaughnessy, L.
Graham of Edmonton, L. [Teller.] Stallard, L.
Stoddart of Swindon, L.
Greene of Harrow Weald, L. Strabolgi, L.
Grey, E. Taylor of Blackburn, L.
Hampton, L. Taylor of Gryfe, L.
Hamwee, B. Thomson of Monifieth, L.
Hanworth, V. Tordoff, L. [Teller.]
Harris of Greenwich, L. Varley, L.
Healey, L. Wallace of Coslany, L.
Hilton of Eggardon, B. Wedderburn of Charlton, L.
Hirshfield. L. White, B.
Hollis of Heigham, B. Wigoder, L.
Holme of Cheltenham, L. Williams of Elvel, L.
Houghton of Sowerby, L. Williams of Mostyn, L.
Howell, L. Wilson of Rievaulx, L.
Jay, L. Winchilsea and Nottingham, E.
Jay of Paddington, B. Young of Dartington, L.
Abercorn, D. Bessborough, E.
Aberdare, L. Birdwood, L.
Aldington. L. Blatch, B.
Allenby of Megiddo, V. Blyth, L.
Archer of Weston-Super-Mare, L. Boardman, L.
Borthwick, L.
Arran, E. Boyd-Carpenter, L.
Astor, V. Brabazon of Tara, L.
Astor of Hever, L. Braine of Wheatley, L.
Attlee, E. Brougham and Vaux, L.
Banbury of Southam, L. Butterworth, L.
Barber, L. Cadman, L.
Beloff, L. Caithness, E.
Belstead, L. Campbell of Alloway, L.
Carnegy of Lour, B. Margadale, L.
Chelmer, L. Marlesford, L.
Cochrane of Cults, L. Merrivale, L.
Coleraine, L. Mersey, V.
Colnbrook, L. Milverton, L.
Constantine of Stanmore, L. Monk Bretton, L.
Cox, B. Morris, L.
Craigavon, V. Mountevans, L.
Cranborne, V. Mowbray and Stourton, L.
Crickhowell, L. Moyne, L.
Cumberlege, B. Munster, E.
Davidson, V. Murton of Lindesfarne, L.
Denham, L. Nelson, E.
Denton of Wakefield, B. Norfolk, D.
Eccles of Moulton, B. Northbourne, L.
Elliot of Harwood, B. O'Cathain, B.
Elliott of Morpeth, L. Orkney, E.
Elphinstone, L. Orr-Ewing, L.
Elton, L. Oxfuird, V.
Faithfull, B. Park of Monmouth, B.
Fanshawe of Richmond, L. Pearson of Rannoch, L.
Ferrers, E. Pender, L.
Fraser of Carmyllie, L. Perry of Southwark, B.
Fraser of Kilmorack, L. Peyton of Yeovil, L.
Gainford, L. Platt of Writtle, B.
Geddes, L. Plumb, L.
Goschen, V. Prentice, L.
Grantchester, L. Rankeillour, L.
Gray of Contin, L. Reay, L.
Gridley, L. Renwick, L.
Hailsham of Saint Marylebone, L. Richardson, L.
Rippon of Hexham, L.
Halsbury, E. Rodger of Earlsferry, L.
Harmar-Nicholls, L. Romney, E.
Haslam, L. St. Davids, V.
Hayhoe, L. Seccombe, B.
Henley, L. Shannon, E.
Hesketh, L. [Teller.] Shrewsbury, E.
Holderness, L. Skidelsky,
HolmPatrick, L. Soulsby of Swaffham Prior, L.
Hood, V. Stewartby, L.
Hothfield, L. Stodart of Leaston, L.
Howe, E. Strafford, E.
Hylton-Foster, B. Strange, B.
Ironside, L. Strathclyde, L.
Jellicoe, E. Strathmore and Kinghorne, E. [Teller.]
Johnston of Rockport, L.
Kimball, L. Swinfen, L.
Kinloss, Ly. Teviot, L.
Kitchener, E. Thomas of Gwydir, L.
Knights, L. Thurlow, L.
Knollys, V. Trumpington, B.
Lauderdale, E. Ullswater, V.
Lawson of Blaby, L. Vaux of Harrowden, L.
Long, V. Vivian, L.
Lyell, L. Wakeham, L.
McColl of Dulwich, L. Walker of Worcester, L.
Mackay of Ardbrecknish, L. Westbury, L.
Mackay of Clashfern, L. Wharton, B.
Macleod of Borve, B. Wolfson, L.
Mancroft, L. Wynford, L.
Manton, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

4.43 p.m.

Earl Ferrers

This may be a convenient moment to take the Statement which has been made in another place. I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House Resumed.